SIDERAR SOCIEDAD ANONIMA INDUSTRIAL Y COMERCIAL

FINANCIAL STATEMENTS

AT SEPTEMBER 30, 2002

SIDERAR SOCIEDAD ANONIMA INDUSTRIAL Y COMERCIAL

FINANCIAL STATEMENTS

AT SEPTEMBER 30, 2002

Summary information

Consolidated financial statements

Financial statements at September 30, 2002

Balance sheet

Statement of income

Statement of changes in shareholders’ equity

Statement of sources and uses of funds

Notes and exhibits to the financial statements

Report on limited review

SUMMARY INFORMATION

In accordance with the regulations of Resolution No. 368/01 of the National Securities Commission the Board of Directors has approved the following information corresponding to the period of nine months begun on January 1, 2002 and ended September 30, 2002.

1. ACTIVITIES OF THE COMPANY

1. Results for the year to date

In accordance with Resolution MD 3/2002 issued by the Professional Council in Economic Sciences for the Autonomous City of Buenos Aires and Resolution No.415/02 of the National Securities Commission, these financial statements are disclosed adjusted for inflation. The financial statements are expressed in constant September 30, 2002 Argentine pesos, considering that the accounting measurements that had been restated by the changes in the purchasing power of the currency through to August 31, 1995, as well as those that had a date of origin in the period between that date and December 31, 2001, were restated by the changes in the purchasing power of the currency as from that latter date.

Results of foreign currency denominated transactions of the period were converted into pesos at the relevant exchange rate at the moment each transaction was performed and were adjusted for inflation up until the period closing date using the Wholesale Price Index (IPIM). Holding results on related and subsidiary companies abroad were converted at the relevant exchange rate at the end of the period. Figures for fiscal years prior to December 31, 2001 were restated in closing date currency on the basis of the change in the IPIM between December 31, 2001 and September 30, 2002, in accordance with the procedures detailed in Note 2.2 to the financial statements.

The buying rate for US dollars at the end of the period was 3.64 pesos, and the selling rate was 3.74 pesos. The average rate for US dollars for the period was 2.96 pesos. Accumulated wholesale inflation in 2002 to September 30, 2002 was 121.2%.

Results for the period developed in a context of considerable uncertainty, as a result of the difficult political and economic situation Argentina undergoes. Changes in economic regulations, the sharp currency devaluation which had significant impact on the prices of goods and services, together with the deep changes in the financial system, had a strong effect on the already persistent recessive situation in the domestic market.

The consolidated result for the period was a profit of $ 17.6 million; this figure is made up of an operating profit of $ 359.3 million, a loss generated by financial and holding results, and other ordinary income and expense for $ 402.5 million (generated basically by the devaluation, which affected mainly the indebtedness and the conversion of certain credits into pesos), a gain from investments in related companies of $ 12.4 million and a gain from net foreign exchange results in related companies of $ 48.4 million. During the same period of the previous year, the net result was a loss of $ 92.1 million.

During the period shipments totaled 1,570 thousand tons (including slabs for 171 thousand tons) and the production of hot rolled products amounted to 1,481 thousand tons, compared to the 1,545 thousand tons (including slabs for 41 thousand tons) and 1,545 thousand tons respectively in the same period of the previous year.

Sales on the domestic market totaled 543 thousand tons, a drop of 25% compared to the 726 thousand tons in the same period of the previous year.

Export sales totaled 1,028 thousand tons, a 26% increase compared to the 819 thousand tons shipped in the same period of the previous year.

Net sales amounted to $ 1,862.4 million, compared to the $ 1,388.3 million in the same period of the previous year. Most of the increase in net sales was due to the effects of converting Siderar´s foreign currency sales to pesos, as the devaluation exceeded wholesale inflation. In addition during the period export shipments increased significantly, offset by lower domestic sales and a reduction in tax rebates, and the impact of an export sales tax.

Selling and administrative expenses amounted to $ 166.6 million (9% of net sales), compared to $ 164.8 million (12% of net sales) in the same period of the previous year. The increase in sales expenses, mainly due to a higher proportion of exports in the sales mix, was compensated by the effect of the cost reduction programs initiated during the previous year.

Operating profit for the period was $ 359.3 million (19% of net sales) compared to $ 60.7 million (4 % of net sales) in the same period of the previous year. this result, although affected by the low level of domestic market sales, showed an improvement as a result of higher export shipments and the recovery of international prices as from the second quarter of the period, even after considering the effects of the reduction of 50% in tax rebates on export sales and the impact of a 5% export tax on industrial manufactured goods. A higher cost of sales was originated by the imported supplies component, that was compensated by the benefits of the cost reduction programs initiated last year.

Financial and holding results reflect the strong impact generated by the devaluation of the peso, the changes in the prices of goods and services and the effects of inflation. Interest and other financing expenses results were a loss of $ 181.9 million. Net foreign exchange results were a loss of $ 589.5 million, of which $ 503.2 million were related to foreign exchange debt incurred in capital expenditure financing and as such were capitalized in fixed assets; as a result of this the net foreign exchange result was a loss of $ 86.3 million. Net inventory and fixed asset spares holding results were a gain of $ 1.1 million. The effect of inflation, mainly on certain trade receivables and net tax credits, generated a loss of $ 97.8 million. Foreign exchange gains generated by investments in related companies of $ 48.4 million were included under Net foreign exchange results on equity holdings.

Other ordinary income and expenses recorded a loss of $ 37.6 million, compared to $ 17.5 million in the previous year. This is mainly the result of a non-repetitive adjustment in 2001 of the provisions for contingencies, that was partially offset by lower restructuring costs this year.

No extraordinary results were recorded during the period, while in the same period last year extraordinary losses amounted to $ 29.0 million, and were related to certain expenses caused by an emergency stoppage of Blast Furnace #2, and costs related to terminations agreed with management personnel to adapt the management structure to current requirements.

Amazonia equity holdings result during the period was a net income of $ 12.2 million. This amount includes an operating loss of $ 27.5 million and a partial adjustment gain of $ 39.7 million of the provision set up as of December 31, 2001. The investment in Amazonia Equity and Equity Convertible Loans (including accrued interest) amounted to $ 130.5 million (US$ 34.9 million).

During the period funds generated by operations were $ 202.3 million; those funds were mainly used to finance working capital.

The main changes to equity accounts were caused by the effects of the revaluation of foreign currency items, the capitalization of foreign exchange results on fixed assets and the restatements of inventory values as a result of the devaluation and the changes in the price of goods and services.

1.2. Results for quarter

The consolidated result for the July-September 2002 quarter was a gain of $ 74.1 million, while in the same period of the previous year the result was a loss of $ 34.9 million. This improvement was mainly due to the increase in the ordinary operating income.

Sales on the domestic market remained at low levels, totaling 185 thousand tons, a decrease of 8% compared to the 201 thousand tons in the same period of the previous year. Export sales totaled 343 thousand tons showing a significant recovery, being 72% higher than the 200 thousand tons in the same period of the previous year.

Net sales in the quarter totaled $ 691.1 million, compared to the $ 373.0 million in the same period of the previous year. Most of this increase was due to the effects of converting Siderar's foreign currency sales to pesos, as the devaluation exceeded the rate of wholesale inflation. In addition, Siderar benefited from higher export shipments and higher average selling prices even after the impact of the 5% export sales tax and 50% reduction in tax rebates on export sales.

Selling and administrative expenses totaled $ 57.2 million (8% of net sales), while in the same period of the previous year they totaled $ 44.5 million (12% of net sales). The increase in sales expenses was due to a higher proportion of exports in the sales mix, and was offset by the effect of the cost reduction programs initiated during the previous year.

Operating profit for the quarter was $ 226.1 million (33% of net sales) compared to $ 19.3 million (5% of net sales) in the same period of the previous year. This improvement was mainly due to the increase in export shipments and prices, that were partially offset by a decline in domestic shipments and the impact of the reduction in tax rebates, and the application of an export sales tax. A higher cost of sales was the result of higher shipments and the effect of the imported supplies component, that were partially compensated by the benefits of the cost reduction programs initiated last year.

Net financial and holding results for the quarter recorded a loss of $ 116.1 million, which included a loss from interest and other financing expenses result of $ 51.9 million. Net foreign exchange results were a gain of $ 151.7 million as a result of the domestic currency revaluation during the quarter, of which $ 104.0 million were related to foreign exchange debt incurred in capital expenditure financing and as such it adjusted the foreign exchange result that was capitalized in fixed assets during the current fiscal year; as a result of this the net foreign exchange result was a gain of $ 47.7 million. Net inventory and fixed asset spares holding results were a loss of $ 86.8 million. The effect of inflation, mainly on certain trade receivables and net tax credits, generated a loss of $ 25.1 million. Foreign exchange losses generated by investments in related companies of $ 17.6 million were included under Net foreign exchange results on equity holdings.

Other ordinary income and expenses recorded a loss of $ 8.7 million, compared to $ 8.8 million in the previous year, as a result of a non-repetitive adjustment in 2001 of the provisions for contingencies, that was offset by lower restructuring costs this year.

Amazonia equity holdings result during the quarter was a loss of $ 9.6 million, a slight recovery compared to a loss of $ 12.8 million reported in the same period of the previous year.

2. CONSOLIDATED EQUITY STRUCTURE (compared to the nine-month periods ended September 30, 1998, 1999, 2000 and 2001 - Amounts stated in thousands of pesos)


	09.30.2002	09.30.2001	09.30.2000	09.30.1999	09.30.1998
Current assets	1,046,460	1,082,458	1,063,950	1,093,403	1,192,498
Non-current assets	2,249,383	1,749,721	1,901,993	1,936,615	2,075,301
Total	3,295,843	2,832,179	2,965,943	3,030,018	3,267,799

Current liabilities	1,928,517	1,104,596	793,075	812,972	963,470
Non-current liabilities	276,853	468,357	750,089	837,565	815,677
Sub-total	2,205,370	1,572,953	1,543,164	1,650,537	1,779,147
Minority interest in subsidiaries	64	120	129	118	224
Shareholders’ equity	1,090,409	1,259,106	1,422,650	1,379,363	1,488,428
Total	3,295,843	2,832,179	2,965,943	3,030,018	3,267,799

3. CONSOLIDATED INCOME (compared to the nine-month periods ended September 30, 1998, 1999, 2000 and 2001- Amounts stated in thousands of pesos)


	01.01.2002 to 09.30.2002	01.01.2001 to 09.30.2001	01.01.2000 to 09.30.2000	01.01.1999 to 09.30.1999	01.01.1998 to 09.30.1998
	(1)
Result from ordinary operations	359,332	60,713	202,378	126,690	333,043
Financial and holding results	(364,902)	(71,458)	(83,897)	(88,431)	(64,887)
Other ordinary income and expenses	(37,589)	(17,497)	(24,469)	(18,671)	(27,053)
Minority interest in subsidiaries	29	(18)	(7)	(15)	(38)
Result before taxes	(43,130)	(28,260)	94,005	19,573	241,065
Taxes	-	6,611	(21,976)	8,138	(80,185)
Ordinary result	(43,130)2)	(21,649)	72,029	27,711	160,880
Result from investments in related companies	12,360	(41,362)	(29,285)	(78,975)	(500)
Result from net exchange differences in related companies	48,364	-	-	-	-
Extraordinary results	-	(29,047)	-	-	-
Net result for the period	17,594	(92,058)	42,744	(51,264)	160,380

(1) As from 12/31/01 the Company changed its fiscal year-end closing date from June 30 to December 31.

4. CONSOLIDATED DATA (compared to the nine-month periods ended September 30, 1998, 1999, 2000 and 2001 - in thousands of tons)


	01.01.2002 to 09.30.2002	01.01.2001 to 09.30.2001	01.01.2000 to 09.30.2000	01.01.1999 to 09.30.1999	01.01.1998 to 09.30.1998
	(1)
Shipments (2)	1,570	1,545	1,448	1,669	1,649
Domestic market	543	726	806	877	1,229
Exports	1,028	819	642	792	420

Production
Hot rolled steel	1,481	1,545	1,581	1,450	1,445
Cold rolled steel	958	1,156	1,154	1,027	797
Coated	466	278	240	403	403

(1) As from 12/31/01 the Company changed its fiscal year-end closing date from June 30 to December 31.

(2) Includes 6.7, 22.9, 13.8, 77.0,and 181.8 thousand tons of pig iron in bars for the nine-month periods ended September 30, 2002, 2001, 2000, 1999 and 1998, respectively.

5. CONSOLIDATED RATIOS (compared to the nine-month periods ended September 30, 1998, 1999, 2000 and 2001)


	09.30.2002	09.30.2001	09.30.2000	09.30.1999	09.30.1998
Liquidity	0.54	0.98	1.34	1.34	1.24
Indebtedness	2.02	1.25	1.08	1.19	1.20

6. OUTLOOK

The Argentine economy has suffered from a persistent recession in recent years, and during these nine months the situation has worsened considerably, with GDP estimated to fall 14% this year. This situation was the main cause of the 25% drop in domestic market shipments. However, a recovery in the level of activity has recently been noted, reflecting in a slight increase in volumes shipped to this market. The preservation of this mild recovery in the future will depend on the evolution of the economic situation of the country.

Regarding the export markets, we estimate that export shipments and prices will remain at current levels in the coming months.

