UNITED STATES
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

For the month of July, 2005

Masisa S.A.

(Exact name of registrant as specified in its charter)

Masisa ~~S.A.~~ Incorporated

(Translation of Registrant's name into English)

Av. Apoquindo 3650, Piso 10, 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 if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____ 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 Securities Exchange Act of 1934.

Yes _______ No ___X____

If Yes is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2 (b): 82-

On ~~March~~April 829, 2005 the registrant filed a report with the Superintendencia de Valores y Seguros de Chile (Chilean Superintendent of Securities and Insurance) which included information of the registrant’s financial statements and results of its operations for the ~~twelve~~three month period ended on ~~December~~March 31, ~~2004~~2005. Attached is a free translation of the financial statements and results of operations from the original document in Spanish. The financial information included in this report was prepared according to the accounting principles generally accepted in Chile and does not include reconciliation to generally accepted accounting principles in the United States.

MASISA S.A.

( Free translation from the original in Spanish)

	As of December 31,
	2004	2003
CONSOLIDATED BALANCE SHEET	THUS$	THUS$
ASSETS
CURRENTS ASSETS
Cash and Banks	4,358	8,661
Time deposits	17,033	0
Marketable securities (net)	1,175	0
Accounts receivable (net)	75,280	58,245
Notes receivable (net)	8,099	8,150
Sundry debtors	10,480	5,825
Notes and accounts receivable from related companies	7,383	2,298
Inventories (net)	90,967	77,716
Recoverable taxes	13,547	11,180
Prepaid expenses	5,067	2,874
Deferred taxes	110	562
Other current assets	0	40,224
Total current assets	233,499	215,735
FIXED ASSETS
Land	68,213	67,031
Buildings and infrastructure	107,980	105,384
Machinery and equipment	493,210	488,554
Other fixed assets	182,668	158,755
Asset reappraisal	0	0
Less: depreciation	(213,267)	(188,749)
Total fixed assets	638,804	630,975
OTHER ASSETS
Investments in related companies	0	0
Investments in other companies	60	10
Goodwill	1,334	1,419
Negative goodwill	(1,754)	(1,854)
Long term receivable	4,677	1,218
Notes and accounts receivable from related companies	597	3,297
Deferred taxes	0	0
Intangible assets	0	0
Amortization (less)	0	0
Other Assets	11,628	9,055
Total other assets	16,542	13,145
TOTAL ASSETS	888,845	859,855

The accompanying Notes N° 1 to 29 form an integral part of these consolidated financial statements.

MASISA S.A. (Free translation from the original in Spanish)

(Free translation from the original in Spanish)


	As of March 31,
	2005	2004
CONSOLIDATED BALANCE SHEET	THUS$	THUS$

ASSETS
CURRENTS ASSETS
Cash and Banks	11,837	6,211
Time deposits	21,595	300
Marketable securities (net)	922	0
Accounts receivable (net)	67,843	67,433
Notes receivable (net)	8,377	8,221
Sundry debtors	8,793	6,175
Notes and accounts receivable from related companies	10,847	3,152
Inventories (net)	95,492	75,924
Recoverable taxes	12,274	10,195
Prepaid expenses	6,064	5,212
Deferred taxes	598	513
Other current assets	126	28,524

Total current assets	244,768	211,860

FIXED ASSETS
Land	66,592	66,029
Buildings and infrastructure	108,050	104,583
Machinery and equipment	495,836	489,177
Other fixed assets	184,784	167,057
Asset reappraisal	0	0
Less: depreciation	(219,916)	(193,759)

Total fixed assets	635,346	633,087

OTHER ASSETS
Investments in related companies	0	0
Investments in other companies	56	10
Goodwill	1,313	1,391
Negative goodwill	(1,729)	(1,829)
Long term receivable	4,346	1,182
Notes and accounts receivable from related companies	597	2,997
Deferred taxes	0	0
Intangible assets	0	0
Amortization (less)	0	0
Other Assets	8,873	8,315

Total other assets	13,456	12,066

TOTAL ASSETS	893,570	857,013

	As of December 31,
	2004	2003
CONSOLIDATED BALANCE SHEET	THUS$	THUS$
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES
Due to banks and financial institutions short/term	3,110	37,883
Short/term portion of long/term liabilities to banks and financial institutions	21,819	42,254
Short-term portion of long term Bonds	9,587	9,698
Other long/term liabilities due within one year	111	312
Dividends payable	174	206
Accounts payable	29,923	23,730
Notes payable	557	0
Sundry creditors	1,211	1,685
Notes and accounts payable to related companies	3,509	1,827
Provisions	8,098	4,611
Withholdings	2,636	1,841
Income tax	3,345	0
Unearned income	484	53
Deferred taxes	0	0
Other current payable	8	11
Total current liabilities	84,572	124,111
LONG-TERM LIABILITIES
Due to banks and financial institutions	76,831	74,285
Bonds Payable	125,297	127,239
Notes payable	0	0
Sundry creditors	26	127
Notes and accounts payable to related companies	0	0
Provisions	693	666
Deferred taxes	5,753	4,340
Other long term payable	19,133	10,532
Total long-term liabilities	227,733	217,189
Minority interest	76,076	66,331
SHAREHOLDERS' EQUITY
Paid/up capital stock	237,022	237,022
Capital revaluation reserve	0	0
Share premium account	0	0
Reserve on reappraisal of fixed asset	0	0
Other reserves	70,222	59,706
Retained Earnings	193,220	155,496
Reserve future dividends	133,083	127,315
Accumulated profits	18,568	18,568
Accumulated losses (less)	0	0
Net income for the period	41,569	9,613
Interim dividends (less)	0	0
Total shareholders' equity	500,464	452,224
Total liabilities and shareholders' equity	888,845	859,855

The accompanying Notes N° 1 to 28 form an integral part of these consolidated financial statements.

The accompanying Notes N° 1 to 29 form an integral part of these consolidated financial statements.

MASISA S.A. (Free translation from the original in Spanish)

(Free translation from the original in Spanish)


	As of March 31,
CONSOLIDATED BALANCE SHEET	2005	2004
	THUS$	THUS$

LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES
Due to banks and financial institutions short/term	1,519	24,777
Short/term portion of long/term liabilities to banks and financial institutions	27,171	42,835
Short-term portion of long term Bonds	11,523	11,727
Other long/term liabilities due within one year	28	320
Dividends payable	166	199
Accounts payable	31,746	20,678
Notes payable	503	0
Sundry creditors	1,223	1,857
Notes and accounts payable to related companies	4,595	3,845
Provisions	6,615	5,224
Withholdings	5,458	2,536
Income tax	4,200	0
Unearned income	330	3
Deferred taxes	0	0
Other current payable	8	9

Total current liabilities	95,085	114,010

LONG-TERM LIABILITIES
Due to banks and financial institutions	70,085	71,441
Bonds Payable	120,447	123,377
Notes payable	0	0
Sundry creditors	25	44
Notes and accounts payable to related companies	0	0
Provisions	691	668
Deferred taxes	8,275	11,371
Other long term payable	19,111	12,125

Total long-term liabilities	218,634	219,076

Minority interest	74,687	65,221
SHAREHOLDERS' EQUITY
Paid/up capital stock	237,022	237,022
Capital revaluation reserve	0	0
Share premium account	0	0
Reserve on reappraisal of fixed asset	0	0
Other reserves	67,563	57,908
Accumulated deficit for development period (less)	0	0

Retained Earnings	200,579	163,776

Reserve future dividends	133,083	127,315
Accumulated profits	60,135	28,181
Accumulated losses (less)	0	0
Net income for the period	7,361	8,280
Interim dividends (less)	0	0

Total shareholders' equity	505,164	458,706

Total liabilities and shareholders' equity	893,570	857,013

	For the three-month period
	Ended December 31,
	2004	2003
CONSOLIDATED STATEMENT OF INCOME	THUS$	THUS$
Sales	397,312	281,826
Cost of sales (less)	(277,872)	(215,537)
Gross margin	119,440	66,289
Selling and administrative expenses (less)	(48,351)	(40,963)
OPERATING RESULT	71,089	25,326
Financial Income	1,721	3,328
Income on investments in related companies	0	0
Other non operating income	2,154	1,506
Loss on investments in related companies (less)	(26)	(685)
Amortization of goodwill (less)	(85)	(242)
Financial expenses (less)	(16,892)	(14,875)
Other non/operating expenses (less)	(7,652)	(2,174)
Price/level restatement	0	0
Exchange Differences	(1,078)	375
NON /OPERATING RESULT	(21,858)	(12,767)
Result before income taxes and minority interest	49,231	12,559
Income taxes (less)	(6,642)	(1,695)
Consolidated Profit (Loss)	42,589	10,864
Minority interests	(1,120)	(1,351)
Amortization negative goodwill	100	100
NET INCOME	41.569	9,613

The accompanying Notes N° 1 to 28 form an integral part of these consolidated financial statements.

The accompanying Notes N° 1 to 29 form an integral part of these consolidated financial statements.

MASISA S.A. (Free translation from the original in Spanish)

(Free translation from the original in Spanish)


	For the three-month period
	Ended March 31,
	2005	2004
CONSOLIDATED STATEMENT OF INCOME	THUS$	THUS$

Sales	104,580	87,861
Cost of sales (less)	(76,392)	(65,460)
Gross margin	28,188	22,401
Selling and administrative expenses (less)	(12,515)	(10,767)

OPERATING RESULT	15,673	11,634

Financial Income	400	717
Income on investments in related companies	1	0
Other non operating income	669	266
Loss on investments in related companies (less)	0	(2)
Amortization of goodwill (less)	(21)	(28)
Financial expenses (less)	(3,927)	(4,248)
Other non/operating expenses (less)	(360)	(845)
Price/level restatement	0	0
Exchange Differences	(1,229)	2,378

NON /OPERATING RESULT	(4,467)	(1,762)

Result before income taxes and minority interest	11,206	9,872
Income taxes (less)	(3,439)	(1,742)
Consolidated Profit (Loss)	7,767	8,130
Minority interests	(431)	125
Amortization negative goodwill	25	25

NET INCOME	7,361	8,280

	For the three-month period
	ended December 31,
CONSOLIDATED STATEMENT OF CASH FLOW	2004THUS$	2003THUS$
Cash flow from operating activities
Collection of accounts receivable	471,920	328,951
Interest income receivable	2,151	887
Dividends and other distributions received	0	0
Other income	10,867	16,857
Payments of suppliers and personnel (less)	(387.899)	(297.497)
Interest paid (less)	( 14,923)	(9,817)
Income tax paid (less)	(5,136)	(8,135)
Other expenses paid (less)	(2,850)	(2,179)
V.A.T. and similar paid (less)	(13,518)	(11,270)
Net positive (negative) cash flow from operating activities	60,612	17,797
Cash flow from financing activities
Issuance of cash shares	0	0
Loans drawn	39,374	81,269
Bonds issued	0	85,707
Documented loans from related companies	0	0
Other loans from related companies	0	5,848
Other financing sources	2	1,102
Dividends paid (less)	(3,825)	(4,382)
Distribution of paid in capital (less)	0	0
Loans repaid (less)	(90,197)	(114,026)
Bonds paid (less)	(9,000)	(25,000)
Repayment of documented loans from related companies (less)	0	0
Repayment of other loan form related companies (less)	0	0
Stock issuance expense (less)	0	(1,883)
Other financing disbursements (less)	(127)	(82)
Net positive (negative) cash flow from financing activities	(63,773)	28,553
Cash flow from investment activities
Sales of fixed assets	1,432	91
Sales of permanent investments	0	0
Sales of other investments	0	0
Collection of documented loans to related companies	0	0
Collection of other loans to related companies	131	0
Other investment income	28,736	0
Acquisition of fixed assets (less)	(21,571)	(24,461)
Interest capitalized repaid (less)	(2,376)	(1,516)
Permanent investments (less)	0	0
Investments in securities (less)	0	0
Documented loans to related companies (less)	0	0
Other loans to related companies (less)	(406)	(4,401)
Other investment disbursements (less)	0	0
Net positive (negative) cash flow from investment activities	5,946	(30,287)
Net total positive (negative) cash flow of the period	2,785	16,063
Effect of inflation on cash and cash equivalents	0	1,484
Net change in cash and cash equivalents (less)	2,785	17,547
Initial balance of cash and cash equivalents	19,781	2,234
Final balance of cash and cash equivalents	22,566	19,781

The accompanying Notes N° 1 to 28 form an integral part of these consolidated financial statements.

The accompanying Notes N° 1 to 29 form an integral part of these consolidated financial statements.

MASISA S.A. (Free translation from the original in Spanish)

(Free translation from the original in Spanish)


	As of March 31,
CONSOLIDATED STATEMENT OF CASH FLOW	2005 THUS$	2004 THUS$

Cash flow from operating activities
Collection of accounts receivable	132,305	96,706
Interest income receivable	355	2,101
Dividends and other distributions received	0	0
Other income	4,617	3,935
Payments of suppliers and personnel (less)	(107,930)	(90,079)
Interest paid (less)	(1,116)	(2,014)
Income tax paid (less)	(1,129)	(1,020)
Other expenses paid (less)	(800)	(369)
V.A.T. and similar paid (less)	(2,974)	(2,353)

Net positive (negative) cash flow from operating activities	23,328	6,907

Cash flow from financing activities
Issuance of cash shares	0	0
Loans drawn	0	1,710
Bonds issued	0	0
Documented loans from related companies	0	0
Other loans from related companies	0	0
Other financing sources	0	2
Dividends paid (less)	(3,113)	(16,142)
Distribution of paid in capital (less)	0	0
Loans repaid (less)	0	0
Bonds paid (less)	0	0
Repayment of documented loans from related companies (less)	0	0
Repayment of other loan form related companies (less)	0	0
Stock issuance expense (less)	0	0
Other financing disbursements (less)	0	(14)

Net positive (negative) cash flow from financing activities	(3,113)	(14,444)

Cash flow from investment activities
Sales of fixed assets	1,093	0
Sales of permanent investments	0	0
Sales of other investments	0	0
Collection of documented loans to related companies	0	0
Collection of other loans to related companies	0	0
Other investment income	0	0
Acquisition of fixed assets (less)	(8,634)	(4,992)
Interest capitalized repaid (less)	(886)	(730)
Permanent investments (less)	0	0
Investments in securities (less)	0	0
Documented loans to related companies (less)	0	0
Other loans to related companies (less)	0	0
Other investment disbursements (less)	0	0

Net positive (negative) cash flow from investment activities	(8,427)	(5,722)

Net total positive (negative) cash flow of the period	11,788	(13,259)

Effect of inflation on cash and cash equivalents	0	0

Net change in cash and cash equivalents (less)	11,788	(13,259)

Initial balance of cash and cash equivalents	22,566	19,770

Final balance of cash and cash equivalents	34,354	6,511

	For the three-month period
	ended December 31,
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES	2004 THUS$	2003 THUS$
Net income (loss) for the period	41,569	9,613
Results on sales of assets:
(Profit) loss on sales of fixed assets	(1,916)	11
(Profit) on sales of investments	0	0
Loss on sales of investments	0	0
(Profit) loss on sales of other assets	0	0
Charges (credits) to income not affecting cash flow:
Depreciation for the period	27,705	25,814
Amortization of intangibles	328	263
Write/off and provisions	5,970	575
Income from investment in related companies (less)	0	0
Loss on investment in related companies	26	685
Amortization of goodwill	85	242
Amortization of negative goodwill (less)	(100)	(100)
Net price/level restatements	0	0
Net exchange difference	1,078	(375)
Other credit to income not affecting cash flow (less)	(342)	(683)
Other changes to income not affecting cash flow	5,604	3,300
Changes in assets, affecting cash flow:
Decrease (increase) in accounts receivable	(23,055)	(8,037)
Decrease (increase) in inventories	(13,629)	(13,413)
Decrease (increase) in other assets	(4,295)	6,006
Changes in liabilities, affecting cash flow:
Increase (decrease) in accounts payable related to operating income	9,109	(4,587)
Increase (decrease) in interest payable	1,704	633
Net Increase (decrease) in income taxes payable	3,078	(5,699)
Increase (decrease) in other accounts payable related to non/operating income	(1,051)	904
Net increase (decrease) value added tax and similar payable	7,624	1,294
Profit (loss) of minority interest	1,120	1,351
Net positive (negative) cash flow from operating activities	60,612	17,797

The accompanying Notes N° 1 to 28 form an integral part of these consolidated financial statements.

The accompanying Notes N° 1 to 29 form an integral part of these consolidated financial statements.

MASISA S.A. ~~NOTES~~ ~~TO THE CONSOLIDATED FINANCIAL STATEMENTS~~ ~~DECEMBER 31, 2004 AND 2003~~ (Free translation from the original in Spanish)

NOTE 1- COMPANY REGISTRATION


	For the three-month period
	ended March 31
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY	2005	2004
OPERATING ACTIVITIES	THUS$	THUS$

Net income (loss) for the period	7,361	8,280
Results on sales of assets:
(Profit) loss on sales of fixed assets	(487)	0
(Profit) on sales of investments	0	0
Loss on sales of investments	0	0
(Profit) loss on sales of other assets	0	0
Charges (credits) to income not affecting cash flow:
Depreciation for the period	7,251	6,757
Amortization of intangibles	0	87
Write/off and provisions	(58)	325
Income from investment in related companies (less)	(1)	0
Loss on investment in related companies	0	2
Amortization of goodwill	21	28
Amortization of negative goodwill (less)	(25)	(25)
Net price/level restatements	0	0
Net exchange difference	1,229	(2,378)
Other credit to income not affecting cash flow (less)	0	(70)
Other changes to income not affecting cash flow	1,295	1,067
Changes in assets, affecting cash flow:
Decrease (increase) in accounts receivable	5,713	(10,463)
Decrease (increase) in inventories	(4,519)	1,792
Decrease (increase) in other assets	84	(879)
Changes in liabilities, affecting cash flow:
Increase (decrease) in accounts payable related to operating income	4,199	(1,892)
Increase (decrease) in interest payable	1,359	1,208
Net Increase (decrease) in income taxes payable	1,991	667
Increase (decrease) in other accounts payable related to non/operating income	(1,203)	278
Net increase (decrease) value added tax and similar payable	(1,313)	2,248
Profit (loss) of minority interest	431	(125)

Net positive (negative) cash flow from operating activities	23,328	6,907

The accompanying Notes N° 1 to 28 form an integral part of these consolidated financial statements.

MASISA S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005 AND 2004
(Free translation from the original in Spanish)

NOTE 01- COMPANY REGISTRATION

The Parent Company, MASISA S.A., is a quoted stock corporation, registered under N°132 in the Official Company Register and is therefore governed by the rules of the Superintendencia de Valores y Seguros de Chile (Chilean Superintendent of Securities and Insurance) and of the Securities and Exchange Commission of the U.S.A.

~~NOTE~~ Corporate 2Purpose · Forestation and reforestation of lands and management, felling and forestry of natural and artificial forests. - ~~SUMMARY~~Industrialization OFand ~~SIGNIFICANT~~commercialization ~~ACCOUNTING~~in ~~POLICIES~~Chile and/or abroad of all kind of forester and wood, cattle and agricultural products, and of all kind of machinery or vehicle. · Capital expenditures on forester and agricultural business, managing, forming or participating on the corporations. · Delivery of management services of technical, financial and/or legal consultancy.

NOTE 02 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Accountant Period

The following financial statements correspond to the period between January 1, ~~2004~~2005 and ~~December~~March 31, ~~2004~~2005, and are presented compared to the same period of ~~2003~~ 2004.

b) Currency used in accounting

By the Resolution N° 259 of the Chilean Internal Taxes Service , dated April 10, 2003, the Company was authorized to have its accounting in dollars of the United States of America asfrom of January 1, 2003. Otherwise, dated October 10, 2003, the Chilean Superintendence of Securities and Insurance authorized the Company to present its financial statements and quarters FECUs in dollars of the United States of America.

c) Consolidated financial statements preparation basis

The consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in Chile and the specific ~~accounting~~ accounting regulations of the Superintendent of Securities and Insurance (“SVS”). If any discrepancy exists between both entity’s regulations, those of the Superintendent of Securities and Insurance will ~~prevail~~primate.

d) Presentation basis

The current financial statements have been issued in dollars of the United States of America, for which no updating factor ~~has~~have been applied to the numbers in this document.

8 9

e) Consolidated basis

The Consolidated Financial Statements includes the assets, liabilities, ~~results~~ result and statement of cash flows of the Company and its direct or indirect subsidiaries

The following is a list of the consolidated subsidiaries:

			Ownership as of
				12/31/2004		12/31/2003
			03/31/2005			03/31/2004 Total
RUT	Company	Business	Direct	Indirect	Total	~~Total~~
79,554,560-3	Inversiones Coronel Limitada	Investments	99.9842	0.0158	100.0000	100.0000
79,959,070-0	Masisa Inversiones Limitada	Investments	99.9973	0.0027	100.0000	100.0000
77,790,860-K	Masisa Partes y Piezas Limitada		99.8000	0.2000	100.0000	100.0000
81,507,700-8	Forestal Tornagaleones S.A.	Wood products and by-products processing	60.4538	0.0000	60.4538	60.4492
79,616,940-0	Masisa Concepción Limitada		0.0100	99.9900	100.0000	100.0000
Foreign	Masisa Overseas Ltd.	Investments/Fund Raising	100.000	0.0000	100.0000	100.0000
Foreign	Maderas y Sintéticos del Perú S.A.C.		99.0114	0.8897	99.9011	99.9011
Foreign	Maderas y Sintéticos de Mexico S.A. de C.V.	Wood products and by/products processing	0.0002	99.9998	100.0000	100.0000
Foreign	Maderas y Sintéticos Servicios S.A. de C.V.		1.0000	99.0000	100.0000	100.0000
Foreign	Masisa Ecuador S.A.		0.1000	99.9000	100.0000	100.0000
Foreign	Masisa do Brazil Limitada	Particleboard and MDF Commercialization	0.0010	99.9990	100.0000	100.0000
Foreign	Masisa Argentina S.A.	Wood products and by/products processing	0.0000	100.0000	100.0000	100.0000
Foreign	Forestal Tornagaleones Overseas Ltd.		0.0000	0.0000	0.0000	60.4492
Foreign	Forestal Argentina S.A.		0.0000	30.2874	30.2874	30.2851

The effects of unrealized results form transactions with subsidiaries have been eliminated.

f) Price-level restatement

In The ansubsidiaries ~~Extraordinary~~that ~~Board~~carries oftheir ~~Directors~~accounting ~~Meeting~~figures ofin ~~Masisa’s~~Chilean ~~subsidiary Forestal~~pesos, ~~Tornagaleones~~have ~~S.A.~~adjusted ~~held~~their onfinancial ~~November~~statements ~~11,~~in ~~2003,~~order ~~the Board agreed~~ to ~~proceed~~ ~~with~~recognize the ~~liquidation~~effects ~~and~~on ~~dissolution~~the variation of ~~Forestal~~the ~~Tornagaleones~~price ~~S.A. subsidiary~~level ~~FTG~~restatement ~~Overseas~~of ~~Ltd~~that currency. OnFor ~~December~~this 31effects, ~~2003,~~ the ~~documents~~current ~~needed~~legal todispositions ~~proceed~~have ~~with~~been ~~the~~applied. ~~liquidation~~These ~~and~~restatements ~~dissolution~~have ofbeen ~~FTG~~calculated ~~Overseas~~based ~~Ltd.~~on ~~were presented to~~ the ~~Record~~variations ~~of registered companies~~ in ~~which FTG Overseas Ltd. was registered and which managed~~ the ~~legal~~official ~~existence~~Consumer ofPrice ~~the~~Index ~~company.~~on ~~Thus,~~a ~~and~~previous asmonth ~~of December 31~~basis, ~~2003,~~which ~~the~~was ~~liquidator of FTG Overseas Ltd~~–0.80% ~~distributed~~in ~~the~~2005 ~~assets, liabilities, rights and obligations of FTG Overseas Ltd~~(-0.50% toin ~~its controlling and only shareholder Forestal Tornagaleones S~~2004).A.

g) Foreign currency

f) The ~~Price-level~~Company ~~restatement~~is authorized to have its accounting and present its financial statements in American dollars. The American dollar is used as common currency and thus assets and liabilities corresponding to different currencies have been expressed in American dollars at the exchange rates of the end of each period. The exchange differences are accounted in results. As of March 31 2005 and 2004 the main closing exchange rates used, expressed in US dollars, were the following:

The subsidiaries that carry their accounting figures in Chilean pesos, have adjusted their financial statements in order to recognize the effects on the variation of the price level restatement of that currency. For this effects, current legal dispositions have been applied. These restatements have been calculated based on the variations in the official Consumer Price Index on a previous month basis, which was 2.50% in 2004 (1.00% in 2003).



Currency		2005	2004

Chilean pesos	Ch$	585.93	616.41
Unidad de Fomento (U.F.)	U.F.	0.03407	0.03665
Argentine Pesos	Ar$	2.9165	2.8575
Real (Brazil)	$R	2.6655	2.8940
Mexican Peso	MxN	11.1628	11.1210
Nuevo Sol	Sol	3.2600	3.4590

g) Foreign currency

The Company is authorized to carry its accounting and present its financial statements in American dollars. The American dollar is used as common currency and thus assets and liabilities corresponding to different currencies have been expressed in American dollars at the exchange rates of the end of each period. The exchange differences are accounted for in results.

As of December 31 2004 and 2003 the main closing exchange rates used, expressed in US dollars, were the following:

Currency		2004	2003
Chilean pesos	Ch$	557.40	593.80
Unidad de Fomento (U.F.)	U.F.	0.03219	0.03509
Argentine Pesos	Ar$	2.9705	2.9350
Real (Brazil)	$R	2.6520	2.920
Mexican Peso	MxN	11.1890	11.2245
New Sol	Sol	3.2825	3.4675

h) Financial Investments

Time deposits are presented at inverse value plus interests and readjustments accrued at the end of each period and are classified under the category of the same name.

~~i) Inventories~~ 10

i) Inventories

The inventories are valued at production cost or at the acquisition cost including indirect manufacturing costs, and its balance is determined by the weighted average price method plus.

The Company makes obsolescence inventory provisions, that are presented deducted from the original.

The timber resources presented in this account has been determined in accordance with a technical appraisal, as explained in the note 2k). As of ~~December~~ March 31, ~~2003~~2005, this account includes the expenses related to roads built for the harvesting, which were valued at their cost and accounted at its cost of sales, in the time the forests associated are exploited and sold.

The amount thus determined does no exceed their corresponding market values.

j) Allowance for doubtful accounts

j) Allowance for doubtful accounts

The company has recorded allowances to cover the possible non-collection of account receivables, which are shown as a deduction from account receivables. The allowances were calculated considering a 1% of the local account receivables plus others specific account receivables of doubtfully recovery.

k) Fixed assets

k) Fixed assets

Fixed assets , excluding plantations, are presented at their acquisition or construction cost value, price level restated at December 31, 2002, date in which the figures were converted to American dollars. The costs mentioned includes the actual financial cost incurred by the company, until those assets were in conditions to be used, applying effective financing cost rate.

Major maintenance expenses are incorporated into assets and then amortized over the period between the maintenance and the scheduled next major maintenance those items with significant relative value are depreciated in the same period of are as the fixed asset with which they are associated and spare parts that are periodically used are charged to production cost when utilized.

The forestry plantations value is determined in accordance with a technical appraisal. The value over the book value thus estimated , that includes the financing value during the growing period, has been accounted with surplus to the forestry reserve fund in the Net worth of the respective subsidiary.

