Download - Compañía Electro Metalúrgica S.A
Annual Report
2013
Compañía Electro Metalúrgica S.A.
2
Indice
Chapter 1
Company Information 5
Board Of Directors 6
Managent Of Elecmetal S.a. 9
Historical Information 10
Chapter 2
2013 Business Results 15
2.1 Business Results 16
Metallurgic Business 17
Container Business 18
Wine Business 18
2.2 Metallurgic Business 20
Growth Strategy 21
Important Investment Plan 23
3
Territorial Expansion And Global Coverage 24
Delivery Of Comprehensive Solutions To Clients 24
Organizational Development 27
Financial Results 28
2.3 Container Business 30
2.4 Wine Business 34
2.5 Communication Business 38
Ediciones Financieras S.A. 39
Ediciones e Impresos S.A. 39
Chapter 3
Consolidated Financial Statements 2013 41
Classified Statement Of Financial Position 42
Incomes Statement By Function 44
Comprehensive Income Statement 45
Direct Cash Flows Statement 46
Independent Auditors Report 48
Related Companies 50
Main Related Companies 50
Summary Of Financial Statement Of Main Subsidiaries 55
Statement of Liability 59
CHAPTER 1Company Information
Corporate Name: Compañía Electro Metalúrgica S.A. Elecmetal S.A.
Address: Av. Vicuña Mackenna 1570, Ñuñoa.
Telephone: 23614010
I.D. No.: 90,320,000-6
Type Of Entity: Open Corporation, Registered in the Securities Registry of the Securities and Insurance Supervisor, N° 45.
Web Page: www.me-elecmetal.com / www.elecmetal.cl
6
Board Of Directors
CHAIRMAN
JAIME CLARO VALDES
I.D. Number 3,180,078-1
Industrial Civil Engineer, chairman of the board of directors of ME Global Inc. (USA), vice-chair-
man of the board of Cristalerías de Chile S.A.; and director of Viña Los Vascos S.A.
VICE-CHAIRMAN
BALTAZAR SÁNCHEZ GUZMÁN
I.D. Number 6,060,760-5
Commercial Engineer; chairman of the board of directors of Cristalerías de Chile S.A., Edicio-
nes Financieras S.A., and Ediciones e Impresos S.A.; vice-chairman of the board of Sociedad
Anónima Viña Santa Rita and Quemchi S.A.; and director of Navarino S.A., ME Global Inc.
(USA), and Inversiones Siemel S.A.
DIRECTORS
JUAN ANTONIO ÁLVAREZ AVENDAÑO
I.D. Number 7,033,770-3
Lawyer; MBA Pontificia Universidad Católica de Chile; chairman of the board of Quemchi S.A.
and Navarino S.A.; vice-chairman of the board of Parque Arauco S.A.; director of Cristalerías
de Chile S.A., Compañía Sud Americana de Vapores S.A., SM SAAM S.A. and Marítima de In-
versiones S.A.; member of the Advisory Board of Generación Empresarial.
CARLOS F. CÁCERES CONTRERAS
I.D. number 4,269,405-3
Commercial Engineer, MBA Cornell University, ITP Harvard Business School; president of BAT
(Chile); vice-chairman Carozzi S.A., SIPSA S.A.; president of Instituto Libertad y Desarrollo
and member of Board of other companies, as well as nonprofit organizations; president of the
Executive Committee of Universidad del Desarrollo’s MBA program. As a civil servant he has
been a member of the State Committee; president of the Chilean Central Bank, Minister of
Finance, and Minister of the Interior.
7
JUAN AGUSTÍN FIGUEROA YÁVAR
I.D. number 3,513,761-0
Lawyer, partner of the Law Firm DyP Abogados; chairman of the board of directors of S.A.
Viña Santa Rita, Marítima de Inversiones S.A., and Termas de Puyehue S.A.; director of Cris-
talerías de Chile S.A. and Quemchi S.A.; chairman of Fundación Pablo Neruda and Sociedad
de Bibliófilos de Chile, former tenured professor of procedural law at Universidad de Chile.
FERNANDO FRANKE GARCÍA
I.D. number 6,318.139-0
Commercial Engineer, Master of Finance, Universidad Adolfo Ibañez; director of Cristalerías
de Chile S.A., Enlasa S.A., Edelpa S.A., Cía. Inversiones la Española S.A.; director of Un Techo
para Chile and Colegio San José de Lampa.
ALFONSO SWETT SAAVEDRA
I.D. number 4,431,932-2
Businessman; chairman of the board of Forus S.A., Costanera S.A.C.I., and Olivos del Sur S.A.;
director of Cristalerías de Chile S.A., Sociedad Anónima Viña Santa Rita, Marbella Chile S.A.;
and Counselor of SOFOFA.
DIRECTORS’ COMMITTEE
CHAIRMAN
CARLOS F. CÁCERES CONTRERAS
DIRECTORS
JUAN ANTONIO ÁLVAREZ AVENDAÑO
ALFONSO SWETT SAAVEDRA
8
9
GENERAL MANAGER
ROLANDO MEDEIROS SOUX
I.D. number 5,927,393-0
Chemical Engineer. M.Sc Upsala
DEPUTY GENERAL MANAGER
JOSÉ PABLO DOMÍNGUEZ BUSTAMANTE
I.D. number 10,557,722-2
Commercial Engineer. MBA UC
ADMINISTRATION AND FINANCE MANAGER
NICOLÁS CUEVAS OSSANDÓN
I.D. number 7,050,857-5
Commercial Engineer
COMMERCIAL MANAGER
ROBERTO LECAROS VILLARROEL
I.D. number 9,982,226-0
Civil Engineer
CONTROLLING MANAGER
JORGE SAAVEDRA ALMONACID
I.D. number 11,595,917-4
Commercial Engineer
OPERATIONS MANAGER
RAOUL MEUNIER ARTIGAS
I.D. number 4,855,515-2
Technical Mechanical Engineer
CAST OPERATIONS MANAGER
IVÁN LEMUS CORDERO
I.D. number 10,855,370-7
Civil Engineer. MBA UC.
MACHINE SHOP OPERATIONS MANAGER
JUAN CARLOS ALLENDE SÁNCHEZ
I.D. number 7,031,802-4
Mining Civil Engineer
PROJECT MANAGER
MATÍAS BUSTOS SANTA MARÍA
I.D. number 13,436,386-k
Electrical Civil Engineer
HUMAN RESOURCES MANAGER
RODRIGO OGALDE CONTRERAS
I.D. number 10,134,671-4
Commercial Engineer
INTERNAL AUDITING MANAGER
MARIO OLIVARÍ VOLPATO
I.D. number 7,171,528-0
Accountant Auditor
Management Of Elecmetal S.A.
10
Historical Information
Emilio Orrego Luco, together with a group of
important local businessmen and investors,
founded Compañía Electro Metalúgica S.A.,
Elecmetal, in 1917.
The project meant installing the first electric
arc furnace in Latin America, initially to make
steel spare parts for agriculture, mining, and
industry applications, and the publicly owned
Empresa de Ferrocarriles del Estado.
In the mid 1970’s, Elecmetal initiated an ac-
tive plan of investment and diversification of
its assets. In 1975 the company acquired 46%
of the shares of Cristalerías de Chile S.A., a
manufacturer of glass containers, in a tender
offering convened by the Corporación de Fo-
mento de la Producción (CORFO). Thereafter,
it continued buying shares until completing
68.17% of its shareholding. From then on, an
important technological and commercial mo-
dernization process began; highlighting a te-
chnical cooperation agreement celebrated in
1977 with the company Owens Illinois of the
United States, the world’s leading producer
of glass containers.
As a natural extension of the glass container
business, in 1980 the Company expanded its
activities through Cristalerías de Chile S.A.
into plastic packaging. By means of the latter
and jointly with Owens Illinois, the Company
continued its diversification policy by acqui-
ring Viña Santa Rita Ltda. that same year,
thus initiating its involvement in the agro-in-
dustrial sector.
In 1986 new steps were taken into diversifi-
cation policy. Through its subsidiary, Crista-
lerías de Chile S.A., it acquired 17% of Marin-
sa S.A., an investment company with a large
shareholding in Compañía Sud Americana
de Vapores S.A., in a public tender. Later it
increased its shareholding in Marinsa S.A. to
52.9%.
In late 1989, Navarino S.A. was born, a com-
pany that originated from the division of
Cristalerías de Chile S.A., into which all in-
vestments in the shipping sector were trans-
ferred.
Elecmetal continued with its diversification
plan in 1989 by acquiring, through Cristale-
rías de Chile S.A. television frequencies ten-
dered by Televisión Nacional de Chile, and
creating the company Red Televisiva Mega-
visión S.A. “MEGA.”Which was sold in early
2012.
In 1992, the board approved the division of
Elecmetal, creating a new company Quemchi
S.A. into which all the investments in the shi-
pping sector were transferred, and giving it a
68.17% shareholding in Navarino S.A.
Toward the end of 1993, and as a way to fi-
nance its modernization and diversification
process, Cristalerías de Chile S.A. carried out
a capital increase, of which a large part of the
shares were sold in the international markets
by means of the American Depositary Re-
ceipts (ADR) mechanism. As of that moment,
and until 2005, its shares were traded on the
New York Stock Exchange, under the ticker
symbol «CGW». This way, Elecmetal and its
subsidiaries reduced their shareholding in
Cristalerías de Chile S.A.
