6-K 1 d6k.txt FORM 6-K Conformed Copy 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 ACINDAR ARGENTINE STEEL INDUSTRY INC. (Translation of Registrant's name into English) Estanislao Zeballos 2739 B1643AGY - Beccar Province of Buenos Aires Argentina (Address of principal office) (Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.) (Check One) Form 20-F X Form 40-F --- --- (Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.) (Check One) Yes No X --- --- (If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b). 82- .) --- April 9, 2003 FREE TRANSLATION INTO ENGLISH FROM ORIGINAL IN SPANISH Buenos Aires, March 11, 2003 Controller Bolsa de Comercio de Buenos Aires Mr. Raul Pagella Re: Financial Statements as of December 31, 2002 -------------------------------------------- Dear Sir, We would like to inform you that the Board of Directors of Acindar Industria Argentina de Aceros S.A. (the "Company") approved the financial statements for the period ended December 31, 2002, which resulted in a net loss of $316,194,953, excluding extraordinary results. In accordance with regulations, the following is a breakdown of the Company's net worth as of December 31, 2002: Item Ps. ---- --- Share Capital 279,233,023 Capital Reduction/(1)/ (139,402,259) Restatement of Capital Reduction 322,830,214 Net Loss (491,672,837) -------- ------------ Total Net Worth (29,011,859) (1) Approved by shareholders meeting on April 30, 2002. The capital reduction is subject to authorization and registration by the Bolsa de Comercio de Buenos Aires and the Comision Nacional de Valores, which has not yet been completed. In addition, we hereby inform you that the Board of Directors will not authorize any dividends or capitalization of the account "Integral Adjustments of Capital". In accordance with Article 62(o) of the "Reglamento de Cotizacion" (Trading Rules), we inform you that, as of December 31, 2002, 165,233,914 class "B" shares (1 vote and Ps.1 par value per share), representing 59.17% of the capital stock of the Company, are not owned by the principal shareholders of the Company. The exchange losses arising from the devaluation of the peso for this period were $943,721,560, $60,456,464 of which was related to capital expenditure financing that was capitalized in fixed assets. The result generated a net exchange loss of $883,265,096. We request that the information in this letter and the attached additional information be made public. Sincerely Yours, ALEJANDRO J. YAVEN Director [LOGO] Acindar Contacts: Jose I. Giraudo Andrea Dala Investor Relations Manager Investor Relations Officer Acindar S.A. Acindar S.A. (54 11) 4719 8674 (54 11) 4719 8672 ACINDAR S.A. FISCAL YEAR 2002 RESULTS ENDED AS OF DECEMBER 31, 2002 Buenos Aires, March 11, 2003 - Acindar S.A. (the "Company") today announced a net loss for the year ended December 31, 2002 of Ps. 316.2 million. The loss is attributable primarily to the Company's Financial and Holding Losses, which mainly reflects the exchange losses caused by the devaluation of the Argentine peso since January 2002. On July 17, 2002, the Argentine Government issued Decree No. 1269/02 which provided, among other things, that financial statements be restated to reflect the changes in the purchasing power of the peso. Subsequently, the Comision Nacional de Valores (the "CNV") issued Resolution No. 415/2002, which provided procedures for reflecting the changes in the purchasing power of the peso for companies, including the Company, that have registered securities with the CNV. Such procedures are effective for any financial statements corresponding to any period commencing on or after January 1, 2002 and filed with the CNV subsequent to the date of the resolution. Financial data for the year ended December 31, 2001, presented herein for comparative purposes, has been restated to December 31, 2002 using a conversion factor of 118%, which represents the rate of inflation for 2002. Revenues for 2002 increased by 6.5% compared to revenues for 2001, principally due to higher export sales. While export revenues, denominated in foreign currencies, increased in comparison to the devaluation of the peso (which exceeded the rate of inflation significantly for 2002), and also benefited from increased volumes, domestic prices increased to almost entirely offset the increase in the Company's production costs. While electricity and natural gas prices have not risen significantly, the Company cannot provide any assurances that, in the coming months, local cost increases (including electricity and gas prices) will not significantly exceed the rate of devaluation. The Company believes that an increase in the rate of inflation and a slowdown in the pace of the devaluation will cause its margins, which are at historically high levels, to contract to its average historical levels. Operating Results* ------------------ Net sales expressed in constant currency as of December 2002 increased 6.5%, to Ps. 1,062.2 million for the year ended December 31, 2002, as compared with Ps. 997.3 million for 2001. Domestic shipments in 2002 posted a decrease of 12.5% in comparison with 2001. However, if sales of semifinished products (billets) are excluded, the decrease in domestic sales reaches 23.7%, as a consequence of the deep recession of the Argentine economy. 