Indefinitely inactive fixed assets have been classified in the item Other Long Term Assets and are shown at their estimated realization value.

l) Fixed assets depreciation

l) Fixed assets depreciation

Depreciation has been computed using the straight/line method, considering the remaining estimated useful life of each asset.

m) Leasing assets

m) Assets ~~Leasing~~purchased under financial leasing are valued at the current value of the contract, which is set discounting the periodical installment and the purchase option at the interest rate established in the related contract. On the other hand, the respective obligation is shown in the short and long term portion net of non/accrued interests. Legally, these assets are not property of the corporation and, therefore, they can’t be treated as if they are.

Assets purchased under financial leasing are valued at the current value of the contract, which is set discounting the periodical installment and the purchase option at the interest rate established in the related contract. On the other hand, the respective obligation is shown in the short and long term portion net of non/accrued interests. These assets are not legally property of the company, and thus the company can not freely dispose of them

n) Investments in related companies

n) Investments in related companies

Investments in related companies are valued based on the equity method, eliminating unrealized profits and losses.

Investments in companies located in other countries are controlled in US American dollars (US$) and have been valued in accordance with Technical Bulletin N°64 of the Chilean Institute of Accountants.

In accordance to Circular N° 150 of the SVS, the Company had made an evaluation over the value of its subsidiaries assets in Argentina, Mexico and Brazil, and over the cash flows this subsidiaries produce, the Company had concluded that it don’t need to make any adjustment for this concept, due to there has been no significant decay in the recuperation value of those respective assets.

o) Goodwill and negative Goodwill

o) Goodwill and negative Goodwill

This item represents the positive and/or negative difference between the acquisition value of shares of the related company and its proportional equity value at the date of purchase. This differences are amortized in the following steps:

Goodwill Goodwill corresponding to the purchase of the subsidiary Masisa Cabrero S.A., ex Fibranova S.A.. This value will be amortized in a period of 20 years, given the returns of current administration of the plant.

Negative Goodwill The ~~acquisition~~capital’s raise of ~~the~~Forestal ~~former~~Tornagaleones ~~subsidiary Maderas y Paneles~~ S.A., ~~merged~~in ~~on august~~June 3127th, ~~1993~~2002, ~~was~~generated ~~amortized~~a inhigher ainvestment ~~period~~value offor 10the ~~years,~~Company ~~given~~. ~~the~~This ~~returns~~value ofwill ~~the production~~be ~~management~~amortized ofin ~~the~~a ~~actual~~period ~~plant.~~of 20 years.

Goodwill corresponding to the purchase of the subsidiary Masisa Cabrero S.A., ex Fibranova S.A.. This value will be amortized in a period of 20 years, given the returns of current administration of the plant.

Negative Goodwill

The capital’s raise of Forestal Tornagaleones S.A. in June 27th, 2002, generated a higher investment value for the Company . This value will be amortized in a period of 20 years.

p) Securities purchased under resale agreements

Are included in the account “Other Current Assets” and corresponds to the acquisition of financial assets that must be sold in the short term, and are presented at market value as of the purchase date plus adjustments ~~for~~and ~~accrued~~ the interest accrued as of the last day of the period.

The value thus determined dodoes not exceed the current market value.

q) Expenses of the issuance and placement of shares and debts titles

The ~~company~~society presents under the account “Other Assets”, the expenses of the issuance and placement of debt titles made in the 2003 exercise, which will be amortized in the terms of the respective debt.

r) Bonds payable

r) Bonds payable corresponds to the placement in Chile of immaterialized bonds, which are valued at their nominal value plus readjustments and interests accrued at the closing date of the exercise. The difference between the nominal value and the placement value is registered as deferred asset. This asset is amortized in the term period of the obligation.

s) Income tax and Deferred tax

~~Bonds payable corresponds to the placement in Chile of immaterialized bonds,~~ ~~which are valued at their nominal value plus readjustments and accrued interest at the closing date of the exercise.~~ The ~~difference~~company ~~between~~has ~~the~~recognized ~~nominal~~its ~~value and~~tax ~~the~~obligations ~~placement value is registered as deferred asset. This asset is amortized~~ in ~~the~~conformity ~~term~~with ~~period~~current ~~of the obligation~~legislation.

s) The ~~Income~~effects produced by deferred taxes, as a consequence of temporal differences between the financial and tax purpose balance sheet, have been registered as per Technical Bulletin N° 60, 68, 69 and ~~Deferred~~71 ~~tax~~of the Chilean Institute of Accountants and in the Circular N° 1,466 of the Superintendencia de Valores Seguros. The effects derived of the existing taxes at January 1st, 2000, that were not registered before, will be recognized on the results, starting in this year, to the extend that the temporal differences are reversed.

~~The company has recognized its tax obligations in conformity with current~~ legislation. The effects produced by deferred taxes, as a consequence of temporal differences between the financial and tax purpose balance sheet, have been registered as per Technical Bulletin N° 60, 68, 69 and 71 of the Chilean Institute of Accountants and in the Circular N° 1,466 of the Superintendencia de Valores Seguros. The effects derived of the existing taxes at January 1st, 2000, that were not registered before, will be recognized on the results, starting in this year, to the extend that the temporal differences are reversed. 12

t) Sales

t) Sales

Sales are recognized on an accrual basis, at the moment of delivery of the products that the Company manufactures, which are given by underlying market conditions.

u) Derivative contracts

u) As ~~Derivative~~of March 31, 2005, the Company keeps swap interest rates contracts with financial institutions. This contracts were defined as hedge and are registered by which is establishes in the Boletín Técnico Nro 57 of the Colegio de Contadores de Chile A.G.

As The offair ~~December~~value ~~31,~~of ~~2004,~~these ~~the~~instruments ~~Company~~has ~~keeps~~been ~~interest~~accounted ~~rates~~in ~~swap~~the ~~contracts~~item ~~with financial~~other ~~institutions.~~assets ~~These~~and ~~contracts~~obligations ~~were~~with ~~defined~~banks ~~as hedge~~ and ~~are~~financing ~~registered by~~institutions, ~~what~~according isto ~~established~~if byit ~~the~~is ~~Boletín~~payable ~~Técnico~~or ~~Nro~~receivable 57to of the ~~Colegio~~correspondent ~~de Contadores~~financing ~~de Chile A~~institution.G.

The ~~fair~~unrealized ~~value~~losses for contracts of ~~these~~expected ~~instruments~~transactions ~~has~~coverage ~~been~~are ~~recorded~~presented in the ~~line~~item ~~“other assets”~~Other orAssets. ~~“due~~The unrealized income corresponding to ~~banks~~contracts ~~and~~of ~~financial~~existing ~~institutions”~~entry ~~depending~~coverage onhave ~~weather~~been recorded in the item other liabilities. The realized ~~result~~results isare anrecorded ~~account~~as ~~collectible~~financial orexpenditures ~~payable~~as tothe closing date of the ~~corresponding~~present financial ~~institution~~ statements.

~~Expected unrealized losses arising from derivative contracts are presented in~~ ~~the~~In ~~line~~those ~~“other~~cases ~~assets”. Existing unrealized gains arising from derivative contracts are presented~~ in ~~the~~which ~~line~~is ~~“other~~verified ~~liabilities”.~~that ~~The realized results are presented as financial expenses on~~ the ~~closing~~taken ~~date~~coverage ~~of the current financial statements. In those cases where the hedge~~ is not effective, the contracts have been ~~treated~~ considered as investment instruments.

v) Software

v) Software

The Company uses the system SAP R/3 version 4.6 C, acquired from SAP Chile S.A. , and has determined a depreciation period of 4 years.

w) Research and Development expenses

w) Research and Development expenses

The Research and Development expenses are charged to the income of the period of which expenses were incurred. The Company has not incurred in significant Research and Development expenses.

x) Consolidated Statement of Cash Flows

x) Consolidated Statement of Cash Flows

As set forth the No 50 Technical Bulletin of the Accountant Institute of Chile and the Circular N° 1,312 of the Superintendencia de Valores y Seguros dated January 17, 1997, the Company has defined the following concepts related to the Statement of Cash Flows.

Cash Equivalent: Every investment that meets the following conditions: - May be quickly converted in a known amount of cash. - The Company has the intention to do the this conversion in no more than 90 days. - There is a minimum risk of a significant lose of value due to this investment

As of ~~December~~March 31, ~~2004~~2005, all the short-term investments of the company meet the mentioned conditions.

y) Operating Activities:

Cash flows from operating activities includes all business-related cash flows, including interest paid, financial income and, in general, all flows that are not defined as related to investment or financing activities. It should be pointed out that this definition is broader than that used in the consolidated statement of income.

NOTE 03 - CHANGES IN ACCOUNTING PRINCIPLES

~~NOTE 3 - CHANGES IN ACCOUNTING PRINCIPLES~~ 13

During the exercise comprise between January 1 and ~~December~~March 31, ~~2004~~2005, there have been no changes in the accounting principles for the current period in comparison to the previous period.

14NOTE 04 – ACCOUNTS RECEIVABLE SHORT AND LONG TERM

~~NOTE~~ The 4detail –of ~~ACCOUNTS~~the ~~RECEIVABLE~~debtors ~~SHORT~~for ~~AND~~sale ~~LONG~~is ~~TERM~~the following:

The break-down of accounts receivables is the following:



	2005	2004
	THUS$	THUS$

Chile	18,731	24,652
Argentina	6,177	7,046
Brasil	18,417	20,638
México	21,639	13,310
Ecuador	1,734	1,770
Perú	1,145	17

Total	67,843	67,433

	2004	2003
	Currency
	THUS$	THUS$
	Less than 90 days		More than 90 and less than 1 year			Currency Total		Long-term
Chile	20,568	23,925
	03/31/2005	03/31/2004	03/31/2005	03/31/2004	Sub-Total	03/31/2005	03/31/2004	03/31/2005	03/31/2004
Argentina	11,246	6,733
Account receivable	64,381	65,964	7,204	1,469	71,585	67,843	67,433	0	512
Brasil	22,630	14,848
Non-collect receivables estimate	0	0	0	0	3,742
México	18,343	11,177
Notes receivable	6,562	7,581	2,494	640	9,056	8,377	8,221	0	0
Ecuador	1,630	1,545
Non-collect receivables estimate	0	0	0	0	679
Perú	863	17
Sundry debtors	5,684	5,863	3,436	312	9,120	8,793	6,175	4,346	670
Total	75,280	58,245
Non-collect receivables estimate	0	0	0	0	327
						Total Long Term receivable		4,346	1,182

	Currency
			More than 90 and less
	Less than 90 days					Currency Total		Long-term
			than 1 year
	12/31/2004	12/31/2003	12/31/2004	12/31/2003	Sub-Total	12/31/2004	12/31/2003	12/31/2004	12/31/2003
Account receivable	67,081	59,897	11,618	1,467	78,699	75,280	58,245	560	201
Non-collect receivables estimate	0	0	0	0	3,419
Notes receivable	7,346	8,324	1,467	575	8,813	8,099	8,150	1,381	0
Non-collect receivables estimate	0	0	0	0	714
Sundry debtors	7,277	5,825	3,538	149	10,815	10,480	5,825	2,736	1,017
Non-collect receivables estimate	0	0	0	0	325
					Total Long Term receivable			4,677	1,218

NOTE 05 - TRANSACTIONS WITH RELATED COMPANIES

NOTE 5 - TRANSACTIONS WITH RELATED COMPANIES

Notes and accounts receivables from related companies in the short-term:

Sales of goods and services made by the Company from and to related companies in Chile are made in Chilean pesos and with a pay term not exceeding 60 days, without interest nor restatement . Export sales to foreign related companies are in American dollars, without interest and in general, not exceeding 180 days.

Notes and accounts receivables from related companies in the long-term:

The long term account receivable for the subsidiary Forestal Río Calle Calle S.A. are summarized in American dollars (US$).

15 14

Notes and account receivable from related companies:

RUT	Company	Short-Term		Long-Term
		12/31/2004	12/31/2003	12/31/2004	12/31/2003
		03/31/2005	03/31/2004	03/31/2005	03/31/2004
96,626,060-2	Forestal Río Calle Calle S.A.	32	0	597	32,~~297~~997
96,802,690-9	Terranova S.A.	~~109~~790	0	0	0
Foreign	Masnova de Mexico S.A. de C.V.	1,360	1,~~872~~768	0	0
Foreign	Terranova Colombia S.A.	34120	33129	0	0
Foreign	Fibranova C.A.	~~627~~278	0726	0	0
Foreign	Terranova ~~Forest~~Brasil ~~Products Inc.~~Limited	~~4,527~~121	190	0	0
Foreign	~~Plycem~~Terranova ~~Construsistemas~~Forest ~~Costa~~Products ~~Rica~~Inc.	~~373~~6,651	~~268~~0	0	0
Foreign	Plycem Construsistemas ElCosta ~~Salvador~~Rica	491,106	96314	0	0
Foreign	Plycem Construsistemas ~~Guatemala~~El Salvador	~~160~~22	1028	0	0
Foreign	Plycem Construsistemas ~~Honduras~~Guatemala	51198	058	0	0
Foreign	Plycem Construsistemas ~~Nicaragua~~Honduras	90170	0129	0	0
TOTAL		7,383	2,298	597	3,297
Foreign	Plycem Construsistemas Nicaragua	29	0	0	0
TOTAL		10,847	3,152	597	2,997

a) Notes and accounts payables from related companies:

RUT	Company	Short-Term		Long-Term
		12/31/2004	12/31/2003	12/31/2004	12/31/2003
		03/31/2005	03/31/2004	03/31/2005	03/31/2004
96,626,060-2	Forestal Río Calle Calle S.A.	0	~~228~~31	0	0
96,802,690-9	Terranova S.A.	0	~~666~~73	0	0
Foreign	~~Fibranova~~Terranova ~~C.A.~~Brasil Limitada	0	356	0	0
Foreign	Forestal Terranova ~~Brasil~~Mexico ~~Limitada~~S.A.de C.V.	264,595	483,534	0	0
Foreign	~~Forestal~~Plycem ~~Terranova~~Construsistemas ~~Mexico~~Costa ~~S.A.de C.V.~~Rica	~~3,483~~0	~~877~~139	0	0
Foreign	Plycem Construsistemas ~~Honduras~~Guatemala	0	310	0	0
Foreign	Plycem Construsistemas Nicaragua	0	2	0	0
TOTAL		34,~~509~~595	13,~~827~~845	0	0

~~b) Come from relate companies and persons:~~ 15

				12/31/2004		12/31/2003
					Effect on		Effect on
					Income,		Income,
					Profit (loss)		Profit (loss)
Company	RUT	Relationship	Concept	Amount	(loss) (loss)	Amount	(loss) (loss)
				THUS$	THUS$	THUS$	THUS$
Terranova S.A.	96,802,690-9	Common director	Purchase of raw materials	2,461	1,740	1,692	0
Terranova S.A.	96,802,690-9	Common director	Reimburse invoice	290	290	327	327
Forestal Rio Calle Calle S.A.	96,626,060-2	Associated	Interest	34	34	99	99
Fibranova C.A.	Foreign	Common director	Management Fee	490	490	279	279
Fibranova C.A.	Foreign	Common director	Sales of products	2,720	909	1,273	435
Terranova Costa Rica S.A.	Foreign	Common director	Sales of products	0	0	150	51
Terranova Colombia S.A.	Foreign	Common director	Sales of products	510	171	686	234
Terranova Forest Products, Inc.	Foreign	Common director	Sales of products	8,365	2,795	161	55
Forestal Terranova de Guatemala S.A.	Foreign	Common director	Sales of products	0	0	36	12
Plycem Construsistemas Costa Rica S.A.	Foreign	Common director	Sales of products	718	240	253	63
Plycem Construsistemas Salvador S.A.	Foreign	Common director	Sales of products	263	88	90	22
Plycem Construsistemas Guatemala S.A.	Foreign	Common director	Sales of products	312	104	211	51
Plycem Construsistemas Honduras	Foreign	Common director	Sales of products	175	58	114	26
Plycem Construsistemas Nicaragua	Foreign	Common director	Sales of	118	39	62	16

b) come from relate companies and persons:



Company	RUT	Relationship	Concept	03/31/2005		03/31/2004
Company	RUT	Relationship	Concept	Amount THUS$	Effect on Income, Profit (loss)(loss)(loss) THUS$	Amount THUS$	Effect on Income, Profit (loss)(loss)(loss) THUS$

Forestal Rio Calle Calle S.A.	96,626,060-2	Associated	Received remittances	2	0	47	0
Terranova S.A.	96,802,690-9	Common director	Purchase of raw materials	582	0	774	0
Terranova S.A.	96,802,690-9	Common director	Received remittances	21	0	382	0
Terranova S.A.	96,802,690-9	Common director	Administration service	123	0	0	0
Terranova S.A.	96,802,690-9	Common director	Various services	156	0	0	0
Fibranova C.A.	Foreign	Common director	Sales of products	549	93	0	0
Fibranova C.A.	Foreign	Common director	Services and expenditures	0	0	44	0
Forestal Terranova de Guatemala S.A.	Foreign	Common director	Sales of products	0	0	44	0
Forestal Terranova de Guatemala S.A.	Foreign	Common director	Services and expenditures	0	0	10	0
Plycem Construsistemas Colombia S.A.	Foreign	Common director	Sales of products	106	18	0	0
Plycem Construsistemas Costa Rica S.A.	Foreign	Common director	Sales of products	682	115	195	11
Plycem Construsistemas Costa Rica S.A.	Foreign	Common director	Sales of products	17	3	0	0
Plycem Construsistemas Salvador S.A.	Foreign	Common director	Sales of products	82	14	28	8
Plycem Construsistemas Guatemala S.A.	Foreign	Common director	Sales of products	97	16	64	10
Plycem Construsistemas Honduras	Foreign	Common director	Sales of products	128	22	132	33
Terranova Costa Rica S.A.	Foreign	Common director	Sales of products	0	0	139	28
Terranova Forest Products, Inc.	Foreign	Common director	Sales of products	6,740	1,137	0	0

NOTE 606 – INVENTORIES

The principal components are set forth below:

	2004	2003
	2005	2004
Inventories	THUS$	THUS$
In process and finished goods	53,641	46,477
Finished products	65,463	47,631
Obsolescence provision	(789)	(996)
Provision for finished products devaluation	(752)	(305)
Raw Materials	13,949	12,948
Net value finished products	64,711	47,326
Other material	3,172	3,966
Spare parts	7,756	5,032
Raw materials on transit	7,130	0
Provision for spare parts devaluation	(525)	(516)
Spare parts	7,396	7,704
Net value spare parts	7,231	4,516
Provision for spare part obsolescence	(328)	0
Raw Materials	14,070	11,680
Forest and Plantation in exploitation	6,796	7,617
Equipment	2,882	5,899
Total	90,967	77,716
Plants y woods	6,598	6,503
Inventories	95,492	75,924

~~NOTE 7 – DEFERRED TAXES AND INCOME TAXES~~ 16

~~At December 31 2004, the Company has made the income tax provision as per the~~ ~~tax~~NOTE ~~dispositions~~07 in– ~~force. Considering~~DEFERRED aTAXES ~~taxable~~AND ~~base~~INCOME ~~of:~~TAXES

		2004
		THUS$
Inversiones Coronel Ltda.’s taxable income		2,612
Masisa Concepción Ltda’s taxable income		6,549
Masisa Inversiones Ltda’s taxable income		7,549

At March 31 2005, the Company has made the income tax provision as per the tax dispositions in force.

~~Balances~~ Considering ofa ~~tributary~~taxable ~~retained~~base ~~gains and their respective credits~~of:

1)	Masisa S.A.		: Taxed Earning Reserve amounting THUS$531 with credit of 15%
		2005
			THUS$24,102 with credit of 16%,
		THUS$
			THUS$4,448 with credit of 16.5%, and THUS$11,411 without credit.
Masisa S.A.’s taxable income		332
2)	Masisa Inversiones Limitada		: Taxed Earning Reserve amounting THUS$5,958 with credit of 15%
Masisa Inversiones Ltda’s taxable income		2,218
			THUS$5,326 with credit of 16%,
Inversiones Coronel Ltda.’s taxable income		1,011
			THUS$5,449 with credit of 16,5%,
Masisa Concepción Ltda’s taxable income		1,827
			THUS$6,266 with credit of 17%, and THUS$1,081 without credit.
3)	Inversiones Coronel Limitada		: Taxed Earning Reserve amounting THUS$1,377 with credit of 15%,
			THUS$620 with credit of 16%,
			THUS$365 with credit of 16,5%,
			THUS$2,167 with credit of 17%, and THUS$48 without credit.
4)	Inversiones Concepción Limitada		: Taxed Earning Reserve amounting THUS$5,436 with credit of 17%.
5)	Masisa Argentina		: (Tax loss THUS$ 1,880)
6)	Masisa do Brasil Limitada		: (Tax loss THUS$23,853)
7)	Forestal Tornagaleones S.A.		: (Tax loss THUS$19,888)
8)	Forestal Argentina S.A.		: (Tax loss THUS$ 9,106)
9)	Masisa Ecuador S.A.		: (Tax loss THUS$840)


Balances of tributary retained gains and their respective credits:

1)Masisa S.A.	:	: Taxed Earning Reserve amounting THUS$531 with credit of 15%
		THUS$24,102 with credit of 16%,
		THUS$4,448 with credit of 16.5%,
		THUS$332 with credit of 17.0%, and THUS$11,411 without credit.

2)Masisa Inversiones Limitada		: Taxed Earning Reserve amounting THUS$5,958 with credit of 15%
		THUS$5,326 with credit of 16%,
		THUS$5,449 with credit of 16,5%,
		THUS$6,266 with credit of 17%,
		THUS$2,218 with credit of 17%, and THUS$1,081 without credit.

3)Inversiones Coronel Limitada		: Taxed Earning Reserve amounting THUS$1,377 with credit of 15%,
		THUS$620 with credit of 16%,
		THUS$365 with credit of 16,5%,
		THUS$2,167 with credit of 17%,
		THUS$1,011 with credit of 17%, and THUS$48 without credit.

4)Inversiones Concepción Limitada		: Taxed Earning Reserve amounting THUS$5,436 with credit of 17%.
		THUS$1,827 with credit of 17%,

5)Masisa Argentina		: (Tax loss THUS$1,680)
6)Masisa do Brasil Limitada		: (Tax loss THUS$23,546)
7)Forestal Tornagaleones S.A.		: (Tax loss THUS$18,918)
8)Forestal Argentina S.A.		: (Tax loss THUS$9,104)
9)Masisa Ecuador S.A.		: (Tax loss THUS$840)

a) Deferred Tax ~~The~~ ~~balances for this item are as follows:~~

			12/31/2004				12/31/2003
	Assets deferred taxes		Liabilities deferred taxes		Assets deferred taxes		Liabilities deferred taxes
	Short Term	Long Term	Short Term	Long Term	Short Term	Long Term	Short Term	Long Term
Temporary Differences
Provision for accounts receivable losses	692	647	0	0	624	0	0	0
Anticipated income	0	0	0	0	0	0	0	0
Vacation provisions	336	0	0	0	237	0	0	0
Amortization of intangibles	0	0	0	0	0	0	0	0
Leasing assets	0	19	0	0	0	72	0	0
Manufacturing expenses	0	0	736	2,901	0	0	1,012	3,552
Fixed assets depreciation	0	0	0	22,639	0	0	0	19,074
Others events	60	1,002	63	297	6	258	70	271
Obsolescence provision	98	99	0	0	235	102	0	0
Unrealized profits and loss	191	135	0	178	223	168	0	178
Tax Loss	374	21,431	0	0	904	31,524	0	0
Interest capitalized Plantations	0	0	486	594	0	0	380	623
Plantations capitalized indirect cost	0	0	394	3,286	0	0	270	2,638
Bond issuance expense	0	0	0	258	0	0	0	0
Fixed asset provisions	0	1,528	0	0	0	1,159	0	0
Others	0	0	0	0	0	0	0	0
Balance for Complementary assets amortization	29	1,456	67	7,548	30	1,419	95	8,168
Valuation provisions	0	6,553	0	0	0	18,036	0	0
Total	1,722	16,852	1,612	22,605	2,199	13,828	1,637	18,168

The balances for this item are as follows:



	03/31/2005				03/31/2004
	Assets deferred taxes		Liabilities deferred taxes		Assets deferred taxes		Liabilities deferred taxes
	Short Term	Long Term	Short Term	Long Term	Short Term	Long Term	Short Term	Long Term

Temporary Differences
Provision for accounts receivable losses	925	431	0	0	627	0	0	0
Anticipated income	0	0	0	0	0	0	0	0
Vacation provisions	247	0	0	0	174	0	0	0
Amortization of intangibles	0	0	0	0	0	0	0	0
Leasing assets	0	5	0	0	0	60	0	0
Manufacturing expenses	0	0	838	2,898	0	0	932	3,552
Fixed assets depreciation	0	0	0	24,394	0	0	0	15,126
Others events	0	0	0	245	0	0	0	0
Obsolescence provision	122	0	0	0	234	104	0	0
Forest Reserve	0	0	0	0	0	0	70	8,400
Tax Loss	336	21,321	0	0	850	12,348	0	0
Interest capitalized plantations	0	0	486	565	0	0	379	778
Particleboard line provision	0	1,503	0	0	0	1,133	0	0
Non realized results provision	289	153	0	178	205	166	0	0
Plantation indirect activated costs	0	0	454	3,126	0	0	267	2,568
Others	421	392	0	295	4	255	0	270

Balance for Complementary assets amortization	31	1,385	67	7,340	28	120	95	9,745
Valuation provisions	0	6,334	0	0	0	4,368	0	0

Total	2,309	16,086	1,711	24,361	2,066	9,578	1,553	20,949

b) Income Taxes:

	2004	2003
	2005	2004
Items	THUS$	THUS$
Income tax provision	(41,~~824~~457)	(21,~~816~~262)
Tax expenses Adjustment	750	50
Effect for deferred taxes of the period	(31,~~699~~748)	~~3,849~~7
Tax credit due to tax loss	(~~9,448~~148)	(~~7,190~~354)
Effect for amortization of deferred assets and liabilities complementary accounts	~~(438)~~139	(~~3,854~~129)
Effect on assets and liabilities of the changes in the valuating provisions	~~11,753~~(219)	~~8,179~~0
Others	(616)	~~132~~(4)
Total	(63,~~642~~439)	(1,~~695~~742)

NOTE 808 –- ~~OTHER~~FIXED ~~CURRENT~~ ASSETS

The principal components are set forth below:

NOTE 9 - FIXED ASSETS

a) This caption includes:

		2004				2003
	2005			2004
		Accumulated	~~Accumulated~~	~~Year depreciation~~	Accumulated		~~Accumulated~~	~~Year depreciation~~
	Assets value	~~Assets value~~Depreciation	~~Depreciation~~Exploitation	~~Operating~~Assets value	~~Non-operating~~Depreciation	~~Assets value~~Exploitation	~~Depreciation~~	~~Operating~~	~~Non-operating~~
Fixed assets	THUS$	THUS$	THUS$	THUS$	THUS$	THUS$	~~THUS$~~	~~THUS$~~	~~THUS$~~
Lands	66,592	~~68,213~~0	066,592	066,029	0	6766,~~031~~029	0	0	0
Building and infrastructure	108,050	~~107~~(29,~~980~~707)	~~(26~~78,~~164)~~343	(2104,~~769)~~583	(9428,486)	~~105~~76,~~384~~097	~~(24,554)~~	~~(3,429)~~	~~(39)~~
Machinery and equipment	495,836	~~493~~(172,~~210~~114)	~~(147~~323,~~385)~~722	~~(21~~489,~~018)~~177	(~~107~~151,050)	~~488~~338,~~554~~127	~~(126,094)~~	~~(19,642)~~	~~(48)~~
	Machinery and equipment	492,374	(147,087)	(20,963)	(26)	487,781	(125,795)	(19,554)	(25)
Other fixed assets:	184,784	(18,095)	166,689	167,057	(14,223)	152,834
	Transportation equipment	836	(298)	(55)	(81)	773	(299)	(88)	(23)
-Plantations	137,564	0	137,564	124,843	0	124,843
Other fixed assets:		182,668	(12,013)	(1,699)	(2,018)	158,755	(12,287)	(1,236)	(1,420)
-Furniture, fixture and other	11,875	(9,901)	1,974	11,129	(8,557)	2,572
	Plantations	139,207	0	0	0	118,863	0	0	0
-Construction in progress	11,911	0	11,911	10,811	0	10,811
	Furniture, fixture and other	9,672	(6,462)	(342)	(496)	11,062	(8,165)	(266)	(612)
-Other fixed assets	23,434	(8,194)	15,240	20,274	(5,666)	14,608
	Spare parts	11,233	(363)	(172)	0	11,200	(1,065)	(494)	0
Total	855,262	(219,916)	635,346	826,846	(193,759)	633,087
	Transit spare parts and equipment	0	0	0	0	47	0	0	0
Total Fixed assets	635,346			633,087
	Construction in progress	7,516	0	0	0	8,825	0	0	0
	Transit fixed assets	2,543	0	0	0	0	0	0	0
	Other fixed assets	12,497	(5,188)	(1,185)	(1,522)	8,758	(3,057)	(476)	(808)
	Fixed assets in leasing	1,712	(1,212)	(155)	0	1,763	(1,119)	(163)	0
	Computacional systems (software)	6,364	(3,763)	(408)	(966)	5,444	(1,938)	(313)	(808)
	Other	4,421	(213)	(622)	(556)	1,551	0	0	0
Total		852,071	(185,562)	(25,486)	(2,219)	819,724	(162,935)	(24,307)	(1,507)
Total Fixed assets		638,804	(213,267)			630,975	(188,749)

b) From a legal viewpoint, assets acquired under finance are not the property of the Company until the purchase option is exercised. The present assets in leasing corresponds to an electrical substation, contracted with Endesa S.A. in April 1995, for a total of 120 monthly payments of US$28,396, at an annual rate of 10.5% .