Buenos Aires, November 8, 2002


Leonardo Stazi Chief Financial Officer

THE BOARD OF DIRECTORS

Fiscal year No. 42 commenced on January 1, 2002

FINANCIAL STATEMENTS at September 30, 2002

Legal address: Leandro N. Alem 1067, Buenos Aires

Main activity: Promotion, construction and operation of steel mills, production and marketing of steel, iron and steel products

From the by-laws and articles of incorporation:

Date of registration in the National Commercial Court of Record of First Instance: March 7, 1962

From the amendments:

Dates of registration in the National Commercial Court of Record of First Instance:

November 10, 1966;

October 10, 1967;

June 11, 1969;

June 9, 1971;

June 24, 1976;

July 1, 1977;

October 5, 1977;

June 26, 1980;

October 13, 1980;

March 29, 1982;

April 27, 1983;

April 11, 1984;

April 2, 1985;

May 7, 1986;

June 30, 1987;

August 10, 1992;

September 16, 1992;

July 28, 1993;

May 6, 1994;

January 5, 1995;

November 7, 1995;

May 28, 1996;

March 11, 1997;

September 30, 1999;

June 25, 2001;

December 27, 2001 and

July 10, 2002

Registration number with the Superintendency of Corporations: 14,510

Duration of the Company: Up to April 2, 2090

Name of parent company: III Industrial Investments Inc.

Participation of parent company in equity: 50,20%

Percentage votes held by parent company: 50,20%

Capital: Par value shares of 1 peso and one vote each


Class	No. of votes per share	Authorized for Public Offer	Subscribed and paid-in
		$
Common "A" shares outstanding	1	347,468,771	347,468,771

Legal address: Leandro N. Alem 1067, Buenos Aires

COMPLEMENTARY ACCOUNTING INFORMATION

CONSOLIDATED FINANCIAL STATEMENTS

AT SEPTEMBER 30, 2002 (1)

CONTENTS

Consolidated financial statements at September 30, 2002

Consolidated balance sheet

Consolidated statement of income

Consolidated statement of sources and uses of funds

Notes to the consolidated financial statements

(1) As mentioned in Note 1, the consolidated financial statements should be read together with complementary information to the individual financial statements of Siderar S.A.I.C.

CONSOLIDATED BALANCE SHEET at September 30, 2002 and 2001


	09.30.02	09.30.01		09.30.02	09.30.01
	$	$		$	$
ASSETS			LIABILITIES
CURRENT ASSETS			CURRENT LIABILITIES
Cash and banks (Note 4 a))	21,946,399	6,810,558	Accounts payable (Note 4 n))	173,954,274	179,326,703
Other investments (Note 4 b))	127,233,537	235,702,471	Short-term debt (Note 4 o))	1,696,196,141	836,039,682
Trade receivables (Note 4 c))	390,437,555	352,866,050	Social security and taxes (Note 4 p))	43,553,893	67,417,048
Other receivables (Note 4 d))	60,215,800	72,420,434	Other liabilities (Note 4 q))	10,291,735	17,612,497
Inventories (Note 4 e))	445,859,245	410,528,111	Provisions for contingencies	4,521,672	4,199,907
Other assets (Note 4 f))	767,349	4,130,328
Total Current Assets	1,046,459,885	1,082,457,952	Total Current Liabilities	1,928,517,715	1,104,595,837
NON-CURRENT ASSETS			NON-CURRENT LIABILITIES
Trade receivables (Note 4 g))	4,111,987	432,532	Accounts payable (Note 4 r))	10,318,045	14,246,116
Other receivables (Note 4 h))	53,645,656	75,543,871	Long-term debt (Note 4 s))	233,223,099	411,098,528
Investments (Note 4 i))	907,619	86,223,690	Social security and taxes (Note 4 t))	12,764,426	20,800,926
Other investments (Note 4 j))	468,356,982	129,814,431	Other liabilities (Note 4 u))	5,098,701	4,656,919
Intangible assets (Note 4 k))	10,978,349	2,772,335	Provisions for contingencies	15,448,511	17,554,881
Fixed assets (Note 4 l))	1,708,722,443	1,452,273,753
Other assets (Note 4 m))	2,660,451	2,660,463
Total Non-Current Assets	2,249,383,487	1,749,721,075	Total Non-Current Liabilities	276,852,782	468,357,370
			Total Liabilities	2,205,370,497	1,572,953,207
			MINORITY INTEREST IN SUBSIDIARIES	63,867	120,368
			SHAREHOLDERS' EQUITY	1,090,409,008	1,259,105,452
Total Assets	3,295,843,372	2,832,179,027	Total Liabilities and Shareholders' Equity	3,295,843,372	2,832,179,027

The accompanying notes 1 to 4 are an integral part of these consolidated financial statements.

The report on limited review is issued as a separate document.

CONSOLIDATED STATEMENT OF INCOME for the nine-month period ended September 30, 2002, and for the nine-month period ended September 30, 2001


	Period ended on
	09.30.02	09.30.01
	$	$
Net income from sales	1,862,431,154	1,388,255,582
Cost of sales	(1,336,473,834)	(1,162,755,447)
Gross profit	525,957,320	225,500,135

Selling expenses	(84,805,220)	(58,560,588)
Administrative expenses	(81,820,146)	(106,226,066)
Result from ordinary operations	359,331,954	60,713,481

Financial and holding results
Generated by assets	42,139,999	12,292,657
Generated by liabilities	(407,041,821)	(83,750,658)
Other ordinary income and expenses	(37,588,721)	(17,497,404)
Minority interest in subsidiaries	28,612	(17,608)
Loss before taxes	(43,129,977)	(28,259,532)
Income tax provision / Minimum notional income tax	-	6,611,088
Ordinary loss	(43,129,977)	(21,648,444)
Result from investments in related companies	12,360,551	(41,362,097)
Result from net exchange differences in related companies	48,363,750	-
Extraordinary results	-	(29,047,320)
Net income (loss) for the period	17,594,324	(92,057,861)

The accompanying notes 1 to 4 are an integral part of these consolidated financial statements.

The report on limited review is issued as a separate document.

CONSOLIDATED STATEMENT OF SOURCES AND USES OF FUNDS for the nine-month period ended September 30, 2002, and for the nine-month period ended September 30, 2001


	Period ended on
	09.30.02	09.30.01
	$	$
CHANGES IN FUNDS
Funds at the beginning of the period (1)	78,016,946	56,868,096
Increase in funds	71,162,990	185,644,933
Funds at the end of the period (1)	149,179,936	242,513,029
FUNDS GENERATED BY (APPLIED TO) OPERATIONS
Income (loss) for the period	17,594,324	(92,057,861)
Add: Items not representing funds disbursements
Allowance for inventory obsolescence	5,108,888	-
Depreciation of fixed assets	198,048,902	139,160,532
Amortization of intangible assets	1,722,845	3,551,917
Allowance for doubtful accounts	27,801,304	15,501,696
Board of Directors' and Surveillance Committee's fees provision (2)	2,003,585	1,786,743
Provision for contingencies	10,791,426	-
Holding result in related companies	-	41,362,097
Minority interest in subsidiaries	-	17,608
Less: Items not providing funds
Allowance for inventory obsolescence	-	(1,283,332)
Holding result in related companies	(12,360,551)	-
Result from net exchange differences in related companies	(48,363,750)	-
Provision for contingencies	-	(15,167,295)
Income tax provision / Minimum notional income	-	(6,611,088)
Minority interest in subsidiaries	(28,612)	-
Funds provided by (applied to) operations	202,318,361	86,261,017
Net decrease (increase) in assets
Trade receivables	(131,638,684)	85,030,747
Other receivables	26,315,459	(26,902,264)
Inventories (3)	(48,617,406)	101,810,111
Net (decrease) increase in liabilities
Trade payables	(36,014,934)	(49,411,370)
Social security charges and taxes, other liabilities and provision for contingencies	(40,345,435)	23,353,221
Minority interest in subsidiaries	(24,098)	(44,241)
Other operating changes	(230,325,098)	133,836,204
Funds provided by (applied to) operations - Carried forward	(28,006,737)	220,097,221

CONSOLIDATED STATEMENT OF SOURCES AND USES OF FUNDS for the nine-month period ended September 30, 2002, and for the nine-month period ended September 30, 2001


	Period ended on
	09.30.02	09.30.01
	$	$
Brought forward	(28,006,737)	220,097,221
FUNDS GENERATED BY (APPLIED TO) INVESTMENT ACTIVITIES
Decrease in investments	-	3,995,513
Net (increase) decrease in other non-current investment	(21,029,634)	13,461,791
Net increase in funds conveyed to the trust (4)	(128,370,265)	-
Net increase in fixed assets and in intangible assets (5)	(499,445,707)	(60,564,256)
Net decrease in other assets	3,362,991	1,682,410
Funds generated by (applied to) investment activities	(603,423,347)	(41,424,542)
FUNDS GENERATED BY (APPLIED TO) FINANCING ACTIVITIES
Net increase in short and long-term debt (6)	702,661,769	6,972,254
Distribution of profits voted by Shareholders’ Meeting on April 30, 2002	(68,695)	-
Funds generated by (applied to) financing activities	702,593,074	6,972,254
Increase in funds	71,162,990	185,644,933

Note: variations include exchange differences.

Cash and banks plus other current investments.
The nominal value is $ 1,453,502.
Includes holding results of $ 20,595,081.
Includes exchange differences of $ 134,924,669.
Includes the capitalization of exchange differences of $ 503,247,711 and holding results of $ 21,340,540.
Includes exchange differences of $ 780,192,432.

The accompanying notes 1 to 4 are an integral part of these financial statements.

The report on limited review is issued as a separate document.

NOTE 1 - BASES FOR THE PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS - ACCOUNTING STANDARDS

The consolidated financial statements have been prepared in accordance with the valuation basis and criteria explained in Notes 1 and 2 to the financial statements of the parent company and must be read jointly with the complementary information to the financial statements.

NOTE 2 - CONSOLIDATION BASES

The consolidated companies and the respective percentage of voting stock at September 30, 2002 were as follows:


Company		Participation
Comesi San Luis S.A.I.C.		99.0000%
Prosid Investments S.C.A.		99.9934%

The consolidated financial statements have been prepared on the basis of the financial statements of the subsidiaries at September 30, 2002.

Where appropriate, the necessary adjustments have been made to unify the valuation and disclosure criteria of the consolidated companies. Balances between consolidated companies, transactions and their results and intercompany balances have been eliminated, if significant.

NOTE 3 - COMPLEMENTARY INFORMATION NOT DIFFERING SIGNIFICANTLY FROM THAT PRESENTED BY THE PARENT COMPANY

Notes 1 to 2, 4 to 16 and Exhibits A to I to the financial statements of the parent company are in this situation.

NOTE 4 - COMPOSITION OF CONSOLIDATED BALANCE SHEET ITEMS

	09.30.02			09.30.01
	$		$
CURRENT ASSETS
a) Cash and banks
Cash	5,097,465			356,820
Checks to be deposited	5,588,265			4,995,674
Banks	11,260,669			1,458,064
	21,946,399			6,810,558
b) Other investments
Sight deposits - Other related companies	125,583,281			20,936,737
Time deposits	-			214,765,734
Government Securities	1,650,256			-
	127,233,537			235,702,471
c) Trade receivables
Ordinary and documented debtors from the domestic market		100,827,160			280,850,179
Related companies Sect. 33 - Law No. 19,550 and amendments		-			685,620
Other related companies		43,936,333			23,801,952
Export reimbursements/convergence factor		24,965,190			10,055,896
Ordinary and documented debtors from foreign markets		256,567,621			81,635,866
Allowance for doubtful accounts		(35,858,749)			(44,163,463)
		390,437,555			352,866,050
d) Other receivables
Related companies Sect. 33 - Law No. 19,550 and amendments		6,827,772			6,837,108
Other related companies		11,818,855			10,957,726
Advances and loans to personnel		2,645,088			6,716,015
Receivables from sale of real property		584,489			1,088,530
Tax credits		5,660,241			24,291,109
Advances to suppliers		6,877,134			3,299,169
Expenses paid in advance		4,600,990			5,666,755
Sundry receivables		21,201,231			13,564,022
		60,215,800			72,420,434
e) Inventories
Finished products		93,250,730			111,899,612
Products in process		96,179,927			98,669,080
Raw material		161,702,054			89,730,340
Materials		96,608,228			112,730,687
Advances to suppliers		4,156,339			2,872,355
Allowance for obsolescence		(6,038,033)			(5,373,963)
		445,859,245			410,528,111
f) Other assets
Real Property		767,349			4,130,328
		767,349			4,130,328

NOTE 4 - COMPOSITION OF CONSOLIDATED BALANCE SHEET ITEMS (Contd.)