1 During 2002, the Company was able to increase domestic prices to almost entirely compensate for higher production costs. Domestic net sales were Ps. 651.0 million for the year ended December 31, 2002, compared with Ps. 703.2 million for 2001. Export net sales posted a significant increase, from Ps. 294.1 million for the year ended December 31, 2001 to Ps. 411.2 million for 2002. Export volume rose 26.9%, reaching 388.7 thousand tons as of December 31, 2002. Although sale prices in the domestic market, expressed in United States dollars, were less than prices prevailing before the change in the Argentine monetary system, the Company's average price for 2002 was 6.9% higher than for 2001 (expressed in constant currency of December 2002). -------------------------------------------------------------------------------- 2000 2001 2002 2002 vs. 2001 Domestic Market Sales (tons) (tons) (tons) Var. % -------------------------------------------------------------------------------- Semifinished Products 106,686 92,904 136,738 + 47.0% -------------------------------------------------------------------------------- Rolled Products 477,558 451,051 343,962 - 23.7% -------------------------------------------------------------------------------- Wires & Cables 84,929 72,432 69,883 -3.5% -------------------------------------------------------------------------------- Pipes & Tubes 102,864 80,853 59,632 -26.0% -------------------------------------------------------------------------------- Total Domestic Market 772,037 697,240 610,215 -12,5% -------------------------------------------------------------------------------- Export Market Sales 353,753 306,159 388,656 + 26.9% -------------------------------------------------------------------------------- Total Sales 1,125,790 1,003,399 998,871 - 0,5% -------------------------------------------------------------------------------- In constant currency of December 2002, the average costs of the Company in 2002 fell 21.5% compared to 2001. Accordingly, the increase in Acindar's prices of inputs was lower (on average) than the general rate of inflation, as measured by the domestic wholesale price index. In addition, production costs diminished due to: (i) increased production that allowed for a better absorption of fixed costs and (ii) significant productivity gains that were part of the Company's strategy implemented beginning at the end of 2001. Gross profits for 2002 rose to Ps. 443.3 millions (41.7% of net sales) compared to Ps 204.3 millions (20.5% of net sales) for 2001. Administration and selling expenses for 2002 decreased 8.3% and 46.4%, respectively, in comparison with 2001, due to the reasons described above for diminished production costs. In the case of administration expenses, extraordinary expenses related to debt restructuring were recognized. EBITDA for 2002 was Ps. 340.2 million (32% of net sales), in comparison with Ps. 75.6 million (7.6% of net sales) for 2001. Financial income (expenses) and holding gains (losses) in 2002 represented a net loss of Ps. 536.5 million, compared to a net loss of Ps. 147.8 million in 2001. Foreign exchange losses for 2002 were Ps. 943.7 million, Ps. 60.5 million of which was related to capital expenditure financing that was capitalized in fixed assets in accordance with accounting standards and CNV Resolution No. 398/2002. The effect of exposure to inflation on results of operations resulted in a gain of Ps. 482.9 million. 2 The net loss for the fiscal year ended December 31, 2002 amounted to 316.2 million, excluding extraordinary results. Accumulated losses reached Ps 491.7 million and the Company reported a negative stockholders' equity of Ps. 29.0 million. Decree 1269/2002 suspended, until December 10, 2003, clause 5 of section 94 of law No. 19,550, which mandates the dissolution of a company with a negative stockholders' equity. Financial Situation ------------------- The Company's financial situation showed a gradual but steady recovery during 2002, although at the beginning of the year the financial situation was extremely difficult. To protect the continuity of its operations, on December 19, 2001, Acindar announced that it had discontinued payments of interest and principal on certain of its financial debt. Nevertheless, the Company's cash flow continued to deteriorate, which resulted in delays in payments to suppliers and employees, further worsening the Company's financial situation. However, due to improved inventory control, the postponement of capital and maintenance expenditures and the assistance of the Company's employees and suppliers, the Company stabilized its financial situation. The depreciation of the Argentine peso negatively affected the domestic economy, although it improved the profitability of the export market, gradually improving the cash flow of the Company. During the first quarter of 2002, the Company obtained export advances from sales in Brazil, which allowed the Company to rebuild its working capital. Moreover, domestic demand stabilized and exports increased, gradually improving production. Increased sales allowed the Company to improve its cash flow and the additional cash was used to pay overdue salaries and payables. The Company's financial creditors appointed a committee to negotiate the restructuring of the Company's financial debt. Since last August, meetings have been held to develop a restructuring proposal. Although negotiations with the committee have not concluded, the Board of Directors is optimistic that in the short term it will develop a proposal that the committee would agree is a foundation for a potentially successful restructuring, which would allow the Company to begin drafting and negotiating the related legal instruments.** An agreement between the Company and its creditors would be likely to improve the uncertainty of its results of operations. * The analysis of Acindar results presented herein has been made comparing the fiscal year ended December 31, 2002 with the year ended December 31, 2001. Under current regulations (Technical Resolution #8 of the CPCE), the financial statements as of and for the year ended December 31, 2002 are compared with the results of the transitional fiscal year of the six months ended December 31, 2001. ** For a more up-to-date description of the efforts of Acindar and the committee to develop a restructuring proposal, please see the Company's report on Form 6-K, submitted to the Securities and Exchange Commission on March 26, 2003. 3 -------------------------------------------------- Schedule A -------------------------------------------------- (million of Pesos restated to December 2002)

