-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AihbXGGOwRxzuxbR5Yai0DuYKXwI+yltkRVtqE4gCVEualtH519b9jGMjURuO32e yd0euoq6t3aCXbCneasiFQ== 0000893750-04-000007.txt : 20040108 0000893750-04-000007.hdr.sgml : 20040108 20040108165318 ACCESSION NUMBER: 0000893750-04-000007 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20031204 FILED AS OF DATE: 20040108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GLASSWORKS OF CHILE CENTRAL INDEX KEY: 0000917335 STANDARD INDUSTRIAL CLASSIFICATION: GLASS CONTAINERS [3221] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12752 FILM NUMBER: 04515892 BUSINESS ADDRESS: STREET 1: HENDAYA 60 OF 201 LOS CONDES CITY: SANTIAGO STATE: F3 ZIP: 00000 BUSINESS PHONE: 0115622468855 MAIL ADDRESS: STREET 1: HENDAYA 60 OF 201 LOS CONDES CITY: SANTIAGO STATE: F3 ZIP: 00000 6-K 1 form6k2.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 January, 2004 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 90331000-6 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 9/30/2003 1.00.01.30 Type of Currency Chilean Pesos 1.00.01.40 Type of Financial Statements Consolidated 1 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. 09-30-03 09-30-02 5.11.00.00 TOTAL CURRENT ASSETS 171,598,638 182,359,025 5.11.10.10 Cash 1,895,071 35,933,528 5.11.10.20 Time deposits 45 6,923,184 7,214,531 5.11.10.30 Marketable securities (net) 4 64,407,136 12,739,452 5.11.10.40 Debtors from sales (net) 5 40,569,247 37,585,366 5.11.10.50 Documents receivable (net) 4,583,097 5,389,705 5.11.10.60 Sundry debtors (net) 1,552,182 1,021,454 5.11.10.70 Doc. & accts receivable related Co. 6 744,153 463,521 5.11.10.80 Inventories (net) 36,488,666 35,405,869 5.11.10.90 Recoverable taxes 2,681,579 473,437 5.11.20.10 Prepaid expenses 1,388,166 1,079,342 5.11.20.20 Deferred taxes 8 1,432,239 1,650,350 5.11.20.30 Other current assets 10 8,933,918 43,402,470 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 138,675,566 130,156,094 5.12.10.00 Land 12 13,116,753 13,484,070 5.12.20.00 High rises & 2infrastructure 12 61,375,398 55,910,535 5.12.30.00 Machinery & equipment 12 143,565,630 134,964,006 5.12.40.00 Other fixed assets 12 11,325,067 10,638,079 5.12.50.00 Positive goodwill from technical 12 revaluation of fixed assets 6,619,986 8,637,670 5.12.60.00 Depreciation (minus) 12 (97,327,268) (93,478,266) 5.13.00.00 TOTAL OTHER ASSETS 141,508,268 154,220,307 5.13.10.10 Investment in related companies 14 105,659,811 112,855,150 5.13.10.20 Investment in other companies 15 827,235 1,319,838 5.13.10.30 Negative goodwill 16 9,607,498 10,370,837 5.13.10.40 Positive goodwill (minus) 0 0 5.13.10.50 Long-term debtors 227,987 205,277 5.13.10.60 Doc. & accts receivable related Co. 2,898 1,445 5.13.10.65 Long-term deferred taxes 0 0 5.13.10.70 Intangibles 17 11,814,556 11,747,268 5.13.10.80 Amortization (minus) 17 (1,155,149) (969,802) 5.13.10.90 Other 18 14,523,432 18,690,294 5.13.20.10 Long-term leasing contracts (net) 0 0 5.10.00.00 TOTAL ASSETS 451,782,472 466,735,426
2 LIABILITIES 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance: Consolidated
LIABILITIES NOTE No. 09-30-03 09-30-02 5.21.00.00 TOTAL CURRENT LIABILITIES 44,961,116 66,493,915 5.21.10.10 Short-term oblig. Banks & Fin. Inst. 150,898 1,117,114 5.21.10.20 Short-term portion - Long-term oblig. Banks & Financial Institutions 19 3,872,025 26,076,767 5.21.10.30 Obligations with the public (notes) 0 0 5.21.20.40 Short-term portion oblig with public 22 1,141,520 1,573,197 5.21.10.50 Long-term oblig. due within 1 year 199,278 174,657 5.21.10.60 Dividends payable 505,634 552,853 5.21.10.70 Accounts payable 12,024,602 13,313,141 5.21.10.80 Notes payable 2,463,212 1,758,273 5.21.10.90 Sundry creditors 1,048,744 2,022,423 5.21.20.10 Notes & accts payable related Co. 836,988 775,446 5.21.20.20 Provisions 23 9,664,291 12,761,878 5.21.20.30 Withholdings 3,078,707 2,485,669 5.21.20.40 Income tax 0 1,046,016 5.21.20.50 Unearned income 4,919,157 2,836,481 5.21.20.60 Deferred taxes 0 0 5.21.20.70 Other current liabilities 20 5,056,060 0 5.22.00.00 TOTAL LONG-TERM LIABILITIES 141,794,267 127,777,544 5.22.10.00 Oblig with Banks & Financial Inst. 21 39,280,665 25,935,450 5.22.20.00 Long-term oblig with public (bonds) 22 89,813,959 89,740,797 5.22.30.00 Long-term notes payable 0 160,083 5.22.40.00 Long-term sundry debtors 360,523 3,261,714 5.22.50.00 Long-term notes & accts. payable related companies 0 0 5.22.60.00 Long-term provisions 23 7,623,385 5,444,154 5.22.70.00 Long-term deferred taxes 8 4,715,735 3,235,346 5.22.80.00 Other long-term liabilities 0 0 5.23.00.00 MINORITY INTEREST 26 37,647,535 36,694,923 5.24.00.00 TOTAL EQUITY 227,379,554 235,769,044 5.24.10.00 Paid-in capital 27 64,749,257 64,686,393 5.24.20.00 Reserve capital revaluation 27 776,991 840,924 5.24.30.00 Premium in sale of own shares 27 27,929,574 27,930,030 5.24.40.00 Other reserves 27 8,112,383 11,561,262 5.24.50.00 Retained earnings (addition of codes 5.24.51.00 to 5.24.56.00) 125,811,349 130,750,435 5.24.51.00 Reserve future dividends 124,356,319 116,289,293 5.24.52.00 Accrued profits 0 0 5.24.53.00 Accrued losses (minus) 0 0 5.24.54.00 Profit (loss) for the year 27 2,415,990 16,447,688 5.24.55.00 Prov. dividends (minus) 27 (960,960) (1,986,546) 5.24.56.00 Accr. deficit dev. period 0 0 5.20.00.00 TOTAL LIABILITIES 451,782,472 466,735,426
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. 09-30-03 09-30-02 5.31.11.00 OPERATING INCOME 27,107,013 30,178,087 5.31.11.10 Gross Margin 45,539,906 48,169,042 5.31.11.11 Sales 123,647,646 116,809,410 5.31.11.12 Costs (minus) (78,107,740) (68,640,368) 5.31.11.20 Adm. & sales expenses (minus) (18,432,893) (17,990,955) 5.31.12.00 NON-OPERATING RESULTS (21,364,434) (4,340,377) 5.31.12.10 Interest income 2,181,678 1,942,920 5.31.12.20 Income investments Rel. Co. 14 1,551,714 295,218 5.31.12.30 Other non-operating income 28 553,447 859,482 5.31.12.40 Loss investments Rel. Co. (-) (5,510,961) (9,719,807) 5.31.12.50 Amortization neg.goodwill (-) (463,901) (475,197) 5.31.12.60 Interest expenses (minus) (5,179,610) (4,630,550) 5.31.12.70 Other non-operat expenses (-) 28 (1,521,725) (2,692,423) 5.31.12.80 Price level restatement 29 (705,670) (1,581,501) 5.31.12.90 Exchange differences 30 (12,269,406) 11,661,481 5.31.10.00 RESULTS BEFORE INCOME TAX AND EXTRAORDINARY ITEMS 5,742,579 25,837,710 5.31.20.00 INCOME TAX 8 (1,589,839) (5,281,853) 5.31.30.00 EXTRAORDINARY ITEMS 0 0 5.31.40.00 PROFIT (LOSS) BEFORE MINORITY INTEREST 4,152,740 20,555,857 5.31.50.00 MINORITY INTEREST 26 (1,736,750) (4,108,169) 5.31.00.00 NET INCOME (LOSS) 2,415,990 16,447,688 5.32.00.00 Amortization of positive goodwill 0 0 5.30.00.00 INCOME (LOSS) FOR THE YEAR 2,415,990 16,447,688
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. 09-30-03 09-30-02 5.41.11.00 NET FLOW FROM OPERATING ACTIVITIES 26,444,302 38,097,002 5.41.11.10 Collection from sales debtors 151,561,796 137,803,874 5.41.11.20 Interests received 2,819,335 8,523,979 5.41.11.30 Dividends & other distributions funds received 162,892 191,653 5.41.11.40 Other income 33 2,751,987 2,388,300 5.41.11.50 Payments to suppliers & personnel (-) (107,971,752) (93,642,830) 5.41.11.60 Interest paid (minus) (5,623,361) (3,118,260) 5.41.11.70 Income tax paid (minus) (3,813,455) (2,319,854) 5.41.11.80 Other expenses (minus) 33 (6,066,363) (1,509,759) 5.41.11.90 V.A.T. & other taxes (minus) (7,376,777) (10,220,101) 5.41.12.00 CASH FLOW FINANCING ACTIVITIES (11,957,348) 15,579,131 5.41.12.05 Proceeds from share issue 0 0 5.41.12.10 Loans received 133,113 71,952 5.41.12.15 Obligations with the public 0 69,273,018 5.41.12.20 Secured loans from related companies 93,663 88,963 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) (9,030,801) (8,306,949) 5.41.12.40 Capital distributions (minus) 0 0 5.41.12.45 Repayment of loans (minus) (2,104,400) (41,107,149) 5.41.12.50 Payment of obligations with the public (-) (212,852) (211,529) 5.41.12.55 Repayment of secured loans from rel Co.(-) (76,667) (309,113) 5.41.12.60 Repayment other loans from related Co.(-) 0 (38,619) 5.41.12.65 Share issue payment (minus) 0 0 5.41.12.70 Payment of issue publ oblig (minus) 0 (3,881,443) 5.41.12.75 Other financing payments (minus) 33 (759,404) 0 5.41.13.00 CASH FLOW FROM INVESTING ACTIVITIES (28,602,615) (3,215,795) 5.41.13.05 Sale of fixed assets 314,910 94,003 5.41.13.10 Sale of permanent investments 0 1,398 5.41.13.15 Sale of other investments 33 308,240 11,496,549 5.41.13.20 Proceeds secured loans to related Comp. 0 0 5.41.13.25 Proceeds other loans to related companies 1,940,110 45,754 5.41.13.30 Other investment income 33 2,261,336 4,634,901 5.41.13.35 Incorporation of fixed assets (minus) (23,203,964) (11,719,876) 5.41.13.40 Capitalized interests payment (minus) 0 0 5.41.13.45 Permanent Investments (minus) (3,932,925) (5,004,625) 5.41.13.50 Investments in financial instruments (minus) (69,214) (1,609,915) 5.41.13.55 Other loans to related companies (minus) 0 0 5.41.13.60 Other loans to related companies (minus) (8,937) (28,669) 5.41.13.65 Other distrib of funds on invest activities (-) 33 (6,212,171) (1,125,315) 5.41.00.00 TOTAL NET CASH FLOW FOR THE PERIOD (14,115,661) 50,460,338 5.42.20.00 EFFECT OF INFLATION ON CASH & CASH EQUIV. (2,386,739) 226,153 5.41.00.00 NET CHANGE IN & CASH EQUIVALENT (16,502,400) 50,686,491 5.42.00.00 CASH & CASH EQUI AT BEGINNING OF PERIOD 94,415,355 39,376,324 5.43.00.00 CASH & CASH EQUIV BALANCE AT END OF PERIOD 77,912,955 90,062,815
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. 09-30-03 09-30-02 5.50.10.00 Profit (Loss) for the year 2,415,990 16,447,688 5.50.20.00 Profit (Loss) in sale of assets 78,055 29,101 5.50.20.10 (Profit) Loss in sale of fixed assets 78,055 29,101 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) 27,433,181 19,526,968 5.50.30.05 Depreciation for the year 12 10,891,513 10,261,009 5.50.30.10 Amortization of intangibles 937,368 1,410,846 5.50.30.15 Write-offs and provisions 1,198,846 4,901,189 5.50.30.20 Accrued earnings from investments in related companies (minus) (1,551,714) (295,218) 5.50.30.25 Accured losses from investments in related Co. 5,510,961 9,719,807 5.50.30.30 Negative goodwill amortization 463,901 475,197 5.50.30.35 Positive goodwill amortization (minus) 0 0 5.50.30.40 Price level restatement 29 705,670 1,581,502 5.50.30.45 Net exchange difference 30 12,269,406 (11,661,481) 5.50.30.50 Other non-cash credits to results (minus) (305,063) (963,032) 5.50.30.55 Other non-cash debits to results (2,687,707) 4,097,149 5.50.40.00 Changes in Assets affecting cash flow (incr) decreases (25,375,503) (31,615,089) 5.50.40.10 Debtors from sales (19,246,173) (22,803,624) 5.50.40.20 Inventory (5,701,251) (6,755,732) 5.50.40.30 Other assets (428,079) (2,055,733) 5.50.50.00 Changes in liabilities affecting cash flow increases (decr) 20,155,829 29,600,165 5.50.50.10 Accounts payable related to results for the year 21,478,762 26,810,368 5.50.50.20 Interests payable (901,088) 1,096,130 5.50.50.30 Income tax payable (net) (360,022) 2,460,116 5.50.50.40 Other accounts payable related to non-oper results 49,180 (316,175) 5.50.50.50 VAT and other taxes payable (net) (111,003) (450,274) 5.50.60.00 Profit (Loss) of minority interest 26 1,736,750 4,108,169 5.50.00.00 NET OPERATING CASH FLOW 26,444,302 38,097,002
6 01. 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 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 September 30 of 2003 and 2002. b) Preparation basis of financial statements: These consolidated financial statements as of September 30, 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 September 30, 2003 by 2.9%. 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. The company 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. in 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 Vina Centenaria S.A., with 99.9% 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 and efects of transactions were eliminated in the consolidation and the participation of minority investors has been recognized presented in the balance as minority interest. e) Adjustment for Currency Devaluation (Price Level Restatement) Consolidated financial statements have been restated considering the variation in the purchasing power of the currency occurred during the fiscal year 2003, which was 1.2% (1.3% in 2002). f) Conversion Basis Balances in foreign currency and indexed currency units have been converted to pesos at the indicated parities: 8 2003 2002 Ch$ Ch$ U.S. Dollar 660.97 748.73 Pound Sterling 1,099.23 1,173.19 Swedish Crown 501.76 506.96 EURO 770.81 738.39 Unidad de Fomento 16,946.03 16,455.03 g) Marketable Securities and Time Deposits Transactions in short-term fixed income instruments are shown at the return value of the investment, which does not exceed the market value as of September 30, 2003. Investments in shares 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. Investments carried out by the parent company in Celulosa Arauco bonds are registered on the long term under the item Others, presented at their investment value plus interests accrued at the date of the fiscal year, without adjusting to market value because there is the intention of keeping them until their maturity. h) Inventory Inventory of finished products has been valued as of September 30, 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. Programs inventories at the closing of each fiscal year represent 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 broadcasted. i) Bad Debts (Uncollectables) 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. j) Fixed Assets The property in fixed assets is shown at the purchase cost plus legal and regulatory revaluations accumulated until September 30, 2003 and 2002. k) Depreciation of Fixed Assets 9 Depreciation of these goods is calculated on updated values, according to the straight-line depreciation method, considering the estimated useful life of the goods. l) Assets on Leasing None. m) Sales Transactions with Leaseback None. n) Intangibles The corrected purchase value of trademarks of the subsidiary S.A. Vina Santa Rita which includes inscription costs are presented as intangibles. The subsidiary CIECSA consolidated includes chanel 9 TV frequency, which has an amortization period of 40 years, and the amortization method is the one of "Increasing Digits". o) Investments in Related Companies Investments in shares and rights in related companies have been valued according to the participation percentage 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 September 30, 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. r) Obligations with the 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. 10 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 accounting principles generally accepted in Chile. 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 acquire computer packages from third parties. Development disbursements 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 register expenses for this item directly in results as they are generated. 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, fixed rate mutual funds investments and agreements 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 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." 11 CRISTALERIAS DE CHILE S.A. NOTE 2 - ACCOUNTING CRITERIA USED - COMPANIES INCLUDED IN THE CONSOLIDATED REPORT
Percentage of Shareholding R.U.T. Company Name 09.30.2003 09.30.2002 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. 98.4458 0.0000 98.4458 98.2737 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
12 03. Accounting Changes As of September 30, 2003 and 2002, there have not been any changes in the accounting criteria applied that affect the consolidated financial statements. 13 04. Marketable Securities As of September 30, 2003, this item is composed by the following investments: a) Investments in bonds, Fixed Fate Instruments, mainly corresponding to investments in state bonds and bonds from financial institutions in USA, Germany, Holland; Collateralized Bonds of Private Companies in USA (with accounts receivable guarantee) and USA Mortgage Bonds with state guarantee are included in the amount of Th Ch$ 51,487,181. b) Th Ch$ 4,163,102 in shares. c) Th Ch$ 8,756,853 in fixed rate investment funds in US$. As of September 30, 2002, Th Ch$ 3,776,725 were included in investments in shares, Th Ch$ 8,903,062 in fixed rate mutual funds in Dollars, Th Ch$ 29,724 in mutual funds in chilean pesos and Th Ch$ 29,941 for accrued interests of long-term bonds. CRISTALERIAS DE CHILE S.A. NOTE 4 -MARKETABLE SECURITIES- BALANCE COMPOSITION Type of Security Book Value 09-30-2003 09-30-2002 Shares 4,163,102 3,776,725 Bonds 51,487,181 29,941 Shares of mutual funds 0 0 Shares of investment funds 8,756,853 8,932,786 Public tender notes 0 0 Mortgage bonds 0 0 Total Marketable Securities 64,407,136 12,739,452 14 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. 63,642,856 9.9980 95 6,071,528 4,163,102 Value Investment Portfolio 6,071,528 4,163,102 Adjustment Provision 0 Book value, Investment Portfolio 4,163,102
15 CRISTALERIAS DE CHILE S.A. NOTE 4 - MARKETABLE SECURITIES - FIXED RATE INSTRUMENTS
Type of Security Par Book Value Market Reserve Value Amount Rate %(3) Value Financial Institutions bonds (USA, Germany and Holland) 24,044,544 24,044,544 5.90 24,044,544 0 US treasury bonds 13,584,553 13,584,553 1.26 13,584,553 0 Mortgage bonds USA, with state guarante 13,359,571 13,359,571 1.26 13,359,571 0 Call Deposit 806,753 806,753 5.85 806,753 0 BBH U.S. Money Market Portfolio 8,448,613 8,448,613 0.00 8,448,613 0 TOTAL 60,244,034 60,244,034 - 60,244,034 -
Note: (1) The investements has been made in U.S. Dollars (78.8%) and EUROS (21.2%) these are on custody abroad. (2) These investments can be recovered within 48 hrs. warning. (3) Rate of period from 01-01-2003 to 09-30-2003. 16 05. Short-Term and Long-Term Debtors As of September 30, 2003, there are balances short-term debtors in the amount of Th $46,704,526 (Th $ 43,996,525 in 2002). As of September 30, 2003, there is a bad debt reserve of Th $ 738,465 in 2003 (Th $699,826 in 2002), presented deducting the balances of Debtors from Sales and Documents receivable. The balances of Short-term Debtors are shown net of Customer Advance Payments. In addition, there is a balance of Th $ 227,987 in Long Term Debtors in 2003 (Th $ 205,277 in 2002). 17 CRISTALERIAS DE CHILE S.A. NOTE 5 - SHORT AND LONG TERM DEBTORS
Current Assets Item Over 90 days Long Term Up to 90 days up to 1 year Subtotal Total Current (net) 09-30-2003 09-30-2002 09-30-2003 09-30-2002 09-30-2003 09-30-2002 09-30-2003 09-30-2002 Debts from Sales 38,383,144 36,204,307 2,690,393 1,896,975 41,073,537 40,569,247 37,585,366 0 0 Estimate of bad debtors - - - - 504,290 - - - - Documents receivable 4,697,318 5,516,584 119,954 57,031 4,817,272 4,583,097 5,389,705 0 0 Estimate of bad debtors - - - - 234,175 - - - - Misc. Debtors 1,520,222 979,543 31,960 41,911 1,552,182 1,552,182 1,021,454 227,987 205,277 Estimate of bad debtors - - - - - - - - - Total Long Term Debtors 227,987 205,277
18 06. Balances and Transactions with related parties a) BALANCES RECEIVABLE Balances receivable in the Short-Term as of September 30, 2003 total Th Ch$ 744,153 (Th Ch$ 463,521 in 2002) and correspond mainly to a loan granted by the subsidiary Ciecsa to Editorial Zig Zag for Th Ch$ 163,532 including interests, with maturity on 06-30-2004 at an annual interest rate of 1% and advertising sold by Red Televisiva Megavision S.A. to Metropolis Intercom for Th Ch$109,576. The balance corresponds to invoicing receivable for Th Ch$ 471,045 (Th Ch$ 177,604 in 2002). b) BALANCES PAYABLE Balances payable in the short term totaling Th Ch$ 836,988 at September 30, 2003 (Th Ch$ 775,446 in 2002) mainly correspond to commercial transactions under 90 days for Th Ch $ 336,410 (Th Ch$ 260,351 in 2002) and dividends payable to Majority shareholders for Th Ch$ 500,578 (Th Ch$ 515,095 in 2002). In 2003 there is a long-term receivable balance corresponding to invoices totaling Ch Th$ 2,898 (Ch Th$ 1,445 in 2002). 19 CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCE AND TRANSACTIONS WITH RELATED COMPANIES DOCUMENTS AND ACCOUNTS RECEIVABLE
R.U.T. Company Short Term Long Term 09-30-2003 09-30-2002 09-30-2003 09-30-2002 89.150.900-6 Vina Los Vascos S.A. 144,726 146,578 0 0 0-E Rayen Cura SAIC 245,083 0 0 0 83.032.100-4 Serv. Y Consultorias Hendaya S.A. 1,977 0 0 0 90.684.000-6 Editorial Zig-Zag S.A. 163,532 236,377 0 0 86.881.400-4 Envases CMF S.A. 50,671 4,913 0 0 90.320.000-6 Cia. Electro Metalurgica S.A. 0 190 0 0 96.539.380-3 Ediciones Financieras S.A. 0 0 0 0 79.753.810-8 Claro y Cia. 651 140 0 0 96.787.775-1 Metropolis Intercom S.A. 109,576 49,540 0 0 90.160.000-7 Sudamericana de Vapores S.A. 27,937 25,783 0 0 77658870-9 Marketing Meter Ltda. 0 0 0 0 96793770-3 Ediciones Chiloe S.A. 0 0 2,898 1,445 86963200-7 Forus S.A. 0 0 0 0 Total 744,153 463,521 2,898 1,445
20 CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES DOCUMENTS AND ACCOUNTS PAYABLE
R.U.T. Company Short Term Long Term 09-30-2003 09-30-2002 09-30-2003 09-30-2002 90.320.000-6 Cia. Electro Metalurgica S.A. 328,946 338,485 0 0 83.032.100-4 Serv. Y Consultorias Hendaya S.A. 110,773 87,661 0 0 89.150.900-6 Vina Los Vascos S.A. 8,814 14,323 0 0 79.753.810-8 Claro y Cia. 61,356 10,044 0 0 96.539.380-3 Ediciones Financieras S.A. 101 1,853 0 0 86.881.400-4 Envases CMF S.A. 220,381 215,228 0 0 90.160.000-7 Cia. Sudamericana de Vapores S.A. 9,683 8,754 0 0 96.787.750-6 Metropolis Intercom S.A. 8,246 0 0 0 86.755.600-1 Inversiones Bayona S.A. 88,688 91,260 0 0 77.658.870-9 Marketing Meter Ltda. 0 7,838 0 0 Total 836,988 775,446 0 0
21 CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES
TRANSACTIONS Company R.U.T. Relationship Description of Transaction Serv. Y Consultorias Hendaya S.A. 83.032.100-4 Majority shareholder Services received - Dividends paid - Services supplied Majority shareholder Products sold - Services rendered Claro y Cia. 79.753.810-8 With the Chairman Advice received - Products sold Quemchi S.A. 96.640.360-8 Same Parent Services rendered Rayen Cura S.A.I.C. 0-E Indirect affiliate Direct sales Navarino S.A. 96.566.900-0 Same Parent Services supplied Cia. Sud-Americana de Vapores S.A. 90.160.000-7 Same Parent Product sold - Freight services received - Other sales Ediciones Financieras S.A. 96.793.77-3 Indirect affiliate Services received - Products sold - Services purchased - Advertising Vina Los Vascos S.A. 89.150.900-6 Indirect affiliate Direct sales - Materials purchased Inversiones Bayona S.A. 86.755.600-1 Majority shareholder Dividends paid Forus S.A. 86.963.200-7 Affiliate Advertising hired - Services purchased Carmen Luz Sanchez Guzman 5781266-4 Indirect Raw Material Purchased Cia. Electro Metalurgica S.A. 90.320.000-6 Majority shareholder Dividends paid - Payment Made for own Account - Product sold - Materials purchased Metropolis Intercom S.A. 96.787.750-6 Indirect affiliate Advertising services - Other sales - Products sold - Advertising hired Soc Agric. Cullipeumo Ltda. 77489-K Indirect Raw Material Purchased Envases CMF S.A. 86.881.400-4 Indirect affiliate Materials purchased - Other sales - Products sold Editorial Televisa de Chile S.A. 93.585.000-2 Affiliate Services purchased Cordillera Comunicaciones Ltda. 78.619.370-2 Affiliate Transmission rights
CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES
TRANSACTIONS 09-30-2003 09-30-2002 Company Amount Effect on Result Amount Effect on Result Serv. Y Consultorias Hendaya S.A. 980,575 -980,575 971,887 -971,887 694,870 0 649,275 0 15,709 15,709 14,928 14,928 203 63 172 57 28,888 -28,888 42,733 -42,733 Claro y Cia. 153,836 -153,836 152,020 -152,020 443 134 610 203 Quemchi S.A. 8,215 8,215 7,541 7,541 Rayen Cura S.A.I.C. 435,591 135,177 188 0 Navarino S.A. 7,586 7,586 7,541 7,541 Cia. Sud-Americana de Vapores S.A. 26,850 10,779 26,334 8,727 223,578 -36,009 43,553 -30,933 3,036 0 27,440 27,440 Ediciones Financieras S.A. 3,748 -3,748 0 0 4,073 1,262 0 0 304 -304 0 0 22,309 -22,309 0 0 Vina Los Vascos S.A. 307,151 79,590 391,165 108,484 29,177 0 16,709 0 Inversiones Bayona S.A. 723,399 0 584,673 0 Forus S.A. 184,900 184,900 80,814 80,814 0 0 2,095 -2,095 Carmen Luz Sanchez Guzman 38,358 0 0 0 Cia. Electro Metalurgica S.A. 2,664,783 0 2,489,931 0 280 0 0 0 1,029 671 0 0 3,585 0 1,808 0 Metropolis Intercom S.A. 11,420 -11,420 19,387 -19,387 23,778 7,371 45 0 3,478 3,478 5,010 1,667 204,193 204,055 237,321 237,321 Soc Agric. Cullipeumo Ltda. 40,468 0 0 0 Envases CMF S.A. 458,899 0 363,933 0 137 0 0 0 55,925 17,334 145 48 Editorial Televisa de Chile S.A. 0 0 35 -35 Cordillera Comunicaciones Ltda. 0 0 220,149 0
22 07. Inventory An itemized list of inventory, valued according to note 2 h), is presented on an attached chart. CRISTALERIAS DE CHILE S.A. NOTE 7 - INVENTORY (Consolidated) 2003 2002 Th Ch$ Th Ch$ Finished Products * Cristalerias de Chile S.A. 2,680,271 2,492,461 * S.A. Vina Santa Rita 5,483,551 6,273,148 Subtotal Finished Products 8,163,822 8,765,609 Raw Materials and Fuel * Cristalerias de Chile S.A. 1,635,413 1,659,258 * S.A. Vina Santa Rita 21,278,426 18,308,076 Subtotal Raw Materials and Fuel 22,913,839 19,967,334 Supply Materials and Parts * Cristalerias de Chile S.A. 1,041,451 1,149,005 * S.A. Vina Santa Rita 1,083,428 1,393,424 Subtotal Supply Materials and Parts 2,124,879 2,542,429 Materials in Transit 361,011 348,294 Red Televisiva Megavision S.A. (CIECSA S.A.) * Foreign, taped, for broadcast 2,477,925 3,664,438 * Domestic programming, to be broadcast 447,190 117,765 Subtotal Red Televisiva Megavision S.A. 2,925,115 3,782,203 Total 36,488,666 35,405,869 23 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 years for Short-Term Assets, 5 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 of 16.5% of taxable income in 2003 (16% in 2002) subject to the First Category, in addition to a 35% Income 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 (1,274,019) (4,408,275) Single tax reserve (8,032) (7,116) ---------- ---------- SUB TOTAL (1,282,051) (4,415,391) Credits: Monthly reserve payments 3,337,843 3,254,028 Training expenditures 68,535 74,051 Fixed Assets credit 32,032 6,131 Donations 9,739 35,165 ---------- ---------- CREDIT SUB TOTAL 3,448,149 3,369,375 Income Tax 2,166,098 (1,046,016) Income Tax to be Recovered 14,253 240,469 Other Taxes to be recovered: VAT Fiscal Credit 268,855 232,968 Income tax credit, previous year 232,373 0 TOTAL TAXES TO BE ________ _________ RECOVERED 2,681,579 473,437 24 C) TAXABLE PROFIT FUND The parent company registered the following balance of profits to be distributed: 2003 Th Ch$ 2002 Th Ch$ Generated as of 12.31.1983: Profits adjustment 1,924,782 1,924,782 Generated since 01.01.1984: Without Credit 1,075,346 1,048,220 With 10% First Category Credit 22,761 82,751 With 15% First category Credit 86,254,956 95,265,496 With 15% Additional rate Credit 724 746 With 16% First Category Credit 16,173,816 15,904,716 With 16.5% First Category Credit 4,113,428 0 ----------- ----------- SUB-TOTAL TAX PROFITS 107,641,031 112,301,929 Non-income revenues 6,845,657 6,850,759 ---------- ---------- TOTAL RETAINED EARNINGS 114,486,688 119,152,688 25 CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX
DEFERRED TAXES 09-30-2003 Item Asset Deferred Tax Liability Deferred Tax Short term Long Term Short Term Long Term Temporary Differences Reserve non-collectable accounts 124,823 0 0 0 Prepaid Income 836,257 0 0 0 Vacation provision 165,363 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 0 0 8,473,752 Severance payments 1,756 145,219 0 0 Other events 0 0 0 0 Packaging reserve 193,613 0 0 0 Furnace repair provision 0 580,543 0 0 Stock obsolescence provision 88,876 0 0 0 Spare parts obsolescence provision 97,303 0 0 0 Lower value sale of bonds 80,518 0 53,281 780,960 Deferred customs duties 0 0 0 1,959 Non realized profits 228,159 6,991 0 0 Other provisions 20,972 0 0 0 Direct labor 21,502 0 0 0 Automobiles Accumulated Depreciation 0 16,598 0 80,552 Tax losses 0 3,965,797 0 0 Goodwill bonds placement 0 0 0 0 Prepaid expenses 0 0 36,420 0 Banking reserve 0 0 0 41,685 Fixed assets, molds 0 0 0 264,005 Commercial brands 37,772 0 0 0 Amortization commercial brands 0 0 0 0 Expenses assetted 50,004 0 260,500 0 Supplementary accounts-net of amort. 164,478 3,288,705 0 3,500,735 Valuation provision 0 0 Total 1,782,440 1,426,443 350,201 6,142,178
CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX
DEFERRED TAXES 09-30-2002 Item Asset Deferred Tax Liability Deferred Tax Short term Long Term Short Term Long Term Temporary Differences Reserve non-collectable accounts 114,099 0 0 0 Prepaid Income 482,202 0 0 0 Vacation provision 156,780 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 0 0 7,993,430 Severance payments 1,745 33,149 0 0 Other events 0 0 15,652 1,048 Packaging reserve 212,577 0 0 0 Furnace repair provision 260,577 262,273 0 0 Stock obsolescence provision 60,652 0 0 0 Spare parts obsolescence provision 97,404 0 0 0 Lower value sale of bonds 54,052 0 0 0 Deferred customs duties 21,369 0 0 157,849 Non realized profits 183,698 2,453 0 0 Other provisions 160,945 102,934 0 0 Direct labor 8,922 0 0 0 Automobiles Accumulated Depreciation 0 12,489 0 0 Tax losses 0 5,054,789 0 0 Goodwill bonds placement 0 0 52,608 215,354 Prepaid expenses 0 0 29,522 8,248 Banking reserve 9,951 0 0 0 Fixed assets, molds 0 0 0 239,565 Commercial brands 0 0 0 0 Amortization commercial brands 285,166 0 0 0 Expenses assetted 0 0 197,445 0 Supplementary accounts-net of amort. 164,562 4,262,534 0 4,174,595 Valuation provision 0 0 Total 1,945,577 1,205,553 295,227 4,440,899
26 CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX INCOME TAX
09/30/2003 09/30/2002 Th Ch$ Th Ch$ Current tax expense (tax provision) -1,282,051 -4,415,391 Adjustment tax expense (previous year) 0 0 Effects from assets or liabilities, deferred year's tax -410,555 -1,061,497 Tax benefit from tax losses 461 0 Effect of amortiz. of supplementary accounts for deferred assets and liabilities 102,306 0 Effect on assets or liabilities from deferred tax from changes in assessment provision 0 0 Other charges or credits to the account 139 240 Total -1,589,839 -5,281,853
27 09. Short and Long-term Leasing Contracts and Assets for Leasing As of September 30, 2003, balances are not included under this heading. 28 10. Other current assets As of September 30, 2003, included under this item are investment in: a) Financial instruments with resale agreement for Th Ch$ 8,542,425 valued as expressed by note 2 q). b) Deferred expenses for bonds placement for Th Ch$ 363,500. c) Th Ch$27,993 for cash reserve. As of September 30, 2002, there were investments in: a) Financial instruments with resale agreement for Th Ch$ 37,952,029 valued as expressed by note 2 q). b) Deferred expenses for bonds placement for Th Ch$367,919. c) Th Ch$ 28,755 for cash reserve. d) Balance in favor of Th Ch$ 5,053,767 for Future Contracts in foreign currency. 29 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. 30 NOTE 11 - INFORMATION ON OPERATIONS WITH PURCHASE COMMITMENT, SALE COMMITMENT, SALE WITH REPURCHASE AGREEMENTS AND PURCHASE WITH RESALE AGREEMENTS OPERATIONS OF TITLES AND REAL ESTATE SECURITIES SALE OPERATIONS WITH REPURCHASE COMMITMENT (VRC) AND PURCHASE OPERATIONS WITH RESALE COMMITMENT (CRV)
Code Dates Counterpart Original Start End Currency CRV 09.30.2003 10.01.2003 Banco BCI Corredores de Bolsa Pesos CRV 09.30.2003 10.01.2003 Banchile Dollars CRV 07.14.2003 10.03.2003 Banco Santander Santiago Pesos CRV 08.13.2003 10.06.2003 Banco Santander Santiago Pesos CRV 08.13.2003 10.27.2003 Banco Santander Santiago Pesos CRV 09.25.2003 11.10.2003 Banco Santander Santiago Pesos CRV 09.25.2003 11.05.2003 Banco Santander Santiago Pesos CRV 09.25.2003 11.24.2003 Banco Santander Santiago Pesos CRV 07.29.2003 10.24.2003 Scotiabank Sud Americano Dollars CRV 09.25.2003 11.21.2003 Scotiabank Sud Americano Dollars CRV 09.30.2003 10.30.2003 Inversiones Boston Corredores de Bolsa Ltda. Dollars CRV 09.30.2003 10.10.2003 Banco de Chile Pesos CRV 09.29.2003 10.03.2003 Banco de Chile Pesos CRV 09.30.2003 10.10.2003 Banco de Chile Pesos CRV 09.29.2003 10.04.2003 Banco de Chile Pesos CRV 09.29.2003 10.07.2003 Banco de Chile Dollars CRV 09.30.2003 10.10.2003 Banco Bilbao Vizcaya Argentaria Dollars CRV 09.25.2003 10.27.2003 Banco Bilbao Vizcaya Argentaria Dollars CRV 09.25.2003 10.10.2003 Banco Bilbao Vizcaya Argentaria Dollars CRV 09.30.2003 10.10.2003 Banco Bilbao Vizcaya Argentaria Dollars CRV 09.30.2003 10.10.2003 Banco Bilbao Vizcaya Argentaria Dollars
Price Rate Final Instrument Market Value Set Value 827,000 0.22 827,061 BPC-PDBC 827,000 1,228,229 1.00 1,220,581 CHI-EST-PRD-FNCHI 1,228,229 350,000 0.30 352,552 PRBC 352,488 350,000 0.30 351,701 PRBC 351,554 300,000 0.30 302,100 PRBC 301,372 150,000 0.30 150,621 PRBC 150,081 320,000 0.30 321,181 PRBC 320,173 320,000 0.30 321,728 PRBC 320,173 280,000 1.60 265,410 PRBC 265,140 262,400 1.60 265,016 PRBC 264,454 228,000 0.29 228,066 PRD 228,000 500,000 0.27 500,450 PRD 500,000 250,000 0.33 250,110 PRD 250,028 70,000 0.27 70,063 PRD 70,000 105,000 0.33 105,046 PRD 105,012 458,201 1.55 456,226 PRD 456,089 109,746 1.70 109,112 PRD 109,060 1,688,773 2.00 1,701,713 PRD 1,699,165 657,110 1.80 661,466 PRD 661,135 63,852 1.70 63,483 PRD 63,453 19,954 1.70 19,838 PRD 19,829
31 12. Fixed Assets Fixed Assets: Cristalerias de Chile S.A. The Fixed Assets are valued according to note 2j), and the main goods included under this item as of september 30, 2003 and 2002 are the ones detailed in the annexed table. The items that make up the Company's fixed assets as of September 30, 2003 and 2002 include mainly Land, Industrial Constructions, Infrastructure Works, Machinery, and Equipment distributed between the Padre Hurtado, Alto Jahuel and other minor. During 2002, the parent company effected a fixed asset inventory, proceeding to adjust the values of write-off assets with their respective accumulated depreciation. Technical Reappraisal and Adjustment of Accounting Values: The parent company carried out a technical reappraisal of its fixed assets in 1979. Likewise, 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 amounts to Th Ch$ 10,891,555 in 2003 and Th Ch$ 10,261,008 in 2002. The detail is shown on an attached chart. 32 CRISTALERIAS DE CHILE S.A. AND SUBSIDIARIES 2003 2002 ThCh$ Th Ch$ Land Land and Mining Properties 13,116,753 13,484,070 Subtotal Lands 13,116,753 13,484,070 Buildings and Infrastructure Projects Hi rises and industrial buildings 30,556,354 29,741,788 Installations 30,792,779 26,142,482 Residences 26,265 26,265 Subtotal 61,375,398 55,910,535 Accumulated depreciation 18,771,389 15,644,259 Fiscal year depreciation 2,231,632 1,867,992 Subtotal Depreciations 21,003,021 17,512,251 Subtotal Constructions and Projects 40,372,377 38,398,284 Machinery and Equipment Machinery 93,183,797 92,716,919 Furnaces 46,365,920 37,892,223 Furniture and Furnishings 2,526,959 2,926,751 Tools 625,352 631,234 Rolling Stock 863,602 796,879 Subtotal 143,565,630 134,964,006 Accumulated depreciation 62,802,660 60,902,367 Fiscal year depreciation 8,503,175 8,236,267 Subtotal Depreciations 71,305,835 65,825,364 Subtotal Machinery and Equipment 72,259,795 65,825,372 Other Fixed Assets Spare parts 5,545,442 5,216,836 Imports in transit 131,726 65,105 Work in progress 2,734,774 2,577,078 Lots in Pirque and Leyda 464,290 475,952 Deferred Customs Duties 289,747 457,394 Packages and Bundling 236,179 236,182 Other 1,922,909 1,609,532 Subtotal Other Assets 11,325,067 10,638,079 Total Fixed Assets 229,382,848 214,996,690 3Total Accumulated Depreciation 81,574,049 76,546,626 Total Depreciation of the Period 10,734,807 10,104,259 Total Net Fixed Assets 137,073,992 128,345,805 33 TECHNICAL REVALUATION AND ADJUSTMENT TO ACCOUNTING VALUES 2003 2002 ThCh$ Th Ch$ Land Land 313,585 319,476 Subtotal net land and mining properties 313,585 319,476 Buildings and Infrastructure Projects High rises and industrial buildings 6,264,995 6,258,899 Installations 41,406 444,405 Subtotal Buildings 6,306,401 6,703,304 Accumulated Depreciation (4,861,664) (5,055,742) Fiscal year depreciation (156,748) (156,749) Subtotal depreciation (5,018,412) (5,212,491) Subtotal Buildings and Infrastructure project 1,287,989 1,490,813 Machinery and Equipment Furnaces 0 530,370 Machinery 0 1,015,188 Furniture and Furnishings 0 54,778 Tools 0 14,554 Subtotal Machinery and Equipment 0 1,614,890 Accumulated Depreciation 0 (1,614,890) Fiscal year depreciation 0 0 Subtotal depreciation 0 (1,614,890) Subtotal Machinery and Equipment 0 0 Subtotal Net Technical Revalatuaion 1,601,574 1,810,289 TOTAL REVALUED ASSETS 6,619,986 8,637,670 TOTAL ACCUMULATED DEPRECIATION (4,861,664) (6,670,632) TOTAL DEPRECIATION OF THE PERIOD (156,748) (156,749) TOTAL NET 1,601,574 1,810,289 34 13. Sales transactions with leaseback These type of transactions were not carried out as of September 30, 2003 and 2002. 35 14. Investments in related companies Investments in force as of September 30, 2003 and 2002 are detailed as follows: METROPOLIS INTERCOM S.A. On April 30, 2000 the Shareholders of Metropolis Intercom S.A.. agreeded to make a capital increase by issuing 3,923,834 shares for Ch$ 1,256.67 per share, equivalent to Th Ch$ 4,931,000. Such amount was subscribed 50% by Cristalchile Comunicaciones S.A. and the remaining 50% by Liberty Comunicaciones de Chile Uno Ltda. The payment of such subscription was made by the subsidiary Cristalchile Comunicaciones S.A. on September 29, 2003, paying 1,961,917 shares for a value of Th Ch$ 2,462,794. CIECSA S.A. On August 26, 2003 the Shareholders of Ciecsa S.A. agreeded to increase company's equity through the issue of 36,400,000 shares equivalent to Th Ch$ 910,000 which were fully subscribed by Cristalerias de Chile S.A. This capital increase allowed CIECSA S.A. to complete financing in order to pay the balance of a ThUS$ 2,100 debt it had with Televisa S.A., produced by the purchase of 7,885,472 shares of Megavision S.A. in August 2002. MEGAVISION S.A. On August 27, 2002 the Company purchased from Televisa S.A. 7,885,472 shares of Megavision S.A., wich correspond to the totality of the participation that Televisa S.A. held in that company. The price of transaction of the shares of Megavision S.A. held by Televisa S.A. was Th US$ 4,200,000; equivalent to US$ 0.532625 per share. Both parties agreed that the aforementioned price would be paid with US$2,100,000 cash on August 27, 2002, and the remaining balance of US$ 2,100,000 on August 27, 2003. On the other hand, Ciecsa S.A. sold 3,600 shares of Megavision S.A. at a price of US$ 0.532625 each, to Servicios y Consultorias Hendaya S.A. As a result of this transactions the participation of Ciecsa in Megavision S.A. reached 99.99%. EDICIONES CHILOE S.A. On September 27, 2001, the Shareholders of Ediciones Chiloe agreeded to increase the company's equity in Th Ch$ 684.308, by issuing 1,500,395 shares, that were subscribed both by Ciecsa S.A. and Recoletos Chile Ltda. Of this issue 1,279,013 shares were paid for the equivalent to Th Ch$583,339 through the contribution of 1,046 shares of Ediciones Financieras S.A., with a value of Th Ch$ 421,551 and the capitalization of loans that the shareholders had granted the comoany for Th Ch$ 161,788. On February 4, 2002, the partners of Ediciones Chiloe agreed to pay 86,352 shares already subscribed. Ciecsa S.A. paid Th Ch$ 19,859 equivalent to 43,176 shares, with which the participation in Ediciones Chiloe S.A. is maintained at 50%. 36 There are 135,030 subscribed shares for which the due date is September 2004. INVESTMENTS ABROAD - ------------------------ RAYEN CURA S.A.I.C. On January 31, April 25 and September 30 of 2003 Rayen Cura S.A.I.C. carried out repayment of part of a capital increase paid on April 29, 2002. Total amounts reimbursed amounted Th US$ 2,600. As of September 30 the financial statements of Rayen Cura S.A.I.C. acknowledge a rate of exchange of $ 2.87 Argentine pesos pero Dollar. Cristalchile Inversiones, in turn, has adjusted the financial statements of Rayen Cura S.A.I.C. in order to acknowledge the variation occurred from $3.32 (December 31, 2002) and $2.87 Argentine pesos per US dollar at of September 30, 2003. As an effect of the result of the subsidiary and the financial statements conversion of Rayen Cura S.A.I.C., according to the chilean normative, CristalChile Inversiones S.A. has acknowledged during the period a profit of Th Ch$ 717,358 and Th Ch$ 2,675,431 loss as of September 30, 2002. On the other hand, the Dollar rate of exchange variation in Chile during the period, originated adjustments of Th Ch$ 1,232,724 and Th Ch$500,208 from the investment in Rayen Cura and for goodwill from the purchase of shares of that company, respectively, which were charged (2003) and credited (2002) to the item Other Equity Reserves. As stipulated in Technical Bulletin No. 64 of the Accountants Association of Chile, following is the information related to investments abroad: 2002 2003 Th$ Th$ CristalChile Inversiones's share of Rayen Cura S.A.I.C. 12,917,603 17,079,169 Negative goodwill(net of amortization) 4,766,114 5,937,234 ----------- ----------- TOTAL 17,683,717 23,016,403 Loss due to devaluation (2,055,600) (3,671,745) Accrued losses 717,358 (2,675,431) The investment in Rayen Cura S.A.I.C. is controlled in Dollars of the United States of America. 37 CRISTALERIAS DE CHILE S.A. NOTE 14- INVESTMENTS IN RELATED COMPANIES BREAKDOWN OF INVESTMENTS
Investment Shareholder Company (Percentage) Equity R.U.T. COMPANY Country of Control Number of 09-30-2003 09-30-2002 09-30-2003 09-30-2002 Origin Currency Shares 78.619.410-5 Cordillera Comunicaciones Holding Chile Peso 0 50.0000000000 50.0000000000 135,544,132 149,543,210 78.619.370-2 Cordillera Comunicaciones Ltda. Chile Peso 0 0.2500000000 0.2500000000 136,225,258 150,294,680 89.150.900-6 Vina Los Vascos S.A. Chile Peso 60,000,000 43.0000000000 43.0000000000 13,013,180 10,928,525 90.684.000-6 Editorial Zig-Zag S.A. Chile Peso 114,516,900 49.8896198750 49.8896198750 455,245 428,124 96.793.770-3 Ediciones Chiloe S.A. Chile Peso 1,570,146 49.9999965057 49.9999965057 1,430,903 1,588,745 96.826.870-8 Inmobiliaria Don Alberto S.A. Chile Peso 3,817 38.1700000000 38.1700000000 27 235 86.881.400-4 Envases CMF S.A. Chile Peso 28,000 50.0000000000 50.0000000000 33,088,075 30,296,796 0-E Rayen Cura S.A.I.C Argentina Dollar 1,376,000 40.0000000000 40.0000000000 32,294,007 42,697,923 98.806.690-0 Proser S.A. Chile Peso 0 0.5000000000 0.5000000000 -12,200 -46,099 96.787.750-6 Metropolis Intercom S.A. Chile Peso 88,970,214 2.2051403800 0.0000000000 78,632,817 0 TOTAL
BREAKDOWN OF INVESTMENTS R.U.T. Net Result of VPP Income not Income Accrual Realized 09-30-2003 09-30-2002 09-30-2003 09-30-2002 09-30-2003 09-30-2002 09-30-2003 09-30-2002 78.619.410-5 -10,445,352 -13,614,071 -5,222,767 -6,807,037 67,772,066 74,771,605 0 0 78.619.370-2 -10,498,023 -13,682,483 -26,245 -34,206 340,563 375,735 0 0 89.150.900-6 1,110,802 147,423 477,645 63,391 5,595,667 4,699,266 0 0 90.684.000-6 -323,472 -264,183 -161,268 -66,983 227,120 213,591 0 0 96.793.770-3 -201,354 -133,966 -100,677 -66,983 715,451 794,372 -186,672 -227,077 96.826.870-8 -8 -2,734 -4 -1,042 10 91 0 0 86.881.400-4 713,420 463,654 356,709 231,827 16,544,038 15,148,398 0 0 0-E 1,793,395 -6,688,577 717,358 -2,675,431 12,917,603 17,079,169 0 0 98.806.690-0 146 -3,340 2 -3,328 1 0 0 0 96.787.750-6 7,393,877 0 0 0 1,733,964 0 0 0 105,846,483 113,082,227 -186,672 -227,077
R.U.T. Book value of Investment 09-30-2003 09-30-2002 78.619.410-5 67,772,066 74,771,605 78.619.370-2 340,563 375,735 89.150.900-6 5,595,667 4,699,266 90.684.000-6 227,120 213,591 96.793.770-3 528,779 567,295 96.826.870-8 10 91 86.881.400-4 16,544,038 15,148,398 0-E 12,917,603 17,079,169 98.806.690-0 1 0 96.787.750-6 1,733,964 0 105,659,811 12,855,150
38 15. Investments in other companies Investments in other companies that totaled Th Ch$ 827,235 in September 30, 2003 (Th Ch $1,319,838 in 2002) are shown on attached charts. CRISTALERIAS DE CHILE S.A. NOTE 15 - INVESTMENTS IN OTHER CORPORATIONS
R.U.T. Company Name Number of Shareholding Book Value Shares (Percentage) 09-30-2003 09-30-2002 96.895.100-9 Internet Holding S.A. 57,104 7.4020 222,521 715,115 0-E Bazuca.com Inc. 266,500 7.8900 604,714 604,723
39 16. Goodwill Amortization NEGATIVE GOODWILL Stock purchases made in different periods of S.A. Vina Santa Rita, Vina Los Vascos S.A., Ciecsa S.A., Empresa Editora Zig Zag S.A., Red Televisiva Megavision S.A., Metropolis Intercom S.A., and Rayen Cura S.A.I.C. have produced negative goodwill whose net balance to be amortized as of September 30, 2003 totaled Th Ch 9,607,498 (Th Ch$ 10,370,837 in 2002). POSITIVE GOODWILL As of September 30, 2003 and 2002 the parent company and the subsidiaries do not show any balance for this item. 40 CRISTALERIAS DE CHILE S.A. NOTE 16 - GOODWILL ON INVESTMENTS NEGATIVE GOODWILL
R.U.T. Company Name 09-30-2003 09-30-2002 Amount Amortiz. Goodwill Amount Amortiz. Goodwill this period Balance this period Balance 99.999.999-9 Rayen Cura S.A. 223,412 4,766,114 261,937 5,937,234 86.547.900-K S.A. Vina Santa Rita 37,707 572,714 37,708 623,000 96.608.270-4 Ciecsa S.A. 91,106 1,366,596 91,108 1,488,096 89.150.900-6 Vina Los Vascos S.A. 66,877 1,171,686 66,530 1,260,808 90.684.000-6 Editorial Zig-Zag S.A. 4,773 104,195 4,774 110,562 79.952.350-7 Red Televisiva Megavision S.A. 40,026 897,362 13,140 951,137 96.787.750-6 Metropolis Intercom S.A. 0 728,831 0 0 TOTAL 463,901 9,607,498 475,197 10,370,837
