6-K 1 combined6k.txt FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934 October 20, 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): ______ Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [ ] No [X] NYSE: CGW Santiago: CRISTALES www.cristalchile.com CONTACT IN SANTIAGO: Ricardo Dunner Head of Investor Relations PH: (562) 787-8855 FAX: (562) 787-8800 EMAIL: ir@cristalchile.cl 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 1/1/2004 1.00.01.20 Closing date 6/30/2004 1.00.01.30 Type of Currency Chilean Pesos 1.00.01.40 Type of Financial Statements Individual Independent Auditors' Report Refered to Interim Individual Financial Statements As of June 30, 2004 To the Shareholders and Directors of Cristalerias de Chile S.A.: 1. We have revised the general balance sheets of Cristalerias de Chile S.A. as of June 30, 2004 and 2003 and the corresponding statements of income and cash flows for the six months periods ended on those dates. These financial statements and their corresponding notes are the responsibility of Cristalerias de Chile S.A.'s management. The Ratio Analysis and Relevant Events attached are not part of these financial statements; therefore this report does not extend to them. 2. We have effected our revisions in accordance with audit norms established in Chile for a revision of interim financial information. A revision of interim financial information consists mainly in applying analytic revision procedures of the financial statements and effect inquiries to the responsible financial and accounting personnel. The extent of this revision is substancially lower than an audit effected according to generally accepted accounting principles in Chile, in which case the objective is to express an opinion on financial statements as a whole. Consequently, the interim financial statements as of June 30 2004 and 2003 have not been audited and, therefore, we are not in condition for expressing, nor we express an opinion. 3. The refered interim financial statements have been prepared to reflect the individual financial situation of Cristalerias de Chile S.A., based on criteria described in Note 2 b), prior to consolidation, line by line, of subsidiaries detailed in Note 14's financial statements. Consequently, for an adequate interpretation, these individual interim financial statements must be read and analyzed together with the consolidated interim financial statements of Cristalerias de Chile S.A. and subsidiaries, which are required by the generally accepted accountinbg principles in Chile. This report is presented solely to inform and be used by the Board and Management of Cristalerias de Chile S.A. and by the Chilean Securities and Insurance Commission (SVS). 4. Based on our revision of the interim financial statements as of June 30, 2004 and 2003, we have no knowledge of significant adjustments needed to be made to them in order for them to be in accordance with principles described in Note 2 b). Ruben Lopez D. Ernst & Young Ltda. R.U.T.: 9.385.460-8 Auditors' R.U.T.: 77.802.430-6 Santiago, July 28 2004 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. 06-30-04 06-30-03 5.11.00.00 TOTAL CURRENT ASSETS 108,300,902 103,843,808 5.11.10.10 Cash 1,471,566 1,805,117 5.11.10.20 Time deposits 41 5,004,267 10,445,036 5.11.10.30 Marketable securities (net) 4 59,615,681 58,750,126 5.11.10.40 Debtors from sales (net) 5 18,766,519 14,697,104 5.11.10.50 Documents receivable (net) 5 995,423 1,673,336 5.11.10.60 Sundry debtors (net) 5 828,330 675,327 5.11.10.70 Doc. & accts receivable 6 4,892,084 2,167,143 related Co. 5.11.10.80 Inventories (net) 7 6,978,729 6,682,527 5.11.10.90 Recoverable taxes 8 1,126,358 1,276,166 5.11.20.10 Prepaid expenses 339,649 334,727 5.11.20.20 Deferred taxes 8 843,755 362,459 5.11.20.30 Other current assets 10-11 7,438,541 4,974,740 5.11.20.40 Leasing contracts (net) 0 0 5.11.20.50 Leasing assets (net) 0 5.12.00.00 TOTAL FIXED ASSETS 75,449,358 80,614,276 5.12.10.00 Land 12 1,514,725 1,510,424 5.12.20.00 High rises & infrastructure 12 23,286,000 22,585,524 5.12.30.00 Machinery & equipment 12 105,768,357 102,739,721 5.12.40.00 Other fixed assets 12 8,515,021 6,914,445 5.12.50.00 Positive goodwill from technical revaluation of fixed 12 6,659,823 7,767,850 assets 5.12.60.00 Depreciation (minus) 12 (70,294,568) (60,903,688) 5.13.00.00 TOTAL OTHER ASSETS 181,194,501 182,044,554 5.13.10.10 Investment in related companies 14 145,666,038 144,970,802 5.13.10.20 Investment in other companies 0 0 5.13.10.30 Negative goodwill 16 1,821,374 1,992,171 5.13.10.40 Positive goodwill (minus) 0 0 5.13.10.50 Long-term debtors 5 119,106 151,965 5.13.10.60 Doc. & accts receivable 6 22,007,684 21,994,506 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 11,580,299 12,935,110 5.13.20.10 Long-term leasing contracts 0 0 (net) 5.10.00 TOTAL ASSETS 364,944,761 366,502,638
LIABILITIES 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance : Individual
LIABILITIES NOTE No. 06-30-04 06-30-03 5.21.00.00 TOTAL CURRENT LIABILITIES 18,639,661 20,276,257 5.21.10.10 Short-term oblig. Banks & 0 0 Fin. Inst. 5.21.10.20 Short-term portion - Long-term oblig. Banks & 19 139,500 156,829 Financial Institutions 5.21.10.30 Obligations with the public 0 0 (notes) 5.21.20.40 Short-term portion oblig with 1,688,964 1,683,436 public 5.21.10.50 Long-term oblig. due within 1 0 0 year 5.21.10.60 Dividends payable 651,595 509,838 5.21.10.70 Accounts payable 2,251,469 3,410,613 5.21.10.80 Notes payable 2,580,225 3,316,315 5.21.10.90 Sundry creditors 835,577 1,008,139 5.21.20.10 Notes & accts payable related 6 941,564 676,521 Co. 5.21.20.20 Provisions 23 7,170,405 4,128,088 5.21.20.30 Withholdings 661,448 390,574 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 34 1,718,914 4,995,904 5.22.00.00 TOTAL LONG-TERM LIABILITIES 110,912,860 115,212,025 5.22.10.00 Oblig with Banks & Financial 21 31,815,000 35,165,736 Inst. 5.22.20.00 Long-term oblig with public 69,761,295 69,951,855 (bonds) 5.22.30.00 Long-term notes payable 0 0 5.22.40.00 Long-term sundry debtors 162,254 186,544 5.22.50.00 Long-term notes & accts. payable 6 0 0 related companies 5.22.60.00 Long-term provisions 23 6,417,630 7,578,300 5.22.70.00 Long-term deferred taxes 8 2,756,681 2,329,590 5.22.80.00 Other long-term liabilities 0 0 5.23.00.00 MINORITY INTEREST 0 0 5.24.00.00 TOTAL EQUITY 235,392,240 231,014,356 5.24.10.00 Paid-in capital 27 65,396,749 65,137,753 5.24.20.00 Reserve capital revaluation 27 523,174 716,515 5.24.30.00 Premium in sale of own shares 27 28,097,372 28,069,388 5.24.40.00 Other reserves 27 7,499,397 9,155,080 5.24.50.00 Retained earnings (addition of codes 5.24.51.00 to 5.24.56.00) 27 133,875,548 127,935,620 5.24.51.00 Reserve future 27 128,030,273 125,943,731 dividends 5.24.52.00 Accrued profits 27 0 0 5.24.53.00 Accrued losses 0 0 (minus) 5.24.54.00 Profit (loss) 27 7,125,275 2,957,649 for the year 5.24.55.00 Prov. dividends (1,280,000) (965,760) (minus) 5.24.56.00 Accr. deficit 27 0 0 dev. period 5.20.00.00 TOTAL LIABILITIES 364,944,761 366,502,638
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. 06-30-04 06-30-03 5.31.11.00 OPERATING RESULTS 10,135,406 9,685,489 5.31.11.10 Gross Margin 12,897,397 12,206,668 5.31.11.11 Sales 33,297,866 33,524,221 5.31.11.12 Costs (20,400,469) (21,317,553) (minus) 5.31.11.20 Adm. & sales expenses (2,761,991) (2,521,179) (minus) 5.31.12.00 NON-OPERATING RESULTS (1,449,153) (5,986,197) 5.31.12.10 Interest income 905,688 1,539,550 5.31.12.20 Income from invmnts 14 3,248,046 2,770,301 Rel. Co. 5.31.12.30 Other non-operating 28 302,039 198,321 income 5.31.12.40 LOSS invmnts Rel. Co. (4,042,363) (3,468,270) (-) 5.31.12.50 Amortization 16 (86,391) (86,306) neg.goodwill (-) 5.31.12.60 Interest expenses (2,392,823) (2,484,021) (minus) 5.31.12.70 Other non-operat 28 (498,015) (449,378) expenses (-) 5.31.12.80 Price level 29 (276,582) (388,966) restatement 5.31.12.90 Exchange differences 30 1,391,248 (3,617,428) 5.31.10.00 RESULTS BEFORE INCOME TAX 8,686,253 3,699,292 AND EXTRAORDINARY ITEMS 5.31.20.00 INCOME TAX 8 (1,560,978) (741,643) 5.31.30.00 EXTRAORDINARY ITEMS 0 0 5.31.40.00 PROFIT (LOSS) BEFORE 7,125,275 2,957,649 MINORITY INTEREST 5.31.50.00 MINORITY INTEREST 0 0 5.31.00.00 NET INCOME (LOSS) 7,125,275 2,957,649 5.32.00.00 Amortization of positive goodwill 16 0 0 5.30.00.00 INCOME (LOSS) FOR THE YEAR 7,125,275 2,957,649
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. 06-30-04 06-30-03 5.41.11.00 NET FLOW FROM OP. ACT. 18,827,455 17,226,182 5.41.11.10 Collection from sales debtors 42,923,558 46,037,878 5.31.11.20 Interests received 4,190,264 2,082,963 5.31.11.30 Dividends & other distributions 1,722,636 1,656,121 funds received 5.31.11.40 Other income 277,394 1,195,234 5.31.11.50 Payments to suppliers & (23,836,693) (26,462,157) personnel (-) 5.31.11.60 Interest paid (minus) (2,201,738) (2,329,031) 5.31.11.70 Income tax paid (minus) (1,043,041) (1,528,046) 5.31.11.80 Other expenses 33 (195,194) (2,116,900) 5.31.11.90 V.A.T. & other taxes (3,009,731) (1,309,880) 5.41.12.00 CASH FLOW FINANCING ACTIVITIES (2,589,534) (6,840,195) 5.41.12.05 Proceeds from share issue 0 0 5.41.12.10 Loans received 0 0 5.41.12.15 Obligations with the public 0 0 5.41.12.20 Secured loans from related 0 0 companies 5.41.12.25 Other loans from related 0 0 companies 5.41.12.30 Other financing resources 0 0 5.41.12.35 Dividends paid (minus) (2,589,534) (6,840,195) 5.41.12.40 Capital distributions (minus) 0 0 5.41.12.45 Repayment of loans (minus) 0 0 5.41.12.50 Payment of obligations with the 0 0 public (-) 5.41.12.55 Repayment of secured loans from 0 0 rel Co. (-) 5.41.12.60 Repayment other loans from 0 0 related Co. (-) 5.41.12.65 Share issue payment (minus) 0 0 5.41.12.70 Payment of issue publ oblig 0 0 (minus) 5.41.12.75 Other financing payments (minus) 33 0 0 5.41.13.00 CASH FLOW FROM INVESTING ACTIVITIES (7,118,517) (12,523,216) 5.41.13.05 Sale of fixed assets 48,951 110,236 5.41.13.10 Sale of permanent investments 0 0 5.41.13.15 Sale of other investments 33 0 0 5.41.13.20 Proceeds secured loans to 0 2,468,018 related Comp. 5.41.13.25 Proceeds other loans to related 0 0 companies 5.41.13.30 Other investment income 33 0 1,476,576 5.41.13.35 Incorporation of fixed assets (3,355,855) (15,312,980) (minus) 5.41.13.40 Capitalized interests payment 0 0 (minus) 5.41.13.45 Permanent Investments (minus) (197) (603,804) 5.41.13.50 Investments in financial 0 0 instruments (minus) 5.41.13.55 Other loans to related companies (3,804,928) (7,523) (minus) 5.41.13.60 Other loans to related companies (6,488) (25,931) (minus) 5.41.13.65 Other distrib of funds on invest 33 0 (627,808) activities (-) 5.41.00.00 TOTAL NET CASH FLOW FOR THE PERIOD 9,119,404 (2,137,229) 5.42.20.00 EFFECT OF INFLATION ON CASH & CASH EQUIV. (583,131) (911,569) 5.41.00.00 NET CHANGE IN & CASH EQUIVALENT 8,536,273 (3,048,798) 5.42.00.00 CASH & CASH EQUI AT BEGINNING OF PERIOD 60,479,914 74,512,489 5.43.00.00 CASH & CASH EQUIV BALANCE AT END OF PERIOD 69,016,187 71,463,691
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. 06-30-04 06-30-03 5.50.10.00 Profit (Loss) for the year 7,125,275 2,957,649 5.50.20.00 Profit in sale of assets (8,589) (3,687) 5.50.20.10 (Profit) Loss in sale of fixed assets (8,589) (3,687) 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) 11,622,754 12,957,524 5.50.30.05 Depreciation for the year 12 5,248,805 4,671,670 5.50.30.10 Amortization of intangibles 412,961 420,455 5.50.30.15 Write-offs and provisions 2,179,244 386,663 5.50.30.20 Accrued earnings from investments in 14 (3,248,046) (2,770,301) related companies (minus) 5.50.30.25 Accured losses from investments in 14 4,042,363 3,468,270 related Co. 5.50.30.30 Negative goodwill amortization 16 86,391 86,306 5.50.30.35 Positive goodwill amortization (minus) 0 0 5.50.30.40 Price level restatement 29 276,582 388,966 5.50.30.45 Net exchange difference 30 (1,391,248) 3,617,428 5.50.30.50 Other non-cash credits to results (minus) (324,671) (66,274) 5.50.30.55 Other non-cash debits to results 4,340,373 2,754,341 5.50.40.00 Changes in Assets affecting cash flow (incr) (1,616,989) (2,530,811) decreases 5.50.40.10 Debtors from sales 311,356 3,768,875 5.50.40.20 Inventory (2,191,980) (1,276,232) 5.50.40.30 Other assets 263,635 38,168 5.50.50.00 Changes in liabilities affecting cash flow 1,705,004 (1,216,115) increases (decr) 5.50.50.10 Accounts payable related to results for 295,908 (418,113) the year 5.50.50.20 Interests payable (12,009) (71,363) 5.50.50.30 Income tax payable (net) 999,181 (114,155) 5.50.50.40 Other accounts payable related to 509,336 (372,279) non-oper results 5.50.50.50 VAT and other taxes payable (net) (87,412) (240,205) 5.50.60.00 Profit (Loss) of minority interest 0 0 5.50.00.00 NET OPERATING CASH FLOW 18,827,455 17,226,182
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 No. 061 and it is supervised by the Chilean Securities and Insurance Commission (SVS). 02. Applied Accounting Criteria APPLIED ACCOUNTING CRITERIA a) Accounting Period These financial statements correspond to the period between January 1 and June 30 of 2004 and 2003. b) Preparation basis of financial statements: These individual financial statements as of June 30, 2004 and 2003 have been prepared on the basis of generally accepted accounting principles and specific norms issued by the SVS, with the former prevailing in case of discrepancies. Investments in subsidiaries are registered in a single line of the general balance sheet at their proportional equity value (VPP) and therefore, have not been consolidated line to line. This treatment does not modify the net result of the fiscal year nor the equity. These financial statements have been emitted solely for the effect of doing an individual analysis of the company and, in consideration to it, they must be read together with the consolidated financial statements, which are required by the generally accepted accounting principles in Chile. c) Presentation Basis For comparison purposes, the financial statements and figures included in the disclosures for the 2004 fiscal year are presented updated according to non-accounting terms as of June 30, 2004 by 0.6%. d) 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 2004 fiscal year, which was 0.8% (1.1% in 2003). For financial matters, effective variations occurred during each month of 2004 and 2003 have been considered, with respect to June 2004 and 2003. For tax matters, negative variations occurred in some months of 2003 and 2004, with respect to June 2003 and 2004, have been equaled to zero, in accordance with instructions from the Chilean Internal Revenue Service (SII), not affecting significantly the financial statements. e) Conversion Basis Balances in foreign currency and indexed currency units have been converted to pesos at the indicated parities: 2004 2003 Ch$ Ch$ U.S. Dollar 636.30 699.12 Pound Sterling 1,157.12 1,157.48 Swiss Franc 509.16 517.18 EURO 775.88 803.86 Unidad de Fomento 17,014.95 16,959.67 f) Marketable Securities and Time Deposits Transactions in fixed income instruments are shown at the return value of the investment, which does not exceed the market value as of June 30, 2004. 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. Mutual fund investment quotas are valued at the liquidation price of each period. g) Inventory Inventory of finished products has been valued as of June 30, 2004 and 2003 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 company has made provision for bad debts that is deducted from debtors for sales. The criterion adopted to estimate them is the age of the balances. i) Fixed Assets The fixed assets are shown at purchase cost plus legal and regulatory revaluations accumulated until June 30, 2004 and 2003. j) Depreciation of Fixed Assets Depreciation of this property is calculated on updated values, according to the straight-line depreciation system, considering the estimated useful life of the property. k) Assets in Leasing None. l) Sales Transactions with Leaseback None. m) Intangibles At June 30, 2004 and 2003 there was no balance for this item. n) Investments in Related Companies Investments in stocks and rights in related companies have been valued according to the percentage of the holding that corresponds to the Company in the equity of its affiliates (Net Worth Proportional Value or "VPP"), according to procedures established for these purposes by circulars No. 368 and No. 1,697 of the Securities and Insurance Commission. o) Negative and Positive Investment Goodwill: Negative and positive investment goodwill have arisen when comparing the price paid for the investment made and the proportional value that corresponds to that investment in the net worth of the company. Those values are amortized over a twenty-year period. At June 30, 2004 and 2003 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 1,466 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 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 sales on an accrued basis according to generally accepted accounting principles in Chile. t) Derivative Contracts The company maintains Future contracts in foreign currency, which have been recorded as established in Technical Bulletin No. 57 of the Accountants Association of Chile A.G. u) Computer Software The company develops computer software with its own resources, and it also acquires computer packages from third parties. Disbursements for its own development are charged to results as they are generated. Computer packages are recorded in Fixed Assets and amortized in 36 months. v) Research and Development Expenses The company registers expenses for this concept directly to results, as they generate. 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 term deposits and agreement with maturity more than 90 days has been clasified in the item "Investments in Financial Instrument" 03. Accounting Changes As of June 30 2004 and 2003, there have not been any changes in the accounting criteria that affect the individual financial statements. 04. Marketable Securities At June 30, 2004, this item is composed by the following investments: a) Th$55,251,502 investments in bonds and Fixed Rate Instruments equivalent to US$ 41,048,455 and 37,547,521 EUROS; which mainly corresponds to investments in state bonds and financial institutions in USA, Germany and Holland; Collateralized Bonds of Private Companies in USA (with accounts receivable guarantee) and USA Mortgage Bonds with state guarantee. b) Th Ch$ 4,187,786 in shares. c) Th Ch$ 176,393 in interest accrued in Celulosa Arauco S.A. bonds. At June 30, 2003, there were the following investments: a) Th$54,372,053 investments in bonds and Fixed Rate Instruments; which mainly corresponds to investments in state bonds and financial institutions in USA, Germany, and Holland; Collateralized Bonds of Private Companies in USA (with accounts receivable guarantee) and USA Mortgage Bonds with state guarantee. b) Th Ch$ 4,183,939 in shares. c) Th Ch$ 194,134 in accrued interest in Celulosa Arauco S.A. bonds. CRISTALERIAS DE CHILE S.A. NOTE 4 - MARKETABLE SECURITIES - BALANCE COMPOSITION Type of Security Book Value 06-30-2004 06-30-2003 Shares 4,187,786 4,183,939 Bonds 0 0 Mutual fund quotas 0 0 Investment fund quotas 0 0 Public tender promissory notes 0 0 Mortgage bonds 0 0 Fixed rate instruments and bonds 55,251,502 54,372,053 Acrrued interest in Celulosa Arauco 176,393 194,134 S.A. bonds Total Marketable Securities 59,615,681 58,750,126 CRISTALERIAS DE CHILE S.A. NOTE 4 - MARKETABLE SECURITIES - SHARES
Unit Market R.U.T. Company Name Number of Share Market Investment Corrected Shares Percentage Value Value Cost 96.512.200-1 Bodegas y Vinedos Santa Emiliana S.A. 63,642,856 9.9980 85 5,409,643 4,187,786 Value Investment Portfolio 5,409,643 4,187,786 Adjustment Reserve 0 Book value, Investment Portfolio 4,187,786
CRISTALERIAS DE CHILE S.A. NOTE 4 - MARKETABLE SECURITIES - FIXED RATE INSTRUMENTS
Type of Security Par Book Value Market Reserve Value Value Amount Rate % Financial Institutions bonds (USA, Germany and Holland) (1) 29,132,371 29,132,371 1.17 29,132,371 0 USA treasure bonds (2) 20,555,448 20,555,448 0.38 20,555,448 0 Mortgage bonds USA (with state guarantee) (2) 5,549,780 5,549,780 0.38 5,549,780 0 Call Deposit (2) 13,903 13,903 0.38 13,903 0 Celulosa Arauco Bonds (Interests) (2) 176,393 176,393 2.80 176,393 TOTAL 55,427,895 55,427,895 55,427,895 - Note: (1) The investement has been made in EUROS (2) The investement has been made in U.S. Dollar (3) Rate for period from 01-01-2004 to 06-30-2004. (4) The investment can be rescued within a 48 hour warning.
05. Short-Term and Long-Term Debtors At June 30, 2004 and 2003 there are balances of short-term debtors of Th Ch$ 20,590,272 and Th Ch$ 17,045,767 respectively. There is also a balance of Th Ch$ 119,106 for Long-Term debtors in 2004 (Th Ch$ 151,965 in 2003). At June 30, 2004 and 2003 the company has established a reserve for bad debts of Th Ch$ 143,127 in 2004 (Th Ch$ 143,986 in 2003), which is deducted from Debtors for Sales and documents receivable. The balance of Short-term Debtors is shown net of reserve for bad debtors and customer advances. CRISTALERIAS DE CHILE S.A. NOTE 5 - SHORT AND LONG TERM DEBTORS
Current Assets Over 90 days Area Up to 90 days up to 1 year 06-30-2004 06-30-2003 06-30-2004 06-30-2003 Debts from Sales 17,897,634 14,104,583 1,012,012 736,507 Estimate of non-collectable debt - - - - Documents receivable 947,335 1,608,188 48,088 65,148 Estimate of bad debtors - - - - Misc. Debtors 395,818 639,915 432,512 35,412 Estimate of bad debtors - - - - Long Term Area Subtotal Total Current (net) 06-30-2004 06-30-2003 06-30-2004 06-30-2003 Debts from Sales 18,909,646 18,766,519 14,697,104 0 0 Estimate of non-collectable debt 143,127 - - - - Documents receivable 995,423 995,423 1,673,336 0 0 Estimate of bad debtors 0 - - - - Misc. Debtors 828,330 828,330 675,327 119,106 151,965 Estimate of bad debtors - - - - - Total Long Term 119,106 151,965 Debtors
06. Balances and Transactions with related entities I. Balances receivable in the Short-Term as of June 30, 2004 and 2003 are in the amount of Th Ch$ 4,892,084 and Th Ch$ 2,167,143 respectively. In the Long-Term a balance of Th Ch$ 22,007,684 and Th Ch$ 21,994,506 respectively, is recorded, of which Th Ch$ 20,037,623 in 2004 (19,964,196 in 2003) correspond to shares sold of Rayen Cura S.A.I.C. to the subsidiary Cristalchile Inversiones S.A., equivalent to UF 1,177,648, without interests; and Th Ch$ 867,762 in 2004 (Th Ch$ 2,030,310 in 2003) correspond to a balance of loan granted to Red Televisiva Megavision S.A. 1. Detail of Credits receivable: a. Loan to Red Televisiva Megavision S.A.; 2.49% annual rate, adjutabbility in UF. 05.07.2006 UF17,000 ThCh$289,254 05.01.2007 UF17,000 ThCh$289,254 05.07.2007 UF17,000 ThCh$289,254 b. Loan to Metropolis Intercom S.A.; annual rate 3% in pesos. 09.06.2005 ThCh$2,704,725 short term 18.04.2006 ThCh$ 855,171 long term 2. There are balances for sales invoicing with the following related companies with maturity under 90 days: 2004 2003 Th Ch$ ThCh$ S.A. Vina Santa Rita 1,868,019 1,881,621 Vina Carmen S.A. 2,355 0 Vina Los Vascos S.A. 205,021 184,174 Servicios y Consultorias Hendaya S.A. 3,309 0 Rayen Cura S.A.I.C. 83,738 85,526 Vina Dona Paula S.A. 23,556 0 Total 2,185,998 2,151,321 In addition, as of June 2003 there was a balance receivable for a loan granted to Cristalchile Comunicaciones S.A. for ThCh$15,822. II. Balances payable in the short term amount Th Ch$ 941,564 in 2004, and ThCh$ 676,521 in 2003, that correspond mainly to invoicing with maturity under 90 days: 2004 2003 Th Ch$ ThCh$ S.A. Vina Santa Rita 155,186 146,801 Envases CMF S.A. 0 37 Ediciones Financieras S.A. 0 1,603 Vina Los Vascos S.A. 4,048 10,587 Cia. Electrometalurgica S.A. 0 1,064 Servicios y Consultorias Hendaya S.A. 103,315 85,701 Marketing Meter Ltda. 1,879 0 Total 264,418 245,793 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 06-30-2004 06-30-2003 06-30-2004 06-30-2003 86547900-K S.A. VINA SANTA RITA 1,868,019 1,881,621 0 0 79952350-7 RED TELEVISIVA MEGAVISION S.A. 0 0 867,762 2,030,310 89150900-6 VINA LOS VASCOS S.A. 205,021 184,174 0 0 96721580-5 CRISTALCHILE COMUNICACIONES S.A. 1,361 15,822 0 0 96972440-5 CRISTALCHILE INVERSIONES S.A. 0 0 20,037,623 19,964,196 83032100-4 SERV. Y CONSULTORIAS HENDAYA S.A. 3,309 0 0 0 87941700-7 VINA CARMEN S.A. 2,355 0 0 0 96787750-6 METROPOLIS INTERCOM S.A. 2,704,725 0 855,171 0 78936090-1 INMOB. Y CONSTRUCTORA MONTE AZUL S.A. 0 0 247,128 0 0-E VINA DONA PAULA S.A. 23,556 0 0 0 0-E RAYEN CURA S.A.I.C. 83,738 85,526 0 0 TOTAL 4,892,084 2,167,143 22,007,684 21,994,506
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 06-30-2004 06-30-2003 06-30-2004 06-30-2003 86547900-K S.A. VINA SANTA RITA 155,186 146,801 0 0 89150900-6 VINA LOS VASCOS S.A. 4,048 10,587 0 0 96972440-5 CRISTALCHILE INVERSIONES S.A. 7,947 9,298 0 0 96721580-5 CRISTALCHILE COMUNICACIONES S.A. 948 0 0 0 96539380-3 EDICIONES FINANCIERAS S.A. 0 1,603 0 0 86755600-1 BAYONA S.A. 118,251 89,220 0 0 96608270-4 CIECSA S.A. 813 3,549 0 0 86881400-4 ENVASES CMF S.A. 0 37 0 0 90320000-6 CIA. ELECTROMETALURGICA S.A. 435,600 329,725 0 0 83032100-4 SERV. Y CONSULTORIAS HENDAYA S.A. 216,902 85,701 0 0 77658870-9 MARKETING METER LTDA. 1,869 0 0 0 TOTAL 941,564 676,521 0 0
CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES TRANSACTIONS
06-30-2004 06-30-2003 Company R.U.T. Relationship Description of Amount Effect on Amount Effect on Transaction Results Results (Debit/Credit) (Debit/Credit) CRISTALCHILE 96721580-5 Affiliate Adjustment 3 3 195 195 COMUNICACIONES S.A.. CRISTALCHILE INVERSIONES 96972440-5 Affiliate Loan refund 0 0 1,863,628 0 S.A. Affiliate Adjustment 111,818 111,818 262,634 262,634 S.A VINA SANTA RITA 86547900-K Affiliate Marketing 0 0 34,204 34,204 Affiliate Direct sales 2,804,231 689,129 2,828,239 654,883 Bottles Affiliate Direct Sales 268,406 0 224,787 0 Packages Affiliate Material 254,713 751 214,726 35,868 Purchase Affiliate Vine Leasing 15,873 15,873 57,000 57,000 Affiliate Received 642,943 0 1,515,616 0 Dividends SERV. Y CONS. HENDAYA 83032100-4 Controlling Received 518,655 -518,655 520,120 -520,120 S.A. stockholder services Controlling Given services 9,563 9,563 10,549 10,549 stockholder SERV. Y CONS. HENDAYA 90320000-6 Controlling Dividends paid 228,310 0 613,337 0 S.A. stockholder CLARO Y CIA. 79753810-8 With the Chairman Legal assesment 15,954 -15,954 23,945 -23,945 NAVARINO S.A. 96566900-0 Indirect Given services 5,062 5,062 5,074 5,074 subsidiary QUEMCHI S.A. 96640360-8 Indirect Loaned services 5,076 5,076 5,708 5,708 affiliate CIA. SUDAMERICANA DE 90160000-7 Indirect Freight 82,982 0 194,324 0 VAPORES S.A. affiliate services BAYONA S.A. 86755600-1 Controlling Dividends paid 237,684 0 638,519 0 stockholder VINA LOS VASCOS S.A. 89150900-6 Indirect Direct sales 394,495 96,946 299,626 69,379 affiliate Indirect Materials 27,972 0 16,542 0 affiliate purchased EDICIONES FINANCIERAS 96793770-3 Indirect Received 3 -3 3,770 -3,770 S.A. affiliate services RAYEN CURA S.A.I.C. 0-E Indirect Direct Sales 115,741 34,269 123,648 34,288 affiliate CIA. ELECTROMETALURGICA 90320000-6 Controlling Dividends paid 875,556 0 2,352,111 0 S.A. stockholder Controlling Materials 4,688 0 2,713 0 stockholder purchased Controlling Payment for 0 0 281 0 stockholder own account RED TELEVISIVA 79952350-7 Indirect Interests 27,463 27,463 74,153 74,153 MEGAVISION S.A. affiliate Indirect Adjustment 4,842 4,842 33,177 33,177 affiliate Indirect Loan refund 0 0 580,088 0 affiliate Indirect Payment for 0 0 960 960 affiliate own account Indirect Advertising 0 0 6,438 -6,438 affiliate CIECSA S.A. 96608270-4 Adjustment 16 -16 49 -49 VINA CARMEN S.A. Land rent 2,354 2,354 0 0 CIA. ELECTROMETALURGICA 90320000-6 Controlling Payment for 0 0 382 0 S.A. stockholder own account RED TELEVISIVA 79952350-7 Indirect Advertising 5,000 -5,000 6,438 -6,438 MEGAVISION S.A. affiliate Indirect Loan refund 0 0 580,089 0 affiliate Indirect Payment for 0 0 961 961 affiliate own account METROPOLIS INTERCOM S.A. 96787750-6 Indirect Long-term loan 855,171 0 0 0 affiliate granted Indirect Short-term 2,704,725 0 0 0 affiliate loan granted INM. Y CONSTRUCTORA 78936090-1 Affiliate Loan granted 247,128 0 0 0 MONTE AZUL S.A.