~~================================================================================================================~~Income ~~9.30.02~~Statement ~~9.30.01~~ ------------------- -------------------- ~~Ps Ps~~ ------------------- ------------------------------------------- ~~Net~~(Consolidated ~~sales~~Information) December December (~~Note~~Fiscal 17Year) ~~773~~2002 2001 Shipments (Tons) Domestic Market 610,~~942,786~~215 ~~755~~697,~~821,881~~240 ~~Cost~~Export ofMarket ~~sales~~388,656 ~~(473~~306,~~472~~159 Total 998,~~419)~~871 ~~(586~~1,~~998~~003,~~823)~~399 ------------------- ---------------------------------------------------------------------------------- ~~Gross~~Prices ~~operating profit 300,470,367 168,823,058 Administrative expenses~~ (~~40,544,138~~Ps./Ton) ~~(39,437,450)~~Domestic ~~Selling~~Market ~~expenses (16~~1,~~643,404)~~067 ~~(26~~1,~~683,537)~~009 ~~Depreciation~~Export ~~and~~Market ~~amortization (85,824,347) (81,105,012) Other expenses (Note 6 v)) (38,335,807) (27,599,244) Share of earnings of equity method investments (Note 8) (6,575,616)~~ 1,~~238,338~~058 ~~Profit~~961 ~~from~~Average ~~sale~~Price ~~of subsidiary~~ 1,~~062,722~~063 -994 ~~Other revenues and (expenses)~~ - ~~net (Note 6 w)) (6,974,893) (51,726,030)~~ ------------------- --------------------------------------------------------------------------------- ~~Subtotal~~EBITDA ~~106,634,884~~ (~~56,489,877)~~in ~~Financial~~millions ~~and~~Ps.) ~~holding~~340.2 ~~results~~75.6 ~~Generated~~EBITDA by/ ~~assets~~Ton (~~Note 6 x~~Ps./Ton)) ~~(275,626,529) (13,593,234) Generated by liabilities (Note~~ 340.6 ~~y))~~75.4 ~~(332,711,015) (98,224,789)~~ ------------------- -------------------- ~~Operating losses (501,702,660) (168,307,900) Results from reorganization of operations (Note 21)~~ - ~~(38,161,593)~~ ------------------- ------------------------------------------ ~~Loss~~In ~~before~~Million ~~taxes~~Ps. Net Sales 1,062.2 100.0% 997.3 100.0% Cost of Sales -618.9 (~~501~~58,~~702,660~~3%) -793.0 (~~206~~79,~~469,493~~5%) ~~Income~~Gross ~~tax~~Profit ~~and~~443.3 ~~tax~~41,7% on204.3 ~~minimum~~20,5% ~~notional~~Selling ~~income~~Expenses -22.1 (772,~~237~~1%) -41.3 (~~670~~4,~~923~~1%) Administration Expenses -51.0 (4,8%) -55.6 (5,6%) Depreciation & Amortization -105.7 (10,0%) -109.3 (11,0%) Doubtful Accounts -30.1 (2,8%) -31.8 (3,2%) Operating Income 234.4 22,0% -33.7 (3,4%) Other Operating Income - Net -11.4 (1,1%) -131.4 (13,2%) Long Term Investments Results -2.6 (0,2%) 5.1 0,5% Financial & Holding Results -536.5 (50,5%) -147.8 (14,8%) Non Operating Charges -- -- -37.7 (3,8%) Loss before Income Tax -316.1 (29,8%) -345.5 (34,6%) Income Tax and Tax on Minimum Notional -0.1 -- -~~---------------~~1.0 ~~Net~~(0,1%) ~~loss~~Income ~~for~~Net ~~the~~Loss ~~period~~-316.2 (~~501~~29,~~779,897~~8%) -346.5 (~~207~~34,~~140,416~~7%) ~~================================================================================================================~~

