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

Aug 14, 2002

SIDERAR SOCIEDAD ANONIMA INDUSTRIAL Y COMERCIAL

FINANCIAL STATEMENTS

AT JUNE 30, 2002

SIDERAR SOCIEDAD ANONIMA INDUSTRIAL Y COMERCIAL

FINANCIAL STATEMENTS

AT JUNE 30, 2002

CONTENTS

Summary information

Consolidated financial statements

Financial statements at June 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 six months begun on January 1, 2002 and ended June 30, 2002.

1. ACTIVITIES OF THE COMPANY

Accounts disclosed in these financial statements were adjusted for inflation as established by General Resolution No. 415/02 of the National Securities Commission.

Results for the first half of the year developed in a context of considerable uncertainty, as a result of the difficult political and economic situation Argentina undergoes. The important changes in economic regulations, the sharp currency devaluation, which had a significant impact in 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 six-month period was a loss of $ 49.9 million; this amount is made up of an operating gain for $ 117.8 million, a loss generated by financial, holding and other results for $ 245.5 million mainly generated by the devaluation which affected indebtedness and conversion of certain credits into pesos, net income provided by investments in related companies for $ 19.4 million, and net income corresponding to result from net exchange differences in related companies amounting to $ 58.4 million.

During the six-month period total shipments amounted to 1,042 thousand tons (including 134 thousand tons of slabs) and the production of hot rolled steel reached 937 thousand tons, less than the 1,144 thousand tons (including 41 thousand tons of slabs) and 1,126 thousand tons respectively in the same period of the previous year.

Sales volume on the domestic market totaled 358 thousand tons, a drop of 32% compared to the 525 thousand tons in the same period of the previous year.

Sales to foreign markets during the six-month period reached 684 thousand tons, an 11% increase on the 619 thousand tons shipped in the same period of the previous year. The increase in the level of exports took place in a global steel market dominated by the protectionist measures adopted by the largest consuming countries, particularly the U.S. which was followed by Europe.

Operating profit was $ 117.8 million. This result, although it reflects a depressed level of domestic market shipments, 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 and the application of a 5% withholding tax on exports of industrial manufactured goods. The economic measures that included a devaluation and a forced conversion into pesos had also a one time negative impact on the Company’s results. The theoretical benefit to competitiveness from the devaluation was partially offset by a high imported content in the production costs.

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. Net financial results excluding foreign exchange results were a loss of $ 114.9 million. Net foreign exchange results were a loss of $ 725.8 million, $ 607.3 million of which 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 $ 118.5 million. Net inventory and fixed asset spares holding results were a gain of $ 77.7 million. Result from exposure to inflation, mainly on certain trade receivables and net tax credits, generated a loss of $ 64.3 million. Foreign exchange gains generated by investments in related companies amounting to $ 58.4 million were included under Net foreign exchange results on equity holdings in the statement of income.

The investment result in Amazonia during the period was a net income of $ 19.4 million. This amount includes an operating loss of $ 22.4 million and a partial adjustment of $ 41.7 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 US$ 36.7 million.

During the six-month period funds generated by operations were $ 33.6 million; those funds were mainly used to finance working capital and investments in fixed assets.

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.

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

	06.30.2002		06.30.2001		06.30.2000		06.30.1999		06.30.1998
	(1)
Current assets	990,751		987,193		898,878		977,897		1,008,963
Non-current assets	2,282,467		1,587,056		1,692,152		1,749,467		1,849,955
Total	3,273,218		2,574,249		2,591,030		2,727,363		2,858,918
Current liabilities	1,902,501		876,371		753,726		785,354		849,059
Non-current liabilities	471,806		553,369		601,813		681,450		680,941
Sub-total	2,374,307		1,429,740		1,355,539		1,466,804		1,530,001
Minority interest in subsidiaries	93		143		106		100		186
Shareholders’ equity	898,818		1,144,366		1,235,385		1,260,460		1,328,731
Total	3,273,218		2,574,249		2,591,030		2,727,363		2,858,918