			09.30.02			09.30.01
			$			$
	NON-CURRENT ASSETS
	g) Trade receivables
	Ordinary and documented debtors from the domestic market		6,622,626			432,532
	Allowance for doubtful accounts		(2,510,639)			-
			4,111,987			432,532
	h) Other receivables
	Related companies Sect. 33 - Law No. 19,550 and amendments		-			2,758,225
	Advances and loans to personnel		2,282,612			4,903,595
	Receivables from sale of real property		6,092,897			15,037,205
	Tax credits		19,643,263			49,838,293
	Expenses paid in advance		1,169,711			2,198,425
	Sundry receivables		24,457,173			808,128
			53,645,656			75,543,871
	i) Investments
	Shares in Consorcio Siderurgia Amazonia Ltd.		-			85,349,653
	Shares in Compañía Afianzadora de Empresas Siderúrgicas S.G.R.		87,140			762,428
	Shares in Fondo de Garantías Buenos Aires S.A.P.E.M.		22,120			22,120
	Shares in Information Systems Technologies N.V.		13,160			12,412
	Shares in Lomond Holdings B.V.		785,199			77,077
			907,619			86,223,690
	j) Other investments
	Funds conveyed to the trust - Other related companies		323,372,403		-
	Loans convertible into shares in Consorcio Siderurgia Amazonia Ltd.		130,501,370		77,162,017
	Investments in insurance companies		14,483,209		23,097,186
	Guarantee fund Compañía Afianzadora de Empresas Siderúrgicas S.G.R.		5,962,200		37,682,864
	Allowance for risk fund uncollectibility		(5,962,200)		(8,127,636)
			468,356,982		129,814,431
	k) Intangible assets (residual value)
	Goodwill (Comesi S.A.I.C.)		-		2,367,944
	Information systems projects		10,978,349		404,391
			10,978,349		2,772,335
	The amortization of the period amounted to $ 1,722,845
	l) Fixed assets (residual value)
	Land		50,952,407		50,953,389
	Industrial buildings and facilities		1,184,231,121		888,655,823
	Machinery and equipment		312,932,700		248,515,833
	Vehicles and means of transport		3,740,614		7,625,627
	Furniture, general machinery and office supplies		3,470,874		4,535,456
	Steel spares and supplies		79,619,844		131,957,296
	Fixed assets in transit		1,659,866		3,932,949
Work in progress		69,561,875		113,205,161
	Advances to suppliers		2,553,142		2,892,219
			1,708,722,443		1,452,273,753
	The depreciation of the period amounted to $ 198,048,902

	m) Other assets
	Real property		2,660,451		2,660,463
			2,660,451		2,660,463

NOTE 4 - COMPOSITION OF CONSOLIDATED BALANCE SHEET ITEMS (Contd.)

	09.30.02			09.30.01
	$		$
CURRENT LIABILITIES
n) Accounts payable
Ordinary suppliers	101,938,258	88,081,174
Related companies Sect. 33 - Law No. 19,550 and amendments	98,939	1,690,868
Other related companies	22,887,270	14,832,211
Notes payable	46,581,279	68,309,728
Unearned interest	(501,161)	(960,995)
Advances from customers	2,949,689	7,373,717
	173,954,274	179,326,703
o) Short-term debt
Financial	2,347,398			863,790
Other related companies	374,000			539,633
Import/export financing	1,350,672,446			745,408,351
Negotiable Corporate Bonds	359,975,000			121,660,000
Unearned interest	(17,172,703)			(32,432,092)
	1,696,196,141			836,039,682
p) Social security and taxes
Provision for income tax/minimum notional income tax	-			27,826,960
Income tax withholding, advances and others	-			(27,811,969)
Provision for turnover tax	358,101			168,145
Wages and social security	33,780,190			60,656,661
Others sundry	9,415,602			6,577,251
	43,553,893			67,417,048
q) Other liabilities
Related companies Sect. 33 - Law No. 19,550 and amendments	-	810,979
Other related companies	1,754,093	1,215,293
Liabilities due to dismissal and restructuring	6,540,555	11,630,510
Others sundry	1,997,087	3,955,715
	10,291,735	17,612,497
NON-CURRENT LIABILITIES
r) Accounts payable
Other related companies	3,704,302			4,380,441
Notes payable	7,016,410			10,665,594
Unearned interest	(402,667)			(799,919)
	10,318,045			14,246,116
s) Long-term debt
Import/export financing	242,258,231			313,227,309
Negotiable Corporate Bonds	-			121,660,000
Unearned interest	(9,035,132)			(23,788,781)
	233,223,099			411,098,528
t) Social security and taxes
Provision for income tax/minimum notional income tax	-			6,370,560
Income tax withholding, advances and others	-			(101,341)
Sundry	12,764,426			14,531,707
	12,764,426			20,800,926
u) Other liabilities
Liabilities due to dismissal and restructuring	5,098,701			4,656,919
	5,098,701			4,656,919

The report on limited review is issued as a separate document.

Fiscal year No. 42 commenced on January 1, 2002

FINANCIAL STATEMENTS at September 30, 2002

Legal address: Leandro N. Alem 1067, Buenos Aires

Main activity: Promotion, construction and operation of steel mills, production and marketing of steel, iron and steel products

From the by-laws and articles of incorporation:

Date of registration in the National Commercial Court of Record of First Instance: March 7, 1962

From the amendments:

Dates of registration in the National Commercial Court of Record of First Instance:

November 10, 1966;

October 10, 1967;

June 11, 1969;

June 9, 1971;

June 24, 1976;

July 1, 1977;

October 5, 1977;

June 26, 1980;

October 13, 1980;

March 29, 1982;

April 27, 1983;

April 11, 1984;

April 2, 1985;

May 7, 1986;

June 30, 1987;

August 10, 1992;

September 16, 1992;

July 28, 1993;

May 6, 1994;

January 5, 1995;

November 7, 1995;

May 28, 1996;

March 11, 1997;

September 30, 1999;

June 25, 2001;

December 27, 2001 and

July 10, 2002

Registration number with the Superintendency of Corporations: 14,510

Duration of the Company: Up to April 2, 2090

Name of parent company: III Industrial Investments Inc.

Participation of parent company in equity: 50,20%

Percentage votes held by parent company: 50,20%

Capital: Par value shares of 1 peso and one vote each


Class	No. of votes per share	Authorized for Public Offer	Subscribed and paid-in
		$
Common "A" shares outstanding	1	347,468,771	347,468,771

FINANCIAL STATEMENTS AT SEPTEMBER 30, 2002

Financial statements at September 30, 2002

Balance sheet

Statement of income

Statement of changes in shareholders' equity

Statement of sources and uses of funds

Notes and exhibits to the financial statements

BALANCE SHEET at September 30, 2002 and 2001


	09.30.02	09.30.01		09.30.02	09.30.01
	$	$		$	$
ASSETS			LIABILITIES
CURRENT ASSETS			CURRENT LIABILITIES
Cash and banks (Note 3 a))	21,896,761	6,729,097	Accounts payable (Note 3 i))	174,045,493	179,303,452
Other investments (Note 3 b) - Exhibit D)	125,421,296	235,592,734	Short-term debt (Note 3 j))	1,695,819,917	835,457,418
Trade receivables (Note 3 c))	389,723,374	347,841,163	Social security and taxes (Note 3 k))	43,535,138	67,316,508
Other receivables (Note 3 d))	59,707,282	71,170,405	Other liabilities (Note 3 l))	10,275,925	17,612,364
Inventories (Exhibit F)	445,779,893	409,077,776	Provisions for contingencies (Exhibit E)	4,520,972	4,171,151
Other assets (Note 3 e))	767,349	4,130,328
Total Current Assets	1,043,295,955	1,074,541,503	Total Current Liabilities	1,928,197,445	1,103,860,893
NON-CURRENT ASSETS			NON-CURRENT LIABILITIES
Trade receivables (Note 3 f))	4,111,987	432,532	Accounts payable (Note 3 m))	10,318,045	14,246,116
Other receivables (Note 3 g))	53,645,656	75,482,817	Long-term debt (Note 3 n))	233,223,099	411,098,528
Investments (Exhibit C)	136,790,710	173,188,764	Social security and taxes (Note 3 o))	12,764,426	20,800,926
Other investments (Exhibit D)	337,855,612	52,652,414	Other liabilities (Note 3 p))	5,098,701	4,656,919
Intangible assets (Exhibit B)	10,978,349	2,772,335	Provisions for contingencies (Exhibit E)	15,448,511	17,554,881
Fixed assets (Exhibit A)	1,706,120,515	1,449,592,887
Other assets (Note 3 h))	2,660,451	2,660,463
Total Non-Current Assets	2,252,163,280	1,756,782,212	Total Non-Current Liabilities	276,852,782	468,357,370
			Total Liabilities	2,205,050,227	1,572,218,263
			SHAREHOLDERS' EQUITY (as per
			respective statement)	1,090,409,008	1,259,105,452
Total Assets	3,295,459,235	2,831,323,715	Total Liabilities and Shareholders’ Equity	3,295,459,235	2,831,323,715

The accompanying notes 1 to 16 and exhibits A to I are an integral part of these financial statements.

The report on limited review is issued as a separate document.

STATEMENT OF INCOME for the nine-month period ended September 30, 2002, and for the nine-month period ended September 30, 2001


	Period ended on
	09.30.02	09.30.01
	$	$
Net income from sales	1,858,756,971	1,383,784,154
Cost of sales (Exhibit F)	(1,333,746,388)	(1,161,332,485)
Gross profit	525,010,583	222,451,669

Selling expenses (Exhibit H)	(84,672,526)	(58,237,934)
Administrative expenses (Exhibit H)	(81,481,122)	(105,845,686)
Result from ordinary operations	358,856,935	58,368,049

Financial and holding results
Generated by assets (Exhibit H)	44,568,038	10,330,870
Generated by liabilities (Exhibit H)	(407,594,778)	(83,577,401)
Other ordinary income and expenses (Exhibit H)	(37,076,217)	(17,502,417)
Loss before taxes	(41,246,022)	(32,380,899)
Income tax provision	-	6,657,821
Ordinary loss	(41,246,022)	(25,723,078)
Result from investments in subsidiaries and related companies (Note 8 f))	10,476,596	(37,287,463)
Result from net exchange differences in subsidiaries and related companies	48,363,750	-
Extraordinary results (Note 10)	-	(29,047,320)
Net income (loss) for the period	17,594,324	(92,057,861)

The accompanying notes 1 to 16 and exhibits A to I are an integral part of these financial statements.

The report on limited review is issued as a separate document.

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY for the nine-month period ended September 30, 2002, and for the nine-month period ended September 30, 2001


	Capital stock			Non-capitalized contributions	Retained earnings				09.30.02	09.30.01
Item	Shares outstanding	Capital adjustment	Total	Premium on issue of shares	Legal reserve	Reserve for future dividends	Free reserve	Unappropriated retained earnings	Total shareholders' equity	Total shareholders' equity
	$	$	$	$	$	$	$	$	$	$
Balances at the beginning of the period	347,468,771	481,627,004	829,095,775	46,882,566	43,723,120	329,402,763	44,240,000	(220,460,845)	1,072,883,379	1,360,337,499
Adjustments to balance (Note 6)	-	-	-	-	-	-	-	-	-	(9,174,186)
Adjusted balances	347,468,771	481,627,004	829,095,775	46,882,566	43,723,120	329,402,763	44,240,000	(220,460,845)	1,072,883,379	1,351,163,313
Approved by the Shareholders' Ordinary Meeting on April 30, 2002
- Release of Reserve for future dividends	-	-	-	-	-	(220,460,845)	-	220,460,845	-	-
- Distribution of profits
Hnos. Agustín y Enrique Rocca Foundation	-	-	-	-	-	(68,695)	-	-	(68,695)	-
Result for the period as per statement of income	-	-	-	-	-	-	-	17,594,324	17,594,324	(92,057,861)
Balances at September 30, 2002	347,468,771	481,627,004	829,095,775	46,882,566	43,723,120	108,873,223	44,240,000	17,594,324	1,090,409,008
Balances at September 30, 2001	347,468,771	481,627,004	829,095,775	46,882,566	43,723,120	410,427,500	44,240,000	(115,263,509)		1,259,105,452

The accompanying notes 1 to 16 and exhibits A to I are an integral part of these financial statements.

The report on limited review is issued as a separate document.

STATEMENT OF SOURCES AND USES OF FUNDS for the nine-month period ended September 30, 2002, and for the nine-month period ended September 30, 2001


	Period ended on
	09.30.02	09.30.01
	$	$
CHANGES IN FUNDS
Funds at the beginning of the period (1)	77,932,848	56,715,556
Increase in funds	69,385,209	185,606,275
Funds at the end of the period (1)	147,318,057	242,321,831
FUNDS GENERATED BY (APPLIED TO) OPERATIONS
Income (loss) for the period	17,594,324	(92,057,861)
Add: Items not representing funds disbursements
Allowance for inventory obsolescence	5,108,888	-
Depreciation of fixed assets	198,014,007	139,100,556
Amortization of intangible assets	1,722,845	3,551,917
Allowance for doubtful accounts	27,853,283	15,501,696
Board of Directors' and Surveillance Committee's fees provision (2)	2,003,585	1,786,743
Provision for contingencies	10,783,336	-
Holding result in subsidiaries and related companies	-	37,287,463
Less: Items not providing funds
Allowance for inventory obsolescence	-	(1,283,332)
Holding result in subsidiaries and related companies	(10,476,596)	-
Result from net exchange differences in subsidiaries and related companies	(48,363,750)	-
Provision for contingencies	-	(15,228,461)
Income tax provision	-	(6,657,821)
Funds provided by (applied to) operations	204,239,922	82,000,900
Net decrease (increase) in assets
Trade receivables	(136,704,591)	84,654,826
Other receivables	25,494,388	(27,399,597)
Inventories (3)	(50,118,822)	100,751,976
Net (decrease) increase in liabilities
Trade payables	(35,862,357)	(49,554,576)
Social security charges and taxes, other liabilities and provision for contingencies	(40,214,464)	23,572,517
Other operating changes	(237,405,846)	132,025,146
Funds provided by (applied to) operations - Carried forward	(33,165,924)	214,026,046

STATEMENT OF SOURCES AND USES OF FUNDS for the nine-month period ended September 30, 2002, and for the nine-month period ended September 30, 2001 (Contd.)