41 17. Intangibles As of September 30, 2003 and 2002 this item is composed as follows: Th Ch$ Th Ch$ 2003 2002 Concession of Channel 9 frequency and regional network 10,200,756 10,200,584 Trademarks 1,613,800 1,546,684 ---------- ---------- TOTAL INTANGIBLES 11,814,556 11,747,268 ACCUMULATED AMORTIZATIONS From Channel 9 Frequency (932,965) (786,814) From Trademarks (222,184) (182,988) ---------- ---------- TOTAL AMORTIZATIONS (1,155,149) (969,802) 42 18. Others (Assets) As of september 30, 2003 and 2002 the following are included under this item: 2003 2002 Th Ch$ Th Ch$ Celulosa Arauco bonds (*) 8,870,218 10,339,348 Price differential bond adquisition(*) 101,384 240,869 Negative goodwill Bond Sale (Net) 3,209,731 3,548,757 Expenses of bond sales 1,092,665 1,288,650 Bank Cash Reserve 2,402 31,151 Local programs to be exhibited over a year from the present 0 0 Foreign programs to be exhibited over a year from the present 743,899 2,764,162 Long-Term Tax VAT Vina Dona Paula 437,144 258,357 No Accrued Custom Duty Interests 0 50,271 Presumed Minimum Profit Tax 20,694 18,763 Other 45,295 149,966 ----------- ----------- Total 14,523,432 18,690,294 (*) Investment in Celulosa Arauco bonds equivalent to US$ 13,420,000 at an annual rate of 6.95% and maturity at September 15, 2005, Th Ch$ 101,384 for surpluss Price differential paid in the acquisition of Celulosa Arauco bonds, which will be amortized in the same term of the bond's maturity date. Considering that there is the intention of maintaining the Celulosa Arauco and Constitucion S.A. bonds until their maturity 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. 43 19. Short-term obligations with banks and financial institutions A detailed list of operations is shown on the attached chart. 44 CRISTALERIAS DE CHILE S.A. NOTE 19- OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS, SHORT TERM Type of Currency and Readjustment Index
Bank or Financial R.U.T. Institution Dollars Euros Yen 09-30-2003 09-30-2002 09-30-2003 09-30-2002 09-30-2003 09-30-2002 ---------- ---------- ---------- ---------- ---------- ---------- Short term (code: 5.21.10.10) 0-E Banco Regional de Cuyo 0 0 0 0 0 0 97.004.000-5 Banco de Chile 133,106 0 97.036.000-K Banco SantanderSantiago 0 75,872 0 0 0 0 Other 0 0 0 0 0 0 TOTAL 133,106 75,872 0 0 0 0 Amount capital due 132,192 75,839 0 0 0 0 Annual average interest rate 1.88 2.60 0.00 0.00 0.00 0.00 Long Term - Short Term (code: 5.21.10.20) 0-E JP Morgan Chase Bank 136,073 22,015,872 0 0 0 0 97.036.000-K Banco SantanderSantiago 0 0 0 0 0 0 97.008.000-7 Citibank NA 1,818,983 2,137,069 0 0 0 0 0-E Banco Dresner 0 554,750 0 0 0 0 0-E Banco Argentaria 241,755 282,326 0 0 0 0 97.018.000-1 Scotiabank 0 0 0 0 0 0 Banco Credito e 97.006.000-6 Inversiones 0 0 0 0 0 0 97.004.000-4 Banco de Chile 0 0 0 0 0 0 97.030.000-5 Banco Estado 0 0 0 0 0 0 Other 0 0 0 0 0 0 TOTAL 2,196,811 24,990,017 0 0 0 0 Amount capital due 2,043,238 24,944,632 0 0 0 0 Average annual interest rate 1.83 3.35 0.00 0.00 0.00 0.00 Percentage oblig. foreign curr. (%) 57.0000 Percentage oblig. foreign curr. (%) 43.0000
CRISTALERIAS DE CHILE S.A. NOTE 19- OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS, SHORT TERM Type of Currency and Readjustment Index
Other Bank or Financial Foreign R.U.T. Institution Currencies U.F. Nonadjustable $ Total 09-30-2003 09-30-2002 09-30-2003 09-30-2002 09-30-2003 09-30-2002 09-30-2003 09-30-2002 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Short term (code: 5.21.10.10) 0-E Banco Regional de Cuyo 17,792 9,755 0 0 0 0 17,792 9,755 97.004.000-5 Banco de Chile 0 0 0 0 0 0 133,106 0 97.036.000-K Banco SantanderSantiago 0 0 0 0 0 1,031,487 0 1,107,359 Other 0 0 0 0 0 0 0 0 TOTAL 17,792 9,755 0 0 0 1,031,487 150,898 1,117,114 Amount capital due 17,792 9,755 0 0 0 1,029,000 149,984 1,114,594 Annual average interest rate 0.00 3.09 0.00 0.00 0.00 Long Term - Short Term (code: 5.21.10.20) 0-E JP Morgan Chase B`ank 0 0 0 0 0 0 136,073 22,015,872 97.036.000-K Banco SantanderSantiago 0 0 471,630 253,018 0 0 471,630 253,018 97.008.000-7 Citibank NA 0 0 0 0 0 0 1,818,983 2,137,069 0-E Banco Dresner 0 0 0 0 0 0 0 554,750 0-E Banco Argentaria 0 0 0 0 0 0 241,755 282,326 97.018.000-1 Scotiabank 0 0 447,011 449,736 0 0 447,011 449,736 Banco Credito e 97.006.000-6 Inversiones 0 0 170,149 170,010 0 0 170,149 170,010 97.004.000-4 Banco de Chile 0 0 317,510 213,986 0 0 317,510 213,986 97.030.000-5 Banco Estado 0 0 0 0 268,914 0 268,914 0 Other 0 0 0 0 0 0 0 0 TOTAL 0 0 1,406,300 1,086,750 268,914 0 3,872,025 26,076,767 Amount capital due 0 0 1,323,507 991,467 264,375 0 3,631,120 25,936,099 Average annual interest rate 0.00 0.00 4.43 4.22 4.94 0.00 Percentage oblig. foreign curr. (%) Percentage oblig. foreign curr. (%)
45 20. Other Current Liabilities As of September 30, 2003, there was a balance Th Ch$ 5,056,060 in favor of financial institutions corresponding to future contracts in foreing currency subscribed by the parent company and its subsidiaries. More detail on these is shown in note 34 Derivative Contracts. As of September 30, 2002 there was no balance for this item in othe current liabilities. 46 21. Long-term obligations with banks and financial institutions The obligations with banks and financial institutions are presented on the charts attached. 47 CRISTALERIAS DE CHILE S.A. NOTE 21: LONG-TERM OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS
Institution Years of Maturity Bank or Currency Financial adjustment More than 1 More than 2 More than 3 More than 5 R.U.T. Institution index up to 2 up to 3 up to 5 up to 10 Thou Ch$ Thou Ch$ Thou Ch$ Thou Ch$ - ----------------- ---------------------------- -------------- -------------- -------------- ------------- ---------- 0-E J.P. Morgan Chase Bank Dollars 0 8,262,125 24,786,375 0 90.008.000-K Citibank N.A. Dollars 781,146 0 0 0 Dollars 120,755 0 97.006.000-6 Banco Credito e Inversiones UF 169,460 84,728 0 0 97.004.000-5 Banco de Chile UF 1,222,750 0 0 0 0-E Banco Argentaria Dollars 120,877 0 0 0 Other 0-E Banco Regional de Cuyo currency 44,835 10,760 1,869 0 97.030.000-7 Banco Estado Non-adjustment 275,722 264,376 132,188 0 97.036.000-K Banco SantanderSantiago UF 458,673 458,673 458,673 0 97.018.000-1 Banco Scotiabank UF 406,670 406,670 813,340 0 Total 3,600,888 9,487,332 26,192,445 0 Percentage of obligations in foreign currency 87.0000% Percentage of obligations in local currency 13.0000%
CRISTALERIAS DE CHILE S.A. NOTE 21: LONG-TERM OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS
Closing date Closing date Institution Years of Maturity Current period Previous period Total Long- Total Long- Term at Annual Term at Bank or closing average closing Financial of Financial interest of Financial R.U.T. Institution More than 10 years Statements rate Statements Amount Period - ----------------- ---------------------------- ----------- ----------- -------------- ------------- --------------- 0-E J.P. Morgan Chase Bank 0 0 33,048,500 1.925 16,509,497 90.008.000-K Citibank N.A. 0 0 781,146 1.74 2,731,571 0 0 120,755 2.12 423,065 97.006.000-6 Banco Credito e Inversiones 0 0 254,188 TAB 90+2.0 423,306 97.004.000-5 Banco de Chile 0 0 1,222,750 TAB 180+2.0 1,510,223 0-E Banco Argentaria 0 0 120,877 2.12 423,529 0-E Banco Regional de Cuyo 0 0 57,464 1.75 49,370 97.030.000-7 Banco Estado 0 0 672,286 4.94 0 97.036.000-K Banco SantanderSantiago 0 0 1,376,019 TAB 180+1.8 1,833,194 97.018.000-1 Banco Scotiabank 0 0 1,626,680 TAB 180+2.0 2,031,695 Total 0 39,280,665 25,935,450 Percentage of obligations in foreign currency Percentage of obligations in local currency
48 22. Short-term and long-term obligations with the public (promissory notes and bonds) The balance for the short-term as of September 30, 2003 was Th Ch$ 1,141,520, corresponding to interests accrued for bonds issued by the Parent Company and the subsidiary S.A. Vina Santa Rita. As of September 30, 2003, there are long-term obligations with the public for Th Ch$ 89,813,959, of which Th Ch$ 69,478,723 correspond to bonds issued in UF's by the parent company, of series C1, C2, D1, D2; and Th Ch$ 20,335,236 which correspond to bonds series C and D issued in UF's by the subsidiary S.A. Vina Santa Rita. As of September 30, 2002 the balance in the short term was Th Ch$ 1,573,197, corresponding to accrued interests of bonds issued by the parent company and the subsidiary S.A. Vina Santa Rita. As of September 30, 2002, there are long-term obligations with the public for Th Ch$ 89,740,797, of which Th Ch$ 69,422,126 correspond to bonds issued in UF's by the parent company, of series C1, C2, D1, D2; and Th Ch$ 20,318,671 which correspond to bonds of series C and D issued by the subsidiary S.A. Vina Santa Rita. This liability is shown in detail in the appendix. 49 Cristalerias de Chile S.A. NOTE 22: SHORT-TERM AND LONG-TERM OBLIGATIONS WITH PUBLIC (PROMISSORY NOTES AND BONDS)
BONDS REGISTRATION OR CURRENT IDENTIFICATION No. DEPOSIT 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 01-15-2004 296-09.07.02 C2 Interests 0 UF 4.75 01-15-2004 296-09.07.02 D1 Interests 0 UF 5.80 01-15-2004 296-09.07.02 D2 Interests 0 UF 5.80 01-15-2004 144-12.07.91 A 0 UF 6.70 06-01-2003 241-15.12.00 C1 Interests 0 UF 6.25 06-01-2003 241-15.12.00 D1 Interests 0 UF 6.25 06-01-2003 241-15.12.00 D2 Interests 0 UF 6.25 06-01-2003 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 5.80 07-15-2023 296-09.07.02 D2 200,000 UF 5.80 07-15-2023 241-15.12.00 C1 200,000 UF 6.25 12-15-2005 241-15.12.00 D1 100,000 UF 6.25 12-15-2021 241-15.12.00 D2 900,000 UF 6.25 12-15-2021 LONG-TERM TOTAL
Cristalerias de Chile S.A. NOTE 22: SHORT-TERM AND LONG-TERM OBLIGATIONS WITH PUBLIC (PROMISSORY NOTES AND BONDS)
BONDS REGISTRATION OR IDENTIFICATION No. OF INSTRUMENT SERIES INSTALLMENTS ISSUE INTEREST AMORTIZATION PAR VALUE IN CHILE OR PAYMENT PAYMENT 09-30-2003 09-30-2002 ABROAD - ---------------------------- ------------ ---------- ------------ ---------- ---------- --------- LONG-TERM BONDS-CURRENT PORTION 296-09.07.02 C1 Interests SEMI-ANNUAL SEMI-ANNUAL 255,254 255,047 LOCAL 296-09.07.02 C2 Interests SEMI-ANNUAL SEMI-ANNUAL 85,085 85,015 LOCAL 296-09.07.02 D1 Interests SEMI-ANNUAL SEMI-ANNUAL 393,798 393,477 LOCAL 296-09.07.02 D2 Interests SEMI-ANNUAL SEMI-ANNUAL 41,452 41,418 LOCAL 144-12.07.91 A SEMI-ANNUAL SEMI-ANNUAL 0 432,606 LOCAL 241-15.12.00 C1 Interests SEMI-ANNUAL SEMI-ANNUAL 60,988 60,938 LOCAL 241-15.12.00 D1 Interests SEMI-ANNUAL SEMI-ANNUAL 30,494 30,470 LOCAL 241-15.12.00 D2 Interests SEMI-ANNUAL SEMI-ANNUAL 274,449 274,226 LOCAL TOTAL CURRENT PORTION 1,141,520 1,573,197 LONG-TERM BONDS 296-09.07.02 C1 SEMI-ANNUAL SEMI-ANNUAL 25,419,045 25,398,339 LOCAL 296-09.07.02 C2 SEMI-ANNUAL SEMI-ANNUAL 8,473,015 8,466,113 LOCAL 296-09.07.02 D1 SEMI-ANNUAL SEMI-ANNUAL 32,197,457 32,171,229 LOCAL 296-09.07.02 D2 SEMI-ANNUAL SEMI-ANNUAL 3,389,206 3,386,445 LOCAL 241-15.12.00 C1 SEMI-ANNUAL SEMI-ANNUAL 3,389,206 3,386,445 LOCAL 241-15.12.00 D1 SEMI-ANNUAL SEMI-ANNUAL 1,694,603 1,693,223 LOCAL 241-15.12.00 D2 SEMI-ANNUAL SEMI-ANNUAL 15,251,427 15,239,003 LOCAL LONG-TERM TOTAL 89,813,959 89,740,797
50 23. Provisions and Write-Offs Provisions The Company has short-term provisions of Th Ch$ 9,664,291 as of September 30, 2003, and Th Ch$ 12,761,878 in 2002. Long-term provisions of Th Ch$ 7,623,385 and Th Ch$ 5,444,154 are recorded for the years 2003 and 2002 respectively. In the attached chart a detail for provisioned amounts is shown. Bad Debt Provisions: The parent company and the subsidiaries S.A. Vina Santa Rita and Ciecsa S.A. have established a bad debt provision of Th Ch$ 738,465 and Th Ch$ 699,826 as of September 30, 2003 and 2002, respectively. This provision is deducted from the balance of Debtors from Sales and Documents Receivable. Vacation Provision: The parent company and its subsidiaries have established provisions for the total cost of vacations pending as of June 30, 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$ 994,626 as of September 30, 2003 (Th Ch$ 974,092 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 reserve in the amount of Th Ch$ 3,514,837 and Th Ch$ 3,199,104 as of September 30, 2003 and 2002, respectively. 51 CRISTALERIAS DE CHILE S.A. NOTE 23: PROVISIONS AND WRITE-OFFS
09-30-2003 09-30-2002 Thou Ch$ Thou Ch$ ---------- ---------- Short-Term Commissions and Fees 2,885,484 3,127,859 Reserve indirect cost 1,180,854 1,287,744 Packing return to clients 1,150,178 1,288,343 Legal holidays 994,626 974,092 Local and foreign suppliers 885,780 1,218,482 Advertising Agency Commmission 513,278 618,937 Spareparts reserve 438,189 459,332 Grape harvest expenses 405,606 117,683 Advertising and marketing 242,503 94,820 Severance payments 181,526 171,436 Share of Board of Directors 162,213 800,062 Reserve for loss of exported products 89,709 0 Reserve for bonus 81,832 68,593 Copyright 48,248 297,877 Furnace reconstruction 0 1,628,602 Insurance Policies 0 28,776 Other reserves 404,265 579,240 TOTAL 9,664,291 12,761,878 Long-Term Severance payment 4,108,548 3,873,652 Furnace reconstruction 3,514,837 1,570,502 TOTAL 7,623,385 5,444,154
52 24. Severance Payment The provision for severance payments to personnel is included at its current value, as expressed in note 2 t). As of September 30, 2003 it amounts to Th Ch$ 4,290,074 (Th Ch$ 4,045,088 in 2002). As of September 30, 2003, the parent company has paid severance payments of Th Ch$ 138,485 (Th Ch$ 66,607 in 2002) chargeable against the provision. 53 25. Other long-term liabilities As of September 30, 2003 and 2002 there are no balances for this item. 54 26. Minority interest The subsidiaries that generate minority interests as of September 30, 2003 and 2002 are shown on the attached chart. CRISTALERIAS DE CHILE S.A. NOTE 26: MINORITY INTEREST
SUBSIDIARY COMPANY NET WORTH RESULTS SHAREHOLDING Thou Ch$ Thou Ch$ Thou Ch$ Thou Ch$ % % 2003 2002 2003 2002 2003 2002 - ------------------------------------ ------------- ----------- ---------- ----------- ------- ------- S.A.Vina Santa Rita 37,352,787 36,456,464 (1,715,871) (3,851,187) 45.90 45.90 CIECSA Consolidated 292,433 226,538 (21,186) (256,777) 1.55 1.73 Constructora Apoger S.A. 1,022 10,434 210 (340) 20.00 20.00 Cristalchile Comunicaciones S.A. 1,293 1,487 97 135 0.01 0.01 TOTAL 37,647,535 36,694,923 (1,736,750) (4,108,169)
55 27. Changes in Equity a. Activity in 2003 and 2002 The activity of the capital and reserve accounts in the fiscal years ended in September 30, 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 4,599,545 4,390,932 Reserve for adjustment of value of fixed assets 1,601,574 1,810,288 Adjustment for conversion difference in investment in Rayen Cura S.A.I.C. 2,129,950 5,578,731 Difference VPP Sodex (218,686) (218,689) -------- -------- TOTAL OTHER RESERVES 8,112,383 11,561,262
56 CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NET WORTH
Reserve Premium in Reserve Paid-in capital sale of Other Future ITEM Capital revaluation shares Reserves Dividends - --------------------------------------- ----------- ----------- ------------ ----------- ----------- Balances as of 09/30/2003 Initial balance 64,749,257 0 27,598,393 9,713,099 114,912,655 Distribution result previous fiscal year 0 0 0 0 14,356,726 Final dividend previous fiscal year 0 0 0 0 -5,526,400 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 -1,717,273 0 Eventual Dividends 0 0 0 0 -960,000 Owner's equity Revaluation 0 776,991 331,181 116,557 1,573,338 Fiscal Year Result 0 0 0 0 0 Provisional Dividends 0 0 0 0 0 ---------- ------- ---------- --------- ----------- Final balances as of 09/30/2003 64,749,257 766,991 27,929,574 8,112,383 124,356,319 ========== ======= ========== ========= =========== Initial balance as of 09/30/2002 62,863,356 0 26,794,558 7,942,919 102,798,113 Distribution result previous fiscal year 0 0 0 0 12,989,754 Final dividend previous fiscal year 0 0 0 0 -4,230,400 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 3,189,257 0 Eventual Dividends 0 0 0 0 0 Owner's equity revaluation 0 817,224 348,328 103,258 1,454,480 Fiscal Year Result 0 0 0 0 0 Provisional Dividends 0 0 0 0 0 ---------- ------- ---------- --------- ----------- Final balances 62,863,356 817,224 27,142,886 11,235,434 113,011,947 ========== ======= ========== ========= =========== Updated Final Balances as of 09/30/2002 64,686,393 840,924 27,930,030 11,561,262 116,289,293 ========== ======= ========== ========= ===========
CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NET WORTH
Devel. Accumulated Provisional Period Fiscal ITEM Results Dividends Deficit Year Result - ------------------------------------- ----------- ----------- ---------- ----------- Balances as of 09/30/2003 Initial balance 17,660,662 -3,303,936 0 0 Distribution result previous fiscal year -17,660,662 3,303,936 0 0 Final dividend previous fiscal year 0 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 Eventual Dividends 0 0 0 0 Owner's equity Revaluation 0 -960 0 0 Fiscal Year Result 0 0 0 2,415,990 Provisional Dividends 0 -960,000 0 0 Final balances as of 09/30/2003 -960,960 2,415,990 Initial balance as of 09/30/2002 17,770,611 -4,657,728 -123,129 0 Distribution result previous fiscal year -17,770,611 4,657,728 123,129 0 Final dividend previous fiscal year 0 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 Eventual Dividends 0 0 0 0 Owner's equity revaluation 0 0 0 0 Fiscal Year Result 0 0 0 15,984,148 Provisional Dividends 0 -1,930,560 0 0 -------- ---------- ------- ---------- Final balances 0 -1,930,560 0 15,984,148 ======== ========= ======= ========== Updated Final Balances as of 09/30/2002 0 -1,986,546 0 16,447,688 ======== ========= ======= ==========
57 CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NETWORTH - NUMBER OF SHARES No. No. No. SHARES SHARES SHARES SERIES SUBSCRIBED PAID WITH VOTING ------ ---------- ---------- ---------- SINGLE 64,000,000 64,000,000 64,000,000 CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NETWORTH - CAPITAL (AMOUNT - TH CH$) SUBSCRIBED PAID-IN SERIES CAPITAL CAPITAL ------ ---------- ---------- SINGLE 64,749,257 64,749,257 58 28. Other Non-Operating Income and Disbursements As of September 30, 2003 and 2002 the non-operating income totals Th Ch$ 553,447 and Th Ch$ 859,482 respectively. Non-operating Expenditures were Th Ch$ 1,521,725 in 2003 and Th Ch$ 2,692,423 in 2002. More detail is shown on the attached chart. CRISTALERIAS DE CHILE S.A. NOTE 28: OTHER NON-OPERATING INCOME AND EXPENSES
2003 2002 Th Ch$ Th Ch$ ------ ------ INCOME Offices and establishments rental 156,873 225,044 Tax exemptions 106,623 127,418 Indemnity for claims 69,475 138,067 Sale of materials 20,919 9,397 Fontec Proyect Benefit 5,443 90,988 Sale of fixed assets 4,527 34,560 Miscellaneous Income 189,587 234,008 TOTAL NON-OPERATING INCOME 553,447 859,482 EXPENSES Professional advice 569,119 607,037 Suppliers 173,030 641,087 Frequency and internet amortization 111,056 275,366 Research and development Amortization 89,757 0 Loss in sales of fixed assets 82,582 63,661 Share of Board of Directors 75,114 139,620 Trademarks amortization 72,058 42,061 ADR'S expenses 51,624 0 Personnel Contracts Finished 37,018 12,114 Taxes 17,579 0 Write-Off drama series and others 0 526,176 Contracts and unpredictables 0 154,589 Leases 0 40,748 Insurance 0 21,310 Other expenses 241,888 168,654 TOTAL NON-OPERATING EXPENSES 1,521,725 2,692,423
59 29. 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 charge to results in the 2003 fiscal year in the amount of Th Ch$ 705,670 and a net charge against results of Th Ch$ 1,581,501 in 2002. Additional information organized by item on the Balance Sheet is shown on the attached chart. Cristalerias de Chile S.A. NOTE 29: ADJUSTMENT FOR PRICE LEVEL RESTATEMENTS
ADJUSTABILITY ASSETS (CHARGES)/CREDITS INDEX 09-30-2003 09-30-2002 - ------------------------ ----- ---------- ---------- INVENTORY CPI 96,579 183,419 FIXED ASSETS CPI 1,523,345 1,529,246 INVESTMENTS IN RELATED COMPANIES CPI 729,840 1,650,849 MARKETABLE SECURITIES CPI 45,991 46,376 SHORT-TERM DEBTORS CPI 38,747 43,904 SHORT-TERM DEBTORS UF 1,009 0 ACCOUNTS RECEIVABLE RELATED COMPANIES CPI 262,350 0 LONG-TERM DEBTORS CPI 1,943 2,302 OTHER NON-MONETARY ASSETS CPI 461,321 -239,688 TIME DEPOSITS CPI 4,656 0 RATE DIFFERENCE IN PLACEMENTOF L/T BONDS UF 27,848 0 INFLATION EFFECT CPI 391,258 0 OTHER NON-MONETARY ASSETS CPI 2,361 0 EXPENSE AND COST ACCOUNTS CPI 209,427 991,575 TOTAL (DEBITS)/CREDITS 3,796,675 4,207,983 LIABILITIES (DEBITS)/ CREDITS NET WORTH CPI -2,809,120 -2,791,397 ACCOUNTS PAYABLE RELATED COMPANIES UF -91 0 BANK LOANS CPI 0 -250,302 BANK LOANS UF -17,067 0 SHORT-TERM RESERVES CPI -5,086 -8,218 LONG-TERM BANK LOANS UF -56,559 0 LONG-TERM BANK LOANS CPI 0 -249,313 LONG-TERM RESERVES CPI -71,369 -88,327 LONG-TERM CREDITORS CPI -535 -553 OBLIGATIONS WITH THE PUBLIC CPI -1,073,461 -244,188 MINNORITY INTEREST CPI -1,038 -59,936 NON-MONETARY LIABILITIES UF -163,024 -810,571 INCOME ACCOUNTS CPI -304,995 -1,286,679 TOTAL (DEBITS)/ CREDITS -4,502,345 -5,789,484 (LOSS) PROFIT FROM ADJUSTMENT FOR CURRENCY DEVALUATION -705,670 -1,581,501
60 30. Exchange Differences There is a net charge to results in the 2003 fiscal year of Th Ch$ 12,269,406 and a net credit to results of Th Ch$ 11,661,481 in 2002 due to exchange differences. According to dispositions of Circular No. 1560 of the SVS, the net effect on results of foreign currency adjustable assets and liabilities adjustment without the inflationary effect of the local currency is presented under this item. More information is shown on the attached chart. Cristalerias de Chile S.A. NOTE 30: EXCHANGE DIFFERENCES
AMOUNT ITEM CURRENCY 09-30-2003 09-30-2002 - ---- -------- ---------- ---------- CURRENT ASSETS DOLLARS -1,084,194 1,333,867 CURRENT ASSETS OTHER CUR. -72,836 35,331 MARKETABLE SECURITIES DOLLARS -4,300,205 980,251 CLIENTS DOLLARS -476,913 450,589 CLIENTS OTHER CUR 227,690 1,094,278 TIME DEPOSITS DOLLARS -131,752 5,606,858 INVENTORY DOLLARS -300,861 724,432 INVENTORY OTHER CUR 0 220 LONG TERM INVESTMENTS DOLLARS -783,301 1,330,756 FUTURE CONTRACT EFFECT DOLLARS -763,376 0 INFLATIONARY EFFECT DOLLARS -391,258 0 OTHER ASSETS DOLLARS -270,564 1,180,439 OTHER ASSETS OTHER CUR. -14,363 5,807 TOTAL (DEBITS) CREDITS -8,361,933 12,742,828 SHORT-TERM BANK CREDITS DOLLARS 0 -3,888 ACCOUNT PAYABLE DOLLARS 0 0 DOCUMENTS PAYABLE DOLLARS 464,731 -742,392 DOCUMENTS PAYABLE OTHER CUR. -45,146 -104,662 MISCELLANEOUS CREDITORS SHORT TERM DOLLARS 64,714 -109,118 SHORT TERM RESERVES DOLLARS 2,897 -205,976 LONG-TERM BANK CREDITS DOLLARS 2,882,000 0 LONG-TERM CREDITORS DOLLARS 7,134 -265,405 LONG TERM RESERVES DOLLARS 259,380 -340,705 OTHER LONG-TERM LIABILITIES DOLLARS -104,672 905,769 OTHER LONG-TERM LIABILITIES OTHER CUR. -27,906 -214,970 FUTURE CONTRACT EFFECT DOLLARS -7,410,605 0 INFLATIONARY EFFECT DOLLARS 0 0 TOTAL (DEBITS) CREDITS -3,907,473 -1,081,347 (LOSS) PROFIT FROM EXCHANGE DIFFERENCES -12,269,406 11,661,481
61 31. Extraordinary Items As of September 30, 2003 and 2002 there are no extraordinary item. 62 32. Expenses for the issue and placement of stocks and debt instruments The parent company and the subsidiary S.A. Vina Santa Rita carried out bond placements in August 2002 and March 2001, incurring in placement expenses that as of September 30, 2003 totaled Th Ch$ 3,793,386 (Th Ch$ 4,191,997 in 2002). The charge to Results for the amortization of these expenses for year 2003 amounts Th Ch$ 277,966 (Th CH$ 72,558 in 2002) and is beaing realized according to the maturity of each series.