In 1994, Elecmetal, through its subsidiary
Cristalerías de Chile S.A., expanded its in-
vestments in the area of communications
by entering the cable television services bu-
siness together with TCI/Bresnan, current-
ly Liberty Global Inc.. Cable systems were
acquired and the company Metrópolis S.A.
was created. The following year, the board
agreed to the merger of Metrópolis S.A. and
the cable television company, Intercom, crea-
ting Metrópolis-Intercom S.A., where Crista-
lerías and Liberty participated with 60% of
the shareholding. Later, in 2000, Cristalerías
de Chile and Liberty bought in equal shares
from their partner the remaining 40% of the
shares of Metrópolis-Intercom. In 2005 Cris-
talerias entered into an agreement with LGI
Internacional, Inc. (a subsidiary of Liberty
Global Inc.) to merge the operations of Me-
trópolis-Intercom S.A. and VTR GlobalCom
S.A., under the latter; leaving Cristalerías de
Chile S.A. with 20% of VTR GlobalCom S.A.,
participation which it sold in 2010.
The year 1995 marked the completion of
the acquisition, through Cristalerías de Chile
S.A., of a considerable percentage of the sha-
reholding of the financial newspaper “El Dia-
rio”, presently “Diario Financiero”. As of 2013
12
the participation in Ediciones Chiloé S.A. is
equivalent to 99.5%; the latter owns 74.84%
of Ediciones Financieras S.A., the publishing
company of the newspaper «Diario Financie-
ro», and 99.5% of Ediciones e Impresos S.A.,
editor of the magazine CAPITAL.
In 1996, the subsidiary Cristalerías de Chile
S.A. acquired an additional 49.9% interest in
the companies of the plastics sector, Cristal
Plásticos Ltda. (Crowpla) and Reicolite S.A.,
completing 99.9% of the holdings in both
companies which were later merged to form
a new company called Crowpla-Reicolite S.A.
Afterwards, in 2001, Cristalerías de Chile S.A.
and Embotelladora Andina S.A. established a
business venture in the plastic container bu-
siness through their respective subsidiaries,
Crowpla-Reicolite S.A. and Envases Multipack
S.A., forming the company Envases CMF S.A.
where they held equal ownership until 2012,
when Cristalerías de Chile sold it its share.
In the year 1996, the subsidiary S.A. Viña
Santa Rita acquired 39.4% of the share ca-
pital of Viña Los Vascos, which was later in-
creased to 43% in 1999. The main sharehol-
der, with a holding of 57%, is Les Domaines
Barons de Rothschild (Lafite) controlled by
the Rothschild family.
In 1999, the subsidiary Cristalerías de Chile
S.A. acquired 40% of Rayén Curá S.A.I.C., a
glass container production company located
in the province of Mendoza, Argentina, from
the Spanish company Vicasa S.A., which
maintains the remaining 60% shareholding
and is a subsidiary of the French multina-
tional Saint Gobain Emballage D.F.A. Rayén
Curá S.A.I.C. The latter maintains a technical
cooperation agreement with Saint Gobain,
which is the world’s second largest manufac-
turer of glass containers.
In 2001, Elecmetal formed the subsidiary ME
Global Inc. in Delaware, USA, with the objecti-
ve of carrying out its globalization project as
a supplier of steel spare parts. With this goal,
the company then successfully participated
in the acquisition process of the assets of ME
International, Inc. and ME West Castings, Inc..
Both companies were under the provisions of
Chapter 11 of the US Bankruptcy Law because
of the financial problems of their owners, GS
Industries Inc. and its holding company GS
Technologies Corp. The purchased assets are
primarily two high-technology furnaces loca-
ted at Duluth, Minnesota, and Tempe, Arizo-
na, USA.
Continuing with the development of the steel
spare-parts business, in 2003 Elecmetal was
awarded 60% of the property of the com-
pany Fundición Talleres S.A. in the National
and International Public Tender of the Fur-
nace Business of the Workshops Division ca-
rried out by Codelco, Chile. Subsequently, in
2007, Elecmetal completed the acquisition of
100% of its ownership.
In 2006, the subsidiary Cristalerías de Chi-
le initiated the operation of its second glass
container production plant in Chile, located
in the municipality of Llay-Llay, in the Fifth
Region.
ANNUAL REPORT 2013Chapter 1 / Historical Information
In 2007, Elecmetal and Esco Corp. (USA) sig-
ned a joint-venture agreement and establi-
shed the company Esco Elecmetal Fundición
Limitada, subsidiary that produces steel spa-
re parts for ground engaging to supply the
domestic and export market.
In 2009, as part of the development of new
products and markets, Elecmetal began the
sale of grinding balls for large mining com-
panies.
In 2011, Elecmetal and Changshu Longteng
Special Steel Co., Ltd., a grinding ball pro-
ducer, established a 50/50 Joint Venture in
China. In 2013 the new company, named “ME
Long Teng Grinding Media (Changshu) Co.
Ltd.” completed the second stage of a pro-
duction plant in Changshu, China, which will
produce 400,000 tons of grinding balls with
ME Elecmetal’s technology. Additionally, the
Board has agreed to continue with the third
phase of the project that should be comple-
ted in mid 2014.
In 2012 Elecmetal continued with its interna-
tional expansion program by incorporating
the subsidiary ME Elecmetal (China) Co., Ltd
in the city of Changzhou, China. In 2013 this
subsidiary initiated the construction of liners
for US$45 million. The latter will begin ope-
rating during the second semester of 2014
and will serve the markets of Asia, Africa and
Oceania.
14
15
CHAPTER 22013 Business Results
ELECMETAL (Consolidated) 01/01/2013 01/01/2012
Income Statement (MM$) 12/31/2013 12/31/2012
Revenue from explotation 516,017 460,522
Costs from explotation (380,755) (344,286)
Gross earnings 135,262 116,236
Distribution cost (10,787) (9,411)
Administration cost (60,883) (52,817)
Earnings from operational activities 65,396 55,219
Income in Associates 2,465 2,545
Taxes in earnings (15899) (15,533)
Earnings from discontinued operations 0 29,540
Total profit after taxes 46,469 65,207
16
2.1 2013 Business Results
The result for 2013 periodis a total profit of $46,469 million, figure that is not comparable to
the total profit of $65,207 million of the previous year that includes extraordinary earnings of
$29,540 million after taxes from the sale of Megavisión and its affiliates. If this extraordinary
effect is excluded, the total profit of 2013 increased by $10,802 million or 30.3% regarding
the previous year.
From total earnings of $46,469 million for the year, the amount of $37,021 million is attribu-
table to shareholders of the parent and $9,449 million attributable to non-controlling partici-
pants (minority interest).
Consolidated sales for 2013 reached $516,017 million, figure that is 12.1% greater than the
year 2012 ($460,522 million). The increase is due to greater sales in the metallurgic (19.7%),
wine (8.4%), and glass container (0.8%) businesses.
The exercises’ gross earnings were equivalent to $135,262 million, which represents an in-
crease of 16.4% in comparison to the year 2012. This can be explained by a greater gross
earning in the metallurgic, wine, and container businesses.
The earnings of the consolidated operational activities reached $65,396 million, figure that is 18.4%
greater than the previous year, of which $37,686 million are attributable to the metallurgic business
(increase of 11.8%), $19,314 million to the glass container business (increase of 14.2%), $8,625 mi-
llion to the wine business (increase of 39%), and a loss of $229 million in other businesses.
Income statement (MM$)
01/01/2013 01/01/2012
12/31/2013 12/31/2012
Revenue 284,855 238,021
Explotation Cost (226,279) (187,119)
Gross earnings 58,576 50,902
Earnings from operational activities
37,686 33,712
17
In 2013, the participation in associated com-
panies (non-consolidated subsidiaries) repor-
ted a profit of $2,465 million, which is com-
parable to a profit of $2,545 million obtained
during the previous exercise.
The expense for income tax on earnings at
the close of 2013 is a charge of $15,899 mi-
llion (charge of $15,533 million in 2012).
In relation to the results by business area, the
analysis is as follows:
METALLURGIC BUSINESS
The sales revenue of the metallurgic busi-
ness, which includes the individual business
of Elecmetal, Fundición Talleres, and ME Glo-
bal (EE.UU.), in addition to the commerciali-
zation of products produced by third parties
under our specifications, reached $284,855
million in the year 2013, 19.7% greater than
the previous year. The increase in sales is
due to the activity in global mining where the
company is present in 35 countries and its
successful penetration in the new business
of grinding balls. The consolidated earnings
of operational activities of the steel business
were $37,686 million, which is comparable to
$33,712 million in 2012, product of the increa-
se in sales and operational efficiencies that
stem from executed extension and optimiza-
tion projects.
In relation to the development of the meta-
llurgic business, the advance of projects is as
follows:
i) ME Long Teng Grinding Media (Changshu)
Co. Ltd, the Chinese subsidiary with our local
partner Long Tengo Steel Co. Ltd., completed
the second phase of the plant of 400,000
tons of grinding balls, inaugurated in march
2012, during the fourth quarter of 2013. The
third phase is currently in full development;
the first line of the two contemplated has
been finished.
ii) In 2012 the Board approved an investment
of US$45 million plus work capital for the
construction of a special steels foundry in
the city of Changzhou, province of Jiangsu,
China.
The plant will have a capacity of 30,000
tons of spare parts for grinding equipment,
which will be mainly directed towards large
scale mining in the region of Asia, Africa, and
Oceania. The second semester of 2013 began
with the construction of the plant, which, to-
gether with the production of the equipment,
progresses as planned and should gradually
enter into production during the second se-
mester of 2014.
Income statement (MM$)
01/01/2013 01/01/2012
12/31/2013 12/31/2012
Revenue 109,822 108,948
Explotation Cost (79,227) (82,158)
Gross earnings 30,595 26,790
Earnings from operational activities
19,314 16,915
18
iii) In regards to the Modernization Project
for the Rancagua plant, the engineering stu-
dies are being completed and the ground-
work has begun.