	Period ended on
	09.30.02	09.30.01
	$	$
Brought forward	(33,165,924)	214,026,046
FUNDS GENERATED BY (APPLIED TO) INVESTMENT ACTIVITIES
Decrease in investments	2,673,000	9,646,542
Net (increase) decrease in other non-current investment	21,032,824	13,723,838
Net increase in funds conveyed to the trust (4)	(128,370,265)	-
Net increase in fixed assets and intangible assets (5)	(499,469,343)	(60,551,733)
Net decrease in other assets	3,362,991	1,682,410
Funds generated by (applied to) investment activities	(600,770,793)	(35,498,943)
FUNDS GENERATED BY (APPLIED TO) FINANCING ACTIVITIES
Net increase in short and long-term debt (6)	703,390,621	7,079,172
Distribution of profits voted by Shareholders’ Meeting on April 30, 2002	(68,695)	-
Funds generated by (applied to) financing activities	703,321,926	7,079,172
Increase in funds	69,385,209	185,606,275

Note: variations include exchange differences.

Cash and banks plus other current investments.
The nominal value is $ 1,453,502.
Includes holding results of $ 20,595,081.
Includes exchange differences of $ 134,924,669.
Includes the capitalization of exchange differences of $ 503,247,711 and holding results of $ 21,340,540.
Includes exchange differences of $ 780,192,432.

The accompanying notes 1 to 16 and exhibits A to I are an integral part of these financial statements.

The report on limited review is issued as a separate document.

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002

NOTE 1 - BASES FOR THE PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared in accordance with General Resolution No. 368/01 of the National Securities Commission.

NOTE 2 - ACCOUNTING STANDARDS

The most significant accounting standards are as follows:

2.1. Comparative information

The financial statements are presented in pesos and include comparative information with the period of nine months ended September 30, 2001, restated by the domestic wholesale price index published by the National Institute of Statistics and Census.

2.2. Recognition of the effects of inflation

In accordance with Resolution MD No. 3/2002 of the Professional Council in Economic Sciences of the Autonomous City of Buenos Aires, and Resolution No. 415/02 of the National Securities Commission, these financial statements are adjusted for inflation. The financial statements are stated in constant currency of September 30, 2002, considering the accounting measurements restated by the changes in the purchasing power of the currency until August 31, 1995, as well as those arising between that date and December 31, 2001, are stated in the currency of the latter date.

2.3. Treatment of exchange differences

The Company has recognized the effects of the devaluation as established by Resolution No. 392/02 of the National Securities Commission and Resolution No. 1/02 of the Board of Directors of the Professional Council in Economic Sciences of the Autonomous City of Buenos Aires.

During the period commenced on January 1, 2002 and ended on September 30, 2002, the Company recorded a negative exchange difference (net of inflation) of $ 853,672,625, of which $ 503,247,711 correspond to financial loans (excluding short-term export financing) for the acquisition of fixed assets and were capitalized under that caption, as established by MD Resolution No. 3/02 issued by the Professional Council in Economic Sciences of the Autonomous City of Buenos Aires and Resolution No. 398/02 of the National Securities Commission.

Those exchange differences will be totally or partially absorbed against future adjustments for inflation on those assets.

2.4. Valuation criteria

These financial statements have been prepared applying the valuation criteria established by General Resolution No. 368/01 of the National Securities Commission, as explained below:

Advances to suppliers are stated at their current value.
Inventories (finished products and products in process) have been valued at their replacement cost at the end of the period, applying the direct industrial cost method and including certain indirect manufacturing expenses, except fixed assets depreciation and general expenses.

Raw material and materials have been valued at their replacement cost at the end of the period.

As a result of the significant changes in the relative prices of input, a holding gain of $ 20,595,081 was generated during the year (see Exhibit H to the financial statements).

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 2 - ACCOUNTING STANDARDS (Contd.)

2.4. Valuation criteria (Contd.)

Real property included in Other current assets was valued at acquisition cost, and the necessary adjustments were made for that value not to exceed recoverable value.

Other non-current assets are valued at restated construction cost, verifying that they do not exceed their recoverable value, and include real property for sale to personnel.

d) Spares and steel-working tools included under Fixed assets have been valued at replacement cost or at economic value to the business at the end of the period. Given the significant changes in the relative prices of those assets, a holding result of $ 21,340,540 was generated during the period (see Exhibit H to the financial statements).

Fixed assets at the Ensenada Plant, which had been technically appraised (based on the valuation carried out at June 30, 1990), were restated for inflation as mentioned in Note 2.2 to the financial statements. The remaining fixed assets have been valued at their restated cost. Depreciation of fixed assets has been calculated according to the straight-line method by applying annual rates sufficient to extinguish their values by the end of their estimated useful lives.

The Company acquired vehicles and machinery through the leasing modality these operations were treated as financed purchases. At the end of the period the residual value of vehicles and machinery was $ 925,843 and $ 9,854,400, respectively.

The investments in other companies were valued by the equity method of accounting based on the financial statements mentioned in Exhibit C to the financial statements, except for the investment in FO.GA.BA. S.A.P.E.M., which was valued at adjusted acquisition cost. In addition, where applicable, the accounting standards used by the subsidiaries and related companies have been unified with the accounting criteria applied by Siderar S.A.I.C.

To determine the proportional equity value of Prosid Investments S.C.A., Information Systems and Technologies N.V. and Lomond Holdings B.V., which issue their financial statements in foreign currency, they were translated into pesos at the rates of exchange in force at the closing date of each financial statement, in accordance with the criteria established in Technical Pronouncement No. 13 of the Argentine Federation of Professional Councils in Economics Sciences. As a result of the implementation of the adjustment for inflation mentioned above, during the current period temporary exchange differences were recognized as result under Result from net exchange differences in subsidiaries and related companies, net of the effect of inflation, corresponding to the result generated by the devaluation of the peso on investments in foreign companies which in the first quarter had been recognized under shareholders' equity.

f) Other investments

The investments in government securities were valued at their quotation value.
Compañía Afianzadora de Empresas Siderúrgicas S.G.R. risk fund, corresponds to the portion attributable to the company considering the percentage contributions paid by the protecting partners of Sociedad de Garantía Recíproca and the net value of the fund at September 30, 2002 (see Note 8 c) to the financial statements).

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 2 - ACCOUNTING STANDARDS (Contd.)

2.4. Valuation criteria (Contd.)

g) Intangible Assets

The goodwill (Comesi S.A.I.C.) corresponds to the difference between the value paid for the shares of Comesi S.A.I.C. and the proportional equity value at the date of purchase once the accounting values of the assets of the issuer have been adjusted by their respective current values. Goodwill is amortized by the straight-line method, over a maximum term of five years as from April 1997. At the end of the period it is fully depreciated.
Information systems projects represent disbursements for systems development, acquisition and implementation, mainly for the administration, finance and commercial areas. These were valued at their cost value and are amortized over three years as from the date they are put in production.

h) In addition to the mentioned in Note 2.3, the Company has capitalized the financial costs from the projects for the modernization of its fixed assets.

The specific financing cost of each project has been considered to determine the financial charge to be capitalized, by computing all items derived from its financial structure.

The abovementioned capitalization is made until the works-related assets giving rise to it become operative, and will be amortized applying the same criteria used for the assets constructed.

Financial costs capitalized in the period amounted to $ 7,255,823.

i) The Company segregates the implicit financial components included in the assets, liabilities and income balances, if significant.

The Company has set up the allowances and provisions considered necessary so that the value assigned to assets does not exceed their recoverable value and that the value assigned to liabilities is not lower than the value which may be claimable by third parties.

The provisions disclosed in current and non-current liabilities for a total of $ 19,969,483 were set up to meet threatened civil, labor, commercial and tax lawsuits and other contingent risks.

As from August 1, 1995, the Company implemented a retirement benefit plan in favor of certain officials. Since that date the resulting liabilities are being accrued during the remaining years of service of the beneficiaries involved. At the end of the period in progress these liabilities are shown under “Social security and taxes” as a non-current liability, no debt being claimable as at that date.

In addition, the Company has taken out insurance policies with savings clause, which could be used to partially or totally cover these benefits.

l) Interest accrued on receivables, payables and other financial operations is in line with current market rates.

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 2 - ACCOUNTING STANDARDS (Contd.)

2.4. Valuation criteria (Contd.)

m) The Company enters into hedges on financial derivatives from time to time to limit the fluctuations in the rate of exchange of currencies other than the US dollar.

The results from these operations are recognized and disclosed over the term of the contracts that give rise to them.

The contracts in effect at the end of the period to cover euro, pound sterling and yen exchange fluctuations in relation to the U.S. dollar corresponding to purchase operations amounting to US$ 34,854,640 and sale operations amounting to US$ 35,114,077.

In June, the contract in effect until March 31, 2002 for US$ 100,000,000 par value was unwound. Under that contract the Company granted an option to set a LIBO rate of 5.725 % for a five-year term as a counterpart to an annual premium until December 2002, the total cost was US$ 3.4 million.

n) The Company, where applicable, calculates income tax by applying a 35% rate on taxable profits, the corresponding charge being disclosed in the statement of income under Income tax provision. Law No. 25063 published in the Official Gazette on December 30, 1998 established the creation of minimum notional income tax applicable to commercial periods ended as from December 31, 1998. The Company has considered the income tax charges for the years ended June 30, 2000 and 2001 for $ 19,643,263 as a credit (see Note 3 g) - Tax credits), since current regulations permit computation of that tax as payment on account of income tax in excess of tax on minimum notional income arising in ten fiscal years; and it is estimated that such a surplus will be recorded.

In November 2001 the Company entered into an Agreement to improve competitivity and generation of employment in the steel industry which will be in effect until March 31, 2003, the main benefit being the exemption from payment of minimum notional income tax.

o) The Company's Board of Directors considers that aggregate valuation of assets captions is less than their recoverable value.

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 3 - COMPOSITION OF BALANCE SHEET ITEMS

	09.30.02	09.30.01
	$	$
CURRENT ASSETS
a) Cash and banks
Cash	5,097,413	350,885
Checks to be deposited	5,588,265	4,995,674
Banks	11,211,083	1,382,538
	21,896,761	6,729,097
b) Other investments
Sight deposits – Other related companies (Exhibit D)	123,771,040	20,827,000
Time Deposits (Exhibit D)	-	214,765,734
Government securities (Exhibit D)	1,650,256	-
	125,421,296	235,592,734
c) Trade receivables
Ordinary and documented debtors from the domestic market	100,038,490	274,868,882
Related companies Sect. 33 - Law No. 19,550 and amendments	62,846	1,546,518
Other related companies	43,932,976	23,794,526
Export reimbursements/Convergence Factor	24,965,190	10,055,896
Ordinary and documented debtors from foreign markets	256,567,621	81,635,866
Allowance for doubtful accounts (Exhibit E)	(35,843,749)	(44,060,525)
	389,723,374	347,841,163
d) Other receivables
Related companies Sect. 33 - Law No. 19,550 and amendments	6,854,580	6,837,376
Other related companies	11,813,831	10,957,578
Advances and loans to personnel	2,637,744	6,680,401
Receivables from sale of real property	584,489	1,088,530
Tax credits	5,140,284	23,083,116
Advances to suppliers	6,877,134	3,299,169
Expenses paid in advance	4,600,990	5,666,755
Sundry receivables	21,198,230	13,557,480
	59,707,282	71,170,405
e) Other assets
Real property	767,349	4,130,328
	767,349	4,130,328
NON-CURRENT ASSETS
f) Trade receivables
Ordinary and documented debtors from the domestic market	6,622,626	432,532
Allowance for doubtful accounts (Exhibit E)	(2,510,639)	-
	4,111,987	432,532
g) Other receivables
Related companies Sect. 33 - Law No. 19,550 and amendments	-	2,758,225
Advances and loans to personnel	2,282,612	4,842,541
Receivables from sale of real property	6,092,897	15,037,205
Tax credits	19,643,263	49,838,293
Expenses paid in advance	1,169,711	2,198,425
Sundry receivables	24,457,173	808,128
	53,645,656	75,482,817
h) Other assets
Real property	2,660,451	2,660,463
	2,660,451	2,660,463

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 3 - COMPOSITION OF BALANCE SHEET ITEMS (Contd.)