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

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

		01.01.2002 to 06.30.2002		01.01.2001 to 06.30.2001		01.01.2000 to 06.30.2000		01.01.1999 to 06.30.1999		01.01.1998 to 06.30.1998
		(1)
Result from ordinary operations		117,830		36,588		114,248		76,358		192,641
Financial and holding results		(219,999)		(46,316)		(57,045)		(60,169)		(41,669)
Other ordinary income and expenses		(25,499)		(7,718)		(15,787)		(7,124)		(15,395)
Minority interest in subsidiaries		13		(13)		2		(12)		(22)
Result before taxes		(127,655)		(17,459)		41,419		9,053		135,555
Taxes		-		5,847		(5,759)		7,797		(42,939)
Ordinary result		(127,655)		(11,613)		35,660		16,851		92,616
Result from investments in related companies		19,361		(25,218)		(20,607)		(49,355)		(3,515)
Result from net exchange differences in related companies		58,360		-		-		-		-
Extraordinary results		-		(13,716)		-		-		-
Net result for the period		(49,934)		(50,546)		15,053		(32,504)		89,101

(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 six-month periods ended June 30, 1998, 1999, 2000 and 2001 - in thousands of tons)

		01.01.2002 to 06.30.2002		01.01.2001 to 06.30.2001		01.01.2000 to 06.30.2000		01.01.1999 to 06.30.1999		01.01.1998 to 06.30.1998
		(1)
Shipments (2)		1,042		1,144		959		1,106		1,098
Domestic market		358		525		552		585		821
Exports		684		619		407		521		277
Production
Hot rolled steel		937		1,126		992		900		962
Cold rolled steel		587		884		792		668		445
Coated		288		138		84		242		261

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

(2) Includes 3.5, 18.6, 8.2, 44.8 and 144.3 thousand tons of pig iron in bars for the six-month periods ended June 30, 2002, 2001, 2000, 1999 and 1998, respectively.

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

		06.30.2002		06.30.2001		06.30.2000				06.30.1999			06.30.1998
		(1)
Liquidity		0.52		1.13			1.19			1.25			1.19
Indebtedness		2.64		1.25			1.10			1.16			1.15

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

6. OUTLOOK

The complex situation of the international steel industry, and the persistence of the recessive situation affecting the domestic market as a result of a deep political and economic crisis, including significant changes introduced to economic and financial regulations and a strong devaluation of the peso, provide a context in which activity levels and results are particularly difficult to predict.

A recovery in the domestic market sales, that remains at depressed levels, is still awaiting an overall reactivation of the Argentine economy.

In the case of the export markets, prices are expected to remain at current levels, and we estimate an increase in our presence on international markets, further diversifying destinations based on products with quality levels that are comparable to those of the countries with higher degree of industrial development. Undoubtedly the current trend in prices and the Company’s export business, will be subject to the effects that could derive from protectionist measures taken by countries in Europe and by the U.S.

Buenos Aires, August 7, 2002

Leonardo Stazi Chief Financial Officer

THE BOARD OF DIRECTORS

Fiscal year No. 42 commenced on January 1, 2002

FINANCIAL STATEMENTS at June 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 JUNE 30, 2002 (1)

CONTENTS

Consolidated financial statements at June 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 June 30, 2002 and 2001

	06.30.02	06.30.01		06.30.02	06.30.01
	$	$		$	$
ASSETS			LIABILITIES
CURRENT ASSETS			CURRENT LIABILITIES
Cash and banks (Note 4 a))	18,127,727	8,307,878	Accounts payable (Note 4 n))	217,689,524	204,036,867
Other investments (Note 4 b))	43,144,401	181,171,560	Short-term debt (Note 4 o))	1,636,003,251	590,045,014
Trade receivables (Note 4 c))	382,728,972	377,125,205	Social security and taxes (Note 4 p))	33,643,812	67,726,760
Other receivables (Note 4 d))	104,278,647	53,163,385	Other liabilities (Note 4 q))	9,816,518	10,524,708
Inventories (Note 4 e))	440,603,833	363,404,519	Provisions for contingencies	5,348,494	4,038,043
Other assets (Note 4 f))	1,867,237	4,020,650
Total Current Assets	990,750,817	987,193,197	Total Current Liabilities	1,902,501,599	876,371,392
NON-CURRENT ASSETS			NON-CURRENT LIABILITIES
Trade receivables (Note 4 g))	-	419,963	Accounts payable (Note 4 r))	14,519,379	12,612,862
Other receivables (Note 4 h))	29,454,108	60,126,281	Long-term debt (Note 4 s))	424,144,627	502,187,564
Investments (Note 4 i))	717,063	92,446,375	Social security and taxes (Note 4 t))	15,107,359	12,082,250
Other investments (Note 4 j))	512,080,591	120,499,306	Other liabilities (Note 4 u))	5,298,819	1,540,824
Intangible assets (Note 4 k))	7,987,413	3,141,166	Provisions for contingencies	12,735,455	24,944,938
Fixed assets (Note 4 l))	1,729,875,428	1,307,585,495
Other assets (Note 4 m))	2,352,802	2,837,648
Total Non-Current Assets	2,282,467,405	1,587,056,234	Total Non-Current Liabilities	471,805,639	553,368,438
			Total Liabilities	2,374,307,238	1,429,739,830
			MINORITY INTEREST IN SUBSIDIARIES	92,905	143,370
			SHAREHOLDERS' EQUITY	898,818,079	1,144,366,231
Total Assets	3,273,218,222	2,574,249,431	Total Liabilities and Shareholders' Equity	3,273,218,222	2,574,249,431

