-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WC/S62U2FnuyH9gUdwrCgbQR3bZwTECtECFyUojPrgkHqP9Bc1yBP3HvrtXcKVP6 p3y8Jsf6bQ7xvsE4+8/NVA== 0000893750-05-000030.txt : 20050119 0000893750-05-000030.hdr.sgml : 20050119 20050119145149 ACCESSION NUMBER: 0000893750-05-000030 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20050119 FILED AS OF DATE: 20050119 DATE AS OF CHANGE: 20050119 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GLASSWORKS OF CHILE CENTRAL INDEX KEY: 0000917335 STANDARD INDUSTRIAL CLASSIFICATION: GLASS CONTAINERS [3221] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12752 FILM NUMBER: 05536010 BUSINESS ADDRESS: STREET 1: HENDAYA 60 OF 201 LOS CONDES CITY: SANTIAGO STATE: F3 ZIP: 00000 BUSINESS PHONE: 0115622468855 MAIL ADDRESS: STREET 1: HENDAYA 60 OF 201 LOS CONDES CITY: SANTIAGO STATE: F3 ZIP: 00000 6-K 1 fecu_consolidated.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 January 19, 2005 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] 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 9/30/2004 1.00.01.30 Type of Currency Chilean Pesos 1.00.01.40 Type of Financial Statements Individual ASSETS 2.0 FINANCIAL STATEMENTS 2.01 BALANCE SHEET 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance: Individual
ASSETS NOTE No. 09-30-04 09-30-03 - ------------------------------------------------------------ -------- ----------- ---------- 5.11.00.00 TOTAL CURRENT ASSETS 118,942,309 99,010,783 5.11.10.10 Cash 878,177 1,293,366 5.11.10.20 Time deposits 41 5,000,900 5,345,527 5.11.10.30 Marketable securities (net) 4 61,712,215 56,853,859 5.11.10.40 Debtors from sales (net) 5 22,571,956 19,907,104 5.11.10.50 Documents receivable (net) 5 988,515 1,866,117 5.11.10.60 Sundry debtors (net) 5 832,056 845,053 5.11.10.70 Doc. & accts receivable related Co. 6 5,022,190 2,390,646 5.11.10.80 Inventories (net) 7 7,307,287 5,750,535 5.11.10.90 Recoverable taxes 8 0 1,751,790 5.11.20.10 Prepaid expenses 168,151 208,996 5.11.20.20 Deferred taxes 8 702,681 379,198 5.11.20.30 Other current assets 10-11 13,758,181 2,418,592 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 77,683,404 80,092,520 5.12.10.00 Land 12 1,531,255 1,532,050 5.12.20.00 High rises & infrastructure 12 23,540,105 22,890,718 5.12.30.00 Machinery & equipment 12 107,665,497 104,375,105 5.12.40.00 Other fixed assets 12 11,953,761 7,686,427 5.12.50.00 Positive goodwill from technical revaluation of fixed assets 12 6,732,617 6,725,906 5.12.60.00 Depreciation (minus) 12 (73,739,831) (63,117,686) 5.13.00.00 TOTAL OTHER ASSETS 174,289,049 185,407,477 5.13.10.10 Investment in related companies 14 148,128,783 149,193,545 5.13.10.20 Investment in other companies 0 0 5.13.10.30 Negative goodwill 16 1,797,583 1,970,339 5.13.10.40 Positive goodwill (minus) 0 0 5.13.10.50 Long-term debtors 5 112,575 145,111 5.13.10.60 Doc. & accts receivable related Co. 6 21,292,513 21,675,448 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 2,957,595 12,423,034 5.13.20.10 Long-term leasing contracts (net) 0 0 5.10.00 TOTAL ASSETS 370,914,762 364,510,780
1 LIABILITIES 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance: Individual
LIABILITIES NOTE No. 09-30-04 09-30-03 - ------------------------------------------------------------ -------- ----------- ---------- 5.21.00.00 TOTAL CURRENT LIABILITIES 26,093,685 18,982,431 5.21.10.10 Short-term oblig. Banks & Fin. Inst. 0 0 5.21.10.20 Short-term portion - Long-term oblig. Banks & Financial Institutions 19 292,991 138,250 5.21.10.30 Obligations with the public (notes) 0 0 5.21.20.40 Short-term portion oblig with public 9,382,181 787,998 5.21.10.50 Long-term oblig. due within 1 year 0 0 5.21.10.60 Dividends payable 652,273 512,868 5.21.10.70 Accounts payable 2,291,268 2,521,597 5.21.10.80 Notes payable 2,613,646 2,096,218 5.21.10.90 Sundry creditors 383,845 1,025,162 5.21.20.10 Notes & accts payable related Co. 6 832,342 810,885 5.21.20.20 Provisions 23 7,806,558 5,441,149 5.21.20.30 Withholdings 1,015,459 1,529,309 5.21.20.40 Income tax 823,122 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 0 4,118,995 5.22.00.00 TOTAL LONG-TERM LIABILITIES 102,008,704 114,510,722 5.22.10.00 Oblig with Banks & Financial Inst. 21 30,445,000 33,577,276 5.22.20.00 Long-term oblig with public (bonds) 61,886,808 70,590,383 5.22.30.00 Long-term notes payable 0 0 5.22.40.00 Long-term sundry debtors 146,647 171,314 5.22.50.00 Long-term notes & accts. payable related companies 6 0 0 5.22.60.00 Long-term provisions 23 6,604,096 7,745,359 5.22.70.00 Long-term deferred taxes 8 2,926,153 2,426,390 5.22.80.00 Other long-term liabilities 0 0 5.23.00.00 MINORITY INTEREST 0 0 5.24.00.00 TOTAL EQUITY 242,812,373 231,017,627 5.24.10.00 Paid-in capital 27 65,396,749 65,785,245 5.24.20.00 Reserve capital revaluation 27 1,242,538 789,423 5.24.30.00 Premium in sale of own shares 27 28,403,990 28,376,447 5.24.40.00 Other reserves 27 6,677,095 8,242,181 5.24.50.00 Retained earnings (addition of codes 5.24.51.00 to 5.24.56.00) 27 141,092,001 127,824,331 5.24.51.00 Reserve future dividends 27 129,427,446 126,346,020 5.24.52.00 Accrued profits 27 0 0 5.24.53.00 Accrued losses (minus) 27 0 0 5.24.54.00 Profit (loss) for the year 27 14,237,355 2,454,646 5.24.55.00 Prov. dividends (minus) 27 (2,572,800) (976,335) 5.24.56.00 Accr. deficit dev. period 27 0 0 5.20.00.00 TOTAL LIABILITIES 370,914,762 364,510,780
2 INCOME STATEMENT 2.02 INCOME STATEMENT 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance: Individual
INCOME STATEMENT NOTE No. 09-30-04 09-30-03 - ------------------------------------------------------------------ -------- ----------- ---------- 5.31.11.00 OPERATING RESULTS 18,250,638 17,633,228 5.31.11.10 Gross Margin 22,969,583 21,611,109 5.31.11.11 Sales 55,125,736 55,405,249 5.31.11.12 Costs (minus) (32,156,153) (33,794,140) 5.31.11.20 Adm. & sales expenses (minus) (4,718,945) (3,977,881) 5.31.12.00 NON-OPERATING RESULTS (1,144,215) (14,276,628) 5.31.12.10 Interest income 1,557,365 2,037,296 5.31.12.20 Income from invmnts Rel. Co. 14 6,059,364 3,722,990 5.31.12.30 Other non-operating income 28 425,365 292,827 5.31.12.40 LOSS invmnts Rel. Co.(-) (5,565,845) (5,335,051) 5.31.12.50 Amortization neg.goodwill (-) 16 (131,001) (130,874) 5.31.12.60 Interest expenses (minus) (3,631,937) (3,727,123) 5.31.12.70 Other non-operat expenses (-) 28 (724,138) (637,254) 5.31.12.80 Price level restatement 29 (398,945) (439,377) 5.31.12.90 Exchange differences 30 1,265,557 (10,060,062) 5.31.10.00 RESULTS BEFORE INCOME TAX AND EXTRAORDINARY ITEMS 17,106,423 3,356,600 5.31.20.00 INCOME TAX 8 (2,869,068) (901,954) 5.31.30.00 EXTRAORDINARY ITEMS 0 0 5.31.40.00 PROFIT (LOSS) BEFORE MINORITY INTEREST 14,237,355 2,454,646 5.31.50.00 MINORITY INTEREST 0 0 5.31.00.00 NET INCOME (LOSS) 14,237,355 2,454,646 5.32.00.00 Amortization of positive goodwill 16 0 0 5.30.00.00 INCOME (LOSS) FOR THE YEAR 14,237,355 2,454,646
3 DIRECT CASH FLOW STATEMENT 2.03 CASH FLOW STATEMENT 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance: Individual
DIRECT CASH FLOW STATEMENT NOTE No. 09-30-04 09-30-03 - ----------------------------------------------------------------------- -------- ----------- ---------- 5.41.11.00 NET FLOW FROM OP. ACT. 23,687,919 18,771,098 5.41.11.10 Collection from sales debtors 66,465,614 68,217,523 5.41.11.20 Interests received 2,678,287 2,670,297 5.41.11.30 Dividends & other distributions funds received 1,760,843 1,732,515 5.41.11.40 Other income 1,273,908 912,659 5.41.11.50 Payments to suppliers & personnel (-) (37,761,239) (40,442,522) 5.41.11.60 Interest paid (minus) (4,092,539) (4,396,967) 5.41.11.70 Income tax paid (minus) (1,440,837) (2,253,425) 5.41.11.80 Other expenses 33 (305,798) (5,389,448) 5.41.11.90 V.A.T. & other taxes (4,890,320) (2,279,534) 5.41.12.00 CASH FLOW FINANCING ACTIVITIES (3,891,673) (7,832,786) 5.41.12.05 Proceeds from share issue 0 0 5.41.12.10 Loans received 0 0 5.41.12.15 Obligations with the public 0 0 5.41.12.20 Secured loans from related companies 0 45,621 5.41.12.25 Other loans from related companies 0 0 5.41.12.30 Other financing resources 0 0 5.41.12.35 Dividends paid (minus) (3,891,673) (7,878,407) 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 public (-) 0 0 5.41.12.55 Repayment of secured loans from rel Co. (-) 0 0 5.41.12.60 Repayment other loans from related Co. (-) 0 0 5.41.12.65 Share issue payment (minus) 0 0 5.41.12.70 Payment of issue publ oblig (minus) 0 0 5.41.12.75 Other financing payments (minus) 33 0 0 5.41.13.00 CASH FLOW FROM INVESTING ACTIVITIES (6,897,405) (23,613,343) 5.41.13.05 Sale of fixed assets 49,469 111,443 5.41.13.10 Sale of permanent investments 0 0 5.41.13.15 Sale of other investments 33 5,115,961 313,172 5.41.13.20 Proceeds secured loans to related Comp. 1,025,615 3,097,144 5.41.13.25 Proceeds other loans to related companies 0 0 5.41.13.30 Other investment income 33 659,830 1,492,737 5.41.13.35 Incorporation of fixed assets (minus) (7,530,320) (18,156,591) 5.41.13.40 Capitalized interests payment (minus) 0 0 5.41.13.45 Permanent Investments (minus) (199) (4,086,905) 5.41.13.50 Investments in financial instruments (minus) 0 0 5.41.13.55 Other loans to related companies (minus) (3,936,873) (68,000) 5.41.13.60 Other loans to related companies (minus) (12,394) (7,639) 5.41.13.65 Other distrib of funds on invest activities (-) 33 (2,268,494) (6,308,704) 5.41.00.00 TOTAL NET CASH FLOW FOR THE PERIOD 12,898,841 (12,675,031) 5.42.20.00 EFFECT OF INFLATION ON CASH & CASH EQUIV. (1,369,038) (988,247) 5.41.00.00 NET CHANGE IN & CASH EQUIVALENT 11,529,803 (13,663,278) 5.42.00.00 CASH & CASH EQUI AT BEGINNING OF PERIOD 61,139,913 75,327,604 5.43.00.00 CASH & CASH EQUIV BALANCE AT END OF PERIOD 72,669,716 61,664,326
4 INCOME STATEMENT RECONCILIATION CONCILIATION BETWEEN CASH FLOW GENERATED BY THE OPERATION'S ACTIVITIES AND THE INCOME STATEMENT FOR THE YEAR 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance: Individual
CASH FLOW - INCOME STATEMENT RECONCILIATION NOTE No. 09-30-04 09-30-03 - ------------------------------------------------------------ -------- ----------- ---------- 5.50.10.00 Profit (Loss) for the year 14,237,355 2,454,646 5.50.20.00 Profit in sale of assets (8,676) (4,599) 5.50.20.10 (Profit) Loss in sale of fixed assets (8,676) (4,599) 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) 12,033,837 17,971,091 5.50.30.05 Depreciation for the year 12 7,984,244 7,413,630 5.50.30.10 Amortization of intangibles 636,720 659,414 5.50.30.15 Write-offs and provisions 2,157,926 747,287 5.50.30.20 Accrued earnings from investments in related companies (minus) 14 (6,059,364) (3,722,990) 5.50.30.25 Accrued losses from investments in related Co. 14 5,565,845 5,335,051 5.50.30.30 Negative goodwill amortization 16 131,001 130,874 5.50.30.35 Positive goodwill amortization (minus) 0 0 5.50.30.40 Price level restatement 29 398,945 439,377 5.50.30.45 Net exchange difference 30 (1,265,557) (10,060,062) 5.50.30.50 Other non-cash credits to results (minus) (25,156) (25,131) 5.50.30.55 Other non-cash debits to results 2,509,233 (3,066,483) 5.50.40.00 Changes in Assets affecting cash flow (incr) decreases (5,371,394) (1,199,132) 5.50.40.10 Debtors from sales (3,355,449) (958,289) 5.50.40.20 Inventory (2,468,302) (259,443) 5.50.40.30 Other assets 452,357 18,600 5.50.50.00 Changes in liabilities affecting cash flow increases (decr) 2,796,797 (450,908) 5.50.50.10 Accounts payable related to results for the year 85,452 7,832 5.50.50.20 Interests payable (780,775) (1,006,292) 5.50.50.30 Income tax payable (net) 2,971,856 414,979 5.50.50.40 Other accounts payable related to non-oper results 353,239 (320,696) 5.50.50.50 VAT and other taxes payable (net) 167,025 453,269 5.50.60.00 Profit (Loss) of minority interest 0 0 5.50.00.00 NET OPERATING CASH FLOW 23,687,919 18,771,098
5 01. Registration In The Securities Register 1. IDENTIFICATION OF THE COMPANY AND REGISTRATION IN THE SECURITIES REGISTER The company is registered in the Securities Register under N 061 and is supervised by the Securities and Insurance Commission. 6 02. Applied Accounting Criteria a) Accounting Period These financial statements correspond to the period between January 1 and September 30 of 2004 and 2003. b) Preparation basis of financial statements: These individual financial statements as of September 30, 2004 and 2003 have been prepared on the basis of generally accepted accounting principles and specific norms issued by the S.V.S., with the former prevailing in case of discrepancies. Investments in subsidiaries are recorded on one line in the general balance sheet at their net worth and, therefore, they have not been consolidated line by line. This treatment does not modify the net income of the fiscal year nor the net worth. These financial statements have been issued only for purposes of making an individual analysis of the Company and, in consideration thereof, shall be read together with the consolidated statements, which are required by generally accepted accounting principles in Chile. 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 September 30, 2004 by 1.6%. d) Adjustment for Currency Devaluation (Price Level Restatement) Financial statements have been corrected monetarily on the basis of considering the variation in the purchasing power of the currency which occurred in the 2004 fiscal year, which was 1.9% (1.2% in 2003). For financial effects, the variations have been considered effective been every month of the year 2003 and 2004, with respect to September of 2004 and 2003. For tax purposes, negative variations occurred in some months of 2003 and 2004 with respect to September 2003 and 2004, were equaled to zero, according to the instructions of the of Internal Revenue Service, not significantly affecting the financial statements. 7 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 608.90 660.97 Pound Sterling 1,091.41 1,099.23 Swiss Franc 482.14 501.76 EURO 757.34 770.81 Unidad de Fomento 17,190.78 16,946.03 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 September 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. Investments in Mutual Funds are valued at the liquidation value at the close of the fiscal year. g) Inventory Inventory of finished products has been valued as of September 30, 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 (Uncollectibles) The parent company and subsidiaries have made provision for bad debts that is deducted from debtors for sales. The criterion adopted to estimate them is the age of the balances. i) Fixed Assets Fixed assets are shown at purchase cost plus legal and regulatory revaluations accumulated until September 30, 2004 and 2003. 8 j) Depreciation of Fixed Assets Depreciation of this property is calculated on updated values, according to the straight-line depreciation system, considering the estimated useful life of the property. k) Assets in Leasing None. l) Sales Transactions with Leaseback None. m) Intangibles None. n) Investments in Related Companies Investments in stock and rights in related companies have been valued according to the percentage of the holding that corresponds to the Company in the equity of its affiliates (VPP), according to procedures established for these purposes by circular 368 of the Securities and Insurance Commission. o) Negative and Positive Investment Goodwill: Negative and positive investment goodwill have arisen when comparing the price paid for the investment made and the proportional value that corresponds to that investment in the net worth of the company. Negative goodwill amortizations are carried out over a twenty-year period. As of September 30, 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 9 Current Assets, in the terms established in Circular No. 768 of the Securities and Insurance Commission. q) Deferred Taxes and Income Tax The company has complied with deferred taxes, in accounting terms, as established in Technical Bulletin No. 60 and the norms indicated in Circular 1466 of the S.V.S. Income tax is recorded in the accounting on the basis of the calculation of net taxable income determined according to norms established in the Income Tax Law. r) Severance payment The parent company has established a reserve for all of the personnel's severance payment, according to the union contracts signed with their workers. This reserve is shown at the present value of the obligation. s) Sales The company recognizes the income from its operations on an accrued basis according to generally accepted accounting principles in Chile. t) Derivative Contracts The company maintains Future contracts in foreign currency, which have been recorded as established in Technical Bulletin 57 of the Accountants Association of Chile. u) Computer Software The company develops computer software with its own resources, and it also acquires computer packages from third parties. Disbursements for its own development are charged to results as they are generated. Computer packages are recorded in Fixed Assets and amortized in 36 months. v) Research and Development Expenses The company records expenses for this concept directly in results as they are generated. 10 w) Cash Flow Statement: According to current regulations of the Securities and Insurance Commission and the Accountants Association of Chile, in preparing the cash flow statement, the Company has considered time deposits, fixed rate mutual fund investments and deposits with maturities under 90 days as cash. Such cash flows related to the Company's line of business, interest paid, interest income received, dividends received, and all such that is not defined as investment or Financing is included under the heading "Flow Originating in Activities of the Operation." Income by time deposits and agreements with maturity more than 90 days has been classified in the item "Investments in Financial Instruments". 11 03. Accounting Changes As of September 30, 2004 and 2003, there have not been any changes in the accounting criteria that affect the individual financial statements. 12 04. Marketable Securities As of September 30, 2004, this item is composed by the following investments: a) Th Ch$ 53,833,075 of investments in bonds and fixed rate Instruments equivalent to US$ 41,389,097 and Euros 37,805,020; mainly corresponding to investments in State Bonds and bonds of financial institutions in USA, Germany, and Holland, Collateralized Bonds of Private Companies in USA (guaranteed by accounts receivable) and USA Mortgage Bonds with state guarantee. b) Th Ch$ 4,233,486 in shares. c) Th Ch$ 3,635,133 in investment bonds of Celulosa Arauco equivalent to US$ 5,970,000, at an annual rate of 6.95% with maturity on September 15, 2005. d) Th Ch$ 10,521 in interest of Celulosa Arauco bonds. As of September 30, 2003 investments in shares are included as follows: a) Th Ch$ 52,310,976 of investments in bonds and fixed rate Instruments; mainly corresponding to investments in State Bonds and bonds of financial institutions in USA, Germany, and Holland, Collateralized Bonds of Private Companies in USA (guaranteed by accounts receivable) and USA Mortgage Bonds with state guarantee. b) Th Ch$ 4,229,711 in shares. c) Th Ch$ 313,172 in interest of Celulosa Arauco bonds. CRISTALERIAS DE CHILE S.A. NOTE 4 -MARKETABLE SECURITIES- BALANCE COMPOSITION Type of Security Book Value - -------------------------------- --------------- ---------------- 09-30-2004 09-30-2003 --------------- ---------------- Stock 4,233,486 4,229,711 Bonds 0 0 Mutual fund shares 0 0 Investment fund shares 0 0 Public tender promissory notes 0 0 Mortgage bonds 0 0 Fixed rate instruments and bonds 57,468,208 52,310,976 Interest of Celulosa Arauco bonds 10,521 313,172 Total Marketable Securities 61,712,215 56,853,859 13 CRISTALERIAS DE CHILE S.A. NOTE 4 - MARKETABLE SECURITIES - SHARES
Unit Market Number of Share Market Investment Corrected R.U.T. Company Name Shares Percentage Value Value Cost - ------------------- ------------------------------------- ----------- ------------ -------- ----------- ---------- 96.512.200-1 Bodegas y Vinedos Santa Emiliana S.A. 63,642,856 9.9980 90 5,727,857 4,233,486 Value Investment Portfolio 5,727,857 4,233,486 Adjustment Reserve Book value, Investment Portfolio 4,233,486
14 CRISTALERIAS DE CHILE S.A. NOTE 4 - MARKETABLE SECURITIES - FIXED RATE INSTRUMENTS
Book Value Par ------------------------- Market Type of Security Value Amount Rate % Value Reserve - ---------------------------------------------- ----------------- ----------- ------------ ------------ ------------ Financial Institutions bonds Germany and Holland (1) 32,470,490 32,470,490 1.93 32,470,490 0 US treasury bonds (2) 18,133,100 18,133,100 0.70 18,133,100 0 Mortgage bonds USA, with state guarantee (2) 6,852,522 6,852,522 0.70 6,852,522 0 Call Deposit (2) 12,096 12,096 0.70 12,096 0 Celulosa Arauco bonds, interest (2) 10,521 10,521 4.02 10,521 0 TOTAL 57,478,729 57,478,729 57,478,729 -
Note: (1) The investments were made in EUROS. (2) The investments were made in US Dollars. (3) Rate for period from 01-01-2004 to 09-30-2004. (4) These investments can be rescued within 48 hours warning. 15 05. Short-Term and Long-Term Debtors At September 30, 2004 and 2003 there are balances of short-term debtors of Th Ch$ 24,392,527 and Th Ch$ 22,618,274, respectively. In addition there is a balance of Th Ch$ 112,575 for Long-Term debtors in 2004 (Th Ch$ 145,111 in 2003). As of September 30, 2004 and 2003 the company has established a reserve for bad debts of Th Ch$ 173,127 in 2004 (Th Ch$ 145,417 in 2003), which is deducted from Debtors for Sales. The balance of Short-term Debtors is shown net of the reserve for bad debtors and customer advances. 16 CRISTALERIAS DE CHILE S.A. NOTE 5 -SHORT AND LONG TERM DEBTORS
Current Assets -------------- Item Up to 90 days Over 90 days up to 1 year Subtotal Total Current (net) ____ ------------- ------------------------- -------- ------------------- 09-30-2004 09-30-2003 09-30-2004 09-30-2003 09-30-2004 09-30-2003 ---------- ---------- ---------- ---------- ---------- ---------- Debts from Sales 21,419,412 19,018,736 1,325,671 1,033,785 22,745,083 22,571,956 19,907,104 Estimate of non-collectable debt -- -- -- 173,127 -- -- Documents receivable 943,581 1,744,243 44,934 121,874 988,515 988,515 1,866,117 Estimate of bad debtors -- -- -- -- -- -- -- Misc. debtors 738,362 812,582 93,694 32,471 832,056 832,056 845,053 Estimate of bad debtors -- -- -- -- -- -- -- Long Term Item --------- ---- 09-30-2004 09-30-2003 ---------- ---------- Debts from Sales 0 0 Estimate of non-collectable debt -- -- Documents receivable 0 0 Estimate of bad debtors -- -- Misc. debtors 112,575 145,111 Estimate of bad debtors -- -- Total Long Term Debtors 112,575 145,111
17 06. Balances and Transactions with related entities I. Balances receivable in the Short-Term as of September 30, 2004 and 2003 amount Th Ch$ 5,022,190 and Th Ch$ 2,390,646 respectively. In the Long-Term a balance of Th Ch$ 21,292,513 and Th Ch$ 21,675,448 is recorded, respectively. 1) Th Ch$ 19,207,576 in 2004 (Th Ch$ 20,211,988 in 2003) correspond to the sale of Rayen Cura S.A.I.C. shares to the subsidiary Cristalchile Inversiones S.A., equivalent to UF 1,117,318, without interests which are shown in long-term. 2) Detail of outstanding credits from related companies: a) Th Ch$ 876,730 in 2004 (Th Ch$ 1,463,460 in 2003) Loan to Red Televisiva Megavision S.A., annual rate 2.49%, UF adjustability 07.05.2006 17,000 UF Th Ch$ 292,243 01.05.2007 17,000 UF Th Ch$ 292,243 07.05.2007 17,000 UF Th Ch$ 292,244 b) Loan to Metropolos-Intercom S.A., annual rate 3.0% in Ch$ 06.09.2005 Th Ch$ 2,725,425 Short-Term. 04.18.2006 Th Ch$ 861,688 Long-Term. c) Loan to Inmob. Monte Azul S.A. UF 20,000 (Th Ch$ 346,519), annual rate 3.0% in Long-Term. 3) There are balances for invoicing of Sales of bottles and services with the following related companies with expiration under 90 days: 2004 2003 --------- -------- Th Ch$ Th Ch$ S.A. Vina Santa Rita 2,197,371 2,040,804 Vina Carmen S.A. 2,382 0 Vina Los Vascos S.A. 87,013 147,042 Servicios y Consultorias Hendaya S.A 208 1,930 Rayen Cura S.A.I.C. 0 183,530 Vina Dona Paula S.A. 0 2,192 _________ ________ Total 2,286,974 2,375,498 18 Balances Payable in the Short-Term amount Th Ch$ 832,342 in 2004 and Th Ch$ 810,885 in 2003, which correspond to invoicing balances with expirations under 90 days: 2004 2003 -------- ------- Th Ch$ Th Ch$ S.A. Vina Santa Rita 140,395 207,172 Ediciones Financieras S.A. 204 0 Vina Los Vascos S.A. 14,413 8,955 Cia. Electro Metalurgica S.A. 1,141 0 _______ _______ TOTAL 156,153 216,127 For dividends payable to related companies there is the following detail: 2004 2003 -------- ------- Th Ch$ Th Ch$ Cia. Electro Metalurgica S.A. 435,600 331,927 Servicios y Consultorias Hendaya S.A, 113,587 86,553 Bayona S.A. 118,251 90,107 ------- ------- TOTAL 667,438 508,587 For balances in favor in Cristalchile Inversiosnes S.A.'s current account for Th Ch$ 7,932 and Cristalchile Comunicaciones S.A. Th Ch$ 819. 19 CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCE AND TRANSACTIONS WITH RELATED COMPANIES DOCUMENTS AND ACCOUNTS RECEIVABLE
R.U.T. Company Short Term Long Term ------ ------- ---------- --------- 09-30-2004 09-30-2003 09-30-2004 09-30-2003 ---------- ---------- ---------- ---------- 86547900-K S.A. VINA SANTA RITA 2,197,371 2,040,804 0 0 79952350-7 RED TEL. MEGAVISION S.A. 5,579 15,148 876,730 1,463,460 89150900-6 VINA LOS VASCOS S.A. 87,013 147,042 0 0 96721580-5 CRISTACHILE COMUNICACIONES S.A. 1,375 0 0 0 96972440-5 CRISTALCHILE INVERSIONES S.A. 0 0 19,207,576 20,211,988 83032100-4 SERV. Y CONSULTORIAS HENDAYA S.A. 208 1,930 0 0 87941700-7 VINA CARMEN S.A. 2,382 0 0 0 96787750-6 METROPOLIS INTERCOM S.A. 2,725,425 0 861,688 0 78936090-1 INMOB. Y CONSTRUCTORA MONTE AZUL S.A. 0 0 346,519 0 96608270-4 CIECSA S.A. 2,837 0 0 0 0-E VINA DONA PAULA S.A. 0 2,192 0 0 0-E RAYEN CURA S.A.I.C. 0 183,530 0 0 TOTAL 5,022,190 2,390,646 21,292,513 21,675,448
20 CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES DOCUMENTS AND ACCOUNTS PAYABLE
R.U.T. Company Short Term Long Term ------ ------- ---------- --------- 09-30-2004 09-30-2003 09-30-2004 09-30-2003 ---------- ---------- ---------- ---------- 86547900-K S.A. VINA SANTA RITA 140,395 207,172 0 0 89150900-6 VINA LOS VASCOS S.A. 14,413 8,955 0 0 96972440-5 CRISTALCHILE INVERSIONES S.A. 7,932 9,074 0 0 96721580-5 CRISTALCHILE COMUNICACIONES S.A. 819 31,962 0 0 96539380-3 EDICIONES FINANCIERAS S.A. 204 0 0 0 86755600-1 BAYONA S.A. 118,251 90,107 0 0 96608270-4 CIECSA S.A. 0 45,135 0 0 90320000-6 CIA. ELECTROMETALURGICA S.A. 436,741 331,927 0 0 83032100-4 SERV. Y CONSULTORIAS HENDAYA S.A. 113,587 86,553 0 0 TOTAL 832,342 810,885 0 0
21 CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES TRANSACTIONS
09-30-2004 09-30-2003 ---------- ---------- Effect on Effect on Description of Results Results Company R.U.T. Relationship Transaction Amount (Debit/Credit) Amount (Debit/Credit) ------- ------ ------------ -------------- ------ -------------- ------ -------------- Container S.A. VINA SANTA RITA 86547900-K Subsidiary Sales 4,488,007 1,290,451 4,435,729 1,149,407 Packaging Subsidiary sales 431,757 0 376,668 0 Materials Subsidiary Purchase 427,162 6,815 481,729 128,212 Rent of Subsidiary Vineyard 16,503 16,503 14,040 14,040 Dividends Subsidiary Received 649,952 0 1,530,682 0 SERV. Y CONS. HENDAYA Controlling Received S.A. 83032100-4 stockholder services 781,298 -781,298 793,069 -793,069 Controlling stockholder Given services 14,551 14,551 15,960 15,960 Controlling 90320000-6 stockholder Dividends paid 341,897 0 705,988 0 CLARO Y CIA. 79753810-8 With the Chairman Legal assesment 35,322 -35,322 31,748 -31,748 Indirect NAVARINO S.A. 96566900-0 subsidiary Loaned services 7,624 7,624 7,707 7,707 Indirect QUEMCHI S.A. 96640360-8 affiliate Loaned services 7,624 7,624 8,346 8,346 CIA. SUDAMERICANA DE Indirect Carrier VAPORES S.A. 90160000-7 affiliate services 82,982 0 190,570 0 Controlling BAYONA S.A. 86755600-1 stockholder Dividends paid 355,935 0 734,973 0 Indirect VINA LOS VASCOS S.A. 89150900-6 affiliate Direct sales 543,522 156,281 312,065 80,863 Indirect Materials affiliate purchased 41,156 0 29,644 0 EDICIONES FINANCIERAS Indirect Received S.A. 96793770-3 affiliate services 3,870 -3,870 3,808 -3,808 CIA. ELECTROMETALURGICA Controlling S.A. 90320000-6 stockholder Dividends paid 1,311,156 0 2,707,420 0 Controlling Materials stockholder purchased 5,647 0 3,642 0 Controlling Account stockholder Payments 0 0 284 0 RED TELEVISIVA Related with MEGAVISION S.A. 79952350-7 Subsidiary Interests 33,042 33,042 93,394 93,394 Related with Subsidiary Adjustments 13,810 13,810 31,417 31,417 Related with Subsidiary Loan repayment 0 0 1,170,798 0 Related with Subsidiary Advertisements 5,000 -5,000 0 0 Indirect Long-term loan METROPOLIS INTERCOM S.A. 96787750-6 affiliate granted 861,688 0 0 0 Indirect Short-term affiliate loan granted 2,725,425 0 0 0 CRISTALCHILE Capital COMUNICACIONES 96721580-5 Subsidiary Contribution 0 0 2,550,160 0 Subsidiary Adjustments 42 42 0 0 CRISTALCHILE INVERSIONES S.A. 96972440-5 Subsidiary Credit return 1,025,615 0 1,816,678 0 Subsidiary Adjustments 302,547 302,547 249,258 249,258 Related with VINA CARMEN S.A. 87941700-7 Subsidiary Rent 32,955 32,955 0 0 Capital CIECSA S.A. 96608270-4 Subsidiary Contribution 0 0 1,536,216 0 Subsidiary Adjustments 15 -15 92 -92 Related with VINA DONA PAULA S.A. 0-E Subsidiary Direct Sales 23,556 6,773 0 0 Indirect RAYEN CURA S.A.I.C. 0-E affiliate Direct Sales 115,771 40,106 442,560 137,340 INMOB. Y CONSTRUCTORA MONTE AZUL 78936090-1 Affiliate Loan granted 343,815 0 0 0 Affiliate Interest 2,705 2,705 0 0