4 -------------------------------------------------- Schedule B -------------------------------------------------- (million of Pesos restated to December 2002)

~~=====================================================================================================================~~Balance ~~STOCKHOLDERS'~~Sheet ~~CONTRIBUTIONS~~ --------------------------------------------------------- ~~Subscribed capital~~ ------------------ ~~Shares Adjustment to Item outstanding capital Total~~ ---- ------------------ -------~~-----------~~ ------------------- Ps Ps Ps ------------------ ------------------ ------------------- Balances at the beginning of the year 278,804,518 453,679,787 732,484,305 Capital reduction due to absorption of accumulated losses at historical value (1)Consolidated ~~(139,402,259~~Information) ~~(52,331,650)~~December ~~(191,733,909)~~December ~~Restatement~~2002 of2001 ~~capital~~ASSETS ~~reduction~~Current ~~due~~Assets toCash ~~absorption~~& ofInvestments ~~accumulated~~165.6 ~~losses~~15.7 -Accounts ~~(72,176,996)~~Receivables ~~(72,176,996)~~190.3 ~~Net~~210.1 ~~loss~~Other ~~for~~Receivables ~~the~~70.3 ~~period~~53.0 asInventories ~~per~~158.3 ~~unaudited~~124.5 ~~interim~~Other ~~consolidated~~Current ~~statement~~Assets of4.3 ~~operations~~7.6 -Total -Current -Assets ~~------------------~~588.8 ~~------------------~~410.9 Non-~~------------------~~Current ~~Balances~~Assets atFix ~~the~~Assets ~~end~~887.6 of945.4 ~~the~~Other ~~period~~Non-Current ~~139,402,259~~Assets ~~329,171,141~~98.1 ~~468,573,400~~268.3 ===================================================================================================================== ===================================================================================================================== Unappropriated Item retained losses Total Non-~~---~~Current ~~--------------------~~Assets ~~-----------------~~985.7 Ps1213.7 PsTOTAL ~~--------------------~~ASSETS ~~-----------------~~1574.5 ~~Balances~~1624.6 atLIABILITIES ~~the~~Current ~~beginning~~Liabilities ofAccounts ~~the~~Payable ~~year~~150.0 ~~(441,796,003)~~234.3 ~~290,688,302~~Loans ~~Capital~~531.8 ~~reduction~~321.2 ~~due~~Other toCurrent ~~absorption~~Liabilities of95.7 ~~accumulated~~98.7 ~~losses~~Total atCurrent ~~historical~~Liabilities ~~value~~777.5 ~~(1)~~654.2 ~~191,733,909~~Non -Current ~~Restatement~~Liabilities ofLoans ~~capital~~776.4 ~~reduction~~587.0 ~~due~~Other toNon ~~absorption~~Current ofLiabilities ~~accumulated~~49.6 ~~losses~~96.7 ~~72,176,996~~Total -Non ~~Net~~Current ~~loss~~Liabilities ~~for~~826.0 ~~the~~683.7 ~~period~~TOTAL asLIABILITIES ~~per~~1603.5 ~~unaudited~~1337.9 ~~interim~~TOTAL ~~consolidated~~STOCHKHOLDERS ~~statement~~EQUITY ~~of operations~~ (~~501,779,897~~29.0) ~~(501,779,897)~~286.7 ~~-------------------~~TOTAL ~~-----------------~~LIABILITIES ~~Balances~~AND atSTOCKHOLDERS ~~the~~EQUITY ~~end~~1574.5 ~~of the period (679,664,995) (211,091,595) =====================================================================================================================~~1624.6

5 [LOGO] Acindar -------------------------------------------------- Schedule C -------------------------------------------------- (million of Pesos restated to December 2002)