	09.30.02	09.30.01
	$	$
CURRENT LIABILITIES
i) Accounts payable
Ordinary suppliers	101,910,146	87,948,525
Related companies Sect. 33 - Law No. 19,550 and amendments	219,943	1,803,233
Other related companies	22,885,597	14,829,244
Notes payable	46,581,279	68,309,728
Unearned interest	(501,161)	(960,995)
Advances from customers	2,949,689	7,373,717
	174,045,493	179,303,452
j) Short-term debt
Financial	2,345,174	821,159
Import/export financing	1,350,672,446	745,408,351
Negotiable Corporate Bonds	359,975,000	121,660,000
Unearned interest	(17,172,703)	(32,432,092)
	1,695,819,917	835,457,418
k) Social security and taxes
Provision for income tax/minimum notional income tax	-	27,758,388
Income tax withholding, advances and others	-	(27,758,388)
Provision for turnover tax	357,691	157,501
Wages and social security	33,768,549	60,624,058
Others sundry	9,408,898	6,534,949
	43,535,138	67,316,508
l) Other liabilities
Related companies Sect. 33 - Law No. 19,550 and amendments	-	810,979
Other related companies	1,754,093	1,215,293
Liabilities due to dismissal and restructuring	6,540,555	11,630,510
Others sundry	1,981,277	3,955,582
	10,275,925	17,612,364
NON-CURRENT LIABILITIES
m) Accounts payable
Other related companies	3,704,302	4,380,441
Notes payable	7,016,410	10,665,594
Unearned interest	(402,667)	(799,919)
	10,318,045	14,246,116
n) Long-term debt
Import/export financing	242,258,231	313,227,309
Negotiable Corporate Bonds	-	121,660,000
Unearned interest	(9,035,132)	(23,788,781)
	233,223,099	411,098,528
o) Social security and taxes
Provision for income tax/minimum notional income tax	-	6,370,560
Income tax withholding, advances and others	-	(101,341)
Sundry	12,764,426	14,531,707
	12,764,426	20,800,926
p) Other liabilities
Liabilities due to dismissal and restructuring	5,098,701	4,656,919
	5,098,701	4,656,919

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 4 - DEPOSIT OF FUNDS, RECEIVABLES AND PAYABLES: DUE DATES AND RATES


Captions		Up to 3 months		Between 3 and 6 months	Between 6 and 9 months		Between 9 and 12 months		Between 1 and 2 years	Between 2 and 3 years	Between 3 and 4 years		Over 4 years		Total at 09.30.02		Total at 09.30.01
	$		$		$	$		$		$	$	$		$		$
Overdue
Trade receivables - fixed rate		20,646,727		1,057,474	12,016,645		8,621,517		25,233,909	3,610,042	2,326,280		1,170,620		74,683,214		121,039,605
Total at September 30, 2002		20,646,727		1,057,474	12,016,645		8,621,517		25,233,909	3,610,042	2,326,280		1,170,620		74,683,214
Total at September 30, 2001		52,897,044		13,958,937	6,944,789		33,179,772		5,807,292	3,245,179	733,072		4,273,520				121,039,605
Not yet due
Deposits of funds - fixed rate		125,421,296		-	-		-		-	-	-		-		125,491,226		235,592,734
Deposits of funds - floating rate		-		-	-		-		-	323,372,403	-		14,483,209		337,855,612		23,097,186
Trade receivables - fixed rate		311,231,232		12,133,067	1,391,280		1,163,140		6,596,446	26,180	-		-		332,541,345		261,238,720
Trade receivables - without rate		24,965,190		-	-		-		-	-	-		-		24,965,190		10,055,896
Other receivables - fixed rate		2,105,176		602,407	524,608		1,504,131		1,344,608	905,683	597,935		5,724,424		13,308,972		33,963,612
Other receivables - floating rate		15,750		4,707,567	15,750		15,750		47,251	-	-		24,207,648		29,009,716		7,591,905
Other receivables - without rate		45,732,927		1,458,958	1,123,678		1,900,580		407,836	20,140,952	227,964		41,355		71,034,250		105,097,705
Total at September 30, 2002		509,471,571		18,901,999	3,055,316		4,583,601		8,396,141	344,445,218	825,899		44,456,636		934,136,381
Total at September 30, 2001		549,415,078		21,605,606	2,268,158		4,336,380		7,232,203	54,271,336	1,673,500		35,835,497				676,637,758
Not yet due
Accounts payable - fixed rate		42,063,030		473,371	1,773,139		465,069		2,855,969	1,235,519	-		-		48,866,097		120,065,655
Accounts payable – floating rate		3,266,191		-	3,113,279		-		6,226,557	-	-		-		12,606,027		11,305,762
Accounts payable - without rate		114,427,896		5,125,547	-		3,337,971		-	-	-		-		122,891,414		62,178,150
Short and long-term debt - fixed rate		44,336,738		27,732,577	33,909,882		8,706,874		159,032,606	18,891,582	11,893,772		10,304,814		314,808,845		478,775,513
Short and long-term debt - floating rate		1,255,330,256		189,655,328	5,517,050		123,203,285		31,700,419	1,399,906	-		-		1,606,806,244		767,780,433
Short and long-term debt - without rate		7,427,927		-	-		-		-	-	-		-		7,427,927		-
Social security and taxes - without rate		32,057,510		11,477,628	-		-		-	-	-		12,764,426		56,299,564		88,117,436
Other debt - without rate		4,023,189		854,489	2,223,886		3,174,361		2,544,879	1,409,446	387,799		756,577		15,374,626		22,269,283
Total at September 30, 2002		1,502,932,737		235,318,940	46,537,236		138,887,560		202,360,430	22,936,453	12,281,571		23,825,817		2,185,080,744
Total at September 30, 2001		391,803,230		195,872,180	300,178,376		211,835,956		287,788,497	122,133,572	13,353,074		27,527,347				1,550,492,232

The allowances for doubtful accounts and existing guarantees are sufficient to cover overdue trade receivables.
Interest rates are not lower than market rates.
There are no receivables or debts without stated due date.

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 5 - FUNDS CONVEYED TO THE TRUST

The Company decided to appropriate part of its balances in cash and banks abroad to the setting up of a trust, the purpose of which is to cover its financing needs, ensuring the normal curse of operations.

These funds, which amount to US$ 86,463,209, were valued at the value arising from the account statement issued by the trustee, at the rate of exchange ruling at period-end.

NOTE 6 - CHANGES IN ACCOUNTING PROCEDURES

The Company has followed the same criteria adopted in the previous year with respect to valuation, depreciation and other items.

As from June 30, 2001 the procedure to calculate the provision for finished and semi-manufactured products was changed, following more prudent criteria than those applied in the previous year.

At September 30, 2001 this change of criteria implies:

Prior year’s adjustment (see Statement of Changes in Shareholders’ Equity) - loss amounting to $ 9,174,186.

NOTE 7 - ENCUMBERED AND RESTRICTED ASSETS AND SURETIES GRANTED

In accordance with the contracts signed as a result of the incorporation of Consorcio Siderurgia Amazonia Ltd., guarantees were granted as mentioned in Note 8 b) to the financial statements.

At period-end, the Company had become the guarantor of obligations for US$ 2,300,000.

NOTE 8 - INVESTMENTS IN OTHER COMPANIES

a) Comesi San Luis S.A.I.C.

The Company holds a 99% equity interest in Comesi San Luis S.A.I.C. The corporate purpose of Comesi San Luis S.A.I.C. is the production of cold and/or hot-rolled plates, whether coated or not, shaped and/or skelped.

On September 19, 2002, Comesi San Luis distributed cash dividends amounting to $ 2,700,000.

As of September 30, 2002, Comesi San Luis S.A.I.C. shareholders’ equity amounted to $ 5,525,388 and the net loss for the nine-month period ended September 30, 2002, to $ 2,941,886.

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 8 - INVESTMENTS IN OTHER COMPANIES (Contd.)

b) Prosid Investments S.C.A.

b) 1. Privatization of Sidor

On November 13, 1997 Consorcio Siderurgia Amazonia Ltd. (Amazonia) was set up to participate in the bid for 70% de Siderúrgica del Orinoco C.A. (Sidor), which was privatized by the government of Venezuela and awarded to Amazonia on December 18, 1997. At present Siderar holds a participation in the capital stock of Amazonia through its subsidiary Prosid Investments S.C.A. (Prosid).

Sidor share purchase-sale contract established certain obligatory conditions to be fulfilled by Amazonia and its shareholders over a term of five years, which should be guaranteed to the Fondo de Inversiones de Venezuela (currently Banco de Desarrollo Económico y Social de Venezuela) and the Corporación Venezolana de Guayana (C.V.G.) for a total aggregate amount of up to US$ 150,000,000. As regards certain secured obligations (those related to the continuity of operations while maintaining a minimum production volume, a minimum amount of investments in fixed assets and the holding of a given participation by the original shareholders) a performance bond with a financial institution was granted for a maximum amount of US$ 150,000,000 for the first three years and US$ 125,000,000 and US$ 75,000,000 for the fourth and fifth years, respectively, counted as from the date of purchase, provided that there has been no foreclosure on this guarantee in the preceding year. The maximum risk guaranteed by Siderar at the date of these financial statements amounts to US$ 26,250,000. The bond expires in January 2003.

In addition, the shareholders of Amazonia signed a guarantee contract covering certain liabilities of Sidor amounting to US$ 602,800,000. This guarantee was only claimable in connection with accrued interest not paid in fiscal 1998 and 1999, which could be executed as from the third year in connection with the past due and claimable principal balance. According to its participation, the maximum risk guaranteed by Siderar on these liabilities is US$ 135,998,000.

b) 2. Restructuring of debt in Amazonia and Sidor

As a result of the adverse economic environment, Sidor and Amazonia recorded losses, which gave rise to delays in compliance with their financial obligations. On February 23, 2000, the negotiations to restructure their respective debts were concluded. The most relevant aspects included in the agreements were the contribution of resources by the shareholders of Sidor amounting to US$ 300,000,000, of which US$ 210,000,000 were indirectly provided by the shareholders of Amazonia by subscribing subordinated convertible debt and capital contributions and the obtaining of two years of grace for the amortization of rescheduled liabilities. The participation of Siderar through Prosid was US$ 56,156,707; part of the funds corresponded to a capital contribution for US$ 25,392,703, which increased the participation of Prosid in Amazonia, from 17.5% to 19.76%, and the remaining amount to the subscription of loans convertible into shares in Amazonia amounting to US$ 30,764,004. The participation of Prosid included part of the portion corresponding to Siderúrgica Venezolana Sivensa S.A., a shareholder of Amazonia, which was not in a position to participate with additional funds.

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 8 - INVESTMENTS IN OTHER COMPANIES (Contd.)

b) Prosid Investments S.C.A. (Contd.)

b) 2. Restructuring of debt in Amazonia and Sidor (Contd.)

As a result of the financing of the restructuring process, Amazonia recorded a debt of approximately US$ 245,000,000 (without including the subordinated convertible debt) and Sidor of US$ 1,200,000,000, as a result of which Sidor agreed to assign part of its fixed assets to a trust, with its creditors as beneficiaries, for up to US$ 827,000,000. In addition, the shares of Amazonia held by Prosid continue to be granted in guarantee of the creditors of Amazonia.

b) 3. Current situation

As a consequence of the continuing negative conditions in the worldwide steel industry, the deterioration of the financial markets, the difficult economic and political situation in Venezuela and other adverse factors, at September 30, 2002, Sidor has failed to comply with certain covenants assumed in the debt restructuring contracts entered into with the Fondo de Inversiones de Venezuela and creditor banks, including: (i) payment of interest as from December 18, 2001, (ii) deposit in reserve accounts of certain debts as established in the mentioned contracts, and (iii) maintaining of certain financial ratios. These contracts grant creditors the right to accelerate the maturity of these credits.

Amazonia and Sidor continue to negotiate the restructuring of their debts with the creditor banks and the Venezuelan government under terms satisfactory to both parties. At the date of these financial statements, significant progress has been made in connection with those negotiations.

Siderar values its participation in Amazonia through its subsidiary, as indicated in Note 2.4 e) to the financial statements. The initial investment of Siderar in Amazonia amounting to US$ 122,835,535 and the additional contribution of US$ 56,156,707 was reduced to US$ 34,891,111 at September 30, 2002 due to the recognition of losses corresponding to Amazonia by the equity method of accounting.

c) Compañía Afianzadora de Empresas Siderúrgicas S.G.R.

The Company has a 38.8889% interest in the capital stock of Compañía Afianzadora de Empresas Siderúrgicas S.G.R. in its capacity as protecting partner. The main purpose of this company is to grant guarantees to participating partners to facilitate or enable their access to the bank credit line for the purchase of national steel raw material and to provide technical, economic and financial advice to them. To do so, the Company has made a net contribution of $ 5,962,200 to the risk fund (see Exhibit D to the financial statements). The purpose of the risk fund is to realize guarantees to be granted to participating partners.

d) Information Systems and Technologies N.V.

On March 19, 2001 the Company acquired 25% of the shares of Information Systems and Technology N.V. (IST) for $ 13,032. IST renders information technology services relating to development, advice, sale, planning and consultancy.

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 8 - INVESTMENTS IN OTHER COMPANIES (Contd.)

e) Lomond Holdings B.V.

On May 3, 2001 the Company acquired 25% of the shares of Lomond Holdings B.V. for US$ 53,288. Lomond Holdings B.V. is an international business company, the main purposes of which is to invest in the capital stock of companies and corporations engaged in the providing of industrial services and goods purchasing services. To this end, it invests in the capital stock of companies engaged in the providing of supply services in Argentina, Mexico and Italy. Exiros.ar is the Argentine subsidiary of Lomond Holding B.V., which acts as purchase agent of the industrial companies of the Techint Organization operating in Argentina.

f) Result from investments in subsidiaries and related companies:


	09.30.02	09.30.01
	$	$
Subsidiaries
Comesi San Luis S.A.I.C.	(2,940,981)	2,001,194
Inventory valuation adjustment Comesi San Luis S.A.I.C.	1,057,833	537,516
Prosid Investments S.C.A. (See Note to Exhibit C)	12,218,919	(39,530,145)
Sub-total result of subsidiaries	10,335,771	(36,991,435)
Related companies
Compañía Afianzadora de Empresas Siderúrgicas S.G.R.	(554,130)	(83,490)
Ecocemento S.A.	-	(155,327)
Information Systems and Technologies N.V.	(4,033)	(16,415)
Lomond Holdings B.V.	698,988	(40,796)
Sub-total result of related companies	140,825	(296,028)
Total result of investments	10,476,596	(37,287,463)

NOTE 9 - RESTRICTIONS ON THE DISTRIBUTION OF PROFITS

In accordance with the Corporations Law, the Company’s by-laws and General Resolution No. 368/01 of the National Securities Commission, 5% of the net profits for the year plus or less prior years’ adjustments must be appropriated to the Legal Reserve after absorbing any accumulated losses, until the reserve reaches 20% of adjusted capital.