CONTAINER BUSINESS(Cristalerías de Chile individual)
In 2013 the sale of containers reached
$109,822 million, which is 0.8% greater than
sales in 2012 ($108,948 million). The gross
earnings of the container business were
$30,595 million, which is 14.2% greater than
2012 ($26,790 million).
This is mainly due to the increase in producti-
vity in operations and the reduction of ener-
gy costs and other production costs.
The earnings of operational activities were
$19,314 million in 2013, compared to $16,915
million the year before.
The total consolidated income of Cristalerías
de Chile as of December 31, 2013 was a profit
of $21,126 million, which is not comparable to
the profit of 2012 of $46,247 million, since
the latter includes extraordinary earnings
of $29,973 after taxes product of the sale
of Megavision and its affiliates carried out in
March 2012.
ANNUAL REPORT 2013Chapter 2 / 2013 Business Results
Income statement (MM$)
01/01/2013 01/01/2012
12/31/2013 12/31/2012
Revenue 121,535 112,132
Explotation Cost (75,277) (73,487)
Gross earnings 46,258 38,645
Earnings from operational activities
8,625 6,207
SalesViña Santa Rita
01/01/2013 01/01/2012
12/31/2013 12/31/2012
Wine exports
M.boxes 2,841 2,665
MUS$ 104,400 94,241
Sales in the domestic market
MLts. 64,400 60,762
19
WINE BUSINESS(Viña Santa Rita)
Viña Santa Rita and its subsidiaries reached
revenue from sales of $121,535 million during
the year 2013, which represents an increase
of 8.4% in regards to 2012 and includes the
sale of wine in the domestic and export mar-
kets, the sale of liquors, and others.
In relation to consolidated exports, Viña San-
ta Rita and its subsidiaries exported, in the
period, a total of 2,841,000 boxes, amount
that is 6.6% greater than 2012. The avera-
ge FOB price per box was US$36.8 and the
valued export sales reached an amount of
US$104.4 million, which is 3.9% and 10.8%
greater, respectfully, to 2012. The main ex-
port markets for Viña Santa Rita and its sub-
sidiaries are the United States, Ireland, Scan-
dinavia, Canada, United Kingdom, Holland,
Japan, China, Brazil, and Colombia.
In the national market, the volume of sales
for 2013 reached 64.4 million liters, which re-
presents an increase of 6% in relation to the
previous year. At the same time, the avera-
ge sales price decreased in 0.8% in regards
to the previous year. The valued sales of the
domestic market reached $57,670 million,
which represents an increase of 5.2% in re-
gards to the previous period.
The gross earnings were $46,258 million,
which is 19.7% greater than the previous
year. The earnings of operational activities
were $8,625 million, which is 39% greater
than the gain of $6,207 million in 2012. DIs-
tribution Expenses increased 9% which are
explained becausee of an increase in expor-
tation and sales in the domestic market. Total
Administration and Sales Expenses Increa-
sed 16%, which are explained because of an
increase of total sales, investment in marke-
ting, expansion of commercial offices abroad
and because of greater expenses in wages
and severance payments due to the rationali-
zation of central expenses.
The total consolidated income of Viña Santa
Rita as of December 31, 2013 was a net profit
of $6,105 million ($3,115 million in 2012).
20
2.2 METALLURGIC BUSINESS
21
ME Elecmetal is a global company, leader in innovation and development of alloys, products
and service design, supplying comprehensive solutions to mining industry in more than 35
countries.
As a result of the consolidation of its strategic and global plan, ME Elecmetal has become one
of the main producers and retailers of steel parts in the global market. This plan includes:
acquisitions (ME Global Inc. and Fundición Talleres Ltda.); strategic alliances (particularly with
ESCO Corporation, USA; Ferry Capitain, France; Changshu Long Teng Special Steel Co. Ltd.,
China; and FUCASA, Mexico); territorial expansion, and the extension and innovation of its line
of products and services for mining.
ME Elecmetal is oriented into satisfying domestic and international demand of the following
groups of products and comprehensive solutions: spares for grinding equipment (liners in ste-
els and white irons for SAG mills, ball and bars); grinding balls; spares for grinding equipment
(wearing parts for rotating crushers, cones, jaws, impact, and others), and spares for ground
engaging equipment (knife systems, adaptors, points, and bail protectors for mechanical and
hydraulic shovels, front loaders, and others). Additionally, it manufactures pump components
for the transport of pulp and industrial applications, large castings for mining and industrial
machinery, and delivers high strength steel plates and repair and reconditioning services for
mineral processing crusher equipment, mills, pales, hoppers, melting pots, and other equip-
ment. By means of its lines of representation it offers a large variety of products and comple-
mentary solutions for mining applications, for example, in mills (PAR System equipment for
the handling of coatings, bolts and nuts Valley Forge), for grinders (bronze components and
others, epoxy resin backing), and for mining shovels, the leasing of pales, etc.
GROWTH STRATEGY
ME Global Inc., an affiliate incorporated in 2001 in the United States of America, was the ve-
hicle for the acquisition of the assets of the companies ME International, Inc. and ME West
Castings, Inc. in that country. As of 2002, ME Elecmetal initiated an optimization program
of these assets, introduction of new products and process technologies and organizational
development that have allowed for the attainment of the highest standards of the industry at
a global level.
In Chile, 60% of the property of Fundición Talleres Ltda., dedicated to the manufacturing and
commercialization of steel spares in the region, was acquired by means an international ten-
der process in 2004, completing 100% of the company’s property in 2007.
ESCO Corp., world leader in the manufactu-
ring of steel parts for ground engaging tools,
which celebrated its 100-year anniversary in
2013, has been the licensor of ME Elecmetal
since 1959 with a license and technical coope-
ration agreement to manufacture and com-
mercialize its products in Chile. This alliance
with ME Elecmetal was extended in 2007 to
a 50/50 Joint Venture, creating the affiliate
company “Esco Elecmetal Fundición Ltda.”
As part of the development of new products
and markets and its vision to deliver compre-
hensive solutions to its clients, ME Elecmetal
developed the technology, metallurgic as well
as process, for the elaboration of balls of spe-
cial steels, forged and laminated of superior
quality, used in conjunction with liners in mills
in the grinding process of large-scale mining.
Through exclusive manufacturing agree-
ments with Changshu Longteng Special Steel
Co., Ltd., its new products “ME Super SAG”
and “ME Ultragrind” began to be successfully
commercialized world-wide in 2009. In 2011,
ME Elecmetal and Changshu Longteng Spe-
cial Steel Co., Ltd. established, in China, the
50/50 joint venture company “ME Long Teng
Grinding Media (Changshu) Co. Ltd.” (“ME
Long Teng”) for the manufacturing of these
products that ME Elecmetal commercializes
worldwide.
ME Elecmetal has continued to deepen its
strategic alliance with FUCASA of Mexico,
which includes manufacturing, technical coo-
peration, and licensing agreements.
ANNUAL REPORT 2013Chapter 2 / Metallurgic Business
23
ME Elecmetal has developed important com-
mercial and strategic alliances with famous
international trademarks, in the form of re-
presentations that have been maintained for
many years. A clear example of the latter is
the representation of the trademarks Ferry
Capitain and CMD, of Groupe CIF of France.
The latter is an important conglomerate that
supplies the international heavy industry
from its seven plants located in France and
Germany, and that provides us large cast
components, such as: gears, pinions, crowns,
crusher bodies, mills, and mill caps. In addi-
tion, continuing with its permanent search of
new alliances, ME Elecmetal began to com-
mercialize, in the Chilean market a line of
“ME Elecmetal” high quality epoxic resins for
the application of backing in grinding equip-
ment. In relation to grinding equipment, the
company maintains the representation of the
liner bolts of the trademark “Valley Forge”
and of the equipment for the manipulation
and installation of liners of the trademark
“PAR Systems”, both North American trade-
marks of recognized prestige in the global
industry.
IMPORTANT INVESTMENT PLAN
ME Elecmetal is carrying out an important
investment plan to supply the demand of the
mining activity at a global level.
In 2012 the subsidiary “Esco Elecmetal” inau-
gurated a state of the art steel foundry to su-
pply ESCO products from Chile exclusively to
the Chilean and Latin American market. The
new plant, located in Santiago, manufactu-
res a market leading line of ground engaging
products.
In addition, subsequent to the launching of a
pilot plant in 2010, the new affiliate in China,
“ME Long Teng”, initiated in 2011 the cons-
truction of a modern manufacturing plant of
grinding balls, in the city of Changshu, China,
with a total production capacity of 400,000
MTons of grinding balls that ME Elecmetal
will directly commercialize world-wide. The
second stage of this plant was inagurated in
2013 and the Board approved the investment
to continue with the following phase that
should begin operating in mid-2014.
In relation to projects that are in a development
stage, the new subsidiary “ME Elecmetal (Chi-
na) Co., Ltd.” is advancing in the construction
of a special steel foundry in the city of Chan-
gzhou, province of Jiangsu, China, which
will have a capacity of 30,000 tons of spa-
re parts for grinding equipment, production
which will be directed towards large scale mi-
ning in the region of Asia, Africa and Oceania.
The Project contemplates an investment of
US$45 million and is expected to be comple-
ted during the first semester of 2014. On the
other hand, in Chile, the company is initiating
the modernization of its special steel foundry
plant and machine shop in Rancagua.