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 six-month period ended June 30, 2002, and for the six-month period ended June 30, 2001

	Period ended on
	06.30.02	06.30.01
	$	$
Net income from sales	1,035,823,406	897,807,798
Cost of sales	(821,222,994)	(754,829,421)
Gross profit	214,600,412	142,978,377
Selling expenses	(50,275,791)	(39,936,627)
Administrative expenses	(46,494,442)	(66,453,323)
Result from ordinary operations	117,830,179	36,588,427
Financial and holding results
Generated by assets	241,386,643	3,149,018
Generated by liabilities	(461,386,078)	(49,465,254)
Other ordinary income and expenses	(25,499,488)	(7,718,150)
Minority interest in subsidiaries	13,785	(13,339)
Loss before taxes	(127,654,959)	(17,459,298)
Income tax provision / Minimum notional income tax	-	5,846,569
Ordinary loss	(127,654,959)	(11,612,729)
Result from investments in related companies	19,361,392	(25,217,619)
Result from net exchange differences in related companies	58,359,347	-
Extraordinary results	-	(13,715,570)
Net loss for the period	(49,934,220)	(50,545,918)

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 six-month period ended June 30, 2002, and for the six-month period ended June 30, 2001

	Period ended on
	06.30.02	06.30.01
	$	$
CHANGES IN FUNDS
Funds at the beginning of the period (1)	68,994,914	50,291,758
(Decrease) increase in funds	(7,722,786)	139,187,680
Funds at the end of the period (1)	61,272,128	189,479,438
FUNDS GENERATED BY (APPLIED TO) OPERATIONS
Loss for the period	(49,934,220)	(50,545,918)
Add: Items not representing funds disbursements
Allowance for inventory obsolescence	3,038,673	-
Depreciation of fixed assets	130,858,221	82,024,286
Amortization of intangible assets	1,184,280	2,094,110
Allowance for doubtful accounts	17,820,652	13,709,050
Board of Directors' and Surveillance Committee's fees provision (2)	660,093	1,073,954
Provision for contingencies	7,754,110	-
Holding result in related companies	-	25,217,619
Minority interest in subsidiaries	-	13,339
Less: Items not providing funds
Allowance for inventory obsolescence	-	(1,348,150)
Holding result in related companies	(19,361,392)	-
Result from net exchange differences in related companies	(58,359,347)	-
Provision for contingencies	-	(4,819,533)
Income tax provision / Minimum notional income	-	(5,846,569)
Minority interest in subsidiaries	(13,785)	-
Funds provided by (applied to) operations	33,647,285	61,572,188
Net decrease (increase) in assets
Trade receivables	(144,163,500)	10,094,902
Other receivables	(9,766,172)	(6,227,476)
Inventories (3)	(87,820,403)	89,899,136
Net (decrease) increase in liabilities
Trade payables	37,396,098	1,764,706
Social security charges and taxes, other liabilities and provision for contingencies	(31,905,191)	16,473,079
Minority interest in subsidiaries	3,594	-
Other operating changes	(236,255,574)	112,004,347
Funds provided by (applied to) operations - Carried forward	(202,608,289)	173,576,535