	2005	2004
Depreciation of the accounting year	THUS$	THUS$

Income Effect
Exploitation	6,720	6,353
Administrative expenses	529	402
Non exploitation	2	2

Total	7,251	6,757

c) In the Year 2001, The company has also accounted a provision to adjust the book value of one of its particle board lines, based on the estimate that future cash flows from the operation of those assets will not compensate for future depreciation charges. This provision is presented net of the original amounts.


b)		From a legal viewpoint, assets acquired under finance are not the property of the Company until the purchase option is exercised. The present assets in leasing corresponds to an electrical substation, contracted with Endesa S.A. in April 1995, for a total of 120 monthly payments of US$28,396, at an annual rate of 10.5%.

c)		In the Year 2001, The company has also accounted a provision to adjust the book value of one of its particle board lines, based on the estimate that future cash flows from the operation of those assets will not compensate for future depreciation charges. This provision is presented net of the original amounts.

d) The accountant value of the plantations includes the value determined in accordance with the technical appraisal.. This value is distributed among the accounts in plantations Fixed assets and Inventories as stand wood.


d)		The accountant value of the plantations includes the value determined in accordance with the technical appraisal This value is distributed among the accounts in plantations Fixed assets and Inventories as stand wood.

		As indicated in the Note 2 k) the subsidiary Forestal Tornagaleones S.A. and its subsidiary Forestal Argentina S.A. recognize the increased value of their plantations and forest. The accumulated goodwill ascends to THUS$32,211 (THUS$24,431 in the 2004), which includes the forest plantation under the Forestry reserve presented in the Net worth and has been determined comparing the valuation describer in the Note 2k) to the book value after price level restatement.

		As indicated in the Note 2k), the subsidiary Forestal Tornagaleones S.A. and its subsidiary Forestal Argentina S.A recognized as increased value of the fix assets the financial costs related to the plantation financing a total of THUS$460 in 2005 and THUS$142 in the year 2004.

		As indicated on Note 2 k) the subsidiary Masisa do Brasil has recognized in accounting at the closing of the correspondent exercises the bigger value of its forests and plantations. The higher accumulated value ascending to THUS$10,491 (THUS$7,959 in the year 2004), is included in the item forest plantations with subscription into the

Asforester ~~indicated~~reserve inpresented on the ~~Note~~item 2Equity k)Capital ~~the~~and ~~subsidiary~~has ~~Forestal~~been ~~Tornagaleones~~determined ~~S.A.~~through ~~and its~~the ~~subsidiary~~comparison ~~Forestal~~of ~~Argentina~~the ~~S.A.~~appreciation ~~recognize~~described on the ~~increased~~Note ~~value~~2k), ofwith ~~their plantations~~the ~~and~~book ~~forest.~~value ~~The~~monetary ~~accumulated~~corrected. ~~goodwill~~As ~~ascends~~indicated toon ~~THUS$36~~Note 2k),~~309 (THUS$30,023~~ in the ~~2003),~~subsidiary ~~which~~Masisa ~~includes~~do ~~the~~Brasil ~~forest~~has ~~plantation~~accounted ~~under~~as ~~the Forestry~~bigger ~~reserve~~value ~~presented~~of inthe fixed assets the ~~Net~~real ~~worth~~financing ~~and~~costs ~~has~~associated ~~been~~to ~~determined~~the ~~comparing~~ financing of the ~~valuation~~plantations ~~describer~~for THUS$246 in the ~~Note~~year ~~2k)~~2005 toand ~~the~~THUS$588 ~~book~~in ~~value~~the ~~after~~year ~~price level restatement~~2004.

As indicated in the Note 2k), the subsidiary Forestal Tornagaleones S.A. and its subsidiary Forestal Argentina S.A recognized as increased value of the fix assets the financial costs related to the plantation financing for a total of THUS$207 in 2004. In 2003 interest costs for a total of THUS$1,020 that had previously been capitalized, were expensed.

As indicated in Note 2k) the subsidiary Masisa do Brasil recognized the increased value of its forests and plantations. The increase in value totals THUS$10,489 (THUS$8,035 in 2003), is recorded in line “forest plantations” with credit to line “forestry reserve” of Shareholders’ Equity and has been determined by comparing the valuation of Note 2k) with book value, adjusted for foreign exchange differentials.

As indicated on Note 2k), the subsidiary Masisa do Brasil recognized as increased value of the fix asses, the financial costs incurred in the financing of plantations for a total of THUS$2,169 in 2004. During 2003, interest costs for THUS$2,536 were capitalized.

NOTE 1009 - INVESTMENT IN RELATED COMPANIES

							Shareholder’s		Net income		Net income				Unrealized		Book value
					Participation %		Equity		For the period		Accrued		VPP		Result		of investment
	Investments in			Number	Participation %		Equity		For the period		Accrued		VPP		Result		of investment
RUT	~~Investments in~~ related companies	Country	Currency	~~Number~~ of shares	1203/31/~~2004~~2005	1203/31/~~2003~~2004	1203/31/~~2004~~2005	1203/31/~~2003~~2004	1203/31/~~2004~~2005	1203/31/~~2003~~2004	1203/31/~~2004~~2005	1203/31/~~2003~~2004	1203/31/~~2004~~2005	1203/31/~~2003~~2004	1203/31/~~2004~~2005	1203/31/~~2003~~2004	1203/31/~~2004~~2005	1203/31/~~2003~~2004
96,652,640-8	Inversiones Industriales S.A.	Chile	Pesos	1,000	50.~~0000000~~0000	50.~~0000000~~0000	~~(3,555)~~0	0	0	0	0	0	0	0	0	0	0	0
96,626,060-2	Forestal Río Calle – Calle S.A.	Chile	Pesos	1	0.~~0000000~~00121	0.~~0000000~~00121	~~968~~0	0	0	0	0	0	0	0	0	0	0	0
Foreign	Masnova S.A.	Mexico	Dollar	25,000	50.~~0000000~~0000	50.~~0000000~~0000	(1,~~385~~382)	(1,~~333~~336)	~~(52)~~2	(~~1,370~~3)	~~(26)~~1	(~~685~~2)	0	0	0	0	0	0
99,511,350-3	Inversiones Calle Calle S.A.	Chile	Pesos	100,000	50.~~0000000~~0000	50.~~0000000~~0000	0	0	0	0	0	0	0	0	0	0	0	0
99,505,640-2	Forestal Calle Calle S.A.	Chile	Pesos	1	9.~~0000000~~0900	9.~~0000000~~0900	~~(1,212)~~0	0	0	0	0	0	0	0	0	0	0	0
	Total												0	0	0	0	0	0

a) Subsidiaries with negative equity

The proportional patrimonial value method has been discontinued in the following subsidiaries for presenting negative shareholder’s equity. At the same time provisions has been constituted when corresponds, to recognize the share participation.

- MasNova de México S.A. de C.V. The related company MasNova de México S.A. de C.V. presents negative shareholder’s equity at the closing of both financial statements reason for which a provision for THUS$ 691 and THUS$ 668 has been accounted. This investment is presented in Long Term Provisions.

~~The~~ - ~~related~~Inversiones ~~company~~Industriales ~~MasNova de México~~ S.A. de Inversiones CIndustriales S.VA., ~~presents~~as ~~negative shareholder’s~~of ~~equity~~the atclosure of the ~~closing~~present ofperiod, ~~both~~had ~~financial~~a ~~statements~~negative ~~reason~~Net ~~for which~~Worth, ahence ~~provision~~the ~~for~~company ~~THUS$~~has ~~693~~discontinued ~~and~~the ~~THUS$~~application ~~666~~of ~~has~~the ~~been~~VPP ~~accounted.~~method, ~~This investment~~recognizing islosses ~~presented~~up into ~~Long~~cover ~~Term~~the ~~Provisions.~~total investment

b) Subsidiaries with positive equity lower than MUS$ 1
Inversiones Calle Calle S.A. US$ 353.

- Inversiones Industriales S.A.

Inversiones Industriales S.A., as of the closure of the present period, had a negative Net Worth, hence the company has discontinued the application of the VPP method, recognizing losses up to cover the total investment

b) Subsidiaries with positive equity lower than THUS$ 1

Inversiones Calle Calle S.A. US$ 371.

NOTE 1110 – GOODWILL AND NEGATIVE GOODWILL

a) Goodwill

12/31/2004

12/31/2003

03/31/2005

03/31/2004

First three months 2004

Total

First three months ~~2003~~

Total

Term

Amortization

Goodwill

Amortization

Goodwill

RUT

Company

THUS$

96,623,490-3

Masisa Cabrero S.A.

20 year

8521

1,~~334~~313

8528

1,~~419~~391

87,658,900-1

Maderas y Paneles S.A.

10 year

157

Total

1,313

1,391

1,334

242

1,419

The acquisition of the former subsidiary Masisa Cabrero S.A., former Fibranova S.A., now merged with Masisa S.A., generated a lower investment value for the Company~~. This~~, this value will be amortized in a period of 20 years, given the ~~current~~ returns of current administration of the plant.

Represents the higher value paid in the investments of Maderas y Paneles S.A. , former subsidiary Maderas y Paneles S.A., merged on august 31, 1993.

b) Negative Goodwill

12/31/2004

12/31/2003

03/31/2005

03/31/2004

First three months 2004

~~First three months 2004~~

Total

~~Total~~

First three months 2003

~~First three months 2003~~

Total

~~Total~~

Term

~~Term~~

Amortization

~~Amortization~~

Negative

~~Negative~~

Amortization

~~Amortization~~

Negative

~~Negative~~

RUT

Company

THUS$

Goodwill

81,507,700-8

Forestal Tornagaleones S.A.

10 year

100

1,754

100

1,854

RUT

Company

THUS$

100

1,754

100

1,854

81,507,700-8

Forestal Tornagaleones S.A.

10 year

1,729

1,829

1,729

1,829

Indicate the lower paid value at the capital’s raise of Forestal Tornagaleones S.A. in June 27, This value will be amortized in a period of 20 years.

22NOTE 11 - OTHER LONG/TERM ASSETS

NOTE 12 - OTHER LONG/TERM ASSETS

The principal components are set forth below:

		2004	2003
		2005	2004
Other long-term assets	Term	THUS$	THUS$
Currency swaps mark-to-market value		5,230	0
Currency Swap fair value		3,083	0
Bond issuance and placement cost		54,~~085~~561	5,~~861~~124
Unrealized expected losses from derivative instruments		272	989
Unrealized losses for expected transaction coverage		138	989
Fixed assets destined for sale (1)		136	413
Fixed Assets to be sold (1)		400	395
Recoverable long term taxes and commissions		8781	~~957~~764
Placacentros furnishings		350	0
Others		468	835
Total		11,628	9,055


Placacentros Conditioning	429	677
Others	181	366

Total	8,873	8,315

(1) The Company had proceed to reclassified those assets that are paralyzed or destined to be sale; in agreement with the previous, a valuation of those assets at its estimated realization value had been made by an independent valuator.

NOTE 1312 – BANK AND FINANCIAL INSTITUTIONS SHORT -TERM

		US Dollar		Other foreign		U.F.		~~THUS~~ThCh$$ no ~~adjustment~~		Total
		2004	2003	2004	2003	2004	2003	2004	2003	2004	2003
	Bank or financial Institution							adjustment
		2005	2004	2005	2004	2005	2004	2005	2004	2005	2004
RUT	Bank o financial institution	THUS$	THUS$	THUS$	THUS$	THUS$	THUS$	THUS$	THUS$	THUS$	THUS$
	Short Term
97,004,000-5	Banco de Chile	0	~~9,133~~0	0	0	0	21,~~512~~584	0	0	0	111,~~645~~584
97,919,000-K	ABN Amro Bank	0	0	0	0	0	12,~~155~~026	0	0	0	12,~~155~~026
97,042,000-2	HSBC Bank Chile	0	3,~~609~~607	0	0	0	0	0	0	0	3,~~609~~607
97,030,000-7	Bancoestado	0	3,~~043~~060	0	0	0	0	0	0	0	3,~~043~~060
97,023,000-9	Corpbanca	0	5,080	0	0	0	0	0	0	0	5,080
97.006.000-6	Banco de Crédito e Inversiones	0	5,001	0	0	0	0	0	0	0	5,001
Foreign	Rabobank Curacao N.V.	0	5,075	0	0	0	0	0	0	0	5,075
97.051.000-1	Banco del Desarrollo	1,519	4,521	0	0	0	0	0	0	1,519	4,521
Foreign	ABN Amro Bank	0	0	0	12,~~056~~423	0	0	0	0	0	12,~~056~~423
Foreign	~~Banco~~Fleet ~~del~~National ~~Desarrollo~~Bank	~~1,506~~0	~~5,511~~503	0	0	0	0	0	0	~~1,506~~0	~~5,511~~503
Foreign	Itaú BBA – ACC	~~1,604~~0	0	0	12,~~709~~052	0	0	0	~~1,604~~0	0	12,~~709~~052
	Others	0	0	0	0	0	0	0	0	0	0
	Total	31,~~110~~519	3116,~~451~~692	0	24,~~765~~475	0	3,~~667~~610	0	0	31,~~110~~519	3724,~~883~~777
	Principal owed	31,~~100~~500	3116,~~111~~600	0	24,~~765~~475	0	3,~~667~~610	0	0	31,~~100~~500	3724,~~543~~685
	Rate	3.1259%	2.2623%	0	1615.0175%	0	42.5690%	0	0	0	0
	Long Term portion short term
96,658,480-7	Raboinvestment Chile S.A.	3,~~106~~238	1,~~090~~203	0	0	0	0	0	0	3,~~106~~238	1,~~090~~203
97,006,000-6	Banco de Crédito e Inversiones	52178	0	0	0	12,~~414~~524	2,~~594~~360	0	0	12,~~466~~702	2,~~594~~360
Foreign	Security Bank	~~955~~937	~~962~~941	0	0	0	0	0	0	~~955~~937	~~962~~941
Foreign	Desdner Bank Lateiamerica	2,~~106~~052	12,~~101~~052	0	0	0	0	0	0	2,~~106~~052	12,~~101~~052
Foreign	Citibank N.A.	67155	~~135~~314	0	0	0	0	0	0	67155	~~135~~314
Foreign	Comerica Bank	4,~~360~~456	4,~~360~~457	0	0	0	0	0	0	4,~~360~~456	4,~~360~~457
Foreign	Banco de Chile New York Branch	4,~~399~~509	2,~~234~~326	0	0	0	0	0	0	4,~~399~~509	2,~~234~~326
Foreign	The Bank of Nova Scotia	47,~~045~~712	~~266~~133	0	0	0	0	0	0	47,~~045~~712	~~266~~133
Foreign	Banco Rabobank Ireland PLC	0	2928,~~121~~544	0	0	0	0	0	0	0	2928,~~121~~544
Foreign	Rabobank Nederland	1,~~299~~410	0	0	0	0	0	0	0	1,~~299~~410	0
Foreign	BankBoston. N.A.	0	~~305~~433	0	0	0	0	0	0	0	~~305~~433
Foreign	BankBoston.	0	0	160	8672	0	0	0	0	160	8672
	Others	0	0	0	0	0	0	0	0	0	0
	Total	2024,~~389~~647	3940,~~574~~403	160	8672	12,~~414~~524	2,~~594~~360	0	0	2127,~~819~~171	42,~~254~~835
	Principal owed	1922,~~519~~019	3738,869	0	8672	12,~~324~~501	2,~~428~~325	0	0	2024,~~843~~520	4041,~~383~~266
	Rate	3.2990%	6.6858%	0	0	6.70%	6.70%	0	0	0	0

		2004
		%
Total amount of liabilities in foreign currency:		5.7400
Total amount of liabilities in local currency:		94.2600

NOTE 14 – BANK AND FINANCIAL INSTITUTIONS LONG-TERM



		2005 %

Total amount of liabilities in foreign currency:		91.200
Total amount of liabilities in local currency:		8.800

							Date close actual period		Date close pass period
							Total Long		Total Long
							Term to close		Term to close
			More 1 year	More 2 year	More 3 year	More 5 year	The financial		The financial
		Currency	Up to 2 year	up to 3 year	Up to 5 year	Up to 10 year	Statements		Statements
RUT	Bank o financial institution		THUS$	THUS$	THUS$	THUS$	THUS$	Rate	THUS$
	Short Term
96,658,480-7	Raboinvestment Chile S.A.	Dollar	4,500	5,500	0	0	10,000	Libor 180 days +1.875%	13,000
97,006,000-6	Banco de Credito e Inversiones	U.F.	2,648	0	0	0	2,648	6.70%	4,857
Foreign	Dresdner Bank Lanteiamerica	Dollar	2,000	1,000	0	0	3,000	Libor 180 days +1.900%	5,000
Foreign	Security Bank	Dollar	933	0	0	0	933	Libor 180 days +1.500%	1,867
Foreign	Comerica Bank	Dollar	4,286	2,142	0	0	6,428	Libor 180 days +1.350%	10,714
Foreign	Banco de Chile New York Branch	Dollar	4,300	4,250	0	0	8,550	Libor 180 days +1.250%	12,850
Foreign	The Bank of Nova Scotia	Dollar	7,500	7,500	6,250	0	21,250	Libor 180 days +1.150%	25,000
Foreign	Citibank	Dollar	272	0	0	0	272	5.20%	989
Foreign	Banco de Crédito e Inversiones	Dollar	2,500	2,500	5,000	2,500	12,500	Libor 180 days +1.440%	0
Foreign	Rabobank Nederland	Dollar	2,500	2,500	5,000	1,250	11,250	Libor 180+ spread V.	0
Foreign	Bank Boston	Dollar	0	0	0	0	0	0	8
	Total		31,439	25,392	16,250	3,750	76,831		74,285

		2004
		%
Total amount of liabilities in foreign currency:		3.4500
Total amount of liabilities in local currency:		96.5500

The loans granted by Masisa Inversiones Limitada to the subsidiary Masisa do Brasil Limitada through Banco Itaú BBA S.A., that rise to the amount of US$104,523,218.88, as shown in “Notes” issued by Banco Itaú BBA S.A., of which are holders Masisa Inversiones Limitada and that are record, besides, , and in ¨Cédulas de Crédito Bancário -Res.2770¨ which beneficiary is Banco Itaú BBA S.A., are presented reducing the corresponding debts for the same amount that the subsidiary Masisa do Brasil Limitada maintains with Banco Itaú BBA S.A., in consideration that the documents in which this operations are established allowed to settle them with only the notification to the bank with the anticipation established in the respective documents.

Additionally and as consequence of the previous, the interests generated by the “Notes” and “Cédulas de Crédito Bancário – Res.2770” are presented net in the statement of income.

NOTE 1513 – ~~SHORT~~BANK ~~TERM~~ AND ~~LONG~~FINANCIAL INSTITUTIONS LONG-TERM ~~BONDS~~



							Date close actual period		Date close pass
									period
							Total Long		Total Long
							Term to close		Term to close
			More 1 year	More 2 year	More 3 year	More 5 year	The financial		The financial
		Currency	Up to 2 year	up to 3 year	Up to 5 year	Up to 10 year	Statements		Statements
RUT	Bank o financial institution		THUS$	THUS$	THUS$	THUS$	THUS$	Rate	THUS$

	Short Term

96,658,480-7	Raboinvestment Chile S.A.	Dollar	4,500	5,500	0	0	10,000	Libor 180 days+1.875%	13,000
97,006,000-6	Banco de Credito e Inversiones	U.F.	1,251	0	0	0	1,251	6.70%	3,488
97.006.000-6	Banco de Crédito e Inversiones	Dollar	2,778	2,778	5,556	1,388	12,500	Libor 180 days -1.44%
Foreign	Security Bank	Dollar	467	0	0	0	467	Libor+1.500%	1,401
Foreign	Dresdner Bank Lanteiamerica	Dollar	2,000	0	0	0	2,000	Libor+1.900%	4,000
Foreign	Citibank	Dollar	138	0	0	0	138	5.20%	988
Foreign	Comerica Bank	Dollar	4,286	2,143	0	0	6,429	Libor+1.350%	10,714
Foreign	Banco de Chile New York Branch	Dollar	4,300	4,250	0	0	8,550	Libor 180days+1.250%	12,850
Foreign	The Bank of Nova Scotia	Dollar	7,500	10,000	0	0	17,500	Libor 180 days+1.150%	25,000
Foreign	Rabobank Nederland	Dollar	2,500	2,500	5,000	1,250	11,250	Libor 180 days+spread V.	0

	Total		29,720	27,171	10,556	2,638	70,085		71,441




				2005
				%

Total amount of liabilities in foreign currency:				1.7800
Total amount of liabilities in local currency:				98.2200

The loans granted by Masisa Inversiones Limitada to the subsidiary Masisa do Brasil Limitada through Banco Itaú BBA S.A., that rise to the amount of US$104,523,218.88, as shown in “Notes” issued by Banco Itaú BBA S.A., of which are holders Masisa Inversiones Limitada and that are record, besides, , and in ¨Cédulas de Crédito Bancário - Res.2770¨ which beneficiary is Banco Itaú BBA S.A., are presented reducing the corresponding debts for the same amount that the subsidiary Masisa do Brasil Limitada maintains with Banco Itaú BBA S.A., in consideration that the documents in which this operations are established allowed to settle them with only the notification to the bank with the anticipation established in the respective documents.

Additionally and as consequence of the previous, the interests generated by the “Notes” and “Cédulas de Crédito Bancário – Res.2770” are presented net in the statement of income.

NOTE 14 – SHORT TERM AND LONG TERM BONDS

Characteristics:

1) Bonds 355 y 356: ~~Correspond~~Corresponds to the placement of local bonds, issued by Masisa S.A.

Series A Bond: Corresponds to a maximum of 6.,000 titles of UF500 each with a maturity term of 7 years, with a two year grace period for the amortization of principal. Accrues interest of 5.00% annually, compounded, calculated over the base of equal semesters of 180 days beginning December 15, 2003 and which payments will be made June 15 and December 15 of each year. The repayment of principal will be amortized over 10 equal and successive payments beginning June 15, 2006.

~~This bond counts with partial foreign exchange (dollars to Unidad de Fomento)~~ rate hedge coverage through swap contracts with Scotiabank Sud Americano and Morgan Stanley Capital Services Inc (as indicated in note 23). The contracts have been valued according to what is indicated in paragraph 11 of the Boletin Técnico N°57 of the Colegio de Contadores de Chile A.G., as follows: 27

Series A:
Capital		THUS$ 77.669.-
Adjustment according th BT-57 p. 11		THUS$( 1.181)
Total		THUS$ 76.488.-

This bond is partially covered against the exchange risk of the US currency respect of the Chilean U.F., by swap contracts with Scotiabank -SudAmericano and Morgan Stanley Capital Services Inc. (according to note 23). And it has been valued in consequence, in agreement with arranged in the paragraph 11 of the Technical Bulletin N°57 of the Book-keepers' College of Chile A.G., according to the following detail:

Series B Bond: Corresponds to a maximum of 6.000 titles of UF500 each with a maturity term of 21 years, with a seven year grace period for the amortization of principal. Accrues interest of 6.25% annually, compounded, calculated over the base of equal semesters of 180 days beginning December 15, 2003 and which payments will be made June 15 and December 15 of each year. The repayment of principal will be amortized over 28 equal and successive payments beginning June 15, 2011.


		2005
Series A:		THUS$
Capital		73,382
Adjustment by BT-57 p. 11		(541)

Total		72,841

Series B Bond: Corresponds to a maximum of 6,000 titles of UF500 each with a maturity term of 21 years, with a seven year grace period for the amortization of principal. Accrues interest of 6.25% annually, compounded, calculated over the base of equal semesters of 180 days beginning December 15, 2003 and which payments will be made June 15 and December 15 of each year. The repayment of principal will be amortized over 28 equal and successive payments beginning June 15, 2011.

The maximum aggregate amount placed for the sum of the first issuance of the Series A bond, with charge to the bond line, and the Series B bond, for a fixed amount, will be of UF 4,000,000.

2) Private Placement: Corresponds to a private placement bonds issued by the subsidiary Masisa Overseas Ltd., and acquired by some of the main Insurance Companies of the United States of America.

Maturities:

~~Maturities~~ Bonds B series: The capital matures at the rate of US$9 million, starting on May 15, of each year and finishing May 15, 2008, and interest are paid every six months in May and November of each year.

Bonds B series: The principal expires at a rate of US$9 million, starting on May 15, 2004 and finishing May 15, 2008, and interest are paid every six months in May and November of each year.