ME Elecmetal has five foundries in full pro-
duction, in which it operates with the highest
standards in quality, productivity, and protec-
tion of the environment, reaching 100,000
MTons of capacity of castings of steel in wear
24
parts. Additionally, in Cananea, Mexico, the FUCASA foundry operates with a license of ME
Elecmetal. On the other hand, ME Elecmetal established manufacturing agreements of some cas-
ting parts selected for grinding equipment with three foundries in China, which elaborate
these products in accordance with the standards of quality, industrial security, protection of
the environment, and technical specifications of ME Elecmetal.
TERRITORIAL EXPANSION AND GLOBAL COVERAGE
ME Elecmetal has a worldwide distribution network with technical and sale service capability
that covers the five continents. The company is capable of ensuring the satisfaction of its
client’ needs, currently distributed in more than 35 countries, and to work together with them
in the design of solutions and productivity improvements by means of products and services
that meet the highest standards of quality and innovation technology.
In the Asian and African markets, jointly with the visits to the clients of the region by ME Elecmetal’s
commercial personnel, we operate through representation alliances and with subsidiary offi-
ces in Mongolia and Australia. On the other hand, in order to penetrate the markets of Russia
and countries of the Ex Soviet Union (CIS: Commonwealth of Independent States) the com-
pany maintains a representation agreement with FLSmidth Knelson from Russia. In addition,
in Latin America, the company has new affiliate offices in Peru, and has subsidiary offices in
Brazil.
DELIVERY OF COMPREHENSIVE SOLUTIONS TO CLIENTS
The prestige of ME Elecmetal’s quality is recognized worldwide and stems from a unique com-
bination of designs and alloys tailored to the needs of each client with the strictest technical
standards, which make it possible to achieve returns that significantly reduce mineral proces-
sing costs and other materials. This value proposal is much appreciated by our clients, with
whom we have been able to establish long-term strategic relationships that have enabled us
to lead in the market of wear parts for global mining.
An example of this is the leadership obtained in the market of wear components for crushing
SAG. In this market, excluding China and Russia/CIS (where the company has just started to
penetrate), ME Elecmetal boasts more than 50% share worldwide.
ANNUAL REPORT 2013Chapter 2 / Metallurgic Business
25
26
The technical service delivered by ME Elecmetal,
which generates an effective differentiation
with the competition, is aimed at finding the
least effective cost for its clients and inclu-
des advisory services in the optimization of
loading processes and treatment of minerals
and other materials, new designs, and on site
visits, with highly trained and highly expe-
rienced staff.
In addition to working jointly with clients in
identifying opportunities, finding innovative
solutions, and applying improvements in pro-
duction processes and maintenance practi-
ces, the benefit sales strategy allows for the
establishment of real strategic alliances with
clients. As part of this philosophy, Elecmetal
ME’s VAES program (“Value Added Enginee-
ring Services”) includes a series of activities
focused on six key areas of the mining opera-
tion: Production Increase, Greater Equipment
Availability, Effective Cost Reduction, Envi-
ronment Protection, Training, and Security.
Noteworthy is the introduction in the Chi-
lean market of ESCO’s adapter system and
Hammerless tip, which represents major im-
provements in the above-mentioned areas.
This system’s design incorporates significant
productive advantages for clients, which
translate into higher yields, important re-
duction of risks in the installation operation
and removal of items of wear, and effective
reduction of time devoted to these activities.
In this market of wear products for ground
engaging equipment, clients have recognized
the quality, safety, and ease of installation of
our products. In the haulage blade market for
large-scale mining, ME Elecmetal maintains a
leadership position in Chile, achieving a mar-
ket share of approximately 65%.
Complementing the line of business and com-
prehensive services of its clients, ME Elecmetal
consolidated its new business area of Inspec-
tion and Early Alert Service that delivers ins-
pections of mining equipment, 3D laser mea-
surements, predictive/symptomatic analysis,
and the most advanced technology available
in the market with ultrasound, thermography,
and laser scanning equipment and a highly
qualified technical team.
All these developments and the continued
emphasis on high quality products and ser-
vice excellence are part of the innovation
program that is present in the ongoing con-
duct of ME Elecmetal’s staff. A reflection of
this was the award granted to ME Elecmetal
in 2011 by Anglo American, as part of their
“Supplier Awards” program. Anglo American
grants this annual award worldwide in three
categories in recognition of the excellence of
ANNUAL REPORT 2013Chapter 2 / Metallurgic Business
27
its most outstanding suppliers. ME Elecmetal
was selected amongst the providers that su-
pply at different work sites worldwide, and
obtained the award of Best Global Supplier
in the Innovation Category. This achievement
recognizes the positive results obtained by
Anglo American when implementing new de-
signs and alloys proposed by ME Elecmetal
through the new benefit sales philosophy
VAES. Working together with the client, the
technical knowledge and the application of
world-class simulation software by our Engi-
neering and Design team, were fundamental
to increase the up time of the mills, increa-
se the processing rate and the quality of the
product, obtaining gains of service life and
lower accident exposure of workers, amongst
other benefits, and which constitute innova-
tive solutions and best practices for the mi-
ning market.
ORGANIZATIONAL DEVELOPMENT
ME Elecmetal’s Steel business is comprised
of close to 1,100 individuals, which are distri-
buted mainly in Chile, U.S.A., and China and
also in Australia, Brazil, Canada, and Mongo-
lia.
During the year, ME Elecmetal continued de-
veloping its efforts of organizational align-
ment and of motivation and commitment of
its staff to achieve its vision of the future: “to
be a globally competitive supplier, recognized
for its excellence and leadership in delivering
comprehensive solutions that add value to
mining processes and other target markets.”
Towards this end, ME Elecmetal advances ful-
filling its corporate mission of satisfying the
needs and exceeding expectations of its sha-
reholders, clients, employees, and communi-
ties where it operates, by providing compre-
hensive solutions to the market.
The values framework for management is ba-
sed on the fundamental principle of respect
for an individual’s dignity, and consists of a
set of corporate values such as comprehen-
sive human development, proactive search
for excellence, focus on the client, creativity
and innovation, teamwork and cooperation,
responsibility and integrity, and the commit-
ment to the environment. In this manner, ME
Elecmetal accords the highest priority to esta-
blishing work environments where individuals
can display their full potential, their creativity,
and initiative; so that they feel they are fulfi-
lling themselves through their job. This is the
essence of ME Elecmetal’s Path to Excellence.
28
On the other hand, during 2013, the company
continued to promote their people manage-
ment policies aimed at promoting the perso-
nal and professional development of its colla-
borators, security in the work place, and the
improvement of the quality of life of workers
and their families.
It is important to highlight the excellent labor
relations that exist in the plants, the spirit
of understanding amongst workers and ma-
nagement, and the collaboration and com-
promise of all to face challenges. Like years
before, the Great Place To Work survey was
carried out; this tool is used as the basis for
identifying and implementing specific pro-
grams for improving the organizational envi-
ronment. This is done by the company at a
general level with the help of external consul-
tants as well as the work teams.
FINANCIAL RESULTS
The year 2012 constituted an all-time record
in sales and profits for the steel business,
achieving active sales worldwide and optimal
levels of production as a result of expansion
projects, new plants, and new products and
services.
In regards to ME Elecmetal’s financial re-
sults, sales revenue of the metallurgic bu-
siness, which includes Elecmetal, Fundicion
Talleres, and ME Global (U.S.A.) in addition
to the commercialization of products produ-
ced by third parties under our specifications,
reached $284,855 million in 2013, a figure
19.7% higher than the year 2012. The increa-
se in sales is related to the global mining
activity where the company is present in 35
countries and the successful penetration of
the ball grinding business. The earnings of
the consolidated operational activities of the
steel business were $37,686 million, compa-
red to $33,712 million in 2012, product of the
increase in sales and operational efficiencies
originating from expansion and optimiza-
tion projects that have been carried out. The
EBITDA was $45,196 million in 2013, compa-
red to $40,151 million in 2012.
As occurred the year before, it’s difficult to
predict the evolution of the global economy
due to the growing environment of uncer-
tainty. However, all the matter experts agree
in predicting continuous growth in global
mining activity, the main destination of ME
Elecmetal’s goods and services. The com-
pany has made significant investments and is
currently developing projects to successfully
meet demand, maintaining high standards of
client satisfaction and loyalty, and good ma-
nagement results.
ANNUAL REPORT 2013Chapter 2 / Metallurgic Business
29
30
2.3 GLASS CONTAINER BUSINESS
31
Cristalerías de Chile is the country’s leader in the production and sale of glass containers,
with more than 100 years’ experience, supplying the wine, beer, soft drink, juices, mineral
water, and food markets.
In the year 2013, the glass container business registered sales for $109,822 million, which
represents an increase of 0.8% in regards to the previous year ($108,948 million).
The sale of containers for the wine industry, the company’s principal market, measured in
tons, showed an increase in relation to 2012 due mainly to the increase in the sale of wine
containers for the domestic market and the sale of containers for the sparkling wines market,
which were compensated in part by a reduction in the sale of containers for wine exports. It
is important to point out that in 2013 exports of bottled wine at a national level reached 48.4
million boxes, which represents a 0.81% decrease.
Regarding bottles for non-alcoholic drinks, sales of returnable containers and non-returnable
containers showed similar level to the year before.
In relation to the beer market, the consumption of beer showed an increase in 2013. The vo-
lume of sales of returnable container increased as a result of the continuation of the launch
of a 1,200 cc bottle the year before. The sale of non-returnable containers experienced an
important increase due to increased sales of individual formats.
The sales of bottles for pisco and liquor showed a decrease in regards to the previous year,
due mainly to decreased sales of containers for rum, as a result of a decrease in consumption
for the term.