07. Inventory The balance as of June 30 2004 and 2003 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: 2004 2003 Th Ch$ Th Ch$ Finished Products 3,785,034 3,373,595 Raw Materials and Fuel 1,195,803 2,031,456 Materials and spare parts to be consumed 899,181 1,054,862 Materials in transit 1,098,711 222,614 TOTAL 6,978,729 6,682,527 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 year for Short-Term Assets, 4 years for Long-Term Assets, and 14 years for Long-Term Liabilities. B) INCOME TAX The Company established tax provisions of 17% of First Cateogry Income Tax in 2004 and 16.5% in 2003, and 35% as single tax under Art. 21, for the 2004 and 2003 fiscal years. Credits against taxes are shown deducting the payable obligation. The itemized list is the following: 2004 2003 Th Ch$ Th Ch$ Fiscal year income tax reserve (1,844,654) (571,924) Single tax reserve (7,024) (4,880) ----------- ----------- SUBTOTAL (1,851,678) (576,804) Credits: Monthly reserve payments 865,132 1,380,120 Training expenditure 19,734 31,154 Credit fixed asset 0 0 Donations 0 0 V.A.T. to be recovered 0 208,161 ----------- ----------- CREDIT SUBTOTAL 884,866 1,619,435 Income Tax Credit previous fiscal year 2,093,170 233,535 TOTAL TAXES TO BE ----------- ----------- RECOVERED 1,126,358 1,276,166 C) TAXABLE INCOME FUND The Company had the following taxable income to be distributed: 2004 2003 Th Ch$ Th Ch$ Generated as of 12.31.1983: Profit adjustment 1,930,833 1,930,833 Generated since 01.01.1984: Without Credit 1,943,098 1,080,718 With 10% First Category Credit 22,785 22,875 With 15% First Category Credit 84,552,274 87,651,560 With 16% First Category Credit 14,535,934 16,256,265 With 15% Additional Rate Credit 722 728 With 16.5% First Category Credit 6,972,963 3,571,625 With 17% First Category Credit 10,955,060 0 ----------- ----------- SUBTOTAL TAX PROFITS 118,982,836 108,583,771 Non-income revenues 6,852,415 6,879,852 TOTAL EARNINGS TO DISTR. 125,835,251 115,463,623 CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX DEFERRED TAXES
06-30-2004 Item Asset Deferred Tax Liability Deferred Tax Short term Long Term Short Term Long Term Temporary Differences Reserve non-collectable accounts 24,331 0 0 0 Expected revenue 0 0 0 0 Vacation reserve 65,521 0 0 0 Amortization intangibles 0 0 0 0 Leased assets 0 0 0 0 Manufacturing expenses 0 0 0 0 Fixed asset depreciation 0 0 0 4,710,735 Severance 2,008 155,299 0 0 Other events 0 0 0 0 Packaging reserve 215,059 0 0 0 Other reserve 0 0 0 0 Furnace repair reserve 339,507 358,000 0 0 Refractories obsolescence reserve 7,058 0 0 0 Spare parts obsolescence reserve 103,850 0 0 0 Deferred customs duties 104,236 20,991 0 74,722 Accumulated depreciation automoviles 0 19,288 0 0 Unrealized profit 38,988 10,836 0 0 Fixed asset, molds 0 0 0 229,338 Amortization lower value bonds 0 0 53,803 513,120 OTHERS Complementary accounts-net amortization 0 6,703 0 2,213,523 Valuation reserve 0 0 - - Total 897,558 557,711 53,803 3,314,392 06-30-2003 Item Asset Deferred Tax Liability Deferred Tax Short term Long Term Short Term Long Term Temporary Differences Reserve non-collectable accounts 23,758 0 0 0 Expected revenue 0 0 0 0 Vacation reserve 51,394 0 0 0 Amortization intangibles 0 0 0 0 Leased assets 0 0 0 0 Manufacturing expenses 0 0 0 0 Fixed asset depreciation 0 0 0 4,575,869 Severance 1,973 37,924 0 0 Other events 0 0 0 0 Packaging reserve 189,513 0 0 0 Other reserve 0 110,194 0 0 Furnace repair reserve 0 568,415 0 0 Refractories obsolescence reserve 6,844 0 0 0 Spare parts obsolescence reserve 97,887 0 0 0 Deferred customs duties 2,708 485 0 82,405 Accumulated depreciation automoviles 0 15,888 0 0 Unrealized profit 42,401 2,840 0 0 Fixed asset, molds 0 0 0 270,444 Amortization lower value bonds 0 0 54,019 569,838 OTHERS Complementary accounts-net amortization 0 16,265 0 2,449,485 Valuation reserve 0 - 0 0 Total 416,478 719,481 54,019 3,049,071
CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX INCOME TAX
ITEM 06-30-2004 06-30-2003 Current tax costs (tax reserve) -1,851,678 -576,804 Adjustment tax cost (previous year) 0 0 Effect on assets or liabilities from deferred tax of fiscal year 422,514 -88,399 Tax benefit from tax losses 0 0 Effect of amortization of complementary accounts of deferred -131,814 -76,440 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 -1,560,978 -741,643
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 June 30, 2004 and 2003, there are no transactions for this concept. 6 10. Other current assets As of June 30, 2004, this item includes investments of Th Ch$ 7,112,460 in investments in financial instruments, with resale agreements valued as stated in note 2 p), corresponding to agreements in pesos of Th Ch$ 6,850,685 and Th Ch$ 261,775 in agreements in US Dollars for less than 90 days. Th Ch$ 326,081 also are included as expenses for issue and placement of bond series C and D. As of June 30, 2003, this item includes investments of Th Ch$ 4,647,352 in financial instruments with resale agreements, valued as stated in note 2 p), Th Ch$ 4,085,704 corresponding to agreements in pesos and Th Ch$ 561,648 to agreements in US Dollars for less than 90 days. Th Ch$ 327,388 also are included expenses for issue and placement of bond series C and D. 11. Information on operations involving purchase agreements, sales agreements, sale with buyback agreement, and purchase with sellback agreement of commercial paper or bearer securities Information about these transactions is presented on attached charts. CRISTALERIAS DE CHILE S.A. NOTE 11 - Information on operations involving purchase agreements, sales agreements, sale with buyback agreement, and purchase with sellback agreement of commercial paper or bearer securities Sale Operations with buyback agreement (VRC) and Purchase with resale agreement (CRV)
Code Dates Counterpart Original Price Rate Final Value Document ID Market Currency Set Value Start End CRV 06.25.2004 07.01.2004 BCI CB Pesos 1,000,000 0.15 1,000,300 BCP-PDBC 1,000,250 CRV 06.25.2004 07.02.2004 BCI CB Pesos 1,650,000 0.15 1,650,578 BCP-PDBC 1,650,413 CRV 06.29.2004 07.05.2004 BCI CB Pesos 450,000 0.15 450,135 BCP-PDBC 450,022 CRV 06.30.2004 07.05.2004 SANTANDER INVESTMENT Pesos 760,000 0.16 760,203 BCD-CERO 760,000 CRV 06.30.2004 07.06.2004 SANTANDER INVESTMENT Pesos 1,500,000 0.16 1,500,480 BCD-ZERO-PRD 1,500,000 CRV 06.30.2004 07.07.2004 SANTANDER INVESTMENT Pesos 1,490,000 0.16 1,490,556 BCO-CERO-PRC 1,490,000 CRV 06.30.2004 07.07.2004 SANTANDER AGENTE VALORES Dollar 261,775 1.50 261,851 BCD-BCP-CHI 261,775
12. Fixed Assets Fixed Assets: The Fixed Assets are shown at purchase cost plus the legal and regulatory revaluations accumulated as of June 30, 2004 and 2003. The items that make up the Company's fixed assets as of June 30, 2004 and 2003 include mainly Land, Industrial Constructions, Infrastructure Works, Machinery, and Equipment distributed throughout the Padre Hurtado facility. Technical Reappraisal and Adjustment of Accounting Values The company carried out a technical reappraisal of its fixed assets in 1979. In June 1986 it also adjusted the assets. Both operations were carried out according to the provisions established in Circular Letters No. 1529 and No. 550 respectively of the Securities and Insurance Commission. The effects of these operations, including write-offs of property, are shown on the attached chart. Depreciations: The charge against results for this item is Th Ch$ 5,248,805 in 2004 and Th Ch$ 4,671,670 in 2003. The detail of fixed assets and their depreciation is shown on an attached chart. FIXED ASSETS 2004 2003 Th Ch$ Th Ch$ LAND Land & mining claims 1,514,725 1,510,424 Subtotal land 1,514,725 1,510,424 *Subtotal land 1,514,725 1,510,424 CONSTRUCTIONS & INFRASTRUCTURE High rises and industrial const. 13,486,690 13,461,630 Facilities 9,772,887 9,097,497 Housing developments 26,423 26,397 *Subtotal 23,286,000 22,585,524 DEPRECIATION Accrued (10,724,662) (8,965,783) For the fiscal year (662,130) (644,167) Subtotal depreciation (10,936,792) (9,609,950) SUBTOTAL CONSTRUCTIONS & INFRASTRUCTURE 12,349,208 12,975,574 MACHINERY & EQUIPMENT Machinery 56,994,492 54,327,264 Furnaces 46,747,917 46,597,914 Furniture and Materials 1,371,663 1,239,002 Tools 441,172 353,433 Vehicles 213,113 222,108 *Subtotal 105,768,357 102,739,721 DEPRECIATION Accrued (49,669,976) (41,265,498) For the fiscal year (4,481,549) (3,922,481) Subtotal depreciation (54,151,525) (45,187,979) Subtotal machinery & equip 51,616,832 57,551,742 OTHER FIXED ASSETS Spare parts 5,917,908 5,373,156 Imports in transit 838,648 84,730 Works underway 944,690 642,812 Lots in Pirque and Leyda 413,529 466,610 Other 400,246 347,137 Subtotal other assets 8,515,021 6,914,445 TOTAL FIXED ASSETS 139,084,103 133,750,114 TOTAL ACCUMUL. DEPREC. (59,944,638) (50,231,281) TOTAL DEPREC FOR PERIOD (5,143,679) (4,566,648) TOTAL NET FIXED ASSETS 73,995,786 78,952,185 TECHNICAL REVALUATION AND ADJUSTMENT OF ACCOUNTING VALUES 2004 2003 Th Ch$ Th Ch$ LAND Land and mining claims 315,506 321,069 Subtotal land and mining claims net 315,506 321,069 CONSTRUCTIONS & INFRASTRUCTURE High rises and industrial constructions 6,302,662 6,290,431 Facilities 41,665 41,614 Subtotal Constructions 6,344,317 6,332,045 DEPRECIATION Accrued (5,101,125) (4,886,001) For the fiscal year (105,126) (105,022) Subtotal depreciations (5,206,251) (4,991,024) Subtotal Constuctions & Infrastucture net 1,138,066 1,341,022 MACHINERY & EQUIPMENT Furnaces 0 533,018 Machinery 0 581,718 Tools 0 0 Furniture and Materials 0 0 *Subtotal 0 1,114,736 DEPRECIATION Accrued 0 (1,114,736) For the fiscal year 0 0 Subtotal depreciation 0 (1,114,736) Subtotal machinery & equip 0 0 Total Net Technical Revaluation 1,453,572 1,662,091 TOTAL FIXED REVALUATION 6,659,823 7,767,850 TOTAL ACCRUED DEPREC. (5,101,125) (6,000,737) TOTAL DEPREC FOR THE PERIOD (105,126) (105,022) TOTAL NET 1,453,572 1,662,091 13. Sales transactions with leaseback These type of transactions were not carried out as of June 30, 2004 and 2003. 14. Investments in related companies According to Circular N. 1697 of the SVS, valuations of investments in related companies effected prior to January 2004 have been done using the Equity Method (VPP). This method consists in assigning the investment an equivalent value to the proportion that corresponds to the company in book value net worth of the issuer, and acknowledge proportionally the variations that this value experiments. CIECSA S.A. On April 20, 2000, the Shareholders of Ciecsa S.A. agreeded to increase the company's equity company in the equivalent of UF 359,921 through the issue of 343,750,000 shares that were fully subscribed by Cristalchile S.A. Such subscription was finally paid on April 18, 2003. On August 26, 2003 it was agreed to increase CIECSA's capital by Th Ch$ 910,000 by means of issuing 36,400,000 shares subscribed and paid in its totality by Cristalchile, with which the participation in the subsidiary reached 98.45%. CRISTALCHILE INVERSIONES S.A. At the end of year 2001 this company was created in which Cristalerias de Chile S.A. has a 99.99% participation. Cristalchile Inversiones S.A., in turn, registers an investment of 40% in the capital of Rayen Cura S.A.I.C., a company constituted in the city of Mendoza, Rep. of Argentina. On January 31, April 25 and June 30, 2003, Rayen Cura S.A.I.C. carried out returns from a capital increase paid on April 29, 2002. Amounts reimbursed totalize Th US$ 2,600. As of June 30, 2004, financial statements of Rayen Cura S.A.I.C. recognize a rate of exchange of $ 2.94 argentine pesos per US dollar. Cristalchile Inversiones S.A., in turn, has adjusted the financial statements Rayen Cura S.A.I.C., to recognize the variation of $ 2.91 argentine pesos per US Dollar as of December 31, 2003, and $ 2.94 argentine pesos per US Dollar as of June 30, 2004. For the effect of results of this affiliate and the conversion of financial statements of Rayen Cura S.A.I.C., according to the chilean normative, CristalChile Inversiones S.A., has recognized a Th Ch$ 548,441 income during the first half of 2004 and a Th Ch$ 742,704 income as of June 30, 2003. On the other hand, the variation of the dollar exchange rate in Chile during the first half of 2004, originated in the investment in Rayen Cura S.A.I.C. and for the negative goodwill produced by the purchase of shares of that company, a Th Ch$ 1,026,122 credit In 2004 (Th Ch$ 723,786 charge in 2003), to Other Equity Reserves account. CRISTALCHILE COMUNICACIONES S.A. As of September 29, 2003, the shareholders of the company agreed to increase its capital by issuing 3.861.538 shares without nominal value, at Ch$ 650 per share, which represents Th Ch$ 2,510,000. The increase was subscribed and paid by Cristalerias de Chile S.A., with which its participation in the company reaches 99.998%. S.A. VINA SANTA RITA During the fiscal year 2004, the Company registered an non-realized income for the sale of glass bottles to the subsidiary S.A. Vina Santa Rita of Th Ch$ 41,007 (Th Ch$ 49,701 in 2003). As of June 30, 2004, the accumulated balance for this concept reached Th Ch$ 236,291 (Th Ch$ 256,978 in 2003). INMOBILIARIA MONTE AZUL SA. On May 14, 2004, Cristalchile S.A. paid its subsidiary Constructora Apoger the sum of Th Ch$ 196 for 49% of its rights. With this contribution the participation in this affiliate reached 50% as of June 30, 2004 (without effects in results). CRISTALERIAS DE CHILE S.A. NOTE 14 - INVESTMENTS IN RELATED COMPANIES DETAIL OF INVESTMENTS
R.U.T. Company Country Investment Number of Shareholder of Control Shares (Percentage) Origin Currency 06-30-2004 06-30-2003 06-30-2004 96721580-5 Cristalchile Chile Peso 105,074,698 99.0000000 99.000000 Comunicaciones S.A. 86547900-K S.A. Vina Chile Peso 493,959,597 54.0000000 54.000000 Santa Rita S.A. 86881400-4 Envases CMF Chile Peso 28,000 50.0000000 50.000000 S.A. 96608270-4 Ciecsa S.A. Chile Peso 689,301,305 98.0000000 98.000000 96767580-6 Constructora Chile Peso 800,000 80.0000000 80.000000 Apoger S.A. 96826870-8 Inmobiliaria Chile Peso 3,817 0.00000000 38.000000 Don Alberto S.A. 96972440-5 Cristalchile Chile Peso 9,999 99.9900000 99.990000 Inversiones S.A. 78936090-1 Inmobiliaria Chile Peso 50 50.0000000 0.000000 Monte Azul S.A. TOTAL R.U.T. Company Company Net Accrued Income Equity Income 06-30-2003 06-30-2004 06-30-2004 06-30-2003 06-30-2004 06-30-2003 96721580-5 Cristalchile 65,409,343 70,253,878 -4,040,744 -3,467,776 -4,040,670 -3,467,707 Comunicaciones S.A. 86547900-K S.A. Vina 84,393,304 80,883,079 3,553,335 2,881,707 1,922,248 1,558,918 Santa Rita S.A. 86881400-4 Envases CMF 32,276,385 33,753,421 298,319 1,216,701 149,160 608,349 S.A. 96608270-4 Ciecsa S.A. 19,205,202 14,822,184 926,745 75,302 912,341 74,068 96767580-6 Constructora 3,651 5,456 -1,082 -703 -866 -563 Apoger S.A. 96826870-8 Inmobiliaria 0 37 0 2 0 1 Don Alberto S.A. 96972440-5 Cristalchile -1,811,40 -1,078,682 264,324 529,017 264,297 528,965 Inversiones S.A. 78936090-1 Inmobiliaria -1,052 0 -1,654 0 -827 0 Monte Azul S.A. TOTAL R.U.T. Company VPP Unrealized Investment Book value Income 06-30-2004 06-30-2003 06-30-2004 06-30-2003 06-30-2004 06-30-2003 96721580-5 Cristalchile 65,408,145 70,252,490 0 0 65,408,145 70,252,499 Comunicaciones S.A. 86547900-K S.A. Vina 45,654,254 43,755,327 236,291 256,978 45,417,963 43,498,340 Santa Rita S.A. 86881400-4 Envases CMF 16,138,193 16,876,710 0 0 16,138,193 16,876,710 S.A. 96608270-4 Ciecsa S.A. 18,906,712 14,579,183 207,370 240,309 18,699,342 14,338,874 96767580-6 Constructora 2,921 4,365 0 0 2,921 4,365 Apoger S.A. 96826870-8 Inmobiliaria 0 14 0 0 0 14 Don Alberto S.A. 96972440-5 Cristalchile 0 0 0 0 0 0 Inversiones S.A. 78936090-1 Inmobiliaria -526 0 0 0 -526 0 Monte Azul S.A. TOTAL 146,109,699 145,468,089 443,661 497,287 145,666,038 144,970,802
15. Investments in other companies As of June 30, 2004 and 2003 there are no investments in other companies. 16. Goodwill Amortization NEGATIVE GOODWILL Stock purchases made between years 1993 and 1999 of S.A. Vina Santa Rita and Ciecsa S.A., have produced negative goodwill whose net balance to be amortized as of June 30, 2004 totaled Th Ch$ 1,821,374 (Th Ch$ 1,992,171 in 2003). POSITIVE GOODWILL As of June 30, 2004 and 2003 there were no transactions for this concept. CRISTALERIAS DE CHILE S.A. NOTE 16 - GOODWILL ON INVESTMENTS Negative Goodwill
R.U.T. Company Name 06-30-2004 06-30-2003 Amount Amortiz. Balance of Negative Amount Amortiz. Balance of Negative this period Goodwill this period Goodwill 86547900-K S.A. Vina Santa Rita 25,288 538,221 25,264 588,212 96608270-4 Ciecsa S.A. 61,103 1,283,153 61,042 1,403,959 TOTAL 86,391 1,821,374 86,306 1,992,171
17. Intangibles As of June 30, 2004 and 2003 there are no values for these items. 18. Other (Assets) As of June 30, 2004, Other Long-term Assets include Th Ch$ 8,539,146 (Th Ch$ 9,438,484 in 2003) for investments in Bonds of Celulosa Arauco y Constitucion S.A., equivalent to US$ 13,455,834 at an annual rate of 6.95% with maturity on September 15, 2005; and Th Ch$ 22,801 (Th Ch$ 136,155 in 2003) for overprice, paid in the acquisition of these bonds, which that are amortized in the same term of their maturity. 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 their investment value plus the interest and adjustments accrued at the end of the fiscal year. Within Other Assets, as of June 30, 2004 there is a balance for issue expenses of bond series C and D carried out by Cristalerias, that amounts Th Ch$ 823,125 (Th Ch$ 956,326 in 2003) and negative goodwill as a result of their placement of Th Ch$ 2,195,227 (Th Ch$ 2,404,145 in 2003). 19. Short-term obligations with banks and financial institutions a) Short-term obligations with Banks and Financial Institutions As of June 30, 2004 and 2003, there are not short-term bank obligations. b) Current Portion of Long-term obligations with Banks and Financial Institutions A detail of operations is shown on the attached chart. CRISTALERIAS DE CHILE S.A. NOTE 19 - OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS, SHORT TERM Type of Currency and Readjustment Index
R.U.T. Bank or Financial Dollars Euros Yen Other Foreign Institution Currencies 06-30-2004 06-30-2003 06-30-2004 06-30-2003 06-30-2004 06-30-2003 06-30-2004 06-30-2003 Short term (code: 5.21.10.10) Long Term - Short Term (code: 5.21.10.20) 0-E J.P Morgan Chase Bank 139,500 156,829 0 0 0 0 0 0 Others 0 0 0 0 0 0 0 0 TOTAL 139,500 156,829 0 0 0 0 0 0 Capital amount due 0 0 0 0 0 0 0 0 Average annual 2.05 2.1125 0 0 0 0 0 0 interest rate Percentage oblig. foreign curr.(%) 100.0000 Percentage oblig. foreign curr.(%) 0.0000 R.U.T. Bank or Financial U.F. $ Non adjustable Total Institution 06-30-2004 06-30-2003 06-30-2004 03-31-2003 06-30-2004 06-30-2003 Short term (code: 5.21.10.10) Long Term - Short Term (code: 5.21.10.20) 0-E J.P Morgan Chase Bank 0 0 0 0 139,500 156,829 Others 0 0 0 0 0 0 TOTAL 0 0 0 0 139,500 156,829 Capital amount due 0 0 0 0 0 0 Average annual 0 0 0 0 0 0 interest rate Percentage oblig. foreign curr.(%) Percentage oblig. foreign curr.(%)
20. Other Current Liabilities As of June 30, 2004 , there was a balance in favor of financial institutions of Th Ch$ 1,718,914 (Th Ch$ 4,995,904 in 2003), corresponding to Future Contracts subscribed by the Company, more detail is found in Note 34 under Derivative Contracts. 21. Long term liabilities with banks and financial institutions The obligations with banks and financial institutions are presented on the charts attached. CRISTALERIAS DE CHILE S.A. NOTE 21: LONG-TERM OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS Long-term Obligations With Banks and Financial Institution
Current period Previous period Maturity R.U.T. Bank or Financial Adjustment Institution index From 1 From 2 From 3 From 5 More than 10 years currency to 2 to 3 to 5 to 10 Amount Term M$ M$ M$ M$ M$ 0-E J.P. Morgan Chase Bank Dollars 7,953,750 15,907,500 7,953,750 - - - Euros - - - - - - Yen - - - - - - UF - - - - - - Non-adj.CH$ - - - - - - Others - - - - - - Total 7,953,750 15,907,500 7,953,750 - - - Porcentaje de obligaciones en moneda extranjera 100.00% Porcentaje de obligaciones en moneda nacional 0.00% Closing date Closing date R.U.T. Bank or Current period Previous period Financial Adjustment Total Long-Term Average Total Long-Term Institution index at closing of annual at closing of currency Financial interest Financial Statements rate Statements 0-E J.P. Morgan Chase Bank Dollars 31,815,000 2.05 35,165,736 Euros - - - Yen - - - UF - - - Non-adj.CH$ - - - Others - - - Total 31,815,000 - 35,165,736 Porcentaje de obligaciones en moneda extranjera Porcentaje de obligaciones en moneda nacional
22. Short-term and long-term obligations with the public (promissory notes and bonds) As of June 30, 2004 , there are obligations with the public for UF 4,100,000, equivalent to Th Ch$ 69,761,295 (Th Ch$ 69,951,855 in 2003), divided in series C1, C2, D1, D2 with a 4.75% annual interest rate in series C and of 5.80% in series D, respectively, that is presented in the long term. In short term there is a balance of Th Ch$ 1,688,964 (Th Ch$ 1,683,436 in 2003) corresponding to accrued interests of UF 99,263.51 Series C bonds have a maturity of 6 years, with amortizations beginning 2 years from the date of issue. Series D bonds have a maturity of 21 years, with amortization begining 6 years from the date of issue. Cristalerias de Chile S.A. NOTE 22: SHORT-TERM AND LONG-TERM OBLIGATIONS WITH PUBLIC (PROMISSORY NOTES AND BONDS) BONDS
REGISTRATION OR SERIES CURRENT INDEXING INTEREST FINAL IDENTIFICATION No. FACE VALUE UNIT OF BOND RATE MATURITY OF INSTRUMENT LONG-TERM BONDS-CURRENT PORTION 296-09.07.02 C1 Interests 0 UF 4.75 07-15-2004 296-09.07.02 C2 Interests 0 UF 4.75 07-15-2004 296-09.07.02 D1 Interests 0 UF 5.80 07-15-2004 296-09.07.02 D2 Interests 0 UF 5.80 07-15-2004 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 LONG-TERM TOTAL INSTALLMENTS PAR VALUE REGISTRATION OR INTEREST AMORTIZATION ISSUE IDENTIFICATION No. PAYMENT PAYMENT 06-30-2004 06-30-2003 IN CHILE OR OF INSTRUMENT ABROAD LONG-TERM BONDS-CURRENT PORTION 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 555,855 554,036 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 185,285 184,678 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 857,555 854,748 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 90,269 89,974 LOCAL TOTAL CURRENT PORTION 1,688,964 1,683,436 LONG-TERM BONDS 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 25,522,425 25,592,142 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 8,507,475 8,530,714 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 32,328,405 32,416,713 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 3,402,990 3,412,286 LOCAL LONG-TERM TOTAL 69,761,295 69,951,855
23. Reserves and Write-offs Reserves: As of June 30, 2004, the Company has short-term reserves of Th Ch$ 7,170,405 and Th Ch$ 4,128,088 in 2003. In the Long-term, reserves recorded are of Th Ch$ 6,417,630 and Th Ch$ 7,578,300 respectively as of June 30 2004 and 2003. Provisioned amounts are exposed in the annexed chart. a) Reserves for Bad Debt: The Company has established a reserve for bad debts of Th Ch$ 143,127, and Th Ch$ 143,986, respectively, as of June 30, 2004 and 2003. This reserve is deducted from the balance of debtors from sales, as stated in note 5. b) Vacation Reserve: The Company has established a reserve for the total cost of vacations pending as of June 30, 2004 and 2003, as established in Technical Bulletin No. 47 of the Accountants Association of Chile A.G. The net balance for this item amounts to Th Ch$ 367,771 as of June 30, 2004 (Th Ch$ 311,482 in 2003). c) Reserve for Furnace Reconstruction: This reserve is established throughout the useful life of the refractants 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 reserve for this item in the amount of Th Ch$ 4,194,934 and Th Ch$ 3,441,103 as of June 30, 2004 and 2003, respectively. An itemized list of the amounts provided is shown in the annexed chart. Cristalerias de Chile S.A. Note Reserves and Write-offs 06/30/2004 06/30/2003 Short term Packing for Client Return 1,265,054 1,125,820 Furnace Reconstruction 1,997,982 0 Board Share 285,011 118,306 Reserve Spare Parts 438,189 449,065 Legal Holiday 367,771 311,482 Severance Pay 185,502 183,430 Reserve Subsidiary Losses 1,811,220 1,078,575 Provision Indirect Expenses 492,914 463,354 Provision Legal Gratification 77,432 67,575 Other Reserves 249,330 330,481 Total short term 7,170,405 4,128,088 Long term Severance Pay 4,220,678 4,137,197 Furnace Reconstruction 2,196,952 3,441,103 Total long term 6,417,630 7,578,300 24. Severance Payments The reserve for severance payments to personnel is included at its current value, as expressed in note 2 r). As of June 30, 2004 it amounts Th Ch$ 4,406,180 (Th Ch$ 4,320,627 in 2003). As of June 30, 2004 and 2003 the company has made severance payments of Th Ch$ 135,042 and Th Ch$ 34,375 chargeable against the reserve, respectively. 25. Other long-term liabilities As of June 30, 2004 and 2003 there are no balances for this item. 26. Minority interest Not applicable to individual financial statements. 27. Changes in Equity a. Activity in 2004 and 2003 The activity of the capital and reserve accounts in the fiscal years ended in June 30, 2004 and 2003, are shown in the attached charts. b. Other Reserves The detail of this item is as follows: 2004 2003 Th Ch$ Th Ch$ Future capital increases 4,564,803 4,376,765 Reserve for adjustment of value 1,453,572 1,635,616 of fixed assets Adjustment for conversion difference 1,481,022 3,142,699 in investment in Rayen Cura S.A.I.C. --------- --------- TOTAL OTHER RESERVES 7,499,397 9,155,080 ========= ========= CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NET WORTH
Paid-in Reserve Premium Other Capital capital in sale of Reserves revaluation shares ---------- ----------- ---------- --------- Balances as of 06-30-2004 Initial balance 65,396,749 0 27,874,377 6,421,900 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 1,026,122 Owner's equity Revaluation 0 523,174 222,995 51,375 Fiscal Year Result 0 0 0 0 Provisional Dividends 0 0 0 0 Final balances 65,396,749 523,174 28,097,372 7,499,397 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 profit Capitalization 0 0 0 0 Development period accumulated deficit 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 -719,466 Owner's equity revaluation 0 712,242 303,583 106,844 Fiscal Year Result 0 0 0 0 Provisional Dividends 0 0 0 0 Final balances 64,749,257 712,242 27,901,976 9,100,477 Updated balances 65,137,753 716,515 28,069,388 9,155,080