Identification Number	Series	Nominal amount	Currency	Interest	Last maturity	Periodicity		Value		Place of the transaction
		outstanding				Interest Payment	Capital Payment	12/31/2004	12/31/2003	Chile or Foreign
Short term Portion of Long Term Bond
Private Placement	B	9,000	Dollar	8.06%	15-08-2008	6 Months	Annual	9,371	9,484	Foreign
356	A	0	U.F.	5.00%	15-12-2010	6 Months	6 Months	160	158	Local
355	B	0	U.F.	6.25%	15-12-2004	6 Months	6 Months	56	56	Local
Total Short Term Portion								9,587	9,698
Long Term Bond
Private Placement	B	27,000	Dollar	8.06%	15-05-2008	6 Months	Annual	27,000	36,000	Foreign
356	A	2,500	U.F.	5.00%	15-12-2010	6 Months	6 Months	76,488	71,236	Local
355	B	702	U.F.	6.25%	15-12-2004	6 Months	6 Months	21,809	20,003	Local
Total Long Term Portion								125,297	127,239

NOTE 16 - PROVISIONS AND WRITE-OFFS

Outstanding provisions at the end of each period:

	2004	2003
Current liabilities	THUS$	THUS$
Vacations provision	2,218	1,657
Participation	1,136	325
Audit Provision	291	104
Gratification Provision	300	0
Commissions Provision	1,702	1,068
Industrial Plants provisions	347	168
Forestry Services	254	399
Import expenses and freight export costs	205	266
Plantation Insurance	0	339
Invoices to receive	1,645	285
Total	8,098	4,611
Long –Term liabilities
Equity investment (negative equity) in
Masnova de México S.A. de C.V.	693	666
Total	693	666
Provisions, presented net of the assets that originate them
Allowance for doubtful accounts	4,468	4,017
Inventory obsolescence	1,117	996
Fixed Assets (*)	8,988	6,817
Allowance for other doubtful accounts	2,535	0
Total	17,108	11,830

(*) There provisions correspond to inactive assets and assets for sale.

NOTE 17 – OTHER LONG TERM LIABILITIES

Concepts		Maturity			Amount
	2005	2006	2007	2008 and more	2004	2003
ICMS long term tax payable	2,019	3,461	3,931	4,780	14,191	7,459
Forestry bonifications	0	0	0	3,153	3,153	3,073
Unrealized gain on derivative instruments	1,329	0	0	0	1,329	0
Currency swap mark-to-market value	460	0	0	0	0	0
TOTALS	3,808	3,461	3,931	7,933	19,133	10,532

NOTE 18 – MINORITARY INTEREST

Identification Number

Series

Nominal amount

Currency

Interest

Last maturity

Periodicity

Value

Place of the

outstanding

Interest Payment

Capital Payment

transaction

03/31/2004

03/31/2005

Chile or Foreign

Short term Portion of Long Term Bond

Private Placement

9,000

Dollar

8.06%

15-08-2008

6 Months

Annual

10,096

10,400

Foreign

356

U.F.

5.00%

15-12-2010

6 Months

1,057

983

Local

355

U.F.

6.25%

15-12-2004

6 Months

370

344

Local

Total Short Term Portion

11,523

11,727

Long Term Bond

Private Placement

27,000

Dollar

8.06%

15-05-2008

6 Months

Annual

27,000

36,000

Foreign

356

2,500

U.F.

5.00%

15-12-2010

6 Months

72,841

68,221

Local

355

702

U.F.

6.25%

15-12-2004

6 Months

20,606

19,156

Local

Total Long Term Portion

120,447

123,377

The main components of this item are as follows:

	Included in the liabilities		Included in the net income for the
	2004	2003	2004	2003
	THUS$	THUS$	THUS$	THUS$
Forestal Tornagaleones S.A.	44,893	38,923	(701)	(915)
Forestal Argentina S.A.	31,182	27,408	(418)	(435)
Maderas y Sintéticos de Perú S.A.C	1	0	(1)	(1)
Total	76,076	66,331	(1,120)	(1,351)

NOTE 19 - SHAREHOLDERS' EQUITY

a) The movement on capital and reserve accounts during 2004 and 2003 were as follows:

				2004
						Accumulated
		Reserve de		Reserve for		deficit during
	Paid-in	Revalorization	Other	future	Accumulated	development	Current
	capital	de capital	Reserves	dividends	profit	period	Earning
	THUS$	THUS$	THUS$	THUS$	THUS$	THUS$	THUS$
Balance as of December 31	237,022	0	59,706	127,315	18,568	0	9,613
Allocation of income	0	0	0	9,613	0	0	(9,613)
Definitive dividend of the previous exercise	0	0	0	(3,845)	0	0	0
Capital Increase with shares issue	0	0	0	0	0	0	0
Deficit during subsidiary development period	0	0	0	0	0	0	0
Reserve for foreign currency translation	0	0	4,292	0	0	0	0
Forestry reserves Increase	0	0	6,224	0	0	0	0
Price-level restatement of equity	0	0	0	0	0	0	0
Net income for the period	0	0	0	0	0	0	41,569
Balance	237,022	0	70,222	133,083	18,568	0	41,569
	0	0	0	0	0	0	0

				2003
						Accumulated
		Reserve de		Reserve for		deficit during
	Paid-in	Revalorization	Other	future	Accumulated	development	Current
	capital	de capital	Reserves	dividends	profit	period	Earning
	THUS$	THUS$	THUS$	THUS$	THUS$	THUS$	THUS$
Balance as of December 31	237,022	0	47,991	117,156	18,568	0	14,579
Allocation of income	0	0	0	14,579	0	0	(14,579)
Definitive dividend of the previous exercise	0	0	0	(4,420)	0	0	0
Capital Increase with shares issue	0	0	0	0	0	0	0
Deficit during subsidiary development period	0	0	0	0	0	0	0
Reserve for foreign currency translation	0	0	8,591	0	0	0	0
Forestry reserves Increase	0	0	3,124	0	0	0	0
Price-level restatement of equity	0	0	0	0	0	0	0
Net income for the period	0	0	0	0	0	0	9,613
Balance	237,022	0	59,706	127,315	18,568	0	9,613
Restated balance	237,022	0	59,706	127,315	18,568	0	9,613

NOTE 15 - PROVISIONS AND WRITE-OFFS

b) Outstanding ~~Numbers~~provisions at the end of ~~shares~~each period:

Series	Numbers shares subscribed	Numbers paid shares	Numbers shares with voting rights
	2005	2004
Unique	928,514,743	928,514,743	928,514,743
Current liabilities	THUS$	THUS$
Vacations provision	1,583	1,310
Participation	900	21
Audit Provision	186	40
Gratification Provision	231	211
Commissions Provision	1,398	662
Industrial Plants provisions	23	261
Forester Services	283	564
Import and export freight expenses	334	1,374
Plantations Insurance	59	327
Invoices to receive	1,618	454
Total	6,615	5,224
Long –Term liabilities
Equity investment (negative equity) in
Masnova de México S.A. de C.V.	691	668
Total	691	668
Provisions, presented net of its original assets
Uncollectible Debtors Provision	4,069	2,975
Uncollectible Documents Provision	679	614
Finished Products Provision	752	305
Spare Parts Provision	525	516
Provision for Fixed Assets (*)	7,938	6,652
Others Uncollectible Debts Provision	2,535	0
Total	16,498	11,062

c(*) ~~Capital~~These ~~(amount~~provisions ~~THUS$)~~correspond to provisions of:

Series		Subscribed Capital		Paid Capital
Unique		237,022		237,022

Assets of a particleboard line of, due to the fact that their projected operations projections show that the flows that would be generated by this line on the future will not cover their depreciation charges.
d) Inactive ~~Other~~goods ~~Reserves~~and goods destined to the sale.

1) NOTE ~~Forest~~16 ~~Reserves~~– OTHER LONG TERM LIABILITIES

Are originated in the subsidiaries Masisa do Brasil Limitada, Forestal Tornagaleones S.A. and its subsidiary Forestal Argentina S.A., due to the recognition of the grown in forestry resources. The balance as of December 31, 2004 was THUS$25,151 (THUS$18,927 in 2003).


		Maturity			Amount
Concepts	2007	2008	2009	2010 and	2005	2004
				more

ICMS long term tax payable	3,773	3,648	5,129	0	12,550	9,153
Forestry bonification	4	1	7	3,069	3,081	3,022
Unrealized gains for operations of coverage of
existing lots	2,636	0	0	0	2,636	0
Currency Swap fair value	844	0	0	0	844	0

TOTALS	7,257	3,649	5,136	3,069	19,111	12,175

2) NOTE ~~Reserve~~17 ~~for~~– ~~foreign~~MINORITARY ~~currency~~INTEREST ~~translation adjustments~~

The ~~composition~~main ofcomponents ~~the accumulated adjustment for exchange differences as~~ of ~~December~~ ~~31,~~this ~~2004,~~item ~~corresponds~~are ~~to the balance, calculated~~ as the net difference between the Consumer’s Price Index and the United States dollar at the end of each period of the investments in foreign countries and of the liabilities associated to such investments, according to the Technical Bulletin N°64. The following table depicts such adjustment according to the foreign subsidiary from which it originated. Chilean investments in local functional currency have been included using the same treatment follows:

In December 2004, Balances are made of:



	Included in the liabilities		Included in the net income for the
	2005	2004	2005	2004

Forestal Tornagaleones S.A.	43,331	37,600	(178)	189
Forestal Argentina S.A.	31,355	27,620	(253)	(64)
Maderas y Sintéticos de Perú S.A.C	1	1	0	0

Total	74,687	65,221	(431)	125

	Initial balance	Exchange difference originated in the period		Balance as of
	actualized	Investment	Liabilities	12/31/2004
	THUS$	THUS$	THUS$	THUS$
Masisa Argentina S.A.	26,068	0	0	26,068
Forestal Argentina S.A.	345	(2,542)	593	(1,604)
Masisa do Brasil Limitada.	2,741	0	0	2,741
Masisa Mexico S.A. de C.V.	190	0	0	190
Masisa Cabrero S.A.	95	0	0	95
Masisa Partes y Piezas Limitada	(23)	0	0	(23)
Forestal Tornagaleones S.A.	11,363	6,241	0	17,604
Total	40,779	3,699	593	45,071

NOTE 18 - SHAREHOLDERS' EQUITY

In a) ~~December~~The ~~2003,~~movement ~~are~~on capital and reserve accounts during 2005 and 2004 were as follows:

	Initial balance	Exchange difference originated in the period		Balance as of
	2005
	actualized	Investment	Liabilities	12/31/2004
						Accumulated
	THUS$	THUS$	THUS$	THUS$
		Capital		Reserve for		deficit during
Masisa Argentina S.A.	26,068	0	0	26,068
		valuation	Other	future	Accumulated	development	Current
Forestal Argentina S.A.	3,094	(3,693)	944	345
	Paid-in	reserve	Reserves	dividends	profit	period	Earning
Masisa do Brasil Limitada.	2,741	0	0	2,741
	capital
Masisa Mexico S.A.de C.V.	190	0	0	190
	THUS$	THUS$	THUS$	THUS$	THUS$	THUS$	THUS$
Masisa Cabrero S.A.	95	0	0	95
Balance as of December 31	237,022	0	70,222	133,083	18,566	0	41,569
Masisa Partes y Piezas Limitada	0	(23)	0	(23)
Allocation of income	0	0	0	0	41,569	0	(41,569)
Forestal Tornagaleones S.A.	0	11,363	0	11,363
Definitive dividend of the previous exercise	0	0	0	0	0	0	0
Total	32,188	7,647	944	40,779
Capital Increase with shares issue	0	0	0	0	0	0	0
Deficit during subsidiary development period	0	0	0	0	0	0	0
Reserve for foreign currency translation	0	0	(2,611)	0	0	0	0
adjustments
Forestry reserves Increase	0	0	(48)	0	0	0	0
Price-level restatement of equity	0	0	0	0	0	0	0
Net income for the period	0	0	0	0	0	0	7,361
Balance	237,022	0	67,563	133,083	60,135	0	7,361
	0	0	0	0	0	0	0



	2004

						Accumulated
		Capital		Reserve for		deficit during
	Paid-in	valuation	Other	future	Accumulated	development	Current
	capital	reserve	Reserves	dividends	profit	period	Earning
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$

Balance as of December 31	237,022	0	59,706	127,315	18,568	0	9,613
Allocation of income	0	0	0	0	9,613	0	(9,613)
Definitive dividend of the previous exercise	0	0	0	0	0	0	0
Capital Increase with shares issue	0	0	0	0	0	0	0
Deficit during subsidiary development period	0	0	0	0	0	0	0
Reserve for foreign currency translation	0	0	(1,713)	0	0	0	0
adjustments
Forestry reserves Increase	0	0	(85)	0	0	0	0
Price-level restatement of equity	0	0	0	0	0	0	0
Net income for the period	0	0	0	0	0	0	8,280

Balance	237,022	0	57,908	127,315	28,181	0	8,280

Restated balance	237,022	0	57,908	127,315	28,181	0	8,280



b) Numbers of shares

Series	Numbers shares subscribed	Numbers paid shares	Numbers shares with voting rights

Unique	928,514,743	928,514,743	928,514,743


c) Capital (amount THUS$)

Series		Subscribed Capital	Paid Capital

Unique		237,022	237,022

d) Other Reserves

1) Forest Reserves

Are originated in the subsidiaries Masisa do Brasil Limitada, Forestal Tornagaleones S.A. and its subsidiary Forestal Argentina S.A., due to the recognition of the grown in forestry resources. The balance as of March 31, 2005 was THUS$25,103 (THUS$18,842 in 2004).

2) Reserve for foreign currency translation adjustments

The composition of the accumulated adjustment for exchange differences as of March 31, 2005, corresponds to the balance, calculated as the net difference between the Consumer’s Price Index and the United States dollar at the closing of the 2002 accounting period (beginning in 2003, The Company was authorized to use the US dollar as the accounting currency), all that, according to the Technical Bulletin N°64. The following table depicts such adjustment according to the foreign subsidiary from which it originated. Chilean investments in local functional currency have been included using the same treatment :



In March 2005, Balances are made of:


	Initial balance	Exchange difference originated in the period		Balance as of
	actualized	Investment	Liabilities	03/31/2005
	THUS$	THUS$	THUS$	THUS$

Masisa Argentina S.A.	26,068	0	0	26,068
Forestal Argentina S.A.	(1,604)	708	0	(896)
Masisa do Brasil Limitada.	2,741	0	0	2,741
Masisa Mexico S.A. de C.V.	190	0	0	190
Masisa Cabrero S.A.	95	0	0	95
Masisa Partes y Piezas Limitada	(23)	0	0	(23)
Forestal Tornagaleones S.A.	17,604	(3,319)	0	14,285

Total	45,071	(2,611)	0	42,460



In March 2004, are as follows:

	Initial balance	Exchange difference originated in the period		Balance as of
	actualized	Investment	Liabilities	03/31/2004
	THUS$	THUS$	THUS$	THUS$

Masisa Argentina S.A.	26,068	0	0	26,068
Forestal Argentina S.A.	345	458	0	803
Masisa do Brasil Limitada.	2,741	0	0	2,741
Masisa Mexico S.A.de C.V.	190	0	0	190
Masisa Cabrero S.A.	95	0	0	95
Masisa Partes y Piezas Limitada	(23)	11	0	(12)
Forestal Tornagaleones S.A.	11,363	(2,182)	0	9,181

Total	40,779	(1,713)	0	39,066

Capital Increase

There have been no changes in capital during these periods.

Dividend Policy

The annual dividend policy of Masisa S.A. corresponds to the distribution of not less than 30% and not more than a 50% of the Net Income of the period.

Dividend Paid

~~Dividends~~ The ~~Paid~~following table depicts the dividends that the shareholders meeting agreed during the years 2004, which are presented in pesos and are transformed to dollars at the date of payment:

The following table depicts the dividends that the shareholders meeting agreed during the years 2004 and 2003, which are presented in pesos and converted to US$ at payment date:



Dividend	Date of payment	Dividend per Share	Historical Dividend	Dividend per	Dividend
		CH$	THCh$	Share	THUS$
				US$

2003
N° 33	May, 2004	2.61142	2,286,697	0.0041411	3,845.07

		Dividend per Share	Historical Dividend	Dividend per Share	Dividend
Dividend	Date of payment
		CH$	THUS$	US$	THUS$
2003 N° 33	May, 2004	2.61142	2,286,697	0.0041411	3,845.07
2002N° 32	May, 2003	3.37497	3,133,706	0.0047613	4,420.89

NOTE 19 – OTHERS NON OPERATING INCOME AND EXPENSES

NOTE 20 – OTHERS NON OPERATING INCOME AND EXPENSES

a) Other non operating income:

The main concepts and balances under this heading are as follows:

	2004	2003
	2005	2004
	THUS$	THUS$
Income for rendered services	123	0
Profitability on sale of fixed assets, materials and spare parts	579	55
Gain on rental of industrial plant	304	255
Profitability on plant rental	0	86
Tax recovery	122	0
Services and fees to Related Companies	0	125
Services and commission related companies	511	455
Sale of residues, raw materials and other incomes	90	0
Gain on sales of stock	0	44
Total	669	266
Gain on sale of fixed assets, materials and spare parts	936	658
Sales of waste, raw materials and other income	158	94
Total	2,154	1,506

b) Other non-operating expenses:

The main concepts and balances under this heading are as follows:

	2004	2003
	2005	2004
	THUS$	THUS$
Provision for doubtful accounts	2,762	0
Bad debts provision	0	300
Provision for inactive assets	2,998	0
Patents	104	0
Patents, commissions and taxes	385	90
Donations	14	8
Plant rental, un-costed	192	115
Depreciation of inactive assets and other expenses	39	338
Donations	54	64
Write-off uncollectible debts	0	132
Idle asset depreciation and other expenses	453	1,649
Damages results	36	26
Bad debt expense	184	0
Others	167	41
Results from insurance claims	134	90
Total	360	845
Provision for legal expenses	205	0
Others	285	166
Total	7,652	2,174

NOTE 2120 – EXCHANGE DIFFERENCES - FOREIGN CURRENCY

The breakdown of all foreign currency accounts is as follows:

		~~Amount~~	Amount
Account	Currency		1203/31/~~2004~~2005	1203/31/~~2003~~2004
ASSETS(DEBIT)/CREDIT
Cash	~~New~~Argentine ~~Sol~~Pesos		29(73)	(24)
Cash	~~Argentine~~Chilean Pesos		(~~226~~19)	~~(392)~~248
Cash	~~Chilean~~Mexican Pesos		~~654~~9	~~806~~(166)
Cash	~~Mexican Pesos~~Real		~~(266)~~96	~~(349)~~0
Cash	Real		287	555
Debtors for sale	Argentine pesos		83	(19)
Accounts receivable	Argentine pesos		(46)	605
Debtors for sale	Chilean Pesos		(1,030)	91
Accounts receivable	Chilean Pesos		1.289	3.349
Debtors for sale	U.F.		(27)	0
Accounts receivable	Mexican Pesos		14	(650)
Debtors for sale	Mexican Pesos		(84)	0
Accounts receivable	Real		1.905	(1.000)
Debtors for sale	Real		(264)	0
Recoverable taxes	New Sol		206	(5)
Debtors for sale	Dollar		0	(21)
Recoverable taxes	Argentine pesos		(78)	416
Related Companies	Chilean Pesos		0	92
Recoverable taxes	Chilean pesos		387	788
Related Companies	Real		2	0
Recoverable taxes	Mexican pesos		878	(717)
Related Companies	Dollar		(8)	(142)
Recoverable taxes	~~Real~~Argentine pesos		~~376~~223	~~896~~0
Others currents assets	New Sol		(1)	(1)
Recoverable taxes	Chilean pesos		(117)	0
Others currents assets	Argentine pesos		(12)	113
Recoverable taxes	Mexican pesos		(272)	113
Others currents assets	Chilean pesos		727	1.318
Recoverable taxes	Real		(55)	0
Others currents assets	~~Mexican~~Argentine pesos		~~142~~34	~~(211)~~278
Others currents assets	~~Real~~Chilean pesos		81(125)	(~~467~~1,060)
Total (debit) / credit			6,346	5,030
Others currents assets	U.F.		(335)	(311)
Others currents assets	Mexican pesos		1	815
Others currents assets	Real		(124)	0
Total (debit) / credit			(2,085)	(106)
LIABILITIES (DEBIT)/CREDIT
Accounts payable	Argentine pesos		(84)	(602)
Short Term Financing Liabilities	Argentine pesos		0	(5)
Accounts payable	Chilean pesos		96	(854)
Short Term Financing Liabilities	Mexican pesos		50	0
Accounts payable	Mexican pesos		(10)	634
Short Term Financing Liabilities	Chilean pesos		(123)	103
Accounts payable	Real		(390)	(435)
Short Term Financing Liabilities	U.F.		(339)	46
Banks loans	New Sol		(11)	(2)
Short Term Financing Liabilities	Others money		(50)	0
Banks loans	Argentine pesos		(56)	(22)
Short Term Financing Liabilities	Real		0	(351)
Banks loans	Chilean pesos		149	1
Short Term Financing Liabilities	Dollar		0	(41)
Banks loans	Real		(2,782)	(377)
Long Term Financing Liabilities	U.F.		68	206
Banks loans	U.F.		(257)	(1,713)
Long Term Financing Liabilities	Dollar		0	(222)
Public obligations	U.F.		(3,078)	(824)
Long Term Financing Liabilities	Argentine pesos		0	(23)
Others monetary liabilities	New Sol		(227)	19
Bonds with the public	U.F.		2,051	3,862
Others monetary liabilities	Argentine pesos		153	154
Accounts payable	Argentine pesos		(97)	(120)
Others monetary liabilities	Chilean pesos		(192)	(976)
Accounts payable	Chilean pesos		(29)	(99)
Others monetary liabilities	Mexican pesos		(549)	210
Accounts payable	Mexican pesos		(161)	(630)
Others monetary liabilities	Real		(186)	132
Accounts payable	Real		(277)	0
Total (debit) / credit			(7,424)	(4,655)
Accounts payable	Others money		36	431
(Losses) Gains from foreign exchange			(1,078)	375
Others monetary liabilities	New Sol		0	(1)
Others monetary liabilities	Argentine pesos		(221)	(68)
Others monetary liabilities	Chilean pesos		2,543	(51)
Others monetary liabilities	Mexican pesos		26	(553)
Others monetary liabilities	Real		(2,621)	0
Total (debit) / credit			856	2,484
(Loss) Profit for currency exchange risk			(1,229)	2,378

35NOTE 21 – DEBT AND EQUITY ISSUANCE AND PLACEMENT EXPENSES

NOTE 22 – DEBT AND EQUITY ISSUANCE AND PLACEMENT EXPENSES

Bond issuance and placement expenses

The composition of the associated capitalized expenses included in other current assets and other long term assets are the following:

	2004	2003
	2005	2004
	THUS$	THUS$
Discounted amount of bond placement	43,~~378~~953	4,~~718~~365
Stamp tax	1,358	1,463
Stamp taxes	1,225	1,353
Placement commission	8475	~~297~~83
Risk classification report	3330	6233
Registration and inscription rights	1210	1312
Legal fees	109	2011
Other	3	152
Total	5,~~878~~305	65,~~588~~859
The charge to results for this concept is:	923	44
The resulted charge for this concept is	250	212
Expenses of Bonds issuance placement:
Short term: expenses paid in advance	744	734
Long term: Other assets of the long term	4,561	5,125
Total	5,305	5,859

NOTE 22 – DERIVATIVES (HEDGES AND SWAPS)

Description of the contract

Protected
Value

Affected Account

Type

Contract

Value

Maturity

Class

Buy/Sale

Name

Amount

Name

amount

Paid in

Not paid in

CCPE

IV-2010

Change Money

U.F. Bonds

20,000

21,757

Other long term assets

771

(196)

CCPE

IV-2010

Change Money

U.F. Bonds

40,000

43,513

Other long term assets

2.311

(392)

IV-2010

Change Money

Future Flows

20,000

20,499

Other long term liabilities

844

(844)

CCTE

IV-2006

Interest Rate

Loans in U.S.dollars

12,000

Due to banks and financial institutions

138

(155)

The Company keeps Swap contracts valued according to the indicated in note 2u), which are detailed as follows:

Receivable

Payable

Currency

Amount

Interest Rate

Currency

Amount

Interest Rate

Coverage of existing lots:

Banco Scotiabank Sud Americano

U.F.

701,618.745

4.940%

Dollar

20,000

6.20%

Morgan Stanley Capital Service Inc.

U.F.

1,403,237.000

4.939%

Dollar

40,000

6.36%

Investment Contract

Morgan Stanley Capital Service Inc.

Dollar

20,000

6.200%

MXN

229,000

11.75%

Citibank N.A. New York

Dollar

12,000

Libor 180 days

5.2%

NOTE 23 – ~~DERIVATIVES~~CONTINGENCIES ~~(HEDGES~~ AND ~~SWAPS)~~ COVENANTS - GUARANTEES

Description of the contract

Protected Value

Affected Account

Type

Contract

Value

Maturity

Class

Buy/Sale

Name

Amount

Name

amount

Paid in

Not paid in

CCPE

IV-2010

Change Money

U.F. Bonds

20,000

23,132

Other long-term assets

1,813

(196)

CCPE

IV-2010

Change Money

U.F. Bonds

40,000

46,264

Other long-term assets

3,417

(392)

IV-2010

Change Money

Future Flows

20,000

20,468

Other long-term assets

460

(460)

CCTE

IV-2006

Interest Rate

Loans in U.S. dollars

12,000

Due to banks and financial institutions

272

(67)

The company maintains swap contracts valued according as indicated on Note 2u), which are depicted below:

	Recieve			Pay
	Currency	Amount	Interest Rate	Currency	Amount	Interest Rate
Existing coverage contracts:
Banco Scotiabank Sud Américano	U.F.	701,618.745	4.940%	Dollar	20,000	6.20%
Morgan Stanley Capital Service Inc.	U.F.	1,403,237.000	4.939%	Dollar	40,000	6.36%
Investment contracts
Morgan Stanley Capital Service Inc.	Dollar	20,000	6.200%	MXN	229,000	11.75%
Citibank N.A. New York	Dollar	12,000	Libor + 2.315%			5.2%

NOTE 24 – CONTINGENCIES AND COVENANTS - GUARANTEES

The Contingencies and Covenants assumed by the Company as of the end of the periods are detailed as follows:

Forestal Tornagaleones S.A.

a) Direct Guarantees

~~Forestal~~ On ~~Tornagaleones~~October 15, 1998 the subsidiary subscribed a loan with Rabobank Investments Chile S.A., which was guaranteed with land and plantations. The book value of those plantations as of March 31, 2005 is THUS$20,964 and the value of the land was THUS$5,642. In addition, the agreement includes other clauses normally used in this kind of transactions.

b) Indirect Guarantees

During the year 2001, Forestal Tornagaleones S.A., became joint debtor and guarantee in favor of Banco Dresdner Bank and of Banco Security for the credits obtained by its subsidiary Forestal Argentina S.A. Such loans were used to financing new plantations, the purchase of properties and the restructuring of a) ~~Direct~~financial ~~Guarantees~~debt.