The sales of containers for the food sector showed an increase over the previous year, due
mainly to the increase in sales of jars for infant food and bottles for olive oil.
In relation to the monetary results of the glass container business, the gross earnings for the
period were $30,595 million, which is 14.2% greater than the gross earnings of 2012. This
greater result is due mainly to the increase in revenue and improvements in the Company’s
productivity with a reduction in energy costs and other production costs. The earnings of
operational activities reached $19,314 million, compared to $16,915 million in 2012.
In commercial matters, the company carried out different activities with the objective of providing
a better service to its clients, studying, and promoting the development of new projects of glass
containers, and highlighting benefits of the latter. Some of the most important information:
• Working jointly with clients in new con-
tainer projects and the support with
marketing and materials in sale points
for the final product. Noteworthy in this
regard is the second stage of develop-
ment of a line of lightweight containers
for wine, Ecoglass.
• The sponsorship of important wine,
beer and food fairs, where Cristalerías
de Chile’s clients had a prominent par-
ticipation.
• Support to different activities oriented
towards the promotion of Chilean wine
abroad.
• Continuous massive campaign for the
recycling of glass containers and, as in
previous years, the collaboration with
Corporación de Ayuda al Niño Quema-
do – COANIQUEM -, an institution of re-
cognized prestige in Chile.
• Continuation of the publication of “En
Vitrina” a magazine directed to our
clients, which includes matters relative
to the different industries that use glass,
information is provided regarding new
products packaged in glass and gives
company information. This continues
to be an excellent contact opportunity
with clients and has allowed for the in-
crease and improvement of communi-
cation and information towards them.
In relation to investments, during the year
the company carried out investments for
approximately US$15 million in fixed assets
for the glass container business, mainly in
new lines of container transportation imple-
mented in Furnace C, Padre Hurtado Plant,
with the objective of increasing the speed
and improving the management of conic and
other shaped containers. Additionally, invest-
ments were made in a decorating line, which
will allow for delivering new container op-
tions for clients.
ANNUAL REPORT 2013Chapter 2 / Container Business
33
These investments are part of the Company’s
plan to incorporate the most modern techno-
logy and the necessary equipment for the
manufacturing of containers of the highest
international quality in order to be in optimal
conditions to supply the domestic and export
market demand.
The Company has a total production capacity
of over 500,000 annual tons to deliver the
best quality and opportunity, granting the
best service.
In regards to total results of the Company,
Cristalerías de Chile S.A. mainly consolidates
its results with S.A. Viña Santa Rita, Edicio-
nes Chiloé S.A., and Cristalchile Inversiones
S.A..
The total consolidated results of Cristalerías
de Chile as of December 31, 2013 was a net
profit of $21,126 million, which is not compa-
rable with that registered in 2012 of $46,247
million, since the latter includes extraordi-
nary earnings of $30,000 million after-taxes
from the sale of Megavisión S.A. in March
2012.
From the total earnings of 2013, equivalent
to $21,126 million, the amount of $18,899 mi-
llion is attributable to the shareholders of the
parent and $2,227 million are attributable to
non-controlling participants (minority inte-
rest).
During 2013 the Company’s consolidated sa-
les reached $231,105 million, which are com-
parable to $222,685 million in 2012. This in-
crease of 3,8% is mainly due to the increase
in sales of Viña Santa Rita (8.4%) and glass
containers (“Cristalchile Vidrio”) (0.8%).
Gross consolidated earnings of the exercise
reached $78,391 million that is comparable
to $67,772 million in 2012. The income tax for
the term is a charge of $4,133 million (charge
of $5,432 million in 2012).
34
2.4 WINE BUSINESS
35
Elecmetal participates in the wine business through direct and indirect ownership in So-
ciedad Anonima Viña Santa Rita. It commercializes Chilean wines with its own trademark,
in addition to the trademark Viña Carmen, Terra Andina, and Nativa, and commercializes
wines of Argentinian origin mainly with the trademark Doña Paula.
Viña Santa Rita disputes the leadership in sales in the domestic market and is, jointly with
its subsidiaries, the third wine group in valued exports of bottled wine.
During 2013 the consolidated sales of Viña Santa Rita and its subsidiaries reached $121,535
million, which represents an increase of 8.4% to 2012.
Export sales reached US$104.4 million dollars, which represent an increase of 10.8% in
regards to 2012; sales in the domestic market reached $57,670 million, 5.2% greater than
the sales of the prior year, and the revenue of other sales were $11,723 million, 1.9% grea-
ter than the year before.
In relation to exports, in 2013 Viña Santa Rita and its subsidiaries exported a total of 2,841
million boxes, a figure that is 6.6% greater than the previous year.
In 2013 the total average consolidated price of exports was US$36.8 per box, price that is
3.9% higher than the year 2012. For the principal trademarks, the average price of wines
was: Santa Rita, US$38.6 per box; Viña Carmen US$41.0 per box; and Viña Doña Paula
US$43.2 per box.
The main export markets for Viña Santa Rita and its subsidiaries are: United States of
America, Ireland, Scandinavia, United Kingdom, Holland, Japan, China Brazil, and Colom-
bia.
In relation to sales in the domestic market, physical sales reached 64.4 million liters,
which represents an increase of 6% in respect to the previous year, which can be explai-
ned by the increase in wine consumption domestically. In addition, the sale prices decrea-
sed 0.8%.
The year 2013 was very important for the wines of Viña Santa Rita and its subsidiaries in
terms of expert recognition and international coverage. Amongst these is the recognition
of Casa Real as Wine Legend by the prestigious British magazine Decanter. With this pu-
blication. Chile entered the wine’s big leagues for the first time, this being the first Chilean
and South American wine ever recognized as such, placing itself with Chateau Margaux,
36
Vega Sicilia, Mouton-Rothschild, Lafite, and Dom Pérignon, amongst others. On the other
hand, Santa Rita’s Triple C was selected amongst the 100 best wines of the world by the
American publication Wine Spectator. Amongst the awards obtained in international wine
competitions are: Gran Medalla de Oro for Nativa Terra Reserva Sauvignon Blanc 2013,
Casa Real Reserva Especial 2009, and Carmen Winemaker’s Reserve Carmenere 2009
in the Concours Mondial de Bruxelles Chile. Also this year, the German Contest Mundus
Vini where six medals were obtained and the recognition for the best Chilean red wine for
Carmen Reserva Grande Vidure – Cabernet Sauvignon 2011.
In regards to communications and public relations, diverse activities and publications
were developed at an international level, amongst which its worth mentioning the disse-
mination of the second educational seminar South American Wine Workshop in London in
January 2013. The latter featured prominent personalities of the written press in the UK
and achieved significant international coverage. Within the framework of this Seminar a
dinner and wine tasting was heldwith great writers and critics of international wine, Mas-
ter of Wine. The event included a blind tasting of Cabernet Sauvignons of the world with
the best exponents of this variety, amongst which were Santa Rita Casa Real and Carmen
Gold Reserve. International critics praised both the execution of this event and the Pre-
mium sample that was presented.
In regards to investments, during 2013 Viña Santa Rita invested 8.5 million dollars mainly
in the areas of agriculture, enology, and infrastructure with impact in improvements in
productivity and the concentration of operations. This investment aims at sustaining Viña
Santa Rita’s strategic plan, oriented towards improving the enological efficiency, obtai-
ning greater self sufficiency of fine grapes and increasing the production of high quality
wine.
In the area of agriculture, Viña Santa Rita continued with its program of planting fine
varieties mainly in the areas of Alhué, Palmilla, Pumanque, and Los Hualpes. In addition,
investments were made in anti-hail nets, irrigation systems, and deep wells, in addition
to investments in different agricultural machineries to automate processes and increase
productivity.
In relation to the financial results of the year, the consolidated gross earnings of Viña
Santa Rita were of $46,258 million, which is 19.7% greater than the previous year. The
earnings of operational activities were $8,625 million, 39% greater to the earnings of
2012, which were equivalent to $6,207 million. The increase in the results is due to the in-
crease in sales and the higher gross margins, which increased from 34.5% the year befo-
ANNUAL REPORT 2013Chapter 2 / Wine Business
re to 38.1% in 2013. The latter is a result of
greater average price in the export market
and reduced unitary cost in both the local
and export market.
Distribution costs increased 9% due to in-
creased shipments abroad and sales in the
domestic market; administration costs and
total sales increased in 16%, which is main-
ly explained by the growth of total sales
and also product of a greater investment
in marketing, both nationally as well as in-
ternationally, the opening and expansion
of commercial offices abroad and because
of greater costs in salaries and severance
payment due to the rationalization of cen-
tral costs.
Viña Santa Rita registered an investment
in subsidiaries for $497 million, which can
be explained mainly by the result of Viña
Los Vascos S.A., whose controlling share-
holders with 57% is Les Domaines Barons
de Rothschild (Lafite) and where Viña San-
ta Rita is the owner of the remaining 43%.
During the year 2013 Viña Los Vascos sold
420 thousand boxes, which is 6.1% greater
than 2012 with an average Price of US52.4
per box, in comparison to US$51 from the
previous exercise. The result recognized by
Viña Santa Rita was a profit of $479 million
in 2013 ($535 million is 2012).
The total consolidated results of Viña San-
ta Rita as of December 31, 2013 were a net
profit of $6,105 million ($3,115 million in
2012).
38
2.5 COMMUNICATIONS BUSINESS
39
Since 1989 ELECMETAL participates in the
media and communications area via Cris-
talerías de Chile S.A., which, through its sub-
sidiary Ediciones Chiloé S.A., is present in the
written news business with “Diario Financie-
ro” and in the editorial with the magazines
“CAPITAL”,“ED”, and others.