22 07. Inventory The balance of the inventory item corresponds to finished products and materials that are valued as described in Note 2 g). A detail of its composition is shown below: 2004 2003 --------- --------- Th Ch$ Th Ch$ Finished Products 4,165,325 2,723,155 Raw Materials and Fuel 1,242,139 1,661,580 Materials and spare parts to be consmed 873,822 1,058,114 Materials in transit 1,026,001 307,686 TOTAL 7,307,287 5,750,535 23 08. Deferred taxes and income taxes A) DEFERRED TAXES. Accumulated balances of deferred taxes for temporary differences, and their composition in the income tax account for effects of fiscal year results and recognition of deferred taxes, are presented on the attached charts. Estimated amortization periods of deferred taxes have been estimated on the average at 1 years for Short-Term Assets, 4 for Long-Term Assets, and 14 for Long-Term Liabilities. B) INCOME TAX The Company established tax provisions of 17% of First Category 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 (2,839,048) (666,811) Single tax reserve (10,176) (8,161) ------------ ----------- SUBTOTAL (2,849,224) (674,972) Credits: Monthly reserve payments 1,227,631 2,154,631 Training expenditure 40,518 36,040 Credit fixed assets 0 0 Donations 12,500 0 Recoverable VAT 0 0 ------------ ---------- CREDIT SUBTOTAL 1,280,649 2,190,671 VAT Tax Credit previous fiscal year 745,453 236,091 TOTAL TAXES TO BE ------------ ---------- RECOVERED (823,122) 1,751,790 24 C) TAXABLE PROFIT FUND The company showed the following taxable profits to be distributed: 2004 2003 Thou Ch$ Thou Ch$ Generated as of 31.12.1983: Profit Adjustment 1,955,579 1,955,579 Generated since 01.01.1984: Without Credit 1,952,737 1,092,551 With 10% First Category Credit 22,897 23,125 With 15% First Category Credit 83,691,680 87,635,035 With 16% First Category Credit 14,608,036 16,432,597 With 15% Additional Rate Credit 725 736 With 16.5% First Category Credit 7,024,928 4,179,243 With 17% First Category Credit 16,845,057 0 ------------- ---------- SUBTOTAL TAX PROFITS 124,146,060 109,363,287 Non-income revenues 6,886,405 6,955,188 ------------- ------------ Total earnings to distribute 131,032,465 116,318,475 25 CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX DEFERRED TAXES
09-30-2004 ----------------------------------------------------------- Asset Deferred Tax Liability Deferred Tax -------------------------- --------------------------- Item Short term Long Term Short Term Long Term - ------------------------------------------------- ---------- --------- ---------- --------- Temporary Differences Reserve non-collectable accounts 29,431 0 0 0 Expected revenue 0 0 0 0 Vacation reserve 69,728 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 4,813,625 Severance 1,507 150,147 0 0 Other events 0 0 54,143 502,789 Packaging reserve 154,061 0 0 0 Others reserve 20,400 0 0 0 Furnace repair reserve 325,031 401,392 0 0 Refractories obsolescence reserve 7,135 0 0 0 Spare parts obsolescence reserve 109,251 0 0 0 Deferred customs duties 729 20,087 0 73,330 Accumulated depreciation automobiles 0 20,698 0 0 Unrealized profit 39,551 10,836 0 0 Fixed asset, molds 0 0 0 289,762 Amortization lower valued bonds 0 0 0 0 OTHERS Complementary accounts-net amortization 0 5,586 0 2,155,779 Valuation reserve 0 0 - - Total 756,824 597,574 54,143 3,523,727
26 CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX DEFERRED TAXES
09-30-2003 ----------------------------------------------------------- Asset Deferred Tax Liability Deferred Tax -------------------------- --------------------------- Item Short term Long Term Short Term Long Term - ------------------------------------------------- ---------- --------- ---------- --------- Temporary Differences Reserve non-collectable accounts 23,994 0 0 0 Expected revenue 0 0 0 0 Vacation reserve 63,086 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 4,682,023 Severance 1,784 147,543 0 0 Other events 0 0 54,133 560,950 Packaging reserve 196,711 0 0 0 Others reserve 0 0 0 0 Furnace repair reserve 0 589,832 0 0 Refractories obsolescence reserve 7,203 0 0 0 Spare parts obsolescence reserve 98,860 0 0 0 Deferred customs duties 0 0 0 1,990 Accumulated depreciation automobiles 0 16,864 0 81,841 Unrealized profit 41,693 7,102 0 0 Fixed asset, molds 0 0 0 268,229 Amortization lower valued bonds 0 0 0 0 OTHERS Complementary accounts-net amortization 0 12,753 0 2,420,055 Valuation reserve - - Total 433,331 748,588 54,133 3,174,978
27 CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX INCOME TAX
ITEM 09-30-2004 09-30-2003 - --------------------------------------------------------------------- ---------------- ---------------- Current tax costs (tax reserve) -2,849,224 -674,971 Adjustment tax cost (previous year) 0 0 Effect on assets or liabilities from deferred tax of fiscal year 235,987 -99,677 Tax benefit from tax losses 0 0 Effect of amortization of complementary accounts of deferred assets and liabilities -213,963 -127,306 Effect on assets or liabilities of deferred tax for changes in evaluation reserve 0 0 Other debits or credits in the account -41,868 0 Total -2,869,068 -901,954
28 09. Short-term and long-term leasing contracts and leasing assets (note required only for leasing companies defined in circular No. 939 of 1990). As of September 30, 2004 and 2003, there are no transactions for this concept. 29 10. Other current assets As of September 30, 2004, investments in financial instruments for Th Ch$ 12,947,043, with resale agreements, valued as stated in note 2 p) for Th Ch$ 11,732,400 corresponding to agreements in pesos, and agreements in US$ under 90 days for Th$ 1,214,643. On September, 2004 Th Ch$ 328,138 are included corresponding to issuance expenses and rate placement difference of bonds series C and D. Also there was a balance in favor of Cristalerias de Chile for Th Ch$ 483,000 for Future Contracts, more detail of these is shown in note 34 Derivative Contracts. As of September 30, 2003, there was a balance of Th Ch$ 2,088,112 investments in financial instruments with resale agreements in pesos for Th Ch$ 840,232, valued as stated in note 2 p), and agreements in US$ under 90 days for Th$ 1,247,880. Th Ch$ 330,480 are also included, corresponding to issuance expenses and rate placement difference of bonds series C and D. 30 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. 31 CRISTALERIAS DE CHILE S.A. NOTE 11 - Information on operations involving purchase agreements, sales agreements, sale with buyback agreement, and purchase with sellback agreement of commercial paper or bearer securities Sale Operations with buyback agreement (VRC) and Purchase with resale agreement (CRV)
Dates -------------------------- Original Price Code Start End Counterpart Currency Set - ---------- ------------ ------------ ----------------------------------------------- ----------- --------------- CRV 09.24.2004 10.01.2004 BCI CB PESO 500,000 CRV 09.24.2004 10.12.2004 BANCHILE PESO 5,100,000 CRV 09.28.2004 10.05.2004 BANCHILE PESO 2,000,000 CRV 09.28.2004 10.01.2004 BANCHILE PESO 300,000 CRV 09.29.2004 10.06.2004 BANCHILE PESO 940,000 CRV 09.30.2004 10.07.2004 BCI CB PESO 1,590,000 CRV 09.27.2004 10.04.2004 SANTANDER INVESTMENT PESO 1,300,000 CRV 09.27.2004 10.12.2004 SANTANDER S.A. AGENTE VALORES DOLLAR 608,900 CRV 09.27.2004 10.18.2004 SANTANDER S.A. AGENTE VALORES DOLLAR 605,572
Dates -------------------------- Market Code Start End Rate Final Value Document ID Value - ---------- ------------ ------------ ------------------ --------------------- ----------------- --------------- CRV 09.24.2004 10.01.2004 0.16 500,198 PDBC-BCP 500,160 CRV 09.24.2004 10.12.2004 0.16 5,104,896 BCP-BUCER 5,101,632 CRV 09.28.2004 10.05.2004 0.19 2,000,887 STGEC-STGCC-CHI 2,000,253 CRV 09.28.2004 10.01.2004 0.19 300,057 STD-STGCC 300,039 CRV 09.29.2004 10.06.2004 0.18 940,395 PRC-BCU 940,056 CRV 09.30.2004 10.07.2004 0.20 1,590,742 CERO-DUSAN-PDBC 1,590,000 CRV 09.27.2004 10.04.2004 0.20 1,300,516 PRC-ZERO 1,300,260 CRV 09.27.2004 10.12.2004 1.70 609,331 PRD-BCD-BCP-STD 608,986 CRV 09.27.2004 10.18.2004 1.70 606,172 PRD-BCD-BCP-STG 605,657
32 12. Fixed Assets Fixed Assets: The Fixed Assets are shown at purchase cost plus the legal and regulatory revaluations accumulated as of September 30, 2004 and 2003. The items that make up the Company's fixed assets as of September 30, 2004 and 2003 include mainly Land, Industrial Constructions, Infrastructure Works, Machinery and Equipment distributed in the Padre Hurtado Plant. Technical Reappraisal and Adjustment of Accounting Values The company carried out a technical reappraisal of its fixed assets in 1979. Likewise, in June 1986 it adjusted those assets. Both operations were carried out according to the provisions established in Circular Letters No. 1529 and No. 550 respectively of the Securities and Insurance Commission. The effects of these operations, including write-offs of property, are shown on the attached chart. Depreciations: The charge against results for this item is Th Ch$ 7,984,245 in 2004 and Th Ch$ 7,413,630 in 2003. The detail is shown on an attached chart. 33 FIXED ASSETS 2004 2003 -------------- -------------- Th Ch$ Th Ch$ LAND Land & mining claims 1,531,255 1,532,050 Subtotal land 1,531,255 1,532,050 Subtotal land 1,531,255 1,532,050 High rises and industrial const. 13,633,867 13,608,892 Facilities 9,879,527 9,255,141 Housing developments 26,711 26,685 Subtotal constructions & infrastrucrture 23,540,105 22,890,718 Accumulated depreciation (10,386,787) (9,063,863) Depreciation for the fiscal year (1,005,708) (982,283) Subtotal depreciation (11,392,495) (10,046,146) SUBTOTAL CONSTRUCTIONS & INFRASTRUCTURE 12,147,610 12,844,572 MACHINERY & EQUIPMENT - --------------------- Machinery 58,359,398 55,405,912 Furnaces 47,258,066 47,107,775 Furniture and Materials 1,386,608 1,291,881 Tools 445,987 354,302 Vehicles 215,438 215,235 Subtotal Machinery & equipment 107,665,497 104,375,105 Accumulated depreciation (50,212,007) (41,700,742) Depreciation for the fiscal year (6,819,127) (6,272,091) Subtotal depreciation (57,031,134) (47,972,833) Subtotal machinery & equip 50,634,363 56,402,272 OTHER FIXED ASSETS - ------------------ Spare parts 6,860,830 5,634,169 Imports in transit 1,554,380 125,639 Works underway 2,716,718 1,129,900 Lots in Pirque and Leyda 418,042 471,719 Other 403,791 325,000 Subtotal other assets 11,953,761 7,686,427 TOTAL FIXED ASSETS 144,690,618 136,484,300 TOTAL ACCUMUL. DEPREC. (60,598,794) (50,764,605) TOTAL DEPREC FOR F. YEAR (7,824,835) (7,254,374) TOTAL NET FIXED ASSETS 76,266,989 78,465,321 34 TECHNICAL REVALUATION AND ADJUSTMENT OF ACCOUNTING VALUES 2004 2003 ----------- ----------- Th Ch$ Th Ch$ LAND - ---- Land and mining claims 319,012 318,603 Subtotal land and mining claims net 319,012 318,603 CONSTRUCTIONS & INFRASTRUCTURE - ------------------------------ High rises and industrial constructions 6,371,495 6,365,235 Facilities 42,110 42,068 Subtotal Constructions 6,413,605 6,407,303 Accumulated depreciation (5,156,792) (4,939,451) Depreciation for the fiscal year (159,410) (159,256) Subtotal depreciations (5,316,202) (5,098,707) Subtotal Constuctions & Infrastucture net 1,097,403 1,308,596 MACHINERY & EQUIPMENT - --------------------- Furnaces 0 0 Machinery 0 0 Tools 0 0 Furniture and Materials 0 0 Subtotal Machinery & equipment 0 0 Accumulated depreciation 0 0 Depreciation for the fiscal year 0 0 Subtotal depreciation 0 0 Subtotal machinery & equip 0 0 Total Net Technical Revaluation 1,416,415 1,627,199 ----------- ----------- TOTAL REVALUATED ASSET 6,732,617 6,725,906 TOTAL ACCUMULATED DEPRECIATION (5,156,792) (4,939,451) TOTAL DEPRECIATION FOR YEAR (159,410) (159,256) TOTAL NET 1,416,415 1,627,199 35 13. Sales transactions with leaseback These type of transactions were not carried out as of September 30, 2004 and 2003. 36 14. Investments in related companies In agreement with established in Circular N(0) 1697de the SVS, for the investments valuation in related companies carried out prior to the January 1, 2004, the Equity Method (VPP) has continued to be used. This method consists of assigning the investment a value equivalent to the proportion that corresponds to the company in the issuer's equity at book value, and recognizing proportionally, the variations that it experiences. CIECSA S.A. On April 20, 2000 the Shareholders of Ciecsa S.A. agreed to increase its equity by the equivalent to UF 359,921 through the issue of 343,750,000 shares that were fully subscribed by Cristalchile S.A. On April 18, 2003 such subscription was paid. On August 26, 2003 it was agreed to increase CIECSA's capital by Th Ch$ 910,000, through the issue of 36,400,000 shares totally subscribed and paid by Cristalchile, with which the participation in the subsidiary increased to 98.45%. CRISTALCHILE INVERSIONES S.A. This company was formed at the end of 2001 in which Cristalerias de Chile S.A. has a 99.99% share of the equity. Cristalchile Inversiones S.A., in turn, registers a 40% investment in Rayen Cura S.A.I.C., a company constituted in the city of Mendoza, Republic of Argentina. On January 31, April 25 and June 30 of 2003 Rayen Cura S.A.I.C. made capital reimbursements of part of a capital increase paid on April 29, 2002. Reimbursed amounts totaled Th US$ 2,600. As of September 30, 2004 the financial statements of Rayen Cura S.A.I.C. have recognized an exchange rate of $2.96 Argentine pesos per US Dollar. CristalChile Inversiones S.A., in turn, has adjusted the financial statements of Rayen Cura S.A.I.C. in order to acknowledge the variation occurred from $2.91 Argentine pesos (exchange rate used as of December 31, 2003) and $2.96 Argentine pesos per US dollar as of September 30, 2004. As an effect of the result of this affiliate and the conversion of the financial statements of Rayen Cura S.A.I.C., according to Chilean normative, CristalChile Inversiones S.A., has recognized a Th Ch$ 837,914 income as of September 30, 2004, and a Th Ch$ 728,836 income as of September 30, 2003. On the other hand, the dollar exchange rate variation during the 2004 and 2003 fiscal years originated a Th Ch$ 61,568 charge in 2004 and a Th Ch$ 1,252,448 credit in 2003 in the item Other Equity Reserves, for the investment in Rayen Cura S.A.I.C. and from the negative goodwill produced by the purchase of shares of that company. 37 CRISTALCHILE COMUNICACIONES S.A. As of September 29, 2003 the Shareholders agreed to increase the company's equity by issuing 3,861,538 shares, without nominal value, at a value of Ch$ 650 each, which represents Th Ch$ 2,510,000. Such increase was subscribed and paid by Cristalerias de Chile S.A., with which its participation in the company's equity reaches 99.998%. S.A. VINA SANTA RITA As of September 30, 2004, the company has registered an unrealized income of Th Ch$ 44,915, corresponding to container sales to the subsidiary S.A. Vina Santa Rita. As of September 30, 2004, the balance accumulated for this concept totaled Th Ch$ 239,700 (Th Ch$ 252,684 in 2003). INMOBILIARIA MONTE AZUL S.A. On May 14, 2004, Cristalchile S.A. paid its subsidiary Constructora Apoger Th Ch$196 corresponding to 49% of the rights of that society. With this contribution the participation in the coligate reaches 50% as of September 30, 2004. In order to determine the fair value, the paid value corresponds to market value, thus adjustment for present value has not originated. 38 CRISTALERIAS DE CHILE S.A. NOTE 14 - INVESTMENTS IN RELATED COMPANIES DETAIL OF INVESTMENTS
Shareholder Company Country Investment (Percentage) Equity of Control Number ---------------------- ----------------------- R.U.T. Company Origin Currency of Shares 09-30-2004 09-30-2003 09-30-2004 09-30-2003 ------ ------- ------ -------- --------- ---------- ---------- ---------- ---------- Cristalchile Comunicaciones 96721580-5 S.A. Chile Peso 105,074,698 99.99820 99.99820 70,207,975 71,743,988 S.A. Vina Santa 86547900-K Rita S.A. Chile Peso 493,959,597 54.09700 54.09700 81,722,164 82,649,498 86881400-4 Envases CMF S.A. Chile Peso 28,000 50.00000 50.00000 33,075,371 33,617,484 96608270-4 Ciecsa S.A. Chile Peso 689,301,305 98.44580 98.44580 18,477,821 16,673,471 Constructora 96767580-6 Apoger S.A. Chile Peso 800,000 80.00000 80.00000 3,147 5,158 Inmobiliaria Don 96826870-8 Alberto S.A. Chile Peso 3,817 0.00000 38.17000 0 27 Cristalchile 96972440-5 Inversiones S.A. Chile Peso 9,999 99.99000 99.99000 -3,135,698 -2,169,804 Inmobiliaria 78936090-1 Monte Azul S.A. Chile Peso 50 50.00000 0.00000 -9,169 0 TOTAL
Equity of societies Net Income at Result of R.U.T. Company Net Income at Fair Value Fair Value Accrual ------ ------- ---------- ------------------- ------------- ---------- 09-30-2004 09-30-2003 09-30-2004 09-30-2003 09-30-2004 09-30-2003 09-30-2004 09-30-2003 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Cristalchile Comunicaciones 96721580-5 S.A. -5,559,749 -5,334,291 -5,559,647 -5,334,192 S.A. Vina Santa 86547900-K Rita S.A. 5,395,156 3,704,890 2,918,618 2,052,922 86881400-4 Envases CMF S.A. 750,439 724,835 375,220 362,417 96608270-4 Ciecsa S.A. 2,101,212 838,952 2,068,555 825,914 Constructora 96767580-6 Apoger S.A. -1,637 -1,068 -1,310 -854 Inmobiliaria Don 96826870-8 Alberto S.A. 0 -8 0 -4 Cristalchilz 96972440-5 Inversiones S.A. 697,041 481,785 696,971 481,736 Inmobiliaria 78936090-1 Monte Azul S.A. -9,776 0 -9,169 0 -9,776 0 -4,888 0 TOTAL
Income not Book value R.U.T. Company VPP Realized of Investment ------ ------- --- ---------- ------------- 09-30-2004 09-30-2003 09-30-2004 09-30-2003 09-30-2004 09-30-2003 ---------- ---------- ---------- ---------- ---------- ---------- Cristalchile Comunicaciones 96721580-5 S.A. 64,647,043 71,742,674 0 0 64,647,043 71,742,674 S.A. Vina Santa 86547900-K Rita S.A. 47,127,865 44,710,907 239,700 252,684 46,888,165 44,458,223 86881400-4 Envases CMF S.A. 16,537,685 16,808,743 0 0 16,537,685 16,808,743 96608270-4 Ciecsa S.A. 20,259,204 16,414,329 201,247 234,561 20,057,957 16,179,768 Constructora 96767580-6 Apoger S.A. 2,517 4,127 0 0 2,517 4,127 Inmobiliaria Don 96826870-8 Alberto S.A. 0 10 0 0 0 10 Cristalchile 96972440-5 Inversiones S.A. 0 0 0 0 0 0 Inmobiliaria 78936090-1 Monte Azul S.A. -4,584 0 0 0 -4,584 0 TOTAL 148,569,730 149,680,790 440,947 487,245 148,128,783 149,193,545
39 15. Investments in other companies As of September 30, 2004 and 2003 there are no investments in other companies. 40 16. Goodwill Amortization NEGATIVE GOODWILL Stock purchases made among 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 September 30, 2004 totaled Th Ch$ 1,797,583 (Th Ch$ 1,970,339 in 2003). POSITIVE GOODWILL As of September 30, 2004 and 2003 there are no transactions for this concept. 41 CRISTALERIAS DE CHILE S.A. NOTE 16 - GOODWILL ON INVESTMENTS Negative Goodwill
R.U.T. Company Name 09-30-2004 09-30-2003 ------ ------------ ------------------------------- ------------------------------- Balance of Balance of Amount Amortiz. Negative Amount Amortiz. Negative this period Goodwill this period Goodwill -------------- ----------- -------------- ---------- 86547900-K S.A. Vina Santa Rita 38,347 531,312 38,310 581,877 96608270-4 Ciecsa S.A. 92,654 1,266,271 92,564 1,388,462 TOTAL 131,001 1,797,583 130,874 1,970,339
42 17. Intangibles As of September 30, 2004 and 2003 there are no values for these concepts. 43 18. Other (Assets) As of September 30, 2004 there is a balance for issuance expenses of bond series C and D for Th Ch$ 791,077 and the negative goodwill produced as a result of their placement of Th Ch$ 2,166,518 As of September 30, 2003 there is a balance for issuance expenses of bond series C and D for Th Ch$ 933,271 and the negative goodwill produced as a result of their placement of Th Ch$ 2,374,617. As of September 30, 2003, the sum of Th Ch$ 9,012,140 for investments in Bonds of Celulosa Arauco y Constitucion S.A., equivalent to US$ 13,420,000 at an annual rate of 6.95%, with maturity on September 15, 2005 and Th Ch$ 103,006 for overprice paid in the acquisition of the bonds which are amortized during their maturity, are included in Other Long-term Assets. 44 19. Short-term obligations with banks and financial institutions a) Short-term obligations with Banks and Financial Institutions (5.21.10.10). As of September 30, 2004 and 2003, there are no short-term bank obligations. b) Long-term obligations with Banks and Financial Institutions (5.21.10.20). A list of operations is shown on the attached chart. CRISTALERIAS DE CHILE S.A. NOTE 19 - OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS, SHORT TERM Type of Currency and Readjustment Index
Dollars Euros Yens Bank or Financial ---------------------- ----------------------- ---------------------- R.U.T. Institution 06-30-2004 06-30-2003 09-30-2004 09-30-2003 09-30-2004 09-30-2003 - --------- ----------------- ---------- ---------- ---------- ---------- ---------- ---------- Short term (code: 5.21.10.10) Long Term - Short Term (code: 5.21.10.20) 0-E J.P Morgan Chase Bank 292,991 138,250 0 0 0 0 Others 0 0 0 0 0 0 TOTAL 292,991 138,250 0 0 0 0 Capital amount due 0 0 0 0 0 0 Average annual interest rate 2.05 1.925 Percentage oblig. foreign curr. (%) 100.0000 Percentage oblig. foreign curr. (%) 0.0000
Bank or Financial Other Foreign R.U.T. Institution Currencies U.F. Non adjustable $ Total - ---------- ----------------- ---------------------- ---------------------- --------------------- ---------------------- 09-30-2004 09-30-2003 09-30-2004 09-30-2003 09-30-2004 09-30-2003 09-30-2004 09-30-2003 ---------- ---------- ---------- ---------- --------------------- ---------- ---------- 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 0 0 292,991 138,250 Others 0 0 0 0 0 0 0 0 TOTAL 0 0 0 0 0 0 292,991 138,250 Capital amount due 0 0 0 0 0 0 0 0 Average annual interest rate
45 20. Other Current Liabilities As of September 30, 2003 , a positive balance of Th Ch$ 4,118,995 in favor of financial institutions was produced, as a consequence of Future Contracts subscribed by the Company, more detail of these is shown in note 34 Derivative Contracts. 46 21. Long term liabilities with banks and financial institutions The obligations with banks and financial institutions are presented on the charts attached. 47 01. CRISTALERIAS DE CHILE S.A. NOTE 21: LONG-TERM OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS Long-term Obligations With Banks and Financial Institution
Maturity ------------------------------------------------------------------------------------- More than 10 years Bank or Financial Adjustment From 1 From 2 From 3 From 5 ------------------ R.U.T. Institution index currency to 2 to 3 to 5 to 10 Amount Term - ------- ----------------- -------------- ------ ------ ------ ------- --------- ------ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ 0-E J.P. Morgan Chase Bank Dollars 7,611,250 15,222,500 7,611,250 -- -- -- Euros -- -- -- -- -- -- Yen -- -- -- -- -- -- UF -- -- -- -- -- -- Non-adj.CH$ -- -- -- -- -- -- Others -- -- -- -- -- -- Total 7,611,250 15,222,500 7,611,250 -- -- -- Porcentaje de obligaciones en moneda extranjera 100.00% Porcentaje de obligaciones en moneda nacional 0.00%
Closing date Closing date Current period Previous period -------------------------- ---------------- Total Long-Term Average Total Long-Term at closing of annual at closing of Bank or Financial Adjustment Financial interest Financial R.U.T. Institution index currency Statements rate Statements ------ ----------------- -------------- -------------- -------- --------------- 0-E J.P. Morgan Chase Bank Dollars 30,445,000 2.05 33,577,276 Euros -- -- -- Yen -- -- -- UF -- -- -- Non-adj.CH$ -- -- -- Others -- -- -- Total 30,445,000 33,577,276
48 22. Short-term and long-term obligations with the public (promissory notes and bonds) As of September 30, 2004, there are obligations with the public for UF 4,100,000, equivalent to Th Ch$ 70,482,198 (Th Ch$ 70,590,383 in 2003) divided in series C1, C2, D1 and D2, with a 4.75% annual interest in series C and 5.80% in series D. During 2004, are represented UF 500,000 in short term (Ch$ 8,595,390) and UF 3,600,000 in long term (Th Ch$ 61,886,808). In the short term there is a balance of Th Ch$ 786,791 (Th Ch$ 787,998 in 2003) corresponding to accrued interests for UF 45,768.20. Bond series C have a tenor of 6 years with amortizations beginning 2 years from the placement date. Bond series D have a tenor of 21 years with amortizations beginning 6 years from the placement date. 49 Cristalerias de Chile S.A. NOTE 22: SHORT-TERM AND LONG-TERM OBLIGATIONS WITH PUBLIC (PROMISSORY NOTES AND BONDS) BONDS
REGISTRATION OR IDENTIFICATION No. CURRENT INDEXING INTEREST FINAL OF INSTRUMENT SERIES FACE VALUE UNIT OF BOND RATE MATURITY ----------------- ----------- ---------- ------------ ------- -------- LONG-TERM BONDS-CURRENT PORTION 296-09.07.02 C1 Interests 0 UF 4.75 01-15-2005 296-09.07.02 C2 Interests 0 UF 4.75 01-15-2005 296-09.07.02 D1 Interests 0 UF 5.80 01-15-2005 296-09.07.02 D2 Interests 0 UF 5.80 01-15-2005 296-09.07.02 C1 500,000 UF 4.75 07-15-2005
INSTALLMENTS PAR VALUE -------------------------------- ---------------------------- REGISTRATION OR ISSUE IDENTIFICATION No. INTEREST AMORTIZATION IN CHILE OR OF INSTRUMENT PAYMENT PAYMENT 09-30-2004 09-30-2003 ABROAD ----------------- -------- ------------- ---------- ---------- ----------- LONG-TERM BONDS-CURRENT PORTION 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 258,941 259,338 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 86,314 86,446 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 399,485 400,099 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 42,051 42,115 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 8,595,390 0 LOCAL TOTAL CURRENT PORTION 9,382,181 787,998
REGISTRATION OR IDENTIFICATION No. CURRENT INDEXING INTEREST FINAL OF INSTRUMENT SERIES FACE VALUE UNIT OF BOND RATE MATURITY ----------------- ----------- ---------- ------------ ------- -------- 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
INSTALLMENTS PAR VALUE -------------------------------- ---------------------------- REGISTRATION OR ISSUE IDENTIFICATION No. INTEREST AMORTIZATION IN CHILE OR OF INSTRUMENT PAYMENT PAYMENT 09-30-2004 09-30-2003 ABROAD ----------------- -------- ------------- ---------- ---------- ----------- LONG-TERM BONDS 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 17,190,780 25,825,750 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 8,595,390 8,608,583 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 32,662,482 32,712,616 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 3,438,156 3,443,434 LOCAL LONG-TERM TOTAL 61,886,808 70,590,383
50 23. Provisions and Write-offs Provisions: As of September 30, 2004, the Company has short-term provisions of Th Ch$ 7,806,558 and Th Ch$ 5,441,149 in 2003. In the Long-term, provisions are recorded of Th Ch$ 6,604,096 as of September 30, 2004 and Th Ch$ 7,745,359 as of September 30, 2003. a) Bad Debt Reserves: The Company has established a reserve for bad debts of Th Ch$ 173,127, and Th Ch$ 145,417, respectively, as of September 30, 2004 and 2003. This provision is deducted from the balance of debtors from sales, as stated in note 5. b) Vacation Provision: The company has established a provision for the total cost of vacations pending as of September 30, 2004 and 2003, as established in Technical Bulletin No. 47 of the Accountants Association of Chile. The net balance for this item amounts Th Ch$ 410,164 as of September 30, 2004 (Th Ch$ 382,338 in 2003). c) Provision for Furnace Reconstruction: This provision is established throughout the useful life of the refractories of each smelting furnace so their repair will not have a distort the result of the fiscal year when the repairs are made. The Company has established a provision for this item in the amount of Th Ch$ 4,273,077 and Th Ch$ 3,571,074 as of September 30, 2004 and 2003, respectively. An itemized list of the amounts provisioned is shown in the attached chart. 51 Cristalerias de Chile S.A. Note Provisions and Write-offs 2004 2003 --------- --------- Short term ThCh$ ThCh$ - ---------- Packing for Client Return 906,239 1,168,581 Furnace Reconstruction 1,911,946 0 Board Share 569,494 98,186 Reserve Spare Parts 375,866 445,200 Legal Holiday 410,164 382,338 Severance Pay 185,695 184,430 Provision Subsidiary Losses 2,305,248 2,169,587 Provision Indirect Expenses 721,337 698,262 Provision Legal Gratification 86,090 83,141 Other Provisions 334,479 211,424 --------- --------- Total Short Term 7,806,558 5,441,149 Long term - --------- Severance Pay 4,242,965 4,174,285 Furnace Reconstruction 2,361,131 3,571,074 --------- --------- Total Long-Term 6,604,096 7,745,359 52 24. Severance Payments The reserve for severance payments to personnel is included at its current value, as expressed in note 2 r). As of September 30, 2004 it totals Th Ch$ 4,428,660 (Th Ch$ 4,358,715 in 2003). As of September 30, 2004 and 2003 the parent company has paid severance payments of Th Ch$ 180,607 and Th Ch$ 140,701 respectively, chargeable against the reserve. 53 25. Other long-term liabilities As of September 30, 2004 and 2003 there are no values for this concept. 54 26. Minority interest Not applicable to individual financial statements. 55 27. Changes in Equity a) Activity in 2004 and 2003 The activity of the capital and reserve accounts in the fiscal years ended on September 30, 2004 and 2003, are shown in the attached charts. b) Other Reserves The detail of Other Reserves is the following: 2004 2003 --------- --------- Th Ch$ Th Ch$ Future capital increases 4,667,636 4,450,953 Reserve for adjustment of value 1,416,415 1,627,199 of fixed assets Adjustment for conversion difference 593,044 2,164,029 in investment in Rayen Cura S.A.I.C. --------- --------- TOTAL OTHER RESERVES 6,677,095 8,242,181 56 CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NET WORTH