On ~~October~~March, 1518, ~~1998~~2004, ~~the~~Masisa ~~subsidiary~~S.A., ~~subscribed~~controller ashareholder ~~loan~~of ~~with~~Forestal ~~Rabobank Investments~~Tornagaleones ~~Chile~~ S.A., ~~which~~replaced ~~was~~the ~~guaranteed~~corporation ~~with~~as ~~land~~guarantee ~~and~~of ~~plantations.~~the ~~The~~credit ~~book value~~for ofUS$6,000,000, ~~those~~currently ~~plantations~~reduced asto ofthe ~~December~~amount ~~31,~~of ~~2004 is THUS~~US$204,~~964~~000,000, ~~and~~granted ~~the~~by ~~value~~Dresdner Lateinamerika Bank ofA.G. to the ~~land~~subsidiary ~~was~~Forestal ~~THUS$5~~Argentina S.A. Furthermore,~~642~~ the credit granted by Banco Security to the subsidiary Forestal Argentina S.A. Inforces ~~addition,~~Forestal Tornagaleones S.A. to the ~~agreement~~fulfillment ~~includes~~of ~~other~~the ~~clauses normally~~same ~~used~~obligations inof ~~this~~the ~~kind~~corporation as guarantee of ~~transactions~~the credit granted by Dresdner Lateinamerika Bank A.G. to the subsidiary Forestal Argentina S.A.

b) As ~~Indirect~~a ~~Guarantees~~result of the above mentioned, Forestal Torngaleones S.A., is forced to the fulfillment of some obligations that are normal for this kind of operations, among which are the following:

~~During~~ Keep ~~2001 Forestal Tornagaleones S.A., the subsidiary became~~ a ~~guarantor~~equity ~~in favor~~capital ofnot ~~the~~minor ~~Banco~~than ~~Dresdner~~USD ~~and Banco Security issued to the subsidiary Forestal Argentina S.A. by the bank. The loan was used to finance new plantations~~80, ~~purchase of land and rescheduling of its financial debt.~~000,000,
~~On march 18, 2004, Masisa S.A., controlling shareholder of Forestal~~ ~~Tornagaleones~~Keep ~~S.A.,~~a ~~replaced~~leverage ~~Forestal~~lower ~~Tornagaleones~~or ~~S.A.~~equal ~~as guarantor for the US$6 million debt contract, currently an outstanding balance of US$5 million, with Dresdner Lateinamerika Bank A.G.~~ to ~~the subsidiary Forestal Argentina S~~0.~~A. The~~4 loan issued by Banco Security to the subsidiary Forestal Argentina S.A. obliges Forestal Tornagaleones S.A. to comply with the same commitments that the company, in its guarantor status of the credit issued by Dresdner Lateinamerika Bank A.G. to the subsidiary Forestal Argentina S.A. times;
~~Additionally the loan agreement with the Banco Dresdner establishes for the~~ ~~guarantor~~Keep ~~some~~an ~~normal~~equity ~~obligations~~and ~~for~~long ~~this~~term ~~kind~~credits ~~of operations~~ratio, ~~which~~regarding ~~are applicable on~~ the ~~same~~fixed ~~terms and conditions as the Banco Security credit guarantee. In light of the above~~asset, ~~Banco~~equal ~~Security~~or ~~placed~~superior ~~certain obligations~~than ~~considered~~1; ~~normal for this type of agreement on Forestal Tornagaleones S.A. as the guarantor of the Forestal Argentina S.A. loan as of the above date.~~ and,
As Keep aan ~~result~~EBITDA ofand ~~the~~financial ~~above~~expenses ~~mentioned~~ratio, ~~Forestal~~superior ~~Tornagaleones~~or ~~S.A.~~equal ~~is obliged~~ to ~~comply~~ ~~with~~1.5 ~~certain obligations which are standard for these types of operations, some of which are:~~ times.

~~Maintain~~ All athese ~~equity~~obligations noare ~~lower~~fulfilled ~~than~~at ~~US$~~the 80date ~~million.~~of ~~Maintain~~the acurrent ~~leverage equal or lower than 0.4 times. Maintain a ratio between equity and long term debt to fixed assets equal to or greater than 1. Maintain a ratio between EBITDA and~~ financial ~~expenses greater or equal to 1~~statements.~~5 times.~~

c) Trials

At On the ~~time~~2004 ~~these~~accounting ~~statements~~period, ~~are~~Forestal ~~presented~~Tornagaleones S.A. had a trial against it in compensation for damages. The plaintiff claims for CH$404,000,000 because of damages in lands of his property made by, in opinion of the ~~company~~plaintiff, ~~complies~~Forestal Tornagaleones S.A. On September 22, 2003, an initial sentence was given limiting the scope of claimed damages but the amount of compensation was not determined. The sentence was appealed by the Company and on January 9, 2004, the Appeals Court of Valdivia reviewed the lawsuit against the Company, revoked the sentence and rejected it in its entirety with costs. On January, 31, 2005, the plaintiff presented a replenish recourse in the Supreme Court, that was also rejected by that ~~mentioned~~court ~~obligations~~on March, 7, 2005. Without further appeals, the corporation is collecting the costs proceeding from such trial.

38 37

Masisa S.A.

a) Local bonds issuance and placement

c) Trials

As of December 31 2004, the company have an award of damages trial against it. The plaintiff claims for CH$404,000,000 because of damages in lands of his property made by, in opinion of the plaintiff, Forestal Tornagaleones S.A. On September 22, 2003, an initial sentence was given limiting the scope of claimed damages but the amount of compensation was not determined. The sentence was appealed by the Company and on January 9, 2004, the Appeals Court of Valdivia reviewed the lawsuit against the Company, revoked the sentence and rejected it in its entirety with costs. The accuser presented a demand limiting his pretensions to CH$60,000,000 (CH$40,000,000 for unemployed profit and CH$20,000,000 for moral hazard. The Supreme Court has not yet issued a statement regarding the admissibility of the recourses presented.

On January 27, the Supreme Court declared the recourse inadmissible by its form and rejected its substance.

On January 31, 2005, the plaintiff presented a reposition recourse to the Supreme Court in regard to the rejection of the substance of the recourse for lack of fundamentals, requesting to revoke and declare the ruling inadmissible. With respect to this last recourse, the Supreme Court has not yes issued a pronouncement.

At December 31, 2004 the company has not provisioned for this matter, given that in virtue of the antecedents that it counts with and the opinion of legal council, the odds of success of the plaintiff are minimal.

Masisa S.A.

a) Local bonds issuance and placement

The contract relating to the issuance and placement of the bonds by Masisa in the local market establishes for Masisa and its subsidiaries certain obligations that are normal for this type of transaction. Among the terms and conditions specifically indicated in the respective bond issuance contract are: the maintenance of insurance covering the principal assets according to industry standards; providing to the bond holders a copy of the individual and consolidated financial statements, both quarterly and annually, of the issuer and its subsidiaries that correspond to the rules applicable to public corporations, and copies of risk classification reports; maintain current the accounting of the issuer and its subsidiaries; conduct arms length transactions with its subsidiaries; prohibits providing financing to any entity of the group that is not the issuer or subsidiary of the issuer; maintain on a quarterly basis, beginning December 31, 2003, a level of indebtedness, defined as the ratio of liabilities to shareholders equity, and measured using the values provided in both its consolidated and individual financial statements, no greater than 0.9 times, according to the terms and conditions that are established in the bond issuance contracts, respectively.

b) Indirect Guarantees

On March 18, 2004, the Company became a co-debt holder and signatory to Banco Dresdner for the loan received from the said bank in 2001 by the Company’s subsidiary Forestal Argentina S.A. The loan was designated for financing of new plantations, the purchase of land and the restructuring of its financial debt. As of the same date, the loan agreement was modified and establishes for Masisa S.A. as guarantor, certain normal obligations for this type of agreement.

Masisa Overseas Ltda.

Masisa Overseas Ltda.

The Company and its subsidiary Masisa Argentina S.A. and Maderas y Sintéticos de México S.A. de C.V., had granted loans subscribed by the subsidiary Masisa Overseas Ltd. This loans establishes the fulfillment of some obligations that are normal in this kind of agreement, such as the ones as follows, in the specific terms and conditions as appears in the respective loan agreement:

Maintenance of Properties needed for the normal course of business.
The forbiddance to giving some guarantees over their assets, with the exception of the ones that existed at the time the agreement was signed and others like pledges over new assets in the normal course of business.
The fulfillment of the “Covenants” established in other loans agreements of the Company and/or its subsidiaries - “Cross default”.
The forbiddance to sell, rent, transfer or other kind of alienation of the company’s assets with the exception of the ones the company commercialize in their ordinary course of business and those assets sells at markets values.
The forbiddance to make some speculative transactions over commodities and/or forwards., and, other “Covenants” individualized afterwards.

The obligations relative to financial indexes must be calculated over a consolidated financial statement basis

1.- Private Placement

In connection with loans obtained in a private placement in the United States, by the Company subsidiary, Masisa Overseas Ltd, Masisa S.A. is committed to maintain certain obligations that are normal in this kind of agreement, such as the ones summarized as follows, in the specific terms and conditions as appears in the respective loan agreement:

Compliance with all laws
Maintenance of insurance on properties and businesses
Maintenance of properties in good repair, working order and condition
Compliance with financial indexes

Leverage Ratio not higher than 1

~~The Company must maintain Consolidated Tangible Net Worth (defined as~~ ~~consolidated stockholders’ equity less intangible assets) of not less than an amount equal to the sum of THUS$236,601.~~ 38

The Company must maintain Consolidated Tangible Net Worth (defined as consolidated stockholders’ equity less intangible assets) of not less than an amount equal to the sum of ThUS$236,601.
Financial expenses index not lower than 1.5 ( result before financial expenses and taxes over financial expenses)
Maintenance of the 100.00% of the ownership in the shareholders’ equity of Masisa Overseas Limited and 66.6% of Masisa Argentina S.A.
Forbiddance to some transactions with related parties
Make extensible to the owners of the bonds the new real guarantees that Masisa S.A. and/or their subsidiaries establishes in favor of third parties to guarantee new debts or the ones existing at the day of the contract, with different exceptions, including the ones that have to be make for the normal flow of the business, the ones that have to be make to guarantee the prices account balance of new acquisitions; the ones that are related to letter of Credit, between others.

2.- Comerica Bank

The loan entered by the Company with Comerica Bank for ~~MTHUS~~MMUS$15, which as of ~~December~~ March, 31, ~~2004~~2005 is for THUS$10,~~788~~855 establishes for the parent and /or their branch subsidiaries some obligations that are normal in this kind of agreement, such as the ones as follows, in the specific terms and conditions as appears in the respective loan agreement:

The Company must maintain e insurance over their principal assets following the industry standards.
The Company must maintain updated accounting books for the parent and its branches companies.
The Company must follows the current laws and regulations.
The Company must accomplish and pay all the obligations derivate of loan agreements.
Maintenance of the normal continuousness of the Company
The forbiddance to some guarantees over their assets, with the exception of the ones that existed at the time the agreement was signed and others like pledges over new assets in the normal course of business.
To do transactions with the branch subsidiaries at market conditions.
The forbiddance to merge the company with any other firm, end or dissolve it, and to sell or rent the full or an important amount of it assets, properties or business, except in the conditions settled in the agreement.
To limit the indebtedness and lending grants in accordance to the conditions settled in the contract
The Company must maintain Consolidated Tangible Net Worth (defined as consolidated stockholders’ equity less intangible assets) of not less than an amount equal to ~~MTHUS~~MMUS$345.
The Company must maintain a hedge over financial expenses not lower than 3 .
The Company will not at any time permit the Leverage Ratio (defined as the ratio of consolidated indebtedness to Consolidated Tangible Net Worth) to exceed 1 to 1.

3.- Banco de Chile

41The loan entered by the Company with The Banco de Chile for MMUS$15, which as of March, 31, 2005 is for THUS$13,059 establishes for the parent and /or their branch subsidiaries some obligations that are normal in this kind of agreement, such as the ones as follows, in the specific terms and conditions as appears in the respective loan agreement:

3.- Banco de Chile

The loan entered by the Company with the Banco de Chile for MTHUS$15, an outstanding balance of THUS$12,949 as of December 31, 2004, establishes for the parent and /or their branch subsidiaries some obligations that are normal in this kind of agreement, such as the ones as follows, in the specific terms and conditions as appears in the respective loan agreement:

The Company will not at any time permit the Leverage Ratio (defined as the ratio of consolidated indebtedness to Consolidated Tangible Net Worth) to exceed 1 to 1.
The Company must maintain a hedge over financial expenses not lower than 3 .
The Company must maintain Consolidated Tangible Net Worth (defined as consolidated stockholders’ equity less intangible assets) of not less than an amount equal to ~~MTHUS~~MMUS$345.
The forbiddance to sell, rent, transfer or other kind of alienation of the company’s participation in the property of its subsidiaries, except in the conditions settled in the agreement.
The forbiddance to giving some guarantees over indispensable assets for the normal course of business, except in the conditions settled in the agreement.

4.- The Bank of Nova Scotia

~~The loan entered by the Company with The Bank of Nova Scotia for MTHUS$25,~~ and outstanding balance of THUS$25,295 as of December 31, 2004, in which Scotiabank Sud Americano acted as agent, establishes for the parent and /or their branch subsidiaries some obligations that are normal in this kind of agreement, such as the ones as follows, in the specific terms and conditions as appears in the respective loan agreement: 39

The loan entered by the Company with The Bank of Nova Scotia for MMUS$25, which as of March, 31, 2005 is for THUS$13,059 in which Scotiabank Sud Americano acted as agent, establishes for the parent and /or their branch subsidiaries some obligations that are normal in this kind of agreement, such as the ones as follows, in the specific terms and conditions as appears in the respective loan agreement:

The Company will not at any time permit the Leverage Ratio (defined as the ratio of consolidated indebtedness to Consolidated Tangible Net Worth) to exceed 1 to 1.
The Company must maintain a hedge over financial expenses not lower than 3 .
The Company must maintain Consolidated Tangible Net Worth (defined as consolidated stockholders’ equity less intangible assets) of not less than an amount equal to ~~THUS345~~UF 14,800,000.
The forbiddance to sell, rent, transfer or other kind of alienation of the company’s participation in the property of its subsidiaries, except in the conditions settled in the agreement.
The forbiddance to giving some guarantees over indispensable assets for the normal course of business, except in the conditions settled in the agreement.
The forbiddance to grant loans to its shareholders for operations out of the normal course of the business.

The credit contracts of Masisa Overseas Ltd. Before individualized, establish acceleration clauses en case of noncompliance with any of its obligations.

Masisa Argentina S.A.

The parent society has granted loans obtained by its subsidiary Masisa Argentina S.A.. This loans establishes some obligations that are normal in this kind of agreements, such as the ones as follows, in the specific terms and conditions as appears in the respective loan agreements. The obligations related to financial indexes must be calculated over a consolidated basis.

1.- Rabobank Nederland

1 The loan entered by Masisa Argentina S.A. with Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland) for MMUS$12.5, establishes for the parent Masisa S.A. and /or their branch subsidiaries some obligations that are normal in this kind of agreement, such as the ones as follows, in the specific terms and conditions as appears in the respective loan agreement: Maintenance of the normal continuousness of the Company, maintenance of Properties needed for the normal course of business, the Company must follows the current laws and regulations, send opportunely the financial information of the Company, the Company must maintain e insurance over their principal assets following the industry standards, the Company must maintain a Leverage Ratio not higher than 0,9 times, the Company must maintain a hedge over financial expenses not lower than 3; The Company must maintain Consolidated Tangible Net Worth of not less than an amount equal to MMUS$345, the forbiddance to some guarantees over their assets except in the conditions settled in the agreement, to do transactions with related parties at market conditions, forbiddance to make loans to any entity of the entrepreneurial group which is not the issuing company or any of its subsidiaries or allied.

2.- Banco de Crédito e Inversiones

The loan entered by Masisa Argentina S.A. with ~~Cooperatieve~~Banco ~~Centrale Raiffeisen-Boerenleenbank~~de ~~B.A.~~Crédito ~~(Rabobank~~e ~~Nederland)~~Inversiones for ~~MTHUS~~MMUS$12,.5, establishes for the parent ~~Masisa S.A.~~ and /or their branch subsidiaries some obligations that are normal in this kind of agreement, such as the ones as follows, in the specific terms and conditions as appears in the respective loan agreement: Maintenance of the normal continuousness of the Company, ~~maintenance of Properties needed for the normal course of business, the Company must follows the current laws and regulations,~~ send opportunely the financial information of the Company, the Company must maintain e insurance over their principal assets following the industry standards, the Company must maintain a Leverage Ratio not higher than 0.,9 times, the Company must maintain a hedge over financial expenses not lower than 3;, ~~The~~the Company must maintain Consolidated Tangible Net Worth of not less than an amount equal to ~~MTHUS~~MMUS$345, the forbiddance to some guarantees over their assets except in the conditions settled in the agreement, to do transactions with related parties at market conditions, forbiddance to make loans to any entity of the entrepreneurial group which is not the issuing company or any of its subsidiaries or allied.

~~2.- Banco de Crédito e Inversiones~~ 40

Inversiones Coronel Limitada

~~The~~ Dated ~~loan~~may ~~entered~~30th by2002, ~~Masisa~~was ~~Argentina~~received ~~S.A.~~from ~~with~~the ~~Banco~~Servicio de ~~Crédito~~Impuestos eInternos ~~Inversiones for~~(Taxes ~~MTHUS$12,5,~~Government ~~establishes~~Office) ~~for~~a ~~the~~liquidation ~~parent and /or their branch subsidiaries some obligations that are normal in this kind~~ of ~~agreement~~THCH$406,545 ~~such~~due asto ~~the~~supposed ~~ones~~differences ~~as follows,~~ in the ~~specific~~determination ~~terms~~of ~~and conditions as appears in~~ the ~~respective~~income ~~loan agreement: Maintenance~~taxes. ofThe ~~the~~Company ~~normal~~have ~~continuousness~~not ofmade ~~the Company, send~~provisions ~~opportunely~~accounts ~~the~~for ~~financial~~this ~~information~~concept ofdue ~~the~~to ~~Company~~that, ~~the~~in ~~Company~~aggregate ~~must maintain e insurance over their principal assets following~~ the ~~industry~~advisers ~~standards,~~considers that the ~~Company~~ ~~must~~claim ~~maintain~~presented aby ~~Leverage Ratio not higher than 0.9 times,~~ the ~~Company must~~company ~~maintain~~contains ~~a hedge over financial expenses not lower than 3,~~ the ~~Company~~necessary ~~must maintain~~elements ~~Consolidated Tangible Net Worth of not less than an amount equal~~ to ~~MTHUS$345,~~ ~~the~~leave ~~forbiddance~~without toeffect ~~some~~that ~~guarantees over their assets except in the conditions settled in the agreement~~liquidation.

Forestal Argentina S.A.

43On March 18, 2004, Masisa S.A., began to be joint debtor and guarantee in support of Dresdner Bank for the loan granted by this bank the year 2001 to the subsidiary company Forestal Argentina S.A. This loan was used to finance new plantations, new land acquisitions and the financial debt restructuring. On the same date, the credit contract was modified. In this way, as of this date, the credit contract establish for Masisa S.A. as the guarantee, certain obligations, that are commonly established in these kind of procedures.

~~Inversiones Coronel Limitada~~ 41

~~Dated may 30th 2002, was received from the Servicio de Impuestos~~ ~~Internos~~This ~~(Taxes~~table ~~Government~~resumes ~~Office) a liquidation of THUS$406,545 due to supposed differences in~~ the ~~determination~~contingencies ofand ~~the~~covenants ~~income~~and ~~taxes.~~guarantees ~~The~~assumed ~~Company have not made provisions accounts for this concept due to that, in aggregate the advisers considers that the claim presented~~ by the company ~~contains the necessary elements to leave without effect that liquidation.~~

Forestal Argentina S.A.


Institution	Debtor		Guaranty Type	Compromised Assets		Outstanding amount as of the end of the period		Liberation of guarantees
	Name	Relation	Guaranty Type	Type	Account value	03/31/2005	03/31/2004	03/31/2006	Assets	03/31/2007	Assets	03/31/2008	Assets
Direct Guarantees
Raboinvestments Chile S.A.	Forestal Tornagaleones S.A.	Subsidiary	Mortgage	Equity	13,238	13,238	14,203	3,238		4,500		5,500
Indirect Guarantees
Security Bank	Forestal Argentina S.A.	Subsidiary	Parent Guaranty	Net Worth	1,404	1,404	2,342	937		467		0
Dresdner Bank Lanteiamerica	Forestal Argentina S.A.	Subsidiary	Parent Guaranty	Net Worth	4,052	4,052	6,052	2,052		2,000		0
Comerica Bank	Masisa Overseas Ltd.	Subsidiary	Parent Guaranty	Net Worth	10,885	10,885	15,171	4,456		4,286		2,143
The Bank of Nova Scotia	Masisa Overseas Ltd.	Subsidiary	Parent Guaranty	Net Worth	25,212	25,212	25,133	7,712		7,500		10,000
Private Placement	Masisa Overseas Ltd.	Subsidiary	Parent Guaranty	Net Worth	37,096	37,096	46,400	10,096		9,000		9,000
Banco de Chile New			Parent Guaranty
York Branch	Masisa Overseas Ltd.	Subsidiary		Net Worth	13,059	13059	15,176	4,509		4,300		4,250
Itaú BBA-ACC	Masisa do Brasil Ltda.	Subsidiary	Parent Guaranty	Net Worth	0	0	2,052	0		0		0
ABN Amro Bank	Masisa do Brasil Ltda.	Subsidiary	Parent Guaranty	Net Worth	0	0	2,423	0		0		0
Banco del Desarrollo	Masisa Argentina S.A.	Subsidiary	Parent Guaranty	Net Worth	1,519	1,519	4,521	1,519		0		0
Banco de Credito e Inversiones	Masisa Argentina S.A.	Subsidiary	Parent Guaranty	Net Worth	12,678	12,678	0	178		2,778		2,778
Rabobank Nederland	Masisa Argentina S.A.	Subsidiary	Parent Guaranty	Net Worth	12,660	12,660	0	1,410		2,500		2,500
Rabobank Ireland PLC	Masisa Argentina S.A.	Subsidiary	Parent Guaranty	Net Worth	0	0	28,544	0		0		0
BankBoston	Masisa Argentina S.A.	Subsidiary	Parent Guaranty	Net Worth	0	0	72	0		0		0
BankBoston N.A.	Masisa Argentina S.A.	Subsidiary	Parent Guaranty	Net Worth	0	0	433	0		0		0
Fleet National Bank	Masisa Argentina S.A.	Subsidiary	Parent Guaranty	Net Worth	0	0	503	0		0		0

~~The loans entered by the Company with Banco Dredner A.G. and Banco Security~~ and received during 2001 include some obligations that are normal in this kind of agreement. With respect to the Banco Security credit, the same terms and obligations apply as the terms and obligations indicated in the contract with Banco Dresdner. 42

As NOTE of24 ~~the~~–LIENS ~~date~~OBTAINED ~~above,~~FROM ~~the~~THIRD ~~covenants~~PARTIES ~~affecting the Company were as follows:~~

The ratio between EBITDA and financial expenses must be higher or equal to 1.2 times.

Maintenance of a shareholder’s equity not lower than US$37 million.

able resumes the contingencies and covenants and guarantees assumed by the company

Institution	Debtor		Guaranty Type	Compromised Assets		Outstanding amount as of the end of the period		Liberation of guarantees
	Name	Relation		Type	Account value	12/31/2004	12/31/2003	12/31/2005	Assets	12/31/2006	Assets	12/31/2007	Assets
Direct Guarantees
Raboinvestments Chile S.A.	Forestal Tornagaleones S.A.	Filial	Mortgage	Equity	13,106	13,106	14,090	3,106		4,500		5,500
Indirect Guarantees
Security Bank	Forestal Argentina S.A.	Subsidiary of Subsidiary	Securitized	Net Worth	1,888	1,888	2,829	955	0	933	0	0	0
Dresdner Bank Lanteiamerica	Forestal Argentina S.A.	Subsidiary of Subsidiary	Securitized	Net Worth	5,106	5,106	6,101	2,106	0	2,000	0	1,000	0
Comerica Bank	Masisa Overseas Ltd.	Subsidiary	Securitized	Net Worth	10,788	10,788	15,074	4,360	0	4,286	0	2,142	0
Citibank N.A.	Masisa Overseas Ltd.	Subsidiary	Securitized	Net Worth	339	339	1,124	67	0	272	0	0	0
The Bank of Nova Scotia	Masisa Overseas Ltd.	Subsidiary	Securitized	Net Worth	25,295	25,295	25,266	4,045	0	7,500	0	7,500	0
Private Placement	Masisa Overseas Ltd.	Subsidiary	Securitized	Net Worth	36,371	36,371	45,484	9,371	0	9,000	0	9,000	0
Banco de Chile New York Branch	Masisa Overseas Ltd.	Subsidiary	Securitized	Net Worth	12,949	12,949	15,084	4,399	0	4,300	0	4,250	0
Itaú BBA-ACC	Masisa do Brasil Ltda.	Subsidiary of Subsidiary	Securitized	Net Worth	1,604	1,604	1,709	1,604	0	0	0	0	0
ABN Amro Bank	Masisa do Brasil Ltda.	Subsidiary of Subsidiary	Securitized	Net Worth	0	0	1,056	0	0	0	0	0	0
Banco del Desarrollo	Masisa Argentina S.A.	Subsidiary of Subsidiary	Securitized	Net Worth	1,506	1,506	5,511	1,506	0	0	0	0	0
Banco de Credito e Inversiones	Masisa Argentina S.A.	Subsidiary of Subsidiary	Securitized	Net Worth	12,552	12,552	0	52	0	2,500	0	2,500	0
Rabobank Nederland	Masisa Argentina S.A.	Subsidiary of Subsidiary	Securitized	Net Worth	12,549	12,549	0	1,299	0	2,500	0	2,500	0
Rabobank Ireland PLC	Masisa Argentina S.A.	Subsidiary of Subsidiary	Securitized	Net Worth	0	0	29,121	0	0	0	0	0	0
BankBoston	Masisa Argentina S.A.	Subsidiary of Subsidiary	Securitized	Net Worth	16	16	94	16	0	0	0	0	0
BankBoston N.A.	Masisa Argentina S.A.	Subsidiary of Subsidiary	Securitized	Net Worth	0	0	305	0	0	0	0	0	0

NOTE 25 –LIENS OBTAINED FROM THIRD PARTIES

Masisa S.A.

The Company has received guarantees, such as pledges, mortgages, endorsements of of loan insurance policies, special mandates, surety bonds to guarantee repayment to clients and fulfillment of obligations related to the Company’s ~~business~~ business activities amounting to THUS$4,~~778~~911 (THUS$78,~~583~~662 in ~~2003~~2004).

Forestal Tornagaleones S.A.

Forestal Tornagaleones Shas received guarantees to secure repayment to clients and fulfillment of obligations related to the Company’s business activities amounting to THUS$752 at March 31, 2005.A (THUS$680 in 2004).