As a result of the negotiations started with the Company’s financial creditors mentioned in Note 14, restrictions have temporarily been imposed on the distribution of dividends until November 29, 2002.

NOTE 10 – EXTRAORDINARY RESULTS

The extraordinary result for the nine-month period ended on September 30, 2001 corresponds to costs generated by termination of employment agreed with certain management level personnel in order to adjust the management structure to the market conditions and the Company’s new strategy, and the emergency halting of the blast furnace due to the cooling of the crucible.

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 11 - GLOBAL PROGRAM FOR NEGOTIABLE CORPORATE BONDS

On exercising the mandate and authorization granted by the Shareholders' Ordinary and Extraordinary Meeting held on September 29, 1994, the Board of Directors approved the Offering Circular of the global program for the issue of Negotiable Corporate Bonds for US$ 250,000,000, which has been authorized by the National Securities Commission.

On July 31, 1998 a new tranche was issued for a total of US$ 110,000,000 with nine-monthly maturities in January and July 2002 and 2003, at an interest rate of Libo plus a spread of 0.9%, 1.15%, 1.4%, 1.65% and 1.9% for years one to five, respectively. Interest will be payable quarterly.

During the course of conversations with its financial creditors, the Company extended the postponement of repayment of 50% of the principal on installment No.1 that had originally been granted. In a similar manner, in September 2002 the Company obtained the consent of all holders of Negotiable Obligations for a postponement of 100% of the principal due for installment No.2

Funds from this issue were used as follows:


	US$
Settlement of bank and financial debt	109,130,000
Corporate Bonds issuing expenses	870,000
Total issued	110,000,000

NOTE 12 - AFIP - DGI INCOME TAX CLAIM FOR FISCAL 1995 AND 1996

The Dirección General Impositiva (DGI - tax authorities) have challenged the charge to income of certain disbursements that the Company has treated as expenses necessary to maintain industrial installations, which as such should be deducted in the year in which they take place. The DGI sustain that these are investments or improvements that must be capitalized and, therefore, they made an ex-officio determination of income tax on a nominal tax basis of $ 7,995,540 and $ 2,479,080 for fiscal 1995 and 1996, respectively, which at the end of the period totaled $ 31,502,430 and $ 6,684,291, including fines and interest.

On February 19, 2001 and February 11, 2002 the Company appealed both determinations before the National Tax Court, since its legal and tax advisors consider that, based on existing evidence and the work performed by the Tax Authorities, the Company will obtain favorable results. Consequently no liability has been recorded by the Company.

NOTE 13 - STATUS OF CAPITAL

The status of capital at September 30, 2002 is $ 347,468,771, which has been subscribed, paid-in and registered at the Public Registry of Commerce.

The last capital increase amounting to $ 35,666,000 was approved by the Shareholders' Ordinary and Extraordinary Meeting held on December 29, 1994 and registered at the Public Registry of Commerce on November 7, 1995.

The Ordinary and Extraordinary Meeting of Shareholders and the Meeting of Class B Shareholders simultaneously held on April 30, 2002, resolved the conversion of 27.577.146 ordinary class B shares into ordinary class A shares, instructing the Board of Directors to request the increase in the capital authorized to list for trading on stock exchanges.

The Shareholders' equity at the end of the period amounted to $ 1,090,409,008 and the capital stock outstanding at that date to $ 347,468,771. Accordingly, the proportional equity value for each share of $ 1 par value amounts to $ 3.14 (three pesos and fourteen cents).

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 14 - FINANCIAL SITUATION OF THE COMPANY

As mentioned in the interim financial statements for the current year, the Argentine economic and financial crisis has worsened to the point that the financial system almost suspended the granting of loans to companies, affecting the Company’s financial situation by preventing normal renewal of financing lines upon maturity. As a result, the Company is carrying out negotiations with its creditors to reschedule the maturities according to the variables affecting the Company’s business. Significant progress has been made on these negotiations at the date of these financial statements. The bank and financial debts at the close of the period amounted to $ 1,929.0 million, of which $ 1,695.8 million are current debts and $ 233.2 million are non-current debts. The Company has gained practically no benefit from the conversion into pesos of this financial debt and is therefore to settle it in floating dollars.

NOTE 15 - ARGENTINE ECONOMIC CONTEXT

These financial statements have been prepared as indicated in Notes 1 and 2.

The significant changes in economic regulations, the major impact of the devaluation of the currency on the prices of goods and services and the fact that price indexes have already begun to reflect these events during the nine-month period, as will gradually begin to happen from now on, and the uncertainty regarding many economic measures that are still to be decided, could in future affect the evaluations and estimates made by the Company, so that the interpretation of these financial statements should take into account these exceptional circumstances.

NOTE 16 - EVENTS SUBSEQUENT TO PERIOD-END

After September 30, 2002 no events, situations or circumstances other than those publicly known having a material effect on the Company’s equity, economic or financial position have taken place.

The report on limited review is issued as a separate document.

Financial statements at September 30, 2002

FIXED ASSETS


	09.30.02										09.30.01
						Depreciation
Main account	Values at the beginning of the period	Increases (1)	Decreases	Reclassifications	Values at the end of the period	Accumulated at the beginning of the period	Deletions for the period	For the period (2)	Accumulated at the end of the period	Residual value	Residual value
	$	$	$	$	$	$	$	$	$	$	$
Land	50,744,589	-	-	-	50,744,589	-	-	-	-	50,744,589	50,745,576
Industrial buildings and facilities	1,825,941,138	375,078,142	-	41,727,392	2,242,746,672	918,120,245	-	142,776,944	1,060,897,189	1,181,849,483	886,203,547
Machinery and equipment	900,262,283	128,169,569	-	812,431	1,029,244,283	663,350,557	-	52,972,524	716,323,081	312,921,202	248,497,471
Vehicles and means of transport	31,114,538	998,994	9,753,970	-	22,359,562	23,767,641	6,640,458	1,491,765	18,618,948	3,740,614	7,625,627
Furniture, general machinery and office supplies	37,677,317	-		-	37,677,317	33,434,643	-	772,774	34,207,417	3,469,900	4,533,041
Steel spares and supplies	125,535,574	-	45,915,730	-	79,619,844	-	-	-	-	79,619,844	131,957,296
Fixed assets in transit	1,890,030	-	230,164	-	1,659,866	-	-	-	-	1,659,866	3,932,949
Work in progress	77,862,398	34,239,300	-	(42,539,823)	69,561,875	-	-	-	-	69,561,875	113,205,161
Advances to suppliers	1,132,619	1,420,523	-	-	2,553,142	-	-	-	-	2,553,142	2,892,219
Total at September 30, 2002	3,052,160,486	539,906,528	55,899,864		3,536,167,150	1,638,673,086	6,640,458	198,014,007	1,830,046,635	1,706,120,515
Total at September 30, 2001	2,983,227,888	86,153,228	27,434,104		3,041,947,012	1,454,681,787	1,428,218	139,100,556	1,592,354,125		1,449,592,887

(1) Includes the capitalization of exchange differences in relation to commercial, bank and financial debts (see Note 2.3 to the financial statements).

(2) See Exhibit H to the financial statements.

Note: The Company has considered as original value of technically appraised assets at June 30, 1990 the technical value restated as indicated in Note 2.4 d) to the financial statements. The depreciation rates of the different assets are not included as these vary according to the different remaining useful lives assigned.

The report on limited review is issued as a separate document.

Financial statements at September 30, 2002

INTANGIBLE ASSETS


	09.30.02									09.30.01
					Amortization
Main account	Values at the beginning of the period	Increases	Decreases	Values at the end of the period	Accumulated at the beginning of the period	Deletion for the period	For the period (1)	Accumulated at the end of the period	Residual value	Residual value
	$	$	$	$	$	$	$	$	$	$
Goodwill (Comesi S.A.I.C.)	48,317,231	-	-	48,317,231	47,133,258	-	1,183,973	48,317,231	-	2,367,944
Information systems projects	2,797,030	8,822,220	-	11,619,250	102,029	-	538,872	640,901	10,978,349	404,391
Total at September 30, 2002	51,114,261	8,822,220	-	59,936,481	47,235,287	-	1,722,845	48,958,132	10,978,349
Total at September 30, 2001	48,317,231	404,391	-	48,721,622	42,397,370	-	3,551,917	45,949,287		2,772,335

See Exhibit H to the financial statements.

The report on limited review is issued as a separate document.

Financial statements at September 30, 2002

INVESTMENTS

Securities issued in series and investments in other companies


		09.30.02							09.30.01
Denomination and type of shares	Issuer	Class	Par value	Amount	Percentage participation in capital stock	Restated cost value	Proportional equity value	Amount recorded	Amount recorded
						$	$	$	$
NON-CURRENT INVESTMENTS
Corporations Sect. 33 - Law No. 19,550 and amendments
Subsidiaries:
Shares	Comesi San Luis S.A.I.C.	Ordinary, one vote each	0.0001	1,089,000	99,0000	10,048,950	5,470,134	5,470,134	10,854,530
Shares	Prosid Investments S.C.A.	Ordinary, one vote each	1,000 (1)	999,934	99,9934	397,776,850	130,492,757	130,492,757	162,500,943
Related companies:
Shares	Compañía Afianzadora de Empresas Siderúrgicas S.G.R.	Ordinary, one vote each	1	378,000	38,8889	836,136	87,140	87,140	762,428
Shares	Ecocemento S.A.
Shares	Information Systems and Technologies N.V.	Ordinary, one vote each	50 (2)	230	25,0000	28,827	13,160	13,160	12,412
Shares	Lomond Holdings N.V.	Ordinary, one vote each	100 (2)	600	25,0000	117,873	785,199	785,199	77,077
Others:
Shares	FO.GA.BA. S.A.P.E.M.	Ordinary, one vote each	1	10,000	0,3100	22,120		22,120	22,120
Comesi San Luis S.A.I.C. inventory valuation adjustment							(79,800)	(79,800)	(1,040,746)
						408,830,756	136,768,590	136,790,710	173,188,764

(1) Amount stated in Uruguayan pesos.

(2) Amount stated in Euros.

Financial statements at September 30, 2002

INVESTMENTS (Contd.)

Securities issued in series and investments in other companies


		Information about the issuer
			Latest financial statements
Denomination and type of shares	Issuer	Principal activity	Date	Period	Capital stock	Results	Shareholders’ equity	Date of approval by Board of Directors
					$	$	$
NON-CURRENT INVESTMENTS (Contd.)
Corporations Sect. 33 - Law No. 19,550 and amendments (Contd.)
Subsidiaries:
Shares	Comesi San Luis S.A.I.C.	Production of cold or hot rolled, pre-painted, formed and skelped steel sheets	09.30.02	9 months	110	(2,941,886)	5,525,388	11.06.02
Shares	Prosid Investments S.C.A. (1)	Stock participation in Consorcio Siderurgia Amazonia Ltd. and all types of financial transactions	09.30.02	9 months	305,430,788	12,219,726	130,501,370	11.06.02
Related companies:
Shares	Compañía Afianzadora de Empresas Siderúrgicas S.G.R.	Granting of guarantees to participating partners to facilitate or permit access to credits for the purchase of national steel raw material through the signing of contracts regulated by Law No. 24467	09.30.02	3 months	972,000	(1,927,176)	224,074	11.04.02
Shares	Information Systems and Technologies N.V.	Renders information technology services relating to development, advice, sale, planning and consultancy	09.30.02	9 months	164,489	(16,134)	52,641	10.18.02
Shares	Lomond Holdings	Project investment and financing	09.30.02	9 months	784,637	2,795,960	3,140,796	10.18.02
Shares	FO.GA.BA. S.A.P.E.M.	Granting of guarantees to PYMES operating in the province of Buenos Aires	12.31.00	12 months	3,238,400	(532,746)	48,550,252	03.27.01

(1) As the financial statements for Amazonia at September 30, 2002 were not available, Prosid Investments has valued its investment in Amazonia using the financial statements of the latter with an aging of three months. However, to better reflect the economic reality on these financial statements, the net equity and results of the Company have been adjusted to reflect the estimated effect of the results for Amazonia for the period from July 1 to September 30, 2002.

The report on limited review is issued as a separate document.

Financial statements at September 30, 2002

OTHER INVESTMENTS


	09.30.02				09.30.01
Main account	Balance at the beginning of the period	Increases(1)	Decreases (1)	Balance at the end of the period	Balance at the end of the period
	$	$	$	$	$
OTHER CURRENT INVESTMENTS
Sight deposits - Other related companies	42,411,317	81,359,723	-	123,771,040	20,827,000
Time deposits	7,325,491	-	7,325,491	-	214,765,734
Foreign Government Securities	11,054,839	-	11,054,839	-	-
Argentine Government Securities	1,838,265	-	188,009	1,650,256	-
Total at the end of the period	62,629,912	81,359,723	18,568,339	125,421,296	235,592,734
OTHER NON-CURRENT INVESTMENTS
Funds conveyed to the trust - Other related companies (Note 5)	195,002,138	128,370,265	-	323,372,403	-
Financial investments in insurance companies (Note 2.4. k))	22,497,513	-	8,014,304	14,483,209	23,097,186
Risk fund Compañía Afianzadora de Empresas Siderúrgicas S.G.R.
Net contributions	24,410,864	-	18,448,664	5,962,200	37,682,864
Allowance for doubtful accounts (Exhibit E) (2)	(9,738,790)	(1,653,556)	(5,430,146)	(5,962,200)	(8,127,636)
Total at the end of the period	232,171,725	126,716,709	21,032,822	337,855,612	52,652,414

(1) Value net of the adjustment for inflation of initial balances.