DETAIL 2003 2002 Short -Term Long-Term Short -Term Long-Term ----------- --------- ----------- --------- Rate Placement Differential 198,127 2,337,221 197,966 2,535,429 Stamp Tax 141,789 995,222 146,606 1,171,505 Placement Commissions and other 23,584 97,443 22,711 111,917 Other 0 0 636 5,227 --------- --------- --------- --------- 363,500 3,429,886 367,919 3,824,078
63 33. Cash Flow Statement CASH FLOW STATEMENT The values included in MISCELLANEOUS on the Cash Flow Statement are detailed on the attached appendix. CRISTALERIAS DE CHILE S.A.
CASH FLOW STATEMENT 1. The following is the detail of the item OTHERS: 2003 2002 Th Ch$ Th Ch$ 541.11.40 Other Income Received Treasury Refund Income Tax and others 1,002,072 127,418 Recover VAT exportation 1,368,663 1,379,565 Discount for paid of customs duties 0 303,445 Severance insurance 66,924 211,989 Other income 314,328 365,883 Total 2,751,987 2,388,300 541.11.80 Other expenses paid Exchange difference 5,243,049 612,683 Donations 58,877 44,871 Finished personnel contracts 0 12,114 Advice Services 102,471 108,006 Shareholder's bonds 75,114 0 Customs duties 0 64,032 Other expenses 586,852 668,054 Total 6,066,363 1,509,759 541.12.75 Other financial payments Maturity of future contracts 694,920 0 Others 64,484 0 Total 759,404 0 541.13.15 Sale of other investments Redemption Time Dep. over 90 days 0 10,954,454 Redemption interests L.T. bonds 0 539,039 Other 3,056 Total -- 11,496,549 541.13.30 Other income from investments Maturity of future contracts 2,261,336 4,634,901 Total 2,261,336 4,634,901 541.13.65 Other investment disbursements Purchase of shares 318,170 366,017 Future contracts 5,891,184 728,898 Others 2,817 30,400 Total 6,212,171 1,125,315
64 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 155 960,000 October-03 Amounts payable investment 213,469 October-03 Amounts payable investment 173,757 Decembre-03 -------- Total 1,347,226
65 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$ 93,600 in 2003 (Th US$ 129,700 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. 66 CRISTALERIAS DE CHILE S.A. NOTE 34: DERIVATIVE CONTRACTS
MATURITY OR DESCRIPTION OF CONTRACTS TYPE OF TYPE OF VALUE OF EXPIRATION SPECIFIC PURCHASE/ PROTECTED ITEM OR TRANSACTION DERIVATIVE CONTRACT CONTRACT DATE ITEM SALE POSITION NAME AMOUNT - ------- ------- -------- ---------- -------- ------------- --------------- ------------ FR CI 24,852,472 THIRD 2004 EXCH RATE P - - FR CI 25,777,830 FOURTH 2003 EXCH RATE P - - FR CCPE 742,140 FIRST 2004 EXCH RATE P DOLLAR LOAN 742,140 FR CCPE 742,140 FIRST 2004 EXCH RATE P DOLLAR LOAN 742,140 FR CCPE 1,442,580 FOURTH 2003 EXCH RATE P DOLLAR LOAN 1,442,580 FR CCPE 721,290 FOURTH 2003 EXCH RATE P DOLLAR LOAN 721,290 FR CI 1,456,920 FOURTH 2003 EXCH RATE P PAYABLE ACCOUNT 1,456,920 FR CI 1,456,920 FOURTH 2003 EXCH RATE P INVESTMENTS - FR CI 721,290 FOURTH 2003 EXCH RATE P INVESTMENTS - FR CI 2,769,040 THIRD 2004 EXCH RATE P INVESTMENTS - FR CI 692,260 THIRD 2004 EXCH RATE P INVESTMENTS - FR CI 353,270 FOURTH 2003 EXCH RATE P - - FR CI 353,270 FOURTH 2003 EXCH RATE P - - FR CI 360,805 FOURTH 2003 EXCH RATE P - - FR CI 360,805 FOURTH 2003 EXCH RATE P - -
CRISTALERIAS DE CHILE S.A. NOTE 34: DERIVATIVE CONTRACTS VALUE OF TYPE OF TYPE OF PROTECTED DERIVATIVE CONTRACT ITEM ACCOUNTS AFFECTED ASSETS/LIABILITIES EFFECT ON RESULT NAME AMOUNT REALIZED NOT REALIZED - ------- ------- ---------- ------------ ---------- -------- ------------ FR CI - LIABILITIES 895,101 -895,101 - FR CI - LIABILITIES 3,159,028 -3,159,028 - FR CCPE 660,970 LIABILITIES 87,616 -6,446 - FR CCPE 660,970 LIABILITIES 87,710 -6,540 - FR CCPE 1,321,940 LIABILITIES 132,403 -11,763 - FR CCPE 660,970 LIABILITIES 66,486 -6,166 - FR CI 1,321,940 LIABILITIES 141,924 -6,944 - FR CI - LIABILITIES 140,658 -140,658 - FR CI - LIABILITIES 68,875 -68,875 - FR CI - LIABILITIES 126,305 -126,305 - FR CI - LIABILITIES 31,576 -31,576 - FR CI - LIABILITIES 25,517 -25,517 - FR CI - LIABILITIES 25,517 -25,517 - FR CI - LIABILITIES 33,391 -33,391 - FR CI - LIABILITIES 33,953 -33,953 -
67 35. Contingencies and Restrictions CONTINGENCIES AND COMMITMENTS As of September 30, 2003, there are a guarantees delivered in the amount of Th Ch$ 7,944 (Th Ch$ 7,938 in 2002), according to the detail in the attached chart. LAWSUITS OR OTHER LEGAL ACTIONS THE COMPANY IS INVOLVED IN As of September 30, 2003 and 2002 there are lawsuits and other legal actions pending 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, there are certain financial obligations mentioned as follows: a) TOTAL CONSOLIDATED DEBT TO CAPITALIZATION RATIO Cristalerias de Chile S.A will not allow the Total Consolidated Debt to Capitalization Ratio exceed the 0.45 to 1.0 ratio at any time. Capitalization is defined as the sum of Net Worth plus Minority Interest plus total consolidated debt. b) TOTAL CONSOLIDATED DEBT TO EBITDA RATIO Cristalerias de Chile S.A will not allow the Net Consolidated Debt to EBITDA ratio to exceed the 2.5 to 1.0 ratio at any time. Consolidated EBITDA is defined as the following: operating income plus depreciation and amortization, plus non-cash charges (as long as they have been deduced whe determining operating income) and cash income from 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 during the following periods: 3.5 from January 01 2001 to December 31, 2002; 4.0 from January 01, 2003 onwards. Interest coverage at the day of determination is defined as the ratio between unconsolidated EBITDA for the period of four consecutive fiscal 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. should maintain a minimum amount of UF 10,000,000. 68 Cristalerias de Chile S.A. complies with 100% of the restrictions agreed with the creditor banks. II. BOND ISSUE The bond issue contract signed on May 29, 2002 with Banco Chile as the bonds owners' representative, establishes among others the following obligations: a) Financial Indicators Individual Balance: Indebtedness no higher than 1.2 times. Consolidate Balance: Indebtedness no higher than 1.4 times. b) Insurances for the Company and its subsidiaries' fixed assets. c) The operations refered to by art. 44 and 89 of law 18,046 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 restrictions agreed with the bonds' creditors. OTHER CONTINGENCIES As of September 30, 2003 and 2002, management is not aware of any other contingencies that could affect the company. 69 CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS DIRECT GUARANTEES
NAME ASSETS COMMITTED CREDITOR OF GUARANTEE DEBTOR RELATIONSHIP TYPE OF GUARANTEE TYPE BOOK VALUE --------------------- ------ ------------ ----------------- ---- ---------- EDIFICIO METROPOLIS AGF CRISTALERIAS DE CHILE COMMERCIAL TIME DEPOSIT FLOOR 7,944 S.A. BANCO SANTANDER RED TELEVISIVA MEGAVISION COMMERCIAL MORTGAGE LAND 3,503,419 SCOTIABANK RED TELEVISIVA MEGAVISION COMMERCIAL PLEDGE TV EQUIP 238,310 BANCO CREDITO E RED TELEVISIVA MEGAVISION COMMERCIAL MORTGAGE TV EQUIP 58,536 INVERSIONES SUNDRY CLIENTS RED TELEVISIVA MEGAVISION COMMERCIAL ADVERTISING - 0 GRUPO TELEVISA S.A. RED TELEVISIVA MEGAVISION COMMERCIAL PLEDGE SHARES 0 CREDITOR OF GUARANTEE DEBTOR RELATIONSHIP TYPE OF GUARANTEE ASSETS COMMITTED NAME
BALANCES PENDING PAYMENT AS OF CLOSING DATE OF FINANCIAL STATEMENTS 09/30/2003 09/30/2002 09/30/2004 ASSETS 09/30/2005 ASSETS 09/30/2006 ASSETS ---------- ---------- ---------- ------ ---------- ------- ---------- ------ EDIFICIO METROPOLIS AGF 7,944 7,938 0 0 0 0 7,944 0 BANCO SANTANDER 1,847,649 2,086,212 471,630 0 458,673 0 458,673 0 SCOTIABANK 2,073,691 2,481,430 447,011 0 406,670 0 406,670 0 BANCO CREDITO E 424,337 593,316 170,149 0 169,460 0 84,728 0 INVERSIONES SUNDRY CLIENTS 9,869,662 9,726,862 0 0 0 0 0 0 GRUPO TELEVISA S.A. 0 2,314,333 0 0 0 0 0 0
70 CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS INDIRECT GUARANTEES
NAME ASSETS COMMITTED CREDITOR OF GUARANTEE DEBTOR RELATIONSHIP TYPE OF GUARANTEE TYPE BOOK VALUE --------------------- ------ ------------ ----------------- ---- ---------- Societe des RAYEN CURA S.A.I.C. AFFILIATE SOLIDARY 0 0 Participations Financieres et Industrielles Envases CMF guarantee CRISTALERIAS DE AFFILIATE SOLIDARY 0 0 P.I.A.S CHILE S.A.
BALANCES PENDING PAYMENT AS OF CLOSING DATE OF FINANCIAL STATEMENTS 09/30/2003 09/30/2002 09/30/2004 ASSETS 09/30/2005 ASSETS 09/30/2006 ASSETS ---------- ---------- ---------- ------ ---------- ------- ---------- ------ Societe des 2,665,031 3,993,977 761,437 0 761,437 0 1,142,157 0 Participations Financieres et Industrielles Envases CMF guarantee 226,849 0 0 0 0 0 226,849 0 P.I.A.S
71 CRISTALERIAS DE CHILE S.A. NOTE 35: Contingencies and Restrictions Trials
Court Cause Rol Origin Stage Committed amount ----- --------- ------ ----- ---------------- 12 3025-1997 Civil Given sentence in first verdict 100,000 16 4822-1999 Civil Given sentence in first verdict 10,000 1 1242-2000 Labor First verdict pending 10,000 5 3468-2001 Labor First verdict pending 3,000 1 4391-2003 Labor First verdict pending 2,100 1 3538-2000 NTVC Sight and verdict pending 900
72 36. Guarantees obtained from third parties As of September 30, 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 6,230 Rental of Property to Telecomunicaciones Cono Sur Ltda. (UF 130) 2,203 2,201 Rental of Property Office AGF Building (UF 365.9) 6,201 3,979 Rental of Property Office Metropolis (UF 189.2) 3,206 0 Rental of Property Office Banco Security 5,152 0 Sight drafts suppliers 1,674 1,423 Installation of Buin Tanks (Tersanoix S.A.) 155,112 286,431 Purchase of vine stem cuttings and plants (Intelmaq) 35,051 44,520 Underground materials storehouse Buin Salfa Montajes 31,834 33,293 Grape purchase 1,048,057 299,927 Buin Casino Construction 31,688 0 ------- ------- 1,320,178 678,004
73 37. Local and Foreign Currency Charts attached show the foreign currency balance as of September 30, 2003 and 2002. Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY
ASSETS Amount Items Currency 09302003 09302002 ----- -------- -------- -------- Current Assets Available funds Nonadjust. Ch$ 1,506,586 2,671,539 Other currencies 141,817 514,645 Dollars 228,115 32,747,344 Euros 5,179 0 Argentine Peso 13,374 0 Time deposits Dollars 0 0 Adjustable Ch$ 5,261,345 7,214,531 Nonadjust Ch$ 1,661,839 0 Marketable Securities Dollars 4,503,878 4,516,458 Adjustable Ch$ 59,903,258 8,222,994 Sales receivable Nonadjust Ch$ 30,598,884 28,050,343 Dollars 4,460,659 4,289,899 Euros 3,166,147 0 Other currencies 2,149,433 5,245,124 Argentine Peso 194,124 0 Documents Receivable Nonadjust. Ch$ 4,567,097 5,211,778 Dollars 0 148,193 Other currencies 16,000 29,734 Sundry Debtors Nonadjust. Ch$ 628,451 434,670 Adjustable Ch$ 78,002 531,984 Dollars 747,036 21,986 Other currencies 98,693 32,815 Documentos and Accts. Receivable Dollars 64,443 0 Nonadjust. Ch$ 425,388 463,521 Adjustable Ch$ 254,322 0 Inventory Adjustable Ch$ 30,836,627 5,300,724 Nonadjust. Ch$ 447,191 25,644,577 Dollars 4,544,445 3,901,992 Other currencies 660,403 558,576 Taxes Receivable Nonadjust. Ch$ 0 0 Adjustable Ch$ 2,622,506 473,437 Other currencies 38,152 0 Argentine Peso 20,921 0 Prepaid expenses Adjustable Ch$ 922,495 727,465 Nonadjust. Ch$ 229,286 169,459 Dollars 220,725 182,418 Argentine Peso 15,660 0 Deferred Taxes Nonadjust. Ch$ 1,432,239 1,650,350 Adjustable Ch$ 0 0 Other Current Assets Nonadjust. Ch$ 2,622,831 6,558,430 Adjustable Ch$ 1,564,362 5,115,555 Dollars 4,746,725 31,728,483 Fixed Assets FIXED ASSETS Adjustable Ch$ 138,675,566 130,156,094 Other Assets Investments in related companies Adjustable Ch$ 105,659,811 95,775,981 Dollars 0 17,079,169 Investments in other companies Adjustable Ch$ 827,235 1,319,838 Negative Goodwill Adjustable Ch$ 9,607,498 4,433,603 Dollars 0 5,937,234 74 Longterm debtors Adjustable Ch$ 161,890 205,277 Documents receivable in rel.companies Nonadjust. Ch$ 2,898 1,445 Intangibles Adjustable Ch$ 11,779,991 11,747,268 Amortization Adjustable Ch$ -1,155,149 969,802 Other Adjustable Ch$ 4,128,304 4,623,624 Nonadjust. Ch$ 221,654 706,171 Dollars 9,715,501 13,082,898 Argentine Peso 457,973 277,602 Long-term debtors Dollars 66,097 0 Intangibles Argentine Peso 34,565 0 Total Assets Nonadjust. Ch$ 44,344,344 71,562,283 Other currencies 3,104,498 6,380,894 Dollars 84,697,004 117,342,610 Euros 3,171,326 0 Argentine Peso 736,617 277,602 Adjustable Ch$ 315,728,683 271,172,037
75 Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY CURRENT LIABILITIES
ITEM Currency Up to 90 days 09.30.2003 09.30.2002 Amount Avg.Annual Amount Avg.Annual Thou Ch$ Int. Rate Thou Ch$ Int. Rate -------- --------- -------- --------- Current Liabilities Short-term obligations with banks Nonadjust. Ch$ 0 0 1,031,487 3.72 and financial institutions Other currencies 4,446 2.76 0 0 Dollars 133,115 1.88 75,872 2.6 Long-term obligations with banks Adjust. Ch$ 136,073 1.925 1,086,750 4.22 and financial institutions Adjust. Ch$ 807,575 4.43 0 0 Dollars 0 0 519,939 5.57 Dollars 788,735 1.74 3,210 3.0 Nonadjust. Ch$ 134,457 4.94 0 0 Obligations with the public Adjust. Ch$ 365,391 6.25 0 0 Adjust. Ch$ 0 0 0 0 Adjust. Ch$ 0 0 216,303 0 Longterm obligations with 1 year Adjust. Ch$ 0 0 0 0 maturity Adjust. Ch$ 0 0 0 0 Dollars 8,025 11 19,413 11 Dividends payable Nonadjust. Ch$ 505,634 0 552,853 0 Accounts payable Nonadjust. Ch$ 9,103,531 0 9,743,314 0 Dollars 1,481,820 0 1,109,652 0 Euros 15,223 0 0 0 Other currencies 4,956 0 155,421 0 Argentine Peso 93,637 0 0 0 Documents Payable Dollars 2,030,024 0 1,314,668 0 Adjust. Ch$ 14,239 0 41,139 0 Other currencies 173,852 0 208,588 0 Euros 1,813 0 0 0 Argentine Peso 106,737 0 0 0 Sundry Creditors Dollars 742,159 0 0 0 Nonadjust. Ch$ 306,585 0 2,022,423 0 Withholdings Nonadjust. Ch$ 3,056,563 0 2,474,179 0 Argentine Peso 22,144 0 0 0 Other currencies 0 0 11,490 0 Prepaid income Nonadjust. Ch$ 4,919,157 0 2,836,481 0 Docts and accts payable to rel co. Adjust. Ch$ 59,332 0 0 0 Nonadjust. Ch$ 713,213 0 775,446 0 Dollars 0 0 0 0 Income Tax Nonadjust. Ch$ 0 0 0 0 Provisions Adjust. Ch$ 266,967 0 537,389 0 Euros 694 0 0 0 Dollars 656,412 0 3,186,561 0 Nonadjust. Ch$ 6,510,916 0 7,668,247 0 Argentine Peso 57,216 0 0 0 Other currencies 187,368 0 1,188,570 0 Other Current Liabilities Dollars 118,378 0 0 0 Adjust. Ch$ 4,937,682 0 0 0 Total Current Liabilities Nonadjust Ch$ 25,250,056 27,104,430 Other currencies 370,622 1,564,069 Dollars 5,958,668 6,229,315 Adjust. Ch$ 6,587,799 1,881,581 Euros 17,730 0 Argentine Peso 279,734 0
Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY CURRENT LIABILITIES
ITEM Currency 90 Days to 1 Year 09.30.2003 09.30.2002 Amount Avg.Annual Amount Avg.Annual Thou Ch$ Int. Rate Thou Ch$ Int. Rate -------- --------- -------- --------- Current Liabilities Short-term obligations with banks Nonadjust. Ch$ 0 0 0 0 and financial institutions Other currencies 13,337 2.76 9,755 3.09 Dollars 0 0 0 0 Long-term obligations with banks Adjust. Ch$ 0 0 0 0 and financial institutions Adjust. Ch$ 598,725 4.43 0 0 Dollars 0 0 2,454,206 3.66 Dollars 1,272,003 1.90 22,012,661 3.0 Nonadjust. Ch$ 134,457 4.94 0 0 Obligations with the public Adjust. Ch$ 0 0 340,062 4.75 Adjust. Ch$ 378,336 4.75 434,896 5.80 Adjust. Ch$ 397,253 5.80 581,937 0 Longterm obligations with 1 year Adjust. Ch$ 1,223 7.0 0 0 maturity Adjust. Ch$ 0 0 1,240 7.0 Dollars 190,030 10.98 154,004 11 Dividends payable Nonadjust. Ch$ 0 0 0 0 Accounts payable Nonadjust. Ch$ 94,640 0 0 0 Dollars 1,230,796 0 2,304,754 0 Euros 0 0 0 0 Other currencies 0 0 0 0 Argentine Peso 0 0 0 0 Documents Payable Dollars 122,309 0 141,379 0 Adjust. Ch$ 14,238 0 52,499 0 Other currencies 0 0 0 0 Euros 0 0 0 0 Argentine Peso 0 0 0 0 Sundry Creditors Dollars 0 0 0 0 Nonadjust. Ch$ 0 0 0 0 Withholdings Nonadjust. Ch$ 0 0 0 0 Argentine Peso 0 0 0 0 Other currencies 0 0 0 0 Prepaid income Nonadjust. Ch$ 0 0 0 0 76 Docts and accts payable to rel co. Adjust. Ch$ 0 0 0 0 Nonadjust. Ch$ 0 0 0 0 Dollars 64,443 0 0 0 Income Tax Nonadjust. Ch$ 0 0 1,046,016 0 Provisions Adjust. Ch$ 0 0 0 0 Euros 562,508 0 0 0 Dollars 682,454 0 0 0 Nonadjust. Ch$ 396,135 0 181,111 0 Argentine Peso 0 0 0 0 Other currencies 343,620 0 0 0 Other Current Liabilities Dollars 0 0 0 0 Adjust. Ch$ 0 0 0 Total Current Liabilities Nonadjust Ch$ 625,232 - 1,227,127 - Other currencies 356,957 - 9,755 - Dollars 3,562,035 - 27,067,004 - Adjust. Ch$ 1,389,775 - 1,410,634 - Euros 562,508 - 0 - Argentine Peso 0 - 0 -
77
Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY LONGTERM LIABILITIES CURRENT PERIOD 09302003 1-3 Years 3-5 years Amount Average Amount Average ITEM Currency Thou Ch$ Interest Rate Thou Ch$ Interest Rate - ---- -------- -------- ------------- -------- ------------- Obligations with Banks and Dollars 8,262,125 1.925 24,786,375 1.925 Financial Institutions Dollars 1,022,778 1.84 0 0 Argentine Peso 57,464 1.75 0 0 Nonadjust. Ch$ 672,286 4.94 0 0 Adjustable Ch$ 4,072,967 4.43 406,670 4.43 Obligations with the public Adjustable Ch$ 16,946,030 4.75 16,946,030 4.75 Adjustable Ch$ 0 0 0 0 Adjustable Ch$ 3,389,206 6.25 0 0 Long-term creditors Dollars 132,917 11.06 0 0 Dollars 87,439 11.16 4,252 8.6 Adjustable Ch$ 38,066 0 0 0 Nonadjust. Ch$ 97,849 0 0 0 Deferred taxes Adjustable Ch$ 2,327,556 0 0 0 Nonadjust. Ch$ 2,388,179 0 0 0 Long-term provisions Dollars 3,514,837 0 0 0 Adjustable Ch$ 4,108,548 0 0 0 Total long-term liabilities Dollars 13,020,096 - 24,790,627 - Argentine Peso 57,464 - 0 - Nonadjust. Ch$ 3,158,314 - 0 - Adjustable Ch$ 30,882,373 - 17,352,700 -
5-10 Years More than 10 years Amount Average Amount Average ITEM Currency hou Ch$ Interest Rate Thou Ch$ Interest Rate - ---- -------- ------- ------------- -------- ------------- Obligations with Banks and Dollars 0 0 0 0 Financial Institutions Dollars 0 0 0 0 Argentine Peso 0 0 0 0 Nonadjust. Ch$ 0 0 0 0 Adjustable Ch$ 0 0 0 0 Obligations with the public Adjustable Ch$ 0 0 0 0 Adjustable Ch$ 4,209,191 5.8 31,377,472 5.8 Adjustable Ch$ 0 0 16,946,030 6.25 Long-term creditors Dollars 0 0 0 0 Dollars 0 0 0 0 Adjustable Ch$ 0 0 0 0 Nonadjust. Ch$ 0 0 0 0 Deferred taxes Adjustable Ch$ 0 0 0 0 Nonadjust. Ch$ 0 0 0 0 Long-term provisions Dollars 0 0 0 0 Adjustable Ch$ 0 0 0 0 Total long-term liabilities Dollars 0 - 0 Argentine Peso 0 - 0 Nonadjust. Ch$ 0 - 0 Adjustable Ch$ 4,209,191 - 48,323,502
78 Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY LONGTERM LIABILITIES PREVIOUS PERIOD 09302002
1-3 Years 3-5 Years Amount Average Amount Average ITEM Currency Thou Ch$ Interest Rate Thou Ch$ Interest Rate - ---- -------- -------- ------------- -------- ------------- Obligations with banks Dollars 16,509,497 3 0 0 and financial institutions Dollars 3,578,165 329 0 0 Dollars 3,578,143 422 2,220,274 0 Other currencies 24,142 342 22,634 412 Documents payable Adjustable Ch$ 28,454 0 0 0 Dollars 131,629 0 0 0 Obligations with public Adjustable Ch$ 8,466,113 475 16,932,226 475 Adjustable Ch$ 0 0 0 0 Adjustable Ch$ 0 0 3,386,445 614 Long-term creditors Dollars 870,420 1106 149,504 1106 Dollar 217,091 11 64,344 11 Dollar 1,906,847 0 0 0 Adjustable Ch$ 47,309 0 0 0 Adjustable Ch$ 2,439 7 1,219 7 Long-Term provisions Dollars 1,570,502 0 0 0 Adjustable Ch$ 3,873,652 0 0 0 Deferred taxes Nonadjust. Ch$ 1,240,347 0 0 0 Total long-term liabilities Dollars 28,362,294 - 2,434,122 - Other currencies 24,142 - 22,634 - Adjustable Ch$ 12,417,967 - 20,319,890 - Nonadjust. Ch$ 1,240,347 - 0 -
5-10 Years More than 10 years Amount Average Amount Average ITEM Currency Thou Ch$ Interest Rate Thou Ch$ Interest Rate - ---- -------- -------- ------------- -------- ------------- Obligations with banks Dollars 0 0 0 0 and financial institutions Dollars 0 0 0 0 Dollars 0 0 0 0 Other currencies 2,594 0 0 0 Documents payable Adjustable Ch$ 0 0 0 0 Dollars 0 0 0 0 Obligations with public Adjustable Ch$ 8,466,113 475 0 0 Adjustable Ch$ 4,741,023 58 30,816,651 58 Adjustable Ch$ 0 0 16,932,226 614 Long-term creditors Dollars 0 0 0 0 Dollar 2,543 11 0 0 Dollar 0 0 0 0 Adjustable Ch$ 0 0 0 0 Adjustable Ch$ 0 0 0 0 Long-Term provisions Dollars 0 0 0 0 Adjustable Ch$ 0 0 0 0 Deferred taxes Nonadjust. Ch$ 1,994,998 0 0 0 Total long-term liabilities Dollars 2,543 - 0 - Other currencies 2,594 - 0 - Adjustable Ch$ 13,207,136 - 47,748,877 - Nonadjust. Ch$ 1,994,998 - 0 -
79 38. Penalties The SVS or other administrative authorities have not imposed any penalties during the 2003 and 2002 fiscal years to the Company, its Board nor administrative personnel. 80 39. Subsequent Events On October 15, 2003, the Parent Company paid interim dividend No. 155 of Ch$ 15 per share, over 64,000,000 shares. Between the closing date of the financial statements and the issue date of the present report no more subsequent events that could affect significantly the Company's economic and financial condition have been registered. 81 40. COMPANIES UNDER SPECIAL NORMS Not applicable. 82 41. ENVIRONMENT On its ongoing concern for environmental preservation, as of September 30, 2003 the Parent Company has effected investments of Th Ch$ 206,027, corresponding mainly to the purchase of NOX emission treatment equipment, installed on new Furnace B. As of September 30, 2002, investments of Th Ch$ 189,302 were made on the repair of an electrostatic precipitator to filter the gases discharged from our smelting processes. The subsidiary S.A. Vina Santa Rita has invested Th Ch$ 35,573 as of September 2003 (Th Ch$ 29,589 in 2002), to comply with the ordinances and laws related to Industrial Process and Installations. 83 42. STOCK TRANSACTIONS During the 2003 and 2002 fiscal years the Parent Comoany's members of the board, controlling stockholders, related individuals and entities did not carry out stock transactions. 84 43. DISTRIBUTION OF SHAREHOLDERS The distribution of stockholders as of September 30, 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 65.83 65.83 263 262 Less than 10% shareholding with investment lower than 200 UF 0.14 0.14 774 817 ------ ------ ----- ----- TOTAL 100.00 100.00 1,038 1,080 CONTROLLER OF THE COMPANY 52.14 52.14 3 3