EDICIONES FINANCIERAS S.A.
Diario Financiero, which celebrated its 25-
year anniversary this year, is the most read
business newspaper by executives in Chile,
according to the reading study carried out
annually by Ipsos Chile.
The printed media industry is experiencing
a process of big changes in reading habits,
transitioning from paper to digital. Notwith-
standing the increase in total readership,
sales from marketing decreased for a second
consecutive year, estimating a reduction of
4.1% this exercise.
During 2013 the company had income for
$4,856 million and the final result was a loss
of $207 million (loss of $31 million in 2012).
EDICIONES E IMPRESOS S.A.
Ediciones e Impresos S.A. publishes the busi-
ness magazine “CAPITAL” and the decoration
and design magazine “ED”, both trademarks
are leaders in their corresponding focus
groups.
“CAPITAL” in the most read magazine by
Chilean executives, in accordance to a study
carried out annually by Ipsos Chile, in 2013 it
won three Mag awards, which distinguish the
best in the magazine industry.
In 2013 the company launched the first digi-
tal magazine of sustainability and innovation,
“The Note”, a niche magazine amongst exec-
utives.
The magazine “ED” on the other hand won
four Mag Awards. The award highlights Bazar
ED Online, the company’s first ecommerce
site.
The company’s revenue increased to $3,988
million and the final income of the period was
a profit of $278 million (profit of $339 million
in 2012).
40
41
Consolidated Financial Statements 2013CHAPTER 3
Consolidated Financial Statements 2013 41
Classified Statement Of Financial Position 42
Incomes Statement By Function 44
Comprehensive Income Statement 45
Direct Cash Flow Statement 46
Independent Auditors Report 48
Related Companies 50
Main Related Companies 50
Summary Of Financial Statement Of Main Subsidiaries 55
Statement of Liability 59
42
CONSOLIDATED FINANCIAL STATEMENTS
Assets 12-31-2013 12-31-2012
Current Assets
Cash and cash equivalents 63,472,894 46,320,018
Other current financial assets 24,500,705 17,738,116
Other non-financial assets, current 1,968,342 2,713,778
Trade and other receivables, current 139,328,515 108,579,755
Receivable from Related Entities, current 4,141,126 17,240,433
Inventory 146,303,462 144,646,072
Biological assets, current 5,937,851 5,240,875
Tax assets, current 14,241,850 12,403,683
Total current assets different from assets or groups of assets for their for their disposal classified as maintained for sale or maintai-ned for distribution to owners
399,894,745 354,882,730
Non-current assets or groups of assets for their disposal classified as maintained for sale
0 0
Non-current assets or groups of assets for their disposal classified as maintained for distribution to owners
0 0
Non-current assets or groups of assets for their disposal classified as maintained for sale or maintained for distribution to owners
0 0
Total current assets 399,894,745 354,882,730
Non-current assets
Other financial assets, non-current 3,621,510 13,695,726
Other non-financial assets, non-current 4,535,992 4,880,456
Receivables, non-current 799,021 114,316
Non-current Inventory 0 0
Receivable from Related Entities, non-current 0 0
Investments accounted using equity method 47,111,1530 44,218,6860
Intangible assets different from capital gain 9,428,466 7,592,320
Capital gain 4,451,237 4,451,237
Property, Plant and Equipment 240,678,153 233,517,796
Biological assets, non-current 24,708,852 25,138,418
Investment property 2,361,041 2,421,429
Non-current tax assets 0 0
Deferred tax assets 6,201,211 5,484,668
Total non-current assets 343,896,636 341,515,052
Total Assets 743,791,381 696,397,782
CLASSIFIED STATEMENT OF FINANCIAL POSITION
43
Equity and Liabilities 12-31-2013 12-31-2012
Liabilities
Current Liabilities
Other financial liabilities, current 30,401,923 9,588,931
Trade and other payables, current 76,451,433 58,942,126
Payables to Related Parties, current 3,277,328 1,611,566
Other provisions, current 734,722 686,776
Liabilities from taxes, current 11,271,979 23,389,222
Provisions of employee benefits, current 7,314,317 6,854,038
Other non-financial liabilities, current 3,265,111 4,022,801
Total current liabilities different from the liabilities included in the groups of assets for their disposal classified as being maintained for its sale
132,716,813 105,095,460
Total current liabilities 132,716,813 105,095,460
Non-current liabilities
Other financial liabilities, non-current 182,529,841 166,981,948
Other Payables, non-current 19,167 18,845
Payables to Related Parties, non-current 0 0
Other provisions, non-current 204,484 204,484
Deferred tax liability 22,306,499 21,410,634
Provisions for employee benefits, non-current 9,241,360 10,006,097
Other financial liabilities, non-current 3,550,250 1,791,227
Total non-current liabilities 217,851,601 200,413,235
Total liabilities 350,568,414 305,508,695
Equity
Share capital 23,024,953 23,024,953
Retained earnings (losses) 246,461,550 238,587,019
Other reserves (2,031,857) (4,907,257)
Total equity attributable to the shareholders of the parent 267,454,646 256,704,715
Non-controlling interest 125,768,321 134,184,372
Total equity 393,222,967 390,889,087
Total de equity and liabilities 743,791,381 696,397,782
44
INCOME STATEMENT BY FUNCTION
Income Statement by Function01-01-2013 01-01-2012
12-31-2013 12-31-2012
Profit (loss)
Revenue from ordinary activities 516,016,883 460,522,388
Cost of sales (380,754,673) (344,286,435)
Gross profit 135,262,210 116,235,953
Other income, by function 4,419,753 3,249,706
Distribution Costs (10,787,190) (9,411,041)
Administration costs (60,883,484) (52,816,502)
Other expenses, by function (1,759,277) (1,111,446)
Other earnings (loss) (855,930) (927,599)
Earnings (loss) from operational activities 65,396,082 55,219,071
Financial revenue 2,121,693 3,617,576
Financial costs (8,618,929) (7,308,262)
Participation in earnings (loss) of associates and joint businesses that are accounted using the equity method
2,465,445 2,545,400
Exchange rate differential 3,603,699 (207,674)
Results for indexation units (2,599,285) (2,667,157)
Earnings (loss), before taxes 62,368,705 51,198,954
Expenses from income tax (15,899,410) (15,532,602)
Earnings (loss) from continued operations 46,469,295 35,666,352
Earnings (loss) from discontinued operations 0 29,540,245
Earnings (loss) 46,469,295 65,206,597
Earnings (losses), attributable to
Earnings (loss), attributable to shareholders of the parent 37,020,697 43,577,071
Earnings (loss), attributable to non-controlling interest 3,743,047 21,629,526
Earnings (loss) 46,469,295 65,206,597
Earnings per share
Earnings per basic share
Earnings (loss) per basic share in continued operations 1,060,94 814,30
Earnings (loss) per basic share in discontinued operations 0,00 674,43
Earnings (loss) per basic share 1,060,94 1,488,73
ANNUAL REPORT 2013Chapter 3 / Consolidated Financial Statements
45
COMPREHENSIVE INCOME STATEMENT
Comprehensive Income Statement 01-01-2013 01-01-2012
12-31-2013 12-31-2012
Earnings (loss) 46,469,295 65,206,597
Components of other comprehensive income, before taxes
Differences currency adjustments
Earnings (loss) from differences currency adjustments, before ta-xes
3,743,047 (6,128,118)
Other comprehensive income, before taxes, differences from currency adjustments
3,743,047 (6,128,118)
Cash flow hedges
Earnings (loss) from cash flow hedges, before taxes (180,867) 38,613
Other comprehensive income, before taxes, cash flow hedges (180,867) 38,613
Other comprehensive income, before taxes, earnings (loss) from revaluation
(444,058) (170,860)
Other comprehensive income, before taxes, earnings (loss) from actuarial defined benefit plans
(242,722) 0
Participation in the other comprehensive results of associates and joint businesses that are accounted using the equity method
0 277,910
Other components of other comprehensive income, before ta-xes
2,875,400 (5,982,455)
Other Comprehensive Income 2,875,400 (5,982,455)
Total Comprehensive Income 49,344,695 59,224,142
Comprehensive income attributable to
Comprehensive income, attributable to shareholders of the parent 39,896,097 37,594,616
Comprehensive income, attributable to non-controlling interest 9,448,598 21,629,526
Total Comprehensive income 49,344,695 59,224,142
46
DIRECT CASH FLOW STATEMENT
Direct Cash flow Statement01-01-2013 01-01-2012
12-31-2013 12-31-2012
Cash flow from (utilized in) operational activities
Types of charges by operational activities
Charges from the sale of goods and the provision of services 564,832,567 507,434,802
Types of payments
Payments to suppliers for the supply of goods and services (401,952,468) (375,378,917)
Payments to and on behalf of employees (73,552,122) (64,431,124)
Other payments by operational activity (14,660,581) (8,971,883)
Net cash flows from (used in) operational activities 74,667,396 58,652,878
Dividends 132,570 2,113,718
Paid interest (8,395,045) (7,003,019)
Interest received 2,488,936 3,684,333
Reimbursed income tax (paid) (17,684,959) (10,212,713)
Other case entries (outflows) 330,828 (948,948)
Cash flow from (used in) operational activities 51,539,726 46,286,249
Cash flows from (used in) investment activities
Cash flows from loss of control of subsidiaries or other business 0 88,829,218
Cash flow used to gain control of subsidiaries or other businesses 0 (7,931,652)
Cash flows used in the purchase of non-controlling interest (145,799) (268,889)
Other charges for the sale of interest or debt instruments of other entities
55,543,003 114,938,595
Other payments to acquire interest or debt instruments of other entities
(49,064,366) (90,945,537)
Other charges for the sale of interest in joint businesses 13,125,000 0
Other payments to acquire interest in joint businesses (4,621,970) (3,062,104)
Debt to related entities 0 (2,200,930)
Amounts from the sale of property, plant and equipment 87,418 105,760
Purchase of property, plant, and equipment (25,732,567) (40,384,035)
Purchase of intangible assets (2,185,126) (99,453)
Purchase of other long term assets (2,017,085) (887,567)
Amounts from government subsidies 837,391 0
Payments derived from futures, forwards, options, and swaps agreements
(1,517,178) (5,842,727)
Charges from futures, forwards, options, and swaps agreements 274,340 7,935,623
Charges to related entities 0 2,772,224
Other cash outflows (419,527) (102,857)
Net cash flows from (used in) investment activities (15,836,466) 62,855,669
ANNUAL REPORT 2013Chapter 3 / Consolidated Financial Statements
47
Cash flows from (used in) financing activities
Payments from other equity participations 0 (379,179)
Amounts from long term debt 3,849,570 5,067,621
Amounts from short term debt 11,227,658 39,400,913
Total amounts from debt, classified as financing activities 15,077,228 44,468,534
Debt of related entities 1,077 595
Payments of debt (20,917,252) (49,569,172)
Dividends paid (34,589,595) (107,445,793)
Other sources of financing (Inflows from Bond Emissions) 34,093,812 0
Other cash outflows (14,856,119) 0
Net cash flows from (used in) financing activities (21,190,849) (112,925,015)
Net increase (decrease) in cash and cash equivalents, before the effect of changes in exchange rate
14,512,411 (3,783,097)
Effects of the variation in the exchange rate over cash and cash equivalents
2,640,465 (167,166)
Net increase (decrease) of cash and cash equivalents 17,152,876 (3,950,263)
Cash and cash equivalents at the beginning of the term 46,320,018 50,270,281
Cash and cash equivalents at the end of the term 63,472,894 46,320,018
48
INDEPENDENT AUDITORS REPORT
Sirs.