~~===================================================================================================================~~Statement ~~STOCKHOLDERS'~~of ~~CONTRIBUTIONS~~Source ~~---------------------------------------------------------~~and ~~Subscribed~~Use ~~capital~~of ~~------------------~~Funds ~~Shares Adjustment to Item outstanding capital Total~~ ---- ------------------ ------------------ ------------------- ~~Ps Ps Ps~~ ------------------ ------------------ ------------------- ~~Balances~~(Consolidated atInformation) ~~the~~(Fiscal ~~beginning~~Year) ofDecember ~~the~~2002 ~~year~~December ~~278,804,518~~2001 ~~453,679,787~~Ordinary ~~732,484,305~~Loss ~~Net~~before ~~loss~~Tax ~~for~~(316.1) ~~the~~(345.5) ~~period~~Ordinary asItems ~~per~~not ~~unaudited~~providing ~~interim~~or ~~consolidated~~nor ~~statement~~requiring offunds ~~operations~~656.8 -423.1 -Operating -Income ~~--------------------~~340.7 ~~------------------~~77.6 ~~-------------------~~Changes ~~Balances~~in atWorking ~~the~~Capital ~~end~~(183.1) of(68.8) ~~the~~Interest ~~period~~- ~~278,804,518~~Net ~~453,679,787~~8.6 ~~732,484,305~~(101.4) ~~===================================================================================================================~~Dismissal ~~===================================================================================================================~~Indemnities ~~Unappropriated~~and ~~retained~~taxes ~~Item~~paid ~~earnings~~(15.6) (~~losses~~55.1) ~~Total~~Net ~~----~~Investments ~~--------------------~~in ~~-----------------~~Fixed PsAssets Ps3.9 ~~-------------------- ----------------- Balances at the beginning of the year~~ (~~90,608,154~~10.8) ~~641,876,151~~ Net ~~loss~~funds ~~for~~from ~~the~~financing ~~period~~activities as2.6 ~~per~~73.7 ~~unaudited~~Other ~~interim consolidated statement of operations~~ (~~207,140,416~~4.4) (~~207,140,416~~84.8) ~~-------------------~~Increase ~~--------------------~~(Decrease) ~~Balances~~in atfunds ~~the~~& ~~end~~Cash ofitems ~~the~~152.7 ~~period~~ (~~297,748,570~~85.8) ~~434,735,735 ===================================================================================================================~~

6 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ACINDAR INDUSTRIA ARGENTINA DE ACEROS S.A. (Registrant) Date: April 9, 2003 By: /s/ JORGE N. VIDELA ----------------------- Jorge N. Videla

================================================================================================================ 9.30.02 9.30.01 ----------------------------------------- Ps Ps ----------------------------------------- Cash flows from operating activities Loss before taxes (501,702,660) (206,469,493) Adjustments for: Depreciation and amortization 85,824,347 81,105,012 Financial and holding results 624,458,193 111,818,023 Share of earnings of equity method investments 6,575,616 (1,238,338) Net gain on sale and disposal of property, plant and equipment 510,332 (399,164) Net losses on sale and disposal of other assets 5,091,611 1,362,991 Results from reorganization of operations - 38,161,593 Other provisions/allowances and other revenues and (expenses) - net 63,780,541 56,050,651 ----------------------------------------- Operating cash flows before working capital changes 284,537,980 80,391,275 Increase in receivables and other assets (42,832,737) (25,050,864) Increase in inventories (81,409,747) (851,856) Decrease in liabilities (109,186,423) (91,222,913) ----------------------------------------- Cash generated from (used in) operations 51,109,073 (36,734,358) Dismissal and lawsuits indemnities paid (15,680,177) (38,837,159) Net interest 1,060,040 (85,407,701) Income tax (10,696) (7,458,656) ----------------------------------------- Net cash generated from (used in) operating activities 36,478,240 (168,437,874) ----------------------------------------- Cash flows from investment activities Net investments in property, plant and equipment 3,810,951 (10,995,348) Increase in intangible assets (4,381,511) (1,080,205) Investments in new companies - (10,618) Proceeds from sale of investments 17,854,636 - Collection of dividends 729,960 437,983 ----------------------------------------- Net cash generated from (used in) investment activities 18,014,036 (11,648,188) ----------------------------------------- Cash flows from financing activities Decrease in customers advances 1,573,328 (4,131,758) Net bank and financial debt (1,764,371) (27,410,562) Subordinated convertible negotiable obligations - 132,722,012 ----------------------------------------- Net cash (used in) generated from financing activities (191,043) 101,179,692 ----------------------------------------- Elimination of restatement of funds at the beginning of year (7,134,900) - Increase (decrease) in cash and cash equivalents 47,166,333 (78,906,370) Decrease in funds due to consolidation of Armax S.A. y S.C.I. S.A. - (112,455) Decrease in funds due to liquidation of Aser S.A. - (4,185) Decrease in funds due to sales of companies (16,184) - ----------------------------------------- Cash and cash equivalents at the beginning of the year 13,021,618 99,979,387 ----------------------------------------- Cash and cash equivalents at the end of the period 60,171,767 20,956,377 ========================================= Included in unaudited interim consolidated balance sheets as follows: Cash 39,458,149 28,813,540 Time deposits and others 20,745,272 1,238,719 Short-term loans - Bank overdrafts (31,654) (9,095,882) ----------------------------------------- Total 60,171,767 20,956,377 ================================================================================================================