85 44. BOARD REMUNERATIONS As of September 30, 2003 and 2002 Th Ch$ 901,096 and Th Ch$ 901,937 were paid for honoraries and participation respectively, as follows: 2003 2002 ThCh$ ThCh$ ----- ----- Participation of previous fiscal year profits 890,764 890,583 Session assistance 4,190 4,233 Board Committee 1,344 1,039 Honoraries paid 4,798 6,082 ------- ------- TOTAL 901,096 901,937 On the other hand, Th Ch$ 227,786 have been provisioned for participation of year 2003 (Th Ch$ 800,062 in 2002). 86 45. TIME DEPOSITS As of September 30, 2003 and 2002 the Company presents the following information:
INSTITUTION CURRENCY 2003 2002 Th$ Th$ Banco de Santiago US$ 0 0 Banco Deutsche Bank Chile S.A. US$ 0 0 Banco Santander New York US$ 0 0 Banco Santander Santiago US$ 5,261,345 0 Banco Chile US$ 0 Banco de Credito e Inversiones US$ 0 Banco Scotiabank US$ 0 0 Banco Edwards US$ 0 0 Banco Santiago. UF 0 0 BankBoston $ 369,675 0 Banco de Santander Santiago $ 0 7,214,531 Banco de Chile $ 1,292,164 --------- --------- TOTAL 6,923,184 7,214,531
87 RELEVANT EVENTS As of September 30, 2003 there are no relevant events registered to comment. 88 RATIO ANALYSIS OF THE CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2003
CONSOLIDATED FINANCIAL INDICATORS 09-30-2003 09-30-2002 12-31-2002 Liquidity Current liquidity times 3.82 2.74 4.51 Acid ratio times 2.88 2.16 3.61 Indebtedness Leverage ratio times 0.82 0.82 0.80 Short-term debt % 24.1 34.2 21.3 Long-term debt % 75.9 65.8 78.7 Interest Expenses Coverage times 1.69 6.16 4.81 Activity Total assets MM Ch$ 451,782 466,735 461,528 Investments MM Ch$ 25,315 15,867 18,409 Disposal of property MM Ch$ 315 94 242 Inventory turnover Times n.a. n.a. n.a. Inventory permanence Days n.a. n.a. n.a. Results Sales MM Ch$ 123,648 116,809 164,278 Cost of sales MM Ch$ 78,108 68,640 96,673 Operating income MM Ch$ 27,107 30,178 42,443 Interest expenses MM Ch$ 5,180 4,631 6,976 Nonoperating result MM Ch$ (21,364) (4,340) (13,262) E.B.I.T.D.A. MM Ch$ 20,096 39,262 48,059 Aftertax income MM Ch$ 2,416 16,448 18,014 Profitability Return on equity % 1.0 7.1 7.9 Return on assets % 0.5 3.7 4.1 Return on operating assets % 11.8 13.7 19.4 Income per share $ 37.7 257.0 281.5 Return on dividends % 1.9 3.4 2.9
Current liquidity: Ratio of current assets to current liabilities. Acid ratio: Ratio of uncommitted funds to current liabilities. Leverage ratio: Ratio of total liabilities to net worth. Interest Expenses Coverage: Result before taxes and interest divided by interest expenses. Inventory turnover: Ratio between cost of sales 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: Result before taxes, interest, taxes, depreciation and amortization, and extraordinary items. Return on dividends: Sum of dividends paid in the last twelve months divided by market price of stock at closing of period. 89 The main trends observed in the 2003 fiscal year indicators are: LIQUIDITY INDICES An increase in the index can be observed with respect to September 2002 in the liquidity index as a consequence the payment of short-term bank debt, repayment of 50% of a syndicated loan, and that part of the funds obtained from the long term bonds issue of August 2002 was placed in short-term financial instruments. With respect to December 2002, a slight decrease can be observed in the index due to the decrease of current assets in turn due to investments in related comoanies and payments of fixed asset investments. INDEBTEDNESS INDICES The leverage ratio has kept stable with respect to previous periods. The distribution of short and long-term debt shows a decrease in the short-term debt, due to financing decisions carried out in 2002 fiscal year, which finished with the re-structuring of the syndicated loan. The interest expenses coverage ratio has registered a slight decrease with respect to the previous year due to higher interest expenses originated since August 2002 onwards for bonds issued, and lower income in the present fiscal year. PROFITABILITY INDICES Equity and asset profitability indeces show a decrease with respect to September and December 2002, due to a lower net income in 2003. Likewise, despite better results at related companies, lower non-operating expenses and lower price level restatements, an important decrease is shown by the non-operating result compared with the previous period, due to a negative exchange difference of Th Ch$ 12,269. On the other hand, return of dividends index shows a decrease with respect to the previous year, fundamentaly due to an increase in the market price of the Company's shares in the stock exchange. 2. DIFFERENCE BETWEEN BOOK VALUE AND MARKET VALUE OF MAIN ASSETS. The financial statements as of September 30, 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 September 30, 2003 there were financial investments in shares recorded in the accounting according to their purchase price at Ch$ 4,163 million whose market value on the same date was Ch$ 6,072 million. 90 3. RESULTS AS OF SEPTEMBER 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$123,648 million, 5.9% over 2002. This sales increase results from higher sales in the glass container business (6.8%), CIECSA (12.4%), and Santa Rita (0.6%). Consolidated operating income reached Ch$ 27,107 million, 10.2% below 2002, of which Ch$17,356 million were contributed by the glass container business, Ch$ 7,863 million by Santa Rita and Ch$ 1,808 million by CIECSA. The Company's net profit was Ch$ 2,416 million, compared with Ch$ 16,448 million in the same period of 2002. This result is explained by a higher non-operting loss mainly due to losses from exchange differences and lower operting results at CIECSA and Vina Santa Rita. In 2003 the Company registered a consolidated non-operting loss of Ch$ 21,364 million, compared with a Ch$ 4,340 million loss in 2002. The former was mainly due to a loss from exchange differences (Ch$ 12,269 million loss in 2003 compared with a Ch$ 11,661 million income in 2002), partially compensated by a lower net loss from unconsolidated subsidiaries that passed from Ch$ 9,425 million in 2002 to Ch$ 3,959 million in 2003, mainly due to better results at Rayen Cura, CMF and Vina Los Vascos, and a lower loss at Metropolis-Intercom. The net loss from subsidiaries include a Ch$ 3,128 million charge in 2003 (Ch$ 3,109 million in 2002), corresponding to goodwill amortization, 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$ 54,533 million as of September 2003, which represents a 6.8% increase compared to the previous fiscal year. Volumes sold increased by 6.7% reaching 185,976 tons, mainly due to higher sales of bottles for the wine, non-returnable beer, returnable soft drinks and liquor markets. Operating income reached Ch$ 17,356 million, compared to Ch$ 17,508 million in 2002. Higher costs of sales are due to products that had to be imported due to the reconstruction of furnace B. Non-operating result was a loss of Ch$14,052 million in 2003 (Ch$ 2,370 million income in 2002). During 2003 a Ch$ 9,902 million loss was recorded from exchange differences (Ch$ 8,371 million income in 2002). In addition lower income was registered from Vina Santa Rita and CIECSA, and higher interest expenses. The former was compensated by higher income from Cristalchile Inversiones (owner of 40% of Rayen Cura) and Envases CMF, and a lower loss in Cristalchile Comunicaciones (owner of 50% of Metropolis-Intercom). 3c. Results in Subsidiaries 91 As of September 30, 2003, Santa Rita's net income amounted Ch$ 3,735 million (Ch$ 8,388 million in 2002). In the local market, volumes increased by 1.9% and prices dropped by 4.4% in real terms, as a result of sharp competition. During the period, exports at US$ 41.9 million (US$ 40.0 million in 2002) represented 54.2% of total revenues. The operating income reached Ch$7,863 million, compared to Ch $ 9,184 million in 2002, mainly due to lower prices in the domestic market. The average price in dollars per case for the export market for Santa Rita was US$ 33.0 (US$ 30.5 in 2002) whereas the average price for the industry was US$ 23.6 per case (US$ 23.2 in 2002). Santa Rita recorded a Ch$ 3,177 million non-operating loss, compared to a Ch$ 1,274 million non-operating income in 2002, mainly due a loss from exchange differences. Red Televisiva Megavision, CIECSA's main subsidiary, registered a Ch$1,762 million operating income, compared with an operating profit of Ch$ 3,454 million in 2002, due to an increase in costs from higher internal productions. MEGA reached a 23.0% audience share during the period (25.9% in 2002)1. Net sales increased by 11.9% reaching Ch$ 18,530 million, due to an increase in live programming. As of September 2003, MEGA had a net income of Ch$ 1,026 million (Ch$ 1,729 million in 2002). CIECSA had a Ch$ 826 million net income, compared to a Ch$ 1,063 million net income the previous year. Envases CMF S.A. registered a Ch$ 713 million net income in 2003 compared with a Ch$464 million net income in 2002. The company increased sales by 1.8%, reaching Ch$ 25,035 million during the period. Sales volume increased by 0.4%, reaching 16,697 tons. Operating income reached Ch$ 2,237 million, 17.6% higher than the that obtained in 2002, mainly explained by higher operating efficiencies and the sale of better margin products. 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 95.60% of Metropolis-Intercom S.A. As of September 30, 2003, Metropolis-Intercom S.A. registered sales of Ch$ 33,763 million compared with Ch$ 35,227 million the previous year. Metropolis-Intercom had a net loss of Ch$ 7,394 million compared with a net loss of Ch$ 10,525 million in 2002. This result includes a depreciation charge of Ch$ 10,040 million (Ch$ 8,637 million in 2002) corresponding to the HFC network adquired in July 2000. The company ended the period with 236,000 subscribers of the basic service (239,000 in 2002) and 32,000 subscribers of bradband services, 63.7% higher than in 2002. As a result of the abovementioned and the negative goodwill amortization charge through Cordillera Comunicaciones of Ch$ 3,128 million in the period (Ch$ 3,109 million in 2002), Cristalchile Comunicaciones recorded a net loss of Ch$ 5,250 million (net loss of Ch$ 6,846 in 2002). 4. CASH FLOW STATEMENT Through January/September 2003 a total net negative flow of Ch $14,721 million was generated, which is explained by a positive flow generated by operating activities of Ch$ 26,447 million which were partially offset by a negative financing flows of Ch$ 10,957 million, and a negative flow of investment activities of Ch$ 28,911 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$ 9,030 million and net loans and Obligations with public for Ch$ 2,317 million. - -------- 1 Measured between 7:30AM and 1:30AM; i.e: 18 hours daily, Monday through Sunday. 92 The negative investment flow is mainly explained by the incorporation of fixed assets of Ch$ 23,204 million and permanent investments for Ch$ 3,933 million and other investment disbursements for Ch$ 6,212 million, which are financed, in part, with maturities of future contracts for Ch$ 2,261 million and redemption of loans to related companies for Ch$ 1,940 million. The foregoing results in an decrease in the final balance of cash and cash equivalent, which passed from Ch$ 90,063 million as of December 31, 2002 to Ch$ 77,608 million as of September 30, 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. RISK ANALYSIS a. 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 September 30, 2003 Short-Term and Long-Term bank liabilities and obligations with the public totaled Ch$ 134,259 million, which represents 29.7% of the Company's consolidated assets. Bank credits totaled Ch$ 43,304 million of which Ch$ 36,477 million correspond to credits in foreign currency agreed at variable rates related to the six-month Libor, Ch$ 5,886 million correspond to credits in pesos adjustable in unidades de fomento (indexed currency units) that are exposed to changes in the six-month TAB of 90 and 18 days and Ch$ 941 million correspond to credits in pesos at an annual rate of 4.94%. Within obligations with the public for Ch$ 90,955, Ch$ 70,254 million correspond to Bonds issued by the Parent Company and Ch$ 20,701 millon issued by the subsidiary Vina Santa Rita, both at a fixed interest rate. As of September 30, 2003, the Company had available funds of Th Ch$ 75,710 million invested in instruments at different time periods like term deposits, bonds, fixed-rate mutual funds and resale agreements. Bonds for Ch$ 8,870 million with maturity on September 15, 2005 and share investment for Ch$ 4,163 million were no included. 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. b) Exchange rate The Company and its Subsidiaries maintain liabilities in dollars of US$ 72.8 million, which represent 10.7% of its consolidated assets, and include a long-term syndicated loan of US$ 50 million in the Parent Company and Long-Term bank credits in Vina Santa Rita of US$ 4.8 million. As of September 30 the Company and its Subsidiaries maintain its investments in Dollars of US$ 119.7 million; in time deposits, bonds and fixed rate mutual funds. In addition it also has Dollar purchase future contracts of US$ 93.6 million. 93 On the other hand, aproximately 40% of consolidated sales are adjustment to the exchange rate variation. At the same time, the consolidated costs in foreing currency represent aproximately 27% of the total costs. 94 RELEVANT EVENTS None. 95 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 9/30/2003 1.00.01.30 Type of Currency Chilean Pesos 1.00.01.40 Type of Financial Statements Individual 1 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. 09-30-03 09-30-02 5.11.00.00 TOTAL CURRENT ASSETS 97,451,558 107,154,618 5.11.10.10 Cash 1,272,998 31,748,979 5.11.10.20 Time deposits 41 5,261,345 5,151,002 5.11.10.30 Marketable securities (net) 4 55,958,523 12,709,728 5.11.10.40 Debtors from sales (net) 5 19,593,606 18,339,804 5.11.10.50 Documents receivable (net) 5 1,836,729 2,437,526 5.11.10.60 Sundry debtors (net) 5 831,745 551,564 5.11.10.70 Doc. & accts receivable 6 2,352,998 3,173,123 related Co. 5.11.10.80 Inventories (net) 7 5,659,975 5,300,724 5.11.10.90 Recoverable taxes 8 1,724,203 153,308 5.11.20.10 Prepaid expenses 205,705 191,047 5.11.20.20 Deferred taxes 8 373,226 621,467 5.11.20.30 Other current assets 10-11 2,380,505 26,776,346 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 78,831,220 70,414,451 5.12.10.00 Land 12 1,507,923 1,507,948 5.12.20.00 High rises & infrastructure 12 22,530,234 18,160,874 5.12.30.00 Machinery & equipment 12 102,731,403 96,136,662 5.12.40.00 Other fixed assets 12 7,565,381 6,809,904 5.12.50.00 Positive goodwill from technical revaluation of fixed assets 12 6,619,986 8,637,670 5.12.60.00 Depreciation (minus) 12 (62,123,707) (60,838,607) 5.13.00.00 TOTAL OTHER ASSETS 182,487,675 186,757,757 5.13.10.10 Investment in related companies 14 146,844,040 145,369,715 5.13.10.20 Investment in other companies 0 0 5.13.10.30 Negative goodwill 16 1,939,310 2,111,095 5.13.10.40 Positive goodwill (minus) 0 0 5.13.10.50 Long-term debtors 5 142,826 177,084 5.13.10.60 Doc. & accts receivable 6 21,334,102 24,859,956 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 12,227,397 14,239,907 5.13.20.10 Long-term leasing contracts 0 0 (net) 5.10.00 TOTAL ASSETS 358,770,453 364,326,826
2 LIABILITIES 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance : Individual
LIABILITIES NOTE No. 09-30-03 09-30-02 5.21.00.00 TOTAL CURRENT LIABILITIES 18,683,496 34,347,401 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 19 136,073 22,015,872 5.21.10.30 Obligations with the public 0 0 (notes) 5.21.20.40 Short-term portion oblig with 775,589 774,957 public 5.21.10.50 Long-term oblig. due within 1 0 0 year 5.21.10.60 Dividends payable 504,791 552,151 5.21.10.70 Accounts payable 2,481,887 1,851,240 5.21.10.80 Notes payable 2,063,207 1,161,615 5.21.10.90 Sundry creditors 1,009,018 353,452 5.21.20.10 Notes & accts payable related 6 798,115 704,699 Co. 5.21.20.20 Provisions 23 5,355,462 5,395,482 5.21.20.30 Withholdings 1,505,225 1,537,933 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 4,054,129 0 5.22.00.00 TOTAL LONG-TERM LIABILITIES 112,707,403 94,210,381 5.22.10.00 Oblig with Banks & Financial 21 33,048,500 16,509,497 Inst. 5.22.20.00 Long-term oblig with public 69,478,723 69,422,126 (bonds) 5.22.30.00 Long-term notes payable 0 0 5.22.40.00 Long-term sundry debtors 168,616 1,067,234 5.22.50.00 Long-term notes & accts. payable related companies 6 0 0 5.22.60.00 Long-term provisions 23 7,623,385 5,444,154 5.22.70.00 Long-term deferred taxes 8 2,388,179 1,767,370 5.22.80.00 Other long-term liabilities 0 0 5.23.00.00 MINORITY INTEREST 0 0 5.24.00.00 TOTAL EQUITY 227,379,554 235,769,044 5. 24.10.00 Paid-in capital 27 64,749,257 64,686,393 5. 24.20.00 Reserve capital revaluation 27 776,991 840,924 5. 24.30.00 Premium in sale of own shares 27 27,929,574 27,930,030 5. 24.40.00 Other reserves 27 8,112,383 11,561,262 5. 24.50.00 Retained earnings (addition of codes 5.24.51.00 to 5.24.56.00) 27 125,811,349 130,750,435 5.24.51.00 Reserve 27 124,356,319 116,289,293 future dividends 5.24.52.00 Accrued profits 27 0 0 5.24.53.00 Accrued 0 0 losses (minus) 5.24.54.00 Profit (loss) 27 2,415,990 16,447,688 for the year 5.24.55.00 Prov. dividends (960,960) (1,986,546) (minus) 5.24.56.00 Accr. deficit 27 0 0 dev. period 5.20.00.00 TOTAL LIABILITIES 358,770,453 364,326,826
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 : Individual
INCOME STATEMENT NOTE No. 09-30-03 09-30-02 5.31.11.00 OPERATING RESULTS 17,355,539 17,507,574 5.31.11.10 Gross Margin 21,270,776 21,662,830 5.31.11.11 Sales 54,532,725 51,083,334 5.31.11.12 Costs (minus) (33,261,949) (29,420,504) 5.31.11.20 Adm. & sales expenses (3,915,237) (4,155,256) (minus) 5.31.12.00 NON-OPERATING RESULTS (14,051,799) 2,370,452 5.31.12.10 Interest income 2,005,213 1,519,582 5.31.12.20 Income from invmnts Rel. Co. 14 3,664,360 5,815,658 5.31.12.30 Other non-operating income 28 288,216 484,710 5.31.12.40 Loss invmnts Rel. Co. (-) (5,251,034) (9,599,137) 5.31.12.50 Amortization neg.goodwill (-) 16 (128,813) (128,815) 5.31.12.60 Interest expenses (minus) (3,668,428) (2,908,055) 5.31.12.70 Other non-operat expenses (-) 28 (627,219) (542,429) 5.31.12.80 Price level restatement 29 (432,458) (641,810) 5.31.12.90 Exchange differences 30 (9,901,636) 8,370,748 5.31.10.00 RESULTS BEFORE INCOME TAX 3,303,740 19,878,026 AND EXTRAORDINARY ITEMS 5.31.20.00 INCOME TAX 8 (887,750) (3,430,338) 5.31.30.00 EXTRAORDINARY ITEMS 0 0 5.31.40.00 PROFIT (LOSS) BEFORE 2,415,990 16,447,688 MINORITY INTEREST 5.31.50.00 MINORITY INTEREST 0 0 5.31.00.00 NET INCOME (LOSS) 2,415,990 16,447,688 5.32.00.00 Amortization of positive goodwill 0 0 5.30.00.00 INCOME (LOSS) FOR THE YEAR 6 2,415,990 16,447,688
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 : Individual
DIRECT CASH FLOW STATEMENT NOTE No. 09-30-03 09-30-02 5.41.11.00 NET FLOW FROM OP. ACT. 18,475,490 28,276,573 5.41.11.10 Collection from sales debtors 67,143,231 61,307,619 5.41.11.20 Interests received 2,628,245 7,936,313 5.41.11.30 Dividends & other distributions 1,705,232 1,402,632 funds received 5.41.11.40 Other income 33 898,286 516,841 5.41.11.50 Payments to suppliers & personnel (-) (39,805,632) (34,331,035) 5.41.11.60 Interest paid (minus) (4,327,723) (1,876,694) 5.41.11.70 Income tax paid (minus) (2,217,938) (1,516,970) 5.41.11.80 Other expenses 33 (5,304,575) (663,994) 5.41.11.90 V.A.T. & other taxes (2,243,636) (4,498,139) 5.41.12.00 CASH FLOW FINANCING ACTIVITIES (7,709,435) 20,066,739 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 69,273,018 5.41.12.20 Secured loans from related companies 44,903 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) (7,754,338) (7,272,397) 5.41.12.40 Capital distributions (minus) 0 0 5.41.12.45 Repayment of loans (minus) 0 (38,052,440) 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 0 5.41.12.65 Share issue payment (minus) 0 0 5.41.12.70 Payment of issue publ oblig (minus) 0 (3,881,442) 5.41.12.75 Other financing payments (minus) 33 0 0 5.41.13.00 CASH FLOW FROM INVESTING ACTIVITIES (23,241,479) 1,441,929 5.41.13.05 Sale of fixed assets 109,688 18,439 5.41.13.10 Sale of permanent investments 0 0 5.41.13.15 Sale of other investments 33 308,240 11,496,549 5.41.13.20 Proceeds secured loans to related Comp. 3,048,370 432,923 5.41.13.25 Proceeds other loans to related companies 0 0 5.41.13.30 Other investment income 33 1,469,229 4,000,707 5.41.13.35 Incorporation of fixed assets (minus) (17,870,660) (7,491,711) 5.41.13.40 Capitalized interests payment (minus) 0 0 5.41.13.45 Permanent Investments (minus) (4,022,544) (391,529) 5.41.13.50 Investments in financial 0 (1,609,915) instruments (minus) 5.41.13.55 Other loans to related companies (66,929) (3,903,413) (minus) 5.41.13.60 Other loans to related companies (7,519) (5,170) (minus) 5.41.13.65 Other distrib of funds on invest 33 (6,209,354) (1,104,951) activities (-) 5.41.00.00 TOTAL NET CASH FLOW FOR THE PERIOD (12,475,424) 49,785,241 5.42.20.00 EFFECT OF INFLATION ON CASH & CASH EQUIV. (972,685) (668,722) 5.41.00.00 NET CHANGE IN & CASH EQUIVALENT (13,448,109) 49,116,519 5.42.00.00 CASH & CASH EQUI AT BEGINNING OF PERIOD 74,141,343 19,299,552 5.43.00.00 CASH & CASH EQUIV BALANCE AT END OF PERIOD 60,693,234 68,416,071