~~Forestal Tornagaleones has received guarantees to secure repayment to clients~~ ~~and fulfillment of obligations related to the Company’s business activities amounting to THUS$113 at December 31, 2004. (THUS$705 in 2003).~~ 43

NOTE 2625 – NATIONAL AND FOREIGN CURRENCY

a) Assets

The breakdown of all foreign currency accounts is as follows:

		Amount
Account	Currency	1203/31/~~2004~~2005	1203/31/~~2003~~2004
Cash	~~ThCh$~~Chilean ~~not adjustable~~pesos	~~530~~1,458	~~4,607~~150
Cash	~~US$~~Dollar	~~946~~1,824	23,~~770~~736
Cash	~~ThAr$~~Argentine pesos	~~366~~252	~~275~~355
Cash	ReReal	16,~~878~~241	96795
Cash	~~Euro~~Mexican pesos	21,547	61,168
Cash	~~Mexican~~New ~~pesos~~sol	~~636~~0	~~895~~7
Cash	~~Sol~~Others money	0515	120
Time deposit	~~US$~~Dollar	1721,~~033~~595	0300
Marketable securities (net)	U.F.	1,175	0
Negotiable securities	Chilean pesos	922	0
Account receivable	~~ThCh$~~Chilean ~~not adjustable~~pesos	15,~~518~~930	1514,~~163~~945
Account receivable	~~US$~~Dollar	2715,~~728~~500	1924,~~709~~876
Account receivable	~~ThAr$~~Argentine pesos	21,~~628~~526	1,~~614~~098
Account receivable	~~Sol~~New sol	0	17
Account receivable	ReReal	1314,~~696~~575	1113,~~182~~187
Account receivable	~~Mexican~~Others ~~pesos~~money	~~15,710~~576	~~10,560~~0
Notes receivable	ThCh$ not adjustable	2,973	2,777
Account receivable	Mexican pesos	19,736	13,310
Notes receivable	~~US$~~Chilean pesos	~~616~~2,872	753,052
Notes receivable	~~ThAr$~~U.F.	~~2,242~~96	~~1,242~~0
Notes receivable	~~Sol~~Dollar	12,~~478~~000	~~4,056~~45
Notes receivable	~~Mexican~~Argentine pesos	~~790~~2,085	01,304
Sundry debtors	ThCh$ not adjustable	4,297	2,607
Notes receivable	Nuevo sol	0	3,820
Sundry debtors	Euro	0	16
Notes receivable	Mexican pesos	1,324	0
Sundry debtors	Chilean pesos	2,378	2,804
Sundry debtors	U.F.	41	0
Sundry debtors	Dollar	2,683	1,019
Sundry debtors	Argentine pesos	984	792
Sundry debtors	New sol	0	18
Sundry debtors	Real	2,568	975
Sundry debtors	Mexican pesos	139	82
Sundry debtors	Euro	0	485
Notes and accounts receivable from related companies	Chilean pesos	2,950	0
Notes and accounts receivable from related companies	Dollar	5,804	3,152
Notes and accounts receivable from related companies	Others money	89	0
Notes and accounts receivable from related companies	Argentine pesos	16	0
Notes and accounts receivable from related companies	Mexican pesos	1,988	0
Inventories	Chilean pesos	4,875	4,701
Inventories	Dollar	90,617	71,223
Recoverable taxes	Chilean pesos	772	700
Recoverable taxes	Dollar	4,246	2,748
Recoverable taxes	Argentine pesos	5,595	4,802
Recoverable taxes	New sol	0	95
Recoverable taxes	Real	0	269
Recoverable taxes	Mexican pesos	1,661	1,581
Prepaid expenses	Chilean pesos	3,469	3,092


Prepaid expenses	Dollar	685	481
Prepaid expenses	Argentine pesos	421	352
Prepaid expenses	New sol	0	79
Prepaid expenses	Real	734	1,129
Prepaid expenses	Mexican pesos	11	79
Prepaid expenses	U.F.	744	0
Deferred taxes	Chilean pesos	598	513
Others currents assets	U.F.	126	0
Others currents assets	Dollar	0	28,524
Fixed assets	Chilean pesos	92,658	85,296
Fixed assets	Dollar	542,688	547,791
Investments in other companies	Chilean pesos	0	6
Investments in other companies	Dollar	56	4
Goodwill	Dollar	1,313	1,391
Negative goodwill	Dollar	(1,729)	(1,829)
Long term receivables	Dollar	4,209	481
Long term receivables	Argentine pesos	137	189
Long term receivables	Real	0	512
Notes and accounts receivables from related companies	Dollar	597	2,997
Others	Chilean pesos	474	429
Others	U.F.	801	5,409
Others	Argentine pesos	115	703
Others	Dollar	7,441	989
Others	Mexican pesos	42	785
Total Assets

	Chilean pesos	129,356	115,688
	Dollar	699,529	687,928
	Argentine pesos	11,131	9,595
	Real	24,118	16,867
	Mexican pesos	26,448	17,005
	New sol	0	4,036
	Others money	1,180	0
	U.F.	1,808	5,409
	Euro	0	485

b) Liabilities




		Until 90 days				90 days to 1 year
		03/31/2005		03/31/2004		03/31/2005		03/31/2004
			Annual		Annual		Annual		Annual
Account	Currency	Amount	Rate	Amount	Rate	Amount	Rate	Amount	Rate

Due to banks and financial institutions short/term	U.F.	0	0	3,610	2.19%	0	0	0	0
Due to banks and financial institutions short/term	Dollar	0	0	5,070	2.45%	1,519	3.59%	11,622	3.63%
Due to banks and financial institutions short/term	Real	0	0	4,475	15.75%	0	0	0	0
Short/term portion of long/term liabilities to banks and financial institutions	U.F.	2,524	6.70%	0	0	0	0	2,360	6.70%
Short/term portion of long/term liabilities to banks and financial institutions	Dollar	6,778	3.90%	32,308	7.55%	17,869	3.90%	8,095	2.7%
Short/term portion of long/term liabilities to banks and financial institutions	Argentine pesos	0	0	8	0	0	0	64	0
Short term portion of long term Bond	U.F.	1,427	5.32%	1,327	0	0	0	0	0
Short term portion of long term Bond	Dollar	0	0	10,400	8.06%	10,096	8.06%	0	0
Long/term liabilities due within one year	Dollar	28	0	75	0	0	0	245	0
Dividends payable	Chilean pesos	0	0	199	0	0	0	0	0
Accounts payable	Dollar	166	0	0	0	0	0	0	0
Accounts payable	Chilean pesos	9,098	0	6,748	0	0	0	0	0
Accounts payable	Dollar	6,728	0	6,408	0	0	0	0	0
Accounts payable	Argentine pesos	3,197	0	1,987	0	0	0	0	0
Accounts payable	Real	4,672	0	3,203	0	0	0	0	0
Accounts payable	Mexican pesos	7,133	0	2,276	0	0	0	0	0
Accounts payable	New sol	0	0	47	0	0	0	0	0
Accounts payable	Euro	0	0	9	0	0	0	0	0
Accounts payable	Others money	918	0	0	0	0	0	0	0
Notes payable	Argentine pesos	503	0	0	0	0	0	0	0
Sundry creditors	Chilean pesos	62	0	50	0	0	0	0	0
Sundry creditors	Dollar	1,161	0	1,780	0	0	0	0	0
Sundry creditors	New sol	0	0	27	0	0	0	0	0
Notes and accounts payable to related companies	Chilean pesos	0	0	104	0	0	0	0	0
Notes and accounts payable to related companies	Dollar	4,595	0	3,741	0	0	0	0	0
Provisions	Chilean pesos	2,499	0	1,748	0	0	0	0	0
Provisions	Dollar	505	0	0	0	1,068	0	1,107	0
Provisions	Argentine pesos	704	0	589	0	0	0	0	0
Provisions	Real	1,219	0	1,280	0	0	0	0	0
Provisions	Mexican pesos	261	0	464	0	0	0	0	0
Provisions	New sol	0	0	36	0	0	0	0	0
Provisions	Others money	359	0	0	0	0	0	0	0

Sundry debtors	US$	4,549	530
Withholdings	Chilean pesos	713	0	861	0	0	0	0	0
Sundry debtors	ThAr$	1,123	1,296
Withholdings	Dollar	290	0	5	0	0	0	0	0
Sundry debtors	Re	456	1,319
Withholdings	Argentine pesos	774	0	1,030	0	0	0	0	0
Sundry debtors	Mexican pesos	55	45
Withholdings	Real	3,514	0	466	0	0	0	0	0
Sundry debtors	Sol	0	12
Withholdings	Mexican pesos	150	0	171	0	0	0	0	0
Notes and accounts receivable from related companies	ThCh$ not adjustable	3	0
Withholdings	New sol	0	0	3	0	0	0	0	0
Notes and accounts receivable from related companies	US$	7,380	2,298
Withholdings	Others money	17	0	0	0	0	0	0	0
Inventories	Adjustable ThCh$	4,107	5,930
Income tax	Chilean pesos	1,818	0	0	0	362	0	0	0
Inventories	US$	86,860	71,786
Income tax	Argentine pesos	0	0	0	0	1,742	0	0	0
Recoverable taxes	Adjustable ThCh$	107	2,502
Income tax	New sol	278	0	0	0	0	0	0	0
Recoverable taxes	US$	6,538	471
Income received in advance	Chilean pesos	327	0	3	0	0	0	0	0
Recoverable taxes	ThAr$	5,021	6,300
Other short term liabilities	Dollar	8	0	0	0	0	0	0	0
Recoverable taxes	Sol	2	367
Other short term liabilities	Argentine pesos	0	0	9	0	0	0	0	0
Recoverable taxes	Re	565	295
Total current liabilities	U.F.	3,951	0	4,937	0	0	0	2,360	0
Recoverable taxes	Mexican pesos	1,314	1,245
	Dollar	20,259	0	59,787	0	30,552	0	21,069	0
Prepaid expenses	ThCh$ not adjustable	2,646	1,001
	Real	9,405	0	9,424	0	0	0	0	0
Prepaid expenses	US$	667	767
	Argentine pesos	5,178	0	3,623	0	1,742	0	64	0
Prepaid expenses	ThAr$	20	65
	Chilean pesos	14,517	0	9,713	0	365	0	0	0
Prepaid expenses	Sol	39	29
	Mexican pesos	7,544	0	2,911	0	0	0	0	0
Prepaid expenses	Re	894	283
	New sol	278	0	113	0	0	0	0	0
Prepaid expenses	Mexican pesos	8	2
	Euro	0	0	9	0	0	0	0	0
Prepaid expenses	U.F.	793	727
	Others money	1,294	0	0	0	0	0	0	0
Deferred taxes	US$	110	562
Others currents assets	U.F.	0	11,120
Others currents assets	US$	0	29,104
Fixed assets	Adjustable ThCh$	97,037	87,743
Fixed assets	US$	541,767	543,232
Investments in other companies	Adjustable ThCh$	7	6
Investments in other companies	US$	53	4
Goodwill	US$	1,334	1,419
Negative goodwill	US$	(1,754)	(1,854)
Long term receivables	US$	3,983	0
Long term receivables	U.F.	0	502
Long term receivables	ThAr$	134	201
Long term receivables	Re	560	515
Notes and accounts receivables from related companies	US$	597	3,297
Others	ThCh$ not adjustable	512	537
Others	ThAr$	142	879
Others	US$	5,502	989
Others	Mexican pesos	387	789
Others	U.F.	5,085	5,861
Total Assets
	ThCh$ not adjustable	26,479	26,692
	US$	703,909	675,159
	ThAr$	11,676	11,872
	Re	18,049	13,690
	Euro	2	22
	Mexican pesos	18,900	13,536
	Sol	1,519	4,493
	U.F.	7,053	18,210
	Adjustable ThCh$	101,258	96,181

b) Liabilities

			Until 90 days				90 days to 1 year
		12/31/2004		12/31/2003		12/31/2004		12/31/2003
Account	Currency	Amount	Annual Rate	Amount	Annual	Amount	Annual Rate	Amount	Annual Rate
Due to banks and financial institutions short/term	U.F.	0	0	3,667	4.56%	0	0	0	0
Due to banks and financial institutions short/term	ThCh$ not adjustable	0	0	0	0	1.506	3.59%	0	0
Due to banks and financial institutions short/term	US$	1,604	2.68%	9,633	2.29%	0	0	21,818	2.39%
Short/term portion of long/term liabilities to banks and financial institutions	Real	0	0	2,765	5.77%	0	0	0	0
Short/term portion of long/term liabilities to banks and financial institutions	U.F.	0	0	1,380	6.7%	1.414	6.7%	1,214	6.70%
Short/term portion of long/term liabilities to banks and financial institutions	US$	296	0	1,757	2.98%	20.093	3.29%	37,817	6.79%
Short/term portion of long/term liabilities to banks and financial institutions	ThAr$	16	0	31	0	0	0	55	0
Short term portion of long term Bond	U.F.	0	0	0	0	216	0	214	0
Short term portion of long term Bond	US$	0	0	0	0	9.371	8.06%	9,484	8.06%
Long/term liabilities due within one year	US$	22	10.5%	75	10.5%	89	10.50%	237	10.5%
Dividends payable	ThCh$ not adjustable	174	0	206	0	0	0	0	0
Accounts payable	ThCh$ not adjustable	11,983	0	4,824	0	0	0	0	0
Accounts payable	U.F.	0	0	1,774	0	0	0	0	0
Accounts payable	US$	6,905	0	9,718	0	0	0	0	0
Accounts payable	ThAr$	3,187	0	974	0	0	0	0	0
Accounts payable	Re	2,588	0	3,256	0	0	0	0	0
Accounts payable	Euro	12	0	872	0	0	0	0	0
Accounts payable	Others money	66	0	257	0	0	0	0	0
Accounts payable	Sol	153	0	42	0	0	0	0	0
Accounts payable	Mexican pesos	5,029	0	2,013	0	0	0	0	0
Notes payable	ThAr$	557	0	0	0	0	0	0	0
Sundry creditors	ThCh$ not adjustable	73	0	10	0	0	0	0	0
Sundry creditors	US$	1,122	0	1,643	0	0	0	0	0
Sundry creditors	Sol	16	0	32	0	0	0	0	0
Notes and accounts payable to related companies	ThCh$ not adjustable	0	0	894	0	0	0	0	0
Notes and accounts payable to related companies	US$	3,509	0	933	0	0	0	0	0
Provisions	ThCh$ not adjustable	3,290	0	1,971	0	0	0	0	0
Provisions	US$	495	0	0	0	1,068	0	1,068	0
Provisions	ThAr$	751	0	433	0	116	0	0	0
Provisions	Re	1,605	0	831	0	0	0	0	0
Provisions	Sol	47	0	29	0	0	0	0	0
Provisions	Mexican pesos	726	0	279	0	0	0	0	0
Withholdings	ThCh$ not adjustable	703	0	757	0	0	0	0	0
Withholdings	US$	376	0	0	0	147	0	0	0
Withholdings	ThAr$	589	0	752	0	0	0	0	0
Withholdings	Re	542	0	244	0	0	0	0	0
Withholdings	Sol	5	0	3	0	0	0	0	0
Withholdings	Mexican pesos	274	0	85	0	0	0	0	0
Income tax	ThCh$ not adjustable	1,405	0	0	0	0	0	0	0
Income tax	US$	274	0	0	0	0	0	0	0
Income tax	Argentine pesos	0	0	0	0	1,444	0	0	0
Income Tax	Sol	222	0	0	0	0	0	0	0
Pre-paid revenues	ThCh$ Not Adjustable	484	0	53	0	0	0	0	0
Other current liabilities	Argentine Pesos	8	0	11	0	0	0	0	0
Total current liabilities	U.F.	0	0	6,821	0	1,630	0	1,428	0

ThCh$ Not Adjustable	18,112	8,715	0	0
US$	14,603	23,759	32,274	70,424
Re	4,735	7,096	0	0
Argentine pesos	5,108	2,201	1,560	55
Euro	12	872	0	0
Others money	66	257	0	0
Sol	443	106	0	0
Mexican Pesos	6,029	2,377	0	0

Long -Term Liabilities

Present period

The breakdown of all foreign currency accounts is as follows:

		1 to 3 year		3 to 5 year		5 to 10 year		More of 10 year
Account	Currency	Amount	Rate	Amount	Rate	Amount	Rate	Amount	Rate
Due to banks and financial institutions	U.F.	21,~~648~~251	6.70%	0	0	0	0	0	0
Due to banks and financial institutions	US$	54,183	3.25%	16,250	3.32%	3,750	3.9%	0	0
							Libor
Bonds	U.F.	31,067	5.00%	31,067	5.00%	21,766	5.24%	14,398	6.25%
Due to banks and financial institutions	Dollar	55,640	Libor 180+1.41	10,556	Libor 180+1.41	2.638	180+1.41	0	0
Bonds	~~US$~~U.F.	~~18,000~~0	~~8.06%~~0	972,~~000~~841	~~8.06%~~0	0	0	020,606	0
Sundry creditors	ThCh$ not adjustable	26	0	0	0	0	0	0	0
Bonds	Dollar	27,000	0	0	0	0	0	0	0
Provisions	US$	0	0	0	0	0	0	693	0
Sundry creditors	Dollar	25	0	0	0	0	0	0	0
Deferred taxes	US$	0	0	0	0	0	0	5,753	0
Provisions	Dollar	0	0	0	0	0	0	691	0
Other liabilities	ThCh$ not adjustable	0	0	0	0	0	0	1,474	0
Deferred taxes	Dollar	0	0	0	0	0	0	8,275	0
Other liabilities	~~US$~~Dollar	110,~~789~~906	0	05,311	0	02,894	0	0	0
Other liabilities	Pa	0	0	0	0	0	0	1,679	0
Other liabilities	Re	9,071	0	5,120	0	0	0	0	0
Total long-term liabilities
	U.F.	331,~~715~~251	0	3172,~~067~~841	0	~~21,766~~0	0	1420,~~398~~606	0
	US$	73,972	0	25,250	0	3,750	0	6,446	0
	Dollar	93,571	0	15,867	0	5,532	0	8,966	0
	ThCh$ not adjustable	26	0	0	0	0	0	1,474	0
	Pa	0	0	0	0	0	0	1,679	0
	Re	9,071	0	5,120	0	0	0	0	0

49 48

Past period

The breakdown of all foreign currency accounts is as follows:

		1 to 3 year		3 to 5 year		5 to 10 year		More of 10 year
Account	Currency	Amount	Rate	Amount	Rate	Amount	Rate	Amount	Rate
Due to banks and financial institutions	U.F.	43,~~857~~488	6.70%	0	0	0	0	0	0
Due to banks and financial institutions	~~US$~~Dollar	4246,~~778~~060	2.7364%	2621,~~642~~893	2.6772%	0	0	0	0
Due to banks and financial institutions	Pa	8	0	0	0	0	0	0	0
Bonds	U.F.	13,644	5.00%	27,288	5.00%	31,393	5.17%	15,052	6.25%
Bonds	~~U.F.~~Dollar	1418,~~247~~000	58.0006%	5618,~~989~~000	58.0006%	~~4,286~~0	~~6.25%~~0	~~15,717~~0	~~6.25%~~0
Bonds	US$	18,000	8.06%	18,000	8.06%	0	0	0	0
Sundry Creditors	Chilean pesos	16	0	0	0	0	0	0	0
Sundry Creditors	ThCh$ not adjustable	18	0	0	0	0	0	0	0
Sundry creditors	Dollar	28	10.50%	0	0	0	0	0	0
Sundry creditors	US$	109	10.50%	0	0	0	0	0	0
Provisions	Dollar	0	0	0	0	0	0	668	0
Provisions	US$	0	0	0	0	0	0	666	0
Deferred taxes	Chilean pesos	0	0	0	0	0	0	2,587	0
Deferred taxes	~~US$~~Dollar	0	0	0	0	0	0	34,~~632~~818	0
Deferred taxes	PaReal	0	0	0	0	0	0	~~708~~3,966	0
Other liabilities	~~ThCh$~~Chilean ~~not adjustable~~pesos	0	0	0	0	0	0	1,~~392~~343	0
Other liabilities	PaArgentine pesos	0	0	0	0	0	0	1,679	0
Other liabilities	ReReal	48,~~282~~110	0	31,~~179~~043	0	0	0	0	0
Total long-term liabilities
	U.F.	~~19,104~~0	0	~~56,989~~0	0	~~4,286~~0	0	~~15,717~~0	0
	US$	60,887	0	44,642	0	0	0	4,298	0
	Dollar	0	0	0	0	0	0	0	0
	Pa	8	0	0	0	0	0	2,387	0
	Chilean pesos	0	0	0	0	0	0	0	0
	ThCh$ not adjustable	18	0	0	0	0	0	1,392	0
	Real	0	0	0	0	0	0	0	0
	Re	4,282	0	3,179	0	0	0	0	0
	Argentine pesos	0	0	0	0	0	0	0	0

50 49

NOTE 2726 – SANCTIONS

During the period covered by these financial statements, the Superintendencia de Valores y Seguros no has not applied any type of sanction to the Company, nor to its Directors or the Chief Executive Officer of the Company.

NOTE 2827 – SUBSEQUENT EVENTS

~~Between~~ · ~~December~~April, 3112, ~~2004~~2005. ~~and~~ On the ~~emission~~Extraordinary ~~date~~Meeting of ~~this~~Shareholders, ~~financial~~which ~~statements, no~~was ~~significant~~on ~~event~~April, ~~that~~12, ~~affects~~2005, the ~~financial~~following ~~situation~~agreements ofwere ~~the company have~~ taken: ~~place.~~

~~NOTE~~ a) 29The –completion ~~ENVIRONMENTAL~~of the merger by incorporation of Masisa S.A. into Terranova S.A., subject to the fulfillment of the following conditions: i) that the amount to be paid by Masisa S.A., as result of the withdrawal right made by the shareholders dissenting from the merger above mentioned, does not exceed US$ 6,000,000; ii) the approval by the Extraordinary Meeting of Shareholders of Terranova S.A. made on April, 13, 2005, of the merger by incorporation of Masisa S.A. into Terranova S.A., and iii) that the amount to be paid by Terranova S.A., as a result of the withdrawal right made by the shareholders dissenting of the merger above mentioned, in its case, does not exceed US$10,000,000. As a result of the merger, Terranova S.A., as surviving entity, will assume all the assets and liabilities of Masisa S.A. according to the individual audited Financial Statements and other financial statements audited on December, 31, 2004, succeeding it in all its rights and obligations.

b) The share exchange rate in which the shareholders of Masisa S.A. will receive 2.56 new shares of Terranova S.A. for each share of Masisa S.A. they own.

c) As a result of the merger and dissolution of Masisa, the end of the current program of American Depositary Shares (ADS) registered on the New York Stock Exchange (NYSE) and that the valid Masisa ADS will be replaced by new ADS of Terranova registered in the New York Stock Exchange (MYS).

d) According to the article 69 of the Corporations Law, the approval by the Shareholders Meeting of the above mentioned merger, grants the dissenting shareholders the right of retiring of the Corporation. The price to be paid for share is the weighted average price of the stock exchange transactions of the share during the preceding two months from the day of the Shareholders Meeting and will be informed at the appropriate time to the shareholders according to the law.

· April, 12, 2005.-

On Extraordinary Shareholders Meeting of Masisa S.A., made on April, 12, 2005.

a) The payment of an obligatory minimum definitive dividend, with charge to the distributable net profit of the accounting period finished on December, 31, 2004, for a total amount of US$ 12,440,666.47, equivalent to 30% of the distributable net profit of the 2004 accounting period. Therefore, the obligatory minimum dividend will be US$ 0.013398459 for share.

The obligatory minimum dividend will be paid on April, 27, 2005 and the shareholders registered on the Masisa S.A. Shareholders Register on April, 21, 2005 will have the right to it. This dividend will be paid in pesos, according to the “dólar observado” exchange rate published on the Diario Oficial on April, 22, 2005.

b) The payment, subject to the fulfillment of the conditions indicated as follows, of an additional definitive dividend and an incidental dividend for the total amount of US$54,000,000, which is breakdown as follows:

i. an additional definitive dividend, with charge to the distributable net profit of the accounting period finished on December, 31, 2004, for a total amount of US$29,028,221.76, equivalent to 70% of the distributable net profit of the 2004 accounting period. Therefore, the additional definitive dividend will be US$0.03126307 for share, and

ii. an incidental definitive dividend, with charge to the Masisa S.A. undistributed profits to December, 31, 2004, for a total

amount of US$ 24,971,778.24. Therefore, the incidental definitive dividend will be US$ 0.026894326 for share.

c) The payment of such additional definitive dividend and the incidental one will be subject to the fulfillment of the following conditions:

i. the approval by the Masisa S.A. Extraordinary Shareholders Meeting, to be realized on this date, of the merger by incorporation of Masisa S.A. into Terranova S.A.

ii. that the amount paid by Masisa S.A., as result of the retire right made by the dissenting shareholders of the merger above mentioned, in its case, does not exceed US$6,000,000;

iii. the approval by the Terranova S.A. Extraordinary Meeting of Shareholders, to be made on April, 13, 2005, of the merger by incorporation of Masisa S.A. into Terranova S.A., and

iv. that the amount paid by Terranova S.A., as result of the retire right made by the dissenting shareholders of he merger above mentioned, in its case, does not exceed US$10,000,000.

d) In the case of verifying the conditions above mentioned, the additional definitive dividend and the incidental dividend will be paid on May, 27, 2005 and will have the right to them the shareholders registered on the Masisa S.A. Shareholders Register on May, 19, 2005. Such dividends will be paid in pesos, according the “dólar observado” exchange rate published on the Diario Oficial on may, 20, 2005.

Within the period between March, 31, 2005 and the issuance date of the current financial statements, there is no knowledge of other significant facts affecting the financial situation of the company.

NOTE 28 – ENVIRONMENTAL

The company focuses its environmental policies through 2 perspectives,

1) Legal Aspects

~~Concentrate~~ On this scope is included all ~~subjects~~the related towith ~~authorization~~permission requests, authorizations and ~~certifications related~~certificates toregarding the environmental ~~matters~~area, and also the regularization of the considerations that could be pending.

2) Environmental management and Eco-Efficiency

2) Under ~~Environmental~~the concept that each process may be improved through a responsible and adequate environmental management, the company is constantly evaluating and ~~Eco-Efficiency~~developing projects to reduce cost and wastes in its production processes to accomplish the efficient manage of the resources, and finally, the implementation of the Environmental Management System Certification under international standards.

~~Under the concept that each process may be improved through responsible and~~ ~~adequate~~The ~~environmental management, the~~ company ishas ~~constantly~~committed ~~evaluating~~the ~~and developing~~following ~~projects~~investments ~~to reduce cost and wastes~~ in its ~~production~~operating processes related to ~~accomplish~~ the ~~efficient~~environmental ~~manage of the resources~~subject, ~~and~~Current ~~finally,~~Projects ~~the implementation~~as of ~~the~~March,31, ~~Environmental Management System Certification under international standards~~2005.

The company has committed the following investments in its operating processes related to the environmental subject, Current Projects as of December,31, 2004



Projects	Budget	Amount	Amount 2005
	MUS$	MUS$	MUS$

Current	2,282	2,129	127
Completed during 2005	545	516	6
Completed during 2004	2,621	1,493	0

Projects	Budget	Amount	Amount 2004
	THUS$	THUS$	THUS$
Current	2,827	2,512	863
Completed during 2004	1,529	1,493	583
Completed during 2003	2,621	2,413	0

Disbursements by country:

Masisa Chile

Project	Budget	~~Budget~~Amount Invested	Invested 2005	~~Amount Invested~~Status		~~Invested~~	~~Status~~
						2004
	MUS$	MUS$		03/31/2005	Objective
		THUS$		THUS$			12/31/2004	Objective
SCS Implementation and Certification	40	34	0	In progress
SCS Implementation and Certification		40		34		33	In progress
Mud press material washing water	26	24	0	Completed 2004	Water Pollution Reduction
Installation of equipment in chipping installations		29		30		0	Completed 2003	Pollution reduction
	66	58	0
Fluid agitator, Cabrero Plant		17		14		0	Completed 2003	Water pollution reduction
Cleaning of water used in Chip washing process		48		45		0	Completed 2003	Water pollution reduction
Cleaning of water used in pressing process		26		24		2	Completed 2004	Water pollution reduction
Rain water evacuation		9		9		0	Completed 2003	Avoids the overflow of water
Betterment of the formaldehyde extraction		8		6		0	Completed 2003	Reduction of pollution in the working
process								environment
		177		162		35

The implementation and certification of ISO 14.001 of the environmental processes of all the industrial plants. The development and compliance evaluation of SGA with norms ISO 14.001 was done by Det Norske Veritas and accredited by the Dutch organism RVA.