Reserve Accumulated Provisional Devel. Fiscal Future Results Dividends Period Year Dividends Deficit Result ----------- ----------- ----------- ------- --------- Balances as of 06-30-2004 Initial balance 123,160,119 6,426,520 -958,080 0 0 Distribution result previous fiscal year 5,468,440 -6,426,520 958,080 0 0 Final dividend previous fiscal year -1,612,800 0 0 0 0 Capital increases with cash stock issue 0 0 0 0 0 Reserves and/or Profits Capitalization 0 0 0 0 0 Development period Accumulated deficit 0 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 0 0 Owner's equity Revaluation 1,104,514 0 0 0 0 Fiscal Year Result 0 0 0 0 7,125,275 Provisional Dividends 0 0 -1,280,000 0 0 Final balances 128,030,273 0 -1,280,000 0 7,125,275 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 profit Capitalization 0 0 0 0 0 Development period accumulated deficit 0 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 0 0 Owner's equity revaluation 1,449,595 0 0 0 0 Fiscal Year Result 0 0 0 0 2,940,009 Provisional Dividends 0 0 -960,000 0 0 Final balances 125,192,576 0 -960,000 0 2,940,009 Updated balances 125,943,731 0 -965,760 0 2,957,649
CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN EQUITY - NUMBER OF SHARES SERIES No. No. No. SHARES SHARES SHARES SUBSCRIBED PAID WITH VOTING RIGHT ------ ---------- ---------- ----------- SINGLE 64,000,000 64,000,000 64,000,000 CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NETWORTH - CAPITAL (AMOUNT - TH CH$) SERIES SUBSCRIBED PAID-IN CAPITAL CAPITAL ------ ---------- ---------- SINGLE 65,396,749 65,396,749 28. Other Non-operating Income and Expenses As of June 30, 2004 non-operating income totaled Th Ch$ 302,039 and Th Ch$ 198,321 in 2003. Non-operating expenses amounted to Th Ch$ 498,015 in 2004 and Th Ch$ 449,378 in 2003. Greater detail is shown in the annexed chart. Non-operating Income and Expenses CRISTALERIAS DE CHILE S.A. NOTE 28: OTHER NON-OPERATING INCOME AND EXPENSES 2004 2003 ------- ------- Th Ch$ Th Ch$ INCOME Offices and establishments rental 82,879 88,404 Sale of fixed assets 8,588 3,687 Sale of materials 6,084 7,157 Agricultural Division 15,519 55,783 Amortization of non-realized profits 16,590 16,573 Sundry income 172,379 26,717 TOTAL NON-OPERATING INCOME 302,039 198,321 EXPENSES Professional advice 311,651 311,341 Other expenses 133,087 90,517 Insurances 24,917 21,968 Expenses ADR'S 28,360 25,552 TOTAL NON-OPERATING EXPENSES 498,015 449,378 29. Price-level Restatement As a result of the application of price-level restatement as described in Note 2 d), a net credit to results was generated in the 2004 of Th Ch$ 276,582 and of Th Ch$ 388,966 in 2003 fiscal year. Additional information ordered by balance item is shown in the annexed chart. Cristalerias de Chile S.A. NOTE 29: ADJUSTMENT FOR PRICE LEVEL RESTATEMENTS
ADJUSTABILITY ASSETS (DEBITS)/CREDITS INDEX 06-30-2004 06-30-2003 ------------------------------------------ -------------------- ---------- ---------- INVENTORY Consumer Price Index 99,463 72,133 FIXED ASSET CPI 913,615 733,682 INVESTMENTS IN RELATED COMPANIES CPI 1,164,540 1,628,607 MARKETABLE SECURITIES CPI 33,236 42,125 SHORT TERM DEBTORS CPI 1,293 1,772 ACCOUNTS RECEIVABLE RELATED COMPANIES UF 117,495 296,006 LONG-TERM DEBTORS UF 2,543 2,167 SHORT TERM DEBTORS UF 1,131 913 OTHER NON-MONETARY ASSETS CPI 36,928 43,421 EXPENSE AND COST ACCOUNTS CPI 87,057 892,631 TOTAL (DEBITS)/CREDITS - 2,457,301 3,713,457 LIABILITIES (DEBITS)/ CREDITS NET WORTH CPI -1,812,057 -2,587,697 ACCOUNTS RECEIVABLE RELATED COMPANIES UF 13 -49 SHORT-TERM RESERVES CPI -71,961 -18,884 SHORT -TERM CREDITORS CPI 0 0 LONG-TERM RESERVES CPI -79,482 -54,666 PUBLIC OBLIGATION UF -389,295 -889,057 LONG-TERM CREDITORS CPI -237 -578 NON-MONETARY LIABILITIES CPI -128,680 -90,809 INCOME ACCOUNTS CPI -252,184 -460,683 TOTAL (DEBITS)/ CREDITS - -2,733,883 -4,102,423 (LOSS) PROFIT FROM ADJUSTMENT FOR PRICE LEVEL RESTATEMENT -276,582 -388,966
30. Exchange Differences A net credit against results was made due to exchange rate differences of Th Ch$ 1,391,248 in 2004 and a net charge of Th Ch$ 3,617,428 in 2003. According to the provisions in SVS Circular Letter 1560 of 09/20/2001, this item presents the net effect of the adjustment of adjustable assets and liabilities in foreign currency on results deducting the inflation effect is presented in this item. Further information is shown on the table attached. Cristalerias de Chile S.A. NOTE 30: EXCHANGE DIFFERENCES
ITEM CURRENCY AMOUNT -------------------------------------- -------------- -------------------------- 06-30-2004 06-30-2003 ---------- ---------- FIXED (DEBITS) CREDITS AVAILABLE DOLLARS 7,524 -15,158 MARKETABLE SECURITIES DOLLARS 1,742,267 -1,508,055 MARKETABLE SECURITIES EURO 1,157,849 0 TIME DEPOSITS DOLLARS 0 -185,532 INVENTORY DOLLARS 8,004 -15,660 BONDS INSTALLMENT DOLLARS 573,673 -588,092 SUNDRY DEBTORS DOLLARS 6,308 -9,738 OTHER ASSETS DOLLARS 531,328 -12,995 ADJUSTMENT EFFECT OF INFLATION DOLLARS -194,685 -124,018 TOTAL (DEBITS) CREDITS 3,832,268 -2,459,248 LIABILITIES (DEBITS) CREDITS NOTES PAYABLE DOLLARS -19,254 85,210 NOTES PAYABLE OTHER CURRENCY 1,892 7,235 SUNDRY CREDITORS - SHORT TERM DOLLARS -40,954 22,013 LONG- TERM BANK LOANS DOLLARS -2,125,000 980,347 SHORT-TERM RESERVES DOLLARS -133,450 0 LONG-TERM RESERVES DOLLARS -127,586 61,448 SUNDRY CREDITORS - LONG TERM DOLLARS -8,247 3,943 OTHER LIABILITIES DOLLARS -136,961 0 ADJUSTMENT FUTURE CONTRACTS DOLLARS 30,112 -2,754,341 ADJUSTMENT EFFECT OF INFLATION DOLLARS 118,428 435,965 TOTAL (DEBITS) CREDITS -2,441,020 -1,158,180 (LOSS) PROFIT FROM EXCHANGE DIFFERENCE 1,391,248 -3,617,428
31. Extraordinary Items As of June 30, 2004 and 2003, there are no transactions for this item. 32. Share and Debt Instruments Issue and Placement Expenses On August 2002 the company placed bonds for UF 4,100,000, series C1, C2, D1 and D2, which resulted in issue expenses and rate differential for placement of Th Ch$ 3,344,433 as of June 30, 2004 (Th Ch$ 3,687,857 in 2003). The amortization is been done according to the maturity of each series. There are Th Ch$ 326,081 (Th Ch$ 327,387 in 2003) under other current assets and Th Ch$ 3,018,352 (Th Ch$ 3,360,470 in 2003) other long term assets respectively. The charge to results for its amortization amounted Th Ch$ 164,859 in 2004 (Th Ch$ 163,495 in 2003).
DETAIL Short -Term Long-Term -------------------------- --------------------- ----------------------- 2004 2003 2004 2003 ------- ------- --------- --------- Issue expenses 127,148 127,911 823,125 956,325 Placement rate differences 198,933 199,476 2,195,227 2,404,145 Total 326,081 327,387 3,018,352 3,360,470
33. Cash Flow Statement CRISTALERIAS DE CHILE S.A. 1. The following it the detail of the item OTHERS:
Jun 2004 Jun 2003 Th Ch$ Th Ch$ -------- --------- 541.11.40 Other income received Exchange different 100,216 293,398 Discount for Custom Duties 54,737 0 Loan Adjustment 42,646 0 Tributary tax exemption 15,000 900,822 Treasury Reimbursement 0 Other income 64,795 1,014 Total 277,394 1,195,234 541.11.80 Other expenses paid Exchange difference 149,150 2,084,888 Donations 41,663 25,849 Advice services 0 Contracts finished 0 Board participacion Directorio 0 0 Other expenses 4,381 6,163 Total 195,194 2,116,900 541.13.30 Other income from investments Maturity of future contracts 1,476,576 Total 0 1,476,576 541.13.65 Other investment disbursements Purchase of shares 319,759 Future Contracts 308,049 Total 0 627,808
Following are financing and investment activities that did not generate cash flow during the fiscal year, but that commit future parent company cash flows:
ITEM Amount Th Ch $ Maturity -------------------------- -------------- ------------ Dividend 158 1,280,000 July -2004 Amounts payable investment 537,365 2nd Semester TOTAL 1,817,365
34. Derivative Contracts The company has signed purchase and sale future contracts in foreign currency of Th US$ 37,600 and sale future contracts in foreign currency Th US$ 37,600 and Th US$ 60,600, respectively (purchase of Th Ch$ 109,600 as of June 30, 2003) 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 June 30, 2004 there was a difference in favor of financial institutions of Th Ch$ 1,718,914 (Th Ch$ 4,995,904 in 2003) which is classified under Other Current Liabilities. CRISTALERIAS DE CHILE S.A. NOTE 34: DERIVATIVE CONTRACTS
TYPE OF TYPE OF VALUE OF MATURITY OR DESCRIPTION OF CONTRACTS DERIVATIVE CONTRACT CONTRACT EXPIRATION DATE ----------------------------------------------- SPECIFIC PURCHASE/ PROTECTED ITEM OR ITEM SALE TRANSACTION POSITION ----------------- NAME AMOUNT ------------- -------- ---------- ----------- ------------- -------- ----- ------ FR CI 25,992,590 THIRD 2004 EXCHANGE RATE P - 0 FR CI 36,977,320 THIRD 2004 EXCHANGE RATE S - 0 FR CI 1,931,256 FOURTH 2004 EXCHANGE RATE S - 0
TYPE OF TYPE OF VALUE OF VALUE OF ACCOUNTS AFFECTED DERIVATIVE CONTRACT CONTRACT PROTECTED ITEM ----------------------------------------------------- ASSETS/LIABILITIES EFFECT ON RESULT ------------------------- ------------------------- NAME AMOUNT REALIZED NOT REALIZED ------------- -------- ---------- ----------- ------------- --------- ---------- ------------ FR CI 25,992,590 0 LIABILITIES 2,067,710 -2,067,710 0 FR CI 36,977,320 0 ASSETS 326,444 326,444 0 FR CI 1,931,256 0 ASSETS 22,352 22,352 0
Analysis of Forward Contracts in foreign currency as of 06.30.2004
INSTITUTION DATE FUTURE VALUE FUTURE VALUE PROFIT (Loss) --------------------------- ------------ ------------ ----------- Investment Maturity Exchange US$ Jun PURCHASE US$ ThCh$ --------------------------- ---------- ---------- ------------ ------------ ----------- Citibank NA. 09-08-2003 09-02-2004 694.25 2,000,000 (111,726) Deutsche Bank (Chile) S.A. 09-04-2003 09-03-2004 697.20 15,000,000 (899,492) Bank Boston 09-10-2003 09-06-2004 694.20 2,000,000 (111,788) Deutsche Bank (Chile) S.A. 09-08-2003 09-07-2004 695.50 2,000,000 (111,282) Deutsche Bank (Chile) S.A. 09-08-2003 09-07-2004 693.80 1,800,000 (101,329) Deutsche Bank (Chile) S.A. 09-10-2003 09-09-2004 693.90 2,800,000 (158,015) Deutsche Bank (Chile) S.A. 09-10-2003 09-09-2004 695.50 2,000,000 (115,709) Banco Chile 09-11-2003 09-06-2004 685.84 3,000,000 (145,749) Banco Chile 09-15-2003 09-09-2004 682.92 3,500,000 (154,948) Banco Santander 09-15-2003 08-16-2004 681.90 3,500,000 (157,672) Total Purchase 37,600,000 (2,067,710) SALES Bank Boston 10-14-2003 09-09-2004 649.30 4,800,000 55,330 Banco Santander 10-21-2003 09-07-2004 653.00 2,000,000 29,375 Deutsche Bank (Chile) S.A. 10-22-2003 09-09-2004 650.00 2,000,000 24,343 Banco Santander 10-22-2003 09-09-2004 650.80 1,500,000 19,078 Citibank 10-22-2003 09-07-2004 650.00 1,800,000 21,946 Deutsche Bank (Chile) S.A. 10-23-2003 09-02-2004 641.50 2,000,000 10,828 Banco Santander 10-23-2003 09-03-2004 642.20 6,000,000 35,418 Deutsche Bank (Chile) S.A. 10-24-2003 09-03-2004 642.50 2,000,000 7,981 Deutsche Bank (Chile) S.A. 10-24-2003 09-03-2004 643.00 2,000,000 8,676 Deutsche Bank (Chile) S.A. 10-24-2003 09-03-2004 644.00 1,000,000 5,033 Deutsche Bank (Chile) S.A. 10-24-2003 09-03-2004 644.50 1,000,000 5,381 Banco Santander 10-27-2003 09-03-2004 643.35 2,000,000 9,140 Deutsche Bank (Chile) S.A. 10-27-2003 09-03-2004 645.50 1,000,000 6,058 Deutsche Bank (Chile) S.A. 10-28-2003 08-16-2004 641.50 1,000,000 3,738 Banco Santander 10-28-2003 08-16-2004 642.12 2,500,000 10,484 Banco Santander 10-28-2003 09-06-2004 645.55 2,000,000 12,484 Deutsche Bank (Chile) S.A. 11-06-2003 09-06-2004 637.40 1,000,000 (1,474) Banco Santander 11-12-2003 09-06-2004 638.35 1,000,000 (1,354) Deutsche Bank (Chile) S.A. 11-18-2003 09-06-2004 634.30 1,000,000 (4,998) Deutsche Bank (Chile) S.A. 05-18-2004 08-16-2004 642.50 1,000,000 5,777 Deutsche Bank (Chile) S.A. 05-17-2004 08-16-2004 642.50 2,500,000 9,974 Deutsche Bank (Chile) S.A. 05-18-2004 08-16-2004 641.50 1,000,000 5,299 Deutsche Bank (Chile) S.A. 05-20-2004 08-23-2004 643.30 4,000,000 10,129 Deutsche Bank (Chile) S.A. 05-20-2004 08-18-2004 643.30 4,000,000 10,883 Deutsche Bank (Chile) S.A. 05-24-2004 09-01-2004 640.50 1,500,000 8,955 Deutsche Bank (Chile) S.A. 05-24-2004 08-23-2004 641.00 1,000,000 6,071 Deutsche Bank (Chile) S.A. 05-26-2004 09-03-2004 640.50 2,000,000 4,462 Deutsche Bank (Chile) S.A. 05-26-2004 09-03-2004 641.20 3,000,000 7,427 Deutsche Bank (Chile) S.A. 06-04-2004 10-04-2004 646.30 3,000,000 22,352 Subtotal Sale 60,600,000 348,796 Total as of June 30 2004 -23,000,000 (1,718,914)
35. Contingencies and Restrictions As of June 30, 2004, there is a guarantee delivered in the amount of Th Ch$ 15,822 and Th Ch$ 7,999 in 2003, according to the detail in the attached chart. LAWSUITS OR OTHER LEGAL ACTIONS THE COMPANY IS INVOLVED IN As of June 30, 2004 and 2003 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, the following specific financial obligations exist: a) TOTAL CONSOLIDATED DEBT TO CAPITALIZATION RATIO Cristalerias de Chile S.A will not allow the Total Consolidated Debt to Capitalization Ratio to exceed the 0.45 to 1.0 relation at any time. Capitalization is described as the sum of Net Worth plus minority interests plus total consolidated debt. b) NET CONSOLIDATED DEBT TO EBITDA RATIO Cristalerias de Chile S.A will not allow the Total Non-consolidated Debt to EBITDA Ratio to exceed the 2.5 to 1.0 relation at any time. EBITDA is described as the sum of the following: operating income plus depreciation and amortization; plus non cash charges (as long as they have been deducted when determining operating income) and cash income from interests minus non/cash credits, (as long as they have been aggregated 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 4,0. Interest coverage is defined as interests at the day of the respective determination, the ratio between non consolidated EBITDA for the period of 4 consecutive fiscal quarters that ends on, or most recently ebded before, that date, and interest expenses for that period. d) NET EQUITY Cristalerias de Chile S.A. will maintain a minimum of UF 10,000,000 at any time. Cristalerias de Chile S.A. complies with 100% of the restrictions imposed by the banks. BOND ISSUE At of May 29, 2002 the contract of bonds issue was signed with Banco Chile as the bond owner's representative, established the following obligations: a) Financial Indicators Individual Balance: Leverage not higher than 1.2 times. Consolidate Balance: Leverage not higher than 1.4 times. b) Insurances for fixed assets of the company and its subsidiaries. c) The operations for which art. 44 and 89 of law 18,046 refer to must be carried out according to the conditions that these establish. d) Other restrictions related with contract of the bonds issued. Cristalerias de Chile S.A. complies with 100% of the restrictions imposed by the bonds creditors. OTHER CONTINGENCIES As of June 30, 2004 and 2003, management is not aware of any other contingencies that could affect the company. CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS - DIRECT GUARANTEES
CREDITOR OF DEBTOR TYPE OF ASSETS BALANCES PENDING GUARANTEE GUARANTEE COMMITTED PAYMENT AS OF CLOSING DATE OF FINANCIAL STATEMENTS ------------------------------ -------------- ----------------------- NAME RELATIONSHIP TYPE BOOK VALUE 06-30-2004 06-30-2003 ----------- --------------- ------------ --------- ----- ------ ---------- ---------- EDIFICIO CRISTALERIAS DE COMMERCIAL DEPOSIT FLOOR 15,822 15,822 7,999 METROPOLIS CHILE S.A. AGF
CREDITOR OF DEBTOR GUARANTEE RELEASE OF GUARANTEES ------------------------------ --------------------------------------------------------------- NAME RELATIONSHIP 06-30-2005 ASSETS 06-30-2006 ASSETS 06-30-2007 ASSETS ----------- --------------- ------------ ---------- ------ ---------- ------ ---------- ------ EDIFICIO CRISTALERIAS DE COMMERCIAL - - - - 15,822 - METROPOLIS CHILE S.A. AGF
CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS - INDIRECT GUARANTEES
CREDITOR OF DEBTOR TYPE OF ASSETS BALANCES PENDING GUARANTEE GUARANTEE COMMITTED PAYMENT AS OF CLOSING DATE OF FINANCIAL STATEMENTS ------------------------------ -------------- ----------------------- NAME RELATIONSHIP TYPE BOOK VALUE 06-30-2004 06-30-2003 -------------- --------------- ------------ --------- ----- ------ ---------- ---------- Societe de Affiliate Solidary - - 1,832,545 2,835,765 Participations Rayen Cura Financieres et S.A. Industrielles Cristalerias Envases CMF de Chile S.A. Affiliate Solidary - - 207,423 331,333
CREDITOR OF DEBTOR GUARANTEE RELEASE OF GUARANTEES ------------------------------ --------------------------------------------------------------- NAME RELATIONSHIP 06-30-2005 ASSETS 06-30-2006 ASSETS 06-30-2007 ASSETS -------------- --------------- ------------ ---------- ------ ---------- ------ ---------- ------ Societe de Affiliate 733,018 - 733,018 - 366,509 - Participations Rayen Cura Financieres et S.A. Industrielles Cristalerias Envases CMF de Chile S.A. Affiliate - - - - 207,423 -
36. Guarantees obtained from third parties As of June 30, 2004 and 2003 the Company has received guarantees from third parties, which are shown below: ITEM 2004 2003 Th Ch$ Th Ch$ Real Estate Lease Security Bank UF 304 5,173 5,186 Real Estate Lease to Telecomunicaciones and Services Cono Sur Ltda. UF 130 0 2,218 Real Estate Lease AGF Building UF 365.9 6,226 6,242 Real Estate Lease Metropolis Building UF 189.2 3,219 3,228 Real Estate Lease Cafe Sur Andino UF 260 4,424 0 Suppliers Sight Drafts 1,674 1,684 TOTAL 20,716 18,558 37. Local and Foreign Currency Charts are attached showing the foreign currency balance as of June 30, 2004 and 2003. Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - ASSETS
ITEMS Currency Amount --------------------------- 06-30-2004 06-30-2003 -------------------------- --------------- ----------- ----------- Current Assets CASH Non-adjust Ch$ 1,327,448 1,295,444 CASH Dollars 144,118 509,673 TIME DEPOSITS Dollars 0 10,445,036 MARKETABLE SECURITIES Adjustable Ch$ 4,187,786 4,183,939 MARKETABLE SECURITIES Dollars 26,119,132 54,372,054 MARKETABLE SECURITIES Non-adjust. Ch$ 176,393 194,133 DEBTORS FROM SALES Non-adjust. Ch$ 18,766,519 14,697,104 DOCUMENTS RECEIVABLE Non-adjust. Ch$ 995,423 1,673,336 MISCELLANEOUS DEBTORS Adjustable Ch$ 108,345 93,486 MISCELLANEOUS DEBTORS Non-adjust. Ch$ 51,033 13,923 MISCELLANEOUS DEBTORS Dollars 668,952 567,918 DOC.&ACTS. REC. REL. CO'S. Non-adjust. Ch$ 4,890,723 2,151,322 DOC.&ACTS. REC. REL. CO'S. Adjustable Ch$ 1,361 15,821 STOCK Adjustable Ch$ 4,893,052 4,082,039 STOCK Dollars 2,085,677 2,600,488 REFUNDABLE TAX Adjustable Ch$ 1,126,358 1,276,166 EXPENSES PAID IN ADVANCE Dollars 311,513 334,727 DEFERRED TAXES Non-adjust Ch$ 843,755 362,459 OTHER CURRENT ASSETS Non-adjust Ch$ 6,850,685 4,085,704 OTHER CURRENT ASSETS Dollars 261,775 561,647 OTHER CURRENT ASSETS Adjustable Ch$ 326,081 327,389 TIME DEPOSITS Non-adjust. Ch$ 5,004,267 0 MARKETABLE SECURITIES Euro 29,132,370 0 EXPENSES PAID IN ADVANCE Non-adjust. Ch$ 28,136 0 Fixed Assets FIXED ASSETS Adjustable Ch$ 75,449,358 80,614,276 Other Assets INVESTMENT REL. CO'S. Adjustable Ch$ 145,666,038 144,970,802 NEG. INVESTMENT GOODWILL Adjustable Ch$ 1,821,374 1,992,171 LONG-TERM DEBTORS Adjustable Ch$ 119,106 151,965 L-T DOC. REC. REL. CO'S. Adjustable Ch$ 21,152,513 21,994,506 OTHERS Dollars 8,561,947 9,574,639 OTHERS Adjustable Ch$ 2,195,227 3,360,471 OTHERS Non-adjust. Ch$ 823,125 0 L-T DOC. REC. REL. CO'S. Non-adjust. Ch$ 855,171 0 Total Assets Non-adjust. Ch$ 40,612,678 24,473,425 Dollars 38,153,114 78,966,182 Adjustable Ch$ 257,046,599 263,063,031 Euro 29,132,370 0
Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - CURRENT LIABILITIES
ITEM Currency Up to 90 days --------------------------------------------- 06-30-2004 06-30-2003 -------------------- -------------------- Amount Avg. Amount Avg. Annual Annual Thou Ch$ Int. Rate Thou Ch$ Int. Rate --------------------------------- ---------------- --------- --------- --------- --------- Current Liabilities Long-Term Obligations Dollars 139,500 2.05 156,829 2.113 1-year maturity Long-Term Obligations with public Adjustable Ch$ 741,140 4.75 738,715 4.75 Adjustable Ch$ 947,824 5.80 944,721 5.80 Dividend Payable Non-adjust. Ch$ 651,595 - 509,838 - Accounts Payable Non-adjust. Ch$ 2,251,469 - 3,410,613 - Documents Payable Dollars 2,575,956 - 2,760,113 - Documents Payable Other Currencies 4,269 - 556,202 - Miscellaneous Creditors Non-adjust. Ch$ 222,426 - 218,512 - Miscellaneous Creditors Dollars 613,151 - 789,627 Doc. and Accts. Payable rel Co Non-adjust. Ch$ 939,803 - 672,972 - Doc. and Accts. Payable rel Co Adjustable Ch$ 1,761 - 3,549 - Reserves Adjustable Ch$ 367,771 - 311,482 - Reserves Non-adjust. Ch$ 4,619,150 - 3,633,176 - Withholding Non-adjust. Ch$ 661,448 - 390,574 - Other Current Liabilities Dollars 1,718,914 - 0 - Other Current Liabilities Adjustable Ch$ 0 - 4,995,904 - Reserves Dollars 0 - 0 - Total Current Liabilities Dollars 5,047,521 - 3,706,569 - Adjustable Ch$ 2,058,496 - 6,994,371 - Non-adjust. Ch$ 9,345,891 - 8,835,685 - Other Currencies 4,269 - 556,202 -
ITEM Currency 90 Days to 1 Year --------------------------------------------- 06-30-2004 06-30-2003 -------------------- -------------------- Amount Avg. Amount Avg. Annual Annual Thou Ch$ Int. Rate Thou Ch$ Int. Rate --------------------------------- ---------------- --------- --------- --------- --------- Current Liabilities Long-Term Obligations Dollars - - - - 1-year maturity Long-Term Obligations with public Adjustable Ch$ - - - - Adjustable Ch$ Dividend Payable Non-adjust. Ch$ - - - - Accounts Payable Non-adjust. Ch$ - - - - Documents Payable Dollars - - - - Documents Payable Other Currencies - - - - Miscellaneous Creditors Non-adjust. Ch$ - - - - Miscellaneous Creditors Dollars - - - - Doc. and Accts. Payable rel Co Non-adjust. Ch$ - - - - Doc. and Accts. Payable rel Co Adjustable Ch$ - - - - Reserves Adjustable Ch$ 185,502 - 183,430 - Reserves Non-adjust. Ch$ - - - - Withholding Non-adjust. Ch$ - - - - Other Current Liabilities Dollars - - - - Other Current Liabilities Adjustable Ch$ - - - - Reserves Dollars 1,997,982 - - - Total Current Liabilities Dollars 1,997,982 - - - Adjustable Ch$ 185,502 - 183,430 - Non-adjust. Ch$ - - - - Other Currencies - - - -
Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - LONG-TERM LIABILITIES CURRENT PERIOD 06-30-2004
ITEM Currency 1-3 Years 3-5 years ---------------------------- ---------------------------- Amount Average Amount Average Thou Ch$ Interest Rate Thou Ch$ Interest Rate ---------------------------- --------------- ---------- ------------- ---------- ------------- Obligations with Banks and Dollars 7,953,750 205 23,861,250 205 Financial Institutions Obligations with public bond Adjust. Ch$ - - - - Serie C Obligations with public bond Adjust. Ch$ - - - - Serie D Deferred Custom Duties Dollars 123,473 1225 - - Long-term Creditors Adjust. Ch$ 38,781 - - - Long-term Reserves Dollars 2,196,952 - - - Long-term Reserves Adjust. Ch$ 4,220,678 - - - Deferred Taxes Non-adjust. Ch$ 2,756,681 - - - Total Long-term Liabilities Dollars 10,274,175 - 23,861,250 - Adjust. Ch$ 4,259,459 - - - Non-adjust. Ch$ 2,756,681 - - -
ITEM Currency 5-10 Years More than 10 years ---------------------------- ---------------------------- Amount Average Amount Average Thou Ch$ Interest Rate Thou Ch$ Interest Rate ---------------------------- --------------- ---------- ------------- ---------- ------------- Obligations with Banks and Dollars - - - - Financial Institutions Obligations with public bond Adjust. Ch$ 34,029,900 475 - - Serie C Obligations with public bond Adjust. Ch$ - - 35,731,395 58 Serie D Deferred Custom Duties Dollars - - - - Long-term Creditors Adjust. Ch$ - - - - Long-term Reserves Dollars - - - - Long-term Reserves Adjust. Ch$ - - - - Deferred Taxes Non-adjust. Ch$ - - - - Total Long-term Liabilities Dollars - - - - Adjust. Ch$ 34,029,900 - 35,731,395 - Non-adjust. Ch$ - - - -
Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - LONG-TERM LIABILITIES PREVIOUS PERIOD 06-30-2003
ITEM Currency 1-3 Years 3-5 years ---------------------------- ---------------------------- Amount Average Amount Average Thou Ch$ Interest Rate Thou Ch$ Interest Rate ---------------------------- --------------- ---------- ------------- ---------- ------------- Obligations with banks and Dollars 8,791,434 2.113 26,374,302 2.113 financial institutions Obligations with public bond Adjust. Ch$ 0 - - - Serie C Obligations with public bond Adjust. Ch$ 0 - - Serie D Long-term Creditors Dollars 141,433 12.25 - - Long-term Creditors Adjust. Ch$ 45,111 - - - Long-term Reserves Dollars 3,441,104 - - - Long-term Reserves Adjustable Ch$ 4,137,196 - - - Deferred Taxes Non-adjust. Ch$ 2,329,590 - - - Total Long-term Liabilities - Dollars 12,373,971 - 26,374,302 - - Adjust. Ch$ 4,182,307 - - - - Non-adjust. Ch$ 2,329,590 - - -
ITEM Currency 5-10 Years More than 10 years ---------------------------- ---------------------------- Amount Average Amount Average Thou Ch$ Interest Rate Thou Ch$ Interest Rate ---------------------------- --------------- ---------- ------------- ---------- ------------- Obligations with banks and Dollars - - - - financial institutions Obligations with public bond Adjust. Ch$ 34,122,856 4.75 - - Serie C Obligations with public bond Adjust. Ch$ - 35,828,999 5.8 Serie D 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$ 34,122,856 - 35,828,999 - - Non-adjust. Ch$ - - - -