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 : Individual
CASH FLOW - INCOME STATEMENT RECONCILIATION NOTE No. 09-30-03 09-30-02 5.50.10.00 Profit (Loss) for the year 2,415,990 16,447,688 5.50.20.00 Profit in sale of assets (4,527) (34,559) 5.50.20.10 (Profit) Loss in sale of fixed assets (4,527) (34,559) 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) 17,688,082 12,856,653 5.50.30.05 Depreciation for the year 12 7,296,880 6,756,809 5.50.30.10 Amortization of intangibles 649,029 1,151,110 5.50.30.15 Write-offs and provisions 735,519 4,897,693 5.50.30.20 Accrued earnings from investments in 14 (3,664,360) (5,815,658) related companies (minus) 5.50.30.25 Accured losses from investments in 14 5,251,034 9,599,137 related Co. 5.50.30.30 Negative goodwill amortization 16 128,813 128,815 5.50.30.35 Positive goodwill amortization (minus) 0 0 5.50.30.40 Price level restatement 29 432,458 641,810 5.50.30.45 Net exchange difference 30 9,901,636 (8,370,748) 5.50.30.50 Other non-cash credits to results (minus) (24,735) (24,736) 5.50.30.55 Other non-cash debits to results (3,018,192) 3,892,421 5.50.40.00 Changes in Assets affecting cash flow (incr) (1,180,248) (1,267,598) decreases 5.50.40.10 Debtors from sales (943,198) (2,699,593) 5.50.40.20 Inventory (255,357) 1,318,903 5.50.40.30 Other assets 18,307 113,092 5.50.50.00 Changes in liabilities affecting cash flow (443,807) 274,389 increases (decr) 5.50.50.10 Accounts payable related to results for 7,709 (1,713,238) the year 5.50.50.20 Interests payable (990,445) 695,916 5.50.50.30 Income tax payable (net) 408,444 1,056,743 5.50.50.40 Other accounts payable related to (315,646) (231,765) non-oper results 5.50.50.50 VAT and other taxes payable (net) 446,131 466,733 5.50.60.00 Profit (Loss) of minority interest 0 0 5.50.00.00 NET OPERATING CASH FLOW 18,475,490 28,276,573
6 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 is supervised by the Securities and Insurance Commission. 7 02. Applied Accounting Criteria a) Accounting Period These financial statements correspond to the period between January 1 and September 30 of 2003 and 2002. b) Preparation basis of financial statements: These individual financial statements as of September 30, 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 income of the fiscal year nor the net worth. These financial statements have been issued only for purposes of making an individual analysis of the Company and, in consideration thereof, 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 2002 fiscal year are presented updated according to non-accounting terms as of September 30, 2003 by 2.9%. 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 1.2% (1.3% 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 660.97 748.73 Pound Sterling 1,099.23 1,173.19 Swiss Franc 501.76 506.96 EURO 770.81 770.39 Unidad de Fomento 16,946.03 16,455.03
f) Marketable Securities and Time Deposits 8 Transactions in fixed income instruments are shown at the return value of the investment, which does not exceed the market value as of September 30, 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. Investments in Mutual Funds are valued at the liquidation value at the close of the fiscal year. g) Inventory Inventory of finished products has been valued as of September 30, 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 Fixed assets are shown at purchase cost plus legal and regulatory revaluations accumulated until September 30, 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 None. n) Investments in Related Companies Investments in stock 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. 9 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. Negative goodwill amortizations are carried out over a twenty-year period. As of September 30, 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) Sales 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. 10 v) Research and Development Expenses The company records expenses for this concept directly in results as they are generated. 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." Income by time deposits and agreements with maturity more than 90 days Has been clasified in the item "Investments in Financial Instruments". 11 03. Accounting Changes As of September 30, 2003 and 2002, there have not been any changes in the accounting criteria that affect the individual financial statements. 12 04. Marketable Securities As of September 30, 2003, this item is composed by the following investments: a) Investments in bonds and Fixed Fate Instruments in the amount of Th Ch$ 51,487,181; mainly corresponding to investments in State Bonds and bonds of financial institutions in USA, Germany, Holland, Collateralized Bonds of Private Companies in USA (guaranteed by accounts receivable) and USA Mortgage Bonds with state guarantee. b) Th Ch$ 4,163,102 in shares. c) Th Ch$ 308,240 in investment funds of fixed income in US$. As of September 30, 2002 investments in shares are included in the amount of Th Ch$ 3,776,725; Th Ch$ 8,903,062 in Mutual Funds of Fixed Rate Instruments in US$ and Th Ch$ 29,941 corresponding to interests accrued from Bonds. CRISTALERIAS DE CHILE S.A. NOTE 4 -MARKETABLE SECURITIES- BALANCE COMPOSITION
Type of Security Book Value 09-30-2003 09-30-2002 Stock 4,163,102 3,776,725 Bonds 0 0 Mutual fund shares 0 0 Investment fund shares 308,240 8,903,062 Public tender promissory notes 0 0 Mortgage bonds 0 0 Fixed rate instruments and bonds 51,487,181 29,941 Total Marketable Securities 55,958,523 12,709,728
13 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 63,642,856 9.9980 95 6,071,528 4,163,102 Emiliana S.A. Value Investment Portfolio 6,071,528 4,163,102 Adjustment Reserve 0 Book value, Investment Portfolio 4,163,102
14 CRISTALERIAS DE CHILE S.A. NOTE 4 - MARKETABLE SECURITIES - FIXED RATE INSTRUMENTS
Par Market Type of Security Value Book Value Value Reserve Amount Rate % Financial Institutions bonds (USA, Germany and Holland) 24,044,544 24,044,544 5.90 24,044,544 0 US treasury bonds 13,584,553 15,584,553 1.26 13,584,553 0 Mortgage bonds USA, with state guarantee 13,359,571 13,359,571 1,26 13,359,571 0 Call Deposit 806,753 806,753 5,85 806,753 0 TOTAL 51,795,421 51,795,421 - 51,795,421 -
Note: (1) The investements were made in U.S. Dollars (75.4%) and EUROS (24.6%) with custody abroad. (2) These investments can be rescued within 48 hours warning. (3) Rate for period from 01-01-2003 to 09-30-2003. 15 05. Short-Term and Long-Term Debtors At September 30, 2003 and 2002 there are balances of short-term debtors of Th Ch$ 22,262,080 and Th Ch$ 21,328,894, respectively. In addition there is a balance of Th Ch$ 142,826 for Long-Term debtors in 2003 (Th Ch$ 177,084 in 2002). As of September 30, 2003 and 2002 the company has established a reserve for bad debts of Th Ch$ 143,127 in 2003 (Th Ch$ 128,541 in 2002), which is deducted from Debtors for Sales. The balance of Short-term Debtors is shown net of the reserve for bad debtors and customer advances. 16 CRISTALERIAS DE CHILE S.A. NOTE 5 -SHORT AND LONG TERM DEBTORS
Current Assets Item Up to 90 days Over 90 days up to 1 year Subtotal 09-30-2003 09-30-2002 09-30-2003 09-30-2002 Debts from Sales 18,719,228 17,707,250 1,017,505 761,095 19,736,733 Estimate of non-collectable debt -- -- -- 143,127 Documents receivable 1,716,775 2,380,495 119,954 57,031 1,836,729 Estimate of bad debtors -- -- -- -- -- Misc. debtors 799,785 509,652 31,960 41,912 831,745 Estimate of bad debtors -- -- -- -- --
Current Assets Total Current (net) Long Term 09-30-2003 09-30-2002 09-30-2003 9-30-2002 Debts from Sales 19,593,606 18,339,804 0 0 Estimate of non-collectable debt -- -- -- -- Documents receivable 1,836,729 2,437,526 0 0 Estimate of bad debtors -- -- -- -- Misc. debtors 831,745 551,564 142,826 177,084 Estimate of bad debtors -- -- -- -- Total Long Term Debtors 142,826 177,084
17 06. Balances and Transactions with related entities I. Balances receivable in the Short-Term as of September 30, 2003 and 2002 amount Th Ch$ 2,352,998 and Th Ch$ 3,173,123, respectively. In addition, in the Long-Term a balance of Th Ch$ 21,334,102 and Th Ch$ 24,859,956 is recorded, respectively, which correspond to Th Ch$ 19,893,689 in 2003 for the sale of Rayen Cura S.A.I.C. shares to the subsidiary Cristalchile Inversiones S.A., equivalent to UF 1,173,943.93 , without interests and Th Ch$ 1,440,413 in 2003, which correspond to loans granted to Red Televisiva Megavision S.A. Detail of outstanding credits from related companies: 1) Loan to Red Televisiva Megavision S.A. Annual Rate 4.05%, UF adjustability 07.05.2005 17,000 UF Th Ch$ 288,083 01.05.2006 17,000 UF Th Ch$ 288,083 07.05.2006 17,000 UF Th Ch$ 288,083 01.05.2007 17,000 UF Th Ch$ 288,083 07.05.2007 17,000 UF Th Ch$ 288,081 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 2,008,665 2,389,769 Vina Los Vascos S.A. 144,726 143,578 Rayen Cura S.A.I.C. 180,640 0 Servicios y Consultorias Hendaya S.A 1,900 0 Vina Dona Paula S.A. 2,158 0 --------- --------- Total 2,338,089 2,536,347
II. Balances Payable in the Short-Term amount Th Ch$ 798,115 in 2003 and Th Ch$ 704,699 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 203,909 146,333 Ediciones Financieras S.A. 0 1,765 Vina Los Vascos S.A. 8,814 14,322 Megavision S.A. 0 0 Cia. Electro Metalurgica S.A. 0 0 Servicios y Consultorias Hendaya S.A. 0 0 ------- ------- TOTAL 212,723 162,420
For dividends payable to related companies there is the following detail: 18
2003 2002 Th Ch$ Th Ch$ Cia. Electro Metalurgica S.A. 326,700 336,174 Servicios y Consultorias Hendaya S.A, 85,190 87,661 Bayona S.A. 88,688 91,260 ------- ------- TOTAL 500,578 515,095
For balances in favor in CIECSA S.A.'s current account Th Ch$ 44,424, Cristalchile Inversiosnes S.A. Th Ch$ 8,931 and Cristalchile Comunicaciones S.A. Th Ch$ 31,459. 19 CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCE AND TRANSACTIONS WITH RELATED COMPANIES DOCUMENTS AND ACCOUNTS RECEIVABLE
R.U.T. Company Short Term Long Term 09-30-2003 09-30-2002 09-30-2003 09-30-2002 86547900-K S.A. VINA SANTA RITA 2,008,665 2,389,769 0 0 79952350-7 RED TEL. MEGAVISION S.A. 14,908 622,481 1,440,413 2,302,783 89150900-6 VINA LOS VASCOS S.A. 144,726 146,578 0 0 96721580-5 CRISTACHILE COMUNICACIONES S.A. 0 14,295 0 0 96972440-5 CRISTALCHILE INVERSIONES S.A. 0 0 19,893,689 22,557,173 83032100-4 SERV. Y CONSULTORIAS HENDAYA S.A. 1,900 0 0 0 0-E RAYEN CURA S.A. I.C. 180,640 0 0 0 0-E VINA DONA PAULA S.A. 2,159 0 0 0 TOTAL 2,352,998 3,173,123 21,334,102 24,859,956
20 CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES DOCUMENTS AND ACCOUNTS PAYABLE
R.U.T. Company Short Term Long Term 09-30-2003 09-30-2002 09-30-2003 09-30-2002 86547900-K S.A. VINA SANTA RITA 203,909 146,333 0 0 96608270-4 CIECSA S.A. 44,424 16,942 0 0 96972440-5 CRISTALCHILE INVERSIONES S.A. 8,931 10,243 0 0 89150900-6 VINA LOS VASCOS S.A. 8,814 14,322 0 0 96539380-3 EDICIONES FINANCIERAS S.A. 0 1,765 0 0 86755600-1 BAYONA S.A. 88,688 91,260 0 0 90320000-6 CIA. ELECTROMETALURGICA S.A. 326,700 336,174 0 0 83032100-4 SERV. Y CONSULTORIAS HENDAYA S.A. 85,190 87,660 0 0 96721580-5 CRISTALCHILE COMUNICACIONES S.A. 31,459 0 0 0 TOTAL 798,115 704,699 0 0
21 CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES TRANSACTIONS
09-30-2003 09-30-2002 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 assesment 31,248 -31,248 27,509 -27,509 CIA. SUDAMERICANA DE 90160000-7 Indirect Carrier 187,569 0 12,621 0 VAPORES S.A. affiliate services VINA LOS VASCOS S.A. 89150900-6 Indirect Direct sales 307,151 79,590 391,165 108,484 affiliate Indirect Materials 29,177 0 16,709 0 affiliate purcha EDICIONES FINANCIERAS 96793770-3 Indirect Received 3,748 -3,748 5,883 -5,883 S.A. affiliate services QUEMCHI S.A. 96640360-8 Indirect Loaned services 8,215 8,215 7,541 7,541 affiliate BAYONA S.A. 86755600-1 Controlling Dividends paid 723,399 0 584,673 0 stockholder NAVARINO S.A. 96566900-0 Indirect Given services 7,586 7,586 7,541 7,541 subsidiary CIECSA S.A. 96608270-4 Subsidiary Capital 1,512,024 0 389,971 0 Contribution Subsidiary Adjustments 91 -91 212 -212 SERV. Y CONS. HENDAYA 83032100-4 Controlling Received 780,580 -780,580 777,404 -777,404 S.A. stockholder services Controlling Dividends paid 694,870 0 649,275 0 stockholder Controlling Given services 15,709 15,709 14,928 14,928 stockholder CRISTALCHILE INVERSIONES 96972440-5 Subsidiary Adjustments 245,188 245,188 272,969 272,969 S.A. Subsidiary Credit return 1,788,069 0 432,923 0 Given Credit 0 0 3,837,284 0 Account 0 0 47 0 Payments S.A. VINA SANTA RITA 86547900-K Subsidiary Container 4,365,875 1,131,306 4,969,250 1,378,151 Sales Subsidiary Packaging 370,736 0 443,621 0 sales Subsidiary Materials and 474,143 126,193 520,474 -25,552 services purcha Subsidiary Dividends 1,506,577 0 1,204,635 0 Received Subsidiary Rent of 13,819 13,819 47,475 31,246 Vineyard and grape sales CRISTALCHILE 96721580-5 Subsidiary Adjustments 0 0 173 173 COMUNICACIONES Capital 2,510,000 0 0 0 Contribution CIA. ELECTROMETALURGICA 90320000-6 Controlling Dividends paid 2,664,783 0 2,489,931 0 S.A. stockholder Controlling Materials 3,585 0 1,808 0 stockholder purcha Controlling Account 280 0 0 0 stockholder Payments RED TELEVISIVA 79952350-7 Related with Interests 91,923 91,923 150,918 150,918 MEGAVISION S.A. Subsidiary Related with Adjustments 30,922 30,922 33,651 33,651 Subsidiary Related with Loan repayment 1,152,360 0 0 0 Subsidiary Related with Advertisements 0 0 2,573 -2,573 Subsidiary RAYEN CURA S.A.I.C. 0-E Indirect Direct Sales 435,591 135,177 188 0 affiliate
22 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 2,680,271 2,492,462 Raw Materials and Fuel 1,635,413 1,659,258 Materials and spare parts to be consumed 1,041,451 1,149,004 Materials in transit 302,840 0 ---------- ----------- TOTAL 5,659,975 5,300,724
23 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 years for Short-Term Assets, 5 for Long-Term Assets, and 14.4 for Long-Term Liabilities. B) INCOME TAX The Company established tax provisions of 16.5% of First Cateogry Income Tax in 2003 and 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 (656,310) (2,518,216) Single tax reserve (8,032) (7,115) ----------- ----------- SUBTOTAL (664,342) (2,525,331) Credits: Monthly reserve payments 2,120,700 2,400,153 Training expenditure 35,472 34,847 Credit from donations 0 3,170 Recoverable VAT 0 0 ----------- ----------- CREDIT SUBTOTAL 2,156,172 2,438,170 INCOME TAX TOTAL 0 0 VAT Tax Credit previous fiscal year 232,373 240,469 ----------- ----------- TOTAL TAXES TO BE RECOVERED 1,724,203 153,308
C) TAXABLE PROFIT FUND The company showed the following taxable profits to be distributed:
2003 2002 Thou Ch$ Thou Ch$ Generated to 31.12.1983: Profit Adjustment 1,924,872 1,924,782 Generated since 01.01.1984: Without Credit 1,075,346 1,048,220 With 10% First Category Credit 22,761 82,751 24 With 15% First Category Credit 86,254,956 95,265,496 With 15% Additional Rate Credit 724 746 With 16% First Category Credit 16,173,816 15,904,716 With 16.5% First Category Credit 4,113,428 0 ------------- ------------- SUBTOTAL TAX PROFITS 107,641,031 112,301,929 Non-income revenues 6,845,657 6,850,759 ------------- ------------- Total earnings to distribute 114,486,688 119,152,688
25 CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX DEFERRED TAXES
09-30-2003 09-30-2002 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 21,125 0 0 0 Expected revenue 0 0 0 0 0 0 0 0 Vacation reserve 62,093 0 0 0 0 0 0 0 Amortization intangibles 0 0 0 0 58,097 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 0 0 4,608,290 0 0 0 4,388,437 Severance 1,756 145,219 0 0 1,745 136,083 0 0 Other events 0 0 0 0 0 0 0 0 Packaging reserve 193,613 0 0 0 212,577 0 0 8,248 Machinery repair reserve 0 0 0 0 0 0 0 0 Furnace repair reserve 0 580,543 0 0 260,577 262,274 0 0 Refractories obsolescence reserve 7,090 0 0 0 6,575 0 0 0 Spare parts obsolescence reserve 97,303 0 0 0 97,406 0 0 0 Deferred customs duties 0 0 0 1,959 21,370 0 0 157,849 Accumulated depreciation 0 16,598 0 80,552 0 12,488 0 0 automoviles Unrealized profit 41,036 6,991 0 0 0 2,453 0 0 Fixed asset, molds 0 0 0 264,005 0 0 0 239,566 Lower valued bonds 0 0 53,281 552,116 0 0 52,608 0 OTHERS Complementary accounts-net 0 12,552 0 2,381,944 5,397 55,456 0 2,668,888 amortization Valuation reserve 0 0 - - Total 426,507 736,799 53,281 3,124,978 674,075 357,842 52,608 2,125,212
26 CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX INCOME TAX
ITEM 09-30-2003 09-30-2002 Current tax costs (tax reserve) -664,342 -2,525,331 Adjustment tax cost (previous year) 0 0 Effect on assets or liabilities from deferred tax of fiscal year -98,107 -851,118 Tax benefit from tax losses 0 0 Effect of amortization of complementary accounts of deferred -125,301 -53,889 assets and liabilities Effect on assets or liabilities of deferred tax for changes in 0 0 evaluation reserve Other debits or credits in the account 0 0 Total -887,750 -3,430,338
27 09.Short-term and long-term leasing contracts and leasing assets (note required only for leasing companies defined in circular No. 939 of 1990). As of September 30, 2003 and 2002, there are no transactions for this concept. 28 10. Other current assets As of September 30, 2003, investments in financial instruments for Th Ch$ 2,055,229, with resale agreements, valued as stated in note 2 p) for Th Ch$ 827,000 corresponding to agreements in pesos, and agreements in US$ under 90 days for Th$ 1,228,229. On September, 2003 Th Ch$ 325,276 are included corresponding to issuance expenses and rate placement difference of bonds series C and D. As of September 30, 2002, there was a balance of Th Ch$ investments in financial instruments with resale agreements for Th Ch$ 22,583,084, valued as stated in note 2 p), Th Ch$ 3,864,460 as balance in favor for Future Contracts in foreing currency are included. In addition Th Ch$ 328,802 exist, which correspond to the current portion of expenses and goodwill for the issue of bond series C1, C2, D1 and D2. 29 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. 30 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)
Dates Original Price Market Code Start End Counterpart Currency Set Rate Final Value Document ID Value CRV 09.30.2003 10.01.2003 BCO. CRED. INV. Pesos 827,000 0.22 827,061 BPC-PDBC 827,00 CORREDORES BOLSA CRV 09.30.2003 10.01.2003 BANCO DE CHILE Pesos 1,228,229 1.00 1,220,581 CHI-EST-PRD-FN 1,228,229
31 12. Fixed Assets Fixed Assets: The Fixed Assets are shown at purchase cost plus the legal and regulatory revaluations accumulated as of September 30, 2003 and 2002. The items that make up the Company's fixed assets as of September 30, 2003 and 2002 include mainly Land, Industrial Constructions, Infrastructure Works, Machinery and Equipment distributed in the Padre Hurtado Plant. During 2002, the company carried out a fixed asset inventory, adjusting the value of fully depreciated assets 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. Likewise, 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$ 7,296,880 in 2003 and Th Ch$ 6,756,809 in 2002. The detail is shown on an attached chart. 32 FIXED ASSETS
2003 2002 Th Ch$ Th Ch$ LAND Land & mining claims 1,507,923 1,507,948 Subtotal land 1,507,923 1,507,948 Subtotal land 1,507,923 1,507,948 CONSTRUCTIONS & INFRASTRUCTURE High rises and industrial const. 13,394,578 13,393,376 Facilities 9,109,391 4,741,234 Housing developments 26,265 26,264 Subtotal constructions & infrastrucrture 22,530,234 18,160,874 Accumulated depreciation (8,921,125) (7,275,952) Depreciation for the fiscal year (966,814) (638,052) Subtotal depreciation (9,887,939) (7,914,004) SUBTOTAL CONSTRUCTIONS & INFRASTRUCTURE 12,642,295 10,246,870 MACHINERY & EQUIPMENT Machinery 54,533,378 55,962,010 Furnaces 46,365,920 37,892,223 Furniture and Maerials 1,271,536 1,718,674 Tool 348,722 357,533 Vehicles 211,847 206,222 Subtotal Machinery & equipment 102,731,043 96,136,662 Accumulated depreciation (41,044,037) (40,135,214) Depreciation for the fiscal year (6,173,318) (5,962,008) Subtotal depreciation (47,217,355) (46,097,222) Subtotal machinery & equip 55,514,048 50,039,440 OTHER FIXED ASSETS Spare parts 5,545,442 5,216,836 Imports in transit 123,660 65,105 Works underway 1,112,106 867,905 Lots in Pirque and Leyda 464,290 475,952 Other 319,883 184,106 Subtotal other assets 7,565,381 6,809,904 TOTAL FIXED ASSETS 134,334,941 122,615,388 TOTAL ACCUMUL. DEPREC. (49,965,162) (47,411,466) TOTAL DEPREC FOR F. YEAR (7,140,132) (6,600,060) TOTAL NET FIXED ASSETS 77,229,647 68,604,162
33 TECHNICAL REVALUATION AND ADJUSTMENT OF ACCOUNTING VALUES
2003 2002 Th Ch$ Th Ch$ LAND Land and mining claims 313,585 319,476 Subtotal land and mining claims net 313,585 319,476 CONSTRUCTIONS & INFRASTRUCTURE High rises and industrial constructions 6,264,995 6,258,899 Facilities 41,406 444,405 Subtotal Constructions 6,306,401 6,703,304 Accumulated depreciation (4,861,664) (5,055,742) Depreciation for the fiscal year (156,748) (156,749) Subtotal depreciations (5,018,412) (5,212,491) Subtotal Constuctions & Infrastucture net 1,287,989 1,490,813 MACHINERY & EQUIPMENT Furnaces 0 530,370 Machinery 0 1,015,188 Tools 0 54,778 Furniture and Materials 0 14,554 Subtotal Machinery & equipment 0 1,614,890 Accumulated depreciation 0 (1,614,890) Depreciation for the fiscal year 0 0 Subtotal depreciation 0 (1,614,890) Subtotal machinery & equip 0 0 Total Net Technical Revaluation 1,601,574 1,810,289 TOTAL REVALUATED ASSET 6,619,986 8,637,670 TOTAL ACCUMULATED DEPRECIATION (4,861,664) (6,670,632) TOTAL DEPRECIATION FOR YEAR (156,748) (156,749) TOTAL NET 1,601,574 1,810,289