9.30.02 9.30.01 ------------------- -------------------- Ps Ps ------------------- -------------------- UNAUDITED INTERIM CONSOLIDATED BALANCE SHEETS ASSETS CURRENT ASSETS a) Cash Cash on hand 5,696,071 848,797 Deposits in transit 5,188,439 546,764 Bank deposits 28,573,639 27,417,979 ------------------- -------------------- Total 39,458,149 28,813,540 =================== ==================== b) Time deposits and others Government bonds 54,620 911,391 Time deposits and others 20,690,952 327,328 ------------------- -------------------- Total 20,745,272 1,238,719 =================== ==================== NOTE 6 - COMPOSITION OF MAIN CAPTIONS OF THE UNAUDITED INTERIM CONSOLIDATED BALANCE SHEETS AND THE UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (Contd.) 9.30.02 9.30.01 ------------------- -------------------- Ps Ps ------------------- -------------------- UNAUDITED INTERIM CONSOLIDATED BALANCE SHEETS ASSETS CURRENT ASSETS (Contd.) c) Trade receivables Trade 132,206,940 225,368,264 Related companies - Trade 40,135,412 7,579,840 Notes 29,391,455 14,974,341 Related companies - Notes 130,008 486,632 Allowance for doubtful accounts (1) (36,230,061) (16,031,717) Allowance for discounts (101,417) (551,283) ------------------- -------------------- Total 165,532,327 231,826,077 =================== ==================== d) Other receivables Related companies 45,496 115,829 Dividends receivable from related companies 1,470,000 3,251,689 Related companies - Notes - 372,531 Prepaid expenses 113,167 407,948 Sundry debtors 27,993,039 33,096,373 Tax credits (Note 7) 22,248,935 22,313,826 Advances to suppliers 460,928 1,711,028 Export tax rebates 5,175,285 2,271,842 Attachments 971,199 - Others 3,921,470 7,749,890 ------------------- -------------------- ------------------- -------------------- Total 62,399,519 71,290,956 =================== ==================== e) Inventories Finished products 86,220,405 104,161,695 Raw materials 26,307,343 18,988,472 Materials 17,013,638 29,974,477 Advances to suppliers 8,295,749 3,280,016 Goods in transit 8,485,297 6,931,442 Allowance for inventory losses/Decrease in book values of inventories (3,107,094) (2,089,998) ------------------- -------------------- Total 143,215,338 161,246,104 =================== ==================== f) Other assets Property, plant and equipment held for sale and other assets 4,556,141 12,599,984 ------------------- -------------------- Total 4,556,141 12,599,984 =================== ==================== (1) Debtors in litigation were disclosed net of the allowance for doubtful accounts NOTE 6 - COMPOSITION OF MAIN CAPTIONS OF THE UNAUDITED INTERIM CONSOLIDATED BALANCE SHEETS AND THE UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (Contd.) 9.30.02 9.30.01 -------------------- -------------------- Ps Ps -------------------- -------------------- UNAUDITED INTERIM CONSOLIDATED BALANCE SHEETS ASSETS NON-CURRENT ASSETS g) Trade receivables Notes 384,334 2,060,823 -------------------- -------------------- Total 384,334 2,060,823 ==================== ==================== h) Other receivables Related companies - 72,358 Tax credits (Note 7) 51,797,085 200,257,930 Others 3,043,732 5,266,414 -------------------- -------------------- Total 54,840,817 205,596,702 ==================== ==================== i) Investments Related companies (Note 8) 26,333,792 31,630,832 Others 25,438 88,610 -------------------- -------------------- Total 26,359,230 31,719,442 ==================== ==================== j) Other assets Property, plant and equipment held for sale 195,062 577,341 Assets in comodatum 1,467,993 4,153,409 -------------------- -------------------- -------------------- -------------------- Total 1,663,055 4,730,750 ==================== ==================== LIABILITIES CURRENT LIABILITIES k) Accounts payable Trade 48,519,993 81,047,477 Unsecured notes payable 118,631,244 165,271,030 Related companies 848,468 12,475,708 Accrued interest and expenses 5,609,867 2,527,604 Others 233,708 1,124,998 -------------------- -------------------- Total 173,843,280 262,446,817 ==================== ==================== l) Loans Bank overdrafts (Note 13) 31,654 9,095.882 Secured loans (Note 13) 9,350,000 6,257,996 Unsecured loans (Note 13) 326,649,402 280,414,471 Negotiable Obligations (Note 13) 37,400,000 - Accrued interest and expenses 130,021,641 19,194,352 -------------------- -------------------- Total 503,452,697 314,962,701 ==================== ====================