38. Penalties In the 2004 and 2003 fiscal years no penalties have been applied to the Company, the members of the Board or Company Managers by the SVS or other administrative authorities. 39. Subsequent Events On Jun 22, 2004 the Company agreed paying dividend N(degree) 158 of Ch$ 20 per share over 64,000,000 shares (Th Ch$ 1,280,000) which was made effective on July 15, 2004. There have not been subsequent events recorded that could significantly affect the Company's economic and financial situation since the closing date of the financial statements and the issue of this report. 40. Environment Following its permanent concern to preserve the environment, as of June 30, 2004 the Company has paid Th Ch$ 2,644 for assessments for this concept, which have been charged to 2004 fiscal year result. During fiscal year 2003 the Company made investments of Th Ch$ 206,705 which correspond to the purchase of NOX emmissions treatment equipment for new Furnace B. 41. TIME DEPOSITS As of June 30, 2004 and 2003 the Company presents the following information: INSTITUTION Currency 2004 2003 Th Ch$ Th Ch$ ------------------------------ -------- --------- ---------- Banco de A. Edwards (Chile) US$ 2,446,112 Banco Santander US$ 4,510,021 Banco Deutsche Bank Chile S.A. US$ 2,397,748 Banco Santander N.Y. US$ 1,091,155 Banco Santander $ 5,004,267 0 --------- ---------- TOTAL 5,004,267 10,445,036 ========= ========== 42. STOCK TRANSACTIONS During 2004 and 2003 fiscal years, the following stock transactions were carried out by members of the board, controlling stockholders, related individuals and entities. TRANSACTIONS OF INDIVIDUALS RELATED TO MEMBERS OF THE BOARD NAME 2004 2003 --------------- --------------- Initial Purchase Sale Purchase Sale ----------------------------- ------- -------- ---- -------- ---- Asesorias Portofino Ltda. BSG 21,000 0 0 0 Inmobiliaria Villarrica Ltda. RCV 181,669 0 0 0 Vial de Claro Maria Luisa RCV 650 0 0 0 o BSG related with Director Mr. Baltazar Sanchez o RCV related with the President Mr. Ricardo Claro TRANSACTIONS OF DIRECTORS, MANAGEMENT AND ACCOUNT INSPECTORS None. TRANSACTIONS OF MAJORITY SHAREHOLDERS None. 43. DISTRIBUTION OF SHAREHOLDERS The distribution of stockholders as of June 30, 2004 and 2003 is the following: % of Shareholding No. of Shareholders ------------------ -------------------- TYPE OF SHAREHOLDER 2004 2003 2004 2003 ----------------------------- ----- ------ ----- ----- 10% or more shareholding 34.03 34.03 1 1 Less than 10% shareholding with investment equal to or higher than 200 UF 65.84 65.83 276 269 Less than 10% shareholding with investment lower than 200 UF 0.13 0.14 741 781 TOTAL 100.00 100.00 1,018 1,051 CONTROLLER OF THE COMPANY 52.14 52.14 3 3 44. BOARD COMPENSATION As of June 30, 2004 and 2003 payments were made for compensation and profit sharing ihn the amount of Th Ch$ 264,421 and Th Ch$ 715,991, respectively, according to the following detail: 2004 2003 ThCh$ ThCh$ ------- ------- Share of previous fiscal year profits 257,061 710,664 Compensation for assistance to sessions 5,576 3,977 Compensation for Board Committee 1,784 1,350 ------- ------- TOTAL 264,421 715,991 ======= ======= On the other hand, reserves were made for participation in profits for fiscal year 2004 in the amount of Th Ch$ 285,011 (Th Ch$ 118,306 in 2003). RELEVANT EVENTS On June 23, 2004, the SVS was informed that in the previous day, the Board of the Company had approved a US$ 210 million investment plan, in order to duplicate the production of glass containers in a 10 year period. The first stage of the development plan considers the construction of a new plant, equipped with 4 new fabrication lines and a furnace with a production capacity of 360 tons per day, which supposes a US$ 110 million investment and that would be financed by a combination of internal resources and credits. Start of operations is scheduled for 2006 and will allow to increase the present capacity of production by 35%. The following stages of expansion imply adding 7 fabrication lines and 2 furnaces with production capacities over 400 tons per day, which will be materialized in successive stages, in line with market needs. CRISTALERIAS DE CHILE S.A. RATIO ANALYSIS OF THE FINANCIAL STATEMENTS AS OF JUNE 30, 2004 1.- FINANCIAL INDICATORS
06-30-2004 06-30-2003 12-31-2003 ---------- ---------- ---------- LIQUIDITY Current liquidity times 5.81 5.12 5.98 Acid ratio times 5.31 4.69 5.50 INDEBTEDNESS Leverage ratio times 0.55 0.59 0.55 Short-term debt % 14.39 14.97 12.79 Long-term debt % 85.61 85.03 87.21 Interest expenses coverage times 4.25 1.87 2.14 ACTIVITY Total assets MM Ch$ 364,945 366,503 356,395 Investments MM Ch$ 3,179 15,075 22,804 Disposal of property MM Ch$ 49 111 137 Inventory turnover times 12.2 16.1 12.7 Inventory permanence days 29.5 22.4 28.4 RESULTS Sales MM Ch$ 33,298 33,524 75,146 Costs of sales MM Ch$ 20,400 21,318 44,993 Operating income MM Ch$ 10,135 9,685 24,541 Interest expenses MM Ch$ 2,393 2,484 4,880 Non-operating income (loss) MM Ch$ (1,449) (5,986) (16,588) E.B.I.T.D.A. MM Ch$ 15,509 9,402 21,066 After-tax income MM Ch$ 7,125 2,958 6,478 PROFITABILITY Return on equity % 3.1 1.3 2.8 Return on assets % 1.9 0.9 1.8 Return on operating assets % 9.6 9.4 23.1 Profit per share $ 111.3 45.9 101.2 Return on dividends % 1.4 2.3 2.4
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: Profit before taxes and interest divided by financial expenses. Inventory turnover: Ratio between sales cost of the period and average inventory. Inventory permanence: Ratio between average inventory and sales cost of the period, multiplied by 360 days E.B.I.T.D.A. Earnings before interest, taxes, depreciation, 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. The main trends observed in the indicators of the first half of 2004 are the following: LIQUIDITY INDICES Despite an increase in current assets with respect to December 2003, liquidity indices decrease slightly due to higher provisions and notes payable. INDEBTEDNESS INDICES The indebtedness index remains almost unvaried for the analyzed period. Indebtedness with banks, which corresponds to syndicated loan of US$50 million, shows a slight increase in chilean peso terms, due to the variation of the exchange rate that passed from Ch$ 593,80 in December 2003 to Ch$ 636,30 as of June 30, 2004. The interest expenses coverage ratio shows an increase with respect to the previous year, due to higher net income during the first half of 2004. ACTIVITY INDICES Inventory turnover and permanence deteriorated slightly due an increase in stock of finished products. This is the result of stationality of the glass demand. RESULTS The operating result shows an increase with respect to June 2003 due to lower costs of sales. Likewise, the non-operating result shows a decrease of the loss as a result of the positive exchanges differences balance registered during the present semester. PROFITABILITY INDICES Profitability and equity indices show an increase with respect to March and December 2003, due to a higher net income during the present fiscal year. On the other hand, return on dividends shows a decrease with respect to the previous year, due to a lower dividends distributed during the last 12 months. 2. DIFFERENCE BETWEEN BOOK VALUE AND MARKET VALUE OF MAIN ASSETS. The financial statements of the company have been prepared according to generally accepted accounting principles and general and specific norms of the Securities and Insurance Commission, which is the agency that regulates the Company. The valuation of the assets includes adjustment for currency devaluation, reserves, and technical revaluations. We believe the foregoing is a reasonable way to value the Company's permanent investments. As of June 30, 2004, there were financial investments in stocks recorded according to their purchase price of Th Ch$ 4,188 million, whose market value on the same date was Th Ch$ 5,410 million. 3. RESULTS AS OF JUNE 2004 3a. Individual Result The Company had non-consolidated sales of Ch$ 33,298 million, compared to Ch$ 33,524 million in the previous fiscal year. Volumes sold increased by 7.4%, reaching 120,393 tons., mainly due to higher sales of bottles for wine, the returnable beer and food markets; partially compensated by lower sales to the non-returnable beer, liquor and soft drinks markets. Average prices declined by 7.5%, mainly explained by the strong decrease in the US$/Peso exchange rate that passed from Ch$ 723,66 per to dollar on average during the first semester of 2003 to Ch$ 608,22 per dollar on average during the first semester of 2004. Operating income reached Ch$ 10,135 million, 4.6% over 2003. Non-operating result was a Ch$ 1,449 million loss, which compares to a Ch$ 5,986 million loss in 2003. The former is mainly explained by an income from exchange differences of Ch$ 1,391 million in 2004, compared to a Ch$ 3,617 million loss in 2003. During 2004 a higher loss in Cristalchile Comunicaciones (owner of 50% of Metropolis -Intercom) is registered and a lower income in Envases CMF. The former was partially compensated by higher income in CIECSA and Vina Santa Rita. 3b. Result in Subsidiaries Santa Rita's net income reached Ch$ 3,553 million, 23.3% over 2003. In the local market, prices increased by 10.0% in real terms, while volumes increased by 9.5%. Sales in this market increased by 20.4% reaching Ch$ 17,383 million. During the period, export volume sales increased by 6.6%, representsenting 50.2% of total revenues, in the amount of US$ 30.0 million (US$ 26.8 million in 2003). Operating income reached Ch$4,149 million compared with Ch$ 4,997 million in 2003, fundamentally due to higher costs of musts and a decrease of the Peso/US$ exchange rate that affects export returns. Santa Rita's average price in dollars per case for the export market reached US$ 34.1 (US$ 32.4 in 2003), while the average price for the industry was US$ 24.3 per case (US$ 23.7 in 2003). Santa Rita had a Ch$ 364 million non-operating income, compared to a Ch$ 1,385 million loss in 2003, mainly due to a income from exchange differences of Ch$ 965 million compared with Ch$ 740 million loss in 2003. Red Televisiva Megavision, CIECSA's main subsidiary, registered a Ch$1,125 million operating income, compared with an Ch$ 814 million operating income in 2003. MEGA reached the first place in audience with an audience viewership share of 25.4% during the period(1) (22.7% in 2003). Net sales increased by 8.3% reaching Ch$ 12,341 million, due to an increase in live programming, which has resulted in higher audiendce levels. MEGA had an Ch$ 811 million net income (Ch$ 210 million income in 2003). CIECSA's net income was Ch$ 927 million, compared to Ch$ 75 million income the previous year. Envases CMF S.A. registered a Ch$ 298 million net income in 2004 compared with a Ch$1,226 million net income in 2003. This is mainly explained by the non-operating result, which during 2003 registered a net income from price level restatement and exchange differences of Ch$ 435 million, compared to a Ch$ 205 million loss during the present period. Sales reached Ch$ 14,941 million during the period compared with Ch$ 16,375 million in 2003. Volume sales decreased by 4.1%, reaching 10,557 tons, due to a decline in pre forms exports and lower sales of one-way formats; while average prices decreased by 5.1% influenced by the decrease of the Peso/US$ rate of exchange. As a result the aforementioned operating income reached Ch$ 1,191 million, compared with Ch$ 1,615 million in 2003. In the cable TV area, 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 Metropolis-Intercom S.A. During 2004, Metropolis-Intercom S.A. registered sales of Ch$ 22,186 million, compared with Ch$ 22,408 million in 2003. Metropolis-Intercom had a net loss of Ch$ 5,962 million, compared with a net loss of Ch$ 4,845 million in 2003. This lower result is mainly due to a one-time Ch$ 775 million charge, that affects the non-operating result of the company. Metropolis-Intercom's EBITDA reached Ch$3,192 million during the period (Ch$ 2,944 million in 2003). The latter includes a depreciation charge of Ch$ 7,338 million (Ch$ 6,672 million in 2003) corresponding to the HFC network adquired in July 2000. The company ended the period with 223,820 basic subscribers (237,324 in 2003), 28,970 premium service subscribers (33,440 in 2003), 38,503 broadband internet subscribers (31,5% over 2003) and 9,255 IP telephony subscribers. As a result of the above mentioned and a negative goodwill amortization charge through Cordillera Comunicaciones of Ch$ 2,088 million during the year (Ch$ 2,095 million in 2003), Cristalchile Comunicaciones recorded a net loss of Ch$ 4,041 million (net loss of Ch$3,468 million in 2003). INVESTMENTS ----------------------- (1) Measured between 6:30 A.M. and 1:30 A.M. (i.e:19 hours a day) from Monday through Sunday. On June 23, 2004, Cristalerias de Chile announced that it will invest US$210 million in a development plan that will allow it to duplicate its glass production installed capacity - from 300 thousand tons per year to 600 thousand tons per year- and adecquately attend the increasing demand of its customers. The initiative, that would be materialized in a term of up to 10 years, was approved unanimously by the Board and contemplates materialization in successive stages, according to market needs. The first stage of the development plan considers the construction of a new plant, equipped with 4 new fabrication lines and a furnace with production capacity of 360 tons per day, that supposes USS 110 million investment and that would be financed by a combination of internal resources and credits. Start up of operations is scheduled for 2006 and will allow to increase the present production capacity by 35%. Following stages of the expansion imply adding 7 fabrication lines and 2 furnaces with production capacities over 400 tons per day. 4. CASH FLOW STATEMENT As of June 30, 2004 a total net positive flow of Ch$ 9,119 million was generated, which is explained by a positive flow generated by operating activities of Ch$ 18,827 million, which was decreased by a negative financing flow of Ch$2,595 million and a negative flow of investment activities for Ch$7,113 million. The operating flow corresponds basically to the collection of sales and financial interests and other income received that were reduced in part by payment to suppliers, taxes and financial interests. The negative financing flow is especially explained by the payment of dividends. The investment flow is mainly explained by the incorporation of fixed assets for Ch$ 3,356 million, and loans granted to related companies for Ch$ 3,805 million. The above mentioned results in an increase in the final balance of cash and cash equivalent, which passed from Ch$ 60,480 million as of December 31, 2003 to Ch$ 69,016 million as of June 30, 2004. According to the current regulations of the SVS and the Association of Accountants of Chile, time deposits and agreements with due date of less than 90 days have been considered as cash and cash equivalent. 5. RISKS ANALYSIS a. Interest rates The Company is exposed to the risk of fluctuations in interest rates on its long-term debt, corresponding to a US$50 million loan, which was negotiated annual rate of Libor plus 0.8% percentage points. In addition, the Company issued bonds in two series for a total equivalent to UF 4.1 million, for a period of 6 and 21 years, and which pay a fixed rate of 4.75% and 5.8% respectively (the actual placement rate was 5.3% and 6.5% respectively). As of June 30, 2004, the Company had available funds in the amount of Ch$67,545 million, invested at different terms in financial instruments such as time deposits, bonds, fixed rate mutual funds and agreements with resale commitment. That amount does not include Ch$ 8,539 million in bonds with maturity on September 15, 2005, and an investment in shares for Ch$ 4,186 million. Currently the Company does not use secondary financial instruments to reduce risk in the event of fluctuations in interest rates. This policy will be studied permanently to evaluate the alternatives offered by the market. b. Exchange rate The Company maintains liabilities in dollars of US$64.7 million, which represent 11.3% of its assets, and which include a balance of a long-term syndicated loan of US$50 million. As of June 30, the Company has investments in dollars of US$54.9 million in time deposits, bonds and fixed rate mutual funds. In addition, also has investments in EUROS 37.5 million in fixed rate and fixed rent instruments. Likewise it also has Dollar purchase future contracts of US$37.6 million which are compensated by sale future contracts of US$ 60.6 million. On the other hand, aproximately 35% of the Company's revenues are adjustement by the exchange rate variation. Costs in foreing currency represent approximately 27% of the total costs. 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 1/1/2004 1.00.01.20 Closing date 6/30/2004 1.00.01.30 Type of Currency Chilean Pesos 1.00.01.40 Type of Financial Statements Consolidated Independent Auditors' Report Referred to Interim Consolidated Financial Statements As of June 30, 2004 To the Shareholders and Directors of Cristalerias de Chile S.A.: We have revised the general consolidated balance sheets of Cristalerias de Chile S.A. and subsidiaries as of June 30, 2004 and 2003 and the corresponding consolidated statements of income and cash flows for the six months periods ended on those dates. These financial statements and their corresponding notes are the responsibility of Cristalerias de Chile S.A. and subsidiaries' management. The Ratio Analysis and Relevant Events attached are not part of these financial statements; therefore this report does not extend to them. We have effected our revisions in accordance with audit norms established in Chile for a revision of interim financial information. A revision of interim financial information consists mainly in applying analytic revision procedures of the financial statements and effect inquiries to the responsible financial and accounting personnel. The extent of this revision is substancially lower than an audit effected according to generally accepted accounting principles in Chile, in which case the objective is to express an opinion on financial statements as a whole. Consequently, the interim consolidated financial statements as of June 30, 2004 and 2003 have not been audited and, therefore, we are not in condition for expressing, nor we express an opinion. Based on our revision of the interim consolidated financial statements as of June 30, 2004 and 2003, we have no knowledge of significant adjustments needed to be made to them in order for them to be in accordance with generally accepted accounting principles in Chile. Ruben Lopez D. Ernst & Young Ltda. R.U.T.: 9.385.460-8 Auditors' R.U.T.: 77.802.430-6 Santiago, July 28, 2004 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. 06-30-04 06-30-03 ------------------------------------------------------- -------- ------------- ------------ 5.11.00.00 TOTAL CURRENT ASSETS 191,655,613 185,121,779 5.11.10.10 Cash 2,337,271 2,588,476 5.11.10.20 Time deposits 41 5,384,461 12,151,735 5.11.10.30 Marketable securities (net) 4 67,806,888 67,718,838 5.11.10.40 Debtors from sales (net) 5 40,919,449 35,240,688 5.11.10.50 Documents receivable (net) 5 4,765,988 4,541,128 5.11.10.60 Sundry debtors (net) 5 3,013,052 1,759,408 5.11.10.70 Doc. & accts receivable 6 3,691,705 575,881 related Co. 5.11.10.80 Inventories (net) 7 47,218,588 45,041,807 5.11.10.90 Recoverable taxes 8 1,480,533 2,049,043 5.11.20.10 Prepaid expenses 1,985,130 1,779,083 5.11.20.20 Deferred taxes 8 1,741,034 980,123 5.11.20.30 Other current assets 10 11,311,514 10,695,569 5.11.20.40 Leasing contracts (net) 0 0 5.11.20.50 Leasing assets (net) 0 0 5.12.00.00 TOTAL FIXED ASSETS 12 135,583,958 140,831,612 5.12.10.00 Land 12 13,442,643 13,175,721 5.12.20.00 High rises & infrastructure 12 64,321,481 61,369,521 5.12.30.00 Machinery & equipment 12 148,348,627 143,372,862 5.12.40.00 Other fixed assets 12 11,729,704 10,587,816 5.12.50.00 Positive goodwill from 12 6,659,823 7,767,850 technical revaluation of fixed assets 5.12.60.00 Depreciation (minus) 12 (108,918,320) (95,442,158) 5.13.00.00 TOTAL OTHER ASSETS 136,210,144 143,685,545 5.13.10.10 Investment in related companies 14 100,763,973 107,216,045 5.13.10.20 Investment in other companies 15 788,803 831,373 5.13.10.30 Negative goodwill 16 8,995,298 9,364,453 5.13.10.40 Positive goodwill (minus) 0 0 5.13.10.50 Long-term debtors 5 204,430 173,463 5.13.10.60 Doc. & accts receivable 6 1,106,556 2,883 related Co. 5.13.10.65 Long-term deferred taxes 0 0 5.13.10.70 Intangibles 17 11,913,536 11,874,078 5.13.10.80 Amortization (minus) 17 (1,325,968) (1,109,319) 5.13.10.90 Other 18 13,763,516 15,332,569 5.13.20.10 Long-term leasing contracts 0 0 (net) 5.10.00.00 TOTAL ASSETS 463,449,715 469,638,936
LIABILITIES 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance: Consolidated
LIABILITIES NOTE No. 06-30-04 06-30-03 ------------------------------------------------------- -------- ------------- ------------ 5.21.00.00 TOTAL CURRENT LIABILITIES 52,198,981 56,297,454 5.21.10.10 Short-term oblig. Banks & 19 6,968 19,951 Fin. Inst. 5.21.10.20 Short-term portion - Long-term 19 2,833,925 4,038,923 oblig. Banks & Financial Institutions 5.21.10.30 Obligations with the public 0 0 (notes) 5.21.20.40 Short-term portion oblig with 22 1,740,471 1,735,084 public 5.21.10.50 Long-term oblig. due within 74,279 241,480 1 year 5.21.10.60 Dividends payable 652,088 510,759 5.21.10.70 Accounts payable 16,114,615 18,952,645 5.21.10.80 Notes payable 3,184,042 4,049,596 5.21.10.90 Sundry creditors 891,189 2,546,908 5.21.20.10 Notes & accts payable related 6 1,104,714 745,904 Co. 5.21.20.20 Provisions 23 17,245,411 12,045,713 5.21.20.30 Withholdings 2,293,589 1,471,884 5.21.20.40 Income tax 0 0 5.21.20.50 Earned income 4,136,733 3,992,961 5.21.20.60 Deferred taxes 8 0 0 5.21.20.70 Other current liabilities 20 1,920,957 5,945,646 5.22.00.00 TOTAL LONG-TERM LIABILITIES 136,721,197 144,905,248 5.22.10.00 Oblig with Banks & Financial 21 35,266,974 42,039,039 Inst. 5.22.20.00 Long-term oblig with public 22 90,179,235 90,425,569 (bonds) 5.22.30.00 Long-term notes payable 0 0 5.22.40.00 Long-term sundry debtors 205,331 352,343 5.22.50.00 Long-term notes & accts. 6 0 0 payable related companies 5.22.60.00 Long-term provisions 23 6,417,630 7,578,301 5.22.70.00 Long-term deferred taxes 8 4,652,027 4,509,996 5.22.80.00 Other long-term liabilities 0 0 5.23.00.00 MINORITY INTEREST 26 39,137,297 37,421,878 5.24.00.00 TOTAL EQUITY 27 235,392,240 231,014,356 5. 24.10.00 Paid-in capital 27 65,396,749 65,137,753 5. 24.20.00 Reserve capital revaluation 27 523,174 716,515 5. 24.30.00 Premium in sale of own shares 27 28,097,372 28,069,388 5. 24.40.00 Other reserves 27 7,499,397 9,155,080 5. 24.50.00 Retained earnings (addition 133,875,548 127,935,620 of codes 5.24.51.00 to 5.24.56.00) 5.24.51.00 Reserve future 27 128,030,273 125,943,731 dividends 5.24.52.00 Accrued profits 27 0 0 5.24.53.00 Accrued losses 27 0 0 (minus) 5.24.54.00 Profit (loss) for 27 7,125,275 2,957,649 the year 5.24.55.00 Prov. dividends 27 (1,280,000) (965,760) (minus) 5.24.56.00 Accr. deficit dev. 27 0 0 period 5.20.00.00 TOTAL LIABILITIES 463,449,715 469,638,936
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. 06-30-04 06-30-03 ------------------------------------------------------- -------- ------------- ------------ 5.31.11.00 OPERATING INCOME 15,734,425 15,612,854 5.31.11.10 Gross Margin 28,924,101 27,658,797 5.31.11.11 Sales 80,298,906 76,938,352 5.31.11.12 Costs (minus) (51,374,805) (49,279,555) 5.31.11.20 Adm. & sales expenses (13,189,676) (12,045,943) (minus) 5.31.12.00 NON-OPERATING RESULTS (4,239,480) (9,885,097) 5.31.12.10 Interest income 989,141 1,668,190 5.31.12.20 Income investments 14 969,006 1,750,507 Rel. Co. 5.31.12.30 Other non-operating 28 667,949 416,672 income 5.31.12.40 Loss investments Rel. 14 (4,135,296) (3,670,115) Co. (-) 5.31.12.50 Amortization 16 (322,921) (319,589) neg.goodwill (-) 5.31.12.60 Interest expenses (3,337,812) (3,498,063) (minus) 5.31.12.70 Other non-operat 28 (1,179,937) (1,100,513) expenses (-) 5.31.12.80 Price level 29 (307,756) (668,200) restatement 5.31.12.90 Exchange differences 30 2,418,146 (4,463,986) 5.31.10.00 RESULTS BEFORE INCOME TAX 11,494,945 5,727,757 AND EXTRAORDINARY ITEMS 5.31.20.00 INCOME TAX 8 (2,670,024) (1,437,191) 5.31.30.00 EXTRAORDINARY ITEMS 31 0 0 5.31.40.00 PROFIT (LOSS) BEFORE 8,824,921 4,290,566 MINORITY INTEREST 5.31.50.00 MINORITY INTEREST 26 (1,699,646) (1,332,917) 5.31.00.00 NET INCOME (LOSS) 7,125,275 2,957,649 5.32.00.00 Amortization of positive goodwill 0 0 5.30.00.00 INCOME (LOSS) FOR THE YEAR 7,125,275 2,957,649
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. 06-30-04 06-30-03 ------------------------------------------------------- -------- ------------- ------------ 5.41.11.00 NET FLOW FROM OP. ACT. 21,112,235 21,030,268 5.41.11.10 Collection from sales debtors 93,799,010 98,599,279 5.31.11.20 Interests received 4,272,766 2,211,277 5.31.11.30 Dividends & other 1,079,693 105,094 distributions funds received 5.31.11.40 Other income 1,153,195 2,538,990 5.31.11.50 Payments to suppliers & (66,593,878) (68,960,247) personnel (-) 5.31.11.60 Interest paid (minus) (3,818,916) (3,246,966) 5.31.11.70 Income tax paid (minus) (1,559,357) (2,794,477) 5.31.11.80 Other expenses paid (minus) 33 (714,629) (2,686,088) 5.31.11.90 V.A.T. & other similar paid (6,505,649) (4,736,594) (minus) 5.41.12.00 CASH FLOW FINANCING ACTIVITIES (3,929,584) (10,175,302) 5.41.12.05 Proceeds from share issue 0 0 5.41.12.10 Loans received 0 0 5.41.12.15 Obligations with the public 0 0 5.41.12.20 Secured loans from related 54,017 72,453 companies 5.41.12.25 Other loans from related 0 713 companies 5.41.12.30 Other financing resources 0 0 5.41.12.35 Dividends paid (minus) (3,135,444) (8,121,964) 5.41.12.40 Capital distributions (minus) 0 0 5.41.12.45 Repayment of loans (minus) (823,133) (1,842,090) 5.41.12.50 Payment of obligations with 0 (213,916) the public (-) 5.41.12.55 Repayment of secured loans (25,024) (70,498) from rel Co. (-) 5.41.12.60 Repayment other loans from 0 0 related Co. (-) 5.41.12.65 Share issue payment (minus) 0 0 5.41.12.70 Payment of issue publ oblig 0 0 (minus) 5.41.12.75 Other financing payments 33 0 0 (minus) 5.41.13.00 CASH FLOW FROM INVESTING (11,196,003) (15,754,970) ACTIVITIES 5.41.13.05 Sale of fixed assets 69,055 286,959 5.41.13.10 Sale of permanent investments 0 0 5.41.13.15 Sale of other investments 33 398 0 5.41.13.20 Proceeds secured loans to 0 0 related Comp. 5.41.13.25 Proceeds other loans to 28,819 1,965,532 related companies 5.41.13.30 Other investment income 33 0 1,965,366 5.41.13.35 Incorporation of fixed assets (7,252,623) (19,573,990) (minus) 5.41.13.40 Capitalized interests payment 0 0 (minus) 5.41.13.45 Permanent Investments (minus) (437) (624) 5.41.13.50 Investments in financial 0 (70,331) instruments (minus) 5.41.13.55 Other loans to related (3,803,547) 0 companies (minus) 5.41.13.60 Other loans to related (2,465) (8,123) companies (minus) 5.41.13.65 Other distrib of funds on 33 (235,203) (319,759) invest activities (-) 5.41.00.00 TOTAL NET CASH FLOW FOR THE PERIOD 5,986,648 (4,900,004) 5.42.20.00 EFFECT OF INFLATION ON CASH & CASH EQUIV. 82,812 (1,636,243) 5.41.00.00 NET CHANGE IN & CASH EQUIVALENT 6,069,460 (6,536,247) 5.42.00.00 CASH & CASH EQUI AT BEGINNING OF PERIOD 76,213,878 94,889,433 5.43.00.00 CASH & CASH EQUIV BALANCE AT END OF PERIOD 82,283,338 88,353,186