34 13. Sales transactions with leaseback These type of transactions were not carried out as of September 30, 2003 and 2002. 35 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. agreeded to increase its equity by the equivalent to UF 359,921 through the issue of 343,750,000 shares that were fully subscribed by Cristalchile S.A. On April 18, 2003 the subcribtion was paid. On August 26, 2003 it was agreeded to increase CIECSA's capital by Th Ch$ 910,000, through the issue of 36,400,000 shares totally suscribed and paid by Cristalchile, with which the participation in the subsidiary increased to 98.45% as of September 30, 2003. CRISTALCHILE INVERSIONES S.A. This company was formed at the end of 2001 in which Cristalerias de Chile S.A. has a 99.99 % share of the equity. Cristalchile Inversiones S.A., in turn, registers a 40% investment in Rayen Cura S.A.I.C., a company constituted in the city of Mendoza, Republic of Argentina. On January 31, April 25 and June 30 of 2003 Rayen Cura S.A.I.C. made capital reimbursements of part of a capital increase paid on April 29, 2002. Reimbursed amounts totaled Th US$ 2,600. As of September 30 the financial statements of Rayen Cura S.A.I.C. have recognized an exchange rate of $ 2.87 Argentine pesos per US Dollar. CristalChile Inversiones S.A., in turn, has adjusted the financial statements of Rayen Cura S.A.I.C. in order to acknowledge the variation occurred from $3.32 Argentine pesos (exchange rate used as of December 31, 2002) and $2.87 Argentine pesos per US dollar as of September 30, 2003. As an effect of the result of this affiliate and the conversion of the financial statements of Rayen Cura S.A.I.C., according to chilean normative, CristalChile Inversiones S.A., has recognized a Th Ch$ 717,358 income as of September 30, 2002, and a Th Ch$ 2,675,431 loss as of September 30, 2002. On the other hand, the dollar exchange rate variation during the 2003 and 2002 fiscal years originated a Th Ch$ 1,232,724 charge in 2003 and a Th Ch$ 500,208 credit in 2002 in the item Other Equity Reserves, for the investment in Rayen Cura S.A.I.C. and from the negative goodwill produced by the purchase of shares of that company. CRISTALCHILE COMUNICACIONES S.A. As of September 29, 2003 the Shareholders agreeded to increase the company's equity by issuing 3,861,538 shares, without nominal value, at a value of Ch$ 650 each, which represents Th Ch$ 2,510,000. Such increase was suscribed and paid by Cristalerias de Chile S.A., with which its participation in the company's equity reaches 99.998%. S.A. VINA SANTA RITA 36 As of September 30, 2003, the company has registered an unrealized income of Th Ch$ 248,705, corresponding to container sales to the the subsidiary S.A. Vina Santa Rita. 37 CRISTALERIAS DE CHILE S.A. NOTE 14 - INVESTMENTS IN RELATED COMPANIES DETAIL OF INVESTMENTS
Investment Country of Control Number of Shareholder R.U.T. Company Origin Currency Shares (Percentage) 09-30-2003 09-30-2002 96721580-5 Cristalchile Chile Peso 101,213,160 99.9981689220 99.998000 Comunicaciones S.A. 86547900-K S.A. Vina Santa Rita Chile Peso 493,959,797 54.0970095470 54.097000 S.A 86881400-4 Envases CMF S.A. Chile Peso 28,000 50.0000000000 50.000000 96608270-4 Ciecsa S.A. Chile Peso 652,901,305 98.4457827010 98.273700 Constructora Apoger 96767580-6 S.A. Chile Peso 800,000 80.0000000000 80.000000 Inmobiliaria Don 96826870-8 Alberto S.A. Chile Peso 3,817 38.1700000000 38.170000 Cristalchile 96972440-5 Inversiones S.A. Chile Peso 9,999 99.9900000000 99.990000 TOTAL
CRISTALERIAS DE CHILE S.A. NOTE 14 - INVESTMENTS IN RELATED COMPANIES DETAIL OF INVESTMENTS
Company Net Equity Income 09-30-2003 09-30-2002 09-30-2003 09-30-2002 70,614,161 75,140,007 -5,250,286 -6,845,803 81,347,931 79,399,111 3,735,128 8,387,774 33,088,075 30,296,796 713,420 463,654 16,410,897 11,951,794 825,740 1,063,284 5,077 52,135 -1,051 1,709 27 235 -8 -2,734 -2,135,634 606,921 474,198 -2,752,701
CRISTALERIAS DE CHILE S.A. NOTE 14 - INVESTMENTS IN RELATED COMPANIES DETAIL OF INVESTMENTS
Result of Income not Book value Accrual VPP Realized of Investment 09-30-2003 09-30-2002 09-30-2003 09-30-2002 09-30-2003 09-30-2002 09-30-2003 09-30-2002 -5,250,189 -6,845,668 70,612,868 75,138,505 0 0 70,612,868 75,138,505 2,020,593 4,537,535 44,006,798 42,952,538 -248,705 0 43,758,093 42,952,538 356,710 231,826 16,544,038 15,148,398 0 0 16,544,038 15,148,398 812,907 1,044,929 16,155,836 11,745,470 -230,867 -263,853 15,924,969 11,481,617 -841 1,368 4,062 41,708 0 0 4,062 41,708 -4 -1,044 10 89 0 0 10 89 474,150 -2,752,425 0 606,860 0 0 0 606,860 147,323,612 145,633,568 -479,572 -263,853 146,844,040 145,369,715
38 15. Investments in other companies As of September 30, 2003 and 2002 there are no investments in other companies. 39 16. Goodwill Amortization NEGATIVE GOODWILL Stock purchases made on years 1993, 1994, 1995, 1996 and 1999 of S.A. Vina Santa Rita and Ciecsa S.A., have produced negative goodwill whose net balance to be amortized as of September 30, 2003 totaled Th Ch$ 1,939,310 (Th Ch$ 2,111,095 in 2002). POSSITIVE GOODWILL As of September 30, 2003 and 2002 there are no transactions for this concept. 40 CRISTALERIAS DE CHILE S.A. NOTE 16 - GOODWILL ON INVESTMENTS Negative Goodwill
R.U.T. Company Name 09-30-2003 09-30-2002 Amount Amortiz. Balance of Negative Amount Amortiz. Balance of Negative this period Goodwill this period Goodwill 86547900-K S.A. Vina Santa Rita 37,707 572,714 37,708 623,000 96608270-4 Ciecsa S.A. 91,106 1,366,596 91,107 1,488,095 TOTAL 128,813 1,939,310 128,815 2,111,095
41 17. Intangibles As of September 30, 2003 and 2002 there are no values for these concepts. 42 18. Other (Assets) As of September 30, 2003, the sum of Th Ch$ 8,971,602 (Th Ch$ 10,580,217 in 2002) for investments in Bonds of Celulosa Arauco y Constitucion S.A., equivalent to US$ 13,420,000 at an annual rate of 6.95%, with maturity on September 15, 2005, is included in Other Long-term Assets. Considering that there is the intention of maintaining the Celulosa Arauco y Constitucion S.A. bonds until their maturity 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 according to the investment value, plus interests and adjustments accrued at the end of the fiscal year. As of September 30, 2003 there is a balance for issuance expenses of bond series C and D for Th Ch$ 918,574 (Th Ch$ 1,076,048 in 2002), and the negative goodwill produced as a result of their placement of Th Ch$ 2,337,221 (Th Ch$ 2,535,429 in 2002). In addition, as of September 30, 2002, Th Ch$ 48,213 are included for anticipated interests of Customs Duties Deferred Rights. 43 19. Short-term obligations with banks and financial institutions a) Short-term obligations with Banks and Financial Institutions (5.21.10.10). As of September 30, 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. 44 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 Institution Dollars Euros Yens 06-30-2003 06-30-2002 09-30-2003 09-30-2002 09-30-2003 09-30-2002 Short term (code: 5.21.10.10) Long Term - Short Term (code: 5.21.10.20) 0-E J.P Morgan Chase Bank 136,073 22,015,872 0 0 0 0 Others 0 0 0 0 0 0 TOTAL 136,073 22,015,872 0 0 0 0 Capital amount due 0 22,012,661 0 0 0 0 Average annual interest rate 1.925 3.0 0 0 0 0 Percentage oblig. foreign curr. (%) 100.0000 Percentage oblig. foreign curr. (%) 0.0000
CRISTALERIAS DE CHILE S.A. NOTE 19 - OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS, SHORT TERM Type of Currency and Readjustment Index
Other Foreign Currencies U.F. Non adjustable $ Total 09-30-2003 09-30-2002 09-30-2003 09-30-2002 09-30-2003 09-30-2002 09-30-2003 09-30-2002 0 0 0 0 0 0 136,073 22,015,872 0 0 0 0 0 0 0 0 0 0 0 0 0 0 136,073 22,015,872 0 0 0 0 0 0 0 22,012,661 0 0 0 0 0 0 0 0
45 20. Other Current Liabilities As of September 30, 2003 , a positive balance of Th Ch$ 4,054,129 in favor of financial institutions was produced, as a consequence of Future Contracts subscribed by the Company, more detail of these is shown in note 34 Derivative Contracts. As of September 30, 2002, there was no balance for these transactions. 46 21. Long term liabilities with banks and financial institutions The obligations with banks and financial institutions are presented on the charts attached. 47 CRISTALERIAS DE CHILE S.A. NOTE 21: LONG-TERM OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS Long-term Obligations With Banks and Financial Institution
Maturity Adjustment Bank or index From 1 From 2 From 3 From 5 More than 10 years Financial currency to 2 to 3 to 5 to 10 Amount Term R.U.T. Institution M$ M$ M$ M$ M$ 0-E J.P. Morgan Chase Bank Dollars -- 8,262,125 24,786,375 -- -- -- Euros -- -- -- -- -- -- Yen -- -- -- -- -- -- UF -- -- -- -- -- -- Non-adj.CH$ -- -- -- -- -- -- Others -- -- -- -- -- -- Total -- 8,262,125 24,786,375 -- -- -- Porcentaje de obligaciones en moneda extranjera 100.00% Porcentaje de obligaciones en moneda nacional 0.00%
CRISTALERIAS DE CHILE S.A. NOTE 21: LONG-TERM OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS Long-term Obligations With Banks and Financial Institution
Closing date Closing date Maturity Current period Previous period Total Long-Term Average Total Long-Term at closing of annual at closing of More than 10 years Financial interest Financial Amount Term Statements rate Statements M$ -- -- 33,048,500 1.925 16,509,497 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 33,048,500 16,509,497
48 22. Short-term and long-term obligations with the public (promissory notes and bonds) As of September 30, 2003 and 2002, there are obligations with the public for UF 4,100,000, equivalent to Th Ch$ 69,478,723 (Th Ch$ 69,422,126 in 2002) divided in series C1, C2, D1 and D2, with a 4.75% annual interest in series C and 5.80% in series D. In the short term there is a balance of Th Ch$ 775,889 (Th Ch$ 774,957 in 2002) corresponding to accrued interests for UF 45,468.20. 49 Cristalerias de Chile S.A. NOTE 22: SHORT-TERM AND LONG-TERM OBLIGATIONS WITH PUBLIC (PROMISSORY NOTES AND BONDS) BONDS
REGISTRATION OR INSTALLMENTS IDENTIFICATION No. CURRENT 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 01-15-2004 SEMI-ANNUAL SEMI-ANNUAL 296-09.07.02 C2 Interests 0 UF 4.75 01-15-2004 SEMI-ANNUAL SEMI-ANNUAL 296-09.07.02 D1 Interests 0 UF 5.80 01-15-2004 SEMI-ANNUAL SEMI-ANNUAL 296-09.07.02 D2 Interests 0 UF 5.80 01-15-2004 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 LONG-TERM TOTAL
Cristalerias de Chile S.A. NOTE 22: SHORT-TERM AND LONG-TERM OBLIGATIONS WITH PUBLIC (PROMISSORY NOTES AND BONDS) BONDS
ISSUE PAR VALUE IN CHILE OR 09-30-2003 09-30-2002 ABROAD LONG-TERM BONDS-CURRENT PORTION 296-09.07.02 255,054 255,047 LOCAL 296-09.07.02 85,085 85,015 LOCAL 296-09.07.02 393,798 393,477 LOCAL 296-09.07.02 41,452 41,418 LOCAL TOTAL CURRENT PORTION 775,589 774,957 296-09.07.02 25,419,045 25,398,339 LOCAL 296-09.07.02 8,473,015 8,466,113 LOCAL 296-09.07.02 32,197,457 32,171,229 LOCAL 296-09.07.02 3,389,206 3,386,445 LOCAL LONG-TERM TOTAL 69,478,723 69,422,126
50 23. Provisions and Write-offs Provisions: As of September 30, 2003, the Company has short-term provisions of Th Ch$ 5,355,462 and Th Ch$ 5,395,482 in 2002. In the Long-term, provisions are recorded of Th Ch$ 7,623,385 as of September 30, 2003 and Th Ch$ 5,444,154 as of September 30, 2002. In the annexed chart a detail of provisioned amounts is presented. a) Bad Debt Reserves: The Company has established a reserve for bad debts of Th Ch$ 143,127, and Th Ch$ 128,541, respectively, as of September 30, 2003 and 2002. This provision is deducted from the balance of debtors from sales, as stated in note 5. b) Vacation Provision: The company has established a provision for the total cost of vacations pending as of September 30, 2003 and 2002, as established in Technical Bulletin No. 47 of the Accountants Association of Chile. The net balance for this item amounts Th Ch$ 376,317 as of September 30, 2003 (Th Ch$ 363,108 in 2002). c) Provision for Furnace Reconstruction: This provision is established throughout the useful life of the refractories of each smelting furnace so their repair will not have a distort the result of the fiscal year when the repairs are made. The Company has established a provision for this item in the amount of Th Ch$ 3,514,837 and Th Ch$ 3,199,104 as of September 30, 2003 and 2002, respectively. An itemized list of the amounts provisioned is shown in the attached chart. 51 Cristalerias de Chile S.A. Note Provisions and Write-offs 09/30/2003 09/30/2002 Short term Furnace Reconstruction 0 1,628,602 Packing for Client Return 1,150,178 1,288,343 Board Share 96,640 657,908 Provision Subsidiary Losses 2,135,420 0 Provision Indirect Expenses 687,266 648,481 Provision Legal Gratification 81,832 68,593 Legal Holiday 376,317 363,108 Severance Pay 181,526 171,436 Reserve Spare Parts 438,189 459,332 Other Provisions 208,094 109,679 -------------------------------------- Total Short Term 5,355,462 5,395,482 Long term Severance Pay 4,108,548 3,873,652 Furnace Reconstruction 3,514,837 1,570,502 -------------------------------------- Total Long-Term 7,623,385 5,444,154 52 24. Severance Payments The reserve for severance payments to personnel is included at its current value, as expressed in note 2 r). As of September 30, 2003 it totals Th Ch$ 4,290,074 (Th Ch$ 4,045,088 in 2002). As of September 30, 2003 and 2002 the parent company has paid severance payments of Th Ch$138,485 and Th Ch$ 66,067 respectively, chargeable against the reserve. 53 25. Other long-term liabilities As of September 30, 2003 and 2002 there are no values for this concept. 54 26. Minority interest Not applicable to individual financial statements. 55 27. Changes in Equity Activity in 2003 and 2002 The activity of the capital and reserve accounts in the fiscal years ended on September 30, 2003 and 2002, are shown in the attached charts. The detail of the item Other Reserves is the following:
2003 2002 Th Ch$ Th Ch$ Future capital increases 4,599,545 4,390,932 Reserve for adjustment of value 1,601,574 1,810,288 of fixed assets Adjustment for conversion difference 2,129,950 5,578,731 in investment in Rayen Cura S.A.I.C. Difference VPP Sodex (218,686) (218,689) ---------- ---------- TOTAL OTHER RESERVES 8,122,383 11,561,262
56 CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NET WORTH
Reserve capital Premium in sale Items Paid-in Capital revaluation of shares Other Reserves Balances as of 06-30-2003 Initial balance 64,749,257 0 27,598,393 9,713,099 Distribution result previous fiscal year 0 0 0 0 Final dividend previous fiscal year 0 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 1,717,273 Eventual Dividend 0 0 0 0 Owner's equity Revaluation 0 776,991 331,181 116,557 Fiscal Year Result 0 0 0 0 Provisional Dividends 0 0 0 0 Final balances 64,749,257 776,991 27,929,574 8,112,383 Balances as of 06-30-2002 Initial balance 62,863,356 0 26,794,558 7,942,919 Distribution result previous fiscal year 0 0 0 0 Final dividend previous fiscal year 0 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 3,189,257 Owner's equity revaluation 0 817,225 348,328 103,258 Fiscal Year Result 0 0 0 0 Provisional Dividends 0 0 0 0 Final balances 62,863,356 817,225 27,142,886 11,235,434 Updated balances 64,686,393 840,924 27,930,030 11,561,262
Fiscal Reserve Future Accumulated Provisional Devel. Period Year Items Dividends Results Dividends Deficit Result Balances as of 06-30-2003 Initial balance 114,912,655 17,660,662 -3,303,936 0 0 Distribution result previous fiscal year 14,356,726 -17,660,662 3,303,936 0 0 Final dividend previous fiscal year -5,526,400 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 0 0 0 0 0 adjustment Eventual Dividend -960,000 0 0 0 0 Owner's equity Revaluation 1,573,338 0 -960 0 0 Fiscal Year Result 0 0 0 0 2,415,990 Provisional Dividends 0 0 -960,000 0 0 Final balances 124,356,319 0 -960,000 0 2,415,990 Balances as of 06-30-2002 Initial balance 102,798,113 17,770,611 -4,657,728 -123,129 0 Distribution result previous fiscal year 12,989,754 -17,770,611 4,657,728 123,129 0 Final dividend previous fiscal year -4,230,400 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 0 0 0 0 0 adjustment Owner's equity revaluation 1,454,480 0 -1,930,560 0 0 Fiscal Year Result 0 0 0 0 15,984,148 Provisional Dividends 0 0 0 0 0 Final balances 113,011,947 0 -1,930,560 0 15,984,148 Updated balances 116,289,293 0 -1,986,546 0 16,447,688
57 CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN EQUITY - NUMBER OF SHARES
SERIES No. No. No. SHARES SHARES SHARES SUBSCRIBED PAID WITH VOTING SINGLE 64,000,000 64,000,000 64,000,000
CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NETWORTH - CAPITAL (AMOUNT - TH CH$)
SERIES SUBSCRIBED PAID-IN CAPITAL CAPITAL SINGLE 64,749,257 64,749,257
58 28. Other Non-operating Income and Expenses As of September 30, 2003 non-operating income amounted Th Ch$ 288,216 and Th Ch$ 484,710 in 2002. Non-operating expenses amounted to Th Ch$ 627,219 as of September 30, 2003 and Th Ch$ 542,429 in fiscal year 2002. More detail is shown in annexed chart. 59 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 123,129 170,738 Sale of fixed assets 4,527 34,560 Compensation for Damage 2,551 132,534 Sale of materials 20,919 9,397 Others Income (Agricultural Division) 55,505 23,051 Amortization of non-realized profits 24,736 24,736 Sundry income 56,849 89,694 TOTAL NON-OPERATING INCOME 288,216 484,710 EXPENSES Professional advice 501,037 499,031 Other expenses 74,558 22,088 Insurances 0 21,310 ADR's Expenses 51,624 0 TOTAL NON-OPERATING EXPENSES 627,219 542,429
60 29. Price-level Restatement As a result of the application of price-level restatement as described in Note 2 d), a net charge to results was generated in the 2003 and 2002 fiscal year of Th Ch$ 432,458 and Th Ch$ 641,810 respectively. Additional Balance-itemized information is shown in the annexed chart. 61 Cristalerias de Chile S.A. NOTE 29: ADJUSTMENT FOR PRICE LEVEL RESTATEMENTS
ASSETS (CHARGES)/CREDITS ADJUSTABILITY 09-30-2003 09-30-2002 INDEX INVENTORY Consumer Price Index 17,695 55,783 FIXED ASSET CPI 814,367 744,743 INVESTMENTS IN RELATED COMPANIES CPI 1,768,240 1,897,978 MARKETABLE SECURITIES CPI 45,991 46,376 SHORT TERM DEBTORS CPI 1,921 2,920 ACCOUNTS RECEIVABLE RELATED COMPANIES UF 262,350 306,792 LONG-TERM DEBTORS UF 1,943 2,302 SHORT TERM DEBTORS UF 1,009 0 RATE ISSUANCE DIFFERENCE LONG-TERM BOND UF 27,848 0 INFLATIONARY EFFECT CPI 391,258 0 OTHER NON-MONETARY ASSETS UF 2,361 0 OTHER NON-MONETARY ASSETS CPI 12,626 40,728 EXPENSE AND COST ACCOUNTS CPI -7,647 292,651 TOTAL (CHARGES)/CREDITS - 3,339,962 3,390,273 LIABILITIES (CHARGES)/ CREDITS NET WORTH CPI -2,809,120 -2,791,397 ACCOUNTS RECEIVABLE RELATED COMPANIES UF -91 -212 SHORT-TERM RESERVES CPI -5,086 -8,218 SHORT -TERM CREDITORS CPI 0 -250,302 LONG-TERM CREDITORS CPI 0 -187,696 SHORT-TERM BANK LOANS CPI -71,369 -88,327 LONG-TERM RESERVES CPI -535 -552 PUBLIC OBLIGATION UF -827,831 0 LONG-TERM BANK LOANS CPI 0 -437,998 NON-MONETARY LIABILITIES CPI 16,232 -214,024 INCOME ACCOUNTS CPI -74,620 -53,357 TOTAL (CHARGES)/ CREDITS - -3,772,420 -4,032,083 (LOSS) PROFIT FROM ADJUSTMENT FOR PRICE LEVEL RESTATEMENT -432,458 -641,810
62 30. Exchange Differences A net charge to results was produced due to exchange differences of Th Ch$ 9,901,636 in 2003 and a net credit of Th Ch$ 8,370,748 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 on the table attached. 63 Cristalerias de Chile S.A. NOTE 30: EXCHANGE DIFFERENCES
ITEM CURRENCY AMOUNT 09-30-2003 09-30-2002 FIXED (CHARGES) /CREDITS AVAILABLE DOLLARS -21,682 15,335 MARKETABLE SECURITIES DOLLARS -4,300,205 980,251 TIME DEPOSITS DOLLARS -95,284 5 ,606,858 INVENTORY DOLLARS -70 ,115 145,974 BONDS INSTALLMENT DOLLARS -783,301 1,330,756 SUNDRY DEBTORS DOLLARS -251,963 205,074 OTHER ASSETS DOLLARS -31,701 0 ADJUSTMENT EFFECT OF INFLATION DOLLARS -391,258 0 TOTAL (CHARGES) /CREDITS -5,945,509 8,284,248 LIABILITIES (CHARGES) /CREDITS NOTES PAYABLE DOLLARS 174,682 -387,124 NOTES PAYABLE OTHER CURRENCY 9,397 -38 ,919 SUNDRY CREDITORS - SHORT TERM DOLLARS 64,714 0 LONG- TERM BANK LOANS DOLLARS 2,882,000 0 SHORT-TERM RESERVES DOLLARS 0 -200,379 LONG-TERM RESERVES DOLLARS 259,380 -340,706 SUNDRY CREDITORS - LONG TERM DOLLARS 11,591 -127,965 OTHER LIABILITIES DOLLARS 52,764 743,595 ADJUSTMENT FUTURE CONTRACTS DOLLARS -7,410,605 0 INFLATIONARY EFFECT DOLLARS 0 437,998 TOTAL (CHARGES)/ CREDITS -3,956,127 86,500 (LOSS) PROFIT FROM EXCHANGE DIFFERENCE -9,901,636 8,370,748
64 31. Extraordinary Items As of September 30, 2003, there are no transactions for this item. 65 32. Expenses incurred in the sale of shares and debt instruments On August, 2002 the company placed bond series C1, C2, D1 and D2 for UF 4,100,000, which resulted in expenses and rate placement difference which balance as of September 30, 2003 amounts Th Ch$ 3,581,071 (Th Ch$ 3,940,279 in 2002). Amortization is being done according to the maturity of each series. Classified under current assets there are Th Ch$ 325,276 (Th Ch$ 328,802 in 2002) and Th Ch$ 3,255,795 (Th Ch$ 3,611,477 in 2002) under other long-term fixed assets. As of September 30, 2003 and 2002, the charge to results for their amortization amounts Th Ch$ 247,327 and Th Ch$ 40,487, respectively.