(2) Customers of Compañía Afianzadora de Empresas Siderúrgicas S.G.R. in collection process.

The report on limited review is issued as a separate document.

Financial statements at September 30, 2002

ALLOWANCES AND PROVISIONS


Items	Balance at the beginning of the period	Increases and recoveries (1)	Decreases	Balance at the end of the period
	$	$	$	$
Deducted from current assets
* For doubtful accounts	46,106,866	23,689,088	33,952,205	35,843,749
* For inventory obsolescence	6,400,528	5,108,888	5,471,383	6,038,033
Total at September 30, 2002	52,507,394	28,797,976	39,423,588	41,881,782
Total at September 30, 2001	50,247,215	15,482,880	16,295,607	49,434,488
Deducted from non-current assets	-	2,510,639	-	2,510,639
* For risk fund uncollectibility	9,738,790	1,653,556	5,430,146	5,962,200
Total at September 30, 2002	9,738,790	4,164,195	5,430,146	8,472,839
Total at September 30, 2001	9,392,152	(1,264,516)	-	8,127,636
Included in current liabilities
* For contingencies	6,819,844	17,958,354	20,257,226	4,520,972
Total at September 30, 2002	6,819,844	17,958,354	20,257,226	4,520,972
Total at September 30, 2001	11,132,239	688,447	7,649,535	4,171,151
Included in non-current liabilities
* For contingencies	22,623,529	(7,175,018)	-	15,448,511
Total at September 30, 2002	22,623,529	(7,175,018)	-	15,448,511
Total at September 30, 2001	33,471,789	(15,916,908)	-	17,554,881

See Exhibit H to the financial statements.

The report of independent accountants is issued as a separate document.

Financial statements at September 30, 2002

COST OF SALES


	Period ended on
	09.30.02		09.30.01
	$	$	$	$
1) Inventory at the beginning of the period
Finished products	122,344,581		139,641,744
Production in process	98,217,222		140,573,890
Raw material	76,758,537		109,716,439
Materials	108,703,548		127,524,835
Advances to suppliers	1,146,599		2,496,008
Allowance for obsolescence (Exhibit E)	(6,400,528)	400,769,959	(11,406,494)	508,546,422

2) Purchases of the period		843,276,497		484,119,113
3) Manufacturing expenses (Exhibit H)		514,884,744		568,603,859
Subtotal		1,758,931,200		1,561,269,394
4) Holding results (Exhibit H)		20,595,081		9,140,867
Subtotal		1,779,526,281		1,570,410,261
5) Inventory at the end of the period
Finished products	93,203,847		111,004,389
Products in process	96,147,458		98,113,968
Raw material	161,702,054		89,730,340
Materials	96,608,228		112,730,687
Advances to suppliers	4,156,339		2,872,355
Allowance for obsolescence (Exhibit E)	(6,038,033)	445,779,893	(5,373,963)	409,077,776

COST OF SALES		1,333,746,388		1,161,332,485

The report on limited review is issued as a separate document.

Financial statements at September 30, 2002

FOREIGN CURRENCY ASSETS AND LIABILITIES

	09.30.02
Items	Foreign currency (1)	Amount in foreign currency	Exchange rate used	Amount in local currency	Foreign currency (1)	Amount in foreign currency	Amount in local currency
Historical	Restated
			$	$			$	$
ASSETS
CURRENT ASSETS
Cash and banks
Cash	US$	1,362,711	3,640000	4,960,269	US$	8,037	8,037	17,778
Checks to be deposited					US$	39,920	39,920	88,303
Banks	US$	113,090	3,640000	411,647	US$	11,410	11,410	25,239
	EURO	1,743,556	3,592300	6,263,375
Other investments
Sight deposits - Other related companies	US$	34,003,033	3,6400000	123,771,040	US$	5,629,391	5,629,391	12,452,213
Time deposits					US$	97,091,200	97,091,200	214,765,734
Trade receivables
Ordinary and documented debtors from the domestic market.	US$	11,587,458	3,6400000	42,178,348	US$	110,998,149	110,998,149	245,527,906
Related companies Sect. 33 - Law No. 19,550 and amendments					US$	699,149	699,149	1,546,518
Other related companies	US$	12,069,499	3,6400000	43,932,976	US$	10,757,019	10,757,019	23,794,526
Export reimbursements/convergence factor	US$	5,924,938	3,6400000	21,566,776	US$	4,546,065	4,546,065	10,055,896
Ordinary and documented debtors from foreign markets	US$	70,485,610	3,6400000	256,567,621	US$	29,287,849	29,287,849	64,784,722
					EURO	8,396,405	7,618,058	16,851,144
Allowance for doubtful accounts(Exhibit E)					US$	(19,918,863)	(19,918,863)	(44,060,525)
Other receivables
Related companies Sect. 33 - Law No. 19,550 and amendments	US$	586,801	3,6400000	2,135,955	US$	3,091,038	3,091,038	6,837,376
Other related companies	US$	549,139	3,6400000	1,998,865	US$	470,573	470,573	1,040,907
Receivables from sale of real property	US$	15,000	3,6400000	54,600	US$	232,695	232,695	514,721
Expenses paid in advance					US$	2,561,824	2,561,824	5,666,755
Sundry receivables	US$	4,664,708	3,6400000	16,979,536	US$	4,239,934	4,239,934	9,378,734
Total current assets - Carried forward				520,821,008			257,363,448	569,287,947

Financial statements at September 30, 2002

FOREIGN CURRENCY ASSETS AND LIABILITIES (Contd.)

	09.30.02				09.30.01
Items	Foreign currency (1)	Amount in foreign currency	Exchange rate used	Amount in local currency	Foreign currency (1)	Amount in foreign currency	Amount in local Currency
Historical	Restated
			$	$			$	$
ASSETS
Brought forward				520,821,008			257,363,448	569,287,947
NON-CURRENT ASSETS
Trade receivables
Notes receivable					US$	195,539	195,539	432,532
Other receivables
Related companies Sect. 33 - Law No. 19,550 and amendments					US$	1,246,937	1,246,937	2,758,225
Receivables from sale of real property					US$	352,783	352,783	780,356
Expenses paid in advance					US$	993,863	993,863	2,198,425
Sundry receivables					US$	360,205	360,205	796,773
Other investments
Funds conveyed to the trust – Other related companies	US$	86,463,209	3.740000	323,372,403
Investments in insurance companies					US$	10,441,766	10,441,766	23,097,186
Risk fund Compañía Afianzadora de Empresas Siderúrgicas S.G.R.
Net contributions					US$	17,035,653	17,035,653	37,682,864
Allowance for doubtful accounts (Exhibit E)					US$	(3,674,338)	(3,674,338)	(8,127,636)
Fixed assets
Other receivables
Advances to suppliers	US$	111,739	3.640000	406,731	US$	102,522	102,522	226,779
	EURO	67,351	3.592300	241,946	EURO	338,221	203,610	450,385
					DEM	3,000	1,398	3,092
					FRF	439,619	61,289	135,571
Total non-current assets				324,021,080			27,321,227	60,434,552
Total assets				844,842,088			284,684,675	629,722,499

Financial statements at September 30, 2002

FOREIGN CURRENCY ASSETS AND LIABILITIES (Contd.)

	09.30.02
Items	Foreign currency (1)	Amount in foreign currency	Exchange rate used	Amount in local currency	Foreign currency (1)	Amount in foreign currency	Amount in local currency
Historical	Restated
			$	$			$	$
LIABILITIES
CURRENT LIABILITIES
Accounts payable
Ordinary suppliers	US$	6,973,235	3.740000	26,079,899	US$	4,608,325	4,608,325	10,193,615
Related companies Sect. 33 - Law No. 19,550 and amendments					US$	815,205	815,205	1,803,233
Other related companies	US$	3,463,975	3.740000	12,955,265	US$	2,090,997	2,090,997	4,625,285
Notes payable	US$	9,573,440	3.740000	35,804,666	US$	29,729,825	29,729,825	65,762,373
	EURO	2,888,852	3.691400	10,663,908	EURO	355,882	324,031	716,757
	£	2,264	5.872900	13,299	£	10,165	14,961	33,094
	¥	2,111,032	0.030757	64,929	¥	3,437,046	28,854	63,825
	Skr	85,000	0.405614	34,477
					ITL	178,660,297	84,149	186,138
					DEM	1,327,654	618,586	1,368,312
					ESP	14,796,567	81,026	179,230
Unearned interest	US$	(134,000)	3.740000	(501,161)	US$	(434,446)	(434,446)	(960,995)
Advances from customers	US$	788,687	3.740000	2,949,689	US$	3,333,507	3,333,507	7,373,717
Short-term debt
Import/export financing	US$	358,051,972	3.740000	1,339,114,375	US$	148,012,123	148,012,123	327,402,816
	¥	159,308,743	0.030757	4,899,859	¥	179,589,875	1,507,657	3,334,937
	EURO	1,803,709	3.691400	6,658,212	EURO	1,795,141	1,634,476	3,615,461
					DEM	158,524	73,860	163,378
Debt with exchange insurance in US$					¥	22,179,793,194	185,755,768	410,891,759
Negotiable Corporate Bonds	US$	96,250,000	3.740000	359,975,000	US$	55,000,000	55,000,000	121,660,000
Unearned interest	US$	(3,521,663)	3.740000	(13,171,021)	US$	(11,493,306)	(11,493,306)	(25,423,193)
	¥	(107,855,415)	0.030757	(3,317,309)	¥	(67,937,939)	(570,339)	(1,261,590)
	EURO	(185,397)	3.691400	(684,373)	EURO	(193,466)	(176,151)	(389,646)
Unearned interest with exchange insurance in US$					¥	(290,348,837)	(2,422,090)	(5,357,663)
Total current liabilities – Carried forward				1,781,539,714			418,617,018	925,980,843

Financial statements at September 30, 2002

FOREIGN CURRENCY ASSETS AND LIABILITIES (Contd.)

	09.30.02				09.30.01
Items	Foreign currency (1)	Amount in foreign currency	Exchange rate used	Amount in local currency	Foreign currency (1)	Amount in foreign currency	Amount in local Currency
Historical	Restated
			$	$			$	$
LIABILITIES
Brought forward				1,781,539,714			418,617,018	925,980,843
NON-CURRENT LIABILITIES
Accounts payable
Other related companies	US$	990,455	3.740000	3,704,302	US$	1,980,308	1,980,308	4,380,441
Notes payable	US$	1,876,045	3.740000	7,016,410	US$	4,821,697	4,821,697	10,665,594
Unearned interest	US$	(107,665)	3.740000	(402,667)	US$	(361,627)	(361,627)	(799,919)
Long-term debt
Import/export financing	US$	25,853,697	3.740000	96,692,825	US$	69,456,135	69,456,135	153,636,971
	¥	72,689,989	0.030757	2,235,726	¥	293,442,764	2,463,452	5,449,156
	EURO	3,612,409	3.691400	13,334,846	EURO	4,310,540	3,924,747	8,681,540
Debt with exchange insurance in US$	¥	4,212,951,582	0.030856	129,994,834	¥	7,936,197,441	65,759,332	145,459,642
Negotiable Corporate Bonds					US$	55,000,000	55,000,000	121,660,000
Unearned interest	US$	(1,545,564)	3.740000	(5,780,411)	US$	(7,982,995)	(7,982,995)	(17,658,385)
	¥	(72,689,989)	0.030757	(2,235,726)	¥	(293,442,764)	(2,463,452)	(5,449,156)
	EURO	(276,046)	3.691400	(1,018,995)	EURO	(338,248)	(307,975)	(681,241)
Total non-current liabilities				243,541,144			192,289,622	425,344,643
Total liabilities				2,025,080,858			610,906,640	1,351,325,486

(1) US$: United States Dollars; ITL: Italian Lire; £: Pounds Sterling; DEM: Deutsche Marks; FRF: French Francs; ¥: Yens; ESP: Pesetas; Skr: Swedish Kronor.

The report on limited review is issued as a separate document.