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. 06-30-04 06-30-03 ------------------------------------------------------------------- -------- ------------ ------------ 5.50.10.00 Profit (Loss) for the year 7,125,275 2,957,649 5.50.20.00 Profit (Loss) in sale of assets 98,723 26,467 5.50.20.10 (Profit) Loss in sale of fixed assets 98,529 26,467 5.50.20.20 Profit in sale of investments (minus) 0 0 5.50.20.30 Loss in sale of investments 194 0 5.50.20.40 (Profit) Loss in sale of other assets 0 0 5.50.30.00 Non-cash charges (credits) to results 15,976,546 18,745,164 5.50.30.05 Depreciation for the year 12 7,743,099 7,057,014 5.50.30.10 Amortization of intangibles 522,168 622,517 5.50.30.15 Write-offs and provisions 2,194,521 777,688 5.50.30.20 Accrued earnings from investments in related 14 (969,006) (1,750,507) com. (minus) 5.50.30.25 Accrued losses from investments in related Co. 14 4,135,296 3,670,115 5.50.30.30 Negative goodwill amortization 16 322,921 319,589 5.50.30.35 Positive goodwill amortization (minus) 0 0 5.50.30.40 Price level restatement 29 307,756 668,200 5.50.30.45 Net exchange difference 30 (2,418,146) 4,463,986 5.50.30.50 Other non-cash credits to results (minus) (769,854) (121,554) 5.50.30.55 Other non-cash debits to results 4,727,791 3,038,116 5.50.40.00 Changes in Assets affecting cash flow (incr) decreases (22,180,123) (21,061,717) 5.50.40.10 Debtors from sales (6,141,083) (7,384,403) 5.50.40.20 Inventory (15,364,501) (12,718,926) 5.50.40.30 Other assets (674,539) (958,388) 5.50.50.00 Changes in liabilities affecting cash flow increases 18,572,168 19,029,788 (decr) 5.50.50.10 Accounts payable related to results for the 17,758,985 21,060,125 year 5.50.50.20 Interests payable (760,016) (78,592) 5.50.50.30 Income tax payable (net) 1,446,716 (745,545) 5.50.50.40 Other accounts payable related to non-oper 533,207 (83,397) results 5.50.50.50 VAT and other taxes payable (net) (406,724) (1,122,803) 5.50.60.00 Profit (Loss) of minority interest 1,699,646 1,332,917 5.50.00.00 NET OPERATING CASH FLOW 21,112,235 21,030,268
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 it is supervised by the Securities and Insurance Commission (S.V.S.). The subsidiary S.A. Vina Santa Rita is registered in the Securities Register under number 390 of the S.V.S. 02. Applied Accounting Criteria APPLIED ACCOUNTING CRITERIA a) Accounting Period These financial statements correspond to the period between January 1 and June 30 of 2004 and 2003. b) Preparation basis of financial statements: These consolidated financial statements as of June 30, 2004 and 2003 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 2003 fiscal year are presented updated according to non-accounting terms as of June 30, 2004 by 0.6%. 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. 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 of 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, Vina Centenaria S.A., with 100% stake, Vina Dona Paula S.A. with 100% stake and Sur Andino S.A., with a 100% stake in 2004 and 2003. Amounts and effects of transactions between consolidated companies have been eliminated and the stake of minority investors is presented in the balance sheet 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 in the first half of 2004, that reached 0.8% (1.1% in 2003). For financial effects, effective variations occurred in every month of years 2003 and 2004 have been considered, with respect to June 2003 and 2004. For tax effects, negative variations occurred duing some months of 2003 and 2004 with respect to June 2003 and 2004, have been equaled to zero, according to instructions of the Chilean Internal Revenue Service, not affecting significantly the financial statements. f) Conversion Basis Balances in foreign currency and indexed currency units (unidades de fomento) have been converted to pesos at the indicated parities: 2004 2003 --------- --------- Ch$ Ch$ U.S. Dollar 636.30 699.12 Pound Sterling 1,157.12 1,157.48 Swedish Crown 509.16 517.18 EURO 775.88 803.86 Unidad de Fomento 17,014.95 16,959.67 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 June 30, 2004 and 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 carried out by the Company in Celulosa Arauco bonds are registered under "Other" in the long-term, and are presented at investment value plus accrued interests up to the closing date of the fiscal year of the financial statements, without adjusting to the market value because there is the intention of keeping the bonds until their maturity. h) Inventory Inventory of finished products has been valued as of June 30, 2004 and 2003 at the direct production cost, duly updated, 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. Television programs inventories at the closing of each fiscal year represent the value of contracted films and videos and the proportion of repetitions that are pending exhibition. The actual cost of the programs is charged to results as they are broadcasted. i) Bad Debts (Non-collectable) The Company and subsidiaries have made provision for bad debts that is deducted from debtors from sales and notes 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 up until June 30, 2004 and 2003. k) Depreciation of Fixed Assets 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 in Leasing None. m) Sales Transactions with Leaseback None. n) Intangibles The corrected purchase value of trademarks of the subsidiary S.A. Vina Santa Rita, that are amortized for a period of 40 years, and the costs for trademark registration, that are amortized for a period equivalent to the maturity of the renovation, are presented as intangibles. The subsidiary Ciecsa consolidated includes the frequency of TV channel 9, which has an amortization period of 40 years, and the amortization method is that of "Increasing Digits". o) Investments in Related Companies According to Circular No. 1697 of the SVS, the Equity Method (Valor Patrimonial Proporcional - V.P.P.) has been used for the valuation of investments in related companies effected prior to January 01, 2004. This method consists in assigning the investment an equivalent value to the percentage of the holding that corresponds to the Company in the book value of the issuer, and acknlowledge proportionally the variations that the latter experiments. Investments abroad have been valued according to the provisions of Technical Bulletin No. 64 of the Chilean Accountants Association A.G. 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 June 30, 2004 and 2003 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 under "Other Current Assets", in the terms established in Circular No. 768 of the Securities and Insurance Commission. r) Obligations with public Obligations for bonds issued are shown at their face value plus adjustments and interest accrued at the closing of each fiscal year. The lower value obtained compared to par value is amortized proportionally to payment or redemption of capital installments of those bonds as well as the corresponding expenses for their placement. s) Deferred Taxes and Income Tax The Company and its subsidiaries have complied with deferred taxes, in accounting terms, as established in Technical Bulletin No. 60 and 71 of The Accountants Association of Chile A.G. and the norms indicated in circular 1,466 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 Company has established a reserve for all of the personnel's severance payment, according to the union contracts signed with their workers. This reserve is shown at the present value of the obligation. u) Sales The consolidated companies recognize operating income on an accrued basis according to generally accepted accounting principles in Chile. v) Derivative Contracts The 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 A.G. w) Computer Software The Company and S.A. Vina Santa Rita develop computer software with their own resources and they also acquire computer packages from third parties. Disbursements due to own development are charged to results as they are generated. Computer packages are recorded in Fixed Assets and amortized in 36 months by the Company and in 48 months by the subsidiary S.A. Vina Santa Rita. x) Research and development expenses The companies show any expenses in this item directly as a charge to results as they generate. y) Cash flow statement: According to current regulations of the Securities and Insurance Commission and the Accountants Association of Chile A.G., in preparing the cash flow statement, the Company has considered time deposits and deposits with maturities under 90 days as cash. Such cash flows related to the Company's line of business, interest paid, interest income received, dividends received, and all such that is not defined as investment or Financing is included under the heading "Flow Originating in Activities of the Operation." Disbursements originating in time deposits and agreements with maturities over 90 days have been classified in the item "Investments in Financial Instruments." CRISTALERIAS DE CHILE S.A. NOTE 2 - ACCOUNTING CRITERIA USED COMPANIES INCLUDED IN THE CONSOLIDATED REPORT
Percentage of Shareholding ---------------------------------------------------------- R.U.T. Company Name 06.30.2004 06.30.2003 ------------ -------------------------------- --------------------------------------- ---------- 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
03. Accounting Changes As of June 30, 2004 and 2003, there have not been any changes in the accounting criteria applied that affect the consolidated financial statements. 04. Marketable Securities As of June 30, 2004, this item is composed by the following investments: a) Th Ch$ 55,251,502 in bonds and fixed rate instruments equivalent to US$41,048,455 and 37,547,521 EUROS, which mainly correspond to investments in state bonds and financial institutions of USA, Germany and Holland, Collateralized Bonds of Private Companies in USA (guaranteed with accounts receivable) and USA Mortgage Bonds with state guarantee. b) Th Ch$ 8,191,207 in investment fund quotas in US$ c) Th Ch$ 4,187,786 in shares d) Th Ch$ 176,393 for accrued interest of Celulosa Arauco S.A. bonds. As of June 30, 2003, this item is composed by the following investments: e) Th Ch$ 54,372,053 in bonds and fixed rate instruments, which mainly correspond to investments in Treasury Bills bonds, Collateralized Bonds of Private Companies in USA (guaranteed with accounts receivable) and USA Mortgage Bonds with state guarantee. f) Th Ch$ 8,968,712 in investment fund quotas in US$ g) Th Ch$ 4,183,939 in shares. h) Th Ch$ 194,134 for accrued interest of Celulosa Arauco S.A. bonds. CRISTALERIAS DE CHILE S.A. NOTE 4 -MARKETABLE SECURITIES BALANCE COMPOSITION Type of Security Book Value ------------------------------------ --------------------------------- 06-30-2004 06-30-2003 ---------- ---------- Shares 4,187,786 4,183,939 Bonds 0 0 Shares in mutual funds 0 0 Shares in investment funds 8,191,207 8,968,712 Public tender notes 0 0 Mortgage commitments 0 0 Bonds and fixed rate instruments 55,251,502 54,372,053 Interest Celulosa Arauco S.A. bonds. 176,393 194,134 Total Marketable Securities 67,806,888 67,718,838 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 85 5,409,643 4,187,786 Value Investment Portfolio 5,409,643 4,187,786 Adjustment Provision 0 Book value, Investment Portfolio 4,187,786
CRISTALERIAS DE CHILE S.A. NOTE 4 - MARKETABLE SECURITIES FIXED RATE INSTRUMENTS
Type of Security Par Book Value Market Reserve Value Value ------------------------ Amount Rate % (3) ----------------------------------------------------------- ---------- ---------- ---------- ---------- ------- Financial Institutions bonds (USA, Germany and Holland) (1) 29,132,371 29,132,371 1.27 29,132,371 0 US treasury bonds (2) 20,555,448 20,555,448 0.38 20,555,448 0 Collateralized Bonds USA (2) 5,549,780 5,549,780 0.38 5,549,780 0 Call Deposit (2) 13,903 13,903 0.38 13,903 0 Celulosa Arauco bonds (interest)(2) 176,393 176,393 2.80 176,393 0 BBH U.S. Money Market Portfolio (2) 8,191,207 8,191,207 0.48 8,191,207 0 TOTAL 63,619,102 63,619,102 - 63,619,102 -
Note: (1) The investements have been done in EUROS (2) Investments in U.S. Dollars (3) Rate for Period from 01-01-2004 to 06-30-2004. (4) These investments can be recovered within 48 hrs. notice. 05. Short-Term and Long-Term Debtors As of June 30, 2004 and 2003, there are balances for short-term debtors in the amount of Th $48,674,933 (Th $ 41,541,224 in 2003). The bad debt reserve that amounted Th $ 706,185 in 2004 (Th $708,162 in 2003) is shown deducting the balances of Debtors from Sales and Documents receivable. The balances of Short-term Debtors are shown net of Customer Advance Payments. In addition, there is a balance of Th Ch$ 204,430 in Long-Term Debtors (Th Ch$ 173,463 in 2003). Under "sales debtors", exports made by the subsidiary S.A. Vina Santa Rita amounting Th Ch$ 9,881,314 as of June 30, 2004 (61.71% of the total), and Th Ch$ 9,275,695 as of June 30, 2003 (64.83% of the total) are included. CRISTALERIAS DE CHILE S.A. NOTE 5 -SHORT AND LONG TERM DEBTORS
Current Assets Over 90 days ------------------------------------------------------------- Up to 90 days Over 90 days up to 1 year ------------------------ -------------------------------- Item 06-30-2004 06-30-2003 06-30-2004 06-30-2003 ---------------------------------------- ---------- ---------- ------------- ------------ Debts from Sales 39,426,955 33,708,403 1,953,474 2,029,879 Estimate of bad debtors - - - - Documents receivable 4,963,105 4,685,547 48,088 65,148 Estimate of bad debtors - - - - Misc. Debtors 2,580,540 1,723,996 432,512 35,412 Estimate of bad debtors - - - - Total Current (net) Long Term ------------------------ -------------------------- Item Subtotal 06-30-2004 06-30-2003 06-30-2004 06-30-2003 ---------------------------------------- ---------- ---------- ---------- ---------- ---------- Debts from Sales 41,380,429 40,919,449 35,240,688 0 0 Estimate of bad debtors 460,980 - - - - Documents receivable 5,011,193 4,765,988 4,541,128 0 0 Estimate of bad debtors 245,205 - - - - Misc. Debtors 3,013,052 3,013,052 1,759,508 204,430 173,463 Estimate of bad debtors - - - - - Total Long Term Debtors 204,430 173,463
06. Balances and Transactions with related entities Balances receivable in the Short-Term as of June 30, 2004 totaled Th Ch$ 3,715,261 (Th Ch$ 575,881 in 2003) which correspond mainly to a loan granted by the parent company to Metropolis-Intercom for Th Ch$ 2,704,725 at an annual interest rate of 3%, In addition to a loan granted by the subsidiary Ciecsa to Editorial Zig Zag for Th Ch$ 108,909 (Th Ch$ 164,226 in 2003) including interests, with maturity on June 2004 at an annual interest rate of 1%, and advertising sold by Red Televisiva Megavision S.A. to Metropolis-Intercom for Th Ch$ 120,361 (Th Ch$ 65,025 in 2003). The balance corresponds to invoicing receivable for Th Ch$ 781,266 (Th Ch$ 346,628 in 2003). Balances payable in the short term totaled Th Ch$ 1,104,714 at June 30, 2004 (Th Ch$ 745,904 in 2003) mainly corresponding to commercial transactions under 90 days for Th Ch $ 297,574 (Th Ch$ 231,726 in 2003), and dividends payable to Majority shareholders for Th Ch$ 807,140 (Th Ch$ 514,178 in 2003). In 2004 there is a balance registered under long-term accounts receivables for Th Ch$ 1,106,556 (Th CH$ 2,883 in 2003) corresponding to a loan granted by the parent company to Metropolis-Intercom S.A. for Th Ch$ 855,171 and to Inmobiliaria Monte Azul S.A. for Th Ch$ 247,128, the balance correspond to invoices totaling Ch Th$ 4,257 (Ch Th$ 2,883 in 2003). CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCE AND TRANSACTIONS WITH RELATED COMPANIES DOCUMENTS AND ACCOUNTS RECEIVABLE
Short Term Long Term ------------------------ -------------------------- R.U.T. Company 06-30-2004 06-30-2003 06-30-2004 06-30-2003 ------------ ----------------------------------- ---------- ---------- ---------- ---------- 89.150.900-6 Vina Los Vascos S.A. 205,021 184,174 0 0 83.032.100-4 Serv. Y Consultorias Hendaya S.A. 3,308 0 0 0 90.684.000-6 Editorial Zig-Zag S.A. 108,909 164,226 0 0 86.881.400-4 Envases CMF S.A. 18,587 37,381 0 0 90.320.000-6 Cia. Electro Metalurgica S.A. 2,683 81 0 0 96.539.380-3 Ediciones Financieras S.A. 0 4,739 0 0 79.753.810-8 Claro y Cia. 0 376 0 0 96.787.775-1 Metropolis Intercom S.A. 2,825,086 65,025 855,171 0 90.160.000-7 Sudamericana de Vapores S.A. 1,769 125 0 0 96793770-3 Ediciones Chiloe S.A. 0 0 4,257 2,883 86963200-7 Forus S.A. 0 34,228 0 0 78936090-1 Inmob. Y Constructora Monte Azul S.A. 0 0 247,128 77489120-K Soc. Agr. Vinedos Collipeumo Ltda. 1,144 0 0 0 0-E Rayen Cura SAIC 525,198 85,526 0 0 Total 3,691,705 575,881 1,106,556 2,883
CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES DOCUMENTS AND ACCOUNTS PAYABLE
Short Term Long Term ------------------------ -------------------------- R.U.T. Company 06-30-2004 06-30-2003 06-30-2004 06-30-2003 ------------ ----------------------------------- ---------- ---------- ---------- ---------- 90.320.000-6 Cia. Electro Metalurgica S.A. 443,096 339,257 0 0 83.032.100-4 Serv. Y Consultorias Hendaya S.A. 245,793 85,701 0 0 89.150.900-6 Vina Los Vascos S.A. 4,048 10,587 0 0 79.753.810-8 Claro y Cia. 27,703 36,098 0 0 96.539.380-3 Ediciones Financieras S.A. 102 1,603 0 0 86.881.400-4 Envases CMF S.A. 183,909 174,279 0 0 90.160.000-7 Cia. Sudamericana de Vapores S.A. 2,930 8,768 0 0 77.658.870-9 Marketing Meter Ltda. 0 391 0 0 86.755.600-1 Inversiones Bayona S.A. 118,251 89,220 0 0 92048000-4 Sud Americana Agencias Maritimas S.A. 53,630 0 0 0 96787750-6 Metropolis Intercom S.A. 97 0 0 0 77489120-K Soc. Agr. Vinedos Collipeumo Ltda. 25,155 0 0 0 Total 1,104,714 745,904 0 0
CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES TRANSACTIONS
06-30-2004 06-30-2003 -------------------- ------------------ Description of Effect on Effect on Company R.U.T. Relationship Transaction Amount Result Amount Result -------------------- ------------ ----------------- --------------------------- --------- ---------- -------- --------- Serv. Y Consultorias 83.032.100-4 Majority Services received 648,344 -348,344 655,835 -655,835 Hendaya S.A. shareholder - Dividends paid 228,310 0 613,337 0 - Services supplied 9,563 9,563 10,459 10,459 - Products sold 102 23 29 11 - Services provided 36,866 -36,866 0 0 - Payment made for own account 0 0 29,061 -29,061 Quemchi S.A. 96.640.360-8 Same Parent Services rendered 5,076 5,076 5,708 5,708 Rayen Cura S.A.I.C. 0-E Indirect affiliate Direct sales 115,741 34,269 123,648 34,289 Navarino S.A. 96.566.900-0 Same Parent Services supplied 5,062 5,062 5,074 5,074 Ediciones Financieras 96.793.77-3 Indirect affiliate Products sold 0 0 3,563 1,341 S.A. - Services purchased 2,318 -2,318 134 -134 - Services received 3 -3 3,770 -3,770 Advertising hired 652 -652 0 0 Advertising 5,592 -5,592 10,452 -10,452 - Advertising hired 652 652 0 0 Envases CMF S.A. 86.881.400-4 Affiliate Materials purchased 291,293 0 268,390 0 - Products sold 195 44 119 44 - Other sales 32,860 0 7,048 0 Forus S.A. 86.963.200-7 Indirect affiliate Advertising hired 4,354 -4,354 0 0 Indirect affiliate Advertising hired 4,354 4,354 127,996 127,996 Vina Los Vascos S.A. 89.150.900-6 Indirect affiliate Direct sales 394,495 96,946 299,626 69,379 - Materials purchased 27,972 0 16,542 0 Cia. Sud-Americana de 90.160.000-7 Same Parent Freight services received 110,545 -15,139 215,690 -21,365 Vapores S.A. - Other Sales 197 0 0 0 - Product sold 1,085 247 4,005 753 Cia. Electro Metalurgica 90.320.000-6 Majority Dividends paid 875,556 0 2,352,111 0 S.A. shareholder - Materials purchased 4,688 0 2,713 0 - Other Sales 491 0 399 0 - Product sold 2,385 543 0 0 - Payment Made for own Account 0 0 282 0 Claro y Cia. 79.753.810-8 With the Chairman Advice received 69,471 -69,471 82,805 -82,805 - Expenses reimbursement 0 0 9,953 0 - Product sold 197 45 378 213 Inversiones Bayona S.A. 86.755.600-1 Majority Dividends paid 237,684 0 638,519 0 shareholder Metropolis Intercom S.A. 96.787.750-6 Indirect affiliate Advertising hired 228,684 228,684 127,849 127,849 - Payment Made for own Account 0 0 182 -182 - Long Term Loan granted 855,171 0 0 0 - Short Term Loan granted 2,704,725 0 0 0 - Service Purchased 152 -152 0 0 - Building Rent 762 762 0 0 - Advertising services 15,144 -15,144 4,460 -4,460 - Product sold 0 0 10,917 4,059 Soc Agric. Cullipeumo 77489120-K Indirect Raw Material Purchased 46,070 0 25,762 0 Ltda. - Product sold 551 125 0 0 - Expenses reimbursement 961 0 0 0 Sudamericana Agencias 92048000-4 Indirect Freight services 92,988 -92,988 0 0 Aereas y Maritimas S.A - Other Purchases 10,864 -9,268 0 0 Carmen Luz Sanchez Guzman 5781266-4 Indirect Raw Material Purchased 37,268 0 38,588 0 - Expenses reimbursement 1,397 0 0 0 Inmob. Y Constructora 78936090-1 Affiliate Loan granted 247,128 0 0 0 Monte Azul S.A. Empresa Editora S.A. 90684000-6 Indirect Services Purchased 2,066 -1,852 0 0
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)
2004 2003 Th Ch$ Th Ch$ ---------- ----------- Finished Products * Cristalerias de Chile S.A. 3,785,034 3,373,595 * S.A. Vina Santa Rita 10,224,256 9,864,726 Subtotal Finished Products 14,009,290 13,238,321 Raw Materials and Fuel * Cristalerias de Chile S.A. 1,195,803 2,031,456 * S.A. Vina Santa Rita 27,645,841 23,396,665 Subtotal Raw Materials and Fuel 28,841,644 25,428,121 Supply Materials and Parts * Cristalerias de Chile S.A. 899,181 1,054,862 * S.A. Vina Santa Rita 1,133,231 1,251,235 Subtotal Supply Materials and Parts 2,032,412 2,306,097 Materials in Transit 1,098,711 146,142 Red Televisiva Megavision S.A. (CIECSA S.A.) * Foreign, taped, for broadcast 813,230 3,095,915 * Domestic programming, to be broadcast 423,301 827,211 Subtotal Red Televisiva Megavision S.A. 1,236,531 3,923,126 Total 47,218,588 45,041,807
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 year for Short-Term Assets, 4 years for Long-Term Assets, and 14 years for Long-term Liabilities. B) INCOME TAX The Company and its subsidiary S.A. Vina Santa Rita, made tax provisions of 17% of taxable income subject to the First Category in 2004 and 16.5% for year 2003, in addition to 35% for the Single Income Tax under Art. 21, corresponding to 2004 and 2003 fiscal years. The other consolidated subsidiaries maintain negative taxable income, therefore have not provisioned for this concept. Credits against taxes are shown deducting the payable obligation. The detail is the following:
2004 2003 Th Ch$ Th Ch$ ----------- ---------- Fiscal year income tax reserve (2,713,307) (910,536) Single tax reserve (7,024) (4,880) ----------- ---------- SUB TOTAL (2,720,331) (915,416) Credits: Monthly reserve payments 1,431,423 2,104,392 Training expenditures 52,589 39,352 Fixed Assets credit 28,286 32,196 Donations 1,128 4,332 ----------- ---------- CREDIT SUB TOTAL 1,513,426 2,180,272 Total Income Tax (1,206,905) 1,264,856 Income Tax to be Recovered 0 0 Other Taxes to be recovered: VAT Fiscal Credit 594,268 550,651 Income tax credit, previous year 2,093,170 233,536 TOTAL TAXES TO BE ----------- ---------- RECOVERED 1,480,533 2,049,043
C) TAXABLE INCOME FUND The Company registered the following income balances to be distributed:
2004 Th Ch$ 2003 Th Ch$ ----------- ----------- Generated as of 12.31.1983: 1,930,833 1,930,833 Generated since 01.01.1984: Without Credit 1,943,098 1,080,718 With 10% First Category Credit 22,785 22,875 With 15% First category Credit 84,552,274 87,651,560 With 15% Additional rate Credit 722 728 With 16% First Category Credit 14,535,934 16,256,265 With 16.5% First Category Credit 6,972,963 3,571,625 With 17% First Category Credit 10,955,060 0 ----------- ----------- SUB-TOTAL TAX INCOME 118,982,836 108,583,771 Non-income revenues 6,852,415 6,879,852 ----------- ---------- TOTAL INCOME TO BE DISTRIBUTED 125,835,251 115,463,623
CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX DEFERRED TAXES
06-30-2004 ---------------------------------------------------------- Item Asset Deferred Tax Liability Deferred Tax -------------------------- -------------------------- Short term Long Term Short Term Long Term -------------------------------------------- ---------- --------- ---------- --------- Temporary Differences Reserve non-collectable accounts 120,052 0 0 0 Prepaid Income 594,765 0 0 0 Vacation provision 165,972 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 8,725,309 Severance payments 2,088 155,299 0 0 Other events 104,236 20,991 0 74,722 Packaging reserve 215,059 0 0 0 Furnace repair provision 339,507 358,000 0 0 Stock obsolescence provision 82,354 0 0 0 Spare parts obsolescence provision 103,850 0 0 0 Lower value sale of bonds 97,863 0 0 0 Non realized profits 38,988 10,836 0 0 Other provisions 125,445 0 0 0 Direct labor 85,619 0 0 0 Accumulated depreciation automobiles 0 19,288 0 0 Tax losses 0 4,070,873 0 0 Goodwill bond placement 0 0 53,803 743,007 Prepaid expenses 0 0 50,645 0 Banking reserve 11,337 0 0 32,761 Fixed assets, molds 0 0 0 229,338 Commercial brands 1,560 0 0 0 Amortization commercial brands 0 0 0 0 Expenses assetted 0 0 238,918 0 Deferred customs duties 0 0 0 0 Refractory Obsolence provision 0 0 0 0 Other Expenses provision 0 0 0 0 Complementary accounts-net of amort. 4,215 2,996,439 0 3,514,262 Valuation provision 0 0 Total 2,084,400 1,638,848 343,366 6,290,875 06-30-2003 ----------------------------------------------------------- Item Asset Deferred Tax Liability Deferred Tax --------------------------- --------------------------- Short Term Long Term Short Term Long Term -------------------------------------------- ---------- --------- ---------- --------- Temporary Differences Reserve non-collectable accounts 119,668 0 0 0 Prepaid Income 678,804 0 0 0 Vacation provision 143,682 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 8,394,482 Severance payments 1,973 37,924 0 0 Other events 0 0 0 0 Packaging reserve 189,513 0 0 0 Furnace repair provision 0 568,415 0 0 Stock obsolescence provision 61,997 0 0 0 Spare parts obsolescence provision 97,887 0 0 0 Lower value sale of bonds 0 0 0 0 Non realized profits 84,333 2,840 0 0 Other provisions 75,533 110,194 0 Direct labor 21,631 0 0 0 Accumulated depreciation automobiles 0 15,888 0 0 Tax losses 0 4,324,563 0 0 Goodwill bond placement 74,901 0 54,019 799,844 Prepaid expenses 0 0 40,250 0 Banking reserve 0 0 0 44,588 Fixed assets, molds 0 0 0 270,444 Commercial brands 0 0 0 0 Amortization commercial brands 35,562 0 0 0 Expenses assetted 0 0 343,167 0 Deferred customs duties 2,708 485 0 82,406 Refractory Obsolence provision 0 0 0 0 Other Expenses provision 0 0 0 0 Complementary accounts-net of amort. 170,633 3,635,942 0 3,657,401 Valuation provision 0 0 Total 1,417,559 1,424,367 437,436 5,934,363
CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX INCOME TAX
06/30/2004 06/30/2003 ----------- ----------- Th Ch$ Th Ch$ ----------- ----------- Current tax expense (tax provision) -2,720,331 -915,163 Adjustment tax expense (previous year) 0 0 Effects from assets or liabilities, deferred year's tax -21,828 -438,378 Tax benefit from tax losses 0 0 Effect of amortiz. of supplementary accounts for deferred assets and liabilities 71,448 -83,789 Effect on assets or liabilities from deferred tax from changes in assessment provision 0 0 Other charges or credits to the account 687 139 Total -2,670,024 -1,437,191
09. Short and Long-term Leasing Contracts and Assets for Leasing (Note required only for leasing companies defined in Circular No.939 of 1990) As of June 30, 2004 and 2003, no balances are included under this item. 10. Other current assets As of June 30, 2004, this item includes investments in: a) Financial instruments with resale agreements for Th Ch$ 10,942,806 valued according to note 2 q). b) Deferred expenses for bond placement of Th Ch$ 360,469 c) Th Ch$ 7,691 for bank reserve. d) Th Ch$ 848 for other assets. As of June 30, 2003, there were investments in: a) Financial instruments with resale agreements for Th Ch$ 10,300,334 valued according to note 2 q) b) Deferred expenses for bonds placement for Th Ch$ 366,554 c) Th Ch$ 28,681 for bank reserve 11. Information on operations of purchase agreements, sales agreements, sale with repurchase agreement, and purchase with resale agreement of titles or bearer securities Information about these transactions is presented in attached charts. NOTE 11 - INFORMATION ON PURCHASE COMMITMENT, SALE COMMITMENT, SALE WITH REPURCHASE AGREEMENTS AND PURCHASE WITH RESALE AGREEMENTS OPERATIONS OF TITLES AND BEARER SECURITIES SALE WITH REPURCHASE OPERATIONS (VRC) AND PURCHASE WITH SALE (CRV) COMMITMENT OPERATIONS
Dates ---------------------- Original Price Final Market Code Start End Counterpart Currency Set Rate Value Instrument Value ---- ---------- ---------- ---------------------------- -------- -------- ---- --------- ---------- --------- CRV 06.25.2004 07.01.2004 BCI CB Pesos 1,000,000 0.15 1,000,300 BCP-PDBC 1,000,250 CRV 06.25.2004 07.02.2004 BCI CB Pesos 1,650,000 0.15 1,650,578 BCP-PDBC 1,650,413 CRV 06.29.2004 07.05.2004 BCI CB Pesos 450,000 0.15 450,135 BCP-PDBC 450,023 CRV 06.30.2004 07.05.2004 Santander Investment Pesos 760,000 0.16 760,203 BCD-CERO 760,000 CRV 06.30.2004 07.06.2004 Santander Investment Pesos 1,500,000 0.16 1,500,480 BCD-ZERO-PRD 1,500,000 CRV 06.30.2004 07.07.2004 Santander Investment Pesos 1,490,000 0.16 1,490,556 BCO-ZERO-PRC 1,490,000 CRV 06.30.2004 07.07.2004 Santander Agente de Valores Dollars 261,775 1.50 261,851 BCD-BCP-CHI 261,775 CRV 06.30.2004 07.01.2004 BCI CB Pesos 250,000 0.16 250,013 PRD 250,000 CRV 06.30.2004 07.01.2004 BCI CB Pesos 500,000 0.16 500,027 PRD 500,000 CRV 06.30.2004 07.02.2004 Inversiones Boston Corredores Pesos 162,702 0.18 163,722 PRD 163,702 CRV 06.30.2004 07.02.2004 Inversiones Boston Corredores Pesos 113,112 0.18 113,126 PRD 113,112 CRV 06.30.2004 07.02.2004 Inversiones Boston Corredores Pesos 23,186 0.18 23,188 PRD 23,186 CRV 06.30.2004 07.01.2004 BCI CB Pesos 249,000 0.16 249,013 PRD 249,000 CRV 06.30.2004 07.01.2004 BCI CB Pesos 144,000 0.16 144,008 PRD 144,000 CRV 06.29.2004 07.23.2004 Banco Chile Pesos 280,000 0.15 280,336 PRBC 280,028 CRV 06.29.2004 07.23.2004 Banco Chile Pesos 280,000 0.15 280,336 PRBC 280,028 CRV 06.03.2004 07.15.2004 Banco Chile Pesos 315,000 0.15 315,236 PRBC 315,015 CRV 06.03.2004 07.15.2004 BCI Pesos 315,000 0.14 315,221 PRBC 315,015 CRV 06.29.2004 07.19.2004 Banco Santander Pesos 100,000 0.15 100,100 PRBC 100,010 CRV 06.30.2004 07.08.2004 Banco Santander Pesos 315,000 0.14 315,118 PRBC 315,015 CRV 06.30.2004 07.26.2004 Banco Santander Pesos 280,000 0.15 280,364 PRBC 280,014 CRV 02.27.2004 07.19.2004 Banco Santander Pesos 200,000 0.18 201,716 PRBC 201,500 CRV 06.03.2004 07.05.2004 Banco Santander Pesos 300,000 0.15 300,480 PRBC 300,420
12. Fixed Assets Cristalerias de Chile S.A.: The Fixed Assets are valued according to note 2 j), and the main goods included within this item as of June 30, 2004 and 2003 are detailed in the annexed chart. The items that make up the Company's fixed assets as of June 30, 2004 and 2003 include mainly Land, Industrial Constructions, Infrastructure Works, Machinery, and Equipment distributed between the Padre Hurtado and other minor. S.A.Vina Santa Rita The increase in lands corresponds to the operation of exchange conducted between Vina Santa Rita S.A. and Empresa de Transportes y Excavaciones Limitada, (TRANSEX LTDA.) TRANSEX LTDA. granted Vina Santa Rita two pieces of land that totalize 27,242.67 m2, and Vina Santa Rita S.A., in turn, granted TRANSEX LTDA. a piece of land of 30,983.35 m2, both located in Buin. The parts agreed the exchange price of Ch$ 269,000 (Two hundred and sixty nine million pesos). Technical Reappraisal and Adjustment of Accounting Values: The Company carried out a technical reappraisal of its fixed assets in 1979. On 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 Th Ch$ 7,743,099 in 2004 and Th Ch$ 7,057,014 in 2003. The detail is shown on an attached chart. CRISTALERIAS DE CHILE S.A. AND SUBSIDIARIES NOTE 12 - FIXED ASSETS
2004 2003 ThCh$ Th Ch$ ------------ ------------ Land Land and Mining Properties 13,442,643 13,175,721 Subtotal Lands 13,442,643 13,175,721 Buildings and Infrastructure Projects Hi rises and industrial buildings 31,431,451 30,446,106 Installations 32,863,607 30,897,019 Residences 26,423 26,396 Subtotal 64,321,481 61,369,521 Depreciations Accumulated (21,914,857) (18,943,856) Fiscal year (1,531,160) (1,484,511) Subtotal Depreciations (23,446,017) (20,428,367) Subtotal Constructions and Projects 40,875,464 40,941,154 Machinery and Equipment Machinery 97,261,628 92,830,513 Furnaces 46,747,917 46,597,914 Furniture and Furnishings 2,691,788 2,489,424 Tools 723,600 631,308 Rolling Stock 923,694 823,703 Subtotal 148,348,627 143,372,862 Depreciations Accumulated (74,159,239) (63,440,551) Fiscal year (6,106,813) (5,467,480) Subtotal Depreciations (80,266,052) (68,908,031) Subtotal Machinery and Equipment 68,082,575 74,464,831 Other Fixed Assets Spare parts 5,917,908 5,373,156 Imports in transit 891,470 87,308 Work in progress 2,226,701 2,130,332 Lots in Pirque and Leyda 413,529 466,610 Deferred Customs Duties 98,012 340,223 Packages and Bundling 237,598 237,361 Other 1,944,486 1,952,826 Subtotal Other Fixed Assets 11,729,704 10,587,816 Total Fixed Assets 237,842,455 228,505,920 Total Accumulated Depreciation (96,074,096) (82,384,407) Total Depreciation of the Period (7,637,973) (6,951,991) Total Net Fixed Assets 134,130,386 139,169,522
TECHNICAL REVALUATION AND ADJUSTMENT TO ACCOUNTING VALUES
2004 2003 ThCh$ Th Ch$ ------------ ------------ Land Land 315,506 321,069 Subtotal net land and mining properties 315,506 321,069 Buildings and Infrastructure Projects High rises and industrial buildings 6,302,652 6,290,431 Installations 41,665 41,614 Subtotal Buildings 6,344,317 6,332,045 Accumulated Depreciation (5,101,125) (4,886,002) Fiscal year depreciation (105,126) (105,022) Subtotal depreciation (5,206,251) (4,991,024) Subtotal Net Buildings 1,138,066 1,341,021 Machinery and Equipment Machinery and Equipment 0 1,114,736 Depreciations 0 (1,114,736) Subtotal Machinery and Equipment 0 0 Subtotal Net Technical Revaluation 1,453,572 1,662,090 TOTAL REVALUED ASSETS 6,659,823 7,767,850 TOTAL ACCUMULATED DEPRECIATION (5,101,125) (6,000,738) TOTAL DEPRECIATION OF THE PERIOD (105,126) (105,022) TOTAL NET 1,453,572 1,662,090
13. Sales transactions with leaseback These type of transactions were not carried out as of June 30, 2004 and 2003. 14. Investments in related companies According to Circular N. 1697 of the SVS, valuations of investments in related companies effected prior to January 2004 have been done using the Equity Method (VPP). On the other hand, for investments in which participation is lower than 20%, the Equity Method (VPP) has been used, since they correspond to companies within the same business conglomerate and therefore significant influence over those companies exists. This method consists in assigning the investment an equivalent value to the proportion that corresponds to the company in book value net worth of the issuer, and acknowledge proportionally the variations that this value experiments. Investments in force as of June 30, 2004 and 2003 are detailed as follows: METROPOLIS INTERCOM S.A. On April 30, 2003 the shareholders of Metropolis -Intercom S.A. agreed to increase the capital of the company by issuing 3,923,834 shares at a price of Ch$ 1,256.67 each, which represented Th CH$ 4,931,000. This increase was subscribed 50% by Cristalchile Comunicaciones S.A., and the other 50% by Liberty Comunicaciones de Chile Uno Ltda. The payment of this subscription was made by de subsidiary Cristalchile Comunicaciones S.A. on September 29, 2003, paying 1,961,917 shares for a value of Th CH$ 2,462,794. With this purchase the subsidiary participates directly in a 2.205% and indirectly in 47.795% in the net worth of Metropolis-Intercom S.A. CIECSA S.A. On August 26, 2003 the shareholders of this subsidiary agreed to increase capital of the company by issuing 36,400,000 shares, equivalent to Th Ch$ 910,000, which were subscribed and paid in their totality by Cristalerias de Chile S.A. Such capital increase allowed CIECSA S.A. to complete financing to pay the balance of Th US$ 2,100 owed to Televisa S.A., from the purchase of 7,885,472 shares of Megavision S.A., made in August, 2002. MEGAVISION S.A. On August 27, 2002, the subsidiary CIECSA purchased from Televisa S.A. 7,885,472 shares of Megavision, corresponding to the totality of the participation that Televisa S.A. held in that company. The price of the transaction of shares of Televisa S.A. in Megavision was of US$4,200,000, equivalent to US$ 0.532625 per share. The parties agreed that the price would be paid with US$ 2,100,000 in cash, which was paid in 27 August, 2002 and the balance to be paid in August 27, 2003. On the other hand CIECSA S.A. sold to the related company Servicios y Consultorias Hendaya S.A. 3,600 shares of Megavision S.A. at the cost of US$ 0.532625 per share. As a result of these transactions, participation of CIECSA in the equity of Megavision reached 99.99% EDICIONES CHILOE S.A. On an extraordinary meeting held on September 27, 2003, the shareholders of Ediciones Chiloe agreed to increase its capital by Th Ch$ 684,308, issuing 1,500,395 shares, which were subscribed both by CIECSA S.A. and Recoletos Chile Ltda. From the latter are 135,030 subscribed shares outstanding payment, for which the final date expires on September 2004. INMOBILIARIA MONTE AZUL S.A. On May 14, 2004, Cristalchile S.A. paid its subsidiary Constructora Apoger the sum of Th Ch$ 196 corresponding to 49% of the rights of the company; with this contribution the participation in the affiliate reached to 50% as of June 30, 2004 (no effect on results). INVESTMENTS ABROAD ------------------ RAYEN CURA S.A.I.C. On January 31, April 25 and June 30, 2003, Rayen Cura S.A.I.C. carried out repayment of part of a capital increase paid on April 29, 2002. Reimbursed amounts totaled Th US$ 2,600. On June 30, 2004 the Board of Rayen Cura approved the reimbursement of part of the irrevocable contributions subscribed and paid on April 29, 2002. The amount of that reimbursement was US$ 1,500,000, of which US$ 600,000 will be received by Cristalchile Inversiones S.A., equivalent to 40% of its contribution (provisioned and paid on July 1, 2004). As of June 30, 2004 the financial statements of Rayen Cura S.A.I.C. recognize an exchange rate of $ 2.94 Argentine pesos per US Dollar. CristalChile Inversiones S.A., in turn, has adjusted the financial statemens of Rayen Cura S.A.I.C. in order to recognize the variation from $2.91 (exchange rate at December 31, 2003) and $2.94 (exchange rate at June 30, 2004) Argentine pesos per US dollar. For the effect of results of this affiliate and the conversion of financial statements of Rayen Cura S.A.I.C., according to the chilean normative, CristalChile Inversiones S.A., has recognized a Th Ch$ 548,441 income during the first half of 2004 and a Th Ch$ 742,704 income as of June 30, 2003. On the other hand, the variation of the dollar exchange rate in Chile during the first half of 2004, originated in the investment in Rayen Cura S.A.I.C. and for the negative goodwill produced by the purchase of shares of that company, a Th Ch$ 1,026,122 credit. In 2004 (Th Ch$ 723,786 charge in 2003), to Other Equity Reserves account. As stipulated in Technical Bulletin No. 64 of the Accountants Association of Chile A.G., the following information related to investments abroad is presented:
2004 2003 Th$ Th$ ---------- ----------- CristalChile Inversiones's stake in Rayen Cura S.A.I.C. 12,955,478 13,724,552 Negative goodwill (net of amortization) 4,373,151 5,150,694 ---------- ----------- TOTAL 17,328,629 18,875,246 ========== =========== Devaluation loss (2,319,270) (1,754,398) Accrued Income (loss) 548,441 742,704 Potentially remesable income 0 0
The investment in Rayen Cura S.A.I.C. is controlled in Dollars of the United States of America. The subsidiary Cristalchile Inversiones S.A., does not register liabilities that have been specifically designated and accounted as coverage instruments of the investment abroad. CRISTALERIAS DE CHILE S.A. NOTE 14- INVESTMENTS IN RELATED COMPANIES BREAKDOWN OF INVESTMENTS
Shareholder Company Investment (Percentage) Equity -------------------------------- ---------------------- ------------------------ Country of Control Number of R.U.T. COMPANY Origin Currency Shares 06-30-2004 06-30-2003 06-30-2004 06-30-2003 ------------ ------------------- --------- -------- ------------ ----------- ---------- ----------- ----------- 78.619.410-5 Cordillera Chile Peso 0 50.00000 50.00000 125,572,632 139,822,130 Comunicaciones Holding 78.619.370-2 Cordillera Chile Peso 0 0.00000 0.00000 126,203,650 140,524,754 Comunicaciones Ltda. 89.150.900-6 Vina Los Vascos S.A. Chile Peso 60,000,000 43.00000 43.00000 14,220,467 12,890,919 90.684.000-6 Editorial Zig-Zag Chile Peso 114,596,213 49.00000 49.00000 751,732 559,632 S.A. 96.793.770-3 Ediciones Chiloe Chile Peso 1,570,146 50.00000 50.00000 1,342,768 1,455,745 S.A. 96.826.870-8 Inmobiliaria Don Chile Peso 3,817 0.00000 38.00000 0 37 Alberto S.A. 86.881.400-4 Envases CMF S.A. Chile Peso 28,000 50.00000 50.00000 32,276,385 33,753,421 96806690-0 Proser S.A. Chile Peso 50 0.00000 0.00000 -12,200 -12,273 96787750-6 Metropolis Intercom Chile Peso 1,961,918 2.00000 0.00000 70,969,345 76,664,874 S.A. 78936090-1 Inmob. Y Chile Peso 50 50.00000 0.00000 -1,052 0 Constructora Monte Azul S.A. 0-E Rayen Cura S.A.I.C Argentina Dollar 1,376,000 40.00000 40.00000 32,388,695 34,311,379 Net Result of Income Accrual VPP ------------------------ ----------------------- ------------------------ R.U.T. COMPANY 06-30-2004 06-30-2003 06-30-2004 06-30-2003 06-30-2004 06-30-2003 ------------ ------------------- ------------ ---------- ---------- ---------- ---------- ---------- 78.619.410-5 Cordillera -7,740,034 -6,898,348 -3,870,016 -3,449,175 62,786,316 69,911,067 Comunicaciones Holding 78.619.370-2 Cordillera -7,778,929 -6,933,013 -19,447 -17,332 315,509 351,312 Comunicaciones Ltda. 89.150.900-6 Vina Los Vascos S.A. 631,177 928,960 271,406 399,452 6,114,801 5,543,096 90.684.000-6 Editorial Zig-Zag -80,434 -222,992 -42,208 -111,268 375,220 279,239 S.A. 96.793.770-3 Ediciones Chiloe -142,724 -184,682 -71,362 -92,340 671,384 727,873 S.A. 96.826.870-8 Inmobiliaria Don 0 2 0 1 0 14 Alberto S.A. 86.881.400-4 Envases CMF S.A. 298,319 1,216,701 149,159 608,349 16,138,193 16,876,710 96806690-0 Proser S.A. 98 135 0 0 -61 -61 96787750-6 Metropolis Intercom -5,961,766 -4,843,208 -131,436 0 1,564,973 0 S.A. 78936090-1 Inmob. Y -1,654 0 -827 0 -526 0 Constructora Monte Azul S.A. 0-E Rayen Cura S.A.I.C 1,371,101 1,856,761 548,441 742,704 12,955,478 13,724,552 TOTAL 100,921,287 107,413,802 Not Investment Realized Result Book value ---------------------- ------------------------- R.U.T. COMPANY 06-30-2004 06-30-2003 06-30-2004 06-30-2003 ------------ ------------------- ---------- ---------- ---------- ---------- 78.619.410-5 Cordillera 0 0 62,786,316 69,911,067 Comunicaciones Holding 78.619.370-2 Cordillera 0 0 315,509 351,312 Comunicaciones Ltda. 89.150.900-6 Vina Los Vascos S.A. 0 0 6,114,801 5,543,096 90.684.000-6 Editorial Zig-Zag 0 0 375,220 279,239 S.A. 96.793.770-3 Ediciones Chiloe 157,314 197,757 514,070 530,116 S.A. 96.826.870-8 Inmobiliaria Don 0 0 0 14 Alberto S.A. 86.881.400-4 Envases CMF S.A. 0 0 16,138,193 6,876,710 96806690-0 Proser S.A. 0 0 -61 -61 96787750-6 Metropolis Intercom 0 0 1,564,973 0 S.A. 78936090-1 Inmob. Y 0 0 -526 0 Constructora Monte Azul S.A. 0-E Rayen Cura S.A.I.C 0 0 12,955,478 13,724,552 TOTAL 157,314 197,757 100,763,973 107,216,045
15. Investments in other companies Investments in other companies that totaled Th Ch$ 788,803 as of June 30, 2004 (Th Ch$ 831,373 in 2003) are shown on attached charts. CRISTALERIAS DE CHILE S.A. NOTE 15 - INVESTMENTS IN OTHER COMPANIES
Number of Shareholding Book Value R.U.T. Company Name Shares (Percentage) 06-30-2004 06-30-2003 ------------ -------------------- ---------- ------------ ---------- ---------- 96.895.100-9 Internet Holding S.A. 57,104 7.4200 180,457 223,634 0-E Bazuca.com Inc. 266,500 7.8900 608,346 607,739
16. Goodwill Amortization NEGATIVE GOODWILL Stock purchases made in different periods of S.A. Vina Santa Rita, Vina Los Vascos S.A., Ciecsa S.A., Ediciones Financieras S.A., and Rayen Cura S.A.I.C. have produced negative goodwill whose net balance to be amortized as of June 30, 2004 reached Th Ch 8,995,298 (Th Ch$ 9,364,453 in 2003). POSITIVE GOODWILL As of June 30, 2004 and 2003 the Company and subsidiaries do not show any balance for this item. More detail is shown in the attached chart. CRISTALERIAS DE CHILE S.A. NOTE 16 - GOODWILL ON INVESTMENTS
NEGATIVE GOODWILL 06-30-2004 06-30-2003 ----------------- ----------------------------- -------------------------------- R.U.T. Company Name ------ -------------- Amount Amortiz. Goodwill Amount Amortiz. Goodwill this period Balance this period Balance ----------- ------- ----------- ------- 99.999.999-9 Rayen Cura S.A. 143,382 4,373,151 158,483 5,150,694 86.547.900-K S.A. Vina Santa Rita 25,288 538,221 25,264 588,212 96.608.270-4 Ciecsa S.A. 61,103 1,283,153 61,042 1,403,959 89.150.900-6 Vina Los Vascos S.A. 44,792 1,133,275 44,785 1,200,009 90.684.000-6 Empresa Editoria Zig-Zag S.A. 3,201 100,020 3,198 106,316 79.952.350-7 Red Televisiva Megavision S.A. 26,844 862,487 26,817 915,263 96787750-6 Metropolis Intercom S.A. 18,311 704,991 0 0 TOTAL 322,921 8,995,298 319,589 9,364,453
17. Intangibles The following values are included in this item:
Th Ch$ Th Ch$ 2004 2003 ---- ---- Concession of Channel 9 frequency and regional network 10,261,701 10,251,480 Trademarks 1,651,835 1,622,598 TOTAL INTANGIBLES 11,913,536 11,874,078 ========== ========== ACCUMULATED AMORTIZATIONS From Channel 9 Frequency (1,057,456) (900,130) From Trademarks (268,512) (209,189) TOTAL AMORTIZATIONS (1,325,968) (1,109,319) ========= ==========
18. Other (Assets) As of June 30, 2004 and 2003 its composition is the following:
2004 2003 Th Ch$ Th Ch$ --------- --------- Celulosa Arauco bonds (*) 8,539,146 9,375,162 Price differential bond acquisition(*) 22,801 199,477 Negative goodwill Bond Placement (Net) 2,971,837 3,316,538 Expenses of bond placement 971,261 1,141,134 Bank Reserve 0 9,627 Foreign programs to be exhibited over a year from the present 649,332 791,556 Long-Term Tax VAT Vina Dona Paula (**) 535,423 395,738 Presumed Minimum Income Tax 45,885 40,928 Other 27,831 62,409 ---------- ---------- Total 13,763,516 15,332,569 ========== ==========
(*) Investment in Celulosa Arauco bonds equivalent to US$13,420,000 at an annual rate of 6.95% and maturity on September 15, 2005. Th Ch$ 22,801 correspond to price differential paid in the acquisition of Celulosa Arauco bonds which will be amortized in the same term of the bonds due 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. (**) Corresponds to long term taxes to recover of Vina Dona Paula S.A., Mendoza, Argentina. 19. Short-term obligations with banks and financial institutions A detailed list of operations is shown on the attached chart. CRISTALERIAS DE CHILE S.A. NOTE 19- OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS, SHORT TERM
Type of Currency and Readjustment Index ----------------------------------------------------------------------------- Bank or Financial Other Foreign R.U.T. Institution Dollars Euros Yen Currencies ------------ ---------------------------- ----------------------- ---------------- -------------- --------------- 06-30-2004 06-30-2003 06-30- 06-30- 6-30- 06-30- 06-30- 06-30- 2004 2003 2004 2003 2004 2003 Short term (code: 5.21.10.10) 0-E Banco Regional de Cuyo 0 0 0 0 0 0 6,968 19,951 Other 0 0 0 0 0 0 0 0 TOTAL 0 0 0 0 0 0 6,968 19,951 Amount capital due 0 0 0 0 0 0 6,824 19,747 Annual average interest rate 0.00 0.00 0.00 0.00 0.00 0.00 2.48 2.37 Long Term - Short Term (code: 5.21.10.20) 97.008.000-7 Citibank NA 987,097 1,947,699 0 0 0 0 0 0 97.030.000-5 Banco Estado 0 0 0 0 0 0 0 0 97.018.000-1 Scotiabank Sudamericano 0 0 0 0 0 0 411,414 424,107 97.006.000-6 Banco Credito e Inversiones 0 0 0 0 0 0 170,317 172,389 97.004.000-4 Banco de Chile 0 0 0 0 0 0 123,590 298,827 97.036.000-K Banco Santander Chile 0 0 0 0 0 0 502,917 512,917 0-E JP Morgan Chase Bank 139,500 156,829 0 0 0 0 0 0 0-E Banco Argentaria 233,517 258,989 0 0 0 0 0 0 Other 0 0 0 0 0 0 0 0 TOTAL 1,360,114 2,363,517 0 0 0 0 1,208,238 1,408,240 1,161,784 1,332,520 Amount capital due 1,214,986 1,222,276 0 0 0 0 0 0 Average annual interest rate 1.91 1.85 0.00 0.00 0.00 0.00 2.88 5.39 Percentage oblig. foreign curr. (%) 48.0000 Percentage oblig. localcurr. (%) 52.0000
Type of Currency and Readjustment Index -------------------------- U.F. Non adjustable $ Total Bank or Financial ------------------------ ----------------------- ------------------------ R.U.T. Institution 06-30-2004 06-30-2003 06-30-2004 06-30-2003 06-30-2003 06-30-2003 ------------ ---------------------------- ---------- ---------- ---------- ---------- ---------- ---------- Short term (code: 5.21.10.10) 0-E Banco Regional de Cuyo 0 0 0 0 6,968 19,951 Other 0 0 0 0 0 0 TOTAL 0 0 0 0 6,968 19,951 Amount capital due 0 0 0 0 6,824 19,747 Annual average interest rate 0.00 0.00 0.00 0.00 0 0 Long Term - Short Term (code: 5.21.10.20) 97.008.000-7 Citibank NA 0 0 0 0 987,097 1,947,699 97.030.000-5 Banco Estado 0 0 265,573 267,166 265,573 267,166 97.018.000-1 Scotiabank Sudamericano 0 0 0 0 411,414 424,107 97.006.000-6 Banco Credito e Inversiones 0 0 0 0 170,317 172,389 97.004.000-4 Banco de Chile 0 0 0 0 123,590 298,827 97.036.000-K Banco Santander Chile 0 0 0 0 502,917 512,917 0-E JP Morgan Chase Bank 0 0 0 0 139,500 156,829 0-E Banco Argentaria 0 0 0 0 233,517 258,989 Other 0 0 0 0 0 0 TOTAL 0 0 265,573 267,166 2,833,925 4,038,923 0 0 264,375 265,961 2,641,145 2,820,757 Amount capital due 0 Average annual interest rate 0.00 0.00 4.94 4.94 0.00 0.00
20. Other Current Liabilities As of June 30, 2004 and 2003 there is a balance of Th Ch$ 1,920,957 and Th Ch$ 5,945,646 respectively under "Other Current Assets", corresponding to differences in favor of financial institutions for foreign currency future contracts subscribed by the Parent Company and the subsidiaries S.A. Vina Santa Rita and Ciecsa S.A. (see note No. 34). 21. Long-term obligations with banks and financial institutions The obligations with banks and financial institutions are presented on the charts attached. CRISTALERIAS DE CHILE S.A. NOTE 21: LONG-TERM OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS
Institution Years of Maturity --------------------------- ---------------------------------------------------------------------- Bank or Currency More than 1 More than 2 More than 3 More than 5 Financial adjustment up to 2 up to 3 up to 5 up to 10 R.U.T. Institution index Thou Ch$ Thou Ch$ Thou Ch$ Thou Ch$ ------------ --------------------------- ----------- ---------- -------- -------- -------- 0-E Banco Regional de Cuyo Other 18,244 29,843 10,506 0 currency 97.030.000-7 Banco Estado Non-adjustment 266,172 132,188 0 0 97.036.000-K Banco Santander Santiago UF 460,538 460,538 230,269 0 97.018.000-1 Banco Scotiabank UF 408,324 408,324 408,324 0 0-E J.P. Morgan Chase Bank Dollars 7,953,750 15,907,500 7,953,750 0 90.008.000-K Citibank N.A. Dollars 0 0 0 0 97.006.000-6 Banco Credito e Inversiones UF 127,612 0 0 0 97.004.000-5 Banco de Chile UF 122,773 122,773 245,546 0 0-E Banco Argentaria Dollars 0 0 0 0 Total 9,357,413 17,061,166 8,848,395 0 Percentage of obligations in foreign currency 90.0000% Percentage of obligations in local currency 10.0000%
Institution Closing date Closing date Years of Maturity Current period Previous period ------------------ -------------------------------- ---------------- -------------------------- More than 10 years Total Long- Annual Total Long- Bank or ------------------ Term at closing average Term at closing Financial Amount Period of Financial interest of Financial R.U.T. Institution Thou Ch$ Statements rate Statements ------------ --------------------------- -------- ------- ------------- ------------ ---------- 0-E Banco Regional de Cuyo 0 0 58,593 2.48 73,391 97.030.000-7 Banco Estado 0 0 398,360 4.94 667,917 97.036.000-K Banco Santander Santiago 0 0 1,151,345 TAB 180+1.05 1,616,286 97.018.000-1 Banco Scotiabank 0 0 1,224,972 TAB 180+1.1 1,637,756 0-E J.P. Morgan Chase Bank 0 0 31,815,000 2.05 35,165,736 90.008.000-K Citibank N.A. 0 0 0 0 1,089,312 97.006.000-6 Banco Credito e Inversiones 0 0 127,612 TAB 90+1.05 298,576 97.004.000-5 Banco de Chile 0 0 491,092 TAB 180+1.05 1,231,076 0-E Banco Argentaria 0 0 0 0 258,989 Total 0 35,266,974 42,039,039