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

	Period ended on
	06.30.02	06.30.01
	$	$
Brought forward	(202,608,289)	173,576,535
FUNDS GENERATED BY (APPLIED TO) INVESTMENT ACTIVITIES
Increase in investments	-	(1,298,982)
Net (increase) decrease in other non-current investment	(13,985,699)	6,208,173
Net increase in funds conveyed to the trust (4)	(154,015,351)	-
Net increase in fixed assets and in intangible assets (5)	(614,093,186)	(35,414,926)
Net decrease in other assets	1,785,452	635,045
Funds generated by (applied to) investment activities	(780,308,784)	(29,870,690)
FUNDS GENERATED BY (APPLIED TO) FINANCING ACTIVITIES
Net increase (decrease) in short and long-term debt (6)	975,255,037	(4,518,165)
Distribution of profits voted by Shareholders’ Meeting on April 30, 2002	(60,750)	-
Funds generated by (applied to) financing activities	975,194,287	(4,518,165)
(Decrease) increase in funds	(7,722,786)	139,187,680

Note: variations include exchange differences.

1. Cash and banks plus other current investments.
2. The nominal value is $ 481,000.
3. Includes holding results of $ 82,039,958.
4. Includes exchange differences of $ 162,146,055.
5. Includes the capitalization of exchange differences of $ 607,256,629 and holding results of $ 5,506,140.
6. Includes exchange differences of $ 961,625,210.

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 June 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 June 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

	06.30.02			06.30.01
	$		$
CURRENT ASSETS
a) Cash and banks
Cash	5,533,983			411,821
Checks to be deposited	6,604,885			6,511,623
Banks	5,988,859			1,384,434
	18,127,727			8,307,878
b) Other investments
Sight deposits - Other related companies	42,411,509			24,906,687
Time deposits	-			156,264,873
Government Securities	732,892			-
	43,144,401			181,171,560
c) Trade receivables
Ordinary and documented debtors from the domestic market		121,238,628			274,043,534
Related companies Sect. 33 - Law No. 19,550 and amendments		-			5,644,331
Other related companies		49,061,820			15,876,128
Export reimbursements/convergence factor		34,816,214			11,230,900
Ordinary and documented debtors from foreign markets		210,277,913			109,445,366
Allowance for doubtful accounts		(32,665,603)			(39,115,054)
		382,728,972			377,125,205
d) Other receivables
Related companies Sect. 33 - Law No. 19,550 and amendments		9,770,565			4,694,340
Other related companies		10,399,211			6,398,443
Advances and loans to personnel		4,105,594			5,554,196
Receivables from sale of real property		507,585			905,607
Tax credits		15,075,213			20,296,432
Advances to suppliers		4,856,233			2,462,187
Expenses paid in advance		8,542,538			4,456,580
Financial loans		31,030,067			-
Sundry receivables		19,991,641			8,395,600
		104,278,647			53,163,385
e) Inventories
Finished products		85,167,517			98,110,598
Products in process		100,403,740			82,823,554
Raw material		157,942,225			81,423,930
Materials		98,779,067			104,641,328
Advances to suppliers		3,400,277			2,972,986
Allowance for obsolescence		(5,088,993)			(6,567,877)
		440,603,833			363,404,519
f) Other assets
Real Property		1,867,237			4,020,650
		1,867,237			4,020,650