Reserve Premium Paid-in capital in sale of Other Reserve Items Capital revaluation shares Reserves Future Dividends - ---------------------------------------- ---------- ----------- ----------- --------- ---------------- Balances as of 09-30-2004 Initial balance 65,396,749 0 27,874,377 6,421,900 123,160,119 Distribution result previous fiscal year 0 0 0 0 5,468,440 Final dividend previous fiscal year 0 0 0 0 -1,612,800 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 0 133,179 0 Eventual Dividend 0 0 0 0 0 Payment shares 0 0 0 0 0 Owner's equity Revaluation 0 1,242,538 529,613 122,016 2,411,687 Fiscal Year Result 0 0 0 0 0 Provisional Dividends 0 0 0 0 0 ---------- --------- ---------- --------- ----------- Final balances 65,396,749 1,242,538 28,403,990 6,677,095 129,427,446 ---------- --------- ---------- --------- ----------- Balances as of 09-30-2003 Initial balance 64,749,257 0 27,598,393 9,713,099 114,912,655 Distribution result previous fiscal year 0 0 0 0 14,356,726 Final dividend previous fiscal year 0 0 0 0 -5,526,400 Capital increases with cash stock issue 0 0 0 0 0 Reserves and/or profit Capitalization 0 0 0 0 0 Development period accumulated deficit 0 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 -1,717,273 0 Eventual Dividend 0 0 0 0 -960,000 Payment shares 0 0 0 0 0 Owner's equity revaluation 0 776,991 331,181 116,557 1,573,338 Fiscal Year Result 0 0 0 0 0 Provisional Dividends 0 0 0 0 0 Final balances 64,749,257 776,991 27,929,574 8,112,383 124,356,319 ---------- --------- ---------- --------- ----------- Updated balances 65,785,245 789,423 28,376,447 8,242,181 126,346,020 ---------- --------- ---------- --------- -----------
57
Devel. Fiscal Accumulated Provisional Period Year Items Results Dividends Deficit Result - ---------------------------------------- ------------ ----------- -------- ------- Balances as of 09-30-2004 Initial balance 6,426,520 -958,080 0 0 Distribution result previous fiscal year -6,426,520 958,080 0 0 Final dividend previous fiscal year 0 0 0 0 Capital increases with cash stock issue 0 0 0 0 Reserves and/or Profits Capitalization 0 0 0 0 Development period Accumulated deficit 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 0 Eventual Dividend 0 0 0 0 Payment shares 0 0 0 0 Owner's equity Revaluation 0 -12,800 0 0 Fiscal Year Result 0 0 0 14,237,355 Provisional Dividends 0 -2,560,000 0 0 ----------- ----------- ----------- ----------- Final balances 0 -2,572,800 0 14,237,355 ----------- ----------- ----------- ----------- Balances as of 09-30-2003 Initial balance 17,660,662 -3,303,936 0 0 Distribution result previous fiscal year -17,660,662 3,303,936 0 0 Final dividend previous fiscal year 0 0 0 0 Capital increases with cash stock issue 0 0 0 0 Reserves and/or profit Capitalization 0 0 0 0 Development period accumulated deficit 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 0 Eventual Dividend 0 0 0 0 Payment shares 0 0 0 0 Owner's equity revaluation 0 -960 0 0 Fiscal Year Result 0 0 0 2,415,990 Provisional Dividends 0 -960,000 0 0 Final balances 0 -960,960 0 2,415,990 ----------- ----------- ----------- ----------- Updated balances 0 -976,335 0 2,454,646 ----------- ----------- ----------- -----------
58 CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN EQUITY - NUMBER OF SHARES No. No. No. SHARES SHARES SHARES SERIES SUBSCRIBED PAID WITH VOTING ------ ---------- ---------- ----------- SINGLE 64,000,000 64,000,000 64,000,000 CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NET WORTH - CAPITAL (AMOUNT - TH CH$) SUBSCRIBED PAID-IN SERIES CAPITAL CAPITAL ------ ------- ------- SINGLE 65,396,749 65,396,749 59 28. Other Non-operating Income and Expenses As of September 30, 2004 non-operating income amounted Th Ch$ 425,365 and Th Ch$ 292,827 in 2003. Non-operating expenses amounted to Th Ch$ 724,138 as of September 30, 2004 and Th Ch$ 637,254 in fiscal year 2003. More detail is shown in annexed chart. 60 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 129,385 125,099 Sale of fixed assets 8,676 4,599 Compensation for Damage 988 2,592 Sale of materials 33,245 21,254 Agricultural Division 15,674 56,393 Amortization of non-realized profits 25,156 25,132 Prize Soda Ash contract 34,046 0 Condonation deferred custom duties 47,834 0 Sundry income 130,361 57,758 ------- ------ TOTAL NON-OPERATING INCOME 425,365 292,827 EXPENSES Professional advice 490,524 509,054 Other expenses 178,500 75,750 Insurances 5,725 0 ADR's Expenses 49,389 52,450 ------ ------ TOTAL NON-OPERATING EXPENSES 724,138 637,254 61 29. Price-level Restatement As a result of the application of price-level restatement as described in Note 2 d), a net charge to results was generated in the 2004 and 2003 fiscal year of Th Ch$ 398,945 and Th Ch$ 439,377 respectively. Additional Balance-itemized information is shown in the annexed chart. 62 Cristalerias de Chile S.A. NOTE 29: ADJUSTMENT FOR PRICE LEVEL RESTATEMENTS
ADJUSTABILITY ASSETS (CHARGES)/CREDITS INDEX 09-30-2004 09-30-2003 -------------------- ----------- ---------- INVENTORY Consumer Price Index 124,605 17,978 FIXED ASSET CPI 1,790,366 827,397 INVESTMENTS IN RELATED COMPANIES CPI 2,804,065 1,796,532 MARKETABLE SECURITIES CPI 78,936 46,727 SHORT TERM DEBTORS CPI 3,072 1,952 SHORT TERM DEBTORS UF 1,563 1,025 LONG-TERM DEBTORS UF 6,172 1,974 ACCOUNTS RECEIVABLE RELATED COMPANIES UF 320,180 266,548 INFLATIONARY EFFECT CPI 1,156,347 397,518 RATE ISSUANCE DIFFERENCE LONG-TERM BOND UF 37,292 28,294 OTHER NON-MONETARY ASSETS CPI 47,031 15,225 EXPENSE AND COST ACCOUNTS CPI -81,799 -7,769 TOTAL (CHARGES)/CREDITS -- 6,287,830 3,393,401 LIABILITIES (CHARGES)/ CREDITS NET WORTH CPI -4,305,854 -2,854,066 ACCOUNTS RECEIVABLE RELATED COMPANIES UF -12 -92 SHORT-TERM RESERVES CPI -49,106 -5,167 LONG-TERM CREDITORS CPI -470 -544 LONG-TERM RESERVES CPI -54,795 -72,511 PUBLIC OBLIGATION UF -1,110,198 -841,076 INFLATIONARY EFFECT CPI -710,833 0 NON-MONETARY LIABILITIES CPI -128,681 16,492 INCOME ACCOUNTS CPI -326,826 -75,814 TOTAL (CHARGES)/ CREDITS -- -6,686,775 -3,832,778 (LOSS) PROFIT FROM ADJUSTMENT FOR PRICE LEVEL RESTATEMENT -398,945 -439,377
63 30. Exchange Differences A net credit to results was produced due to exchange differences of Th Ch$ 1,265,557 in 2004 and a net charge of Th Ch$ 10,060,062 in 2003. According to the provisions in Circular Letter 1560 of the SVS of 09/20/2001, the net effect of the adjustment of adjustable assets and liabilities in foreign currency on results deducting the effect of inflation is presented in this item. Further information is shown on the table attached. 64 Cristalerias de Chile S.A. NOTE 30: EXCHANGE DIFFERENCES
AMOUNT -------------------------- ITEM CURRENCY 09-30-2004 09-30-2003 - ---------------------------------- -------------- ---------- ---------- FIXED (CHARGES) /CREDITS AVAILABLE DOLLARS -9,910 -22,029 MARKETABLE SECURITIES DOLLARS 615,224 -4,369,008 MARKETABLE SECURITIES EUROS 460,083 0 TIME DEPOSITS DOLLARS 0 -96,809 INVENTORY DOLLARS -44,141 -71,237 BONDS INSTALLMENT DOLLARS 90,147 -795,834 SUNDRY DEBTORS DOLLARS -8,689 -32,208 OTHER ASSETS DOLLARS 828,156 -255,994 INFLATIONARY EFFECT DOLLARS -1,156,347 -397,518 TOTAL (CHARGES) /CREDITS 774,523 -6,040,637 LIABILITIES (CHARGES) /CREDITS NOTES PAYABLE DOLLARS 94,981 177,477 NOTES PAYABLE OTHER CURRENCY 7,356 9,497 SUNDRY CREDITORS - SHORT TERM DOLLARS -106 65,749 LONG- TERM BANK LOANS DOLLARS -755,000 2,928,112 SHORT-TERM RESERVES DOLLARS -47,414 0 LONG-TERM RESERVES DOLLARS -26,083 263,530 SUNDRY CREDITORS - LONG TERM DOLLARS -2,930 11,776 OTHER LIABILITIES DOLLARS -114,165 53,609 ADJUSTMENT FUTURE CONTRACTS DOLLARS 623,562 -7,529,175 INFLATIONARY EFFECT DOLLARS 710,833 0 TOTAL (CHARGES)/ CREDITS 491,034 -4,019,425 (LOSS) PROFIT FROM EXCHANGE DIFFERENCE 1,265,557 -10,060,062
65 31. Extraordinary Items As of September 30, 2004 and 2003 there are no transactions for this item. 66 32. Expenses incurred in the sale of shares and debt instruments On August, 2002 the parent company placed bond series C1, C2, D1 and D2 for UF 4,100,000, which resulted in expenses and rate placement difference which balance as of September 30, 2004 amounts Th Ch$ 3,285,732 (Th Ch$ 3,638,368 in 2003). Amortization is being done according to the maturity of each series. Classified under other current assets are Th Ch$ 328,137 (Th Ch$ 330,480 in 2003) and Th Ch$ 2,957,595 (Th Ch$ 3,307,888 in 2003) under other long-term fixed assets. As of September 30, 2004, the charge to results for their amortization amounts Th Ch$ 249,541 (Th Ch$ 251,284 in 2003).
Short-Term Long-Term ------------------------ ----------------------- DETAIL 2004 2003 2004 2003 ----------------------------------- -------- -------- --------- --------- Issue expenses 127,148 129,183 791,077 933,271 Difference in bonds placement rate 200,989 201,297 2,166,518 2,374,617 Total 328,137 330,480 2,957,595 3,307,888
67 33. Cash Flow Statement An itemized list is included in the attached chart. CRISTALERIAS DE CHILE S.A. CASH FLOW STATEMENT 1. The following is the detail of the item OTHERS: Sep 2004 Sep 2003 -------- -------- Th Ch$ Th Ch$ 541.11.40 Other income received Exchange differences 333,209 0 Discount for Custom Duties 37,886 0 Accountent Return 897,097 909,776 Other income 5,716 2,883 Total 1,273,908 912,659 541.11.80 Other expenses paid Exchange differences 219,861 5,326,938 Donations 82,743 59,819 Other expenses 3,194 2,691 Total 305,798 5,389,448 541.13.15 Sale of other investments Sale bonds 4,972,567 0 Sale bonds Profit 143,394 0 Redemption LT bonds 0 313,172 Total 5,115,961 313,172 541.13.30 Other investment income Maturity of future contracts 659,830 1,492,737 541.13.65 Other investment disbursements Purchase of shares 0 323,261 Future Contracts 2,268,494 5,985,443 Total 2,268,494 6,308,704 Following are financing and investment activities that did not generate cash flow during the fiscal year, but that commit future cash flows: ITEM Amount Th Ch $ Maturity ---- -------------- -------- Dividend No.159 1,280,000 October -2004 Payable investment project imports 1,001,516 4th Quarter _________ TOTAL 2,281,516 68 34. Derivative Contracts The parent company has signed future sale contracts in foreign currency of Th US$ 38,200 as of September 2004 (purchase contracts of Th US$ 76,600 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. As of September 30, 2004 there was a difference in favor of Cristalerias de Chile S.A. of Th Ch$ 483,000 classified under Other Current Assets. As of September 30, 2003 there was a difference in favor of the financial institutions of Th Ch$ 4,118,995 classified under Other Current Liabilities. 69 CRISTALERIAS DE CHILE S.A. NOTE 34: DERIVATIVE CONTRACTS
DESCRIPTION OF CONTRACTS ------------------------------------------------- PROTECTED ITEM OR TRANSACTION MATURITY OR PURCHASE/ VALUE OF TYPE OF TYPE OF VALUE OF EXPIRATION SPECIFIC SALE PROTECTED DERIVATIVE CONTRACT CONTRACT DATE ITEM POSITION NAME AMOUNT ITEM ---------- -------- ---------- ------------ ------------- -------- ---- ------ -------- FR CI 12,908,680 FOURTH 2004 EXCHANGE RATE S - 0 0 FR CI 10,351,300 FIRST 2005 EXCHANGE RATE S - 0 0 ACCOUNTS AFFECTED -------------------------------------------- ASSET/LIABILITY EFFECT ON RESULT ------------------- -------------------------- MATURITY OR TYPE OF TYPE OF VALUE OF EXPIRATION DERIVATIVE CONTRACT CONTRACT DATE NAME AMOUNT REALIZED NOT REALIZED ---------- -------- -------- ----------- ------ ------ -------- ------------ FR CI 12,908,680 FOURTH 2004 ASSETS 204,528 204,528 0 FR CI 10,351,300 FIRST 2005 ASSETS 278,742 278,472 0
69 Analysis of Forward Contracts in foreign currency as of 09.30.2004
PROFIT DATE FUTURE VALUE (Loss) --------------------------- ------------ ------ INSTITUTION Investment Maturity US$ ThCh$ - -------------------------- ---------- -------- Deutsche Bank (Chile) S.A. 06.04.2004 10.04.2004 3,000,000 109,491 Deutsche Bank (Chile) S.A. 07.27.2004 01.24.2005 5,000,000 183,483 Bank Boston 08.23.2004 12.01.2004 3,000,000 72,355 Deutsche Bank (Chile) S.A. 08.23.2004 12.01.2004 1,500,000 36,172 BBVA 09.01.2004 12.10.2004 1,500,000 25,670 Deutsche Bank (Chile) S.A. 09.09.2004 12.20.2004 1,500,000 17,031 Banco Santander 09.20.2004 12.20.2004 3,000,000 6,790 Scotiabank 09.20.2004 12.29.2004 2,000,000 4,468 Banco Santander 09.23.2004 12.22.2004 1,500,000 6,495 Deutsche Bank (Chile) S.A. 09.27.2004 03.29.2005 8,000,000 36,800 Deutsche Bank (Chile) S.A. 09.30.2004 01.05.2005 8,200,000 (15,755) Total 38,200,000 483,000
As of September 30, 2003 there were future purchase contracts for US$ 76,600,000, which caused a difference in favor of the financial institutions of Th Ch$ 4,118,995. 70 35. Contingencies and Restrictions As of September 30, 2004, there is a guarantee delivered in the amount of Th Ch$ 8,547 (Th Ch$ 8,071 in 2003), according to the detail in the attached chart. LAWSUITS OR OTHER LEGAL ACTIONS THE COMPANY IS INVOLVED IN As of September 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, there are certain financial obligations mentioned as follows: a) TOTAL CONSOLIDATED DEBT TO CAPITALIZATION RATIO Cristalerias de Chile S.A will not allow the Total Consolidated Debt to Capitalization Ratio exceed the 0.45 to 1.0 ratio at any time. Capitalization is defined as the sum of Net Worth plus Minority Interest plus total consolidated debt. b) NET CONSOLIDATED DEBT TO EBITDA RATIO Cristalerias de Chile S.A will not allow the Net Consolidated Debt to EBITDA ratio to exceed the 2.5 to 1.0 ratio at any time. Consolidated EBITDA is defined as the following: operating income plus depreciation and amortization, plus non-cash charges (as long as they have been deduced when determining operating income) and cash income from interests minus non-cash credits (as long as they have been added when determining operating income), in each case for each period. c) INTEREST COVERAGE RATIO Cristalerias de Chile S.A. will not allow the Interest Coverage Ratio to be lower than the 4.0 ratio. 71 Interest coverage at the day of determination is defined as the ratio between unconsolidated EBITDA for the period of four consecutive fiscal quarters that end on or most recently ended before, that date; and interest expenses for that period. d) NET EQUITY Cristalerias de Chile S.A. should maintain a minimum amount of UF 10,000,000. Cristalerias de Chile S.A. complies with 100% of the restrictions agreed with the creditor banks. II. BOND ISSUE The bond issue contract signed on May 29, 2002 with Banco Chile as the bonds owners' representative, establishes among others the following obligations: a) Financial Indicators Individual Balance: Indebtedness no higher than 1.2 times. Consolidate Balance: Indebtedness no higher than 1.4 times. b) Insurances for the Company and its subsidiaries' fixed assets. c) The operations referred to by art. 44 and 89 of law 18,046 must be carried out according to the conditions that these establish. d) Other minor restrictions related with the bond issue contract. Cristalerias de Chile S.A. complies with 100% of restrictions agreed with the bonds' creditors. OTHER CONTINGENCIES As of September 30, 2004 and 2003, management is not aware of any other contingencies that could affect the company. 72 CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS - DIRECT GUARANTEES
BALANCES PENDING PAYMENT AS OF CLOSING DATE OF DEBTOR ASSETS COMMITTED FINANCIAL STATEMENTS ------ ---------------- -------------------- TYPE OF BOOK CREDITOR OF GUARANTEE NAME RELATION SHIP GUARANTEE TYPE VALUE 09-30-2004 09-30-2003 - ---------------------------- --------------- ------------- --------- ---- ----- ---------- ---------- CRISTALERIAS DE EDIFICIO METROPOLIS AGF CHILE S.A. COMMERCIAL DEPOSIT -- 8,547 8,547 8,071 RELEASE OF GUARANTEES ------------------------------------------------------------------------ CREDITOR OF GUARANTEE 09-30-2005 ASSETS 09-30-2006 ASSETS 09-30-2007 ASSETS - ---------------------------- ---------- ------ ---------- ------ ---------- ------ EDIFICIO METROPOLIS AGF -- -- -- -- 8,547 --
73 CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS - INDIRECT GUARANTEES
BALANCES PENDING PAYMENT AS OF CLOSING DATE OF DEBTOR ASSETS COMMITTED FINANCIAL STATEMENTS -------------------------- ---------------- ------------------------- TYPE OF BOOK CREDITOR OF GUARANTEE NAME RELATION SHIP GUARANTEE TYPE VALUE 09-30-2004 09-30-2003 - --------------------------- ---- ------------- --------- ---- ----- ---------- ---------- Societe de Participations Financieres et Rayen Cura Industrielles S.A. Affiliate Solidary -- -- 1,753,632 2,707,671 Cristalerias Envases CMF de Chile S.A. Affiliate Solidary -- -- 205,763 230,479 RELEASE OF GUARANTEES ------------------------------------------------------------------------ CREDITOR OF GUARANTEE 09-30-2005 ASSETS 09-30-2006 ASSETS 09-30-2007 ASSETS --------------------- ---------- ------ ---------- ------ ---------- ------ Societe de Participations Financieres et Industrielles 701,453 -- 701,453 -- 350,726 -- Envases CMF -- -- -- -- 205,763 --
74 36. Guarantees obtained from third parties As of September 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 0 5,235 Real Estate Lease to Telecomunicaciones and Services Cono Sur Ltda. UF 130 0 2,238 Real Estate Lease AGF Building UF 365.9 0 6,300 Real Estate Lease to Irarrazabal Ruiz Tagle AGF Building (UF 235.0) 4,040 0 Real Estate Lease Metropolis Building UF 189.2 0 3,219 Real Estate Lease to Eyzaguirre y Cia Metropolis Building (UF 2.2) 38 38 Real Estate Lease to Sur Andino Cafe AGF Building (UF 260) 4,470 0 Suppliers Sight Drafts 1,674 1,701 _______ _____ TOTAL 10,222 18,731 75 37. Local and Foreign Currency Charts are attached showing the foreign currency balance as of September 30, 2004 and 2003. Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - ASSETS ITEMS Currency Amount - --------------------- --------------- -------------------------- 09-30-2004 09-30-2003 ---------- ---------- Current Assets CASH Non-adjust Ch$ 674,286 1,194,472 CASH Dollars 203,891 98,894 TIME DEPOSITS Adjustable Ch$ 5,000,900 5,345,527 MARKETABLE SECURITIES Adjustable Ch$ 4,244,007 4,575,940 MARKETABLE SECURITIES Dollars 28,836,954 52,277,919 MARKETABLE SECURITIES Euros 28,631,254 0 DEBTORS FROM SALES Non-adjust. Ch$ 22,571,956 19,907,104 DOCUMENTS RECEIVABLE Non-adjust. Ch$ 988,515 1,866,117 MISCELLANEOUS DEBTORS Adjustable Ch$ 93,694 79,250 MISCELLANEOUS DEBTORS Non-adjust. Ch$ 69,944 16,821 MISCELLANEOUS DEBTORS Dollars 668,418 748,982 DOC.&ACTS. REC. REL. CO'S. Non-adjust. Ch$ 5,016,611 2,375,499 DOC.&ACTS. REC. REL. CO'S. Adjustable Ch$ 5,579 15,147 STOCK Adjustable Ch$ 5,426,905 3,657,649 STOCK Dollars 1,880,382 2,092,886 TAXES TO BE RECOVERED Adjustable Ch$ 0 1,751,790 EXPENSES PAID IN ADVANCE Dollars 168,151 208,996 DEFERRED TAXES Non-adjust Ch$ 702,681 379,198 OTHER CURRENT ASSETS Non-adjust Ch$ 11,732,400 840,232 OTHER CURRENT ASSETS Dollars 1,697,644 1,247,880 OTHER CURRENT ASSETS Adjustable Ch$ 328,137 330,480 Fixed Assets FIXED ASSETS Adjustable Ch$ 77,683,404 80,092,520 Other Assets INVESTMENT REL. CO'S. Adjustable Ch$ 148,128,783 149,193,545 NEG. INVESTMENT GOODWILL Adjustable Ch$ 1,797,583 1,970,339 LONG-TERM DEBTORS Adjustable Ch$ 112,575 145,111 L-T DOC. REC. REL. CO'S. Adjustable Ch$ 21,292,513 21,675,448 OTHERS Dollars 0 9,115,146 OTHERS Adjustable Ch$ 2,957,595 3,307,888 Total Assets Non-adjust. Ch$ 41,756,393 26,579,443 Dollars 33,455,440 65,790,703 Adjustable Ch$ 267,071,675 272,140,634 Euros 28,631,254 0 76 Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - CURRENT LIABILITIES
Up to 90 days ----------------------------------------------- 09-30-2004 09-30-2003 -------------------- ----------------------- Amount Avg. Annual Amount Avg. Annual ITEM Currency -------- ----------- -------- ----------- - --------------------------------- ------------- Thou Ch$ Int. Rate Thou Ch$ Int. Rate Long-Term Obligations 1-year maturity Dollars 292,991 2.05 138,250 1.925 L-T Obligations with public bonds series C Adjustable Ch$ 0 -- 0 -- L-T Obligations with public bonds series D Adjustable Ch$ 0 -- 0 -- L-T Obligations with public bonds series C Adjustable Ch$ 0 -- 0 -- Dividend Payable Non-adjust. Ch$ 652,273 -- 512,868 -- Dollars 493,256 -- 550,293 -- Accounts Payable Non-adjust. Ch$ 1,798,012 -- 1,971,304 -- Documents Payable Dollars 2,264,474 -- 1,921,159 -- Documents Payable Other Currencies 349,172 -- 175,059 -- Miscellaneous Creditors Dollars 4,289 12.25 753,958 12.25 Miscellaneous Creditors Non-adjust. Ch$ 379,556 -- 271,204 -- Doc. and Accts. Payable rel Co Adjustable Ch$ 0 -- 45,134 -- Doc. and Accts. Payable rel Co Non-adjust. Ch$ 832,342 -- 765,751 -- Reserves Adjustable Ch$ 655,584 -- 184,430 -- Reserves Dollars 0 -- 0 -- Reserves Non-adjust. Ch$ 5,239,028 -- 5,256,719 -- Withholding Non-adjust. Ch$ 1,015,459 -- 1,529,309 -- Other Current Liabilities Adjustable Ch$ 0 -- 4,118,995 -- Income Taxes Non-adjust. Ch$ 823,122 0 -- Total Current Liabilities Dollars 3,055,010 -- 3,363,660 -- Adjustable Ch$ 655,584 -- 4,348,559 -- Non-adjust. Ch$ 10,739,792 -- 10,307,155 -- Other Currencies 349,172 -- 175,059 --
77
90 Days to 1 Year ------------------------------------------------ 09-30-2004 09-30-2003 ----------------------- ---------------------- ITEM Currency Amount Avg. Annual Amount Avg. Annual - --------------------------------- --------------- -------- ----------- ------ ----------- Thou Ch$ Int. Rate Thou Ch$ Int. Rate Long-Term Obligations 1-year maturity Dollars 0 -- 0 -- L-T Obligations with public bonds series C Adjustable Ch$ 345,255 4.75 345,784 4.75 L-T Obligations with public bonds series D Adjustable Ch$ 441,536 5.80 442,214 5.80 L-T Obligations with public bonds series C Adjustable Ch$ 8,595,390 4.75 0 -- Dividend Payable Non-adjust. Ch$ -- -- -- -- Dollars -- -- -- -- Accounts Payable Non-adjust. Ch$ -- -- -- -- Documents Payable Dollars -- -- -- -- Documents Payable Other Currencies -- -- -- -- Miscellaneous Creditors Dollars -- -- -- -- Miscellaneous Creditors Non-adjust. Ch$ -- -- -- -- Doc. and Accts. Payable rel Co Adjustable Ch$ -- -- -- -- Doc. and Accts. Payable rel Co Non-adjust. Ch$ -- -- -- -- Reserves Adjustable Ch$ -- -- -- -- Reserves Dollars 1,911,946 -- -- -- Reserves Non-adjust. Ch$ -- -- -- -- Withholding Non-adjust. Ch$ -- -- -- -- Other Current Liabilities Adjustable Ch$ -- -- -- -- Income Taxes Non-adjust. Ch$ -- -- -- -- Total Current Liabilities Dollars 1,911,946 -- 0 -- Adjustable Ch$ 9,382,181 -- 787,998 -- Non-adjust. Ch$ 0 -- -- -- Other Currencies 0 -- -- --
78 Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - LONG-TERM LIABILITIES CURRENT PERIOD 09-30-2004
1-3 Years 3-5 years --------------------------- --------------------------- Average Average ITEM Currency Amount Interest Rate Amount Interest Rate - ----------------------------- ----------------- --------- ------------- ---------- ------------- Thou Ch$ Thou Ch$ Obligations with Banks and Financial Institutions Dollars 7,611,250 2.05 15,222,500 2.05 Obligations with public bond Series C Adjust. Ch$ 0 -- 25,786,170 4.75 Obligations with public bond Series D Adjust. Ch$ 0 -- 232,908 5.80 Deferred Custom Duties Dollars 118,157 12.25 0 -- Long-term Creditors Adjust. Ch$ 28,490 -- 0 -- Long-term Reserves Dollars 2,361,131 -- 0 -- Long-term Reserves Adjust. Ch$ 4,242,965 -- 0 -- Deferred Taxes Non-adjust. Ch$ 2,926,153 -- 0 -- Total Long-term Liabilities Dollars 10,090,538 -- 15,222,500 -- Adjust. Ch$ 4,271,455 -- 26,019,078 -- Non-adjust. Ch$ 2,926,153 -- 0 -- 5-10 Years More than 10 years -------------------------- --------------------------- Average Average ITEM Currency Amount Interest Rate Amount Interest Rate - ----------------------------- ----------------- --------- ------------- ---------- ------------- Thou Ch$ Thou Ch$ Obligations with Banks and Financial Institutions Dollars 7,611,250 2.05 0 -- Obligations with public bond Series C Adjust. Ch$ 0 -- 0 -- Obligations with public bond Series D Adjust. Ch$ 5,822,705 5.80 30,045,025 5.80 Deferred Custom Duties Dollars 0 0 -- Long-term Creditors Adjust. Ch$ 0 -- 0 -- Long-term Reserves Dollars 0 -- 0 -- Long-term Reserves Adjust. Ch$ 0 -- 0 -- Deferred Taxes Non-adjust. Ch$ 0 -- 0 -- Total Long-term Liabilities Dollars 7,611,250 -- 0 -- Adjust. Ch$ 5,822,705 -- 30,045,025 -- Non-adjust. Ch$ 0 -- 0 --
79 Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - LONG-TERM LIABILITIES PREVIOUS PERIOD 09-30-2003
1-3 Years 3-5 years ---------------------------- ------------------------- Average Average ITEM Currency Amount Interest Rate Amount Interest Rate - ------------------------------------- --------------- ------ ------------- ------ ------------- Obligations with banks and financial institutions Dollars 8,394,319 1.925 25,182,957 1.925 Obligations with public bond series C Adjustable Ch$ 17,217,166 4.75 17,217,167 4.75 Obligations with public bond series D Adjustable Ch$ 0 -- 0 -- Long-term Creditors Dollars 135,043 11.06 0 -- Long-term Creditors Adjust. Ch$ 36,271 -- 0 -- Long-term Reserves Dollars 3,571,074 -- 0 -- Long-term Reserves Adjustable Ch$ 4,174,285 -- 0 -- Deferred Taxes Non-adjust. Ch$ 2,426,390 -- 0 -- Total Long-term Liabilities - Dollars 12,100,436 -- 25,182,957 -- - Adjust. Ch$ 21,427,722 -- 17,217,167 -- - Non-adjust. Ch$ 2,426,390 -- 0 --
5-10 Years More than 10 Years ---------------------------- ------------------------- Average Average ITEM Currency Amount Interest Rate Amount Interest Rate - ------------------------------------- --------------- ------ ------------- ------ ------------- Obligations with banks and financial institutions Dollars 0 -- 0 -- Obligations with public bond series C Adjustable Ch$ 0 -- 0 -- Obligations with public bond series D Adjustable Ch$ 4,276,538 5.80 31,879,512 5.80 Long-term Creditors Dollars 0 -- 0 -- Long-term Creditors Adjust. Ch$ 0 -- 0 -- Long-term Reserves Dollars 0 -- 0 -- Long-term Reserves Adjustable Ch$ 0 -- 0 -- Deferred Taxes Non-adjust. Ch$ 0 -- 0 -- Total Long-term Liabilities - Dollars 0 -- 0 -- - Adjust. Ch$ 4,276,538 -- 31,879,512 -- - Non-adjust. Ch$ 0 -- 0 --
80 38. Penalties As of September 30, 2004 and 2003 no penalties have been applied to the company, the members of the Board or Company Managers by the SVS or other administrative authorities. 81 39. Subsequent Events On September 28, 2004, the Parent Company agreed to pay the interim dividend No. 159 of Ch$ 20 per share, over 64,000,000 shares (Th Ch$ 1,280,000) which was paid on October 21, 2004. On October 25, 2004 the Chilean Anti-trust Commission approved the merger between Metropolis-Intercom S.A. and VTR S.A.; imposing the new company certain operative and commercial restrictions, which are currently being analyzed. Between the closing date of the financial statements and the issue date of the present report there have not been other subsequent events that could alter significantly the Company's financial and economic situation. 82 40. Environment On its ongoing concern for environmental preservation, as of September 30, 2004 the Parent Company has paid Th Ch$ 3,365 for advisory services in relation to this, which have been charged to the 2004 fiscal year. During 2003, the company carried out investments of Th Ch$ 209,323, corresponding to the purchase of NOX emission treatment equipment, installed on new Furnace B. 83 41. TIME DEPOSITS As of September 30, 2004 and 2003 the Company presents the following information: INSTITUTION Currency 2004 2003 - ----------- -------- -------- --------- Th Ch$ Th Ch$ Banco SantanderSantiago US$ 0 5,345,527 Banco SantanderSantiago Ch$ 5,000,900 0 _________ _________ TOTAL 5,000,900 5,345,527 84 42. STOCK TRANSACTIONS During 2004 and 2003 fiscal years, members of the board, controlling stockholders, related individuals and entities did not carry out stock transactions. TRANSACTIONS 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 Invers. Alonso de Ercilla S.A. PGD 48,000 Invers. San Benito S.A. PGD 10,894 0 0 0 o BSG related with Director Mr. Baltazar Sanchez o RCV related with President Mr. Ricardo Claro o PGD related with Director Mr. Patricio Garcia Domiguez TRANSACTIONS OF DIRECTORS, ADMINISTRATIVES AND ACCOUNT INSPECTORS None. TRANSACTIONS OF MAJORITY SHAREHOLDERS None. 85 43. DISTRIBUTION OF SHAREHOLDERS The distribution of stockholders as of September 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 65.83 65.83 286 263 Less than 10% shareholding with investment lower than 200 UF 0.14 0.14 745 774 TOTAL 100.00 100.00 1,032 1,038 CONTROLLER OF THE COMPANY 52.14 52.14 3 3 86 44. BOARD COMPENSATION As of September 30, 2004 and 2003 Th Ch$ 269,636 and Th Ch$ 723,114 respectively, were paid for compensations and income participation according to the following detail: 2004 2003 ---- ---- ThCh$ ThCh$ Participation in previous fiscal year profits 262,202 717,729 Compensation for session attendance 5,632 4,019 Board Committee Compensations 1,802 1,366 _________ _________ TOTAL 269,636 723,114 On the other hand, provisions were made for fiscal year 2004 income participation in the amount of Th Ch$ 569,494 (Th Ch$ 98,186 in 2003). 87 RELEVANT EVENTS None. 88 CRISTALERIAS DE CHILE S.A. NOTES TO FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2004 1.- FINANCIAL INDICATORS
09-30-2004 09-30-2003 12-31-2003 ---------- ---------- ---------- LIQUIDITY Current liquidity times 4.56 5.22 5.98 Acid ratio times 4.24 4.79 5.50 INDEBTEDNESS Leverage ratio times 0.53 0.58 0.55 Short-term debt % 20.37 14.22 12.79 Long-term debt % 79.63 85.78 87.21 Interest Expenses Coverage times 5.28 1.35 2.14 ACTIVITY Total assets MM Ch$ 370,915 364,511 360,284 Investments MM Ch$ 7,077 21,219 23,053 Disposal of property MM Ch$ 49 112 139 Inventory turnover times 4.2 8.1 12.8 Inventory permanence days 49.7 44.4 28.2 RESULTS Sales MM Ch$ 55,126 55,405 75,966 Costs of sales MM Ch$ 32,156 33,794 45,484 Operating result MM Ch$ 18,251 17,633 24,809 Interest expenses MM Ch$ 3,632 3,727 4,933 Non-operating result MM Ch$ (1,144) (14,277) (16,769) E.B.I.T.D.A. MM Ch$ 27,296 12,591 21,296 After-tax profit MM Ch$ 14,237 2,455 6,549 PROFITABILITY Return on equity % 6.0 1.1 2.8 Return on assets % 3.9 0.7 1.8 Return on operating assets % 16.5 16.1 23.2 Profit per share $ 222.5 38.4 102.3 Return on dividends % 1.3 2.1 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: Earnings before taxes and interest divided by interest expenses. Inventory turnover: Ratio between sales cost of the period and average inventory. Ratio between average inventory and sales cost of the period, Inventory permanence: multiplied by 360 days Earnings before interest, taxes, depreciation, amortization and E.B.I.T.D.A: extraordinary items. Sum of dividends paid in the last twelve months divided by market price Return on dividends: of stock at closing of period.