22. Short-term and long-term obligations with the public (promissory notes and bonds) The balance for the short-term as of June 30 2004 was Th Ch$ 1,740,471 (Th Ch$ 1,735,084 in 2003), corresponding to accrued interests for bonds issued by the Parent Company and the subsidiary S.A. Vina Santa Rita. As of June 30, 2004, there are long-term obligations with the public for Th Ch$ 90,179,235 (Th Ch$ 90,425,569 in 2003), of which Th Ch$ 69,761,295 (Th Ch$ 69,951,855 in 2003) correspond to bonds issued in UF's, by the Company, series C1, C2, D1, D2 and Th Ch$ 20,417,940 (Th Ch$ 20,473,714 in 2003) correspond to bonds series C and D issued by the subsidiary S.A. Vina Santa Rita. This liability is shown in detail in the annex. Cristalerias de Chile S.A. NOTE 22: SHORT-TERM AND LONG-TERM OBLIGATIONS WITH PUBLIC (PROMISSORY NOTES AND BONDS)
BONDS ------------------------------------------------------------------------------------------------------------------------------------ INSTALLMENTS REGISTRATION OR CURRENT ---------------------- PAR VALUE ISSUE IDENTIFICATION NO. DEPOSIT INDEXING INTEREST FINAL INTEREST AMORTIZATION -------------------- IN CHILE OF INSTRUMENT SERIES FACE VALUE UNIT OF BOND RATE MATURITY PAYMENT PAYMENT 06-30-2004 06-30-2003 OR ABROAD ----------------- ------------- ---------- ------------ -------- ---------- ----------- ----------- ---------- ---------- --------- LONG-TERM BONDS-CURRENT PORTION 296-09.07.02 C1 Interests 0 UF 4.75 07-15-2004 SEMI-ANNUAL SEMI-ANNUAL 555,855 554,036 LOCAL 296-09.07.02 C2 Interests 0 UF 4.75 07-15-2004 SEMI-ANNUAL SEMI-ANNUAL 185,285 184,678 LOCAL 296-09.07.02 D1 Interests 0 UF 5.80 07-15-2004 SEMI-ANNUAL SEMI-ANNUAL 857,555 854,748 LOCAL 296-09.07.02 D2 Interests 0 UF 5.80 07-15-2004 SEMI-ANNUAL SEMI-ANNUAL 90,269 89,974 LOCAL 241-15.12.00 C1 Interests 0 UF 6.29 12-15-2004 SEMI-ANNUAL SEMI-ANNUAL 8,585 8,608 LOCAL 241-15.12.00 D1 Interests 0 UF 6.29 12-15-2004 SEMI-ANNUAL SEMI-ANNUAL 4,292 4,304 LOCAL 241-15.12.00 D2 Interests 0 UF 6.29 12-15-2004 SEMI-ANNUAL SEMI-ANNUAL 38,630 38,736 LOCAL TOTAL CURRENT PORTION 1,740,471 1,735,084 LONG-TERM BONDS 296-09.07.02 C1 1,500,000 UF 4.75 07-15-2008 SEMI-ANNUAL SEMI-ANNUAL 25,522,425 25,592,142 LOCAL 296-09.07.02 C2 500,000 UF 4.75 07-15-2008 SEMI-ANNUAL SEMI-ANNUAL 8,507,475 8,530,714 LOCAL 296-09.07.02 D1 1,900,000 UF 5.80 07-15-2023 SEMI-ANNUAL SEMI-ANNUAL 32,328,405 32,416,713 LOCAL 296-09.07.02 D2 200,000 UF 5.80 07-15-2023 SEMI-ANNUAL SEMI-ANNUAL 3,402,990 3,412,286 LOCAL 241-15.12.00 C1 200,000 UF 6.29 12-15-2005 SEMI-ANNUAL SEMI-ANNUAL 3,402,990 3,412,286 LOCAL 241-15.12.00 D1 100,000 UF 6.29 12-15-2021 SEMI-ANNUAL SEMI-ANNUAL 1,701,495 1,706,143 LOCAL 241-15.12.00 D2 900,000 UF 6.29 12-15-2021 SEMI-ANNUAL SEMI-ANNUAL 15,313,455 15,355,285 LOCAL LONG-TERM TOTAL 90,179,235 90,425,569
23. Provisions and Write-Offs Provisions: As of June 30, 2004 the balance for short-term provisions amounted to Th Ch$ 17,245,411, and Th Ch$ 12,045,713 in 2003. Long-term provisions amounted to Th Ch$ 6,417,630 and Th Ch$ 7,578,301 in 2004 and 2003, respectively. 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$ 706,185 and Th Ch$ 708,162 as of June 30, 2004 and 2003, respectively. This provision is deducted from the balance of Debtors from Sales and Documents Receivable. Vacation Provision: The Company and its subsidiaries have established provisions for the totality of the cost of vacations pending as of June 30, 2004 and 2003, as established in Technical Bulletin No. 47 of the Accountants Association of Chile A.G. The net balance for this item is Th Ch$ 979,703 as of June 30, 2004 (Th Ch$ 861,509 in 2003). 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$ 4,194,934 and Th Ch$ 3,441,104 as of June 30, 2004 and 2003, respectively. Detail is shown in the attached chart. CRISTALERIAS DE CHILE S.A. NOTE 23: PROVISIONS AND WRITE-OFFS 06-30-2004 06-30-2003 Thou Ch$ Thou Ch$ ---------- ---------- Short Term Commissions and Fees 2,630,469 2,629,348 Furnace reconstruction 1,997,982 0 Share of Board of Directors 356,078 166,756 Legal holidays 979,703 861,509 Local and foreign suppliers 896,398 1,357,361 Packing return to clients 1,265,054 1,125,820 Spareparts reserve 438,189 449,065 Informative services 12,599 0 Advertising and marketing 1,026,940 320,093 Copyright 55,836 53,677 Severance payments 185,502 183,430 Advertising Agency Commmission 624,677 605,547 Reserve indirect cost 492,914 463,355 Severance Legal provision 77,432 67,575 Loss Reserve exported products 86,749 105,497 Grape harvest expenses 4,891,034 2,742,564 Other reserves 1,227,855 914,116 TOTAL 17,245,411 12,045,713 Long Term Severance payment 4,220,678 4,137,197 Furnace reconstruction 2,196,952 3,441,104 TOTAL 6,417,630 7,578,301 24. Severance Payment The Parent Company has effected a serverance provision which is included at its current value, as expressed in note 2 t). As of June 30, 2004 the provision amounts to Th Ch$ 4,406,180 (Th Ch$ 4,320,627 in 2003). As of June 30, 2004, the Parent Company paid severance payments with charge to the provision of Th Ch$ 135,042 (Th Ch$ 34,375 in 2003). 25. Other long-term liabilities As of June 30, 2004 and 2003 there are no balances for this item. 26. Minority interest The subsidiaries that generate minority interests as of June 30, 2004 and 2003 are shown on the attached chart. CRISTALERIAS DE CHILE S.A. NOTE 26: MINORITY INTEREST
NET WORTH RESULTS SHAREHOLDING ---------------------- ----------------------- -------------- Thou Ch$ Thou Ch$ Thou Ch$ Thou Ch$ % % ---------- ---------- ---------- ----------- ------ ------ SUBSIDIARY COMPANY 2004 2003 2004 2003 2004 2003 ------------------------------------ ---------- ---------- ---------- ----------- ------ ------ S.A.Vina Santa Rita and subsidiaries 38,751,342 37,139,291 (1,631,768) (1,323,956) 45.90 45.90 CIECSA and subsidiaries 384,027 280,101 (68,169) (9,172) 1.55 1.64 Apoger S.A. 730 1,098 216 142 20.00 20.00 Cristalchile Comunicaciones S.A. 1,198 1,388 75 68 0.002 0.010 TOTAL 39,137,297 37,421,878 (1,699,646) (1,332,917)
27. Changes in Equity a. Activity in 2004 and 2003 The activity of the capital and reserve accounts in the fiscal years ended on June 30, 2004 and 2003, are shown in the attached charts. b. Other Reserves The detail of this item is as follows: 2004 2003 ThCh$ ThCh$ --------- --------- Future capital increases 4,564,803 4,376,765 Reserve for adjustment to the value of fixed assets 1,453,572 1,635,616 Adjustment for conversion difference in the investment in Rayen Cura S.A.I.C. 1,481,022 3,142,699 ---------- --------- TOTAL OTHER RESERVES 7,499,397 9,155,080 ========== ========= CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NET WORTH
Reserve Premium Reserve Devel. Fiscal Paid-in capital in sale Other Future Accumulated Provisional Period Year ITEM Capital revaluation of shares Reserves Dividends Results Dividends Deficit Result ------------------------- ---------- ----------- ---------- --------- ----------- ------------ ----------- -------- --------- Balances as of 06/30/2004 Initial balance 65,396,749 0 27,874,377 6,421,900 123,160,119 6,426,520 -958,080 0 0 Distribution result previous fiscal year 0 0 0 0 5,468,440 -6,426,520 958,080 0 0 Final dividend previous fiscal year 0 0 0 0 -1,612,800 0 0 0 0 Capital increases with cash stock issue 0 0 0 0 0 0 0 0 0 Reserves and/or Profits Capitalization 0 0 0 0 0 0 0 0 0 Development period Accumulated deficit 0 0 0 0 0 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 1,026,122 0 0 0 0 0 Owner's equity Revaluation 0 523,174 222,995 51,375 1,014,514 0 0 0 0 Fiscal Year Result 0 0 0 0 0 0 0 0 7,125,275 Interim Dividends 0 0 0 0 0 0 -1,280,000 0 0 Final balances as of 06/30/2004 65,396,749 523,174 28,097,372 7,499,397 128,030,273 0 -1,280,000 0 7,125,275 Initial balance as of 06/30/2003 64,749,257 0 27,598,393 9,713,099 114,912,655 17,660,662 -3,303,936 0 0 Distribution result previous fiscal year 0 0 0 14,356,726 -17,660,662 3,303,936 0 0 Final dividend previous fiscal year 0 0 0 0 -5,526,400 0 0 0 0 Capital increases with cash stock issue 0 0 0 0 0 0 0 0 0 Reserves and/or profit Capitalization 0 0 0 0 0 0 0 0 0 Development period accumulated deficit 0 0 0 0 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 -719,466 0 0 0 0 0 Owner's equity revaluation 0 712,242 303,583 106,844 1,449,595 0 0 0 0 Fiscal Year Result 0 0 0 0 0 0 0 0 2,940,009 Interim Dividends 0 0 0 0 0 0 -960,000 0 0 Final balances 64,749,257 712,242 27,901,976 9,100,477 125,192,576 0 -960,000 0 2,940,009 Updated Final Balances as of 06/30/2003 65,137,753 716,515 28,069,388 9,155,080 125,943,731 0 -965,760 0 2,957,649
CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NETWORTH - NUMBER OF SHARES No. No. No. SHARES SHARES SHARES WITH VOTING SERIES SUBSCRIBED PAID RIGHT -------------------- ---------- ---------- ----------- SINGLE 64,000,000 64,000,000 64,000,000 CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NETWORTH - CAPITAL (AMOUNT - TH CH$) SUBSCRIBED PAID-IN SERIES CAPITAL CAPITAL ------------------- ---------- ----------- SINGLE 65,396,749 65,396,749 28. Other Non-Operating Income and Expenses As of June 30, 2004 and 2003 non-operating income totals Th Ch$ 667,949 and Th Ch$ 416,672 respectively. Non-operating Expenses were Th Ch$ 1,179,937 in 2004 and Th Ch$ 1,100,513 in 2003 respectively. More detail is shown on the attached chart. CRISTALERIAS DE CHILE S.A. NOTE 28: OTHER NON-OPERATING INCOME AND EXPENSES 2004 2003 Th Ch$ Th Ch$ --------- --------- INCOME Miscellaneous Income 77,578 26,717 Tax exemptions 124,473 85,010 Offices and establishments rental 88,289 112,692 Sale of fixed assets 8,588 3,687 Indemnity for claims 0 67,258 Land granted 206,378 0 Sale of materials 6,084 7,157 Agricultural Division 15,519 0 Other various income 141,040 114,151 TOTAL NON-OPERATING INCOME 667,949 416,672 EXPENSES Professional advice 381,294 384,170 Soap opera charge and others 0 191 Personnel Finished Contracts 49,767 27,990 Suppliers and eventualities 70,149 136,523 Share of Board of Directors 71,067 57,962 Trademarks amortization 27,864 26,019 Frequency amortization 81,343 75,010 Audit fees 2,317 0 Higher income Tax previous year 146,290 36,436 Loss in sales of fixed assets 106,212 30,154 Licenses 349 6,064 Other expenses 190,008 272,473 Insurance 24,917 21,968 ADR expenses 28,360 25,553 TOTAL NON-OPERATING EXPENSES 1,179,937 1,100,513 29. Price Level Restatements As a result of the application of the adjustment for price level restatement as described in Note 2 e), there was a net charge to results in 2004 and 2003 in the amount of Th Ch$ 307,756 and Th Ch$ 668,200, respectively. 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 06-30-2004 06-30-2003 -------------------------------------- ------------- ---------- ---------- INVENTORY CPI 213,970 148,100 FIXED ASSETS CPI 1,416,455 1,384,662 INVESTMENTS IN RELATED COMPANIES CPI 837,914 416,073 MARKETABLE SECURITIES CPI 33,236 42,494 SHORT-TERM DEBTORS CPI 61,107 34,666 LONG-TERM DEBTORS UF 2,543 2,167 ACCOUNTS RECEIVABLE RELATED COMPANIES CPI 117,495 1,314,695 OTHER NON-MONETARY ASSETS CPI 97,309 353,383 EXPENSE AND COST ACCOUNTS CPI 525,143 1,076,604 TOTAL (CHARGES)/CREDITS 3,305,172 4,772,844 LIABILITIES (CHARGES)/ CREDITS NET WORTH CPI -1,812,057 -2,587,697 ACCOUNTS PAYABLE RELATED COMPANIES UF 13 -49 BANK LOANS UF 0 -18,578 SHORT-TERM RESERVES CPI -96,579 -18,884 LONG-TERM BANK LOANS UF 0 -60,607 LONG-TERM RESERVES CPI -79,482 -54,666 LONG-TERM CREDITORS CPI -18,273 -578 OBLIGATIONS WITH THE PUBLIC CPI -502,785 -1,152,628 MINORITY INTEREST CPI -121,451 -402,955 OTHER LIABILITIES CPI -3,014 -135,090 SHORT-TERM CREDITORS CPI -4,826 0 NON-MONETARY LIABILITIES CPI -136,842 -99,079 INCOME ACCOUNTS CPI -837,632 -910,234 TOTAL (CHARGES)/ CREDITS -3,612,928 -5,441,045 (LOSS) INCOME FROM ADJUSTMENT FOR PRICE LEVEL RESTATEMENT -307,756 -668,200 30. Exchange Differences There is a net credit to results in the 2004 fiscal year of Th Ch$ 2,418,146 and a net charge to results of Th Ch$ 4,463,986 in 2003, as a consequence of exchange differences. According to dispositions set by Circular No. 1560 of the SVS, the net effect on results of the adjustment of assets and liabilities adjustable in foreign currency discounting inflationary effects is presented on this item. More information is shown on the attached chart. Cristalerias de Chile S.A. NOTE 30: EXCHANGE DIFFERENCES AMOUNT ----------------------- ITEM CURRENCY 06-30-2004 06-30-2003 --------------------------------- -------- ---------- ---------- ASSETS (CHARGES) / CREDITS CURRENT ASSETS DOLLARS 716,428 -408,199 CURRENT ASSETS OTHER CUR. 76,766 -44,809 CLIENTS DOLLARS 173,052 -205,334 CLIENTS OTHER CUR 182,686 302,485 TIME DEPOSITS DOLLARS 0 -158,938 INVENTORY DOLLARS 85,459 -114,669 LONG TERM PLACEMENTS DOLLARS 573,673 -588,092 FUTURE CONTRACT EFFECT DOLLARS -12,768 -295,465 OTHER ASSETS DOLLARS 616,227 -21,066 OTHER ASSETS OTHER CUR. 26,300 -15,061 INFLATIONARY EFFECT DOLLARS -194,685 -124,018 MARKETABLE SECURITIES DOLLARS 1,742,267 -1,508,055 MARKETABLE SECURITIES EUROS 1,157,849 0 LONG-TERM FIXED DOLLARS 43,370 0 MISCELLANEOUS CREDITORS DOLLARS 7,036 0 TOTAL (CHARGES) CREDITS 5,193,660 -3,181,221 LIABILITIES (CHARGES) CREDITS ACCOUNT PAYABLE DOLLARS -55,086 84,982 DOCUMENTS PAYABLE DOLLARS -79,098 153,141 DOCUMENTS PAYABLE OTHER CUR. -6,397 -19,095 MISCELLANEOUS CREDITORS SHORT TERM DOLLARS -40,954 15,151 SHORT TERM RESERVES DOLLARS -137,927 2,353 LONG-TERM BANK CREDITS DOLLARS 2,125,000 980,347 LONG TERM RESERVES DOLLARS -127,586 61,448 OTHER LONG-TERM LIABILITIES DOLLARS -248,295 -193,499 OTHER LONG-TERM LIABILITIES OTHER CUR. -92,978 -53,160 MISCELLANEOUS LONG-TERM CREDITORS DOLLARS -9,994 3,943 FUTURE CONTRACT EFFECT DOLLARS 30,112 -2,754,341 INFLATIONARY EFFECT DOLLARS 118,428 435,965 SHORT-TERM BANK CREDITS DOLLARS -739 - TOTAL (DEBITS) CREDITS -2,775,514 -1,282,765 (LOSS) PROFIT FROM EXCHANGE DIFFERENCES 2,418,146 -4,463,986 31. Extraordinary Items As of June 30, 2004 and 2003 there are no transactions for this concept. 32. Expenses for 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 respectively, which produced placement expenses, which as of June 30, 2004 totaled Th Ch$ 3,526,957 (Th Ch$ 3,911,833 in 2003). The charge to results for the amortization of these expenses is Th Ch$ 232,779 in 2004 (Th Ch$ 183,706 in 2003), and is realized according to the maturity of each series. Detail of expenses is as follows: 2004 2003 Th Ch$ Th Ch$ ------------------ ------------------ Short- Long- Short- Long- DETAILS Term Term Term Term ------------------------------------- ------- --------- ------- --------- Placement rate differential 198,933 2,195,227 199,477 2,404,145 Stamp and Seal Tax 143,460 904,588 143,992 1,043,401 Bonds placement Commission and others 18,076 66,673 23,085 97,733 Total 360,469 3,166,488 366,554 3,545,279 33. Cash Flow Statement CASH FLOW STATEMENT 1. The following it the detail of the item OTHERS: 2004 2003 Th Ch$ Th Ch$ ---------- ---------- 541.11.40 Other Income Received Treasury Refund Income Tax and other taxes 15,000 981,808 Recover VAT exportation 672,946 975,801 Insurance Severance 0 67,258 Discount for paid of customs duties 54,737 0 Exchange difference 100,216 293,398 Loan Adjustment 42,646 0 Tax exemption 124,473 0 Other income 143,177 220,725 Total 1,153,195 2,538,990 541.11.80 Other expenses paid Exchange difference 149,150 2,084,888 Donations 41,663 25,849 Personnel contracts Finished 49,767 27,990 Advice Services 71,750 69,840 Shareholder's bonds 78,303 57,962 Other expenses 323,996 419,560 Total 714,629 2,686,089 541.13.30 Other income from investments Maturity of future contracts 0 1,965,366 Total 0 1,965,366 541.13.65 Other investment disbursements Purchase of shares 0 319,759 Future contracts 235,203 0 Others 0 0 Total 235,203 319,759 Following are financing and investment activities that did not generate cash flow during the fiscal year, but that commit future cash flows of the Company: ITEM Amount Th Ch $ Due Date -------------------------- -------------- ------------------ Dividend 158 payable (1,280,000) July 2004 Investment imports payable (537,365) 2nd semester 2004 Total (1,817,365) 34. Derivative Contracts FUTURE CONTRACTS IN FOREIGN CURRENCY As of June 30 2004 the Parent Company and its subsidiaries S.A. Vina Santa Rita have signed future sale contracts in foreign currency of Th US$ 81,600 and future purchase contracts of Th US$ 42,600 in 2004 (purchase contracts for Th US$ 131,200 in 2003) 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. The contracts maintained by the companies as of June 30, 2004 and 2003 have been taken both to shelter from variations of the exchange rate of the American dollar (contracts of existing transactions) as well as investment. Forward contracts taken in order to cover existing items are related, according to management, with covering the Company's obligations in dollars. According to Bulletin No.57 of the Accountants Association of Chile, A.G., results generated by these contracts are recognized in results as long as effects from items subject to coverage are recognized. CRISTALERIAS DE CHILE S.A. NOTE 34: DERIVATIVE CONTRACTS
DESCRIPTION OF CONTRACTS ACCOUNTS AFFECTED ------------------------------------- ----------------------------------------- PROTECTED ITEM EFFECT ON RESULT MATURITY OR PURCHASE/ OR TRANSACTION VALUE OF ASSETS/LIABILITIES ------------------- TYPE OF TYPE OF VALUE OF EXPIRATION SPECIFIC SALE ----------------- PROTECTED --------------------- NOT DERIVATIVE CONTRACT CONTRACT DATE ITEM POSITION NAME AMOUNT ITEM NAME AMOUNT REALIZED REALIZED ---------- -------- ---------- ----------- --------- --------- ------- --------- --------- ----------- --------- ---------- -------- FR CI 25,992,590 THIRD 2004 EXCH RATE P - - - LIABILITIES 2,067,710 -2,067,710 - FR CI 36,977,320 THIRD 2004 EXCH RATE S - - - ASSETS 326,444 326,444 - FR CI 1,931,256 FOURTH 2004 EXCH RATE S - - - ASSETS 22,352 22,352 - FR CCPE 1,384,520 THIRD 2004 EXCH RATE P DOLLAR LOAN 1,384,520 1,272,600 LIABILITIES 118,523 -6,604 - FR CI 2,076,780 THIRD 2004 EXCH RATE P - - - LIABILITIES 118,523 121,491 - FR CI 11,472,970 THIRD 2004 EXCH RATE S - - - ASSETS 69,498 -62,406 - FR CI 3,216,050 FOURTH 2004 EXCH RATE S - - - ASSETS 34,461 34,461 -
35. Contingencies and Restrictions CONTINGENCIES AND COMMITMENTS As of June 30, 2004, there are guarantees delivered in the amount of Th Ch$ 16,857,739 (Th Ch$ 18,486,174 in 2003), according to the detail in the attached chart. LAWSUITS OR OTHER LEGAL ACTIONS THE COMPANY IS INVOLVED IN As of June 30, 2004 and 2003 there are pending lawsuits and other legal actions corresponding to the subsidiary Red Televisiva Megavision, which are presented in the annexed chart. RESTRICTIONS I) SYNDICATED LOAN In relation to the syndicated loan subscribed with JP Morgan Chase Bank and other 8 creditor banks for US$ 50 million, the following specific financial obligations exist: a) TOTAL CONSOLIDATED DEBT TO CAPITALIZATION RATIO Cristalerias de Chile S.A will not allow the Total Consolidated Debt to Capitalization Ratio to exceed the 0.45 to 1.0 ratio at any time. Capitalization is defined as the sum of Net Worth plus minority interest plus total consolidated debt. b) TOTAL CONSOLIDATED DEBT TO EBITDA RATIO Cristalerias de Chile S.A will not allow the Consolidated Net Debt to EBITDA relation to exceed the 2.5 to 1.0 ratio at any time. Consolidated EBITDA is described as the sum of the following: operating income plus depreciation and amortization; plus non cash charges (as long as they have been deducted when determining operating income) and cash income from interests minus non/cash credits, (as long as they have been aggregated 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 4.0 ratio at any time. Interest coverage is defined as interests at the day of the respective determination, the ratio between non consolidated EBITDA for the period of 4 consecutive fiscal quarters that ends on, or most recently ebded before, that date, and interest expenses for that period. d) NET EQUITY Cristalerias de Chile S.A. will maintain a minimum of UF 10,000,000. As of June 30, 2004 Cristalerias de Chile S.A. complies with 100% of restrictions agreed with the lending banks. II) BOND ISSUE The contract of bonds issue with date May 29, 2002 signed with Banco Chile as the bond owner's representative, established, among others the following financial obligations: a) Financial Indicators Individual Balance: Leverage not higher than 1.2 times. Consolidate Balance: Leverage not higher than 1.4 times. b) Insurances for assets of the company and its subsidiaries. c) The operations for which art. 44 and 89 of law 18,046 refer to must be carried out according to the conditions that these establish. d) Other minor restrictions related with the bond issue contract. As of June 30, 2004 and 2003 Cristalerias de Chile S.A. complies with 100% of the restrictions imposed by the bonds creditors. OTHER CONTINGENCIES As of the closing date of financial statements, management is not aware of any other contingencies that could affect the company. CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS - DIRECT GUARANTEES
BALANCES PENDING ASSETS PAYMENT AS OF COMMITTED CLOSING DATE OF RELEASE OF GUARANTEES --------------- FINANCIAL STATEMENTS -------------------------------------------- CREDITOR OF RELATION- TYPE OF BOOK --------------------- 06/30/ 06/30/ 06/30/ GUARANTEE DEBTOR NAME SHIP GUARANTEE TYPE VALUE 06/30/2004 06/30/2003 2005 ASSETS 2006 ASSETS 2007 ASSETS ------------- -------------- ---------- --------- ----- --------- ---------- ---------- ------- ------ ------- ------ ------- ------ EDIFICIO CRISTALERIAS COMMERCIAL TIME FLOOR 15,822 15,822 7,999 0 0 0 0 15,822 0 METROPOLIS DE CHILE S.A. DEPOSIT AGF BANCO RED TELEVISIVA COMMERCIAL MORTGAGE LAND 3,408,506 1,654,262 2,129,203 502,917 0 460,538 0 60,538 0 SANTANDER MEGAVISION CHILE SCOTIABANK RED TELEVISIVA COMMERCIAL PLEDGE TV 157,162 1,636,386 2,061,863 411,414 0 408,324 0 408,324 0 MEGAVISION EQUIP BANCO RED TELEVISIVA COMMERCIAL MORTGAGE TV 31,385 297,929 470,695 170,317 0 127,612 0 0 0 CREDITO E MEGAVISION EQUIP INVERSIONES SUNDRY RED TELEVISIVA COMMERCIAL ADVERTIS- - 0 13,253,340 13,816,414 0 0 0 0 0 0 CLIENTS MEGAVISION ING
CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS - INDIRECT GUARANTEES
BALANCES PENDING ASSETS PAYMENT AS OF DEBTOR COMMITTED CLOSING DATE OF RELEASE OF GUARANTEES ------------------------- ---------- FINANCIAL STATEMENTS -------------------------------------------- CREDITOR OF RELATION- TYPE OF BOOK --------------------- 06/30/ 06/30/ 06/30/ GUARANTEE NAME SHIP GUARANTEE TYPE VALUE 06/30/2004 06/30/2003 2005 ASSETS 2006 ASSETS 2007 ASSETS ----------------- -------------- ---------- --------- ---- ----- ---------- ---------- ------- ------ ------- ------ ------- ------ Societe des RAYEN CURA AFFILIATE SOLIDARY 0 0 1,832,545 2,835,765 733,018 0 733,018 0 366,509 0 Participations S.A.I.C. Financieres et Industrielles Envases CMF CRISTALERIAS AFFILIATE SOLIDARY 0 0 207,423 331,333 0 0 0 0 207,423 0 guarantee DE CHILE S.A. P.I.A.S
CRISTALERIAS DE CHILE S.A. NOTE 35: Trials Committed amount (approximately Court Cause Rol No. Origin Stage Th Ch$) ------- ------------- ------ ------------------------------- -------------- 12 3025-1997 Civil Given sentence in first verdict 100,000 in favor of Megavision 16 4822-1999 Civil Given sentence in first verdict 10,000 against Megavision 1 1242-2000 Labor First verdict pending 10,000 5 3468-2001 Labor First verdict pending 3,000 1 4391-2003 Labor First verdict 2,100 C. of 7643-2000 CNTV Verdict pending 900 Appeals 36. Guarantees obtained from third parties As of June 30, 2004 and 2003 the Parent Company and the subsidiary S.A. Vina Santa Rita have received guarantees from third parties that are shown below: 2004 2003 Concept ThCh$ ThCh$ --------------------------------------------------- --------- --------- Rental of Property Cafe Sur Andino (UF 260) 4,424 0 Rental of Property Banco Security 5,173 5,186 Rental of Property to Telecomunicaciones Cono Sur Ltda. (UF 130) 0 2,218 Rental of Property Office AGF Building (UF 365.9) 6,226 6,242 Rental of Property Office Metropolis (UF 189.2) 3,219 3,228 Sight drafts suppliers 1,674 1,684 Installation of Buin Tanks (Tersanoix S.A.) 0 157,127 Grape purchase (contracts) 928,011 1,061,681 Mortages (grape purchase) 138,523 0 C y CPO Constructora (Salon Andino Sta. Rita) 162,860 0 Purchase of vine stem cuttings and plants (Intelmaq) 0 36,856 Transporters Guarantee Check 42,000 0 Underground materials storehouse Buin Salfa Montajes 0 33,474 --------- --------- 1,292,110 1,307,696 ========= ========= 37. Local and Foreign Currency Charts are attached showing the foreign currency balance as of June 30, 2004 and 2003. -- Cristalerias de Chile S.A. -- -- NOTE 37: LOCAL AND FOREIGN CURRENCY - ASSETS Amount ---------------------- Items Currency 06-30-2004 06-30-2003 -------------------------------------- ------------------ ---------- ---------- Available funds Non-adjust. Ch$ 1,776,757 1,845,203 Other currencies 0 11,590 Dollars 507,374 702,002 Euros 38,068 4,837 Argentine Peso 12,036 24,844 Time deposits Dollars 0 11,046,647 Non-adjust Ch$ 5,353,974 1,105,088 Marketable Securities Adjustable Ch$ 4,187,786 4,183,939 Dollars 34,310,339 63,534,899 Sales receivable Non-adjust Ch$ 31,002,822 25,604,815 Dollars 4,004,413 4,523,946 Euros 2,775,176 3,013,788 Other currencies 2,808,254 1,860,252 Argentine Peso 328,784 237,887 Documents Receivable Non-adjust. Ch$ 4,752,368 4,522,443 Argentine Peso 13,620 18,685 Sundry Debtors Euros 0 1,844 Non-adjust. Ch$ 2,201,758 785,656 Adjustable Ch$ 108,547 93,486 Dollars 672,560 657,154 Argentine Peso 30,187 221,268 Documentos and Accts. Receivable Dollars 447,698 0 Non-adjust. Ch$ 3,134,306 560,059 Adjustable Ch$ 109,701 15,822 Inventory Adjustable Ch$ 43,194,598 38,645,382 Dollars 2,898,907 5,696,404 Argentine Peso 701,782 700,021 Taxes Receivable Argentine Peso 148,675 19,032 Non-adjust. Ch$ 41,871 1,306,305 Adjustable Ch$ 1,289,987 696,695 Dollars 0 27,011 Prepaid expenses Adjustable Ch$ 786,123 1,104,642 Non-adjust. Ch$ 876,359 283,441 Dollars 322,648 363,627 Argentine Peso 0 27,373 Deferred Taxes Non-adjust. Ch$ 829,545 726,850 Adjustable Ch$ 911,489 253,273 Other Current Assets Non-adjust. Ch$ 10,415,727 5,963,131 Adjustable Ch$ 634,012 1,345,974 Dollars 261,775 3,386,464 Available funds Adjustable Ch$ 3,036 0 Time Deposit Adjustable Ch$ 30,487 0 Marketable Securities Euros 29,132,370 0 Non-adjust. Ch$ 176,393 0 Inventory Non-adjust. Ch$ 423,301 0 FIXED ASSETS Adjustable Ch$ 135,583,958 140,831,612 Investments in related companies Adjustable Ch$ 87,808,495 93,491,493 Investments in other companies Adjustable Ch$ 788,803 831,373 Negative Goodwill Adjustable Ch$ 4,622,147 4,213,759 Dollars 4,373,151 5,150,694 Long-term debtors Adjustable Ch$ 140,800 173,463 Documents receivable in rel.companies Non-adjust. Ch$ 855,171 2,883 Intangibles Adjustable Ch$ 11,913,536 11,874,078 Amortization Adjustable Ch$ -1,325,968 -1,109,319 Other Adjustable Ch$ 2,971,838 4,469,809 Non-adjust. Ch$ 999,814 496,565 Dollars 9,210,430 10,366,195 Argentine Peso 581,434 0 Long-term debtors Dollars 63,630 0 Documents receivable in rel.companies Adjustable Ch$ 251,385 0 Investments in related companies Dollars 12,955,478 13,724,552 Total Assets Non-adjust. Ch$ 62,840,166 43,202,439 Other currencies 2,808,254 1,871,842 Dollars 70,028,403 119,179,595 Euros 31,945,614 3,020,469 Argentine Pesos 1,816,518 1,249,110 Adjustable Ch$ 294,010,760 301,115,481 Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - CURRENT LIABILITIES