DETAIL 2003 Short -Term Long-Term Difference in bonds placement rate 198,127 2,337,221 Stamp Tax 114,434 826,717 Placement commission and others 12,715 91,857 Total 325,276 3,255,795 DETAIL 2002 Short -Term Long-Term Difference in bonds placement rate 197,966 2,535,429 Stamp Tax 118,619 975,599 Placement commission and others 12,217 100,449 Total 328,802 3,611,477
66 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:
2003 2002 Th Ch$ Th Ch$ 541.11.40 Other income received Accountent Return 895,449 0 Discount for Custom Duties 0 303,445 Insurance severance 0 206,456 Other income 2,837 6,940 Total 898,286 516,841 541.11.80 Other expenses paid Exchange differences 5,243,049 612,683 Donations 58,877 44,871 Other expenses 2,649 6,440 Total 5,304,575 663,994 541.13.15 Sale of other investments Redemption LT bonds 308,240 539,039 Redemption Time Dep. over 90 days 0 10,954,454 Other 0 3,056 Total 308,240 11,496,549 541.13.30 Other investment income Maturity of future contracts 1,469,229 4,000,707 1,469,229 4,000,707 541.13.65 Other investment disbursements Purchase of shares 318,170 366,017 Future Contracts 5,891,184 728,898 Other 0 10,035 Total 6,209,354 1,104,950
Following are financing and investment activities that did not generate cash flow during the fiscal year, but that commit future cash flows:
ITEM Amount Th Ch $ Maturity Dividend No.155 960,000 October -2003 Payable investment imports 213,469 October -2003 Payable investment imports 173,757 December-2003 --------- TOTAL 1,347,226
67 34. Derivative Contracts The parent company has signed future contracts in foreign currency of Th US$ 76,600 in 2003 (Th US$ 109,600 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 September 30, 2003 there was a difference in favor of financial institutions of Th Ch$ 4,054,129, classified under Other Current Liabilities. As of September 30, 2002 there was a difference in favor of the Company of Th Ch$ 3,864,460 classified under Other Current Assets. 68 CRISTALERIAS DE CHILE S.A. NOTE 34: DERIVATIVE CONTRACTS
DESCRIPTION OF CONTRACTS MATURITY OR PURCHASE/ PROTECTED ITEM OR VALUE OF TYPE OF TYPE OF VALUE OF EXPIRATION SPECIFIC SALE TRANSACTION PROTECTED DERIVATIVE CONTRACT CONTRACT DATE ITEM POSITION NAME AMOUNT ITEM FR CI 25,777,830 FOURTH 2003 EXCHANGE RATE P - 0 0 FR CI 24,852,472 THIRD 2004 EXCHANGE RATE P - 0 0
CRISTALERIAS DE CHILE S.A. NOTE 34: DERIVATIVE CONTRACTS
ACCOUNTS AFFECTED ASSETS/LIABILITY EFFECT ON RESULT NAME AMOUNT REALIZED NOT REALIZED LIABILITIES 3,159,028 -3,159,028 0 LIABILITIES 895,101 -895,101 0
69 Analisys of Forward Contracts in foreign currency as of 09.30.2003
PROFIT INSTITUTION DATE FUTURE VALUE (Loss) Investment Maturity US$ ThCh$ Banco de Chile 05-13-2002 12-01-2003 3,000,000 (115,974) Banco Chile 10-02-2002 10-01-2003 6,000,000 (569,423) Banco Santander 10-03-2002 10-02-2003 5,000,000 (483,738) Deutsche Bank (Chile) S.A. 10-10-2002 10-02-2003 4,000,000 (441,997) Scotiabank 10-16-2002 10-15-2003 2,000,000 (190,752) Deutsche Bank (Chile) S.A. 03-28-2003 11-17-2003 10,000,000 (732,956) Citibank N.A. 03-26-2003 11-10-2003 5,000,000 (362,894) Banco Santander 04-08-2003 11-24-2003 4,000,000 (261,294) Citibank N.A. 09-08-2003 09-02-2004 2,000,000 (44,515) Deutsche Bank (Chile) 09-04-2003 09-03-2004 15,000,000 (474,628) Bank Boston 09-10-2003 09-06-2004 2,000,000 (46,280) Deutsche Bank (Chile) S.A. 09-08-2003 09-07-2004 2,000,000 (44,646) Deutsche Bank (Chile) S.A. 09-08-2003 09-07-2004 1,800,000 (39,997) Deutsche Bank (Chile) S.A. 10-09-2003 09-09-2004 2,800,000 (64,733) Deutsche Bank (Chile) S.A. 10-09-2003 09-09-2004 2,000,000 (46,413) Banco Chile 09-11-2003 09-06-2004 3,000,000 (60,172) Banco Santander 09-15-2003 09-09-2004 3,500,000 (36,877) Banco Santander 09-15-2003 08-16-2004 3,500,000 (36,841) Total 76,600,000 (4,054,129)
70 35. Contingencies and Restrictions CONTINGENCIES AND COMMITMENTS As of September 30, 2003, there is a guarantee delivered in the amount of Th Ch$ 7,944 (Th Ch$ 7,938 in 2002), according to the detail in the attached chart. LAWSUITS OR OTHER LEGAL ACTIONS THE COMPANY IS INVOLVED IN As of September 30, 2003 and 2002 there are no 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, there are certain financial obligations mentioned as follows: a) TOTAL CONSOLIDATED DEBT TO CAPITALIZATION RATIO Cristalerias de Chile S.A will not allow the Total Consolidated Debt to Capitalization Ratio exceed the 0.45 to 1.0 ratio at any time. Capitalization is defined as the sum of Net Worth plus Minority Interest plus total consolidated debt. b) TOTAL CONSOLIDATED DEBT TO EBITDA RATIO Cristalerias de Chile S.A will not allow the Net Consolidated Debt to EBITDA ratio to exceed the 2.5 to 1.0 ratio at any time. Consolidated EBITDA is defined as the following: operating income plus depreciation and amortization, plus non-cash charges (as long as they have been deduced whe determining operating income) and cash income from 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 during the following periods: 3.5 from January 01 2001 to December 31, 2002; 4.0 from January 01, 2003 onwards. Interest coverage at the day of determination is defined as the ratio between unconsolidated EBITDA for the period of four consecutive fiscal 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. should maintain a minimum amount of UF 10,000,000. Cristalerias de Chile S.A. complies with 100% of the restrictions agreed with the creditor banks. 71 II. BOND ISSUE The bond issue contract signed on May 29, 2002 with Banco Chile as the bonds owners' representative, establishes among others the following obligations: a) Financial Indicators Individual Balance: Indebtedness no higher than 1.2 times. Consolidate Balance: Indebtedness no higher than 1.4 times. b) Insurances for the Company and its subsidiaries' fixed assets. c) The operations refered to by art. 44 and 89 of law 18,046 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 restrictions agreed with the bonds' creditors. OTHER CONTINGENCIES As of September 30, 2003 and 2002, management is not aware of any other contingencies that could affect the company. 72 CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS - DIRECT GUARANTEES
CREDITOR OF GUARANTEE DEBTOR TYPE OF GUARANTEE ASSETS COMMITTED NAME RELATIONSHIP TYPE BOOK VALUE EDIFICIO METROPOLIS CRISTALERIAS DE AGF CHILE S.A. COMMERCIAL DEPOSIT FLOOR 7,944
CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS - DIRECT GUARANTEES
BALANCES PENDING PAYMENT AS OF CLOSING DATE OF FINANCIAL STATEMENTS RELEASE OF GUARANTEES 09-30-2003 09-30-2002 09-30-2004 ASSETS 09-30-2005 ASSETS 09-30-2006 ASSETS 7,944 7,938 - - - - 7,944 -
73 CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS - INDIRECT GUARANTEES
CREDITOR OF GUARANTEE DEBTOR TYPE OF GUARANTEE ASSETS COMMITTED NAME RELATIONSHIP TYPE BOOK VALUE Societe de Participations Financieres et Industrielles Rayen Cura S.A. Affiliate Solidary - - Cristalerias de Envases CMF Chile S.A. Affiliate Solidary - -
CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS - INDIRECT GUARANTEES
BALANCES PENDING PAYMENT AS OF CLOSING DATE OF FINANCIAL RELEASE OF STATEMENTS GUARANTEES 09-30-2003 09-30-2002 09-30-2004 ASSETS 09-30-2005 ASSETS 09-30-2006 ASSETS 2,665,031 3,993,977 761,437 - 761,437 - 1,142,157 - 226,849 - - - - - 226,849 -
74 36. Guarantees obtained from third parties As of September 30, 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 6,230 Real Estate Lease Security Bank UF 304 5,152 0 Real Estate Lease to Telecomunicaciones and Services Cono Sur Ltda. UF 130 2,203 2,201 Real Estate Lease AGF Building UF 365.9 6,201 3,979 Real Estate Lease Metropolis Building UF 189.2 3,206 0 Suppliers Sight Drafts 1,674 1,423 ------- ------ TOTAL 18,436 13,833
75 37. Local and Foreign Currency Charts are attached showing the foreign currency balance as of September 30, 2003 and 2002. Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - ASSETS
ITEMS Currency Amount 09-30-2003 09-30-2002 Current Assets CASH Non-adjust Ch$ 1,175,662 1,778,988 CASH Dollars 97,336 29,969,991 TIME DEPOSITS Dollars 0 0 TIME DEPOSITS Adjustable Ch$ 5,261,345 5,151,002 MARKETABLE SECURITIES Adjustable Ch$ 4,503,878 4,486,734 MARKETABLE SECURITIES Dollars 51,454,645 8,222,994 MARKETABLE SECURITIES Non-adjust. Ch$ 0 0 DEBTORS FROM SALES Non-adjust. Ch$ 19,593,606 18,339,804 DOCUMENTS RECEIVABLE Non-adjust. Ch$ 1,836,729 2,437,526 MISCELLANEOUS DEBTORS Adjustable Ch$ 78,002 524,523 MISCELLANEOUS DEBTORS Non-adjust. Ch$ 16,556 19,717 MISCELLANEOUS DEBTORS Dollars 737,187 7,323 DOC.&ACTS. REC. REL. CO'S. Non-adjust. Ch$ 2,338,089 2,536,348 DOC.&ACTS. REC. REL. CO'S. Adjustable Ch$ 14,908 636,775 STOCK Adjustable Ch$ 3,600,049 5,300,724 STOCK Dollars 2,059,927 0 TAXES TO BE RECOVERED Non-adjust. Ch$ 1,724,203 153,308 EXPENSES PAID IN ADVANCE Dollars 205,705 178,408 EXPENSES PAID IN ADVANCE Adjustable Ch$ 0 12,639 DEFERRED TAXES Non-adjust Ch$ 373,226 621,467 OTHER CURRENT ASSETS Non-adjust Ch$ 827,000 4,958,750 OTHER CURRENT ASSETS Dollars 1,228,229 21,488,794 OTHER CURRENT ASSETS Adjustable Ch$ 325,276 328,802 Fixed Assets FIXED ASSETS Adjustable Ch$ 78,831,220 70,414,451 Other Assets INVESTMENT REL. CO'S. Adjustable Ch$ 146,844,040 145,369,715 NEG. INVESTMENT GOODWILL Adjustable Ch$ 1,939,310 2,111,096 LONG-TERM DEBTORS Adjustable Ch$ 142,826 177,084 L-T DOC. REC. REL. CO'S. Non-adjust Ch$ 21,334,102 24,859,956 DEFERRED TAX Non-adjust Ch$ 0 0 LONG-TERM BOND Dollars 8,971,602 10,629,611 OTHERS Adjustable Ch$ 3,255,795 3,610,296 Total Assets Non-adjust. Ch$ 47,494,970 55,552,556 Dollars 64,754,631 70,497,121 Adjustable Ch$ 246,520,852 238,277,149
76 Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - CURRENT LIABILITIES
ITEM Currency Up to 90 days 09-30-2003 09-30-2002 Amount Avg. Annual Amount Avg. Annual Thou Ch$ Int. Rate Thou Ch$ Int. Rate Long-Term Obligations 1-year maturity Dollars 0 - 3,210 3.0 Adjustable Ch$ 136,073 1.925 - - Long-Term Obligations with public Adjustable Ch$ 0 - - - Adjustable Ch$ 0 - - - Dividend Payable Non-adjust. Ch$ 504,791 - 552,151 - Accounts Payable Dollars 541,627 - - - Non-adjust. Ch$ 1,940,261 - 1,851,240 - Documents Payable Dollars 1,890,905 - 960,626 - Documents Payable Other Currencies 172,302 - 200,989 - Miscellaneous Creditors Dollars 742,085 - - - Miscellaneous Creditors Non-adjust. Ch$ 266,933 - 353,452 - Doc. and Accts. Payable rel Co Adjustable Ch$ 44,424 - 16,941 - Doc. and Accts. Payable rel Co Non-adjust. Ch$ 753,691 - 687,758 - Reserves Adjustable Ch$ 181,525 - 534,544 - Reserves Dollars 0 - 1,628,602 - Reserves Non-adjust. Ch$ 5,173,937 - 3,232,336 - Withholding Non-adjust. Ch$ 1,505,225 - 1,537,933 - Other Current Liabilities Adjustable Ch$ 4,054,129 - - - Total Current Liabilities Dollars 3,174,617 - 2,592,438 - Adjustable Ch$ 4,416,151 - 551,485 - Non-adjust. Ch$ 10,144,838 - 8,214,870 - Other Currencies 172,302 - 200,989 -
90 Days to 1 Year ITEM CURRENCY 09-30-2003 09-30-2002 Amount Avg. Annual Amount Avg. Annual Thou Ch$ Int. Rate Thou Ch$ Int. Rate Long-Term Obligations 1-year maturity Dollars - - 22,012,661 3.0 Adjustable Ch$ - - - - Long-Term Obligations with public Adjustable Ch$ 378,335 4.75 340,062 4.75 Adjustable Ch$ 397,253 5.80 434,896 5.80 Dividend Payable Non-adjust. Ch$ - - - - Accounts Payable Dollars - - - - 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 Adjustable Ch$ - - - - Reserves Dollars - - - - Reserves Non-adjust. Ch$ - - - - Withholding Non-adjust. Ch$ - - - - Other Current Liabilities Adjustable Ch$ - - - - Total Current Liabilities Dollars - - 22,012,661 - Adjustable Ch$ 775,588 - 774,958 - Non-adjust. Ch$ - - - - Other Currencies - - - -
77 Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - LONG-TERM LIABILITIES CURRENT PERIOD 09-30-2003
ITEM Currency 1-3 Years 3-5 years Amount Average Amount Average Thou Ch$ Interest Rate Thou Ch$ Interest Rate Obligations with Banks and Financial Institutions Dollars 8,262,125 1.925 24,786,375 1.925 Obligations with public bond Serie C Adjust. Ch$ 16,946,030 4.75 16,946,030 4.75 Obligations with public bond Serie D Adjust. Ch$ - - - - Long-term Creditors Adjust. Ch$ 35,699 - - - Long-term Creditors Dollars 132,917 11.06 - - Long-term Reserves Dollars 3,514,837 - - - Long-term Reserves Adjust. Ch$ 4,108,548 - - - Deferred Taxes Non-adjust. Ch$ 2,388,179 - - - Total Long-term Liabilities Dollars 11,909,879 - 24,786,375 - Adjust. Ch$ 21,090,277 - 16,946,030 - Non-adjust. Ch$ 2,388,179 - - -
Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - LONG-TERM LIABILITIES CURRENT PERIOD 09-30-2003
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 Financial Institutions Dollars - - - - Obligations with public bond Serie C Adjust. Ch$ - - - - Obligations with public bond Serie D Adjust. Ch$ 4,209,191 5.80 31,377,472 5.80 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$ 4,209,191 - 31,377,472 - Non-adjust. Ch$ - - - -
78 Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - LONG-TERM LIABILITIES PREVIOUS PERIOD 09-30-2002
1-3 Years 3-5 years Average Average ITEM Currency Amount Interest Rate Amount Interest Rate Obligations with banks and Dollars 16,509,497 3 0 financial institutions Obligations with public Adjustable Ch$ 8,466,113 4.75 16,932,226 4.75 Obligations with public Adjustable Ch$ 0 - 0 - Long-term Creditors Dollars 870,420 11.06 149,504 11.06 Long-term Creditors Adjust. Ch$ 47,310 - - - Long-term Reserves Dollars 1,570,502 - - - Long-term Reserves Adjustable Ch$ 3,873,652 - - - Deferred Taxes Non-adjust. Ch$ 1,767,370 - - - Total Long-term Liabilities - Dollars 18,950,419 - 149,504 - - Adjust. Ch$ 12,387,075 - 16,932,226 - - Non-adjust. Ch$ 1,767,370 - - -
Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - LONG-TERM LIABILITIES PREVIOUS PERIOD 09-30-2002
5-10 Years More than 10 years Average Average ITEM Currency Amount Interest Rate Amount Interest Rate Obligations with banks and financial institutions Dollars 0 - - - Obligations with public Adjustable Ch$ 8,466,113 4.75 - - Obligations with public Adjustable Ch$ 4,741,023 5.8 30,816,651 - Long-term Creditors 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$ 13,207,136 - 30,816,651 - - Non-adjust. Ch$ - - - -
79 38. Penalties As of September 30, 2003 and 2002 no penalties have been applied to the company, the members of the Board or Company Managers by the SVS or other administrative authorities. 80 39. Subsequent Events On October 15, 2003 the company paid eventual dividend N(degree) 155 of Ch$ 15 per share over 64,000,000 shares. Between the closing date of the financial statements and the issue date of the present report there have not been other sebsequent events that could alter significantly the Company's financial and economic situation. 81 40. Environment On its permanent concern for preserving the environment, as of September 30, 2003 the Company has made investments of Th Ch$ 206,207 corresponding to the purchase of NOX treatment equipment installed in new furnace B. As of September 30, 2002 the Company has made investments of Th Ch$ 189,302 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. 82 41. TIME DEPOSITS As of September 30, 2003 and 2002 the Company presents the following information:
INSTITUTION Currency 2003 2002 Th Ch$ Th Ch$ Banco SantanderSantiago US$ 5,261,345 0 Banco SantanderSantiago Ch$ 0 5,151,002 --------- --------- TOTAL 5,261,345 5,151,002
83 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. 84 43. DISTRIBUTION OF SHAREHOLDERS The distribution of stockholders as of September 30, 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 Less than 10% shareholding with investment equal to or higher than 200 UF 65.83 65.83 263 262 Less than 10% shareholding with investment lower than 200 UF 0.14 0.14 774 817 TOTAL 100.00 100.00 1,038 1,080 CONTROLLER OF THE COMPANY 52.14 52.14 3 3
85 44. BOARD COMPENSATION As of September 30, 2003 and 2002 Th Ch$ 711,726 and Th Ch$ 745,488 respectively, were paid for diverse concepts according to the following detail:
2003 2002 ThCh$ ThCh$ Participation in previous fiscal year profits 706,426 740,215 Honoraries for session attendance 3,956 4,234 Board Committee Honoraries 1,344 1,039 --------- --------- TOTAL 711,726 745,488
On the other hand, provisions made for fiscal year 2003 in the amount of Th Ch$ 96,640 (Th Ch$ 657,908 in 2002). 86 RELEVANT EVENTS None. 87 CRISTALERIAS DE CHILE S.A. NOTES TO FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2003 1.- FINANCIAL INDICATORS
09-30-2003 09-30-2002 12-31-2002 LIQUIDITY Current liquidity times 5.22 3.12 6.72 Acid ratio times 4.79 2.94 6.25 INDEBTEDNESS Leverage ratio times 0.58 0.55 0.56 Short-term debt % 14.22 26.7 12.38 Long-term debt % 85.78 73.3 87.62 Interest Expenses Coverage times 1.35 7.31 5.25 ACTIVITY Total assets MM Ch$ 358,770 364,327 367,979 Investments MM Ch$ 20,885 7,883 10,155 Disposal of property MM Ch$ 110 19 18 Inventory turnover times 8.1 7.1 9.1 Inventory permanence days 44.3 50.6 39.4 RESULTS Sales MM Ch$ 54,533 51,083 72,478 Costs od sales MM Ch$ 33,262 29,421 42,274 Operating result MM Ch$ 17,356 17,508 24,469 Interest expenses MM Ch$ 3,668 2,908 4,711 Non-operating result MM Ch$ (14,052) 2,370 (2,340) E.B.I.T.D.A. MM Ch$ 12,393 28,152 34,104 After-tax profit MM Ch$ 2,416 16,448 18,014 PROFITABILITY Return on equity % 1.0 7.1 7.9 Return on assets % 0.7 4.8 5.3 Return on operating assets % 16.6 17.9 24.3 Profit per share $ 37.7 257.0 281.5 Return on dividends % 1.9 3.7 2.9 Current liquidity Ratio of current assets to current liabilities. Acid ratio: Ratio of uncommitted funds to current liabilities. Leverage ratio: Ratio of total current liabilities to net worth. Interest Expenses Coverage: Earnings before taxes and interest 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 E.B.I.T.D.A: Earnings before interest, taxes, depreciation, amortization and extraordinary 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 the 2003 fiscal year indicators are: LIQUIDITY INDICES An increase in the index can be observed with respect to September 2002 in the liquidity index due to a short term bank loan payment and that the funds obtained from the long term bonds placement of August 2002 are invested in short-term financial instruments. With respect to December 2002, an decrease in the index can be observed due to a decrease of current assets. INDEBTEDNESS INDICES The leverage ratio has kept almost constant for the analyzed period. The distribution of short and long-term debt shows a decrease in the short-term debt, due to the financial resolutions carried out in 2002, which culminated with the restructuring of the syndicated loan for US$ 50 million. The interest expenses coverage index registered decreased with respect to the previous year due to higher interest expenses from bonds issued in August 2002 and a lower net income during the present fiscal year. ACTIVITY INDICES Inventory turnover and permanence indeces improved due to actions undertaken by management to reduce product stock inventories. PROFITABILITY INDICES Equity and asset profitability indices show a decrease with respect to September and December 2002, due to a lower net income during the present fiscal year. Likewise, non-operating result decreased due to higher interest expenses and a negative exchange difference. On the other hand, the return of dividends indexs shows a decrease with respect to the previous year due to lower dividens and an increase in the market price of the company's shares in the stock exchange. 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. 89 As of September 30, 2003, there were financial investments in stocks recorded in the accounting according to their purchase price of Th Ch$ 4,163 million whose market value on the same date was Th Ch$ 6,072 million. 3. RESULTS AS OF SEPTEMBER 2003 3a. Individual Result The Company had non-consolidated sales of Ch$ 54,533 million as of September 2003, which represents a 6.8% increase compared to the previous fiscal year. Volumes sold increased by 6.7% reaching 185,976 tons, mainly due to higher sales of bottles for the wine, non-returnable beer, returnable soft drinks and liquor markets. Operating income reached Ch$17,356 million, compared to Ch$ 17,508 million in 2002. Higher costs of sales are due to products that had to be imported due to the reconstruction of furnace B. Non-operating result was a loss of Ch$14,052 million in 2003 (Ch$ 2,370 million income in 2002). During 2003 a Ch$ 9,902 million loss was recorded from exchange differences (Ch$ 8,371 million income in 2002). In addition lower income was registered from Vina Santa Rita and CIECSA, and higher interest expenses. The former was compensated by higher income from Cristalchile Inversiones (owner of 40% of Rayen Cura) and Envases CMF, and a lower loss in Cristalchile Comunicaciones (owner of 50% of Metropolis-Intercom). 3b. Results in Subsidiaries As of September 30, 2003, Santa Rita's net income amounted Ch$ 3,735 million (Ch$ 8,388 million in 2002). In the local market, volumes increased by 1.9% and prices dropped by 4.4% in real terms, as a result of sharp competition. During the period, exports at US$ 41.9 million (US$ 40.0 million in 2002) represented 54.2% of total revenues. The operating income reached Ch$7,863 million, compared to Ch $ 9,184 million in 2002, mainly due to lower prices in the domestic market. The average price in dollars per case for the export market for Santa Rita was US$ 33.0 (US$ 30.5 in 2002) whereas the average price for the industry was US$23.6 per case (US$ 23.2 in 2002). Santa Rita recorded a Ch$ 3,177 million non-operating loss, compared to a Ch$ 1,274 million non-operating income in 2002, mainly due a loss from exchange differences. Red Televisiva Megavision, CIECSA's main subsidiary, registered a Ch$1,762 million operating income, compared with an operating profit of Ch$3,454 million in 2002, due to an increase in costs from higher internal productions. MEGA reached a 23.0% audience share during the period (25.9% in 2002)FN1. Net sales increased by 11.9% reaching Ch$18,530 million, due to an increase in live programming. As of September 2003, MEGA had a net income of Ch$ 1,026 million (Ch$ 1,729 million in 2002). CIECSA had a Ch$ 826 million net income, compared to a Ch$ 1,063 million net income the previous year. Envases CMF S.A. registered a Ch$ 713 million net income in 2003 compared with a Ch$464 million net income in 2002. The company increased sales by 1.8%, reaching Ch$ 25,035 million during the period. Sales volume increased by 0.4%, reaching 16,697 tons. Operating income reached Ch$ 2,237 million, 17.6% higher than the that obtained in 2002, mainly explained by higher operating efficiencies and the sale of better margin products. - -------- FN1 Measured between 7:30AM and 1:30AM; i.e: 18 hours daily, Monday through Sunday. 90 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 95.60% of Metropolis-Intercom S.A. As of September 30, 2003, Metropolis-Intercom S.A. registered sales of Ch$ 33,763 million compared with Ch$35,227 million the previous year. Metropolis-Intercom had a net loss of Ch$ 7,394 million compared with a net loss of Ch$ 10,525 million in 2002. This result includes a depreciation charge of Ch$ 10,040 million (Ch$8,637 million in 2002) corresponding to the HFC network adquired in July 2000. The company ended the period with 236,000 subscribers of the basic service (239,000 in 2002) and 32,000 subscribers of bradband services, 63.7% higher than in 2002. As a result of the abovementioned and the negative goodwill amortization charge through Cordillera Comunicaciones of Ch$3,128 million in the period (Ch$3,109 million in 2002), Cristalchile Comunicaciones recorded a net loss of Ch$ 5,250 million (net loss of Ch$ 6,846 in 2002). 4. CASH FLOW STATEMENT As of September, 2003 a total net negative flow of Ch$ 12,475 million was generated, which is explained by a positive flow generated by operating activities of Ch$ 18,475 million, which was decreased by a negative financing flow of Ch$7,709 million and a negative flow of investment activities for Ch$23,241 million. The operating flow corresponds basically to the collection of sales and interests income that were reduced by payment to suppliers, personnel and tax and interests payments. The negative financing flow can be explained by the payment of dividends. The investment flow is mainly explained by the incorporation of fixed assets for CH$ 17,871 , of permanent investments for Ch$4,022 million and other investment disbursements for Ch$ 6,209 million. In Addition, sales of fixed assets and other investments amounted Ch$ 418, collection of loans to related companies for Ch$ 3,048 million and the expiry of future contracts for Ch$ 1,469 million. The foregoing results in an decrease in the final balance of cash and cash equivalent, which passed from Ch$ 68,416 million as of December 31, 2002 to Ch$ 60,693 million as of September 30, 2003. According to the current regulations of the SVS and the Association of Accountants of Chile, time deposits and agreements with due date under 90 days have been considered cash and cash equivalent. 5. INTEREST RATES AND EXCHANGE RATE RISK ANALYSIS o 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 on October 2002 at a variable annual rate of Libor plus 0.8% percentage points. In addition, the Company issued bonds in two series, 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). 91 As of September 30, 2003, the Company had available funds in the amount of Ch$59,112 million, invested at different terms in financial instruments such as time deposits, bonds, fixed rate mutual funds and agreements with resale commitment. This figure does not consider Ch$ 8,972 million in bonds with maturity on September 15, 2005 and investments in shares for Ch$ 4,163 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. o Exchange rate The Company maintains liabilities in dollars of US$60,3 million, which represent 10.1% of its assets, and which include a balance of a long-term syndicated loan of US$50 million. As of September 30, the Company has investments in dollars of US$101.7 million in time deposits, bonds and fixed rate mutual funds. In addition, it also has Dollar purchase future contracts of US$76.6 million. On the other hand, aproximately 36% of the company's revenues are adjusted by the exchange rate variation. Costs in foreing currency represent approximately 17% of the total costs. 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. Controller Date: January 8, 2004 -----END PRIVACY-ENHANCED MESSAGE-----