89 The main trends observed in the 2004 fiscal year indicators are: LIQUIDITY INDICES Despite the indices increasing with respect to September and December 2003, a reduction is observed in the liquidity indices due to a shift of bond quotas issued by the company that are due within next year. INDEBTEDNESS INDICES The leverage ratio has kept almost constant for the analyzed period. The percentage of short term debt shows an increase due to the aforementioned, this is the shift of bond quotas issued by the company. The interest expenses coverage index registered increased with respect to the previous year due to higher net income during the present fiscal year. ACTIVITY INDICES Inventory turnover and permanence indices shows a slight deterioration, due to the increase of the finished product inventory. This increase is the result of the stationality in the demand of glass containers. RESULTS The operating result shows to a slight increase with respect to September of 2003 due to lower operating costs. Likewise, non-operating result shows a decrease in the loss as a result of positive exchange difference registered during the present fiscal year, as well as due to the net income from investments in related companies. PROFITABILITY INDICES Equity and asset profitability indices show an increase with respect to September and December 2003, due to a higher net income during the present fiscal year. On the other hand, the return of dividends index shows a decrease with respect to the previous year due to lower dividends distributed during the last twelve months. 90 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 September 30, 2004, there were financial investments in stocks recorded in the accounting according to their purchase price of Th Ch$ 4,233 million whose market value on the same date was Th Ch$ 5,727 million. 3. RESULTS AS OF SEPTEMBER 2004 ---------------------------- 3a. Individual Result The Company had non-consolidated sales of Ch$ 55,126 million as of September 2004, compared to Ch$ 55,405 million the previous fiscal year. Volumes sold increased by 5.9% reaching 196,937 tons, mainly due to higher sales of bottles for the wine, returnable beer, non-returnable soft drinks and food markets; partially compensated by lower sales to the non-returnable, liquor and returnable soft drink markets. The level of average prices decreased by 6.0%, mainly explained by a sharp decline of the nominal rate of exchange that passed from Ch$ 713.59 per Dollar on average during the first nine months of 2003 to Ch$ 614.91 per Dollar on average during the same period of this year. Operating income reached Ch$ 18,251 million, 3.5% over 2003. Non-operating result was a loss of Ch$ 1,144 million in 2004, compared to Ch$ 14,277 million loss in 2003. The aforementioned was due to a Ch$ 1,266 million income from exchange differences, compared to a Ch$ 10,060 million loss in 2003. During 2004 a Ch$ 494 million net income was registered from investments in related companies (Ch$ 1,612 million net loss in 2003) mainly due to higher income in Vina Santa Rita and CIECSA. 3b. Results in Subsidiaries Santa Rita's net income amounted Ch$ 5,395 million, compared to Ch$ 3,795 million income in 2003, which is explained by a better non-operating result. In the local market, prices increased by 13.5% in real terms, while volumes maintained without variation. Sales in this market increased 13,6%, reaching Ch$ 27,576 million. During the period, exports increased by 19.7% representing 52.3% of revenues, to reach US$51.3 million (US$ 41.90 million in 2003). Operating income reached Ch$ 6,891 million, compared to Ch $ 7,989 million in 2003, mainly due to higher costs of musts and a decline in the Peso US Dollar exchange rate, which affects exports returns. The average price in dollars per case for the export market for Santa Rita was US$ 33.8 (US$ 33.0 in 2003) whereas the average price for the industry was US$23.9 per case 91 (US$ 23.6 in 2003). Santa Rita recorded a Ch$270 million non-operating loss, compared to a Ch$ 3,228 million non-operating loss in 2003, mainly due to a Ch$ 1,116 million income form exchange differences in 2004, compared to a Ch$ 2,098 million loss in 2003. Red Televisiva Megavision, CIECSA's main subsidiary, registered a Ch$ 2,862 million operating income, 59.9% over 2003. MEGA had the first place in audience reaching 26.0% audience share during the period (22.8% in 2003)1. Net sales increased by 8.2% reaching Ch$ 20,367 million, due to an increase in live programming, which has resulted in higher audience share. As of September 2004, MEGA had a net income of Ch$ 2,102 million compared to Ch$ 1,042 million net income in 2003. CIECSA had a Ch$ 2,101 million net income, compared to a Ch$ 839 million net income the previous year. Envases CMF S.A. registered a Ch$ 750 million net income in 2004 compared with a Ch$730 million net income in 2003. Volume sales decreased by 3.2%, reaching 16,162 tons, due to lower pre forms volume exports sales, while average prices deceased by 5,1% influenced by a drop of the exchange rate. Due to the aforementioned sales reached Ch$ 23,461 million during the period, compared with Ch$ 25,522 million in 2003. Operating income reached Ch$ 2,023 million, compared to Ch$ 2,283 million in 2003. Non-operating loss reached Ch$ 1,136 million, compared to Ch$ 1,341 million loss in 2003. In the cable TV business, Cristalchile Comunicaciones S.A. (99.99% owned by Cristalerias), is the owner of 50% of Cordillera Comunicaciones Ltda., which in turn is the owner of Metropolis-Intercom S.A. During 2004, Metropolis-Intercom S.A. registered sales of Ch$ 33,674 million compared with Ch$34,301 million the previous year. Metropolis-Intercom had a net loss of Ch$ 7,920 million compared with a net loss of Ch$ 7,515 million in 2003. The aforementioned was due to a lower operating result, mainly due to higher depreciation charges; partially compensated by better non-operational result, in turn due to lower interest expenses and the appreciation of the exchange rate. Metropolis-Intercom's EBITDA reached Ch$ 4,608 million during the period (Ch$ 4,521 million in 2003). This figure includes a depreciation charge of Ch$ 11,260 million (Ch$10,200 million in 2003) mainly corresponding to the HFC network acquired in July 2000. The company ended the period with 224,657 subscribers of the basic service (235,596 in 2003), 27,989 subscribers of premium service (33,305 in 2003), 38,735 of the broadband service (32,227 in 2003) and 10,999 subscribers of IP Telephony (1,451 in 2003). As a result of the abovementioned and a negative goodwill amortization charge through Cordillera Comunicaciones of Ch$3,149 million during the period (Ch$3,178 million in 2003), Cristalchile Comunicaciones recorded a net loss of Ch$ 5,560 million (net loss of Ch$5,334 in 2003). - -------- 1 Measured between 7:30AM and 1:30AM; i.e: 18 hours daily, Monday through Sunday. 92 4. CASH FLOW STATEMENT As of September, 2004 a total net positive flow of Ch$ 12,899 million was generated, which is explained by a positive flow generated by operating activities of Ch$ 23,688 million, decreased by a negative financing flow of Ch$ 3,892 million and a negative flow of investment activities for Ch$ 6,897 million. The operating flow corresponds basically to the collection of sales and interests income that were reduced by payment to suppliers, personnel and tax and interests payments. The negative financing flow can be explained by the payment of dividends. The investment flow is mainly explained by the incorporation of fixed assets for Ch$ 7,530 million, loans to related companies for Ch$ 3,937 million and future purchase contracts for Ch$ 2,268 million, that were partially financed by Ch$ 5,116 of sales of bonds and payments of loans to related companies for Ch$ 1,026 million. The foregoing results in an increase in the final balance of cash and cash equivalent, which passed from Ch$ 61,140 million as of December 31, 2003 to Ch$ 72,670 million as of September 30, 2004. According to the current regulations of the SVS and the Association of Accountants of Chile, time deposits and agreements with due date under 90 days have been considered cash and cash equivalent. 5. INTEREST RATES AND EXCHANGE RATE RISK ANALYSIS o Interest rates The Company is exposed to the risk of fluctuations in interest rates on its long-term debt, corresponding to a loan of US$50 million, which has a variable annual rate of Libor plus 0.8% percentage points. In addition, the Company issued two bond series, for a total of UF 4.1 million, for a period of 6 and 21 years, and which pay a fixed rate of 4.75% and 5.8% respectively (the actual placement rate was 5.3% and 6.5% respectively). At the same time, as of September 30, 2004, the Company had available funds in the amount of Ch$71,781million, invested at different terms in financial instruments such as time deposits, bonds, fixed rate mutual funds and agreements with resale commitment. This figure does not consider Ch$ 3,635 million in bonds with maturity on September 15, 2005 and investments in shares for Ch$ 4,233 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. 93 o Exchange rate The Company maintains liabilities in dollars of US$62.2 million, which represent 10.2% of its assets, and which include a balance of a long-term syndicated loan of US$50 million. As of September 30, the Company has investments in dollars of US$49.4 million in time deposits, bonds and fixed rate mutual funds. In addition, it also has investments in Euros of 37.8 million in fixed rate instruments. Likewise, there are future sale Dollar contracts of US$38.2 million. On the other hand, approximately 35.9% of the company's revenues are adjusted by the exchange rate variation. Costs in foreign currency represent approximately 27.5% of the total costs. 94 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 9/30/2004 1.00.01.30 Type of Currency Chilean Pesos 1.00.01.40 Type of Financial Statements Consolidated ASSETS 2.0 FINANCIAL STATEMENTS 2.01 BALANCE SHEET 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance : Consolidated
ASSETS NOTE No. 09-30-04 09-30-03 - ------ -------- -------- -------- 5.11.00.00 TOTAL CURRENT ASSETS 198,490,176 174,344,216 5.11.10.10 Cash 1,372,180 1,925,392 5.11.10.20 Time deposits 41 5,431,649 7,033,955 5.11.10.30 Marketable securities (net) 4 69,876,826 65,437,650 5.11.10.40 Debtors from sales (net) 5 45,696,034 41,218,355 5.11.10.50 Documents receivable (net) 5 4,123,073 4,656,426 5.11.10.60 Sundry debtors (net) 5 1,823,486 1,577,017 5.11.10.70 Doc. & accts receivable 6 3,178,597 756,059 related Co. 5.11.10.80 Inventories (net) 7 42,206,374 37,072,485 5.11.10.90 Recoverable taxes 8 0 2,724,484 5.11.20.10 Prepaid expenses 1,512,574 1,410,377 5.11.20.20 Deferred taxes 8 1,709,044 1,455,155 5.11.20.30 Other current assets 10 21,560,339 9,076,861 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 12 138,345,917 140,894,375 5.12.10.00 Land 12 13,590,995 13,326,621 5.12.20.00 High rises & infrastructure 12 65,040,108 62,357,404 5.12.30.00 Machinery & equipment 12 150,861,624 145,862,680 5.12.40.00 Other fixed assets 12 15,857,598 11,506,268 5.12.50.00 Positive goodwill from 12 6,732,617 6,725,906 technical revaluation of fixed assets 5.12.60.00 Depreciation (minus) 12 (113,737,025) (98,884,504) 5.13.00.00 TOTAL OTHER ASSETS 128,001,937 143,772,401 5.13.10.10 Investment in related companies 14 99,923,294 107,350,368 5.13.10.20 Investment in other companies 15 770,586 840,471 5.13.10.30 Negative goodwill 16 8,696,914 9,761,218 5.13.10.40 Positive goodwill (minus) 0 0 5.13.10.50 Long-term debtors 5 194,609 231,635 5.13.10.60 Doc. & accts receivable 6 1,212,596 2,944 related Co. 5.13.10.65 Long-term deferred taxes 0 0 5.13.10.70 Intangibles 17 12,050,313 12,003,589 5.13.10.80 Amortization (minus) 17 (1,395,740) (1,173,631) 5.13.10.90 Other 18 6,549,365 14,755,807 5.13.20.10 Long-term leasing contracts 0 0 (net) 5.10.00.00 TOTAL ASSETS 464,838,030 459,010,992
1 LIABILITIES 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance : Consolidated
LIABILITIES NOTE No. 09-30-04 09-30-03 - ----------- -------- -------- -------- 5.21.00.00 TOTAL CURRENT LIABILITIES 52,756,139 45,680,494 5.21.10.10 Short-term oblig. Banks & 19 15,884 153,312 Fin. Inst. 5.21.10.20 Short-term portion - Long-term 19 2,699,525 3,933,977 oblig. Banks & Financial Institutions 5.21.10.30 Obligations with the public 0 0 (notes) 5.21.10.40 Short-term portion oblig with 22 9,753,398 1,159,784 public 5.21.10.50 Long-term oblig. due within 1 72,225 202,467 year 5.21.10.60 Dividends payable 652,697 513,724 5.21.10.70 Accounts payable 14,176,290 12,216,996 5.21.10.80 Notes payable 3,149,797 2,502,623 5.21.10.90 Sundry creditors 445,748 1,065,524 5.21.20.10 Notes & accts payable related 6 1,101,916 850,380 Co. 5.21.20.20 Provisions 23 14,212,657 9,818,920 5.21.20.30 Withholdings 2,372,537 3,127,966 5.21.20.40 Income tax 905,158 0 5.21.20.50 Unearned income 3,198,307 4,997,864 5.21.20.60 Deferred taxes 8 0 0 5.21.20.70 Other current liabilities 20 0 5,136,957 5.22.00.00 TOTAL LONG-TERM LIABILITIES 128,823,542 144,062,975 5.22.10.00 Oblig with Banks & Financial 21 33,638,245 39,909,156 Inst. 5.22.20.00 Long-term oblig with public 22 82,515,744 91,250,982 (bonds) 5.22.30.00 Long-term notes payable 0 0 5.22.40.00 Long-term sundry debtors 1,379,772 366,291 5.22.50.00 Long-term notes & accts. 6 0 0 payable related companies 5.22.60.00 Long-term provisions 23 6,604,096 7,745,359 5.22.70.00 Long-term deferred taxes 8 4,685,685 4,791,187 5.22.80.00 Other long-term liabilities 0 0 5.23.00.00 MINORITY INTEREST 26 40,445,976 38,249,896 5.24.00.00 TOTAL EQUITY 27 242,812,373 231,017,627 5.24.10.00 Paid-in capital 27 65,396,749 65,785,245 5.24.20.00 Reserve capital revaluation 27 1,242,538 789,423 5.24.30.00 Premium in sale of own shares 27 28,403,990 28,376,447 5.24.40.00 Other reserves 27 6,677,095 8,242,181 5.24.50.00 Retained earnings (addition 27 141,092,001 127,824,331 of codes 5.24.51.00 to 5.24.56.00) 5.24.51.00 Reserve 27 129,427,446 126,346,020 future dividends 5.24.52.00 Accrued 27 0 0 profits 5.24.53.00 Accrued 27 0 0 losses (minus) 5.24.54.00 Profit 27 14,237,355 2,454,646 (loss) for the year 5.24.55.00 Prov. 27 (2,572,800) (976,335) dividends (minus) 5.24.56.00 Accr. 27 0 0 deficit dev. period 5.20.00.00 TOTAL LIABILITIES 464,838,030 459,010,992
2 INCOME STATEMENT 2.02 INCOME STATEMENT 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance : Consolidated
INCOME STATEMENT NOTE No. 09-30-04 09-30-03 - ---------------- -------- -------- -------- 5.31.11.00 OPERATING INCOME 28,326,307 27,540,725 5.31.11.10 Gross Margin 50,342,530 46,268,544 5.31.11.11 Sales 133,046,076 125,626,008 5.31.11.12 Costs (minus) (82,703,546) (79,357,464) 5.31.11.20 Adm. & sales expenses (22,016,223) (18,727,819) (minus) 5.31.12.00 NON-OPERATING RESULTS (7,368,502) (21,706,265) 5.31.12.10 Interest income 1,678,416 2,216,585 5.31.12.20 Income investments 14 1,696,954 1,576,541 Rel. Co. 5.31.12.30 Other non-operating 28 898,101 562,302 income 5.31.12.40 Loss investments Rel. 14 (5,713,350) (5,599,136) Co. (-) 5.31.12.50 Amortization 16 (477,694) (471,323) neg.goodwill (-) 5.31.12.60 Interest expenses (5,022,070) (5,262,484) (minus) 5.31.12.70 Other non-operat 28 (2,033,862) (1,546,073) expenses (-) 5.31.12.80 Price level 29 (768,421) (716,961) restatement 5.31.12.90 Exchange differences 30 2,373,424 (12,465,716) 5.31.10.00 RESULTS BEFORE INCOME TAX 20,957,805 5,834,460 AND EXTRAORDINARY ITEMS 5.31.20.00 INCOME TAX 8 (4,131,202) (1,615,276) 5.31.30.00 EXTRAORDINARY ITEMS 31 0 0 5.31.40.00 PROFIT (LOSS) BEFORE 16,826,603 4,219,184 MINORITY INTEREST 5.31.50.00 MINORITY INTEREST 26 (2,589,248) (1,764,538) 5.31.00.00 NET INCOME (LOSS) 14,237,355 2,454,646 5.32.00.00 Amortization of positive goodwill 0 0 5.30.00.00 INCOME (LOSS) FOR THE YEAR 14,237,355 2,454,646
3 DIRECT CASH FLOW STATEMENT 2.03 CASH FLOW STATEMENT 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance : Consolidated
DIRECT CASH FLOW STATEMENT NOTE No. 09-30-04 09-30-03 - -------------------------- -------- -------- -------- 5.41.11.00 NET FLOW FROM OPERATING ACTIVITIES 30,868,796 26,867,411 5.41.11.10 Collection from sales debtors 153,450,447 153,986,785 5.41.11.20 Interests received 2,790,863 2,864,444 5.41.11.30 Dividends & other distributions 1,110,891 165,498 funds received 5.41.11.40 Other income 2,841,854 2,796,019 5.41.11.50 Payments to suppliers & (109,337,207) (109,699,300) personnel (-) 5.41.11.60 Interest paid (minus) (5,822,032) (5,713,335) 5.41.11.70 Income tax paid (minus) (2,113,461) (3,874,470) 5.41.11.80 Other expenses (minus) 33 (1,421,260) (6,163,425) 5.41.11.90 V.A.T. & other taxes (minus) (10,631,299) (7,494,805) 5.41.12.00 CASH FLOW FINANCING ACTIVITIES (5,784,656) (12,148,666) 5.41.12.05 Proceeds from share issue 0 0 5.41.12.10 Loans received 107,988 135,243 5.41.12.15 Obligations with the public 0 0 5.41.12.20 Secured loans from related 66,805 95,162 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) (4,443,604) (9,175,294) 5.41.12.40 Capital distributions (minus) 0 0 5.41.12.45 Repayment of loans (minus) (1,449,040) (2,138,070) 5.41.12.50 Payment of obligations with the 0 (216,258) public (-) 5.41.12.55 Repayment of secured loans from (66,805) (77,894) 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 (771,555) 5.41.13.00 CASH FLOW FROM INVESTING ACTIVITIES (12,596,472) (29,060,257) 5.41.13.05 Sale of fixed assets 82,363 319,949 5.41.13.10 Sale of permanent investments 0 0 5.41.13.15 Sale of other investments 33 5,116,363 313,172 5.41.13.20 Proceeds secured loans to 0 0 related Comp. 5.41.13.25 Proceeds other loans to related 1,053,913 1,971,152 companies 5.41.13.30 Other investment income 33 839,008 2,297,517 5.41.13.35 Incorporation of fixed assets (12,938,320) (23,575,227) (minus) 5.41.13.40 Capitalized interests payment 0 0 (minus) 5.41.13.45 Permanent Investments (minus) (1,381) (3,995,852) 5.41.13.50 Investments in financial (300,000) (70,322) instruments (minus) 5.41.13.55 Other loans to related companies (3,936,873) 0 (minus) 5.41.13.60 Other loans to related companies (3,148) (9,080) (minus) 5.41.13.65 Other distrib of funds on invest 33 (2,508,397) (6,311,566) activities (-) 5.41.00.00 TOTAL NET CASH FLOW FOR THE PERIOD 12,487,668 (14,341,512) 5.42.20.00 EFFECT OF INFLATION ON CASH & CASH EQUIV. (942,734) (2,424,927) 5.41.00.00 NET CHANGE IN & CASH EQUIVALENT 11,544,934 (16,766,439) 5.42.00.00 CASH & CASH EQUI AT BEGINNING OF PERIOD 77,112,909 95,926,001 5.43.00.00 CASH & CASH EQUIV BALANCE AT END OF PERIOD 88,657,843 79,159,562
4 INCOME STATEMENT RECONCILIATION CONCILIATION BETWEEN CASH FLOW GENERATED BY THE OPERATION'S ACTIVITIES AND THE INCOME STATEMENT FOR THE YEAR 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance : Consolidated
CASH FLOW - INCOME STATEMENT RECONCILIATION NOTE No. 09-30-04 09-30-03 ---------- ----------- ----------- 5.50.10.00 Profit (Loss) for the year 14,237,355 2,454,646 5.50.20.00 Profit (Loss) in sale of assets 307,248 79,304 5.50.20.10 (Profit) Loss in sale of fixed assets 307,052 79,304 5.50.20.20 Profit in sale of investments (minus) 0 0 5.50.20.30 Loss in sale of investments 196 0 5.50.20.40 (Profit) Loss in sale of other assets 0 0 5.50.30.00 Non-cash losses (gains) 20,167,850 27,872,112 5.50.30.05 Depreciation for the year 12 11,754,846 11,065,777 5.50.30.10 Amortization of intangibles 908,238 952,366 5.50.30.15 Write-offs and provisions 2,221,041 1,218,028 5.50.30.20 Accrued earnings from investments in related 14 (1,696,954) (1,576,541) companies (minus) 5.50.30.25 Accured losses from investments in related Co. 14 5,713,350 5,599,136 5.50.30.30 Negative goodwill amortization 16 477,694 471,323 5.50.30.35 Positive goodwill amortization (minus) 0 0 5.50.30.40 Price level restatement 29 768,421 716,961 5.50.30.45 Net exchange difference 30 (2,373,424) 12,465,716 5.50.30.50 Other non-cash credits to results (minus) (403,762) (309,944) 5.50.30.55 Other non-cash debits to results 2,798,400 (2,730,710) 5.50.40.00 Changes in Assets affecting cash flow (incr) decreases (30,341,342) (25,781,511) 5.50.40.10 Debtors from sales (20,177,995) (19,554,112) 5.50.40.20 Inventory (11,411,029) (5,792,471) 5.50.40.30 Other assets 1,247,682 (434,928) 5.50.50.00 Changes in liabilities affecting cash flow increases 23,908,437 20,478,322 (decr) 5.50.50.10 Accounts payable related to results for the 21,750,425 21,822,422 year 5.50.50.20 Interests payable (1,230,790) (915,506) 5.50.50.30 Income tax payable (net) 3,539,374 (365,782) 5.50.50.40 Other accounts payable related to non-oper 421,365 49,967 results 5.50.50.50 VAT and other taxes payable (net) (571,937) (112,779) 5.50.60.00 Profit (Loss) of minority interest 2,589,248 1,764,538 5.50.00.00 NET OPERATING CASH FLOW 30,868,796 26,867,411
5 1. Registration in the Securities Register IDENTIFICATION OF THE COMPANY AND REGISTRATION IN THE SECURITIES REGISTER The Company is registered in the Securities Register under No. 061 and is supervised by the Securities and Insurance Commission. The subsidiary S.A. Vina Santa Rita is registered in the Securities Register under number 390 of the S.V.S. (Securities and Insurance Commission). 6 2. Applied Accounting Criteria APPLIED ACCOUNTING CRITERIA a) Accounting Period These financial statements correspond to the period between January 1 and September 30 of 2004 and 2003. b) Preparation basis of financial statements: These consolidated financial statements as of September 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 September 30, 2004 by 1.6%. 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. consolidated. The company Ciecsa consolidated includes the balances of its subsidiary Red Televisiva Megavision S.A. in which it has a 99.99% stake of its net worth and Simetral S.A. in which it has a 81.5% stake of its net worth. S.A. Vina Santa Rita consolidated includes the balances of its subsidiaries Vina Carmen S.A., with a 99.9% stake in its net worth, and Vina Centenaria S.A., with a 100% stake, Vina Dona Paula S.A. with a 100% stake in its net worth and Sur Andino S.A. with a 100% stake in its net worth in 2004 and 2003. Intercompany balances and effects of transactions were eliminated in the consolidation and the participation of minority investors has been recognized presented in the balance as minority interest. e) Adjustment for Currency Devaluation (Price Level Restatement) 7 Consolidated financial statements have been restated considering the variation in the purchasing power of the currency occurred during the fiscal year 2004, which was 1.9% (1.2% in 2003). For financial effects, the effective variations have been considered for every month in 2003 and 2004, with respect to September 2004 and 2003. For tax effects, the negative variations occurred in some months of 2003 and 2004 with respect to 2003 and 2004 have been equaled to zero, according to the instructions of the Chilean Internal Revenue Service, not significantly affected the financial statements. f) 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 608.90 660.97 Pound Sterling 1,091.41 1,099.23 Swedish Crown 482.14 501.76 EURO 757.34 770.81 Unidad de Fomento 17,190.78 16,946.03 g) Marketable Securities and Time Deposits Transactions in short-term fixed income instruments are shown at the return value of the investment, which does not exceed the market value as of September 30, 2004 and 2003. Investments in shares are shown at the lowest value between the corrected cost and market value. Time deposits are shown at the value of the investment, plus adjustments and interest accrued as of the date of the fiscal year. h) Inventory Inventory of finished products has been valued as of September 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. 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. 8 Programs inventories at the closing of each fiscal year represent the value of the films and videos contracted and the proportion of repeats that are pending exhibition. The actual cost of the programs is charged to results as they are broadcasted. i) Bad Debts (Uncollectables) The parent company and subsidiaries have made provision for bad debts that is deducted from debtors for sales and documents receivable. The criterion adopted to estimate them is the age of the balances. j) Fixed Assets The property in fixed assets is shown at the purchase cost plus legal and regulatory revaluations accumulated until September 30, 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 on Leasing None. m) Sales Transactions with Leaseback None. n) Intangibles The corrected purchase value of trademarks of the subsidiary S.A. Vina Santa Rita which has an amortization period of 40 years, as well as inscription costs that are amortized over the period of duration of the renovation. The subsidiary CIECSA consolidated includes channel 9 TV frequency, which has an amortization period of 40 years, and the amortization method is the one of "Increasing Digits". o) Investments in Related Companies According to the established in the circulating No. 1697 of the VPP, for the valuation of the investments in related companies, carried out prior to the January 01, 2004, the equity method (VPP) has continued to be used. 9 This method consists of assigning to the investment an equivalent value to the proportion that corresponds to the company in the equity at books value of the issuer, and recognize proportionally, the variations that this experiments. Investments abroad have been valued according to 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 September 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 in Other Current Assets, in the terms established in Circular No. 768 of the Securities and Insurance Commission. r) Obligations with the public Obligations for bonds issued are shown at their face value plus adjustments and interest accrued at the closing of each fiscal year. The negative goodwill obtained compared to par value is amortized proportionally to payment or redemption of the capital installments of those bonds and the expenses for the placement of long-term bonds. s) Deferred Taxes and Income Tax The parent company and its subsidiaries has complied with deferred taxes, in accounting terms, as established in Technical Bulletin No. 60 and 71 of The Accountants Association and the norms indicated in circular 1466 of the S.V.S. Income tax is recorded in the accounting on the basis of the calculation of net taxable income determined according to norms established in the Income Tax Law. t) Severance payment 10 The parent company has established a reserve for all of the personnel's severance payment, according to the union contracts signed with their workers. This reserve is shown at the present value of the obligation. u) Sales The consolidated companies recognize operating income on an accrued basis according to accounting principles generally accepted in Chile. v) Derivative Contracts The parent company and its subsidiaries Ciecsa S.A. and S.A. Vina Santa Rita maintain Future contracts in foreign currency recorded as established in Technical Bulletin 57 of the Accountants Association of Chile A.G. w) Computer Software The parent company and S.A. Vina Santa Rita develop computer software with their own resources and they also acquire computer packages from third parties. Development disbursements are charged to results as they are generated. Computer packages are recorded in Fixed Assets and amortized in 36 months by the parent company and in 48 months by the subsidiary S.A. Vina Santa Rita. x) Research and development expenses The companies register expenses for this item directly in results as they are generated. y) Cash flow statement: According to current regulations of the Securities and Insurance Commission and the Accountants Association of Chile, in preparing the cash flow statement, the Company has considered time deposits, fixed rate mutual funds investments and agreements with maturities under 90 days as cash. Such cash flows related to the Company's line of business, interest paid, interest income received, dividends received, and all that is not defined as investment or Financing is included under the heading "Flow Originating in Activities of the Operation." Disbursements originating in time deposits and deposits with maturities over 90 days have been classified in the item "Investments in Financial Instruments." 11 CRISTALERIAS DE CHILE S.A. NOTE 2 - ACCOUNTING CRITERIA USED - COMPANIES INCLUDED IN THE CONSOLIDATED REPORT