Project	Budget	~~Budget~~Amount Invested	Invested 2005	~~Amount Invested~~Status		~~Invested~~	~~Status~~
						2004
	MUS$	MUS$		03/31/2005	Objective
		THUS$		THUS$			12/31/2004	Objective
ISO 14001 projects, Chiguayante Plant	52	38	0	Completed 2004	Company does not pollute the environment
ISO 14001 projects, Chiguayante Plant		52		38		2	Completed 2004	Company does not pollute the environment
ISO 14001 projects, Mapal Plant	73	71	0	Completed 2004	Company does not pollute the environment
ISO 14001 projects, Mapal Plant		73		71		2	Completed 2004	Company does not pollute the environment
ISO 14001 projects, Ranco plant	73	73	0	Completed 2004	Company does not pollute the environment
ISO 14001 projects, Ranco plant		73		73		18	Completed 2004	Company does not pollute the environment
ISO 14001 projects, Puschmann plant	26	22	0	Completed 2004	Company does not pollute the environment
ISO 14001 projects, Puschmann plant		26		22		22	Completed 2004	Company does not pollute the environment
	224	204	0
		224		204		44

Masisa Argentina

Project	Budget	~~Budget~~Amount Invested	Invested 2005	~~Amount Invested~~Status		~~Invested~~	~~Status~~
						2004
	MUS$	MUS$		03/31/2005	Objective
		THUS$		THUS$			12/31/2004	Objective
Tertiary treatment of industrial affluent of the MDF line	30	30	0	Completed 2004	Recovery all the effluents treated in process
Construction of warehouse in the area of loading of sawdust		24		25		0	Completed 2003	Avoids the dispersion of sawdust during the loading / unloading of trucks.
Implementation of ISO 14.001 norms at Concordia Plant	92	91	0	Completed 2004	Company does not pollute the environment
Rain water drainage at Rucci street		38		38		0	Completed 2003	Avoids the overflow of water
Production facilities ventilation system	95	95	0	Completed 2004	Improve work space
Expansion of treatment of affluent liquids		90		93		0	Completed 2003	Reutilization of affluent liquids
Thermal oil networks unification	20	20	0	Completed 2004	Minimize fossil fuel consumption
								Safety of the plant.
Dust conversion of Erratic boiler	140	60	60	Valid	Avoid contamination by pollution
Change in the energy source receptor plant		8		7		0	Completed 2003	Avoids the formation of residuals that
Trucks entry change	140	128	0	Completed 2005	Avoid contamination by pollution
								create dust.
Sieving of filters discharge	25	23	0	Completed 2005	Avoid wood dust dispersion
Closing of the walls of the drying areas of PB		6		6		0	Completed 2003	Contain the dispersion of sawdust
Slope Chipper	150	155	12	Valid	Make use of industrial wastes
Plantation of “green curtains”		8		5		0	Completed 2003	Protect from wind and noise
	692	602	72
Capacity increase of affluent liquids plant of		90		93		0	Completed 2003	Improvement of affluent liquids quality
MDF lines
Rain water drainage		97		105		0	Completed 2003	Better drainage at Rucci street
Industrial affluent treatment from MDF plants		30		30		30	Completed 2004	Reutilization of all the treated afflatus
								in the process
Implementation of ISO 14.001 norms at		92		91		4	Completed 2004	Company does not pollute the
Concordia Plant								environment
Production facilities ventilation		95		95		95	Completed 2004	Improves working environment
Thermal oil network unification		20		20		20	Completed 2004	Minimizes fossil fuel consumption
Erratic kettle conversion to dust		140		128		128	Current	Avoids contamination by pollution
Truck entry change		140		-		-	Current	Avoids contamination by pollution
Filter dock sift		25		23		23	Current	Avoids dust dispersion
Chipper		150		143		143	Current	Reuses industrial waste
		1,053		902		443

Masisa do Brasil

Project	Budget	~~Budget~~Amount Invested	Invested 2005	~~Amount Invested~~Status		~~Invested~~	~~Status~~
						2004
	MUS$	MUS$		03/31/2005	Objective
		THUS$		THUS$			12/31/2004	Objective
SGA ISO 14.001 Implementation and Certification	147	138	0	Completed 2004	Certification ISO 14.001. Company does not pollute the environment.
SGA ISO 14.001 Implementation and Certification		147		138		14	Completed 2003	Certification ISO 14.001. Company
Sewage treatment network expansion	44	43	0	Completed 2005
								does not pollute the environment.
Store improvement	4	4	0	In progress	Various safety and environmental betterments
Expansion in water treatment network		44		43		43
Ponta Grossa Plant betterments	155	105	0	In progress	Various safety and health betterments
Warehouse betterments		4		4		4	In progress	Various safety and environmental
SGI – ISO 14001 and OSAS 18001 betterments	235	227	5	Completed 2005	Company does not pollute the environment
								betterments
Use of wood residuals in place of natural gas	1,075	1,025	0	In progress	Use of renewable energy instead of non renewable energy.
Ponta Grossa Plant betterments		155		105		105	In progress	Various safety and health betterments
	1,660	1,542	5
SGI – ISO 14001 and OSAS 18001 betterments		235		222		70	In progress	Company does not pollute the
								environment
Use of wood residuals in place of natural gas		1,075		1,025		0	In progress	Use of renewable energy instead of non
								renewable energy.
		1,660		1,537		236

Masisa México

Project	Budget	Amount Invested	Invested 2005	Status
			2004
	MUS$	MUS$		03/31/2005	Objective
	THUS$	THUS$		12/31/2004	Objective
Isolation of thermal oils ducts in presses L-1 and L-2	6	10	0	Completed 2003	Reduce fire hazard risk
Change of sifts	738	729	0	Completed 2003	Pollution reduction
L-1 polish capabilities	489	461	0	Completed 2003	Pollution reduction
Optimum classification of raw material and transportation	916	737	0	Completed 2003	Pollution reduction
modification.
Isolation of thermal oils ducts in presses L-1 and L-2	6	10	0	Completed 2004	Reduce fire hazard risk
Change of low cyclone chains L-1 and L-2	15	12	120	Completed 2004	Pollution reduction
Change of sifted feeder L-1	10	9	90	Completed 2004	Pollution reduction
Change in ducts and tops with leaks of L-1 and L-2	12	11	110	Completed 2004	Pollution reduction
shavings
L-2 dryer – L-1 dry silo connection	767	766	~~284~~0	Completed 2004	Reduction of diesel consumption ~~and~~
					pollution reduction
Reduction of formaldehyde emissions of presses L-1 and	70	71	470	Completed 2004	Reduction of emissions in working area
L-2					~~area~~
Shavings transportation to L-1 dryer	15	12	12	Completed 2004	Pollution reduction
L-1 dust burning control	10	12	0	Completed 2004
Sawdust burning L-2 control	10	12	12	In progress	Reduction in environmental pollution
Shavings transportation to L-1 dryer	15	12	0	Completed 2005	Pollution reduction
					due to gas emissions
Implementation and Certification of SGA and OHSAS	75	75	0	Completed 2005	Company does not pollute the environment
Implementation and Certification of SGA and OHSAS	75	75	75	In progress	Company does not pollute the
18.000 security systems.
18.000 security systems.					environment
Installation of natural light in roof	16	8	1	Completed 2005	Reduce the consumption of energy
Installation of natural light in roof	16	7	7	In progress	Reduce the consumption of energy
	996	986	1
	3,145	2,922	469

Forestal Argentina

Project	Budget	Amount Invested	Invested 2005	Status
			2004
	MUS$	MUS$		03/31/2005	Objective
	THUS$	THUS$		12/31/2004	Objective
SGA implementation	80	101	22	In progress	ISO 14.001 certification. Company does not pollute the environment
SGA implementation	80	79	79	In progress	ISO 14.001 certification
	80	101	22
	80	79	79		Eliminates pollution

Forestal Tornagaleones

Project	Budget	Amount Invested	Invested 2004	Status
			2004
	MUS$	MUS$		03/31/2005	Objective
	THUS$	THUS$		12/31/2004	Objective
SGA ISO 14.001Implementation and Certification and OHSAS 19.00	638	645	33	In progress	Certification ISO 14.001
SGA ISO 14.001Implementation and Certification				In progress	Certification ISO 14.001
	638	645	33
OHSAS 19.00	638	612	141
	638	612	141

55 53

REASONED ANALYSIS

A. COMPARATIVE ANALYSIS OF THE MAIN OBSERVED TRENDS

Liquidity ratios	12Mar-31-~~2004~~05	12Mar-31-~~2003~~04	Dec-31-04
Current liquidity	2.7657	1.7486	2.76
Acid Ratio	0.2736	0.1606	0.27

The change on the liquidity ratios are mainly explained by the ~~payment~~reduction of ~~short~~ ~~term~~financing ~~financial~~ liabilities with ~~the~~ resources ~~obtained~~generated ~~of the bonds placement in the local market made~~ on ~~December, 2003 and~~ the ~~cash generated from operations~~operation.

Indebtedness Indexes	12Mar-31-~~2004~~05	12Mar-31-~~2003~~04	Dec-31-04
Total debt/Equity capital	62.4010%	7572.4761%	62.40%
Short term Debt/Total Debt	2730.0831%	3634.2623%	27.08%
Long term Debt/Total Debt	7269.9269%	6365.6477%	72.92%
Financial Expenses Coverage	3.~~91%~~85	13.~~84%~~32	3.91

The Total Debt index toon Equity Capital shows a reduction with regard to ~~December~~ March, ~~2003~~2004, mainly due to the reduction ofon the financial debt and the increase of the equity capital value on the concepts Other Reserves and Undistributed Profits. The ratio of the short term debt was increased due to the payment of the maturities of the financing debt with resources generated in the operation. The improvement of the financial expenses coverage index regarding the previous year is mainly explained by the increase of the consolidated operational result, which is analyzed on the following paragraphs.

The ratio of the short term debt was reduced due to the bonds placement made by Masisa S.A. during the last month of the previous year. With the results obtained from such placement, at the end of the year 2003 and the beginning of 2004, short and mid term debts were prepaid. The improvement of the financial expenses coverage index regarding the previous year is mainly explained by the increase of the consolidated operational result, which is analyzed in the following paragraphs.


Activity Indexes	Mar-31-05	Mar-31-04	Dec-31-04

Total of Assets	893,570	857,013	888,845
- Investments	9,520	5,722	23,947
- Transfers	1,093	-	1,432

Inventory Turnover	0.80	0.86	3.42
Inventory Permanence	112.50	104.39	105.16

Activity Indexes	12-31-2004	12-31-2003
Total of Assets	888,845	859,855
• Investments	23,947	25,977
• Transfers	1,432	91
Inventory Turnover	3,42	2,91
Days Inventory	105,16	123,85

The total assets of the company during 2004, were mainly increased by the bigger investment on working capital required to an operation with bigger volumes, and the investment on fixed assets on improvement projects and increase on operating capacity.
The inventory indexes show an increase on the turnover, due to the sales increment and to a better management on the distribution chain.


Results Indexes	Mar-31-05	Mar-31-04	Dec-31-04

Exploit incomes	104,580	87,861	397,312
- Domestic Market	76,412	62,815	285,027
- Foreign Market	28,168	25,046	112,285
Exploit costs	(76,392)	(65,460)	(277,872)
- Domestic Market	(54,648)	(47,250)	(205,515)
- Foreign Market	(21,744)	(18,210)	(72,357)
Operational Results	15,673	11,634	71,089
Financial Expenses	(3,927)	(4,248)	(16,892)
Non-operational Results	(4,467)	(1,762)	(21,858)
R.A.I.I.D.A.I.E.	22,405	20,905	93,913
Profits after Taxes	7,361	8,280	41,569

~~The total assets of the company during 2004, were mainly increased by higher~~ ~~investment on working capital required to an operation with bigger volumes, and the investment on fixed assets on improvement projects and increase on operating capacity.~~54

The ~~inventory~~operational ~~indexes~~result ~~show~~of anthe ~~increase~~company onhas been increased compared to the ~~turnover,~~previous year. This increase is mainly due to the ~~sales~~bigger volumes placed and to athe ~~better~~prices ~~management~~recovery on the main markets of the ~~distribution~~company ~~chain.~~and to the increment on the export to USA of products with a bigger added value:

Results Indexes	12-31-2004	12-31-2003
Consolidated net Sales	397,312	281,826
Domestic Market	285,027	214,259
Foreign Market	112,285	67,567
Cost of Goods Sold	(277,872)	(215,537)
Domestic Market	(205,515)	(160,937)
Foreign Market	(72,357)	(54,600)
Operational Results	71,089	25,326
Financial Expenses	(16,892)	(14,875)
Non-operational Results	(21,858)	(12,767)
Earnings before minority interest, goodwill	93,913	53,490
amortization, financial expenses, income tax and
depreciation.
Profits after Taxes	41,569	9,613

- Regarding the first quarter of the year 2204, the sales in Mexico increased 39.7%, the particle, MDF and OSB boards increased 17.1% and the average sale prices, in dollars, have remained steady.
- Regarding the first quarter of the year 2004, the sales in Brazil increased 15.9%, the volumes of MDF and OSB boards reduced 16.5%, and the average sale prices, in dollars, increased 33.7% .
- Regarding the first quarter of the year 2004, the sales in Argentina increased 44%, the volumes of particle and MDF boards increased 22.6%, and the average sale process, in dollars, increased 16.2% .
- Regarding the first quarter of the year 2004, the sales in Chile have increased 8%, the volumes of particle and MDF boards reduced 14%, and the average sales prices, in dollars increased 24.4% .
- Regarding the first quarter of the year 2004, the sales in USA have increased 27.5%, the volumes of MDF and OSB moldings commercialized increased 76.9% and 33.2% respectively. The prices of the moldings increased 21.3% and the prices of OSB reduced 30.2%

~~The~~ It ~~operational~~is ~~result~~important ofto mention that the ~~company~~export ~~has~~costs ~~been~~include ~~increased~~the ~~compared~~Depletion to(Consumo ~~the previous~~de ~~year.~~Materia ~~This~~Prima ~~increase~~Propia is(CMPP)). ~~mainly~~The ~~due~~Depletion corresponds to the ~~recovery~~historical oncost of the ~~markets observed~~forest ~~from~~that is being harvested. Under the ~~third~~Chilean ~~quarter~~accounting ofregulations, this cost reduces the ~~year~~operational ~~2003~~result; however, ~~after~~it adoes ~~low~~not ~~performance~~represent ~~during the~~a ~~first~~cash ~~half~~expense offor the ~~same year~~company.

The ~~lower~~depletion ~~operational~~for ~~result on~~ the ~~previous~~analyzed ~~year~~periods ~~was~~is ~~mainly~~detailed ~~produced~~as by two reasons. The first one was a temporary reduction on the production levels of MDF in Chile, due to the incorporation of new technology on the plants, which meant a reduction on the sales levels of this product and an increase on the production unitary costs. The second reason was that, due to the economic crisis in Argentina, the company has shifted the sales volumes previously destined to the Argentinean market, to export markets, which, in general, represent lower margins due to the high transport costs. On the other hand, some Argentinean competitors geared part of their sales of boards to the Chilean market, which resulted on a reduction of the price of these boards in Chile. From the third quarter of 2003, the recovery of the Argentinean local market allowed to improve the margins and reorient volume to the internal market, releasing the pressure over the Chilean market.follows:


Depletion	Mar-31-05	Mar-31-04	Dec-31-04

	MUS$	MUS$	MUS$

Chile	430	388	1,612
Argentina	460	464	2,116
Brazil	338	292	787
Total	1,228	1,144	4,515

The ~~best~~ non-operational result ~~obtained~~shows ~~during~~an ~~the~~important ~~year~~reduction ~~2004~~regarding ~~is mainly due to~~ the ~~positive~~previous ~~cycle of prices kept by the OSB on the international markets~~year, ~~especially~~ onwhich ~~the North-American market. In spite of the price of OSB reached its higher level in April, it~~ is ~~still~~mainly ~~kept~~due atto ~~levels~~an ~~comparatively~~exchange rate ~~high~~differential ~~in relation~~associated to the ~~previous~~debt ~~years. This allows that the OSB plant in Brazil directly exports a significant part~~ of ~~its production, thus improving~~ the ~~business~~ ~~margins.~~company ~~The growth of the internal market of the MDF~~ in ~~Brazil~~U.F., ~~the sustained recovery of the Argentinean local market, with its resulting recovery of local margins~~ and ~~reduction of~~ the ~~imports~~change ~~pressure over the Chilean market, together with the growth~~ of ~~the Mexican market, and the increase of the sales of products with~~ a ~~bigger added value such as MDF moldings, are the positive~~passive ~~factors~~position ~~that~~in ~~explain~~non-dollar ~~the~~currency ~~results of the period. On the other hand, some difficulties on the export towards overseas markets due~~ to ~~the~~an ~~lack~~active ofposition ~~ships have~~in ~~restrained~~non-dollar acurrency ~~better~~into ~~performance of~~ the ~~company~~compared periods.

It is important to mention that the costs of goods sold depletion. Depletion corresponds to the historical cost of the forest that is being harvested. Under the Chilean accounting regulations, this cost reduces the operational result; however, it does not represent a cash outflow for the company.


Profitability Index	Mar-31-05	Mar-31-04	Dec-31-04

Equity capital Profitability	1.47%	1.83%	9.12%
Asset Profitability	0.83%	0.96%	4.74%
Operational Assets Return	1.79%	1.38%	8.24%
Profit per share	0.01	0.01	0.04
Dividends Return	0.65%	2.49%	0.63%

The ~~depletion~~profitability ~~for~~indexes, together, show the ~~analyzed~~effect ~~periods~~of ~~are~~the ~~detailed~~increment ~~below:~~of the operational result regarding the same period of the previous year, increment mainly explained by the improvement on the operational result explained in the previous paragraph.

Depletion	12-31-2004	12-31-2003
	THUS$	THUS$
Chile	1,612	1,643
Argentina	2,116	1,094
Brazil	787	1,061
Total	4,515	3,798

The non-operational result shows an important reduction regarding the previous year, which is mainly explained by the bigger financial expense and exchange rate differential associated to the bonds in U.F., at fixed rate, lower financial incomes due to the reduction of financial investments and bigger provisions.

Profitability Index	12-31-2004	12-31-2003
Equity capital Profitability	9.12%	2.19%
Asset Profitability	4.74%	1.16%
Operational Assets Return	8.24%	3.15%
Profit per share	0.04%	0.01%
Dividends Return	0.63%	2.27%

B. DESCRIPTION AND ANALYSIS OF THE CASH VARIATIONS AND EQUIVALENT CASH

Main flows of the period	12-31-2004	12-31-2003
MAIN FLOWS OF THE PERIOD	Mar-31-05	Mar-31-04	Dec-31-04
	THUS$	THUS$
OBTAINED RESOURCES:	138,370	104,454	554,613
OBTAINED RESOURCES:	554,613	520,712
Collection Debtors by Sales	471,920	328,951
Financial Incomes	2,151	887
Dividends and other distributions received
Other Incomes Received	10,867	16,857
Share placement	0	0
Loans obtainment	39,374	81,269
Bonds with the public	0	85,707
Obtainment of other loans of related	0	5,848
companies
Other financing sources	2	1,102
Fixed Asset Sales	1,432	91
Other Investments Sales	0	0
Collection of other loans to related		0
companies	131
Other Incomes of investment	28,736	0
APPLIED RESOURCES:	551,828	504,49
Providers Payment	387,899	297,497
Interest Paid	14,923	9,817

59 55

Income Tax Paid	5,136	8,135
Collection Debtors by Sales	132,305	96,706	471,920
Other expenses paid	2,977	2,261
Financial Incomes	355	2,101	2,151
VAT Paid	13,518	11,270
Dividends and other distributions received	-	-	-
Dividends payment	3,825	4,382
Other Incomes Received	4,617	3,935	10,867
Loans payment	90,197	114,026
Share issuance	-	-	-
Payment of Bonds with the public	9,000	25,000
Loans obtainment	-	1,710	39,374
Payment of expenses for issue and	0	1,883
Bonds with the public	-	-	-
placement of bonds with the public
Obtainment of other loans of related companies	-	-	-
Fixed Assets Purchase	21,517	24,461
Other financing sources	-	2	2
Capitalized interests	2,376	1,516
Fixed Asset Sales	1,093	-	1,432
Other loans to related companies (minus)	406	4,401
Other Investments Sales	-	-	-
Increase (Reduction) of Funds	2,785	16,063
Collection of other loans to related companies	-	-	131
Other Incomes of investment	-	-	28,736
APPLIED RESOURCES	126,582	117,713	551,828
Providers Payment	107,930	90,079	387,899
Interest Paid	1,116	2,014	14,923
Income Tax Paid	1,129	1,020	5,136
Other expenses paid	800	383	2,977
VAT Paid	2,974	2,353	13,518
Dividends payment	-	-	3,825
Loans payment	3,113	16,142	90,197
Payment of Bonds with the public	-	-	9,000
Payment of expenses for issue and placement of bonds with the public	-	-	-
Fixed Assets Purchase	9,094	4,992	21,571
Capitalized interests	426	730	2,376
Other loans to related companies (minus)	-	-	406
Increase (Reduction) of Funds	11,788	(13,259)	2,785

Observing the flows, it could be noticed an important increase on the Collection ofby Sales, which is mainly explained by the increase of the sales in Chile, Brazil, Mexico and Argentina, compared with the same period of the previous year. In its turn, we can notice the increase on the providers payment due to the bigger purchase volumes ~~commercialized.~~required ~~The~~for ~~other~~the growing activity. Other incomes received mainly correspond to returns of ~~exports~~export ~~VAT.~~Value Added Taxes. The ~~loan~~smaller ~~obtainment~~debt ~~corresponds~~payments toduring the ~~decision~~ first quarter of ~~restructuring~~the year 2005 are due to the reform of the debt ~~from~~at the ~~short~~end ~~term~~of tothe year 2003. The fresh resources were available for reducing part of the ~~long~~short term debts.

C. ACCOUNTING AND ECONOMIC VALUES OF ASSETS AND LIABILITIES

The main assets of the company are related to its productive plants located in Chile, Argentina, Brazil and Mexico, which are valued ~~appreciated~~ according to accounting principles generally accepted. The studies usually made by the company to analyze the economic value of its productive plants show that such values at least cover the respective book values.

D. ANALYSIS OF THE MOST IMPORTANT VARIATIONS OF THE PERIOD

The company makes its business in different markets, mainly focused in Chile, Argentina, Brazil, Mexico and ~~Mexico~~USA. Due to this, the sales and financial performance of the company are exposed to the characteristic conditions ~~characteristic~~ of each ~~market~~of these markets. The following table explains the distribution of the consolidated sales, grouped by target market.

Sales Distribution 60according to the Target Market

	Sales Distribution according to the Target Market
	12-31-2004	12-31-2003
Chile	24.1%	27.2%
Argentina	10.9%	10.2%
Brazil	22.3%	26.3%
Mexico	14.3%	13.4%
USA	14.1%	4.8%
Others	14.3%	18.1%
Total	100.0%	100.0%


Mar-31-05	Mar-31-04	Dec-31-04

~~Comparing the distribution of sales of the analyzed periods, in the current~~ period we observe an important increase of the USA as a destination market, which is explained by the bigger sale of OSB and MDF moldings towards that country. This increase and redistribution of volume towards the other markets, reduces the participation of the Chilean and Brazilian markets in the total of Masisa. Argentina and Mexico keep their participation due to the recovery shown on the local economies, which allows for an increase in the volumes commercialized in such markets.56

During the last years, Masisa S.A. has increased the diversification of its market risks through the expansion of its productive and commercial operations to other countries. That is the reason of having plants in Chile, Argentina, Brazil and Mexico. The company also has its own commercial operations in Peru and Ecuador and exports to several countries in America, Asia and Europe. In this way, the company reduces the exposition to the risk of a particular market.


Chile	23%	26%	24%
Argentina	11%	9%	11%
Brazil	21%	22%	22%
Mexico	18%	15%	14%
EEUU	11%	11%	14%
Others	15%	17%	14%
Total	100%	100%	100%

~~The~~ Comparing ~~company also faces in its markets~~ the ~~risk~~distribution of ansales ~~eventual enhancement~~ of ~~the~~ ~~competitors or~~ the ~~appearance~~analyzed ofperiods, ~~new actors~~ in the ~~market~~current ofperiod ~~boards.~~it ~~Masisa S.A.~~could ~~considers~~be itnoticed ~~has~~an ~~solid~~important ~~positions~~increase on ~~each~~the ~~market~~Argentina ~~where~~and itMexico ~~directly participates~~participation, which ~~allows~~is ~~keeping~~explained ~~profitable~~by ~~and growing operations. However,~~ the ~~company~~higher ~~could~~dynamism ~~not assure that these conditions would not change in the future with the entrance~~ of ~~new~~those ~~participants~~economies orand the ~~enhancement of the~~commercial ~~competitors~~management, inwhich ~~the~~allows ~~markets where it participates. In order~~ to ~~face~~increase ~~these risks,~~ the ~~company~~volumes ~~focus~~commercialized ~~its efforts~~ in ~~actions~~such ~~tending to keep its leadership in costs, keep a strong distribution chain, constantly improve its products offer and obtain brand recognition, among others~~markets.

~~The~~ During ~~company~~the ~~has~~last ~~exposure~~years, onMasisa ~~its~~S.A. ~~assets~~has ~~and~~been ~~liabilities,~~increasing to the ~~variations~~diversification of ~~the~~ ~~value~~its ofmarket ~~foreign~~risks ~~currency~~through orthe ~~currencies~~expansion ~~different~~of ~~from~~its ~~the~~productive ~~functional currency~~and ~~–currency~~commercial inoperations ~~which~~to isother ~~made~~countries. ~~the~~That ~~accounting~~is ~~(dollars).~~the ~~The~~reason ~~existence~~ of ~~assets~~ ~~and~~having ~~liabilities~~plants in noChile, ~~dollar~~Argentina, ~~currency~~Brazil isand Mexico. ~~mainly~~The ~~due~~company toalso ~~the~~has ~~operations~~its ~~of the~~own ~~company~~commercial operations in ~~the~~Peru ~~local~~and ~~markets,~~Ecuador toand ~~the~~exports ~~activities~~to ofseveral ~~domestic~~countries ~~sales~~in America, ~~to activities~~Asia ofand ~~investment~~Europe. onIn ~~assets~~this ~~purchased~~way, in the ~~local~~company ~~market~~avoids ~~and~~the exposition to the ~~obtainment~~ risk of ~~internal~~a ~~financing.~~particular market.

61The company also faces in its markets the risk of an eventual enhancement of the competitors or the appearance of new actors in the market of boards. Masisa S.A. considers it has solid positions on each market where it directly participates, which allows to keep profitable and growing operations. However, the company could not assure that these conditions does not change in the future with the entrance of new participants or the enhancement of the competitors in the markets where it participates. In order to face these risks, the company focus its efforts in actions tending to keep its leadership in costs, keep a strong distribution chain, constantly improve its products offer and obtain brand recognition, among others.