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

				06.30.02			06.30.01
				$			$
		NON-CURRENT ASSETS
		g) Trade receivables
		Ordinary and documented debtors from the domestic market		-			419,963
				-			419,963
		h) Other receivables
		Related companies Sect. 33 - Law No. 19,550 and amendments		-			1,869,810
		Advances and loans to personnel		1,597,801			3,565,722
		Receivables from sale of real property		6,286,262			12,888,482
		Tax credits		19,643,263			38,441,040
		Expenses paid in advance		1,648,706			2,615,584
		Sundry receivables		278,076			745,643
				29,454,108			60,126,281
		i) Investments
		Shares in Consorcio Siderurgia Amazonia Ltd.		-			86,754,238
		Shares in Compañía Afianzadora de Empresas Siderúrgicas S.G.R.		131,353			745,629
		Shares in Ecocemento S.A.		-			4,832,450
		Shares in Fondo de Garantías Buenos Aires S.A.P.E.M.		19,562			19,562
		Shares in Information Systems Technologies N.V.		14,771			13,648
		Shares in Lomond Holdings B.V.		551,377			80,848
				717,063			92,446,375
		j) Other investments
		Funds conveyed to the trust - Other related companies		326,467,061		-
		Loans convertible into shares in Consorcio Siderurgia Amazonia Ltd.		139,515,277		66,882,850
		Investments in insurance companies		40,045,939		19,490,002
		Guarantee fund Compañía Afianzadora de Empresas Siderúrgicas S.G.R.		11,035,653		43,106,144
		Allowance for risk fund uncollectibility		(4,983,339)		(8,979,690)
				512,080,591		120,499,306
		k) Intangible assets (residual value)
		Goodwill (Comesi S.A.I.C.)		-		3,141,166
		Information systems projects		7,987,413		-
				7,987,413		3,141,166
		The amortization of the period amounted to $ 1,184,280
		l) Fixed assets (residual value)
		Land		45,061,040		45,061,040
		Industrial buildings and facilities		1,190,180,493		807,425,351
		Machinery and equipment		328,770,529		231,252,956
		Vehicles and means of transport		5,754,443		7,293,013
		Furniture, general machinery and office supplies		3,280,370		4,273,356
		Steel spares and supplies		87,092,052		117,213,037
		Fixed assets in transit		839,807		14,011,969
	Work in progress		67,207,887		77,613,354
		Advances to suppliers		1,688,807		3,441,419
				1,729,875,428		1,307,585,495
		The depreciation of the period amounted to $ 130,858,221
		m) Other assets
		Real property		2,352,802		2,837,648
				2,352,802		2,837,648

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

	06.30.02			06.30.01
	$		$
CURRENT LIABILITIES
n) Accounts payable
Ordinary suppliers	111,092,310	97,485,752
Related companies Sect. 33 - Law No. 19,550 and amendments	-	901,112
Other related companies	20,406,424	17,569,358
Notes payable	88,081,955	86,619,842
Unearned interest	(1,891,165)	(751,466)
Advances from customers	-	2,212,269
	217,689,524	204,036,867
o) Short-term debt
Financial	3,867,765			3,174,756
Import/export financing	1,398,781,794			565,935,808
Negotiable Corporate Bonds	261,250,000			53,795,500
Unearned interest	(27,896,308)			(32,861,050)
	1,636,003,251			590,045,014
p) Social security and taxes
Provision for income tax/minimum notional income tax	-			24,608,996
Income tax withholding, advances and others	-			(24,484,560)
Provision for turnover tax	698,169			163,405
Wages and social security	26,074,205			60,539,593
Others sundry	6,871,438			6,899,326
	33,643,812			67,726,760
q) Other liabilities
Other related companies	1,333,013	-
Liabilities due to dismissal and restructuring	7,093,242	7,431,574
Others sundry	1,390,263	3,093,134
	9,816,518	10,524,708
NON-CURRENT LIABILITIES
r) Accounts payable
Other related companies	7,396,141			-
Notes payable	7,739,132			13,473,580
Unearned interest	(615,894)			(860,718)
	14,519,379			12,612,862
s) Long-term debt
Import/export financing	335,257,486			370,059,675
Negotiable Corporate Bonds	104,500,000			161,386,500
Unearned interest	(15,612,859)			(29,258,611)
	424,144,627			502,187,564
t) Social security and taxes
Sundry	15,107,359			12,082,250
	15,107,359			12,082,250
u) Other liabilities
Liabilities due to dismissal and restructuring	5,298,819			1,540,824
	5,298,819			1,540,824

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

Fiscal year No. 42 commenced on January 1, 2002

FINANCIAL STATEMENTS at June 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 JUNE 30, 2002

CONTENTS

Financial statements at June 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 June 30, 2002 and 2001