Percentage of Shareholding -------------------------------------------------- R.U.T. Company Name 09.30.2004 09.30.2003 - ------------- -------------------------------- ---------------------------------- ---------- Direct Indirect Total Total ------- -------- -------- -------- 96.721.580-5 Cristalchile Comunicaciones S.A. 99.9982 0.0000 99.9982 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 98.4458 86.547.900-K S.A. Vina Santa Rita 54.0970 0.0000 54.0970 54.0970 96.972.440-5 Cristalchile Inversiones S.A. 99.9900 0.0100 100.0000 100.0000
12 3. Accounting Changes As of September 30, 2004 and 2003, there have not been any changes in the accounting criteria applied that affect the consolidated financial statements. 13 4. Marketable Securities As of September 30, 2004, this item is composed by the following investments: a) Th Ch$ 53,833,075 are included Investments in bonds, Fixed Fate Instruments equivalent to Th Ch$ 41,389,097 plus 37,805,020 EUROS which mainly correspond to investments in state bonds and bonds from financial institutions in USA, Germany, Holland; Collateralized Bonds of Private Companies in USA (with accounts receivable guarantee) and USA Mortgage Bonds with state guarantee. b) Th Ch$ 8,164,611 in fixed rate investment funds in US$. c) Th Ch$ 4,233,486 in shares. d) Th Ch$ 3,635,133 investments in bonds of Celulosa Arauco equivalent to US$ 5,970,000, with a 6.95% rate per year with maturity on September 15, 2005. e) Th Ch$ 10,521 for accrued interests of bonds of Celulosa Arauco S.A. As of September 30, 2003, this item is composed by the following investments: a) Th Ch$ 52,310,976 are included Investments in bonds, fixed rate instruments which mainly correspond to investments in state bonds of the Treasury Bills, Collateralized Bonds of Private Companies in USA (with accounts receivable guarantee) and USA Mortgage Bonds with state guarantee. b) Th Ch$ 4,229,712 in fixed rate investment funds in US$. c) Th Ch$ 8,896,962 in shares. CRISTALERIAS DE CHILE S.A. NOTE 4 -MARKETABLE SECURITIES- BALANCE COMPOSITION Type of Security Book Value - ----------------------------------- --------------------------- 09-30-2004 09-30-2003 ---------- ---------- Shares 4,233,486 4,229,712 Bonds 57,468,208 52,310,976 Shares of mutual funds 0 0 Shares of investment funds 8,164,611 8,896,962 Public tender notes 0 0 Mortgage bonds 0 0 Bonds and fixed rate instruments 0 0 Interest of Celulosa Arauco bonds 10,521 0 Total Marketable Securities 69,876,826 65,437,650 14 CRISTALERIAS DE CHILE S.A. NOTE 4 - MARKETABLE SECURITIES - SHARES
Number of Unit Market of Participation Market Investment Corrected R.U.T. Company Name Shares Percentage Value Value Cost - ------------------ ------------------------------------- ------------- ------------- -------- ---------- ---------- 96.512.200-1 Bodegas y Vinedos Santa Emiliana S.A. 63,642,856 9.9980 90 5,727,857 4,233,486 Value Investment Portfolio 5,727,857 4,233,486 Adjustment Provision 0 Book value, Investment Portfolio 4,233,486
15 CRISTALERIAS DE CHILE S.A. NOTE 4 - MARKETABLE SECURITIES - FIXED RATE INSTRUMENTS
Market Book Value Value Reserve ---------------------- ---------- -------- Par Rate % Type of Security Value Amount (3) - ------------------------------------------------------- ---------- ---------- ------ Financial Institutions bonds in Germany and Holland (1) 32,470,490 32,470,490 1.93 32,470,490 0 US treasury bonds (2) 18,133,100 18,133,100 0.70 18,133,100 0 US Collateralized Bonds (2) 6,852,522 6,852,522 0.70 6,852,522 0 Call Deposit (2) 12,096 12,096 0.70 12,096 0 Celulosa Arauco bonds (interests) (2) 10,521 10,521 4.02 10,521 0 BBH U.S. Money Market Portfolio (2) 8,164,611 8,164,611 1.05 8,164,611 0 TOTAL 65,643,340 65,643,340 65,643,340 0
Note: (1) The investements have been made in EUROS. (2) The investements have been made in U.S. Dollars. (3) Rate of period from 01-01-2004 to 09-30-2004. (4) These investments can be recovered within 48 hrs. warning. 16 5. Short-Term and Long-Term Debtors As of September 30, 2004, there are balances short-term debtors in the amount of Th Ch$51,642,593 (Th Ch$ 47,451,798 in 2003). As of September 30, 2004, there is a bad debt reserve of Th Ch$ 739,424 in 2004 (Th Ch$ 750,280 in 2003), presented deducting the balances of Debtors from Sales and Documents receivable. The balances of Short-term Debtors are shown net of Customer Advance Payments. In addition, there is a balance of Th Ch$ 194,609 in Long-Term Debtors in 2004 (Th Ch$ 231,635 in 2003). Under accounts receivable are included exports made by the subsidiary Vina Santa Rita S.A., that represent 63,91% of the total at September 30, 2004 (65,64% in 2003) for Th Ch$11,495,814 in 2004 (Th Ch$ 9.991.823 in 2003). 17 CRISTALERIAS DE CHILE S.A. NOTE 5 -SHORT AND LONG TERM DEBTORS
Current Assets Over 90 days Long Term ---------------------------------------------------------------------------------- ---------------------- Up to 90 days up to 1 year Subtotal Total Current (net) ---------------------- ---------------------- ---------- ---------------------- ---------------------- Item 09-30-2004 09-30-2003 09-30-2004 09-30-2003 09-30-2004 09-30-2003 09-30-2004 09-30-2003 - ----------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Debts from Sales 43,502,117 38,997,274 2,699,166 2,733,439 46,201,283 45,696,034 41,218,355 0 0 Estimate of bad debtors - - - - 505,249 - - - - Documents receivable 4,312,314 4,772,475 44,934 121,873 4,357,248 4,123,073 4,656,426 0 0 Estimate of bad debtors - - - - 234,175 - - - - Misc. Debtors 1,729,792 1,544,546 93,694 32,471 1,823,486 1,823,486 1,577,017 194,609 231,635 Estimate of bad debtors - - - - - - - - - Total Long-Term Debtors 194,609 231,635
18 6. Balances and Transactions with related parties Balances receivable in the Short-Term as of September 30, 2004 total Th Ch$ 3,178,597 (Th Ch$ 756,059 in 2003) and correspond mainly to a loan granted by the parent company to Metropolis Intercom for Th Ch$ 2,725,425 at an annual interest rate of 3%, and a loan granted by the subsidiary Ciecsa to Editorial Zig Zag for Th Ch$ 110,285 (Th Ch$ 850,380 in 2003) including interests, with maturity on 06-30-2003 at an annual interest rate of 1%. The balance corresponds to invoicing receivable for Th Ch$ 342,887 (Th Ch$ 478,582 in 2003). Balances payable in the short term totaling Th Ch$ 1,101,916 at September 30, 2004 (Th Ch$ 850,380 in 2003) mainly correspond to commercial transactions under 90 days for Th Ch $ 434,478 (Th Ch$ 341,793 in 2003) and dividends payable to Majority shareholders for Th Ch$ 667,438 (Th Ch$ 508,587 in 2003). In 2004 there is a long-term receivable balance corresponding to accounts receivable totaling Ch Th$ 1,212,596 (Ch Th$ 2,944 in 2003), which correspond to a loan granted by the parent company to Metropolis Intercom S.A. for Th Ch$ 861,688 and to Inmobiliaria Monte Azul S.A. for Th Ch$ 346,519, the balance corresponds to invoicing for Th Ch$ 4,389 (Th Ch$ 2,944 in 2003). 19 CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCE AND TRANSACTIONS WITH RELATED COMPANIES DOCUMENTS AND ACCOUNTS RECEIVABLE
R.U.T. Company Short Term Long Term - ------------ ------------------------------------- -------------------------- ------------------------- 09-30-2004 09-30-2003 09-30-2004 09-30-2003 ---------- ---------- ---------- ---------- 89.150.900-6 Vina Los Vascos S.A. 87,013 147,042 0 0 90.684.000-6 Editorial Zig-Zag S.A. 110,285 166,149 0 0 86.881.400-4 Envases CMF S.A. 15,302 51,482 0 0 83.032.100-4 Serv. Y Consultorias Hendaya S.A. 247 2,009 0 0 90.048.000-4 Sudamericana Agencias Aereas y 1,008 0 0 0 Maritimas S.A. 79.753.810-8 Claro y Cia. 302 660 0 0 96.787.775-1 Metropolis Intercom S.A. 2,905,819 111,329 861,688 0 90.160.000-7 Sudamericana de Vapores S.A. 1,510 28,384 0 0 96.793.770-3 Ediciones Chiloe S.A. 0 0 4,389 2,944 86.963.200-7 Forus S.A. 0 0 0 0 78.936.090-1 Inmob. Y Constructora Monte Azul S.A. 0 0 346,519 0 77.489.120-K Soc. Agr. Vinedos Collipeumo Ltda 0 0 0 0 0-E Rayen Cura SAIC 57,111 249,004 0 0 Total 3,178,597 756,059 1,212,596 2,944
20 CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES DOCUMENTS AND ACCOUNTS PAYABLE
R.U.T. Company Short Term Long Term - ------------ ------------------------------------- -------------------------- ------------------------- 09-30-2004 09-30-2003 09-30-2004 09-30-2003 ---------- ---------- ---------- ---------- 90.320.000-6 Cia. Electro Metalurgica S.A. 443,023 334,209 0 0 83.032.100-4 Serv. Y Consultorias Hendaya S.A. 113,587 112,545 0 0 89.150.900-6 Vina Los Vascos S.A. 14,847 8,955 0 0 79.753.810-8 Claro y Cia. 14,193 62,338 0 0 96.539.380-3 Ediciones Financieras S.A. 204 103 0 0 86.881.400-4 Envases CMF S.A. 201,120 223,907 0 0 90.160.000-7 Cia. Sudamericana de Vapores S.A. 11,718 9,838 0 0 0-E Rayen Cura S.A.I.C. 173,268 0 0 0 86.755.600-1 Inversiones Bayona S.A. 118,251 90,107 0 0 92.048.000-4 Sudamericana Agencias Maritimas S.A. 11,607 0 0 0 96.787.750-6 Metropolis Intercom S.A. 98 8,378 0 0 77.489.120-K Soc. Agr. Vinedos Collipeumo Ltda. 0 0 0 0 Total 1,101,916 850,380 0 0
21 CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES TRANSACTIONS
09-30-2004 09-30-2003 --------------------- ----------------------- Description of Effect on Effect on Company R.U.T. Relationship Transaction Amount Result Amount Result - --------------------- ------------ ------------ ---------------------- --------- --------- --------- --------- Serv. Y Consultorias Majority Hendaya S.A. 83.032.100-4 shareholder Services received 976,661 -976,661 996,264 -996,264 - Dividends paid 341,897 0 705,988 0 - Services supplied 14,551 14,551 15,960 15,960 - Products sold 201 46 206 64 - Services rendered 51,461 -51,461 29,350 -29,350 Payment Made for own - Account 0 0 0 0 Quemchi S.A. 96.640.360-8 Same Parent Services rendered 7,624 7,624 8,346 8,346 Indirect Rayen Cura S.A.I.C. 0-E affiliate Direct sales 115,771 40,106 442,560 137,340 Navarino S.A. 96.566.900-0 Same Parent Services supplied 7,624 7,624 7,707 7,707 Ediciones Indirect Financieras S.A. 96.793.77-3 affiliate Products sold 0 0 4,138 1,282 - Services purchased 325 -325 309 -309 - Services received 6,034 -6,034 3,808 -3,808 - Advertising hired 652 -652 0 0 - Advertising services 5,592 -5,592 22,666 -22,666 - Advertising hired 738 738 0 0 Indirect Envases CMF S.A. 86.881.400-4 affiliate Materials purchased 461,301 0 466,241 0 - Products sold 195 45 56,820 17,611 - Other sales 51,235 0 139 0 Forus S.A. 86.963.200-7 Affiliate Advertising hired 4,354 -4,354 0 0 - Advertising hired 4,354 4,354 187,858 187,858 Indirect Vina Los Vascos S.A. 89.150.900-6 affiliate Direct sales 543,522 156,281 312,065 80,863 - Materials purchased 41,156 0 29,644 0 Cia. Sud-Americana de Freight services Vapores S.A. 90.160.000-7 Same Parent received 123,252 -40,270 227,155 -36,585 - Other sales 1,230 0 3,085 0 - Product sold 9,528 6,971 27,280 10,951 Cia. Electro Majority Metalurgica S.A. 90.320.000-6 shareholder Dividends paid 1,311,156 0 2,707,420 0 - Materials purchased 5,647 0 3,642 0 - Others sales 491 0 0 0 - Product sold 2,556 585 1,045 682 Payment Made for own Account 0 0 284 0 With the Claro y Cia. 79.753.810-8 Chairman Advice received 126,292 -126,292 156,297 -156,297 - Products sold 543 124 450 136 Inversiones Bayona Majority S.A. 86.755.600-1 shareholder Dividends paid 355,935 0 734,973 0 Metropolis Intercom Indirect S.A. 96.787.750-6 affiliate Advertising hired 431,107 380,017 207,460 207,320 - Other sales 0 0 24,158 7,489 - Long-term loan granted 861,688 0 0 0 - Long-term loan granted 2,725,425 0 0 0 - Services purchased 191 -191 0 0 - Land Rent 1,533 1,533 0 0 - Advertising services 15,144 -15,144 11,603 -11,603 - Products sold 0 0 3,534 3,534 Soc Agric. Cullipeumo Ltda. 77.489.120-K Indirect Raw Material Purchased 9,728 0 41,115 0 - Products sold 551 126 0 0 Reimbursement of - Expenses 422 0 0 0 Sudamericana Agencias Aereas y Maritimas S.A. 92.048.000-4 Indirect Freight services 163,820 -163,820 0 0 - Container rent 15,476 -15,476 0 0 - Products sold 67 15 0 0 - Others sales 768 0 0 0 Carmen Luz Sanchez Guzman 5.781.266-4 Indirect Raw Material Purchased 37,268 0 38,972 0 Reimbursement of - Expenses 1,397 0 0 0 Inmobiliaria y Constructora Monte Azul S.A. 78.936.090-1 Affiliate Loan granted 343,816 0 0 0 22 Empresa Editora - Interest 2,705 2,705 0 0 Zig-Zag 90.684.000-6 Indirect Services purchased 107 -107 0 0 - Services sold 1,959 1,959 0 0
23 7. 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. 4,165,325 2,723,155 * S.A. Vina Santa Rita 5,672,310 5,571,287 Subtotal Finished Products 9,837,635 8,294,442 Raw Materials and Fuel * Cristalerias de Chile S.A. 1,242,139 1,661,580 * S.A. Vina Santa Rita 25,159,925 21,618,880 Subtotal Raw Materials and Fuel 26,402,064 23,280,460 Supply Materials and Parts * Cristalerias de Chile S.A. 873,822 1,058,114 * S.A. Vina Santa Rita 1,372,303 1,100,763 Subtotal Supply Materials and Parts 2,246,125 2,158,877 Materials in Transit 1,026,001 366,788 Red Televisiva Megavision S.A. (CIECSA S.A.) * Foreign, taped, for broadcast 2,509,115 2,517,572 * Domestic programming, to be broadcast 185,434 454,346 Subtotal Red Televisiva Megavision S.A. 2,694,549 2,971,918 Total 42,206,374 37,072,485 24 8. 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 parent company and its subsidiary S.A. Vina Santa Rita, made tax provisions of 17% of taxable income in 2004 (16.5% in 2003) subject to the First Category, in addition to a 35% Income Tax under Art. 21, for the 2004 and 2003 fiscal years. The other subsidiaries maintain negative taxable rents, therefore they have not provisioned for this concept. 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 (4,113,277) (1,294,403) Single tax reserve (10,176) (8,161) ----------- ----------- SUB TOTAL (4,123,453) (1,302,564) Credits: Monthly reserve payments 1,891,500 3,391,248 Training expenditures 75,288 69,632 Fixed Assets credit 30,803 32,544 Donations 29,437 9,895 ----------- ----------- CREDIT SUB TOTAL 2,027,028 3,503,319 Income Tax (2,096,425) 2,200,755 25 Income Tax to be Recovered 0 14,481 Other Taxes to be recovered: VAT Fiscal Credit 355,118 273,157 Income tax credit, previous year 745,454 236,091 Profit absorption, previous year 79,591 0 Income Tax advance 11,104 0 TOTAL TAXES TO BE ________ _________ RECOVERED (PAID) (905,158) 2,724,484 C) TAXABLE PROFIT FUND The parent company registered the following balance of profits to be distributed: 2004 2003 ----------- ----------- Th Ch$ Th Ch$ Generated as of 12.31.1983: Profits adjustment 1,955,579 1,955,579 Generated since 01.01.1984: Without Credit 1,952,737 1,092,551 With 10% First Category Credit 22,897 23,125 With 15% First category Credit 83,691,680 87,635,035 With 15% Additional rate Credit 725 736 With 16% First Category Credit 14,608,036 16,432,597 With 16.5% First Category Credit 7,024,928 4,179,243 With 17% First Category Credit 16,845,057 0 ----------- ----------- SUB-TOTAL TAX PROFITS 124,146,060 109,363,287 Non-income revenues 6,886,405 6,955,188 ----------- ----------- TOTAL RETAINED EARNINGS 131,032,465 116,318,475 26 CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX DEFERRED TAXES
09-30-2004 09-30-2003 ----------------------------------------------- --------------------------------------------- Liability Liability Item Asset Deferred Tax Deferred Tax Asset Deferred Tax Deferred Tax - ---------------------------------- ---------------------- ----------------------- ---------------------- --------------------- Short term Long Term Short Term Long Term Short Term Long Term Short Term Long Term ---------- --------- ---------- --------- ---------- --------- ---------- --------- Temporary Differences Reserve non-collectable accounts 132,736 0 0 0 126,820 0 0 0 Prepaid Income 543,712 0 0 0 849,637 0 0 0 Vacation provision 192,385 0 0 0 168,009 0 0 0 Intangible Amortization 0 0 0 0 0 0 0 0 Leased assets 0 0 0 0 0 0 0 0 Manufacturing expenses 0 0 0 0 0 0 0 0 Depreciations fixed assets 0 0 0 8,273,766 0 0 0 8,609,332 Severance payments 1,507 150,147 0 0 1,784 147,543 0 0 Other events 0 0 54,143 502,789 0 0 0 0 Packaging reserve 154,061 0 0 0 196,711 0 0 0 Furnace repair provision 325,031 401,392 0 0 0 589,832 0 0 Stock obsolescence provision 0 0 0 0 0 0 0 0 Spare parts obsolescence provision 109,251 0 0 0 98,860 0 0 0 Amortization lower value bonds 103,807 0 0 0 81,806 0 54,133 793,456 Non realized profits 244,323 10,836 0 0 231,810 7,103 0 0 Other provisions 140,648 0 0 0 21,308 0 0 0 Direct labor 11,337 0 0 0 21,846 0 0 0 Automobiles Accumulated Depreciation 0 20,698 0 0 0 16,864 0 81,841 Tax losses 0 144,781 0 0 0 4,029,249 0 0 Negative bonds placement (-) 0 0 0 232,002 0 0 0 0 Prepaid expenses 0 0 47,158 0 0 0 37,003 0 Banking reserve 0 0 0 30,042 0 0 0 42,352 Fixed assets, molds 0 0 0 289,762 0 0 0 268,229 Commercial brands 1,957 0 0 0 38,376 0 0 0 Amortization commercial brands 0 0 0 0 0 0 0 0 Expenses assetted 0 0 261,654 0 50,804 0 264,668 0 Deferred customs duties 729 20,087 0 73,330 0 0 0 1,990 Stock obsolescence provision 113,939 0 0 0 90,298 0 0 0 Other expenses provision 0 0 0 0 0 0 0 0 Supplementary accounts-net of amort. 3,424 5,586 0 3,973,651 167,110 3,341,325 0 3,556,747 Valuation provision 0 0 0 0 Total 2,071,999 742,355 362,955 5,428,040 1,810,959 1,449,266 355,804 6,240,453
27 CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX INCOME TAX
09/30/2004 09/30/2003 ----------- ----------- Th Ch$ Th Ch$ Current tax expense (tax provision) -4,123,453 -1,302,564 Adjustment tax expense (previous year) 0 0 Effects from assets or liabilities, deferred year's tax 38,147 -417,124 Tax benefit from tax losses 0 469 Effect of amortiz. of supplementary accounts for deferred assets and -23,544 103,943 liabilities Effect on assets or liabilities from deferred tax from changes in 0 0 assessment provision Other charges or credits to the account -22,352 0 Total -4,131,202 -1,615,276
28 9. Short and Long-term Leasing Contracts and Assets for Leasing As of September 30, 2004, balances are not included under this heading. 29 10. Other Current Assets As of September 30, 2004, included under this item are investments in: a) Financial instruments with resale agreement for Th Ch$ 20,146,047 valued as expressed by note 2 q). b) Deferred expenses for bonds placement for Th Ch$ 359,902. c) Balance in favor of Cristalerias de Chile y filial S.A. Vina Santa Rita for Th Ch$ 1,054,390 for Future Contracts in foreign currency. As of September 30, 2003, there were investments in: a) Financial instruments with resale agreement for Th Ch$ 8,679,104 valued as expressed by note 2 q). b) Deferred expenses for bonds placement for Th Ch$ 369,316. c) Th Ch$ 28,441 for bank reserve. 30 11. Information on operations involving purchase agreements, sales agreements, sale with repurchase agreement, and purchase with resale agreement of titles or real estate securities Information about these transactions is presented in attached charts. 31 NOTE 11 - INFORMATION ON OPERATIONS WITH PURCHASE COMMITMENT, SALE COMMITMENT, SALE WITH REPURCHASE AGREEMENTS AND PURCHASE WITH RESALE AGREEMENTS OPERATIONS OF TITLES AND REAL ESTATE SECURITIES SALE OPERATIONS WITH REPURCHASE COMMITMENT (VRC) AND PURCHASE OPERATIONS WITH RESALE COMMITMENT (CRV)
Dates ------------------------ Original Price Final Market Code Start End Counterpart Currency Set Rate Value Instrument Value - ----- ---------- ---------- -------------------- -------- --------- ---- --------- ---------------- --------- CRV 09.24.2004 10.01.2004 BCI CB Pesos 500,000 0.16 500,198 BCP-PDBC 500,160 CRV 09.24.2004 10.12.2004 Banco de Chile Pesos 5,100,000 0.16 5,104,896 BCP-BUCER 5,101,632 CRV 09.28.2004 10.05.2004 Banco de Chile Pesos 2,000,000 0.19 2,000,887 STEGEC-STGCC-CHI 2,000,253 CRV 09.28.2004 10.01.2004 Banco de Chile Pesos 300,000 0.19 300,057 STD-STGCC 300,039 CRV 09.29.2004 10.06.2004 Banco de Chile Pesos 940,000 0.18 940,395 PRC-BCU 940,056 CRV 09.30.2004 10.07.2004 BCI CB Pesos 1,590,000 0.20 1,590,742 CERO-DUSAN-PDBC 1,590,000 CRV 09.27.2004 10.04.2004 Santander Investment Pesos 1,300,000 0.20 1,300,516 PRC-ZERO 1,300,260 CRV 09.27.2004 10.12.2004 Santander S.A. Dollars 608,900 1.70 609,331 PRD-BCD-BCP-STD 608,986 Agente de Valores CRV 09.27.2004 10.18.2004 Santander S.A. Dollars 605,572 1.70 606,172 PRD-BCD-BCP-STG 605,657 Agente de Valores CRV 09.30.2004 10.08.2004 BCI CB Pesos 100,000 0.20 100,053 PRD 100,000 CRV 09.30.2004 10.08.2004 BCI CB Pesos 150,000 0.20 150,080 PRD 150,000 CRV 09.24.2004 10.01.2004 Banco de Chile Pesos 717,190 0.16 717,458 PRD 717,420 CRV 09.30.2004 10.08.2004 Banco de Chile Pesos 1,000,000 0.17 1,000,453 PRD 1,000,000 CRV 09.24.2004 10.01.2004 Banco de Chile Pesos 218,200 0.16 218,281 PRD 218,270 CRV 09.30.2004 10.08.2004 Banco de Chile Pesos 560,000 0.17 560,254 PRD 560,000 CRV 09.30.2004 10.08.2004 Banco BCI Pesos 70,000 0.20 70,037 PRD 70,000 Corredores de Bolsa CRV 09.30.2004 10.08.2004 Banco BCI Pesos 90,000 0.20 90,048 PRD 90,000 Corredores de Bolsa CRV 09.30.2004 10.08.2004 Banco BCI Pesos 420,000 0.20 420,224 PRD 420,000 Corredores de Bolsa CRV 09.30.2004 10.08.2004 Banco de Chile Pesos 180,000 0.17 180,082 PRD 180,000 CRV 09.10.2004 10.05.2004 Banco de Chile Pesos 200,000 0.15 200,250 PRBC 200,210 CRV 09.10.2004 10.04.2004 Banco de Chile Pesos 250,000 0.15 250,300 PRBC 250,263 CRV 09.27.2004 10.25.2004 Banco de Chile Pesos 285,266 0.16 285,692 PRBC 285,327 CRV 09.29.2004 10.25.2004 Banco de Chile Pesos 200,000 0.17 200,295 PRBC 200,023 CRV 09.20.2004 10.22.2004 Scotiabank Pesos 300,000 0.17 300,544 PRBC 300,187 CRV 08.24.2004 11.10.2004 Banco Santander Pesos 301,000 0.17 302,330 PRBC 301,648 CRV 08.31.2004 11.24.2004 Banco Santander Pesos 149,545 0.18 150,308 PRBC 149,823 CRV 08.31.2004 11.10.2004 Banco Santander Pesos 199,850 0.18 200,701 PRBC 200,222 CRV 09.27.2004 11.08.2004 Banco Santander Pesos 296,998 0.18 297,746 PRBC 297,069 CRV 09.27.2004 11.09.2004 Banco Santander Pesos 295,078 0.18 295,839 PRBC 295,149 CRV 09.27.2004 11.10.2004 Banco Santander Pesos 198,225 0.18 198,778 PRBC 198,303 CRV 09.28.2004 11.22.2004 Banco Santander Pesos 297,193 0.19 298,228 PRBC 297,249 CRV 09.28.2004 11.23.2004 Banco Santander Pesos 295,250 0.19 296,298 PRBC 295,306 CRV 09.29.2004 11.25.2004 Banco Santander Pesos 245,012 0.18 245,850 PRBC 245,041 CRV 09.30.2004 11.25.2004 Banco Santander Pesos 177,483 0.18 178,079 PRBC 177,493