Financial statements at September 30, 2002

INFORMATION REQUIRED BY SECTION 64, SUB-SECTION I B) OF CORPORATIONS LAW NO. 19,550 AND AMENDMENTS THERETO

				Financial and holding results			Total for the period-ended
Items	Manufacturing expenses	Selling expenses	Administrative expenses	Generated by assets	Generated by liabilities	Other income and expenses	09.30.02	09.30.01
	$	$	$	$	$	$	$	$
Surveillance Committee's and Directors' fees	-	-	2,003,585	-	-	-	2,003,585	1,786,743
Salaries, wages and social security	135,640,313	9,457,238	32,092,475	-	-	-	177,190,026	250,458,622
Office expenses	1,821,796	346,341	2,687,702	-	-	-	4,855,839	7,851,631
Maintenance expenses and security services for buildings, installation and equipment	88,809,349	13,018	2,914,682	-	-	-	91,737,049	127,022,567
Fees for technical assistance, external advice and commissions	376,388	34,241,468	2,598,421	-	-	-	37,216,277	21,019,265
Taxes, tariffs and contributions	-	-	5,386,136	-	-	-	5,386,136	10,304,410
Third party services	74,441,593	289,340	14,739,378	-	-	-	89,470,311	111,464,936
Operating IT services	-	-	9,071,986	-	-	-	9,071,986	11,635,069
Canteen and refreshment	2,527,062	21,732	154,139	-	-	-	2,702,933	4,446,989
Rents	272,225	-	508,009	-	-	-	780,234	838,759
Personnel transportation	3,487,952	-	223,375	-	-	-	3,711,327	5,074,565
Publicity and advertising	5,984	105,863	223,260	-	-	-	335,107	1,043,562
Charge for (recovery from) provision for contingencies	-	-	-	-	-	10,783,336	10,783,336	(15,228,461)
Charge for allowance for doubtful accounts	-	27,853,283	-	-	-	-	27,853,283	15,501,696
Freight and transportation	23,504,854	11,240,984	16,183	-	-	-	34,762,021	42,077,303
Amortization of intangible assets	-	-	-	-	-	1,722,845	1,722,845	3,551,917
Depreciation of fixed assets	198,014,007	-	-	-	-	-	198,014,007	139,100,556
Recovery from sale of scrap	(26,608,660)	-	-	-	-	-	(26,608,660)	(36,453,574)
External warehouse expenses	129,325	-	-	-	-	-	129,325	247,755
Inventory obsolescence	5,108,888	-	-	-	-	-	5,108,888	(1,283,332)
Severance pay and restructuring costs	-	-	-	-	-	22,636,022	22,636,022	44,891,655
Interests and other financing expenses	-	-	-	(889,366)	190,665,935	-	181,796,569	75,839,048
Exchange differences generated by (1):
Trade receivables	-	-	-	(103,312,826)	-	-	(103,312,826)	(458,161)
Other investments	-	-	-	(154,896,971)	-	-	(154,896,971)	(1,422,838)
Accounts payable (2)	-	-	-	-	40,406,414	-	40,406,414	(77,697)
Short and long- term debt (2)	-	-	-	-	299,254,705	-	299,254,705	(6,231)
Others	-	-	-	(4,390,701)	10,763,795	-	6,373,094	352,217
Holding results on inventories	-	-	-	(20,595,081)	-	-	(20,595,081)	(9,140,867)
Holding results on fixed assets	-	-	-	21,340,540	-	-	21,340,540	8,161,059
Result of exposure to inflation	-	-	-	226,156,367	(133,496,071)	-	92,660,296
Other ordinary income and expenses	7,353,668	1,103,259	8,861,791	-	-	1,934,014	19,252,732	4,837,264
Total at September 30, 2002	514,884,744	84,672,526	81,481,122	(44,568,038)	407,594,778	37,076,217	1,081,141,349
Total at September 30, 2001	568,603,859	58,237,934	105,845,686	(10,330,870)	83,577,401	17,502,417		823,436,427

(1) Exchange differences are shown net of the adjustment for inflation.

(2) Exchange differences are net of the capitalization in fixed assets (see Note 2.3. to the financial statements).

The report on limited review is issued as a separate document.

Financial statements at September 30, 2002

OPERATIONS WITH SUBSIDIARIES AND RELATED COMPANIES


	Operations (1)				Total for the period-ended
	Sales and sundry services	Purchases and services received	Remuneration protector partner Compañía Afianzadora de Empresas Siderúrgicas S.G.R.	Interests	Total at 09.30.02	Total at 09.30.01
	$	$	$	$	$	$
Subsidiaries
Comesi San Luis S.A.I.C.	3,213,415	(42,680)	-	-	3,170,735	17,245,551
Subtotal	3,213,415	(42,680)	-	-	3,170,735	17,245,551
Related companies
Siderca S.A.I.C.	-	-	-	-	-	4,652,856
Compañía Afianzadora de Empresas Siderúrgicas S.G.R.	-	-	4,157,441	-	4,157,441	2,258,030
Ecocemento S.A.	-	-	-	-	-	4,744,479
Consorcio Siderurgia Amazonia Ltd.	2,370,200	-	-	-	2,370,200	2,669,662
Siderúrgica del Orinoco C.A.	-	-	-	-	-	(704,158)
Subtotal	2,370,200	-	4,157,441	-	6,527,641	13,620,869
Other related companies (2)	74,049,037	(80,542,048)	-	6,345,834	(147,177)	(31,490,983)
Total at September 30, 2002	79,632,652	(80,584,728)	4,157,441	6,345,834	9,551,199
Total at September 30, 2001	86,592,936	(89,594,324)	2,368,630	8,195		(624,563)

Amounts in brackets represent losses or disbursements.
Related companies not qualifying under Section 33 of Law No. 19,550.

The report on limited review is issued as a separate document.

REPORT ON LIMITED REVIEW

To the members of the Surveillance Council of

Siderar Sociedad Anónima Industrial y Comercial

We have carried out a limited review of the balance sheets of Siderar Sociedad Anónima Industrial y Comercial at September 30, 2002 and 2001, and the related statements of income and of sources and uses of funds for the nine-month periods then ended, and the statement of changes in shareholders’ equity for the nine-month period ended September 30, 2002, and the complementary notes 1 to 16 and exhibits A to I. Furthermore, we have also carried out a limited review of the consolidated financial statements of Siderar Sociedad Anónima Industrial y Comercial with its subsidiaries for the nine-month periods ended September 30, 2002 and 2001, which are presented as complementary information. The preparation and issuance of the mentioned financial statements is the responsibility of the Company’s management.
Our reviews were limited to the application of the procedures established in Technical Pronouncement No. 7 of the Argentine Federation of Professional Councils in Economic Sciences for limited reviews of interim financial statements, which consist mainly of the application of analytical procedures to the amounts disclosed in the financial statements and inquires made of Company staff responsible for the preparation of the information included in the financial statements and of its subsequent analysis. This review is substantially less in scope than an audit, the objective of which is to express an opinion on the financial statements under review. Accordingly, we do not express an opinion on the Company’s financial position, the results of operations, the changes in its shareholder’s equity and the sources and uses of funds or in its consolidated financial statements.
Note 15 summarize the situation that existed at the end of the period in relation to the economic measures announced by the Government to face the national crisis. The impact generated by all these measures adopted to date by the Government on the financial situation of the Company at September 30, 2002 was determined according to the evaluations and estimates made by Management at the date of preparing the financial statements. Consequently, the Company’s financial statements must be considered in the light of these circumstances. As indicated in Notes 11 and 14, the Company has agreed with its creditors extensions to the original due dates for certain of its financial loans and is evaluating alternatives and other financing proposals so as to modify its indebtedness profile. The Company currently records financial liabilities for a total of $ 1,929.0 million (of which $ 1,695.8 million are current and $ 233.2 million are non-current) so that if the economic context or further changes to legislation and regulations in force were to continue to restrict the availability of credit on financial markets, the Company’s capacity to routinely refinance its debt could be affected.
As mentioned in Note 2.2. and as established by Resolution MD 3/2002 of the Professional Council in Economic Sciences of the Autonomous City of Buenos Aires and Resolution No. 415 of the National Securities Commission, the financial statements recognize the effects of inflation recorded in Argentina as from January 1, 2002. Amounts corresponding to the period ended on September 30, 2001, which are shown for comparative purposes, have also been restated into constant currency of September 30, 2002. Furthermore, in accordance with Resolution MD 3/2002 and Resolution No. 398 of the National Securities Commission and as mentioned in Note 2.3., in the period ended on September 30, 2002 the Company capitalized certain negative exchange differences (net of the effects of inflation) related to direct and indirect financing of fixed assets for a total of $ 503.2 million. Those capitalized exchange differences should be absorbed by future adjustments for inflation to be made by the Company.
As mentioned in Note 8 b) Siderúrgica del Orinoco C.A. (Sidor), 70% of which is controlled by Consorcio Siderurgia Amazonia Ltd. (Amazonia), in which Siderar Sociedad Anónima Industrial y Comercial holds an indirect investment through Prosid Investment S.C.A. (Prosid), has incurred in substantial losses, technical infringements in loans and delays in the payment of certain obligations under the mentioned loans. The worsening of the conditions described above or the impossibility of reaching a satisfactory agreement with the financial creditors could result in the acceleration of the terms of indebtedness, the failure to recover the loans granted by Prosid to Amazonia and the claimability of the guarantees granted. The companies have not yet issued their financial statements for the nine-month period ended September 30, 2002. Consequently, Siderar has valued the investment in these companies based on the financial statements at June 30, 2002 plus estimated operating results for the last quarter.
Based on the work done and on our examination of the financial statements of the Company and its consolidated financial statements for the year ended December 31, 2001, on which we issued our report dated March 6, 2002, we report that the financial statements of Siderar Sociedad Anónima Industrial y Comercial at September 30, 2002 and 2001 and its consolidated financial statements at those dates consider all significant facts and circumstances which are known to us, and we have no others comments to make regarding them.

We have read the “Summary Information” required by the National Securities Commission and, regarding those aspects that fall within our competence, we have no observations to make.

The accompanying financial statements are presented on the basis of accounting principles generally accepted in Argentina, which may differ from the accounting principles generally accepted in jurisdictions -other than Argentina- where those financial statements are to be used.

Buenos Aires, November 8, 2002


PRICE WATERHOUSE & CO. By (Partner)
Daniel A. López Lado

AI assistant

TERNIUM ARGENTINA S.A. Interim / Quarterly Report 2002

SIDERAR SOCIEDAD ANONIMA INDUSTRIAL Y COMERCIAL

FINANCIAL STATEMENTS

SIDERAR SOCIEDAD ANONIMA INDUSTRIAL Y COMERCIAL

FINANCIAL STATEMENTS

AT SEPTEMBER 30, 2002

CONTENTS

FINANCIAL STATEMENTS at September 30, 2002

CONSOLIDATED STATEMENT OF INCOME for the nine-month period ended September 30, 2002, and for the nine-month period ended September 30, 2001

CONSOLIDATED STATEMENT OF SOURCES AND USES OF FUNDS for the nine-month period ended September 30, 2002, and for the nine-month period ended September 30, 2001

CONSOLIDATED STATEMENT OF SOURCES AND USES OF FUNDS for the nine-month period ended September 30, 2002, and for the nine-month period ended September 30, 2001

FINANCIAL STATEMENTS at September 30, 2002

CONTENTS

STATEMENT OF SOURCES AND USES OF FUNDS for the nine-month period ended September 30, 2002, and for the nine-month period ended September 30, 2001

STATEMENT OF SOURCES AND USES OF FUNDS for the nine-month period ended September 30, 2002, and for the nine-month period ended September 30, 2001 (Contd.)

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 4 - DEPOSIT OF FUNDS, RECEIVABLES AND PAYABLES: DUE DATES AND RATES

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 5 - FUNDS CONVEYED TO THE TRUST

NOTE 6 - CHANGES IN ACCOUNTING PROCEDURES

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 12 - AFIP - DGI INCOME TAX CLAIM FOR FISCAL 1995 AND 1996

NOTE 13 - STATUS OF CAPITAL

INVESTMENTS (Contd.)

INFORMATION REQUIRED BY SECTION 64, SUB-SECTION I B) OF CORPORATIONS LAW NO. 19,550 AND AMENDMENTS THERETO

REPORT ON LIMITED REVIEW

AI assistant

TERNIUM ARGENTINA S.A. — Interim / Quarterly Report 2002

SIDERAR SOCIEDAD ANONIMA INDUSTRIAL Y COMERCIAL

FINANCIAL STATEMENTS

SIDERAR SOCIEDAD ANONIMA INDUSTRIAL Y COMERCIAL

FINANCIAL STATEMENTS

AT SEPTEMBER 30, 2002

CONTENTS

FINANCIAL STATEMENTS at September 30, 2002

CONSOLIDATED STATEMENT OF INCOME for the nine-month period ended September 30, 2002, and for the nine-month period ended September 30, 2001

CONSOLIDATED STATEMENT OF SOURCES AND USES OF FUNDS for the nine-month period ended September 30, 2002, and for the nine-month period ended September 30, 2001

CONSOLIDATED STATEMENT OF SOURCES AND USES OF FUNDS for the nine-month period ended September 30, 2002, and for the nine-month period ended September 30, 2001

FINANCIAL STATEMENTS at September 30, 2002

CONTENTS

STATEMENT OF SOURCES AND USES OF FUNDS for the nine-month period ended September 30, 2002, and for the nine-month period ended September 30, 2001

STATEMENT OF SOURCES AND USES OF FUNDS for the nine-month period ended September 30, 2002, and for the nine-month period ended September 30, 2001 (Contd.)

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 4 - DEPOSIT OF FUNDS, RECEIVABLES AND PAYABLES: DUE DATES AND RATES

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 5 - FUNDS CONVEYED TO THE TRUST

NOTE 6 - CHANGES IN ACCOUNTING PROCEDURES

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTES TO THE FINANCIAL STATEMENTS at September 30, 2002 (Contd.)

NOTE 12 - AFIP - DGI INCOME TAX CLAIM FOR FISCAL 1995 AND 1996

NOTE 13 - STATUS OF CAPITAL

INVESTMENTS (Contd.)

INFORMATION REQUIRED BY SECTION 64, SUB-SECTION I B) OF CORPORATIONS LAW NO. 19,550 AND AMENDMENTS THERETO

REPORT ON LIMITED REVIEW

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TERNIUM ARGENTINA S.A. Interim / Quarterly Report 2002