Up to 90 days 90 Days to 1 Year ----------------------------------- ----------------------------------- 06.30.2004 06.30.2003 06.30.2004 06.30.2003 ----------------- ----------------- ----------------- ----------------- Avg. Avg. Avg. Avg. Annual Annual Annual Annual Amount Int. Amount Int. Amount Int. Amount Int. ITEM Currency Thou Ch$ Rate Thou Ch$ Rate Thou Ch$ Rate Thou Ch$ Rate --------------------------------- ----------------- ---------- ------ ---------- ------ ---------- ------ ---------- ------ Current Liabilities Short-term obligations with banks Adjust. Ch$ 0 - 0 - 0 - 0 - and financial institutions Argentine Peso 0 - 19,951 2.370 6,968 2.48 0 - Other currencies 0 - 0 - 0 - 0 - Long-term obligations with banks Other currencies 316,169 2.88 326,448 5.390 892,069 2.88 1,081,792 5.39 and financial institutions Dollars 233,400 1.72 260,323 2.20 987,214 1.95 1,946,365 1.81 Non-adjust. Ch$ 0 - 0 - 265,573 4.94 267,166 4.94 Dollars 139,500 2.05 156,829 2.113 0 - 0 - Adjust. Ch$ 0 - 0 - 1,190 7.00 1,206 7.00 Dollars 2,157 10.42 31,914 11.14 70,932 11.07 208,360 10.99 Obligations with the public Adjust. Ch$ 741,140 4.75 738,715 4.75 51,507 6.29 51,647 6.06 Obligations with the public Adjust. Ch$ 947,824 5.80 944,722 5.80 0 - 0 - Dividends payable Non-adjust. Ch$ 652,088 - 510,759 - 0 - 0 - Accounts payable Dollars 344,429 - 1,018,180 - 184,554 - 1,793,269 - Non-adjust. Ch$ 15,330,404 - 15,985,851 - 31,546 - 0 - Other currencies 5,920 - 3,493 - 0 - 0 - Euros 19,707 - 16,221 - 0 - 0 - Argentine Peso 198,055 - 135,631 - 0 - 0 - Documents Payable Adjust. Ch$ 0 - 0 - 0 - 47,953 - Dollars 2,905,546 - 2,990,306 - 10,630 - 294,699 - Argentine Peso 48,486 - 54,017 - 0 - 0 - Euros 215,111 - 106,418 - 0 - 0 - Other currencies 4,269 - 556,203 - 0 - 0 - Sundry Creditors Non-adjust. Ch$ 277,800 - 280,025 - 0 - 0 - Dollars 613,151 - 2,266,588 - 0 - 0 - Adjust. Ch$ 238 - 295 - 0 - 0 - Docts and accts payable to rel co. Adjust. Ch$ 1,761 - 3,549 - 0 - 15,822 - Non-adjust. Ch$ 813,161 - 460,068 - 0 - 0 - Argentine Peso 0 - 266,464 - 0 - 0 - Dollars 289,792 - 0 - 0 - 0 - Provisions Adjust. Ch$ 376,567 - 317,019 - 185,502 - 183,430 - Non-adjust. Ch$ 11,762,814 - 9,224,782 - 225,534 - 188,402 - Dollars 1,177,895 - 1,222,852 - 1,997,982 - 0 - Argentine Peso 90,197 - 39,582 - 0 - 0 - Euros 726,836 - 398,799 - 0 - 0 - Other currencies 702,084 - 470,847 - 0 - 0 - Withholdings Non-adjust. Ch$ 2,282,069 - 1,433,397 - 0 - 0 - Dollars 0 - 19,068 - 0 - 0 - Argentine Peso 11,520 19,419 0 0 - Prepaid income Non-adjust. Ch$ 4,136,733 3,992,961 0 0 Other Current Liabilities Adjust. Ch$ 0 4,995,904 0 0 Dollars 1,920,957 909,776 0 39,967 Total Current Liabilities - Argentine Pesos 348,258 - 535,064 - 6,968 - 0 - - Other currencies 1,028,442 - 1,356,991 - 892,069 - 1,081,792 - - Dollars 7,626,827 - 8,875,836 - 3,251,312 - 4,282,660 - - Non-adjust Ch$ 35,255,069 - 31,887,843 - 522,653 - 455,568 - - Adjust. Ch$ 2,067,530 - 7,000,204 - 238,199 - 300,058 - - Euros 961,654 - 521,438 - 0 - 0 -
Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - LONG-TERM LIABILITIES CURRENT PERIOD 06-30-2004
1-3 Years 3-5 years 5-10 Years More than 10 years -------------------- -------------------- -------------------- ------------------- Average Average Average Average Amount Interest Amount Interest Amount Interest Amount Interest ITEM Currency Thou Ch$ Rate Thou Ch$ Rate Thou Ch$ Rate Thou Ch$ Rate --------------------------- ---------------- ---------- -------- ---------- -------- ---------- -------- ---------- ------- Obligations with Banks and Dollars 7,953,750 2.05 23,861,250 2.05 0 - 0 - Financial Institutions Argentine Peso 48,087 2.48 10,506 2.48 0 - 0 - Non-adjust. Ch$ 398,360 4.94 0 - 0 - 0 - Adjustable Ch$ 2,872,248 2.88 122,773 2.88 0 - 0 - Obligations with the public Adjustable Ch$ 3,403,490 6.29 0 - 34,029,900 4.75 17,014,450 6.29 Adjustable Ch$ 0 - 0 - 0 - 35,731,395 5.80 Sundry creditors Dollars 123,743 12.25 0 - 0 - 0 - Adjustable Ch$ 38,781 - 0 - 0 - 0 - Dollars 20,930 11.02 3,991 6.07 0 - 0 - Adjustable Ch$ 1,190 7.00 0 - 0 - 0 - Dollars 16,966 - 0 - 0 - 0 - Long-term provisions Dollars 2,196,952 - 0 - 0 - 0 - Adjustable Ch$ 4,220,678 - 0 - 0 - 0 - Deferred taxes Adjustable Ch$ 2,773,948 - 0 - 0 - 0 - Non-adjust. Ch$ 1,878,079 - 0 - 0 - 0 - Total long-term liabilities - Dollars 10,312,071 - 23,865,241 - 0 - 0 - - Argentine Peso 48,087 - 10,506 - 0 - 0 - - Non-adjust. Ch$ 2,276,439 - 0 - 0 - 0 - - Adjustable Ch$ 13,310,335 - 122,773 - 34,029,900 - 52,745,845 -
Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - LONG-TERM LIABILITIES PREVIOUS PERIOD 06-30-2003
1-3 Years 3-5 years 5-10 Years More than 10 years -------------------- -------------------- -------------------- ------------------- Average Average Average Average Amount Interest Amount Interest Amount Interest Amount Interest ITEM Currency Thou Ch$ Rate Thou Ch$ Rate Thou Ch$ Rate Thou Ch$ Rate --------------------------- ---------------- ---------- -------- ---------- -------- ---------- -------- ---------- ------- Obligations with banks Dollars 8,791,434 2.113 26,374,302 2.113 0 - 0 - and financial institutions Dollars 73,391 2.58 0 - 0 - 0 - Argentine Peso 1,348,302 1.94 0 - 0 - 0 - Non-adjust. Ch$ 534,333 4.94 133,583 4.94 0 - 0 - Adjustable Ch$ 4,143,357 5.39 640,337 5.49 0 - 0 - Obligations with public Adjustable Ch$ 3,412,286 6.25 0 - 34,122,856 4.75 17,061,428 6.25 Adjustable Ch$ 0 - 0 - 0 - 35,828,999 5.80 Long-term creditors Adjustable Ch$ 45,111 - 0 - 0 - 0 - Dollars 141,433 12.25 0 - 0 - 0 - Dollars 95,376 11.28 4,574 9.42 0 - 0 - Adjustable Ch$ 2,378 7.00 0 - 0 - 0 - Non-adjust. Ch$ 63,472 - 0 - 0 - 0 - Long-Term provisions Dollars 3,441,104 - 0 - 0 - 0 - Adjustable Ch$ 4,137,197 - 0 - 0 - 0 - Deferred taxes Adjustable Ch$ 2,473,049 - 0 - 0 - 0 - Non-adjust. Ch$ 2,036,947 - 0 - 0 - 0 - Total long-term liabilities - Dollars 12,542,738 - 26,378,876 - 0 - 0 - - Argentine Peso 1,348,302 - 0 - 0 - 0 - Non-adjust. Ch$ 2,634,752 - 133,583 - 0 - 0 - - Adjustable Ch$ 14,213,378 - 640,337 - 34,122,856 - 52,890,427 -
38. Penalties As of June 30, 2004 and 2003 the SVS and other administrative authorities have not imposed any penalties to the company, its directors or its management. 39. Subsequent Events On June 22, 2004, the Parent Company agreed to pay interim dividend No. 158 of Ch$ 20 per share over 64,000,000 shares (Th Ch$ 1,280,000), which was made effective on July 15, 2004. At the closing date of financial statements and the date of issue of the present report there were no subsequent events that could significantly affect the economic and financial situation of the Company. 40. COMPANIES UNDER SPECIAL NORM Not applicable. 41. ENVIRONMENT In line with its permanent commitment with environment preservation the Company has effected as of June 2004 payments for advisories for this concept of Th Ch$ 2,644, that have been charged to results of the fiscal year 2004. During fiscal year 2003 the Parent Company carried out investments of ThCh$ 206,705, which corresponded to the purchase of NOX emission treatment equipment installed at new Furnace B. The subsidiary S.A. Vina Santa Rita has invested Th Ch$ 40,286 during the period January - June 2004 (Th Ch$ 7,961 in 2003) in order to comply with ordinances and laws related to Industrial Process and Installations. 42. STOCK TRANSACTIONS As of June 30, 2004 and 2003 the following stock transactions were carried out by members of the board, majority stockholders and related individuals: TRANSACTIONS OF INDIVIDUALS RELATED TO MEMBERS OF THE BOARD 2004 2003 -------------- -------------- NAME Initial Purchase Sale Purchase Sale ----------------------------- ------- -------- ---- -------- ---- Asesorias Portofino Ltda. BSG 21,000 0 0 0 Inmobiliaria Villarrica Ltda. RCV 181,669 0 0 0 Vial de Claro Maria Luisa RCV 650 0 0 0 o BSG related with Director Mr. Baltazar Sanchez o RCV related with the President Mr. Ricardo Claro TRANSACTIONS OF DIRECTORS, MANAGEMENT AND ACCOUNT INSPECTORS None. TRANSACTIONS OF MAJORITY SHAREHOLDERS None. 43. DISTRIBUTION OF SHAREHOLDERS The distribution of stockholders as of June 30, 2004 and 2003 is the following: % of No. of Shareholding Shareholders ------------------- ------------------ TYPE OF SHAREHOLDER 2004 2003 2004 2003 ---------------------------- --------- -------- -------- -------- 10% or more shareholding 34.03 34.03 1 1 Less than 10% shareholding with investment equal to or higher than 200 UF 65.84 65.83 265 270 Less than 10% shareholding with investment lower than 200 UF 0.13 0.14 762 787 TOTAL 100.00 100.00 1,028 1,058 CONTROLLER OF THE COMPANY 52.14 52.14 3 3 44. BOARD OF DIRECTORS REMUNERATIONS As of June 30, 2004 and 2003 Th Ch$ 343,910 and Th Ch$ 901,660 were paid and provisioned by the Parent Company and the subsidiary S.A. Vina Santa Rita, respectively, according to the following detail: 2004 2003 ThCh$ ThCh$ --------- --------- Participation of previous fiscal year profits 336,073 896,098 Compensations for assistance to sessions 5,576 4,212 Board Committee compensation 2,261 1,350 - - ------- ------- TOTAL 343,910 901,660 ======= ======= On the other hand, Th Ch$ 356,078 and Th Ch$ 166,756 respectively have been provisioned for participation of year 2004 and 2003. 45. TIME DEPOSITS As of June 30, 2004 and 2003 the company presents the following information: 2004 2003 INSTITUTION CURRENCY Th$ Th$ ------------------------------ ---------- ---------- ---------- Banco Santander New York US$ 0 1,091,155 Banco Deutsche Bank Chile S.A. US$ 0 2,397,748 Banco de Santander US$ 0 4,510,021 Banco Chile US$ 0 2,446,112 Banco de Credito e Inversiones US$ 0 601,611 Banco de Santander $ 5,004,267 433,451 Banco de Chile $ 380,194 302,806 BankBoston $ 0 368,831 - - --------- ---------- TOTAL 5,384,461 12,151,735 ========= ========== RELEVANT EVENTS On June 23, 2004, the SVS was informed that in the previous day, the Board of the Company had approved a US$ 210 million investment plan, in order to duplicate the production of glass containers in a 10 year period. The first stage of the development plan considers the construction of a new plant, equipped with 4 new fabrication lines and a furnace with a production capacity of 360 tons per day, which supposes a USS 110 million investment and that would be financed by a combination of internal resources and credits. Start of operations is scheduled for 2006 and will allow to increase the present capacity of production by 35%. The following stages of expansion imply adding 7 fabrication lines and 2 furnaces with production capacities over 400 tons per day, which will be materialized in successive stages, in line with market needs. CRISTALERIAS DE CHILE S.A. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2004 1.- CONSOLIDATED FINANCIAL INDICATORS 06-30-2004 06-30-2003 12-31-2003 ---------- ---------- ---------- LIQUIDITY Current liquidity times 3.67 3.29 4.44 Acid ratio times 2.67 2.40 3.40 INDEBTEDNESS Leverage ratio times 0.80 0.87 0.75 Short-term debt % 27.63 27.98 21.59 Long-term debt % 72.37 72.02 78.41 Interest expenses Coverage times 4.15 2.16 2.03 ACTIVITY Total assets MM Ch$ 463,450 469,639 441,449 Investments MM Ch$ 6,454 18,083 27,805 Disposal of property MM Ch$ 69 287 372 Inventory turnover Times n.a. n.a. n.a. Inventory permanence Days n.a. n.a. n.a. RESULTS Sales MM Ch$ 80,299 76,938 171,301 Cost of sales MM Ch$ 51,375 49,280 106,531 Operating income MM Ch$ 15,734 15,613 37,943 Interest expenses MM Ch$ 3,338 3,498 6,884 Non-operating results MM Ch$ (4,239) (9,885) (28,251) E.B.I.T.D.A. MM Ch$ 21,905 14,934 29,388 After-tax income MM Ch$ 7,125 2,958 6,478 PROFITABILITY Return on equity % 3.1 1.3 2.8 Return on assets % 1.5 0.6 1.5 Return on operating assets % 6.4 6.6 16.4 Profit per share $ 111.3 46.2 101.2 Return on dividends % 1.4 2.6 2.4 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: Profit before taxes and interest divided by financial expenses. Inventory turnover: Ratio between sales cost of the period and average inventory. Inventory permanence: Ratio between average inventory and sales cost of the period, multiplied by 360 days E.B.I.T.D.A. Earnings before interest, taxes, depreciation, 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. The main trends observed in the 2004 fiscal year indicators are: LIQUIDITY INDICES An increase in the index can be observed with respect to June 2003 in the liquidity index as a consequence the payment of current portion of the long-term bank debt and an increase sales debtors due to higher sales. INDEBTEDNESS INDICES Indebtedness index shows a decrease with respect to June 2003 due to a decrease of liabilities. The distribution of the short-term and long-term debt remains stable. The interest expenses coverage ratio shows an increase with respect to the previous year, due to higher net income during the first half of 2004. PROFITABILITY INDICES Equity and assets profitability indices show an increase with respect to first half 2003, due to a higher net income during the present fiscal year. In spite of the increase of the operating income of the profitability indices of the operating assets decreases slightly, due to an increase of these assets. Income per share shows an increase with respect to the previous period due to the higher income during the present semester with respect to the first semester of year 2003. On the other hand, return of dividends shows a decrease with respect to the previous year, due to lower dividends distributed during the last 12 months. 2. DIFFERENCE BETWEEN BOOK VALUE AND MARKET VALUE OF MAIN ASSETS. The financial statements as of June 30, 2004 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 June 30, 2004 there were financial investments in stocks recorded in the accounting according to their purchase price at Ch$ 4,188 million whose market value on the same date was Ch$ 5,410 million. 3. RESULTS FOR THE PERIOD 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$ 80,299 million, 4.4% over 2003. Higher sales result fundamentally from higher sales at Santa Rita (6.7%) and CIECSA (10.3%), partially compensated by lower sales in the glass container business (-0.7%). Consolidated operating income reached Ch$ 15,734 million, compared with Ch$ 15,613 million in 2003, of which the glass container business contributed Ch$ 10,135 million (Ch$ 9,685 million in 2003), Santa Rita Ch$ 4,149 million (Ch$ 4,997 million in 2003) and CIECSA Ch$ 1,417 million (Ch$ 808 million in 2003). The Company's net income was Ch$ 7,125 million, compared with Ch$ 2,958 million in 2003. This result is mainly explained by a better non-operting result. During 2004 the Company registered a consolidated non-operting loss of Ch$ 4,239 million, compared with a Ch$ 9,885 million non-operating loss in 2003. The former is mainly explained by an income from exchange differences of Ch$ 2,418 million in 2004 vs. a Ch$ 4,464 million loss in 2003; partially compensated by a higher net loss from subsidiaries that do not consolidate, that passed from Ch$ 1,920 million in 2003 to Ch$ 3,166 million in 2004, fundamentally due to lower results at Metropolis-Intercom and Envases CMF. The net loss from subsidiaries includes a Ch$ 2,088 million charge in 2004 (Ch$ 2,095 million in 2003) 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$ 33,298 million, compared to Ch$ 33,524 million in the previous fiscal year. Volumes sold increased by 7.4%, reaching 120,393 tons., mainly due to higher sales of bottles for wine, the returnable beer and food markets; partially compensated by lower sales to the non-returnable beer, liquor and soft drinks markets. Average prices declined by 7.5%, mainly explained by the strong decrease in the US$/Peso exchange rate that passed from Ch$ 723,66 per to dollar on average during the first semester of 2003 to Ch$ 608,22 per dollar on average during the first semester of 2004. Operating income reached Ch$ 10,135 million, 4.6% over 2003. Non-operating result was a Ch$ 1,449 million loss, which compares to a Ch$ 5,986 million loss in 2003. The former is mainly explained by an income from exchange differences of Ch$ 1,391 million in 2004, compared to a Ch$ 3,617 million loss in 2003. During 2004 a higher loss in Cristalchile Comunicaciones (owner of 50% of Metropolis -Intercom) is registered and a lower income in Envases CMF. The former was partially compensated by higher income in CIECSA and Vina Santa Rita. 3c. Result in Subsidiaries Santa Rita's net income reached Ch$ 3,553 million, 23.3% over 2003. In the local market, prices increased by 10.0% in real terms, while volumes increased by 9.5%. Sales in this market increased by 20.4% reaching Ch$ 17,383 million. During the period, export volume sales increased by 6.6%, representsenting 50.2% of total revenues, in the amount of US$ 30.0 million (US$ 26.8 million in 2003). Operating income reached Ch$4,149 million compared with Ch$ 4,997 million in 2003, fundamentally due to higher costs of musts and a decrease of the Peso/US$ exchange rate that affects export returns. Santa Rita's average price in dollars per case for the export market reached US$ 34.1 (US$ 32.4 in 2003), while the average price for the industry was US$ 24.3 per case (US$ 23.7 in 2003). Santa Rita had a Ch$ 364 million non-operating income, compared to a Ch$ 1,385 million loss in 2003, mainly due to a income from exchange differences of Ch$ 965 million compared with Ch$ 740 million loss in 2003. Red Televisiva Megavision, CIECSA's main subsidiary, registered a Ch$1,125 million operating income, compared with an Ch$ 814 million operating income in 2003. MEGA reached the first place in audience with an audience viewership share of 25.4% during the period(1) (22.7% in 2003). Net sales increased by 8.3% reaching Ch$ 12,341 million, due to an increase in live programming, which has resulted in higher audience levels. MEGA had an Ch$ 811 million net income (Ch$ 210 million income in 2003). CIECSA's net income was Ch$ 927 million, compared to Ch$ 75 million income the previous year. Envases CMF S.A. registered a Ch$ 298 million net income in 2004 compared with a Ch$1,226 million net income in 2003. This is mainly explained by the non-operating result, which during 2003 registered a net income from price level restatement and exchange differences of Ch$ 435 million, compared to a Ch$ 205 million loss during the present period. Sales reached Ch$ 14,941 million during the period compared with Ch$ 16,375 million in 2003. Volume sales decreased by 4.1%, reaching 10,557 tons, due to a decline in pre forms exports and lower sales of one-way formats; while average prices decreased by 5.1% influenced by the decrease of the Peso/US$ rate of exchange. As a result the aforementioned operating income reached Ch$ 1,191 million, compared with Ch$ 1,615 million in 2003. In the cable TV area, 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 Metropolis-Intercom S.A. During 2004, Metropolis-Intercom S.A. registered sales of Ch$ 22,186 million, compared with Ch$ 22,408 million in 2003. Metropolis-Intercom had a net loss of Ch$ 5,962 million, compared with a net loss of Ch$ 4,845 million in 2003. This lower result is mainly due to a one-time Ch$ 775 million charge, that affects the non-operating result of the company. Metropolis-Intercom's EBITDA reached Ch$3,192 million during the period (Ch$ 2,944 million in 2003). The latter includes a depreciation charge of Ch$ 7,338 million (Ch$ 6,672 million in 2003) corresponding to the HFC network adquired in July 2000. The company ended the period with 223,820 basic subscribers (237,324 in 2003), 28,970 premium service subscribers (33,440 in 2003), 38,503 broadband internet subscribers (31,5% over 2003) and 9,255 IP telephony subscribers. As a result of the above mentioned and a negative goodwill amortization charge through Cordillera Comunicaciones of Ch$ 2,088 million during the year (Ch$ 2,095 million in 2003), Cristalchile Comunicaciones recorded a net loss of Ch$ 4,041 million (net loss of Ch$3,468 million in 2003). INVESTMENTS On June 23, 2004, Cristalerias de Chile announced that it will invest US$210 million in a development plan that will allow it to duplicate its glass production installed capacity -from 300 thousand tons per year to 600 thousand tons per year- and adequately attend the increasing demand of its customers. The initiative, that would be materialized in a term of up to 10 years, was approved unanimously by the Board and contemplates materialization in successive stages, according to market needs. -------- (1) Measured between 6:30 A.M. and 1:30 A.M. (i.e:19 hours a day) from Monday through Sunday. The first stage of the development plan considers the construction of a new plant, equipped with 4 new fabrication lines and a furnace with production capacity of 360 tons per day, that supposes USS 110 million investment and that would be financed by a combination of internal resources and credits. Start up of operations is scheduled for 2006 and will allow to increase the present production capacity by 35%. Following stages of the expansion imply adding 7 fabrication lines and 2 furnaces with production capacities over 400 tons per day. 4. CASH FLOW STATEMENT As of June 30, 2004 a total net positive flow of Ch$ 5,987 million was generated, which is explained by a positive flow generated by operating activities of Ch$ 21,112 million which were partially offset by a negative financing flow of Ch$ 3,929 million, and a negative flow of investment activities of Ch$11,196 million. The operating flow corresponds basically to the collection of sales and financial interests and other income received that were reduced in part by payment to suppliers, taxes and interests. The negative financing flow can be explained mainly by dividends paid of Ch$ 3,135 million and loans payments for Ch$ 648 million. The negative investment flow is mainly explained by the incorporation of fixed assets of Ch$ 7,253 million, and loans to related companies for Ch$ 3,804 million. The foregoing results in an increase in the final balance of cash and cash equivalent, once included the inflationary effect, which passed from Ch$ 76,214 million as of December 31, 2003 to Ch$ 82,283 million as of June 30, 2004. According to the current regulations of the SVS and the Association of Accountants of Chile A.G., term deposits and agreements with due date less than 90 days have been considered cash and cash equivalent. 5. INTEREST RATES AND EXCHANGE RATE RISK ANALYSIS 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 June 30, 2004 Short-Term and Long-Term bank liabilities and obligations with the public totaled Ch$ 130,028 million, which represents 28% of the Company's consolidated assets. Bank loans totaled Ch$ 38,108 million, of which Ch$34,449 million correspond to credits in foreign currency agreed at variable rates related to the six-month Libor and 0.8% percentages point per year, Ch$ 2,995 million correspond to credits in pesos adjustable in unidades de fomento (indexed currency units) are exposed to changes in the six-month TAB rate and Ch$ 664 million correspond to credits in pesos at an annual rate of 4.94%. Of total obligations with the public of Ch$ 91,920, Ch$ 71,450 million correspond to bonds issued by the Company and Ch$ 20,470 millon to bonds issued by the subsidiary Vina Santa Rita, both a fixed interest rate. As of June 30, 2004, the Company had funds available of Ch$ 79,946 million invested in instruments at different tenors like term deposits, bonds, fixed-rate mutual funds and resale agreements. Such amount does not includes bonds for a total of Ch$8,539 million with maturity on September 15, 2005 and investments in shares for Ch$ 4,188 million. Currently the Company and its subsidiaries do not use secondary financial instruments 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 foreign currency for the equivalent to US$ 74.1 million, which represents 10.2% of its consolidated assets, and include a long-term syndicated loan of US$ 50 million in Cristalchile. As of June 30 the Company and its Subsidiaries maintain investments in Dollars of US$ 68.3 million; in time deposits, bonds and fixed rate mutual funds. In addition it also has investments in EUROS 37.5 million in fixed rate and fixed rent instruments. Likewise it also has Dollar purchase future contracts of US$42.6 million which are more than compensated by sale future contracts of US$ 81.6 million. On the other hand, aproximately 37.5% of consolidated income is indexed to the exchange rate variation. At the same time, the consolidated cost in foreign currency represents aproximately 29.6% of total costs. SIGNATURE 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: /s/ Benito Bustamante C. ----------------------------------- Benito Bustamante C. Controller Date: October 20, 2004