32 12. Fixed Assets Cristalerias de Chile S.A. The Fixed Assets are valued according to note 2j), and the main goods included under this item as of September 30, 2004 and 2003 are the ones detailed in the annexed table. The items that make up the Company's fixed assets as of September 30, 2004 and 2003 include mainly Land, Industrial Constructions, Infrastructure Works, Machinery, and Equipment distributed between the Padre Hurtado, Alto Jahuel and other minor. S.A. Vina Santa Rita The increase in land corresponds to the operation of exchange conducted between Vina Santa Rita S.A. and Empresa de Transporte 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 land of 30,983.35 m2, both located in Buin. The parts agreed the exchange price on Ch$ 269,000 million. Technical Reappraisal and Adjustment of Accounting Values: The parent company carried out a technical reappraisal of its fixed assets in 1979. Likewise, in June 1986 it adjusted those assets. Both operations were carried out according to the provisions established in Circular Letters No. 1529 and No. 550 respectively of the Securities and Insurance Commission. The effects of these operations, including write-offs of property, are shown on the attached chart. Depreciations: The charge against results for this item amounts to Th Ch$ 11,754,846 in 2004 and Th Ch$ 11,065,777 in 2003. 33 The detail is shown on an attached chart. Fixed Assets 2004 2003 ------------ ------------ ThCh$ Th Ch$ Land Land and Mining Properties 13,590,995 13,326,621 Subtotal Lands 13,590,995 13,326,621 Buildings and Infrastructure Projects Hi rises and industrial buildings 31,798,777 31,045,256 Installations 33,214,620 31,285,463 Residences 26,711 26,685 Subtotal 65,040,108 62,357,404 Accumulated depreciation (22,207,123) (19,071,731) Fiscal year depreciation (2,338,859) (2,267,338) Subtotal Depreciations (24,545,982) (21,339,069) Subtotal Constructions and Projects 40,494,126 41,018,335 Machinery and Equipment Machinery 99,213,011 94,674,738 Furnaces 47,258,066 47,107,774 Furniture and Furnishings 2,731,920 2,567,390 Tools 731,693 635,358 Rolling Stock 926,934 877,420 Subtotal 150,861,624 145,862,680 Accumulated depreciation (74,618,264) (63,807,502) Fiscal year depreciation (9,256,578) (8,639,226) Subtotal Depreciations (83,874,842) (72,446,728) Subtotal Machinery and Equipment 66,986,782 73,415,952 Other Fixed Assets Spare parts 6,860,830 5,634,169 Imports in transit 1,576,730 133,834 Work in progress 4,691,473 2,778,530 Lots in Pirque and Leyda 418,042 471,719 Deferred Customs Duties 91,727 294,383 Packages and Bundling 240,191 239,958 Other 1,978,605 1,953,675 Subtotal Other Assets 15,857,598 11,506,268 Total Fixed Assets 245,350,325 233,052,973 Total Accumulated Depreciation (96,825,387) (82,879,233) Total Depreciation of the Period (11,595,437) (10,906,564) Total Net Fixed Assets 136,929,501 139,267,176 34 TECHNICAL REVALUATION AND ADJUSTMENT TO ACCOUNTING VALUES 2004 2003 ------------ ------------ Th Ch$ Th Ch$ Land Land 319,012 318,603 Subtotal net land and mining properties 319,012 318,603 Buildings and Infrastructure Projects High rises and industrial buildings 6,371,495 6,365,235 Installations 42,110 42,068 Subtotal Buildings 6,413,605 6,407,303 Accumulated Depreciation (5,156,792) (4,939,451) Fiscal year depreciation (159,409) (159,256) Subtotal depreciation (5,316,201) (5,098,707) Subtotal Buildings and Infrastructure project 1,097,404 1,308,596 Machinery and Equipment Furnaces 0 0 Machinery 0 0 Tools 0 0 Furniture and Furnishings 0 0 Subtotal Machinery and Equipment 0 0 Accumulated Depreciation 0 0 Fiscal year depreciation 0 0 Subtotal depreciation 0 0 Subtotal Machinery and Equipment 0 0 Subtotal Net Technical Revaluation 1,416,146 1,627,199 TOTAL REVALUED ASSETS 6,732,617 6,725,906 TOTAL ACCUMULATED DEPRECIATION (5,156,792) (4,939,451) TOTAL DEPRECIATION OF THE PERIOD (159,409) (159,256) TOTAL NET 1,416,416 1,627,199 35 13. Sales transactions with leaseback These type of transactions were not carried out as of September 30, 2004 and 2003. 36 14. Investments in related companies According to Circulating No. 1697 of the SVS, for the valuation of investments in related companies, carried out prior to the January 01, 2004, the equity method (VPP) has continued to be used. On the other hand, for the investments in which direct participation is lower than 20%, the equity method (VPP) has continued to be used, since they correspond to companies within the same business group and therefore significant influence exists on them. This method consists of assigning the investment an equivalent value to the proportion that corresponds to the company in the equity at book value in the issuer, and recognizing proportionally, the variations that this experiences. Investments in force as of September 30, 2004 and 2003 are detailed as follows: METROPOLIS INTERCOM S.A. On April 30, 2000 the Shareholders of Metropolis Intercom S.A.. agreed to make a capital increase by issuing 3,923,834 shares for Ch$ 1,256.67 per share, equivalent to Th Ch$ 4,931,000. Such amount was subscribed 50% by Cristalchile Comunicaciones S.A. and the remaining 50% by Liberty Comunicaciones de Chile Uno Ltda. The payment of such subscription was made by the subsidiary Cristalchile Comunicaciones S.A. on September 29, 2004, paying 1,961,917 shares for a value of Th Ch$ 2,462,794. With this purchase, the subsidiary participates directly in 2.205% and 47.795% indirectly in Metropolis Intercom S.A.'s equity. CIECSA S.A. On August 26, 2004 the Shareholders of Ciecsa S.A. agreed to increase company's equity through the issue of 36,400,000 shares equivalent to Th Ch$ 910,000 which were fully subscribed by Cristalerias de Chile S.A. This capital increase allowed CIECSA S.A. to complete financing in order to pay the balance of a Th US$2,100 debt it had with Televisa S.A., produced by the purchase of 7,885,472 shares of Megavision S.A. in August 2002. INMOBILIARIA MONTE AZUL S.A. As of May 14, 2004, Cristalchile S.A. paid to its subsidiary Constructora Apoger Th Ch$196 for 49% of the rights of Inmobiliaria Monte Azul Ltda. With this contribution the participation in the affiliate reaches 50% as of June 30, 2004. In order to determine the fair value, it has been 37 considered that the price paid corresponds to the market value, thus not originating adjustment to the investment value by present value. INVESTMENTS ABROAD RAYEN CURA S.A.I.C. On January 31, April 25 and June 30 of 2003 Rayen Cura S.A.I.C. carried out repayment of part of a capital increase paid on April 29, 2002. Total amounts reimbursed amounted to Th US$ 2,600. On June 30, 2004 and August 31, 2004, the Board of Rayen Cura S.A.I.C. approved the reimbursement of part of the irrevocable contributions subscribed and paid on April 29, 2002. The amount of the reimbursement was US$ 3,400,000, of which CristalChile Inversiones S.A. received US$ 1,360,000, equivalent to 40% of its contribution. As of September 30 the financial statements of Rayen Cura S.A.I.C. acknowledge a rate of exchange of $ 2.96 Argentine pesos per Dollar. Cristalchile Inversiones, in turn, has adjusted the financial statements of Rayen Cura S.A.I.C. in order to acknowledge the variation occurred from $ 2.91 (December 31, 2003) and $2.96 Argentine pesos per US dollar as of September 30, 2004. As an effect of the result of the subsidiary and the financial statements conversion of Rayen Cura S.A.I.C., according to the chilean normative, CristalChile Inversiones S.A. has acknowledged during the period a profit of Th Ch$ 837,914 and Th Ch$ 728,836 profit as of September 30, 2003. On the other hand, the Dollar rate of exchange variation in Chile during the period, originated adjustments and from the investment in Rayen Cura and for goodwill from the purchase of shares of that company, respectively, which were charged of Th Ch$61,568 in 2004 (charge Th Ch$ 1,252,448 in 2003) to the item Other Equity Reserves. As stipulated in Technical Bulletin No. 64 of the Accountants Association of Chile, following is the information related to investments abroad: 2004 2003 Th$ Th$ CristalChile Inversiones's share of Rayen Cura S.A.I.C. 12,248,478 13,124,284 Negative goodwill(net of amortization) 4,116,233 4,842,372 ----------- ---------- TOTAL 16,364,711 17,966,656 Loss due to devaluation (2,599,574) (2,088,490) Accrued Profit (loss) 837,914 728,836 Potentially remitable profit 0 0 38 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 contracted that have been specifically designated and entered to as coverage instruments for the investment abroad. 39 CRISTALERIAS DE CHILE S.A. NOTE 14- INVESTMENTS IN RELATED COMPANIES BREAKDOWN OF INVESTMENTS
Shareholder Company Net Investment (Percentage) Equity Income ---------------------------- ----------------- ----------------------- ----------------------- Country Number of Control of 09-30- 09-30- 09-30- 09-30- 09-30- 09-30- COMPANY Origin Currency Shares 2004 2003 2004 2003 2004 2003 ---------------- ------- -------- --------- -------- -------- ----------- ----------- ----------- ----------- Cordillera Comunicaciones 78.619.410-5 Holding Chile Peso 0 50.00000 50.00000 124,110,332 137,712,838 -10,657,135 -10,612,478 Cordillera Comunicaciones 78.619.370-2 Ltda. Chile Peso 0 0.00000 0.00000 124,734,002 138,404,862 -10,710,688 -10,665,991 Vina Los Vascos 89.150.900-6 S.A. Chile Peso 60,000,000 43.00000 43.00000 14,862,748 13,221,391 1,125,162 1,128,575 Editora Zig-Zag 114,596,21 90.684.000-6 S.A. Chile Peso 3 49.00000 49.00000 617,778 462,529 -223,778 -328,648 Ediciones Chiloe 96.793.770-3 S.A. Chile Peso 1,570,146 50.00000 50.00000 1,368,080 1,453,797 -133,623 -204,576 Inmobiliaria Don Alberto 96.826.870-8 S.A. Chile Peso 3,817 0.00000 38.00000 0 27 0 -8 86.881.400-4 Envases CMF S.A. Chile Peso 28,000 50.00000 50.00000 32,324,932 33,617,484 750,439 724,835 98.806.690-0 Proser S.A. Chile Peso 50 0.00000 0.00000 -12,200 -12,395 232 148 Metropolis 96.787.750-6 Intercom S.A. Chile Peso 1,961,918 2.00000 0.00000 69,850,866 79,890,942 -7,919,771 -7,512,179 Inmob. Y Constructora Monte Azul 78.936.090-1 S.A. Chile Peso 50 50.00000 0.00000 -9,169 0 -9,776 0 Rayen Cura 0-E S.A.I.C Argentina Dollar 1,376,000 40.00000 40.00000 30,621,196 32,810,711 2,094,785 1,822,089 TOTAL
Companies' equity Net Income Result of at Fair Value At Fair Value Accrual VPP ------------------- ----------------- ----------------------- ----------------------- 09-30- 09-30- 09-30- 09-30- 09-30- 09-30- 09-30- 09-30- COMPANY 2004 2003 2004 2003 2004 2003 2004 2003 ---------------- -------- --------- -------- -------- ----------- ----------- ----------- ----------- Cordillera Comunicaciones 78.619.410-5 Holding -5,328,567 -5,306,331 62,055,166 68,856,419 Cordillera Comunicaciones 78.619.370-2 Ltda. -26,777 -26,665 311,835 346,012 Vina Los Vascos 89.150.900-6 S.A. 483,820 485,287 6,390,982 5,685,198 Editora Zig-Zag 90.684.000-6 S.A. -111,696 -163,848 308,201 230,754 Ediciones Chiloe 96.793.770-3 S.A. -66,811 -102,288 684,040 726,898 Inmobiliaria Don Alberto 96.826.870-8 S.A. 0 -4 0 10 86.881.400-4 Envases CMF S.A. 375,220 362,416 16,537,685 16,808,743 98.806.690-0 Proser S.A. 0 2 -61 1 Metropolis 96.787.750-6 Intercom S.A. -174,611 0 1,540,309 1,761,707 Inmob. Y Constructora 78.936.090-1 Monte Azul S.A. -9,169 0 -9,776 0 -4,888 0 -4,584 0 Rayen Cura 0-E S.A.I.C 837,914 728,836 12,248,478 13,124,285 TOTAL 100,072,051 107,540,027
Income not Book value Realized of Investment ----------------------- ----------------------- 09-30- 09-30- 09-30- 09-30- COMPANY 2004 2003 2004 2003 ---------------- ----------- ----------- ----------- ----------- Cordillera Comunicaciones 78.619.410-5 Holding 0 0 62,055,166 68,856,419 Cordillera Comunicaciones 78.619.370-2 Ltda. 0 0 311,835 346,012 Vina Los Vascos 89.150.900-6 S.A. 0 0 6,390,982 5,685,198 Editora Zig-Zag 90.684.000-6 S.A. 0 0 308,201 230,754 Ediciones Chiloe 96.793.770-3 S.A. 148,757 189,659 535,283 537,239 Inmobiliaria Don Alberto 96.826.870-8 S.A. 0 0 0 10 86.881.400-4 Envases CMF S.A. 0 0 16,537,685 16,808,743 98.806.690-0 Proser S.A. 0 0 -61 1 Metropolis 96.787.750-6 Intercom S.A. 0 0 1,540,309 1,761,707 Inmob. Y Constructora 78.936.090-1 Monte Azul S.A. 0 0 -4,584 0 Rayen Cura 0-E S.A.I.C 0 0 12,248,478 13,124,285 TOTAL 148,757 189,659 99,923,294 107,350,368
40 15. Investments in other companies Investments in other companies that totaled Th Ch$ 770,586 on September 30, 2004 (Th Ch$ 840,471 in 2003) are shown on attached charts. CRISTALERIAS DE CHILE S.A. NOTE 15 - INVESTMENTS IN OTHER CORPORATIONS
Book Value ------------------------- Number of Shareholding R.U.T. Company Name Shares (Percentage) 09-30-2004 09-30-2003 - ------------ ------------------------------- ---------- ------------ ---------- ---------- 96.895.100-9 Internet Holding S.A. 57,104 7.4200 155,601 226,082 0-E Bazuca.com Inc. 266,500 7.8900 614,985 614,389
41 16. Goodwill Amortization NEGATIVE GOODWILL Stock purchases made in different periods of S.A. Vina Santa Rita, Vina Los Vascos S.A., Ciecsa S.A., Empresa Editora Zig Zag S.A., Ediciones Financieras S.A., and Rayen Cura S.A.I.C. have produced negative goodwill whose net balance to be amortized as of September 30, 2004 totaled Th Ch$ 8,696,914 (Th Ch$ 9,761,218 in 2003). POSITIVE GOODWILL As of September 30, 2004 and 2003 the parent company and the subsidiaries do not show any balance for this item. 42 CRISTALERIAS DE CHILE S.A. NOTE 16 - GOODWILL ON INVESTMENTS NEGATIVE GOODWILL
09-30-2004 09-30-2003 ----------------------------- ---------------------------- Amount Amount Amortiz. Goodwill Amortiz. Goodwill R.U.T. Company Name this period Balance this period Balance - ------------ ------------------------------ ----------- --------- ----------- ---------- 99.999.999-9 Rayen Cura S.A. 205,812 4,116,233 226,987 4,842,372 86.547.900-K S.A. Vina Santa Rita 38,347 531,312 38,310 581,877 96.608.270-4 Ciecsa S.A. 92,654 1,266,271 92,564 1,388,462 89.150.900-6 Vina Los Vascos S.A. 67,554 1,121,846 67,947 1,190,433 90.684.000-6 Editorial Zig-Zag S.A. 4,854 99,493 4,849 105,862 79.952.350-7 Red Televisiva Megavision S.A. 40,706 858,331 40,666 911,720 96.787.750-6 Metropolis Intercom S.A. 27,767 703,428 0 740,492 TOTAL 477,694 8,696,914 471,323 9,761,218
43 17. Intangibles As of September 30, 2004 and 2003 this item is composed as follows: Th Ch$ Th Ch$ ----------- ----------- 2004 2003 Concession of Channel 9 frequency and regional network 10,373,684 10,363,625 Trademarks 1,676,629 1,639,964 ----------- ----------- TOTAL INTANGIBLES 12,050,313 12,003,589 ACCUMULATED AMORTIZATIONS From Channel 9 Frequency (1,110,111) (947,892) From Trademarks (285,629) (225,739) ----------- ----------- TOTAL AMORTIZATIONS (1,395,740) (1,173,631) 44 18. Others (Assets) As of September 30, 2004 and 2003 the following are included under this item: 2004 2003 --------- --------- Th Ch$ Th Ch$ Celulosa Arauco bonds (*) 0 9,012,141 Price differential bond acquisition(*) 0 103,006 Negative goodwill Bond Sale (Net) 2,920,603 3,261,087 Expenses of bond sales 933,534 1,110,148 Bank Cash Reserve 0 2,441 Foreign programs to be exhibited over a year from the present 1,991,396 755,801 Long-Term Tax VAT Vina Dona Paula 631,390 444,138 Presumed Minimum Profit Tax 43,612 21,025 Other 28,830 46,020 --------- --------- Total 6,549,365 14,755,807 As of September 30, 2003 there were other long-term fixed assets: (*) Investment in Celulosa Arauco bonds equivalent to US$13,420,000 at an annual rate of 6.95% and maturity at September 15, 2005, Th Ch$ 103,006 for surplus Price differential paid in the acquisition of Celulosa Arauco bonds, which will be amortized in the same term of the bond's maturity date. (**) Corresponds to long-term refundable taxes of Vina Dona Paula S.A., Mendoza, Argentina subsidiary of S.A. Vina Santa Rita. 45 19. Short-term obligations with banks and financial institutions A detailed list of operations is shown on the attached chart. 46 CRISTALERIAS DE CHILE S.A. NOTE 19- OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS, SHORT TERM
Type of Currency and Readjustment Index -------------------------------------------------------------------------------------- Other Foreign Dollars Euros Yen Currencies -------------------- ----------------- ----------------------- ----------------------- Bank or Financial 09-30- 09-30- 09-30- 09-30- 09-30- 09-30- 09-30- 09-30- R.U.T. Institution 2004 2003 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 15,884 18,076 97.004.000-5 Banco de Chile 0 135,236 0 0 0 0 0 0 Other 0 0 0 0 0 0 0 0 TOTAL 0 135,236 0 0 0 0 15,884 18,076 Amount capital due 0 134,308 0 0 0 0 15,767 18,076 Annual average interest rate 0.00 1.88 0.00 0.00 0.00 0.00 1.96 2.76 Long Term - Short Term (code: 5.21.10.20) 97.008.000-7 Citibank NA 836,331 1,848,087 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 0 0 97.006.000-6 Banco Credito e Inversiones 0 0 0 0 0 0 0 0 97.004.000-4 Banco de Chile 0 0 0 0 0 0 0 0 97.036.000-K Banco SantanderSantiago 0 0 0 0 0 0 0 0 0-E JP Morgan Chase Bank 292,991 138,250 0 0 0 0 0 0 0-E Banco Argentaria 111,355 245,622 0 0 0 0 0 0 Other 0 0 0 0 0 0 0 0 TOTAL 1,240,677 2,231,959 0 0 0 0 0 0 Amount capital due 941,138 2,075,930 0 0 0 0 0 0 Average annual interest rate 2.05 1.83 0.00 0.00 0.00 0.00 0.00 0.00 Percentage oblig. foreign curr. (%) 46.0000 Percentage oblig. foreign curr. (%) 54.0000
Type of Currency and Readjustment Index ------------------------------------------------------------- U.F. Non adjustable $ Total ------------------- ----------------- ----------------------- Bank or Financial 09-30- 09-30- 09-30- 09-30- 09-30- 09-30- R.U.T. Institution 2004 2003 2004 2003 2004 2003 - ------------ ---------------------------- -------- --------- -------- -------- ----------- ----------- Short term (code: 5.21.10.10) 0-E Banco Regional de Cuyo 0 0 0 0 15,884 18,076 97.004.000-5 Banco de Chile 0 0 0 0 0 135,236 Other 0 0 0 0 0 0 TOTAL 0 0 0 0 15,884 153,312 Amount capital due 0 0 0 0 15,767 152,384 Annual average interest rate 0.00 0.00 0.00 0.00 Long Term - Short Term (code: 5.21.10.20) 97.008.000-7 Citibank NA 0 0 0 0 836,331 1,848,087 97.030.000-5 Banco Estado 0 0 268,913 273,217 268,913 273,217 97.018.000-1 Scotiabank Sudamericano 421,190 454,163 0 0 421,190 454,163 97.006.000-6 Banco Credito e Inversiones 172,076 172,872 0 0 172,076 172,872 97.004.000-4 Banco de Chile 126,864 322,590 0 0 126,864 322,590 97.036.000-K Banco SantanderSantiago 469,805 479,176 0 0 469,805 479,176 0-E JP Morgan Chase Bank 0 0 0 0 292,991 138,250 0-E Banco Argentaria 0 0 0 0 111,355 245,622 Other 0 0 0 0 0 0 TOTAL 1,189,935 1,428,801 268,913 273,217 2,699,525 3,933,977 Amount capital due 1,173,790 1,344,683 264,375 268,605 2,379,303 3,689,218 Average annual interest rate 1.39 4.43 4.94 4.94
47 20. Other Current Liabilities As of September 30, 2003, there was a balance Th Ch$ 5,136,957 in favor of financial institutions corresponding to future contracts in foreign currency subscribed by the parent company and the subsidiaries S.A. Vina Santa Rita y Ciecsa S.A. More detail on these is shown in note 34 Derivative Contracts. 48 21. Long-term obligations with banks and financial institutions The obligations with banks and financial institutions are presented on the charts attached. 49 CRISTALERIAS DE CHILE S.A. NOTE 21: LONG-TERM OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS
Institution Years of Maturity --------------------------- ------------------------------ More than More than More than More than 1 2 3 5 up to 2 up to 3 up to 5 up to 10 ---------- ---------- ------------ ----------- Currency Financial adjustment R.U.T. Institution index Thou Ch$ Thou Ch$ Thou Ch$ Thou Ch$ - ------------ --------------------------- -------------- ---------- ---------- ------------ ----------- Other 0-E Banco Regional de Cuyo currency 29,181 10,349 0 0 97.030.000-7 Banco Estado Non-adjustment 271,182 132,188 0 0 97.036.000-K Banco Santander Santiago UF 465,297 465,297 0 0 97.018.000-1 Banco Scotiabank UF 412,543 412,543 412,543 0 0-E J.P. Morgan Chase Bank Dollars 7,611,250 15,222,500 7,611,250 0 90.008.000-K Citibank N.A. Dollars 0 0 0 0 97.006.000-6 Banco Credito e Inversiones UF 85,954 0 0 0 97.004.000-5 Banco de Chile UF 124,042 124,042 248,084 0 0-E Banco Argentaria Dollars 0 0 0 0 Total 8,999,449 16,366,919 8,271,877 0 Percentage of obligations in foreign currency 91.0000% Percentage of obligations in local currency 9.0000%
More than 10 years ------------------------------ Closing date Closing date Previous Amount Period Current period period -------------- ---------- ------------------------- ----------- Total Total Long- Long- Term at Annual Term at closing of average closing of Financial Financial interest Financial R.U.T. Institution Thou Ch$ Statements rate Statements - ------------ --------------------------- -------------- ---------- ------------ ----------- 0-E Banco Regional de Cuyo 0 0 39,530 1.62 58,383 97.030.000-7 Banco Estado 0 0 403,370 4.94 683,043 97.036.000-K Banco Santander Santiago 0 0 930,594 TAB 180+1.05% 1,398,035 97.018.000-1 Banco Scotiabank 0 0 1,237,629 TAB 180+1.1% 1,652,707 0-E J.P. Morgan Chase Bank 0 0 30,445,000 2.050 33,577,276 90.008.000-K Citibank N.A. 0 0 0 916,332 97.006.000-6 Banco Credito e Inversiones 0 0 85,954 TAB 90+1.05% 258,255 97.004.000-5 Banco de Chile 0 0 496,168 TAB 180+1.05% 1,242,314 0-E Banco Argentaria 0 0 0 122,811 Total 0 33,638,245 39,909,156
50 22. Short-term and long-term obligations with the public (promissory notes and bonds) The balance for the short-term as of September 30, 2004 was Th Ch$ 1,158,008, (Th Ch$ 1,159,784 in 2003) corresponding to interests accrued for bonds issued by the Parent Company and the subsidiary S.A. Vina Santa Rita. Also are shown UF 500,000 equivalent to Th Ch$ 8,595,390 which correspond the maturity of 2 quotas of the bonds capital series C1 issued by the parent company. As of September 30, 2004, there are long-term obligations with the public for Th Ch$ 82,515,744 (Th Ch$ 91,250,982 in 2003), of which Th Ch$ 61,886,808 (Th Ch$ 70,590,383 in 2003) correspond to bonds issued in UF's by the parent company, of series C1, C2, D1, D2; and Th Ch$ 20,628,936 (Th Ch$ 20,660,600 in 2003) which correspond to bonds series C1, D1 and D2 issued in UF's by the subsidiary S.A. Vina Santa Rita. This liability is shown in detail in the appendix. 51 Cristalerias de Chile S.A. NOTE 22: SHORT-TERM AND LONG-TERM OBLIGATIONS WITH PUBLIC (PROMISSORY NOTES AND BONDS) BONDS
REGISTRATION OR CURRENT IDENTIFICATION No. DEPOSIT INDEXING INTEREST FINAL OF INSTRUMENT SERIES FACE VALUE UNIT OF BOND RATE MATURITY - ------------------------------- ------------ ------------ ------------ ---------- ----------- LONG-TERM BONDS-CURRENT PORTION 296-09.07.02 C1 Interests 0 UF 4.75 01-15-2005 296-09.07.02 C2 Interests 0 UF 4.75 01-15-2005 296-09.07.02 D1 Interests 0 UF 5.80 01-15-2005 296-09.07.02 D2 Interests 0 UF 5.80 01-15-2005 241-15.12.00 C1 Interests 0 UF 6.29 12-15-2005 241-15.12.00 D1 Interests 0 UF 6.29 12-15-2021 241-15.12.00 D2 Interests 0 UF 6.29 12-15-2021 296-09.07.02 C 250,000 UF 4.75 07-15-2005 296-09.07.02 C 250,000 UF 4.75 07-15-2005 TOTAL CURRENT PORTION LONG-TERM BONDS 296-09.07.02 C1 1,000,000 UF 4.75 07-15-2008 296-09.07.02 C2 500,000 UF 4.75 07-15-2008 296-09.07.02 D1 1,900,000 UF 5.80 07-15-2023 296-09.07.02 D2 200,000 UF 5.80 07-15-2023 241-15.12.00 C1 200,000 UF 6.25 12-15-2005 241-15.12.00 D1 100,000 UF 6.25 12-15-2021 241-15.12.00 D2 900,000 UF 6.25 12-15-2021 LONG-TERM TOTAL
INSTALLMENTS PAR VALUE ------------------------------- --------------------------- REGISTRATION OR CURRENT ISSUE IDENTIFICATION No. INTEREST AMORTIZATION IN CHILE OR OF INSTRUMENT PAYMENT PAYMENT 09-30-2004 09-30-2003 ABROAD - ------------------------------- ------------ ------------ ------------ ---------- ----------- LONG-TERM BONDS-CURRENT PORTION 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 258,941 259,338 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 86,314 86,446 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 399,485 400,099 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 42,051 42,115 LOCAL 241-15.12.00 SEMI-ANNUAL SEMI-ANNUAL 61,869 61,964 LOCAL 241-15.12.00 SEMI-ANNUAL SEMI-ANNUAL 30,935 30,982 LOCAL 241-15.12.00 SEMI-ANNUAL SEMI-ANNUAL 278,413 278,840 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 4,297,695 0 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 4,297,695 0 LOCAL TOTAL CURRENT PORTION 9,753,398 1,159,784 LONG-TERM BONDS 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 17,190,780 25,825,750 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 8,595,390 8,608,583 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 32,662,482 32,172,616 LOCAL 296-09.07.02 SEMI-ANNUAL SEMI-ANNUAL 3,438,156 3,443,433 LOCAL 241-15.12.00 SEMI-ANNUAL SEMI-ANNUAL 3,438,156 3,443,433 LOCAL 241-15.12.00 SEMI-ANNUAL SEMI-ANNUAL 1,719,078 1,721,717 LOCAL 241-15.12.00 SEMI-ANNUAL SEMI-ANNUAL 15,471,702 15,495,450 LOCAL LONG-TERM TOTAL 82,515,744 91,250,982
52 23. Provisions and Write-Offs Provisions The Company has short-term provisions of Th Ch$ 14,212,657 as of September 30, 2004, and Th Ch$ 9,818,920 in 2003. Long-term provisions of Th Ch$ 6,604,096 and Th Ch$ 7,745,359 are recorded for the years 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$ 739,424 and Th Ch$ 750,280 as of September 30, 2004 and 2003, respectively. This provision is deducted from the balance of Debtors from Sales and Documents Receivable. Vacation Provision: The parent company and its subsidiaries have established provisions for the total cost of vacations pending as of June 30, 2004 and 2003, as established in Technical Bulletin No. 47 of the Accountants Association of Chile. The net balance for this item is Th Ch$ 1,137,805 as of September 30, 2004 (Th Ch$ 1,010,540 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$ 4,273,077 and Th Ch$ 3,571,074 as of September 30, 2004 and 2003, respectively. 53 CRISTALERIAS DE CHILE S.A. NOTE 23: PROVISIONS AND WRITE-OFFS 09-30-2004 09-30-2003 ---------- ---------- Thou Ch$ Thou Ch$ Short Term Commissions and Fees 2,720,782 2,931,652 Furnace reconstruction 1,911,946 0 Share of Board of Directors 677,434 164,808 Legal holidays 1,137,805 1,010,540 Local and foreign suppliers 828,425 899,952 Packing return to clients 906,239 1,168,581 Spareparts reserve and other 375,866 445,200 Informative Services 6,028 0 Advertising and marketing 1,285,669 246,383 Copyright 53,633 49,020 Severance payments 185,695 184,430 Advertising Agency Commmission 851,691 521,490 Reserve indirect cost 1,530,627 1,199,478 Reserve for bonus 86,090 83,141 Reserve for loss of exported products 73,068 91,144 Reserve for Grape harvest expenses 884,381 412,096 Other receivable account reserves 697,278 410,735 Other receivable account reserves TOTAL 14,212,657 9,818,920 Long Term Severance payment 4,242,965 4,174,285 Furnace reconstruction 2,361,131 3,571,074 TOTAL 6,604,096 7,745,359 54 24. Severance Payment The provision for severance payments to personnel is included at its current value, as expressed in note 2 t). As of September 30, 2004 it amounts to Th Ch$ 4,428,660 (Th Ch$ 4,358,715 in 2003). As of September 30, 2004, the parent company has paid severance payments of Th Ch$ 180,607 (Th Ch$ 140,701 in 2003) chargeable against the provision. 55 25. Other long-term liabilities As of September 30, 2004 and 2003 there are no balances for this item. 56 26. Minority interest The subsidiaries that generate minority interests as of September 30, 2004 and 2003 are shown on the attached chart. CRISTALERIAS DE CHILE S.A. NOTE 26: MINORITY INTEREST
SUBSIDIARY COMPANY NET WORTH RESULTS SHAREHOLDING - --------------------------------------- ------------------------ -------------------------- ----------------- Thou Ch$ Thou Ch$ Thou Ch$ Thou Ch$ % % 2004 2003 2004 2003 2004 2003 ---------- ---------- ----------- ----------- ------ ------ S.A.Vina Santa Rita 40,002,080 37,950,432 (2,477,427) (1,743,325) 45.90 45.90 CIECSA and subsidiaries 442,082 297,112 (112,251) (21,525) 1.55 1.55 Constructora Apoger S.A. and subsidiary 630 1,038 327 213 20.00 20.00 Cristalchile Comunicaciones S.A. 1,184 1,314 103 99 0.01 0.01 TOTAL 40,445,976 38,249,896 (2,589,248) (1,764,538)
57 27. Changes in Equity a. Activity in 2004 and 2003 The activity of the capital and reserve accounts in the fiscal years ended in September 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 4,667,636 4,450,953 Reserve for adjustment of value of fixed assets 1,416,415 1,627,199 Adjustment for conversion difference in investment in Rayen Cura S.A.I.C. 593,044 2,164,029 --------- --------- TOTAL OTHER RESERVES 6,677,095 8,242,181 58 CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NET WORTH
Reserve Premium in Reserve Paid-in capital sale of Other Future ITEM Capital Revaluation shares Reserves Dividends - ------------------------------------ ---------- ----------- ---------- ---------- ----------- Balances as of 09/30/2004 Initial balance 65,396,749 0 27,874,377 6,421,900 123,160,119 Distribution result previous fiscal year 0 0 0 0 5,468,440 Final dividend previous fiscal year 0 0 0 0 -1,612,800 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 0 133,179 0 Eventual Dividends 0 0 0 0 0 Owner's equity Revaluation 0 1,242,538 529,613 122,016 2,411,687 Fiscal Year Result 0 0 0 0 0 Provisional Dividends 0 0 0 0 0 Final balances as of 09/30/2004 65,396,749 1,242,538 28,403,990 6,677,095 129,427,446 Initial balance as of 09/30/2003 64,749,257 0 27,598,393 9,713,099 114,912,655 Distribution result previous fiscal year 0 0 0 0 14,356,726 Final dividend previous fiscal year 0 0 0 0 -5,526,400 Capital increases with cash stock issue 0 0 0 0 0 Reserves and/or profit Capitalization 0 0 0 0 0 Development period accumulated deficit 0 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 -1,717,273 0 Eventual Dividends 0 0 0 0 -960,000 Owner's equity revaluation 0 776,991 331,181 116,557 1,573,338 Fiscal Year Result 0 0 0 0 0 Provisional Dividends 0 0 0 0 0 Final balances 64,749,257 776,991 27,929,574 8,112,383 124,356,319 Updated Final Balances as of 09/30/2003 65,785,245 789,423 28,376,447 8,242,181 126,346,020
CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NET WORTH (Cont'd)