Directors and Shareholders
Compañía Electro Metalúrgica S.A.:
Report on the consolidated financial statements
We have audited the enclosed consolidated financial statement of Compañía Electro Metalúrgica S.A.
and subsidiaries, which include the consolidated statement of the financial situation as of December
31, 2013 and 2012 and the corresponding consolidated statement of comprehensive income, of chang-
es in equity and cash flows for the years ending on those dates, and the corresponding notes to the
consolidated financial statements.
Management’s responsibility for the consolidated financial statements
Management is responsible for the preparation and reasonable presentation of these consolidated
financial statements in accordance with International Standards of Financial Information. This respon-
sibility includes the design, implementation, and maintenance of the pertinent internal controls for the
preparation and reasonable presentation of these consolidated financial statements so that they are
free from significant incorrect representations, whether due to fraud or error.
Responsibility of the Auditor
Our responsibility consists of issuing an opinion regarding these financial statements, based on our
audits. We have not audited the financial statements of the indirect subsidiaries (consolidated) Viña
Doña Paula S.A. and Sur Andino Argentina S.A., which show total assets that represent 2.2% and
2.4% as of December 31, 2013 and 2012 and a total revenue that represents a 2% and 1.7% respect-
fully for the years ending on those dates. Neither have we audited the financial statements of the
associate (indirect) Viña Los Vascos S.A., the investment as of December 31, 2013 and 2012 that was
of M$15,159,245 (2.03% of total assets) and of M$13,189,719 (1.9% of total assets) respectfully and
its accrued net income was M$478,586 (1% of the total results) and M$534,738 (0.8% of the total
results) respectfully for the years ending on those dated. The financial statements of Viña Doña Pau-
la S.A., Sur Andino Argentina S.A., and Viña Los Vascos S.A., were audited by other auditors whose
reports have been supplied to us and our opinion expressed herein, referred to the amounts included
in relation to such companies, is based solely on the reports issued by those auditors. We conducted
our audits in accordance with generally accepted auditing standards in Chile. Those standards require
that we plan and perform our job with the objective of obtaining a reasonable degree of security that
the consolidated financial statements are free from of material misstatement. An audit involves car-
rying out procedures to obtain auditing evidence on the amounts and revelations in the consolidated
ANNUAL REPORT 2013Chapter 3 / Consolidated Financial Statements
49
financial statements. The selected procedures depend on the judgment of the auditor, including the
evaluation of the risks of material misstatements in the consolidated financial statements, whether
due to fraud or error. When carrying out these risk evaluations, the auditor considers the pertinent
internal control for the preparation and reasonable presentation of the consolidated financial state-
ments of the entity with the objective of designing auditing procedures that are appropriate to the
circumstances, but without the intention of expressing an opinion on the effectiveness of the internal
control of the entity. Consequently, we do not issue an opinion of that nature. An audit includes, as
well, evaluating how appropriate the accounting policies that were used are, and the reasonability of
the material accounting estimations carried out by management, as well as an evaluation of the gen-
eral presentation of the consolidated financial statements.
We believe that the auditing evidence that we have obtained is sufficient and appropriate to provide a
basis to support our auditing opinion with exceptions.
Basis for the opinion with exceptions
The company maintains registered as of December 31, 2013 and 2012, its indirect investment of 40%
in Rayen Curá S.A.I.C., which represent a 1.66% and a 1.83% respectfully of its total consolidated
assets, on the basis of financial statements prepared in their origin, in accordance with Generally
Accepted Accounting Principles in Argentina. The accounting treatment of these investments is not
in accordance with International Financial Reporting Standards. The effects of these deviations in the
Company’s consolidated financial statements, had the investments been valued according to Interna-
tional Financial Reporting Standards, have not been determined.
Opinion with exceptions
In our opinion, based on our audits and the reports of the other auditors, and except for the effects
of not booking the investments mentioned above of “Basis of the Opinion with Exceptions”, the con-
solidated financial statements referred to above present fairly, in all material respects, the financial
position of Compañía Electro Metalúrgica S.A. and subsidiaries as of December 31, 2013 and 2012, and
the results of their operations and cash flows for the years ending on those dates, in accordance with
International Financial Reporting Standards.
Alejandra Vicencio S.
KPMG Ltda. Santiago, March 4, 2014
50
In accordance with current regulations of the Superintendence of Securities and Insurance, a
detailed summary of the Subsidiary’s Financial Statements is included herein below.
Such Financial Statements, in complete form, may be consulted in the offices of Electro Meta-
lúrgica S.A. and the Superintendence of Securities and Insurance.
MAIN RELATED COMPANIES
Inversiones Elecmetal Ltda.
Equity MUS$ 140.379
Type of entity Limited Liability Company
Corporate Purpose Investments
Tax Number 99,506,820-6
Chairman Jaime Claro Valdés (Chairman Elecmetal)
Vice-chairman Baltazar Sánchez Guzmán (Vice-chairman Elecmetal)
Director Rolando Medeiros Soux (General Manager Elecmetal)
General Manager Rolando Medeiros Soux (General Manager Elecmetal)
Direct interest 99.99%
Direct and Indirect Interest 100%
ME Global Inc. (EE.UU.)
Equity MUS$ 144,517
Type of entity Closed corporation
Corporate purpose Steel foundry
Chairman Jaime Claro Valdés (Chairman Elecmetal)
DirectorsRolando Medeiros Soux (General Manager Elecmetal)
Baltazar Sánchez Guzmán (Vice-chairman Elecmetal)
CEO Rolando Medeiros Soux (General Manager Elecmetal)
Indirect interest 100%
RELATED COMPANIES
51
Servicios y Consultorías Hendaya S.A.
Equity M$ 84,615,203
Type of entity Closed corporation
Corporate PurposeInvestments in companies and provision of services and con-
sultancies.
Tax number 83,032,100-4
Chairman Jaime Claro Valdés (Chairman Elecmetal)
Directors
Juan Antonio Álvarez Avendaño (Director Elecmetal)
Juan Agustín Figueroa Yávar (Director Elecmetal)
Patricio García Domínguez
Rolando Medeiros Soux (General Manager Elecmetal)
Alfonso Swett Saavedra (Director Elecmetal)
General Manager Luis Grez Jordán
Direct Interest 99.99%
Cristalerías de Chile S.A.
Equity M$ 224.248.163
Type of Entity Open corporation
Corporate purpose Manufacture of glass and investments in companies
Tax number 90,331,000-6
Chairman Baltazar Sánchez Guzmán (Vice-chairman Elecmetal)
Vice-Chairman Jaime Claro Valdés (Chairman Elecmetal)
Directors
Juan Antonio Álvarez Avendaño (Director Elecmetal)
Joaquín Barros Fontaine
Juan Agustín Figueroa Yávar (Director Elecmetal)
Fernando Franke García (Director Elecmetal)
Arturo Concha Ureta
Alfonso Swett Saavedra (Director Elecmetal)
Blas Tomic Errázuriz
Antonio Tuset Jorratt
General Manager Cirilo Elton González
Direct Interest 34.03%
Direct and Indirect Interest 53.57%
52
Sociedad Anónima Viña Santa Rita
Equity M$ 152,361,218
Type of entity Open corporation
Corporate purpose Production and commercialization of wines
Tax number 86,547,900-K
Chairman Juan Agustín Figueroa Yávar (Director Elecmetal)
Vice-Chairman Baltazar Sánchez Guzmán (Vice-Chairman Elecmetal)
Directors
Gregorio Amunategui Prá
Joaquín Barros Fontaine
Arturo Claro Fernández
Andrés Navarro Betteley
Pedro Ovalle Vial
Alfonso Swett Saavedra (Director Elecmetal)
General Manager Silvio Rostagno Hayes
Direct Interest 1.92%
Direct and indirect interest 57.92%
Fundición Talleres Ltda.