The company has exposure, on its assets and liabilities, to the variations of the value of foreign currency or currencies different from the functional currency –currency in which is made the accounting (dollars). The existence of assets and liabilities in no dollar currency is mainly due to the operations of the company in the local markets, to the activities of domestic sales, to activities of investment on assets purchased in the local market and to the obtainment of internal financing. The balances in ~~non-~~no dollar currency and/or denominated in a currency different from the functional currency –currency in which is made the accounting- on the analyzed periods were the following:

	Summary of assets and liabilities in non-dollar currency
	(Expressed in thousands of American dollars)
	12-31-2004	12-31-2003
Assets	184,936	184,696
Liabilities	156,010	136,582
Active (passive) position	28,926	48,114

Summary of assets and liabilities in no dollar currency
(express in thousands of American dollars)

Based on market conditions, the management of the company establishes policies to obtain credits, invest on deposits and marketable securities with repurchase agreement and the use of derived instruments. Depending on the amounts, the Board of Directors also approve these transactions before their execution. The new long term financing to finance new investments or refinance existing liabilities, should be approved by the Board of Directors of the company. In the countries where Masisa S.A. has operations, the local management could obtain new short term credits for its needs of working capital in the normal operation of the business.


	Mar-31-05	Mar-31-04	Dec-31-04

Assets	194,041	169,085	184,936
Liabilities	185,832	216,322	156,010
Active (passive) position	8,209	(47,237)	28,926

E. RISK ANALYSIS

~~Risk Factors Analysis:~~ 57

Risk Factors Analysis

During the normal course of its business, the company faces different risk factors, of market, financing and operational, among others.

Financing and exchange rate risk

Financing and exchange rate risk:

The management of the company also establishes policies to manage the financial risk through the use of derived instruments such as swaps, forwards, options or futures, in order to cover the exchange rate and the interest rates fluctuation risks.

The company does not use derived instruments for speculative purposes.

Operational risk

~~Operational~~ In the normal course of its business, Masisa S.A. faces risks of raw material supplying, specially chemical resins and wood, which are most relevant elements for its production processes. In order to minimize this risk:, the company has long-term agreements with providers of chemical resins. It is also main stockholder of Forestal Tornagaleones S.A., which has plantations in Chile and Argentina. Additionally, it keeps a policy of spread its supply of wood wastes, reducing the dependence of individual providers.

In As part of the normal course of its business, ~~Masisa~~the ~~S.A.~~company ~~faces~~could face risks of ~~raw~~damages ~~material provision~~on its plants, ~~specially~~risks ~~chemical~~of ~~resins~~losses ~~and~~on ~~wood~~its warehouses, ~~which~~third ~~are~~parties ~~fundamental~~damages, ~~elements for~~legal ~~the~~contingencies, ~~production~~commercial ofrisks ~~its~~and ~~products~~others. InThe ~~order~~management toof ~~minimize this risk,~~ the company try to ~~has~~identify ~~long-term~~these ~~agreements~~risks ~~with~~if ~~providers~~possible ofin ~~chemical~~order ~~resins.~~to Itavoid istheir ~~also~~occurrence, ~~main stockholder~~minimize ofthe ~~Forestal~~adverse ~~Tornagaleones~~potential ~~S.A.,~~effects ~~which~~and/or ~~has~~cover through insurance.

62 58

~~plantations in Chile and Argentina. Additionally, it keeps a policy of spread~~ ~~its~~OUTSTANDING ~~supply of wood wastes, reducing the dependence of individual providers.~~ FACTS

As · ~~part~~March, of24, ~~the~~2005. a) ~~normal~~Dated ~~course~~March, of24, ~~its business~~2005, the ~~company~~U.S. ~~could~~Securities ~~face~~and ~~risks~~Exchange Commission, regulatory organization of ~~damages~~ onthe ~~its~~U.S ~~plants,~~stock ~~risks~~exchanges of("SEC"), ~~losses~~approved onthe ~~its~~registration ~~warehouses,~~of ~~third~~Terranova ~~parties~~S.A. ~~damages~~("Terranova"), ~~legal~~ ~~contingencies,~~corporation ~~commercial~~registered ~~risks~~in ~~and~~the Securities ~~others.~~Record ~~The~~under ~~management~~the ofNº ~~the~~825 ~~company try~~and toparent ~~identify~~company ~~these~~of ~~risks~~Masisa, inas ~~order~~likewise, toof ~~avoid~~American ifDepositary ~~possible~~Receipts ~~their~~("ADRs") ~~occurrence, minimize~~and the ~~adverse~~shares ~~potential~~of ~~effects~~Terranova ~~and/or~~represented ~~cover~~by ~~through~~the ~~insurance~~ADRS.

63b) Such registration is made in the course of the proposal to the merger by incorporation of Masisa into Terranova (the “Merger”), as long as Masisa has a valid ADRs program. The Terranova ADRs will be completely destined to the current ADRs holders of Masisa if the Merger is approved, to the effects of making the correspondent share interchange.

~~Important~~ c) ~~Events~~Considered all the above mentioned and according to the indicated by essential fact on August, 26 2004, the Board of Directors of Masisa gathered on extraordinary meeting made on March, 25, 2005, agreed to convoke to an Extraordinary Meeting the shareholders of Masisa on April, 12, 2005, at 12:00 hours, on the offices located in José Manuel Balmaceda N0 8050, Valdivia, in order to such meeting discuss about the Merger. Likewise, the Board of Directors agreed to convoke and Ordinary Meeting of Shareholders, to be made on the same date and place above mentioned, at 10:00 hours.

d) The ~~following~~sending isto athat ~~summary~~Superintendencia of(Supervisor), to the ~~most~~Stock ~~important~~Exchange ~~facts~~and ~~communicated~~ to the ~~Superintendence~~ ofshareholders ~~securities~~the ~~and~~convoking ~~Insurance~~letters inindicating ~~Chile~~the specific subjects to be discussed on such meetings, ~~New~~was ~~York~~made ~~Stock~~on ~~Exchange~~March, 28, 2005, the same date when the first ~~(NYSE)~~notice ~~and~~of ~~Securities~~ordinary and ~~Exchange~~extraordinary ~~Commission~~meeting ~~(SEC)~~will inbe ~~United~~published ~~States~~on ~~during~~ the ~~year~~ ~~2004~~Diario Austral.

· April, 1, 2005.- On the meeting dates March, 3130, ~~2004~~2005, the Board of Directors agreed:

~~The~~ a) ~~Superintendence~~Submit offor ~~Securities~~the ~~and~~approval ~~Insurance~~of ~~and~~ the ~~Stock~~Ordinary ~~Exchange~~Meeting of ~~Chile~~ ~~have~~Shareholders ~~been~~of ~~informed~~the ~~that~~Corporation, in the ~~meeting~~payment of ~~March~~an ~~31,~~obligatory ~~2004~~minimum ~~the~~definitive ~~Directory~~dividend, ~~of the~~with ~~company~~charge ~~agreed~~ to ~~celebrate~~ the ~~general~~distributable ~~ordinary~~net ~~assembly~~profit of the ~~shareholders~~ ofaccounting ~~Masisa~~period ~~S.A.~~finished on ~~April 2004~~December,21 ~~at 12:00 hours in the offices of the company in José Manuel Balmaceda Nº 8050~~31, ~~Valdivia~~2004.

~~According~~ b) The total amount of the dividend proposed to be distributed is the ~~law~~amount of US$12,440,666.47, equivalent to 30% of the ~~general~~distributable ~~assembly~~net profit of the ~~shareholders~~2004 ~~has~~accounting toperiod, ~~discuss~~ that achieved the ~~following~~amount ~~topics:~~of US$ 41,468,888.23. Therefore, the total dividend for share will be US$ 0.013398459.

1. c) ~~Annual~~It ~~Report~~was agreed to propose to the Meeting that the dividend will be paid on April, ~~Balance~~27, ~~Financial~~2005m ~~Status~~therefore, ~~and~~if ~~Reports~~it ofis ~~the~~approved ~~External Auditors~~such asdividend ofby ~~December~~such 31Meeting, ~~2003~~the shareholders registered on the Masisa S.A. Shareholders Register on April, 21, 2005 will have right to them.

2. d) ~~Renewal~~Likewise, ~~and~~it ~~reelection~~will ofbe proposed that the ~~members~~dividend ofbe paid on Chilean pesos, according to the ~~directory.~~“dólar observado” exchange rate published on the Diario Oficial on April, 22, 2005.

3. e) ~~Fixing~~The notice in virtue of ~~remuneration~~which ~~for~~will be communicated to the ~~board~~shareholders the agreement taken by the meeting regarding this dividend and its payment conditions, will be published on the Diario Austral of ~~directors~~Valdivia at the appropriate time, without detriment to it will be also informed as essential fact.

~~4. Remuneration and budget for expenses of the committee of directors.~~ 59

5. Designation of the external auditors and risk classification agencies for the commercial year 2004.

6. Distribution of net income during the commercial year 2003, exposition of the dividend policy and the shelter measures and the procedure to be used for the respective payments.

7. Inform about the agreements made by the Board of Directors with reference to Article 44, Law Nº 18.046 about corporations.

8. Other topics of company interest which are not under competence of extraordinary assemblies.

The publications for and the citations of the shareholders will be made within the legal and regulatory terms. The Superintendence mentioned above will be informed timely about all these matters.

22nd of April 2004

The Superintendence of Securities and Insurance has been informed that the general ordinary assembly of shareholders of April 21, 2004 agreed upon the following issues:

1. Mr. Julio Moura, Gonzalo Zegers Ruiz-Tagle, Patrick Nielson, Jorge Carey Tagle, Ronald Degen, Isidoro Palma and

Miguel Ignacio Guerrero Gutiérrez have been appointed directors of the company for the next three years.

2. Distribute the final dividends of US$0.004141098 per share, to be paid in pesos according to the observed exchange rate ("dólar observado") to be published in the “Diario Oficial” (Chile’s official daily legal publication) legal of May 7, 2004, which will be paid from May 12, 2004 onwards.

3. Furthermore it has been agreed as policy for future dividends to distribute not less than 30 percent and not more than 50 percent of the liquid utilities of the financial year.

4. Finally PricewaterhouseCoopers have been named as external auditors for the financial year 2004.

August 26, 2004

Communicate to the Superintendence of Securities and Insurance that in conformity to article 10 of the Law N-18.045 of stock market and to the Ruling N-30 (Norma de Carácter General N-30) of the Superintendence of Securities and Insurance, and properly authorized by the Directory of Masisa S.A. ("Masisa"), the company complied in informing the following essential fact with regard to Masisa and its businesses:

The Directory of Masisa, in extraordinary meeting on August 25, 2004, agreed to propose to a next extraordinary meeting of the Masisa shareholders the merger by incorporation of Masisa in Terranova S.A. ("Terranova"), open corporation inscribed in the Securities Registry (“Registro de Valores”) of this Superintendence under the Nº 825, absorbing in consequence Masisa, and Terranova being its legal successor

The Directory of Terranova announced that the above mentioned society will shortly proceed to register in the Securities and Exchange Commission (SEC) of the United States of America in order to obtain the above mentioned register before to the meeting that will have to decide on the proposed merger. Having the above-mentioned registry, the Directory of Masisa will proceed to cite and report the date of the corresponding meeting of shareholders.

In the opinion of the Directory, the proposed merger is highly suitable from the perspective of the interests of Masisa in total and of the totality of its shareholders, since it would generate significant savings in the operational costs of the merged companies, its branches and linked companies as well as big benefits derived from the economies of scale and synergies existing between the above mentioned companies.

Also, the Directory agreed, based on the economic valuations of Terranova and Masisa realized by JP Morgan and taking in consideration also the market value of the above mentioned companies, to propose to the assembly a swap of actions of 2.56 (two point fifty six) actions of Terranova for 1 (one) action of Masisa, this means that the shareholders of Masisa will get 2.56 (two point fifty six) new actions of Terranova for every action of Masisa, in the event that the merger is perfected.

The other terms and conditions of the merger will be evaluated and solved by the Directory of Masisa in the next future, and they will be proposed to the shareholders once the Directories of Terranova and Masisa agreed to cite their respective extraordinary meetings to decide on the above-mentioned merger.

NEWS RELEASE

MASISA S.A. REPORTS 2004 FINANCIAL RESULTS

Santiago, Chile, March 8, 2005 --.MASISA S.A. (“Masisa” or “the Company”) (NYSE: MYS), Latin America’s leading particleboard, MDF and OSB manufacturer, announced today its consolidated financial results for the fourth quarter and year-ended 2004; reporting a solid performance for the period. These figures are stated in Chilean GAAP.

HIGHLIGHTS

Net income for year 2004 was US$41.6 million, an increase of 332.4% with respect to 2003. Net income for the fourth quarter totaled US$8.3 million, 101.9% higher than 4Q03.

Operating income for 2004 increased 180.7% with respect to 2003, totaling US$71.1 million, and represents 17.9% of consolidated net sales. This compares with an operating income of US$25.3 million in 2003, which represented 9.0% of consolidated net sales.

Gross margin for the quarter was 31.8%, which when compared to the 24.4% of 4Q03, reflects improved product pricing and a greater share of value-added products in the sales mix.

Consolidated net sales for the fourth quarter totaled US$104.2 million, a 29.6% increase year-over-year.

Earnings per ADS for the fourth quarter reached US$0.27. Earnings per ADS for the year reached US$1.34, a 332.4% increase in relation to 2003.

	Quarter ended on
	Dec 31,	Mar 31,	Jun 30,	Sep 30,	Dec 31,
	2003	2004	2004	2004	2004
			(US$ million)
Consolidated Net Sales	80.4	87.9	98.8	106.5	104.2
Gross Margin	19.6	22.4	30.4	33.5	33.1
Operating Income	8.2	11.6	19.0	22.0	18.5
Net Income	4.1	8.3	11.5	13.5	8.3
Margins (*)
Gross Margin	24.4%	25.5%	30.8%	31.4%	31.8%
Operating Margin	10.2%	13.2%	19.2%	20.6%	17.7%
Net Income Margin	5.1%	9.4%	11.6%	12.7%	7.9%
Change (**)
Revenue	8.7%	9.3%	12.4%	7.8%	-2.2%
Gross Margin	9.7%	14.3%	35.9%	10.0%	-1.1%
Operating Income	0.7%	42.1%	63.3%	15.6%	-15.9%
Net Income	6.8%	101.9%	38.9%	17.4%	-38.7%
(*): As a % of Revenue
(**): Compared to the previous quarter

Year ended December 31, 2004

Masisa’s consolidated net sales reached US$397.3 million, a 41.0% increase with respect to 2003. The main drivers of this growth were:

Important growth in Brazilian demand for MDF and the penetration of OSB in the Brazilian market;

Solid performance of the Chilean economy allowed for an important recovery of volumes and prices;

Successful commercial strategy in Mexico, which surpassed Chile in the number of PlacaCentros;

Higher exports to the U.S. and importance of the U.S. as a destination market, led by OSB produced in Brazil and MDF mouldings produced in Argentina and Chile.

Recovery of the Argentinean economy, resulting in greater sales volumes at better prices.

Operating margin for 2004 was 17.9%, compared to an operating margin of 9.0% during 2003. This reflects the recovery, in both volumes and prices, of Masisa’s main destination markets, along with effective commercial and operational policies.

Operating income for 2004 was US$71.1 million, a 180.7% increase compared to US$25.3 million of 2003. This result is mainly explained by:

Greater volumes sold and price improvements, associated with the recovery of economies throughout Latin America;

Increase in volumes of OSB and MDF mouldings sold, mainly in the U.S.;

A permanent focus on improving efficiency and cost-controls, both at operational and administrative levels.

Net income for the year totaled US$41.6 million, a 332.4% increase compared to 2003. The higher net income is mainly a consequence of the higher operating income for the year.

Fourth Quarter 2004

Sales remained stable in Argentina and Mexico, compared to the previous quarter. Sales in Chile, expressed in U.S. dollars increased 11.5% . A contraction in the Brazilian market, where U.S. dollar sales fell 19.3% during the quarter, as well as lower sales volume of OSB in the U.S. led to a 2.2% reduction of the quarter’s consolidated sales, compared to the previous quarter.

Consolidated sales volume of particleboard, MDF and OSB increased by 0.3%, decreased by 0.2% and decreased by 13.6%, respectively, when compared to the same period in 2003.

In relation to the third quarter of 2004, volumes declined by 5.4%, 15.0% and 25.5%, respectively.

The primary factors that explain quarter-over-quarter variations in performance were:

A 5.4% decline in sales volume in Argentina. While PB prices remained stable, MDF prices experienced a 4.3% increase.

A 23.4% decline in sales volume in Brazil, driven by a strong contraction during the last two months of the year. Prices in U.S. dollars, increased 5.4%, due to nominal increases and the strengthening of the local currency during the last quarter.

A 3.7% decline in volume sales in Chile. The appreciation of the peso during the final months of 2004, led to an increase in prices measured in U.S. dollars.

Decline in OSB volumes sold in the U.S., mainly due to the severe winter.

Growing share of MDF mouldings in the sales mix, a higher value-added product.

Higher selling, general & administrative expenses, mainly due to the recognition and payment of consulting services related to the merger, as well as compensation bonuses based on the Company’s results.

FINANCIAL SUMMARY

For the fourth quarter ended December 31, 2004:

The table below depicts Masisa’s consolidated financial highlights for the quarter and the percentage change, compared to 2003.

	Quarter ended on
	Dec 31,	Dec 31,	Change
	2003	2004	%
		(US$ million)
Revenue	80.4	104.2	29.6%
Gross margin	19.6	33.1	68.9%
SG&A	(11.4)	(14.6)	28.2%
Operating Income	8.2	18.5	125.7%
Net Income	4.1	8.3	101.9%
Depreciation	6.0	7.4	21.6%
Amortization (Goodwill)	0.0	0.0	-25.0%
Depletion	0.9	1.7	98.3%
Earnings per share (US$)	0.0044	0.0089	101.9%
Earnings per ADS (US$)	0.13	0.27	101.9%
Note: 30 common shares are equivalent to 1 ADS

For the year ended December 30, 2004:

The table below depicts Masisa’s consolidated financial highlights for the year ended December 31, 2004 and the percentage change, compared to 2003.

	12 months ended on
	Dec 31,	Dec 31,	Change
	2003	2004	%
		(US$ million)
Revenue	281.8	397.3	41.0%
Gross margin	66.3	119.4	80.2%
SG&A	(41.0)	(48.4)	18.0%
Operating Income	25.3	71.1	180.7%
Net Income	9.6	41.6	332.4%
Depreciation	25.8	27.7	7.3%
Amortization	0.2	0.1	-64.9%
Depletion	3.8	5.1	35.0%
Earnings per share (US$)	0.0104	0.0448	332.4%
Earnings per ADS (US$)	0.31	1.34	332.4%

Note: 30 common shares are equivalent to 1 ADS

SEGMENTS INFORMATION:

The following table presents results based on the source that originated the sale:

	Quarter ended on		12 months ended on
	Dec 31,	Dec 31,	Dec 31,	Dec 31,
	2003	2004	2003	2004
	(US$ million)		(US$ million)
REVENUE
Chile	27.9	37.2	105.2	130.8
Argentina	18.0	23.0	65.5	85.2
Brazil	22.5	26.9	73.8	118.7
Mexico	10.1	14.4	34.9	55.6
FTG	4.4	6.9	15.7	19.5
Other (*)	(2.5)	(4.2)	(13.1)	(12.5)
Total	80.4	104.2	281.8	397.3
GROSS MARGIN
Chile	6.7	11.5	26.1	34.1
Argentina	3.6	7.0	11.0	22.0
Brazil	6.7	8.8	19.3	43.8
Mexico	1.2	3.1	5.0	12.2
FTG	0.8	1.3	2.8	3.2
Other (*)	0.6	1.4	2.0	4.1
Total	19.6	33.1	66.3	119.4
OPERATING INCOME
Chile	1.6	4.9	8.6	13.4
Argentina	1.8	4.5	3.7	13.6
Brazil	4.8	6.2	12.9	34.7
Mexico	(0.7)	1.1	(1.8)	5.2
FTG	0.6	1.1	2.2	2.6
Other (*)	(0.0)	0.6	(0.2)	1.6
Total	8.2	18.5	25.3	71.1

DEPRECIATION
Chile	2.9	2.8	11.4	11.0
Argentina	2.1	2.4	8.2	8.4
Brazil	1.7	1.9	5.9	7.2
Mexico	0.2	0.2	1.0	1.0
FTG	0.0	0.1	0.1	0.1
Other (*)	(0.9)	0.0	(0.8)	0.0
Total	6.0	7.4	25.8	27.7

(*): Includes elimination of inter-company sales

PRODUCT SEGMENT INFORMATION:

The following table shows the company’s net sales of boards and mouldings. For each period, net sales of particleboard and MDF are broken down between raw board sales and coated (including both melamine-laminated and wood-veneered) board sales.

	Quarter ended on		12 months ended on
	Dec 31,	Dec 31,	Dec 31,	Dec 31,
	2003	2004	2003	2004
	(US$ million)		(US$ million)
PB - raw	8.7	9.8	30.8	37.5
PB - coated	15.9	17.8	61.4	73.5
Total PB	24.6	27.6	92.2	111.0
MDF - raw	25.1	32.9	102.9	130.0
MDF - coated	10.2	12.2	32.2	50.5
Total MDF	35.3	45.1	135.1	180.5
OSB	11.1	10.9	27.7	54.5
MDF Mouldings	2.0	9.9	4.8	22.3
Total	73.0	93.5	259.7	368.2
(Boards and Mouldings)

The following table shows the Company’s physical volume sales in cubic meters of boards and mouldings. For each period, physical volume sales in cubic meters of particleboard and MDF are broken down between raw board sales and coated (including both melamine-laminated and wood-veneered) board sales.

	Quarter ended on		12 months ended on
	Dec 31,	Dec 31,	Dec 31,	Dec 31,
	2003	2004	2003	2004
	(thousand m3)		(thousand m3)
PB - raw	72.1	71.9	278.1	290.0
PB - coated	65.0	65.6	273.9	290.1
Total PB	137.1	137.5	552.0	580.1
MDF - raw	143.3	142.7	578.5	641.7
MDF - coated	39.9	40.1	125.5	174.8
Total MDF	183.2	182.8	704.0	816.6
OSB	60.1	51.9	178.1	247.1
MDF Mouldings	7.3	25.0	16.7	65.5
Total	387.7	397.2	1,450.8	1,709.2
(Boards and Mouldings)

MARKET INFORMATION:

The following table presents net sales, by destination market as a percentage of total consolidated net sales for each period.

	Quarter ended on		12 months ended on
	Dec 31,	Dec 31,	Dec 31,	Dec 31,
	2003	2004	2003	2004
Chile	25.3%	24.5%	27.2%	24.1%
Argentina	10.1%	12.3%	10.2%	10.9%
Brazil	26.9%	20.4%	26.3%	22.3%
Mexico	13.6%	14.2%	13.4%	14.3%
EEUU	7.8%	12.9%	4.8%	14.1%
Other	16.3%	15.7%	18.2%	14.4%

PRODUCTION COST INFORMATION:

Average production costs for raw particleboard, MDF and OSB for each period are broken down as follows:

	Quarter ended on		12 months ended on
	Dec 31,	Dec 31,	Dec 31,	Dec 31,
	2003	2004	2003	2004
Wood	20.8%	19.8%	20.1%	20.6%
Chemicals	38.8%	40.3%	37.8%	39.0%
Energy	8.9%	8.6%	9.0%	9.00%
Labor	6.1%	6.4%	6.3%	6.3%
Depreciation	13.2%	11.0%	14.2%	11.9%
Other	12.2%	13.9%	12.6%	13.2%

MASISA S.A AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENT

	Quarter ended on
	Sep 30,	Dec 31,	Dec 31,
	2003	2003	2004
		(US$ million)
Revenue	106.5	80.4	104.2
Cost of Goods Sold	(73.0)	(60.8)	(71.1)
Gross margin	33.5	19.6	33.1
SGA	(11.5)	(11.4)	(14.6)
Operating Income	22.0	8.2	18.5
Interest expense, net	(3.2)	(2.9)	(4.7)
Other income (expense)	(3.2)	(1.2)	(1.0)
Foreign exchange gain (loss)	(3.4)	0.6	(1.1)
Non-Operating Result	(9.8)	(3.5)	(6.8)
Income before taxes and Minority Interest	12.2	4.7	11.7
Minority Interest	(0.3)	(0.2)	(0.7)
Income Tax	1.6	(0.4)	(2.7)
Net Income	13.5	4.1	8.3
Earnings per share (US$)	0.0145	0.0044	0.0089
Earnings per (US$)	0.44	0.13	0.27
Due to rounding, numbers may not add up.

	12 months ended on
	Dec 31,	Dec 31,
	2003	2004
	(US$ million)
Revenue	281.8	397.3
Cost of Goods Sold	(215.5)	(277.9)
Gross margin	66.3	119.4
SGA	(41.0)	(48.4)
Operating Income	25.3	71.1
Interest expense, net	(11.5)	(15.2)
Other income (expense)	(1.5)	(5.5)
Foreign exchange gain (loss)	0.4	(1.1)
Non-Operating Result	(12.7)	(21.8)
Income before taxes and Minority Interest	12.7	49.3
Minority Interest	(1.4)	(1.1)
Income Tax	(1.7)	(6.6)
Net Income	9.6	41.6
Earnings per share (US$)	0.0104	0.0448
Earnings per (US$)	0.31	1.34
Due to rounding, numbers may not add up.

MASISA S.A AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET

ASSETS	Dec 31,	Dec 31,
	2003	2004
	(US$ million)
Cash and cash equivalents	8,7	22,6
Accounts receivables	72,2	93,9
Notes and accounts receivable from related companies	2,3	7,4
Inventories	77,7	91,0
Recoverable taxes	11,7	13,7
Other current assets	43,1	5,1
Total Current Assets	215,7	233,5
Property, Plant and Equipment	631,0	638,8
Investments in unconsolidated affiliates	0,0	0,0
Goodwill and negative goodwill, net	-0,4	-0,4
Long term receivables	1,2	4,7
Notes and accounts receivables from related companies	3,3	0,6
Other assets	9,1	11,7
Total Other Assets	13,1	16,5
TOTAL ASSETS	859,9	888,8

Due to rounding, numbers may not add up.

LIABILITIES AND SHAREHOLDER’S EQUITY	Dec 31,	Dec 31,
	2003	2004
	(US$ million)
Short-term bank borrowings	80,1	24,9
Other long-term borrowings due within one year	10,0	9,7
Accounts payable	25,4	31,9
Notes and accounts payable to related companies	1,8	3,5
Accrued liabilities	6,5	10,7
Other current liabilities	0,1	3,8
Total Current Liabilities	124,1	84,6
Long-term bank borrowings	74,3	76,8
Other long-term borrowings	127,2	125,3
Deferred income taxes	4,3	5,8
Other long-term liabilities	11,3	19,9
Total Long term Liabilities	217,2	227,7
Minority Interest	66,3	76,1
Total Shareholders’ Equity	452,2	500,5
TOTAL LIABILITES AND SHAREHOLDER’S EQUITY	859,9	888,8

Due to rounding, numbers may not add up.

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.

Date: May 31, 2005

	Masisa S.A. (formely known as Terranova S.A.).
	as sucessor to the Registrant

Date: July 20, 2005	By:	/s/ Patricio Reyes U.

		Patricio Reyes U.
		General Counsel

Masisa S.A. By: /S/ Patricio Reyes Patricio Reyes General Counsel

Deposits Rabobank Curacao N.V.

Repurchase deposit agreements

Filing Compare · MASISA