Devel. Accumulated Provisional Period Fiscal ITEM Results Dividends Deficit Year Result - ------------------------------------ ----------- ---------- -------- ----------- Balances as of 09/30/2004 Initial balance 6,426,520 -958,080 0 0 Distribution result previous fiscal year -6,426,520 958,080 0 0 Final dividend previous fiscal year 0 0 0 0 Capital increases with cash stock issue 0 0 0 0 Reserves and/or Profits Capitalization 0 0 0 0 Development period Accumulated deficit 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 0 Eventual Dividends 0 0 0 0 Owner's equity Revaluation 0 -12,800 0 0 Fiscal Year Result 0 0 0 14,237,355 Provisional Dividends 0 -2,560,000 0 0 Final balances as of 09/30/2004 0 -2,572,800 14,237,355 Initial balance as of 09/30/2003 17,660,662 -3,303,936 0 0 Distribution result previous fiscal year -17,660,662 3,303,936 0 0 Final dividend previous fiscal year 0 0 0 0 Capital increases with cash stock issue 0 0 0 0 Reserves and/or profit Capitalization 0 0 0 0 Development period accumulated deficit 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 0 Eventual Dividends 0 -960 0 0 Owner's equity revaluation 0 0 0 0 Fiscal Year Result 0 -960,000 0 2,415,990 Provisional Dividends 0 -960,000 0 0 Final balances 0 -960,960 0 2,415,990 Updated Final Balances as of 09/30/2003 0 -976,335 0 2,454,646
59 CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NETWORTH - NUMBER OF SHARES No. No. No. SHARES SHARES SHARES SERIES SUBSCRIBED PAID WITH VOTING - --------------- ----------------- ------------------ ----------------------- SINGLE 64,000,000 64,000,000 64,000,000 CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NETWORTH - CAPITAL (AMOUNT - TH CH$) SUBSCRIBED PAID-IN SERIES CAPITAL CAPITAL - --------------- ---------------------------- --------------------------- SINGLE 65,396,749 65,396,749 60 28. Other Non-Operating Income and Disbursements As of September 30, 2004 and 2003 the non-operating income totals Th Ch$ 898,101 and Th Ch$ 562,302 respectively. Non-operating Expenditures were Th Ch$ 2,033,862 in 2004 and Th Ch$ 1,546,073 in 2003. 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 Fontec Proyect Benefit 10,886 5,530 Offices and establishments rental 269,904 159,383 Tax exemptions 176,518 108,329 Sale of fixed assets 8,676 4,599 Land granted 215,542 0 Indemnity for claims 988 70,587 Non-realized profit Amortization 31,158 0 Sale of materials 33,245 21,254 Condonation deferred custom duties 47,834 0 Miscellaneous Income 69,304 192,620 Raw material bonus 34,046 0 TOTAL NON-OPERATING INCOME 898,101 562,302 EXPENSES Professional advice 599,155 578,225 Personnel Contracts Finished 126,672 37,611 Share of Board of Directors 109,223 76,316 Condonation deferred custom duties 0 91,193 Loss in sales of fixed assets 345,119 83,904 Trademarks amortization 45,285 73,211 Municipal patents 3,226 0 Frequency amortization 123,346 113,747 Suppliers 160,202 175,798 Other expenses 317,303 245,758 Insurance 5,725 0 Taxes 149,217 17,860 ADR'S expenses 49,389 52,450 TOTAL NON-OPERATING EXPENSES 2,033,862 1,546,073 61 29. Price Level Restatements As a result of the application of the adjustment for price level restatements as described in Note 2 e), there was a net charge to results in the 2004 fiscal year in the amount of Th Ch$ 768,421 and a net charge against results of Th Ch$ 716,961 in 2003. Additional information organized by item on the Balance Sheet is shown on the attached chart. Cristalerias de Chile S.A. NOTE 29: ADJUSTMENT FOR PRICE LEVEL RESTATEMENTS
ADJUSTABILITY ASSETS (CHARGES)/CREDITS INDEX 09-30-2004 09-30-2003 - ------------------------------------------ ------------- ---------- ---------- INVENTORY CPI 397,811 98,124 FIXED ASSETS CPI 2,968,673 1,547,719 INVESTMENTS IN RELATED COMPANIES CPI 1,798,796 741,517 MARKETABLE SECURITIES CPI 78,936 46,727 SHORT-TERM DEBTORS CPI 366,841 39,367 SHORT-TERM DEBTORS UF 1,563 1,025 ACCOUNTS RECEIVABLE RELATED COMPANIES UF 320,180 266,548 TIME DEPOSITS CPI 0 4,730 LONG-TERM DEBTORS UF 6,172 1,974 RATE DIFFERENCE IN PLACEMENTOF L/T BONDS UF 37,292 28,294 INFLATION EFFECT CPI 1,156,347 397,518 OTHER NON-MONETARY ASSETS CPI 39,107 471,101 EXPENSE AND COST ACCOUNTS CPI 1,065,202 212,778 TOTAL (CHARGES)/CREDITS 8,236,920 3,857,422 LIABILITIES (CHARGES)/ CREDITS NET WORTH CPI -4,305,854 -2,854,066 ACCOUNTS PAYABLE RELATED COMPANIES UF -12 -92 BANK LOANS UF -16,909 -17,340 SHORT-TERM RESERVES CPI -49,106 -5,167 LONG-TERM BANK LOANS UF -46,461 -57,464 LONG-TERM RESERVES CPI -54,795 -72,512 LONG-TERM CREDITORS CPI -470 -544 OBLIGATIONS WITH THE PUBLIC UF -1,434,684 -1,090,636 MINNORITY INTEREST CPI -349,555 -1,055 INFLATION EFFECT CPI -710,833 0 NON-MONETARY LIABILITIES UF -80,713 0 NON-MONETARY LIABILITIES CPI -57,438 -165,632 INCOME ACCOUNTS CPI -1,898,511 -309,875 TOTAL (CHARGES)/ CREDITS -9,005,341 -4,574,383 (LOSS) PROFIT FROM ADJUSTMENT FOR CURRENCY DEVALUATION -768,421 -716,961
62 30. Exchange Differences There is a net charge to results in the 2004 fiscal year of Th Ch$ 2,373,424 and a net credit to results of Th Ch$ 12,465,716 in 2003. According to dispositions of Circular No. 1560 of the SVS, the net effect on results of foreign currency adjustable assets and liabilities adjustment without the inflationary effect of the local currency is presented under this item. More information is shown on the attached chart. Cristalerias de Chile S.A. NOTE 30: EXCHANGE DIFFERENCES
ITEM CURRENCY AMOUNT - ------------------------------------------- ----------- ------------------------- 09-30-2004 09-30-2003 ---------- ---------- CURRENT ASSETS DOLLARS 345,032 -1,101,541 CURRENT ASSETS OTHER CUR. -445 -74,001 CLIENTS DOLLARS 11,909 -484,544 CLIENTS OTHER CUR 23,428 231,333 TIME DEPOSITS DOLLARS 0 -133,860 INVENTORY DOLLARS -183,967 -305,675 FUTURE CONTRACT EFFECT DOLLARS 854,149 -775,590 OTHER ASSETS DOLLARS 847,809 -274,893 OTHER ASSETS OTHER CUR. -12,790 -14,593 INFLATIONARY EFFECT DOLLARS -1,156,347 -397,518 MARKETABLE SECURITIES DOLLARS 615,224 -4,369,008 MARKETABLE SECURITIES EUROS 460,083 0 LONG TERM ASSETS DOLLARS 16,919 0 MISCELLANEOUS DEBTORS DOLLARS -8,482 0 BOND INVESTMENTS DOLLARS 90,147 -795,834 TOTAL (CHARGES) CREDITS 1,902,669 -8,495,724 ACCOUNT PAYABLE DOLLARS 103,749 0 DOCUMENTS PAYABLE DOLLARS 52,813 472,167 DOCUMENTS PAYABLE OTHER CUR. -999 -45,868 MISCELLANEOUS CREDITORS SHORT TERM DOLLARS -106 65,749 SHORT TERM RESERVES DOLLARS -51,837 2,943 LONG-TERM BANK CREDITS DOLLARS -755,000 2,928,112 LONG TERM RESERVES DOLLARS -26,083 263,530 OTHER LONG-TERM LIABILITIES DOLLARS -158,677 -106,347 OTHER LONG-TERM LIABILITIES OTHER CUR. -60,526 -28,352 MISCELLANEOUS CREDITORS LONG TERM DOLLARS 31,496 7,249 FUTURE CONTRACT EFFECT DOLLARS 623,562 -7,529,175 INFLATIONARY EFFECT DOLLARS 710,833 0 SHORT-TERM BANK CREDITS DOLLARS 1,530 0 TOTAL (CHARGES) CREDITS 470,755 -3,969,992 (LOSS) PROFIT FROM EXCHANGE DIFFERENCES 2,373,424 -12,465,716
63 31. Extraordinary Items As of September 30, 2004 and 2003 there are no extraordinary items. 64 32. Expenses for the issue and placement of stocks and debt instruments The parent company and the subsidiary S.A. Vina Santa Rita carried out bond placements in August 2002 and March 2001, incurring in placement expenses that as of September 30, 2004 totaled Th Ch$ 3,459,953 (Th Ch$ 3,854,080 in 2003) The charge to Results for the amortization of these expenses for year 2004 amounts Th Ch$ 280,112 (Th CH$ 282,413 in 2003) and is being realized according to the maturity of each series. Detail of expenses is as follows:
2004 2003 ---------------------------- --------------------------- Short -Term Long-Term Short -Term Long-Term ----------- --------- ----------- --------- Rate Placement Differential 200,989 2,166,518 201,297 2,374,617 Stamp Tax 136,251 850,263 144,058 1,011,145 Placement Commissions and other 22,661 83,271 23,961 99,002 ------- --------- ------- --------- Total 359,901 3,100,052 369,316 3,484,764
65 33. Cash Flow Statement CASH FLOW STATEMENT The values included in MISCELLANEOUS on the Cash Flow Statement are detailed on the attached appendix. CASH FLOW STATEMENT 1. The following is the detail of the item OTHERS:
2004 2003 ------------ --------- Th Ch$ Th Ch$ 541.11.40 Other Income Received Treasury Refund Income Tax and others 897,097 909,776 Recover VAT exportation 1,206,100 1,390,562 Severance insurance 0 67,995 Discount for paid of customs duties 37,886 0 Exchange difference 333,209 0 Tax exemption 176,518 108,329 Other income 191,044 319,357 Total 2,841,854 2,796,019 541.11.80 Other expenses paid Exchange difference 219,861 5,326,938 Donations 82,743 59,819 Finished personnel contracts 126,672 37,610 Advice Services 107,040 105,778 Derivate Contracts liquidation 285,336 0 Shareholder's bonds 78,303 76,316 Other expenses 521,305 556,964 Total 1,421,260 6,163,425 541.13.15 Sale of other investments Bonds' sale 4,972,969 0 Profit on bonds' sale 143,394 0 Redemption interests L.T. bonds 0 313,172 Total 5,116,363 313,172 541.13.30 Other income from investments Future contracts 839,008 2,297,517 Others 0 0 Total 839,008 2,297,517 541.13.65 Other investment disbursements Purchase of shares 0 323,261 Future contracts 2,508,397 5,988,305 Others 0 0 Total 2,508,397 6,311,566
66 Following are financing and investment activities that did not generate cash flow during the fiscal year, but that commit future parent company cash flows: ITEM Amount Th Ch $ Due Date -------------- -------- Dividend 159 1,280,000 October-04 Amounts payable investment 1,001,516 3rd Quarter --------- Total 2,281,516 67 34. Derivative Contracts FUTURE CONTRACTS IN FOREIGN CURRENCY The parent company and its subsidiaries S.A. Vina Santa Rita and Ciecsa S.A. have signed future sales contracts in foreign currency of Th US$ 80,200 in 2004 (purchase contracts of Th US$ 93,600 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 as of September 30, 2004 and 2003, have been taken to protect against exchange rate variations of the American dollar (existing transactions contracts) as well as investment. Forward contracts taken with the intention of covering existing parties, are related, according to what was defined by administration, with coverage of obligations in Dollars. According to Technical Bulletin N(0) 57 of the Chilean Accountants Associations A.G., the results generated by these contracts are recognized in results as long as the effects of parties subject to coverage are recognized. 68 CRISTALERIAS DE CHILE S.A. NOTE 34: DERIVATIVE CONTRACTS
DESCRIPTION OF CONTRACTS ---------------------------------------------------------------- PROTECTED ITEM OR TRANSACTION ----------------------------- MATURITY OR TYPE OF TYPE OF VALUE OF EXPIRATION SPECIFIC PURCHASE/ DERIVATIVE CONTRACT CONTRACT DATE ITEM SALE POSITION NAME AMOUNT - ------------- ----------- -------------- ----------- --------- ------------- ------------- ------ FR CI 12,908,680 FOURTH 2004 EXCH RATE S INVESTMENTS - FR CI 10,351,300 FIRST 2005 EXCH RATE S INVESTMENTS - FR CI 1,279,500 FIRST 2005 EXCH RATE S INVESTMENTS - FR CI 633,220 FIRST 2005 EXCH RATE S INVESTMENTS - FR CI 626,560 FIRST 2005 EXCH RATE S INVESTMENTS - FR CI 615,710 FIRST 2005 EXCH RATE S INVESTMENTS - FR CI 615,710 FIRST 2005 EXCH RATE S INVESTMENTS - FR CI 615,710 FIRST 2005 EXCH RATE S INVESTMENTS - FR CI 1,833,180 FIRST 2005 EXCH RATE S INVESTMENTS - FR CI 1,833,180 FIRST 2005 EXCH RATE S INVESTMENTS - FR CI 1,212,920 FOURTH 2004 EXCH RATE S INVESTMENTS - FR CI 1,882,590 FIRST 2005 EXCH RATE S INVESTMENTS - FR CI 631,860 FIRST 2005 EXCH RATE S INVESTMENTS - FR CI 631,860 FIRST 2005 EXCH RATE S INVESTMENTS - FR CI 1,286,620 FOURTH 2004 EXCH RATE S INVESTMENTS - FR CI 643,310 FOURTH 2004 EXCH RATE S INVESTMENTS - FR CI 1,286,120 FOURTH 2004 EXCH RATE S INVESTMENTS - FR CI 1,263,900 FIRST 2005 EXCH RATE S INVESTMENTS - FR CI 1,597,675 FIRST 2005 EXCH RATE S INVESTMENTS - FR CI 3,067,550 FOURTH 2004 EXCH RATE S INVESTMENTS - FR CI 916,590 FOURTH 2004 EXCH RATE S INVESTMENTS - FR CI 611,060 FOURTH 2004 EXCH RATE S INVESTMENTS - FR CI 1,212,920 FOURTH 2004 EXCH RATE S INVESTMENTS - FR CI 1,820,880 FOURTH 2004 EXCH RATE S INVESTMENTS -
ACCOUNTS EFFECTED ------------------------------------------------------- ASSETS/LIABILITIES EFFECT ON RESULT --------------------------- ---------------------- VALUE OF TYPE OF TYPE OF PROTECTED NOT DERIVATIVE CONTRACT ITEM NAME AMOUNT REALIZED REALIZED - ------------------ -------- --------- ----------- ------- -------- -------- FR CI - ASSETS 204,528 204,528 - FR CI - ASSETS 278,472 278,472 - FR CI - ASSETS 63,332 63,332 - FR CI - ASSETS 23,961 23,961 - FR CI - ASSETS 17,990 17,990 - FR CI - ASSETS 6,791 6,791 - FR CI - ASSETS 6,818 6,818 - FR CI - ASSETS 6,836 6,836 - FR CI - ASSETS 6,681 6,681 - FR CI - ASSETS 6,689 6,689 - FR CI - LIABILITIES 4,106 -4,106 - FR CI - ASSETS 63,331 63,331 - FR CI - ASSETS 25,767 25,767 - FR CI - ASSETS 26,565 26,565 - FR CI - ASSETS 64,837 64,837 - FR CI - ASSETS 33,269 33,269 - FR CI - ASSETS 74,588 74,588 - FR CI - ASSETS 49,420 49,420 - FR CI - ASSETS 81,198 81,198 - FR CI - ASSETS 22,381 22,381 - FR CI - ASSETS 3,458 3,458 - FR CI - ASSETS 2,262 2,262 - FR CI - LIABILITIES 4,857 -4,857 - FR CI - LIABILITIES 5,821 -5,821 -
69 35. Contingencies and Restrictions CONTINGENCIES AND COMMITMENTS As of September 30, 2004, there are a guarantees delivered in the amount of Th Ch$ 8,547 (Th Ch$ 8,071 in 2003), according to the detail in the attached chart. LAWSUITS OR OTHER LEGAL ACTIONS THE COMPANY IS INVOLVED IN As of September 30, 2004 and 2003 there are lawsuits and other legal actions pending corresponding to the subsidiary Red Televisiva Megavision, which are presented in the annexed chart. 1.- Court: 12th civil court of Santiago. Docket No. 3025-97. Plaintiff: Patricio Nasser. Claim: Indemnity for damages - Publicity Abuses Act - for alleged injury caused to the Plaintiff at the broadcasting of a show. Amount of damages sought: Ch$100,000,000. Effect on balance sheet: no accounting effect as of the date of the report. Current Status of proceedings: Judgment rendered on first instance in favor of Mega. The Plaintiff filed an annulment recourse (recurso de casacion en la forma) and appealed in subsidy. Waiting for resolution. 2.- Court: 16th civil court of Santiago. Docket No. 4822-1999. Plaintiff: Maria Santos Martinez Orellana and others. Claim: Indemnity for damages - Publicity Abuses Act - for supposed injury caused at the broadcasting of a show. Amount of damages sought: Ch$100,000,000. Effect on balance sheet: no accounting effect as of the date of the report. Current Status of Proceedings: First instance condemnatory judgment against Mega for an amount of Ch$9,000,000 plus judicial costs and adjustments by inflation, but without interests. The judgment was appealed and such appeal was granted in both effects. The appeal is pending before the Court of Appeals. 3.- Court: 7th civil court of Santiago. Docket No. 4635-2003. Plaintiff: Luciano Marinho Cardoso. Claim: Alleged unjustified dismissal and payment of labor services. Amount claimed: Undetermined. Effect on balance sheet: no accounting effect as of the date of the report. Current Status of Proceedings: The parties are waiting for the conciliation and evidence hearing. 4.- Court: 8th labor court of Santiago. Docket No. 3515-2004. Plaintiff: Cristina Tocco Volpe. Claim: Supposed unjustified dismissal and payment of labor services. Amount claimed: Undetermined. Effect on balance sheet: no accounting effect as of the date of the report. Current Status of Proceedings: The parties are waiting for the conciliation and evidence hearing. 5.- Court: Judge Sergio Urrejola Monckeberg. Docket No.: none. Plaintiff: Red Televisiva Megavision S.A. Claim: Indemnity for damages for contract non-compliance. 70 Amount claimed: Undetermined. Effect on balance sheet: no accounting effect as of the date of the report. Current Status of Proceedings: Resolution of situation of uncompetence of judge promoted by Ms. Tocco is expected. 6.- Court: 25th civil court of Santiago. Docket No.: 5739-2004. Plaintiff: Red Televisiva Megavision S.A. Claim: Consignation payment. Amount claimed: Ch$ 1,800,000. Effect on balance sheet: no accounting effect as of the date of the report. Current Status of Proceedings: Sufficiency of payment is expected. 7.- Court: Court of Appeals of Santiago. Docket No.: 1147-2004. Plaintiff: Red Televisiva Megavision S.A. Claim: Sanction appeal. Amount claimed: 50 UTM. Effect on balance sheet: no accounting effect as of the date of the report. Current Status of Proceedings: In wait for Court of Appeals of Santiago's Judgement. 8.- Court: 10th Labor Court of Santiago. Docket No.: 4391-2003. Plaintiff: Red Televisiva Megavision S.A. Claim: Complaint for a toll imposed by the labor regulatory agency. Amount claimed: 70 UTM. Effect on balance sheet: no accounting effect as of the date of the report. Current Status of Proceedings: In wait for Court's Judgement. 9.- Court: 2nd local police court (juzgado de policia local) of Valparaiso. Docket No. 43965. Plaintiff: Alejandro Collado N. Claim: Criminal action for alleged unpaid municipal rights. Amount claimed: Undetermined. Effect on balance sheet: no accounting effect as of the date of the report. Current Status of Proceedings: Judgment in favor of Mega. It was appealed by Plaintiff. 10.- Court: 2nd criminal court of Santiago. Docket No.: 185.510-8. Plaintiff: Red Televisiva Megavision S.A. Claim: Criminal complaint against whoever result responsible for alleged falsification, private instrument maluse and person usurpation. Amount claimed: Undetermined. Effect on balance sheet: no accounting effect as of the date of the report. Current Status of Proceedings: Trial is pending stage of judicial investigation (etapa de sumario). 11.- Court: 9th criminal court of Santiago. Docket No. 1942-2004-7. Plaintiff: Paul Vasquez. Claim: Criminal complaint for alleged damages and slander. Amount claimed: Undetermined. Effect on balance sheet: no accounting effect as of the date of the report. Current Status of Proceedings: Trial is in the phase of judicial investigation (etapa de sumario) and depositions of certain witnesses are pending. 12.- Court: 9th criminal court of Santiago. Docket No. 1928-2004-7. Plaintiff: Israel Sanz. Claim: Criminal complaint for alleged damages and slander. Amount claimed: Undetermined. Effect on balance sheet: no accounting effect as of the date of the report. Current Status of Proceedings: Trial is in the phase of judicial investigation (etapa de sumario) and certain judicial proceedings are pending. 13.- Court: 15th criminal court of Santiago. Docket No. 4825-2003-F. Plaintiff: Raquel Gutierrez and others. Claim: Criminal complaint for alleged damages and slander. Amount claimed: Undetermined. Effect on balance sheet: no accounting effect as of the 71 date of the report. Current Status of Proceedings: Plaintiff appealed to the resolution that denied the arraignment petition. 14.- Court: 23rd criminal court of Santiago. Docket No. 2012-3. Plaintiff: Daniela Campos and Denisse Campos. Claim: Criminal complaint for alleged damages and slander. Amount claimed: Undetermined. Effect on balance sheet: no accounting effect as of the date of the report. Current Status of Proceedings: Trial is in the phase of judicial investigation (etapa de sumario). Confrontations (careos) among involved individuals have been carried out. 15.- Court: 9th criminal court of Santiago. Docket No. 2180-7. Plaintiff: Patricia James. Claim: Criminal action for alleged justice obstruction. Amount claimed: Undetermined. Effect on balance sheet: no accounting effect as of the date of the report. Current Status of Proceedings: Trial is in the phase of judicial investigation (etapa de sumario), judicial proceedings pending. 16.- Court: 11th criminal court of Santiago. Docket No. 17827-3-2003. Plaintiff: Marcia Astrosa. Claim: Criminal complaint for supposed damages and slander. Amount claimed: Undetermined. Effect on balance sheet: no accounting effect as of the date of the report. Current Status of Proceedings: An appeal to the resolution that denied the petition for abandonment of action was filed. RESTRICTIONS I. SYNDICATED LOAN In relation to the syndicated loan subscribed with JP Morgan Chase Bank and other 8 creditor banks for US$ 50 million, there are certain financial obligations mentioned as follows: a) TOTAL CONSOLIDATED DEBT TO CAPITALIZATION RATIO Cristalerias de Chile S.A will not allow the Total Consolidated Debt to Capitalization Ratio exceed the 0.45 to 1.0 ratio at any time. Capitalization is defined as the sum of Net Worth plus Minority Interest plus total consolidated debt. b) TOTAL CONSOLIDATED DEBT TO EBITDA RATIO Cristalerias de Chile S.A will not allow the Net Consolidated Debt to EBITDA ratio to exceed the 2.5 to 1.0 ratio at any time. Consolidated EBITDA is defined as the following: operating income plus depreciation and amortization, plus non-cash charges (as long as they have been deduced when determining 72 operating income) and cash income from interests minus non-cash credits (as long as they have been added when determining operating income), in each case for each period. c) INTEREST COVERAGE RATIO Cristalerias de Chile S.A. will not allow the Interest Coverage Ratio to be lower than 4.0. Interest coverage at the day of determination is defined as the ratio between unconsolidated EBITDA for the period of four consecutive fiscal quarters that end on or most recently ended before, that date; and interest expenses for that period. d) NET EQUITY Cristalerias de Chile S.A. should maintain a minimum amount of UF 10,000,000. Cristalerias de Chile S.A. complies with 100% of the restrictions agreed with the creditor banks. II. BOND ISSUE The bond issue contract signed on May 29, 2002 with Banco Chile as the bonds owners' representative, establishes among others the following obligations: a) Financial Indicators Individual Balance: Indebtedness no higher than 1.2 times. Consolidate Balance: Indebtedness no higher than 1.4 times. b) Insurances for the Company and its subsidiaries' fixed assets. c) The operations refered to by art. 44 and 89 of law 18,046 must be carried out according to the conditions that these establish. d) Other minor restrictions related with the bond issue contract. As of September 30, 2004 and 2003, Cristalerias de Chile S.A. complies with 100% of restrictions agreed with the bonds' creditors. OTHER CONTINGENCIES As of September 30, 2004 and 2003, management is not aware of any other contingencies that could affect the company. 73 CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS - DIRECT GUARANTEES
BALANCES PENDING PAYMENT AS OF CLOSING DATE ASSETS COMMITTED OF FINANCIAL STATEMENTS ----------------------- ------------------------- CREDITOR OF DEBTOR TYPE OF BOOK GUARANTEE NAME RELATIONSHIP GUARANTEE TYPE VALUE 09/30/2004 09/30/2003 - ------------------ --------------- ------------ ------------ ---------- --------- ---------- ---------- EDIFICIO CRISTALERIAS DE METROPOLIS AGF CHILE S.A. COMMERCIAL TIME DEPOSIT FLOOR 8,547 8,547 8,071 BANCO RED TELEVISIVA SANTANDER CHILE MEGAVISION COMMERCIAL MORTGAGE LAND 3,408,204 1,400,399 1,877,211 RED TELEVISIVA SCOTIABANK MEGAVISION COMMERCIAL PLEDGE TV EQUIP 131,320 1,658,819 2,106,870 BANCO CREDITO E RED TELEVISIVA INVERSIONES MEGAVISION COMMERCIAL MORTGAGE TV EQUIP 28,635 258,030 431,126 RED TELEVISIVA SUNDRY CLIENTS MEGAVISION COMMERCIAL ADVERTISING - 0 11,815,647 10,027,577
RELEASE OF GUARANTEES ------------------------------------------------------------------------------------ CREDITOR OF DEBTOR GUARANTEE NAME 09/30/2005 ASSETS 09/30/2006 ASSETS 09/30/2007 ASSETS - ------------------ --------------- ------------ ------------ ---------- --------- ---------- ---------- EDIFICIO CRISTALERIAS DE METROPOLIS AGF CHILE S.A. 0 0 0 0 8,547 0 BANCO RED TELEVISIVA SANTANDER CHILE MEGAVISION 469,805 0 465,297 0 465,297 0 RED TELEVISIVA SCOTIABANK MEGAVISION 421,190 0 412,543 0 412,543 0 BANCO CREDITO E RED TELEVISIVA INVERSIONES MEGAVISION 172,076 0 85,954 0 0 0 RED TELEVISIVA SUNDRY CLIENTS MEGAVISION 0 0 0 0 0 0
74 CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS INDIRECT GUARANTEES
DEBTOR ASSETS COMMITTED BALANCES PENDING --------------------------- ------------------------- ------------------------ PAYMENT AS OF CLOSING DATE OF FINANCIAL STATEMENTS ------------------------ TYPE OF BOOK 09-30- 09-30- CREDITOR OF GUARANTEE NAME RELATIONSHIP GUARANTEE TYPE VALUE 2004 2003 - ----------------------- ------------- ------------ ---------- ---------- ---------- --------- --------- Societe des Participations Financieres et RAYEN CURA Industrielles S.A.I.C. AFFILIATE SOLIDARY 0 0 1,753,632 2,707,671 Envases CMF guarantee CRISTALERIAS P.I.A.S DE CHILE S.A. AFFILIATE SOLIDARY 0 0 205,763 230,479
RELEASE OF GUARANTEES ----------------------------------------------------------------------------------- CREDITOR OF GUARANTEE 09-30-2005 ASSETS 09-30-2006 ASSETS 09-30-2007 ASSETS - ----------------------- ------------- --------- ---------- ---------- ---------- --------- Societe des Participations Financieres et Industrielles 701,453 0 701,453 0 350,726 0 Envases CMF guarantee P.I.A.S 0 0 0 0 205,763 0
75 36. Guarantees obtained from third parties As of September 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: Item 2004 2003 --------- --------- ThCh$ ThCh$ Rental of Property Sur Andino Cafe (UF 260) 4,470 0 Rental of Property Office Banco Security (UF 304.0) 0 5,235 Rental of Property to Telecomunicaciones Cono Sur Ltda. (UF 130) 0 2,238 Rental of Property Office AGF Building (UF 365.9) 0 6,300 Rental of Property Office Metropolis (UF 189.2) 0 3,219 Rental of Property Eyzaguirre y Cia. (UF 2.2) 38 38 Rental of Property Irrarazaval Ruiz Tagle (UF 235) 4,040 0 Manufacture of fermentation tanks 121,838 0 Sight drafts suppliers 1,674 1,701 Installation of Buin Tanks (Tersanoix S.A.) 0 157,594 Grape purchase (contracts) 937,292 1,064,826 Mortage (grape purchase) 139,909 0 C y CPO Constructora (Salon Andino Sta. Rita) 93,185 0 Purchase of vine stem cuttings and plants (Intelmaq) 0 35,612 Transporters' guarantee check 42,420 0 Underground materials storehouse Buin Salfa Montajes 0 32,343 Buin Casino Construction 0 32,195 --------- --------- 1,344,866 1,341,301 76 37. Local and Foreign Currency Charts attached show the foreign currency balance as of September 30, 2004 and 2003. CriStalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY ASSETS