Equity M$ 17.997.203
Type of entity Limited liability company
Corporate purpose Steel foundry
Tax number 99,532,410-5
Chairman Rolando Medeiros Soux (General Manager Elecmetal)
Directors
José Ignacio Figueroa Elgueta
Eduardo González Errázuriz
Nicolás Cuevas Ossandón
Raoul Meunier Artigas
José Pablo Domínguez Bustamante
General Manager José Pablo Domínguez Bustamante
Direct interest 98%
Direct and indirect interest 100%
ANNUAL REPORT 2013Chapter 3 / Related Companies
53
Cristalchile Inversiones S.A.
Equity M$ 1.634.453
Type of entity Closed corporation
Corporate purposeInvestments, both in Chile and abroad, in all types of goods,
tangible or intangible, shares and corporate interest
Tax number 96,972,440-5
Chairman Jaime Claro Valdés (Chairman Elecmetal)
DirectorsPedro Jullian Sánchez
Baltazar Sánchez Guzmán (Vice-Chairman Elecmetal)
General Manager Cirilo Elton González
Indirect interest 53.56%
ME Elecmetal (China) Co., Ltd.
Equity MUS$ 21.718
Type of entity Wholly Foreign Owned Enterprise
Corporate purpose Steel foundry
Chairman Jaime Claro Valdés (Chairman Elecmetal)
DirectorsBaltazar Sánchez Guzmán (Vice-Chairman Elecmetal)
Rolando Medeiros Soux (General Manager Elecmetal)
Plant Manager Roger Luo
Indirect interest 100%
54
Rayén Curá S.A.I.C. (República Argentina)
Equity M$ Arg. 383.780
Type of entity Closed corporation
Corporate purpose Manufacture and sale of glass of glass objects
Tax number 99,532,410-5
Chairman Benoit D’iribarne
Vice-chairman Cirilo Elton González
Directors
Damián Fernando Beccar Varela
Edgardo Federico Del Popolo Kremer
Walter Formica
Roberto Luiz Hecksher Correa Netto -alternate-
Baltazar Sánchez Guzmán -alternate- (Vice-Chairman Elec-
metal)
Néstor Silva Gómez - alternate -
Ricardo Vicente Seeber - alternate -
General Manager Walter Formica
Direct Interest 98%
Direct and Indirect Interest 100%
Esco Elecmetal Fundición Limitada
Equity M$ 24.332.174
Type of entity Limited liability company
Corporate Purpose Steel foundry
Tax number 76,902,190-6
Chairman Rolando Medeiros Soux (General Manager Elecmetal)
Vice-Chairman Joe Weber
DirectorsRaoul Meunier Artigas
Andy Rowzee
Site Manager Ramón Alarcón Arias
Direct Interest 50%
ANNUAL REPORT 2013Chapter 3 / Related Companies
55
SUMMARY OF FINANCIAL STATEMENT OF MAIN SUBSIDIARIES
INVERSIONES ELECMETAL LTDA. (CONSOLIDATED)2013 2012
MUS$ MUS$
Current Assets 138,524 101,266
Non-current Assets 116,866 93,921
Total Assets 255,390 195,187
Current Liabilities 37,168 36,634
Non-Current Liabilities 77,690 56,822
Equity 140,532 101,731
Total liabilities and equity 255,390 195,187
Revenue from ordinary activities 355,972 322,169
Gross earnings 83,985 71,473
Earnings of the period 37,423 32,272
Variation of net cash and cash equivalents 24,536 8,624
Cash and cash equivalents at the end of the period 33,168 8,632
ME GLOBAL INC (U.S.A.)2013 2012
MUS$ MUS$
Current assets 116,728 90,206
Non-current assets 81,092 82,321
Total Assets 197,820 172,527
Current liabilities 26,088 32,838
Non-current liabilities 27,214 34,561
Equity 144,518 105,128
Total liabilities and Equity 197,820 172,527
Revenue from Ordinary Activities 290,320 285,714
Gross earnings 81,675 70,243
Earnings of the period 39,114 32,856
Variation of net cash and cash equivalents 24,080 26
Cash and cash equivalents at the end of the period 24,108 28
56
SERVICIOS Y CONSULTORÍAS HENDAYA S.A. (CONSOLIDADO)
2013 2012
M$ M$
Current assets 3,687,153 3,199,310
Non-current assets 84,983,754 86,482,600
Total Assets 88,670,907 89,681,910
Current liabilities 894,996 783,510
Non-current liabilities 748,037 1,067,249
Equity 87,027,874 87,831,151
Total liabilities and Equity 88,670,907 89,681,910
Revenue from Ordinary Activities 1,790,518 2,088,832
Gross earnings 567,395 390,960
Earnings of the period 5,548,654 9,445,725
Variation of net cash and cash equivalents (139,891) (29,102)
Cash and cash equivalents at the end of the period 2,528,108 2,667,999
CRISTALERÍAS DE CHILE S.A. (CONSOLIDADO)2013 2012
M$ M$
Current assets 217,960,846 225,408,290
Non-current assets 257,500,818 272,959,718
Total Assets 475,461,664 498,368,008
Current liabilities 71,685,785 58,862,707
Non-current liabilities 119,107,923 143,387,990
Equity 284,667,956 296,117,311
Total liabilities and Equity 475,461,664 498,368,008
Revenue from Ordinary Activities 231,104,673 222,685,039
Gross earnings 78,391,492 67,772,366
Earnings from continued operations 21,125,964 16,274,009
Earnings from discontinued operations - 29,973,156
Earnings of the period 21,125,964 46,247,165
Variation of net cash and cash equivalents (1,296,777) (16,635,273)
Cash and cash equivalents at the end of the period 25,132,090 26,428,867
ANNUAL REPORT 2013Chapter 3 / Related Companies
57
SOCIEDAD ANÓNIMA VIÑA SANTA RITA (CONSOLIDADO)2013 2012
M$ M$
Current assets 116,023,755 111,755,093
Non-current assets 109,249,273 108,808,367
Total Assets 225,273,028 220,563,460
Current liabilities 26,657,919 23,300,720
Non-current liabilities 46,247,073 47,973,609
Equity 152,368,036 149,289,131
Total liabilities and Equity 225,273,028 220,563,460
Revenue from Ordinary Activities 121,534,621 112,132,374
Gross earnings 46,258,043 38,645,268
Earnings of the period 6,104,844 3,114,737
Variation of net cash and cash equivalents 8,561,861 (991,035)
Cash and cash equivalents at the end of the period 9,531,712 969,851
FUNDICIÓN TALLERES LTDA.(CONSOLIDADO)2013 2012
M$ M$
Current assets 19,023,124 19,791,908
Non-current assets 8,542,435 8,309,006
Total Assets 27,565,559 28,100,914
Current liabilities 9,126,506 11,426,427
Non-current liabilities 441,861 184,877
Equity 17,997,192 16,489,610
Total liabilities and Equity 27,565,559 28,100,914
Revenue from Ordinary Activities 35,192,377 35,199,738
Gross earnings 4,999,877 5,401,680
Earnings of the period 1,501,659 1,612,279
Variation of net cash and cash equivalents 401,172 614,747
Cash and cash equivalents at the end of the period 1,065,471 664,299
58
CRISTALCHILE INVERSIONES S.A.2013 2012
M$ M$
Current assets - -
Non-current assets 15,439,618 15,861,341
Total Assets 15,439,618 15,861,341
Current liabilities 18,297 10,775
Non-current liabilities 13,786,868 13,509,582
Equity 1,634,453 2,340,984
Total liabilities and Equity 15,439,618 15,861,341
Earnings of the period 1,544,315 2,152,914
ESCO ELECMETAL FUNDICION LIMITADA2013 2012
M$ M$
Current Assets 6,387,623 7,855,971
Non-current assets 37,133,747 38,022,929
Total assets 43,521,370 45,878,901
Current liabilities 9,620,310 21,652,799
Non-current liabilities 9,568,886 -
Equity 24,332,174 24,226,102
Total liabilities and equity 43,521,370 45,878,901
Earning (loss) for the period 106,072 (1,330,528)
Variation of net cash and cash equivalents 602,551 (2,466,767)
Cash and cash equivalents at the end of the period 899,996 297,445
59
The signing parties, acting as Director and General Manager of Compañía Electro Metalúrgica S.A.,
Elecmetal S.A., registered in the Securities Registry No. 045 swear under oath that the information
contained in the Annual Report of the Company is true and that it is sent to the Superintendence of
Securities and Insurance duly signed by the majority of its Board Directors.
JAIME CLARO VALDÉSChairman
I.D. Number 3,180,078-1
BALTAZAR SÁNCHEZ GUZMÁNVICE-CHAIRMAN
I.D. Number 6,060,760-5
JUAN ANTONIO ÁLVAREZ AVENDAÑODIRECTOR
I.D. Number 7.033.770-3
CARLOS F. CÁCERES CONTRERASDIRECTOR
I.D. Number 4.269.405-3
JUAN AGUSTÍN FIGUEROA YÁVARDIRECTOR
I.D. Number 3.513.761-0
FERNANDO FRANKE GARCÍADIRECTOR
I.D. Number 6.318.139-0
ALFONSO SWETT SAAVEDRADIRECTOR
I.D. Number 4.431.932-2
ROLANDO MEDEIROS SOUXGERENTE GENERAL
I.D. Number 5.927.393-0
Statement of Liability
www.me-elecmetal.com