9.30.02 9.30.01 -------------------------------------- Ps Ps -------------------------------------- UNAUDITED INTERIM CONSOLIDATED BALANCE SHEETS LIABILITIES CURRENT LIABILITIES (Contd.) m) Customers advances Customers advances 3,378,134 13,950,265 Relates companies 566,680 - -------------------------------------- Total 3,944,814 13,950,265 ====================================== n) Taxes and social security payable Salaries and wages 5,055,154 2,356,424 Withholdings, contributions and taxes payable 7,080,215 9,895,965 Taxes (net of prepayment) 4,888,172 6,861,434 Social security charges 4,875,524 10,016,650 -------------------------------------- Total 21,899,065 29,130,473 ====================================== o) Other liabilities Accrued fees and expenses 21,098,593 2,253,385 Debt from Adaptation Program 4,836,310 20,688,851 Debts from legal claims 1,246,740 2,357,477 Unsecured notes payable 21,347,061 12,613,623 Fixed assets rental collected in advance 2,968,842 1,797,463 Accrued interest 423,691 187,698 Relates companies 2,313,276 - Others - 912,842 -------------------------------------- Total 54,234,513 40,811,339 ====================================== p) Provisions Provision for contingencies 1,720,560 2,813,280 Provision for restructuring 4,473,239 - -------------------------------------- Total 6,193,799 2,813,280 ====================================== NON-CURRENT LIABILITIES q) Accounts payable Trade 17,969,366 16,089,266 Unsecured notes payable - 760,132 -------------------------------------- Total 17,969,366 16,849,398 ======================================

9.30.02 9.30.01 ------------------------------------ Ps Ps ------------------------------------ UNAUDITED INTERIM CONSOLIDATED BALANCE SHEETS LIABILITIES NON-CURRENT LIABILITIES (Contd.) r) Loans Unsecured loans (Note 13) 282,399,568 235,340,833 Secured loans (Note 13) - 1,161,317 Negotiable Obligations (Note 13) 374,000,000 243,323,688 Subordinated Convertible Negotiable Obligations (Note 13 and 16) 224,400,000 132,722,011 ------------------------------------ Total 880,799,568 612,547,849 ==================================== s) Taxes payable Taxes payable 11,367,331 25,177,045 ------------------------------------ Total 11,367,331 25,177,045 ==================================== t) Other liabilities Debt from Adaptation Program 2,133,104 3,756,445 Debts from legal claims - 3,536,215 Fixed assets rental collected in advance 8,227,981 6,357,333 Others 324,741 2,238,958 ------------------------------------ Total 10,685,826 15,888,951 ==================================== u) Provisions Provision for contingencies 5,059,883 3,971,200 Provision for restructuring 5,145,064 - ------------------------------------ Total 10,204,947 3,971,200 ==================================== UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS v) Other expenses Taxes (2,792,833) (3,741,451) Doubtful accounts (35,542,974) (23,857,793) ------------------------------------ Total (38,335,807) (27,599,244) ==================================== w) Other revenues and (expenses) - net Net gain on sale and disposal of property, plant and equipment (1,516,182) 399,164 Others (549,271) 54,675 Net losses on sale and disposal of other assets (6,500,992) (1,118,767) Advice to find a strategic investor - (11,555,727) Income (net) on other sales 2,043,178 755,155 Amortization of deferred charges (42,806) (5,466,302) Amortization of assets in comodatum (356,003) (593,345) ------------------------------------ Carried forward (6,922,076) (17,525,147) ------------------------------------