Items Currency Amount - ------------------------------------------ --------------------- ----------------------------- 09-30-2004 09-30-2003 ---------- ---------- Current Assets Available funds Non-adjust. Ch$ 965,954 1,530,691 Other currencies 62,679 144,086 Dollars 233,472 231,765 Euros 28,835 5,262 Argentine Peso 81,240 13,588 Time deposits Adjustable Ch$ 5,031,521 5,345,527 Non-adjust Ch$ 400,128 1,688,428 Marketable Securities Adjustable Ch$ 4,244,007 4,575,940 Dollars 36,701,325 60,861,710 Sales receivable Non-adjust Ch$ 34,197,230 31,088,466 Dollars 4,758,218 4,532,030 Euros 3,324,678 3,216,805 Other currencies 3,374,826 2,183,824 Argentine Peso 41,082 197,230 Documents Receivable Non-adjust. Ch$ 4,111,584 4,640,170 Argentine Peso 11,489 16,256 Sundry Debtors Non-adjust. Ch$ 1,033,420 638,506 Adjustable Ch$ 93,694 79,250 Dollars 674,735 758,989 Argentine Peso 21,637 100,272 Documentos and Accts. Receivable Dollars 7,389 65,474 Non-adjust. Ch$ 3,100,586 432,194 Adjustable Ch$ 70,622 258,391 Inventory Adjustable Ch$ 36,680,249 31,330,013 Dollars 4,389,497 4,617,156 Argentine Peso 951,194 670,969 Non-adjust. Ch$ 185,434 454,346 Taxes Receivable Non-adjust. Ch$ 0 21,256 Adjustable Ch$ 0 2,664,466 Dollars 0 38,762 Prepaid expenses Adjustable Ch$ 583,362 937,255 Non-adjust. Ch$ 744,722 232,955 Dollars 178,553 224,257 Argentine Peso 5,937 15,911 Deferred Taxes Non-adjust. Ch$ 1,709,044 1,455,155 Other Current Assets Non-adjust. Ch$ 17,393,134 2,664,796 Adjustable Ch$ 2,469,561 1,589,392 Dollars 1,697,644 4,822,673 Marketable Securities Euros 28,631,254 0 Non-adjust. Ch$ 300,240 0 Fixed Assets 77 FIXED ASSETS Adjustable Ch$ 138,345,917 140,894,375 Other Assets Investments in other companies Adjustable Ch$ 770,586 840,471 Long-term debtors Dollars 60,890 67,155 Adjustable Ch$ 133,719 164,480 Documents receivable in rel.companies Non-adjust. Ch$ 1,212,596 2,944 Intangibles Adjustable Ch$ 11,992,642 11,968,471 Argentine peso 57,671 35,118 Other Adjustable Ch$ 3,711,681 4,194,357 Non-adjust. Ch$ 171,286 225,200 Dollars 1,991,396 9,870,949 Argentine Peso 675,002 465,301 Amortization Argentine Peso -7,838 0 Adjustable Ch$ -1,387,902 -1,173,631 Investments in related companies Dollars 12,248,478 13,124,284 Adjustable Ch$ 87,674,816 94,226,084 Negative Goodwill Dollars 4,116,233 4,842,372 Adjustable Ch$ 4,580,681 4,918,846 Total Assets Non-adjust. Ch$ 65,525,358 45,075,107 Other currencies 3,437,505 2,327,910 Dollars 67,057,830 104,057,576 Euros 31,984,767 3,222,067 Argentine Peso 1,837,414 1,514,645 Adjustable Ch$ 294,995,156 302,813,687
78 Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - CURRENT LIABILITIES
ITEM Currency Up to 90 days - ---- ------------------- -------------------------------------------------------- 09.30.2004 09.30.2003 ------------------------- ------------------------- Amount Avg.Annual Amount Avg.Annual Thou Ch$ Int. Rate Thou Ch$ Int. Rate -------- --------- -------- --------- Current Liabilities Short-term obligations with banks and financial institutions Argentine Peso 0 - 4,517 - Other currencies 0 - 135,245 2.6 Dollars 725,087 2.03 801,355 1.74 Dollars 292,991 2.050 0 - Non-adjust. Ch$ 134,457 4.94 136,608 4.94 Long-term obligations with banks Adjust. Ch$ 591,199 1.39 820,496 4.43 and financial institutions Adjust. Ch$ 0 - 138,250 4.22 Adjust. Ch$ 0 - 371,786 - Adjust. Ch$ 0 - 0 - Obligations with the public Adjust. Ch$ 0 - 0 - Dollars 1,139,607 - 1,505,529 - Non-adjust. Ch$ 11,407,267 - 9,249,187 - Other currencies 6,642 - 5,035 - Euros 14,443 - 15,467 - Accounts payable Argentine Peso 221,053 - 95,135 - Adjust. Ch$ 0 - 14,467 - Dollars 2,568,602 - 2,062,503 - Argentine Peso 214,816 - 108,445 - Euros 7,036 - 1,842 - Documents Payable Other currencies 349,172 - 176,634 - Non-adjust. Ch$ 441,459 - 311,490 - Sundry Creditors Dollars 4,289 12.25 754,034 - Adjust. Ch$ 0 - 60,281 - Docts and accts payable to rel co. Non-adjust. Ch$ 1,101,916 - 724,625 - Dollars 0 - 0 - Adjust. Ch$ 667,720 - 271,239 - Non-adjust. Ch$ 8,858,313 - 6,615,090 - Dollars 772,225 - 666,915 - Argentine Peso 41,656 - 58,131 - Euros 996,652 - 705 - Provisions Other currencies 723,207 - 190,366 - Non-adjust. Ch$ 2,349,710 - 3,105,468 - Dollars 21,442 - 0 - Withholdings Argentine Peso 1,385 - 22,498 - Prepaid income Non-adjust. Ch$ 3,198,307 - 4,997,864 - Adjust. Ch$ 0 - 5,016,685 - Other Current Liabilities Dollars 0 - 120,272 - Adjust. Ch$ 0 - 0 - Long-term obligations with 1 year Adjust. Ch$ 0 - 0 - maturity Dollars 9,097 11.00 8,153 11.00 Dividends payable Non-adjust. Ch$ 652,697 - 513,724 - Income Tax Non-adjust. Ch$ 905,158 - 0 - Total Current Liabilities - Argentine Peso 478,910 - 288,726 - - Other currencies 1,079,021 - 507,280 - - Dollars 5,533,340 - 5,918,761 - - Non-adjust Ch$ 29,049,284 - 25,654,056 - - Adjust. Ch$ 1,258,919 - 6,693,204 - - Euros 1,018,131 - 18,014 -
79
ITEM Currency 90 Days to 1 Year - ---- -------- ----------------- 09.30.2004 09.30.2003 ------------------------ -------------------------- Amount Avg.Annual Amount Avg.Annual Thou Ch$ Int. Rate Thou Ch$ Int. Rate -------- --------- -------- --------- Current Liabilities Short-term obligations with banks and financial institutions Argentine Peso 15,884 1.96 13,550 - Other currencies 0 - 0 - Dollars 222,599 2.12 1,292,355 1.90 Dollars 0 - 0 - Non-adjust. Ch$ 134,456 4.94 136,608 4.94 Long-term obligations with banks Adjust. Ch$ 598,736 1.39 608,305 4.43 and financial institutions Adjust. Ch$ 0 - 0 - Adjust. Ch$ 371,217 6.16 0 - Adjust. Ch$ 345,255 4.75 384,390 4.75 Obligations with the public Adjust. Ch$ 441,536 5.80 403,608 5.80 Dollars 1,387,278 - 1,250,489 - Non-adjust. Ch$ 0 - 96,154 - Other currencies 0 - 0 - Euros 0 - 0 - Accounts payable Argentine Peso 0 - 0 - Adjust. Ch$ 0 - 14,466 - Dollars 10,171 - 124,266 - Argentine Peso 0 - 0 - Euros 0 - 0 - Documents Payable Other currencies 0 - 0 - Non-adjust. Ch$ 0 - 0 - Sundry Creditors Dollars 0 - 0 - Adjust. Ch$ 0 - 0 - Docts and accts payable to rel co. Non-adjust. Ch$ 0 - 0 - Dollars 0 - 65,474 - Adjust. Ch$ 0 - 0 - Non-adjust. Ch$ 0 - 402,473 - Dollars 2,152,884 - 693,374 - Argentine Peso 0 - 0 - Euros 0 - 571,509 - Provisions Other currencies 0 - 349,118 - Non-adjust. Ch$ 0 - 0 - Dollars 0 - 0 - Withholdings Argentine Peso 0 - 0 - Prepaid income Non-adjust. Ch$ 0 - 0 - Adjust. Ch$ 0 - 0 - Other Current Liabilities Dollars 0 - 0 - Adjust. Ch$ 8,595,390 4.75 0 - Long-term obligations with 1 year Adjust. Ch$ 1,225 7.0 1,243 7.0 maturity Dollars 61,903 11.03 193,071 11,00 Dividends payable Non-adjust. Ch$ 0 - 0 - Income Tax Non-adjust. Ch$ 0 - 0 - Total Current Liabilities - Argentine Peso 15,884 - 13,550 - - Other currencies 0 - 349,118 - - Dollars 3,834,835 - 3,619,029 - - Non-adjust Ch$ 134,456 - 635,235 - - Adjust. Ch$ 10,353,359 - 1,412,012 - - Euros 0 - 571,509 -
81
Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - LONG-TERM LIABILITIES CURRENT PERIOD 09-30-2004 ITEM Currency 1-3 Years 3-5 years - ---- -------- --------------------------- -------------------------- Average Average Amount Interest Rate Amount Interest Rate ------ ------------- ------ ------------- Thou Ch$ Thou Ch$ Dollars 7,611,250 2.05 15,222,500 2.05 Argentine Peso 39,530 1.62 0 - Obligations with Banks and Non-adjust. Ch$ 403,370 4.94 0 - Financial Institutions Adjustable Ch$ 2,626,303 1.39 124,042 1.39 Adjustable Ch$ 3,438,156 6.16 25,786,170 4.75 Obligations with the public Adjustable Ch$ 0 - 232,908 5.8 Dollars 1,211,195 - 0 - Dollars 20,726 9.29 0 - Adjustable Ch$ 146,647 - 0 - Sundry Creditors Adjustable Ch$ 1,204 7 0 - Dollars 2,361,131 - 0 - Long-term provisions Adjustable Ch$ 4,242,965 - 0 - Adjustable Ch$ 1,759,532 - 0 - Deferred taxes Non-adjust. Ch$ 2,926,153 - 0 - Total long-term liabilities - Dollars 11,204,302 - 15,222,500 - - Argentine Peso 39,530 - 0 - - Non-adjust. Ch$ 3,329,523 - 0 - - Adjustable Ch$ 12,214,807 - 26,143,120 -
ITEM Currency 5-10 Years More than 10 years - ---- -------- ------------------------ ------------------------- Average Average Amount Interest Rate Amount Interest Rate ------ ------------- ------ ------------- Thou Ch$ Thou Ch$ Obligations with Banks and Dollars 7,611,250 2.05 0 - Argentine Peso 0 - 0 - Non-adjust. Ch$ 0 - 0 - Financial Institutions Adjustable Ch$ 0 - 0 - Adjustable Ch$ 0 - 17,190,780 6.16 Obligations with the public Adjustable Ch$ 5,822,705 5.8 30,045,025 5.8 Dollars 0 - 0 - Dollars 0 - 0 - Adjustable Ch$ 0 - 0 - Sundry Creditors Adjustable Ch$ 0 - 0 - Dollars 0 - 0 - Long-term provisions Adjustable Ch$ 0 - 0 - Adjustable Ch$ 0 - 0 - Deferred taxes Non-adjust. Ch$ 0 - 0 - Total long-term liabilities - Dollars 7,611,250 - 0 - - Argentine Peso 0 - 0 - - Non-adjust. Ch$ 0 - 0 - - Adjustable Ch$ 5,822,705 - 47,235,805 -
82 Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - LONG-TERM LIABILITIES PREVIOUS PERIOD 09-30-2003
ITEM Currency 1-3 Years 3-5 Years - ---- -------- ------------------------------ -------------------------- Average Average Amount Interest Rate Amount Interest Rate ------ ------------- ------ ------------- Thou Ch$ Thou Ch$ Dollars 8,394,319 1.925 25,182,957 1.925 Dollars 1,039,142 1.84 0 - Argentine peso 58,383 1.75 0 - Obligations with banks Non-adjust. Ch$ 683,043 4.94 0 - and financial institutions Adjustable Ch$ 4,138,134 4.43 413,177 4.43 Adjustable Ch$ 17,217,166 4.75 17,217,166 4.75 Adjustable Ch$ 0 - 0 - Obligations with public Adjustable Ch$ 3,443,433 6.25 0 - Dollars 135,044 11.06 0 - Dollar 88,838 11.16 4,320 8.6 Adjustable Ch$ 38,675 - 0 - Long-term creditors Non-adjust. Ch$ 99,415 - 0 - Dollars 3,571,074 - 0 - Long-Term provisions Adjustable Ch$ 4,174,286 - 0 - Adjustable Ch$ 2,364,797 - 0 - Deferred taxes Non-adjust. Ch$ 2,426,390 - 0 - Total long-term liabilities - Dollars 13,228,417 - 25,187,277 - - Argentine peso 58,383 - 0 - - Non-adjust. Ch$ 3,208,848 - 0 - - Adjustable Ch$ 31,376,491 - 17,630,343 -
ITEM Currency 5-10 Years More than 10 years - ---- -------- --------------------------- -------------------------- Average Average Amount Interest Rate Amount Interest Rate ------ ------------- ------ ------------- Thou Ch$ Thou Ch$ Dollars 0 - 0 - Dollars 0 - 0 - Argentine peso 0 - 0 - Obligations with banks Non-adjust. Ch$ 0 - 0 - and financial institutions Adjustable Ch$ 0 - 0 - Adjustable Ch$ 0 - 0 - Adjustable Ch$ 4,276,538 5.8 31,879,512 5.8 Obligations with public Adjustable Ch$ 0 - 17,217,166 6.25 Dollars 0 - 0 - Dollar 0 - 0 - Adjustable Ch$ 0 - 0 - Long-term creditors Non-adjust. Ch$ 0 - 0 - Dollars 0 - 0 - Long-Term provisions Adjustable Ch$ 0 - 0 - Adjustable Ch$ 0 - 0 - Deferred taxes Non-adjust. Ch$ 0 - 0 - Total long-term liabilities - Dollars 0 - 0 - - Argentine peso 0 - 0 - Non-adjust. Ch$ 0 - 0 - - Adjustable Ch$ 4,276,538 - 49,096,678 -
83 38. Penalties The SVS or other administrative authorities have not imposed any penalties during the 2004 and 2003 fiscal years to the Company, its Board nor administrative personnel. 84 39. Subsequent Events On September 28, 2004, the Parent Company agreed to pay the interim dividend No. 159 of Ch$ 20 per share, over 64,000,000 shares (Th Ch$ 1,280,000) which was paid on October 21, 2004. On October 25, 2004 the Chilean Anti-Trust Commission approved the merger between Metropolis-Intercom S.A. and VTR S.A.; imposing the new company certain operative and commercial restrictions, which are currently being analyzed. Between the closing date of the financial statements and the issue date of the present report no more subsequent events that could affect significantly the Company's economic and financial condition have been registered. 85 40. COMPANIES UNDER SPECIAL NORMS Not applicable. 86 41. ENVIRONMENT On its ongoing concern for environmental preservation, as of September 30, 2004 the Parent Company has paid for advisory services for this concept of Th Ch$ 3,365. As of September 30, 2003, investments of Th Ch$ 209,323, corresponding to the purchase of NOX emission treatment equipment, installed on new Furnace B. The subsidiary S.A. Vina Santa Rita has invested Th Ch$ 55,027 as of September 2004 (Th Ch$ 36,142 in 2003), to comply with the ordinances and laws related to Industrial Process and Installations. 87 42. STOCK TRANSACTIONS During the 2004 and 2003 fiscal years the Parent Company's members of the board, controlling stockholders, related individuals and entities carried out the following stock transactions. TRANSACTIONS OF PERSONS RELATED TO 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 Invers. Alonso de Ercilla S.A. PGD 48,000 Invers. San Benito S.A. PGD 10,894 0 0 0
o BSG related with Director Mr. Baltazar Sanchez o RCV related with President Mr. Ricardo Claro o PGD related with Director Mr. Patricio Garcia Domiguez TRANSACTIONS OF DIRECTORS, ADMINISTRATORS AND ACCOUNT INSPECTORS None. TRANSACTIONS OF MAJORITY SHAREHOLDERS None. 88 43. DISTRIBUTION OF SHAREHOLDERS The distribution of shareholders as of September 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 65.83 65.83 286 263 Less than 10% shareholding with investment lower than 200 UF 0.14 0.14 745 774 ------- ------ ----- ----- TOTAL 100.00 100.00 1,032 1,038 CONTROLLER OF THE COMPANY 52.14 52.14 3 3
90 44. BOARD REMUNERATIONS As of September 30, 2004 and 2003, were paid Th Ch$ 350,171 and Th Ch$ 915,514 respectively, for different concepts by the parent company and the subsidiary S.A. Vina Santa Rita, as follows: 2004 2003 ---------- --------- ThCh$ ThCh$ Participation of previous fiscal year profits 342,073 905,016 Session assistance compensation 6,296 4,257 Board Committee compensations 1,802 1,366 Honoraries paid 0 4,875 --------- --------- TOTAL 350,171 915,514 On the other hand, Th Ch$ 677,434 have been provisioned for participation of year 2004 income (Th Ch$ 231,431 in 2003). 91 45. TIME DEPOSITS As of September 30, 2004 and 2003 the Company presents the following information: INSTITUTION CURRENCY 2004 2003 - ----------- -------- ----- ---- Th$ Th$ Banco Santander Santiago US$ 0 5,345,527 BankBoston $ 0 375,590 Banco de Santander Santiago $ 5,000,900 0 Banco de Chile $ 430,749 1,312,839 --------- --------- --------- TOTAL 5,431,649 7,033,955 92 RELEVANT EVENTS None. 93 RATIO ANALYSIS OF THE CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2004
CONSOLIDATED FINANCIAL INDICATORS 09-30-2004 09-30-2003 12-31-2003 ---------- ---------- ---------- Liquidity Current liquidity times 3.76 3.82 4.44 Acid ratio times 2.90 2.88 3.40 Indebtedness Leverage ratio times 0.75 0.82 0.75 Short-term debt % 29.05 24.07 21.59 Long-term debt % 70.95 75.93 78.41 Interest Expenses Coverage times 4.84 1.69 2.03 Activity Total assets MM Ch$ 464,838 459,011 446,266 Investments MM Ch$ 12,486 25,720 28,108 Disposal of property MM Ch$ 57 320 376 Inventory turnover Times n.a. n.a. n.a. Inventory permanence Days n.a. n.a. n.a. Results Sales MM Ch$ 133,046 125,626 173,170 Cost of sales MM Ch$ 82,704 79,357 107,694 Operating income MM Ch$ 28,326 27,541 38,357 Interest expenses MM Ch$ 5,022 5,262 6,959 Non-operating result MM Ch$ (7,369) (21,706) (28,560) E.B.I.T.D.A. MM Ch$ 36,534 20,417 29,709 After-tax income MM Ch$ 14,237 2,455 6,549 Profitability Return on equity % 6.0 1.1 2.8 Return on assets % 3.1 0.5 1.5 Return on operating assets % 12.1 11.8 16.5 Income per share $ 222.5 38.4 102.3 Return on dividends % 1.3 2.1 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 liabilities to net worth. Interest Expenses Coverage: Result before taxes and interest divided by interest expenses. Inventory turnover: Ratio between cost of sales of the period and average inventory. Inventory permanence: Ratio between average inventory and sales cost of the period, multiplied by 360 days. 94 E.B.I.T.D.A: Earnings before taxes, interest, taxes, depreciation and amortization, and extraordinary items. Return on dividends: Sum of dividends paid in the last twelve months divided by market price of stock at closing of period. 95 The main trends observed in the 2004 fiscal year indicators are: LIQUIDITY INDICES Despite current assets increasing with respect to September and December 2003, a decrease in the liquidity indices is observed due to the shift of bond quotas issued by the company that have maturity during next year. INDEBTEDNESS INDICES The indebtedness index has kept stable with respect to previous periods. An increase in the short-term bank debt can be observed, due to the transfer of bonds to expire within the next 12 months. The interest expenses coverage ratio has registered a slight increase with respect to the previous year due to higher net income in the present fiscal year. RESULTS The operating result shows a slight increase with respect to September of 2003 due to lower operating costs. Likewise, non-operating result shows a decrease of the loss as a conesquence of the positive exchanges differences that is registered during the present fiscal year, as well as the positive net result shown in related companies. PROFITABILITY INDICES Equity and asset profitability indices show an increase with respect to September and December 2003, due to a higher net income in 2004. On the other hand, return of dividends index 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 September 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 96 includes adjustment for currency devaluation, provisions, and technical revaluations. We believe the foregoing is a reasonable way to value the Company's permanent investments. As of September 30, 2004 there were financial investments in shares recorded in the accounting according to their purchase price at Ch$ 4,233 million whose market value on the same date was Ch$ 5,727 million. 3. RESULTS AS OF SEPTEMBER 2004 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$ 133,046 million, 5.9% over 2003. This increase mainly results from higher sales in Santa Rita (10.7%) and CIECSA (9.6%) partially compensated by lower sales at the glass container business (0.5%). Consolidated operating income reached Ch$ 28,326 million, 2.9 over 2003, of which Ch$ 18,251 million were contributed by the glass container business (Ch$ 17,633 million in 2003), Ch$ 6,891 million by Santa Rita (Ch$ 7,989 million in 2003) and Ch$ 3,143 million by CIECSA (Ch$ 1,837 million in 2003). The Company's net profit was Ch$ 14,237 million, compared with Ch$ 2,455 million in the same period of 2003. This result is explained by a better non-operting result. During 2004 the Company registered a consolidated non-operting loss of Ch$ 7,369 million, compared with a Ch$ 21,706 million loss in 2003. The former was mainly due to an income from exchange differences of Ch$ 2,373 in 2004 compared with a Ch$ 12,466 million loss in 2003. The net loss from subsidiaries that do not consolidate did not show any variation reaching with respect to 2003, reaching Ch$ 4,016 millions. The latter includes a Ch$ 3,149 million charge (Ch$ 3,178 million charge 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$ 55,126 million as of September 2004, compared to Ch$ 55,405 million the previous fiscal year. Volumes sold increased by 5.9% reaching 196,937 tons, mainly due to higher sales of bottles for the wine, returnable beer, non- 97 returnable soft drinks and food markets; partially compensated by lower sales to the non-returnable, liquor and returnable soft drink markets. The level of average prices decreased by 6.0%, mainly explained by a sharp decline of the nominal rate of exchange that passed from Ch$ 713.59 per Dollar on average during the first nine months of 2003 to Ch$ 614.91 per Dollar on average during the same period of this year. Operating income reached Ch$ 18,251 million, 3.5% over 2003. Non-operating result was a loss of Ch$ 1,144 million in 2004, compared to Ch$ 14,277 million loss in 2003. The aforementioned was due to a Ch$ 1,266 million income from exchange differences, compared to a Ch$ 10,060 million loss in 2003. During 2004 a Ch$ 494 million net income was registered from investments in related companies (Ch$ 1,612 million net loss in 2003) mainly due to higher income in Vina Santa Rita and CIECSA. 3c. Results in Subsidiaries Santa Rita's net income amounted Ch$ 5,395 million, compared to Ch$ 3,795 million income in 2003, which is explained by a better non-operating result. In the local market, prices increased by 13.5% in real terms, while volumes maintained without variation. Sales in this market increased 13.6%, reaching Ch$ 27,576 million. During the period, exports increased by 19.7% representing 52.3% of revenues, to reach US$51.3 million (US$ 41.90 million in 2003). Operating income reached Ch$ 6,891 million, compared to Ch $ 7,989 million in 2003, mainly due to higher costs of musts and a decline in the Peso US Dollar exchange rate, which affects exports returns. The average price in dollars per case for the export market for Santa Rita was US$ 33.8 (US$ 33.0 in 2003) whereas the average price for the industry was US$23.9 per case (US$ 23.6 in 2003). Santa Rita recorded a Ch$270 million non-operating loss, compared to a Ch$ 3,228 million non-operating loss in 2003, mainly due to a Ch$ 1,116 million income form exchange differences in 2004, compared to a Ch$ 2,098 million loss in 2003. Red Televisiva Megavision, CIECSA's main subsidiary, registered a Ch$ 2,862 million operating income, 59.9% over 2003. MEGA had the first place in audience reaching 26.0% audience share during the period (22.8% in 2003)1. Net sales increased by 8.2% reaching Ch$ 20,367 million, due to an increase in live programming, which has resulted in higher audience share. As of September 2004, MEGA had a net income of Ch$ 2,102 million compared to Ch$ 1,042 million net income in 2003. CIECSA had a Ch$ 2,101 million net income, compared to a Ch$ 839 million net income the previous year. Envases CMF S.A. registered a Ch$ 750 million net income in 2004 compared with a Ch$730 million net income in 2003. Volume sales decreased by 3.2%, reaching 16,162 tons, due to lower pre forms volume exports sales, while average prices deceased by 5,1% influenced by a drop of the exchange rate. Due to the aforementioned sales reached Ch$ 23,461 million during the period, compared with Ch$ 25,522 million in 2003. Operating income reached Ch$ 2,023 million, compared to Ch$ 2,283 million in 2003. Non-operating loss reached Ch$ 1,136 million, compared to Ch$ 1,341 million loss in 2003. - -------- 1 Measured between 7:30AM and 1:30AM; i.e: 18 hours daily, Monday through Sunday. 98 In the cable TV business, Cristalchile Comunicaciones S.A. (99.99% owned by Cristalerias), is the owner of 50% of Cordillera Comunicaciones Ltda., which in turn is the owner of Metropolis-Intercom S.A. During 2004, Metropolis-Intercom S.A. registered sales of Ch$ 33,674 million compared with Ch$34,301 million the previous year. Metropolis-Intercom had a net loss of Ch$ 7,920 million compared with a net loss of Ch$ 7,515 million in 2003. The aforementioned was due to a lower operating result, mainly due to higher depreciation charges; partially compensated by better non-operational result, in turn due to lower interest expenses and the appreciation of the exchange rate. Metropolis-Intercom's EBITDA reached Ch$ 4,608 million during the period (Ch$ 4,521 million in 2003). This figure includes a depreciation charge of Ch$ 11,260 million (Ch$10,200 million in 2003) mainly corresponding to the HFC network adquired in July 2000. The company ended the period with 224,657 subscribers of the basic service (235,596 in 2003), 27,989 subscribers of premium service (33,305 in 2003), 38,735 of the broadband service (32,227 in 2003) and 10,999 subscribers of IP Telephony (1,451 in 2003). As a result of the abovementioned and a negative goodwill amortization charge through Cordillera Comunicaciones of Ch$3,149 million during the period (Ch$3,178 million in 2003), Cristalchile Comunicaciones recorded a net loss of Ch$ 5,560 million (net loss of Ch$5,334 in 2003). 4. CASH FLOW STATEMENT As of September 30, 2004 a total net positive flow of Ch$ 12,488 million was generated, which is explained by a positive flow generated by operating activities of Ch$30,869 million which were partially offset by a negative financing flows of Ch$ 5,785 million, and a negative flow of investment activities of Ch$ 12,596 million. The operating flow corresponds basically to the collection of sales and financial interests and other income received that were reduced in part by payment to suppliers, taxes and interests. The negative financing flow can be explained mainly by dividends paid by Ch$ 4,444 million and net loans for Ch$ 1,449 million. The negative investment flow is mainly explained by the incorporation of fixed assets of Ch$ 12,938 million and loans to related companies for Ch$ 3,937 million. The foregoing results in an increase in the final balance of cash and cash equivalent, which passed from Ch$ 77,113 million as of December 31, 2003 to Ch$ 88,658 million as of September 30, 2004. According to the current regulations of the SVS and the Association of Accountants of Chile, term deposits and agreements with due date less than 90 days have been considered cash and cash equivalent. 99 5. RISK ANALYSIS a. Interest rates Cristalerias and its Subsidiaries are exposed to the risk of fluctuations in interest rates on its short-term and long-term debts. As of September 30, 2004 Short-Term and Long-Term bank liabilities and obligations with the public totaled Ch$ 128,623 million, which represents 28% of the Company's consolidated assets. Bank credits totaled Ch$ 36,354 million of which Ch $ 31,741 million correspond to credits in foreign currency agreed at variable annual rates related to the six-month Libor plus 0.8%, Ch$ 3,940 million correspond to credits in adjustable pesos in unidades de fomento (indexed currency units) that are exposed to changes in the six-month TAB of 90 and 180 days and Ch$ 673 million correspond to credits in pesos at a fixed annual rate of 4.94%. Within obligations with the public for Ch$ 92,269, Ch$ 71,269 million correspond to Bonds issued by the Parent Company and Ch$ 21,000 millon issued by the subsidiary Vina Santa Rita, both in unidades de fomento (indexed currency units) at a fixed interest rate. As of September 30, 2004, the Company had available funds of Th Ch$ 87,586 million invested in instruments at different time periods like term deposits, bonds, fixed-rate mutual funds and resale agreements. Bonds for Ch$ 3,635 million with maturity on September 15, 2005 and share investment for Ch$ 4,233 million were no included. The Company and its subsidiaries do not use secondary financial instruments at the present time to reduce risk in the event of fluctuations in interest rates. That policy will be studied permanently to evaluate the alternatives offered by the market. b) Exchange rate The Company and its Subsidiaries maintain liabilities in dollars of US$ 73.9 million, which represent 9.7% of its consolidated assets, and include a long-term syndicated loan of US$ 50 million of the Parent Company. As of September 30 the Company and its Subsidiaries maintain its investments in Dollars of US$ 49.3 million; in time deposits, bonds and fixed rate mutual funds. In addition it maintains investments in Euros of euros 37.8 million in fixed rate instruments. Likewise, it also has future Dollar sale contracts of US$ 80.2 million. On the other hand, aproximately 39.4% of consolidated sales are adjustment to the exchange rate variation. At the same time, the consolidated costs in foreing currency represent aproximately 30.1% of the total costs. 100 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: January 19, 2005 -----END PRIVACY-ENHANCED MESSAGE-----