9.30.02 9.30.01 ---------------------------------- Ps Ps ---------------------------------- UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS w) Other revenues and (expenses) - net (Contd.) Brought forward (6,922,076) (17,525,147) Indemnities and Provision for restructuring (52,817) (25,014,602) Contingencies and charges for labor lawsuits - (3,318,050) Expenses corresponding to advice for corporate reorganization - (4,058,298) Results due to interuption of activities (1,253,863) Charge due to retirement of assets for sale (556,070) ---------------------------------- Total (6,974,893) (51,726,030) ================================== x) Financial and holding results generated by assets Holding results from inventories (*) (34,412,781) (6,918,531) Net exchange gain (*) 50,747,016 (6,438,159) Interest 10,529,137 (236,544) Cash discounts (2,264,920) - Result of exposure to inflation (300,224,981) - ---------------------------------- Total (275,626,529) (13,593,234) ================================== y) Financial and holding results generated by liabilities Net exchange loss (*) (1,066,581,407) (1,983,749) Interest (*) (54,203,359) (89,458,695) Tax on bank debits and credits (7,802,246) (4,583,769) Taxes on interest - (2,198,576) Result of exposure to inflation 795,875,997 - ---------------------------------- Total (332,711,015) (98,224,789) ================================== (*) Disclosed net of effects of inflation NOTE 7 - OTHER RECEIVABLES - TAX CREDITS The Company's current and non-current tax credits are summarized as follows: 9.30.02 9.30.01 --------------------------------- Ps Ps --------------------------------- Current VAT technical balance 18,976,530 12,764,183 Others 3,272,405 9,549,643 --------------------------------- Total 22,248,935 22,313,826 =================================

Company Ownership Investment by Share of earnings of interest equity method equity method investments -------------------------------------------------------------------------------------------------------------------- 2002 2001 2002 2001 2002 2001 -------------------------------------------------------------------------- % % Ps Ps Ps Ps -------------------------------------------------------------------------- Acero Express S.A. (1) - 50.00 - 13,272 - - Armax S.A. - - - - - 300,596 Fortunato Bonelli y Cia. S.A. 49.00 49.00 13,699,298 20,405,231 (6,363,232) 154,008 I.P.H. S.A.I.C.F. 33.00 33.00 12,606,494 11,029,173 (212,384) 283,474 Sistemas Constructivos Integrales S.A. - - - - - 854,745 (1) Others - - - - - (354,485) -------------------------------------------------------- 26,305,792 31,447,676 (6,575,616) 1,238,338 ========================================================

Currency 9.30.02 9.30.01 9.30.02 9.30.01 ------------- --------------- -------------- --------- ---------- Ps Ps % % --------------- -------------- --------- ---------- SHORT-TERM LOANS Bank overdrafts Ps 31,654 8,893,229 60.00 16.50 US$ - 202,653 - 12.00 --------------- -------------- 31,654 9,095,882 =============== ==============

Currency 9.30.02 9.30.01 9.30.02 9.30.01 ------------- ----------------------------- --------- ---------- Ps Ps % % ----------------------------- --------- ---------- Secured loans US$ 9,350,000 6,257,996 6.32 6.38 ----------------------------- 9,350,000 6,257,996 ============================= Unsecured loans Ps 107,531,114 10,031,165 10.12 11.54 US$ 219,118,288 270,383,306 5.79 10.24 ----------------------------- 326,649,402 280,414,471 ============================= Negotiable Obligations US$ 37,400,000 - 5.57 - ============================= LONG-TERM LOANS Secured loans US$ - 1,161,317 - 6.38 ----------------------------- - 1,161,317 ============================= Unsecured loans Ps 743,295 4,111,675 11.00 11.54 US$ 281,656,273 231,229,158 5.79 10.24 ----------------------------- 282,399,568 235,340,833 ============================= Negotiable Obligations Non-convertible Negotiable Obligations US$ 374,000,000 221,203,353 11.25 11.25 International Finance Corporation (IFC) US$ - 22,120,335 - 7.31 ----------------------------- 374,000,000 243,323,688 ----------------------------- Subordinated Convertible Negotiable Obligations US$ 224,400,000 132,722,011 7.50 7.50 =============================

b) Changes in capital for the last four years: Capital stock ------------------ Ps ------------------ Capital stock as per balance sheet at June 30, 1998 232,651,398 Date -------------------------------------------------- Stockholders' Meeting Authorization for Form of placement approving the issue public offer --------------------------------------------------------------------------------------------- 08.05.96 10.10.96 Conversion of Negotiable Obligations 98,656 convertible into shares 11.10.98 03.07.00 Capital increase 54,464 06.28.00 12.05.00 Capital increase 46,000,000 04.30.02 - Capital reduction (1) (139,402,259) ------------------ Total subscribed and paid-up at September 30, 2002 (139,402,259) ==================

Carrying value of Original amounts of Remaining balances Encumbered assets Type of encumbrance encumbered assets secured debts of secured debts ------------------------------------------------------------------------------------------------------------------- Ps U$s Ps ------------------------------------------------------------------ Property, plant and Mortgage and pledge 50,876,556 10,000,000 9,350,000 equipment

In million pesos --------------------- - Write-off rolling mill No. 3 33.8 - Decrease book value investment in Sistemas Constructivos Integrales S.A. 4.4 --------------------- Total 38.2 =====================

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