	06.30.02	06.30.01		06.30.02	06.30.01
	$	$		$	$
ASSETS			LIABILITIES
CURRENT ASSETS			CURRENT LIABILITIES
Cash and banks (Note 3 a))	18,057,702	8,259,967	Accounts payable (Note 3 i))	218,033,849	203,928,511
Other investments (Note 3 b) - Exhibit D)	41,066,876	174,934,648	Short-term debt (Note 3 j))	1,635,975,463	590,045,014
Trade receivables (Note 3 c))	380,462,866	374,941,366	Social security and taxes (Note 3 k))	33,454,046	67,597,064
Other receivables (Note 3 d))	103,789,282	52,110,613	Other liabilities (Note 3 l))	9,805,958	10,524,610
Inventories (Exhibit F)	440,087,156	362,397,359	Provisions for contingencies (Exhibit E)	5,347,794	4,007,820
Other assets (Note 3 e))	1,867,237	4,020,650
Total Current Assets	985,331,119	976,664,603	Total Current Liabilities	1,902,617,110	876,103,019
NON-CURRENT ASSETS			NON-CURRENT LIABILITIES
Trade receivables (Note 3 f))	-	419,963	Accounts payable (Note 3 m))	14,519,379	12,612,862
Other receivables (Note 3 g))	29,454,108	60,126,281	Long-term debt (Note 3 n))	424,144,627	502,187,564
Investments (Exhibit C)	147,992,547	171,834,997	Social security and taxes (Note 3 o))	15,107,359	12,082,250
Other investments (Exhibit D)	372,565,314	53,616,456	Other liabilities (Note 3 p))	5,298,819	1,540,824
Intangible assets (Exhibit B)	7,987,413	3,141,166	Provisions for contingencies (Exhibit E)	12,735,455	24,944,938
Fixed assets (Exhibit A)	1,727,557,525	1,305,196,574
Other assets (Note 3 h))	2,352,802	2,837,648
Total Non-Current Assets	2,287,909,709	1,597,173,085	Total Non-Current Liabilities	471,805,639	553,368,438
			Total Liabilities	2,374,422,749	1,429,471,457
			SHAREHOLDERS' EQUITY (as per
			respective statement)	898,818,079	1,144,366,231
Total Assets	3,273,240,828	2,573,837,688	Total Liabilities and Shareholders’ Equity	3,273,240,828	2,573,837,688

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 six-month period ended June 30, 2002, and for the six-month period ended June 30, 2001

	Period ended on
	06.30.02	06.30.01
	$	$
Net income from sales	1,033,397,672	893,939,331
Cost of sales (Exhibit F)	(819,155,109)	(753,490,317)
Gross profit	214,242,563	140,449,014
Selling expenses (Exhibit H)	(50,194,132)	(39,729,033)
Administrative expenses (Exhibit H)	(46,345,403)	(66,233,096)
Result from ordinary operations	117,703,028	34,486,885
Financial and holding results
Generated by assets (Exhibit H)	242,735,133	2,890,467
Generated by liabilities (Exhibit H)	(461,901,314)	(49,374,040)
Other ordinary income and expenses (Exhibit H)	(25,163,692)	(7,714,484)
Loss before taxes	(126,626,845)	(19,711,172)
Income tax provision	-	5,887,898
Ordinary loss	(126,626,845)	(13,823,274)
Result from investments in subsidiaries and related companies (Note 8 f))	18,333,278	(23,007,074)
Result from net exchange differences in subsidiaries and related companies	58,359,347	-
Extraordinary results (Note 10)	-	(13,715,570)
Net loss for the period	(49,934,220)	(50,545,918)

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 six-month period ended June 30, 2002, and for the six-month period ended June 30, 2001

	Capital stock			Non-capitalized contributions	Retained earnings				06.30.02	06.30.01
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	385,748,749	733,217,520	41,460,974	38,666,893	291,309,984	39,124,000	(194,966,322)	948,813,049	1,203,025,414
Adjustments to balance (Note 6)	-	-	-	-	-	-	-	-	-	(8,113,265)
Adjusted balances	347,468,771	385,748,749	733,217,520	41,460,974	38,666,893	291,309,984	39,124,000	(194,966,322)	948,813,049	1,194,912,149
Approved by the Shareholders' Ordinary Meeting on April 30, 2002
- Release of Reserve for future dividends	-	-	-	-	-	(194,966,322)	-	194,966,322	-	-
- Distribution of profits
Hnos. Agustín y Enrique Rocca Foundation	-	-	-	-	-	(60,750)	-	-	(60,750)	-
Result for the period as per statement of income	-	-	-	-	-	-	-	(49,934,220)	(49,934,220)	(50,545,918)
Balances at June 30, 2002	347,468,771	385,748,749	733,217,520	41,460,974	38,666,893	96,282,912	39,124,000	(49,934,220)	898,818,079
Balances at June 30, 2001	347,468,771	385,748,749	733,217,520	41,460,974	38,666,893	362,964,862	39,124,000	(71,068,018)		1,144,366,231

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 six-month period ended June 30, 2002, and for the six-month period ended June 30, 2001

	Period ended on
	06.30.02	06.30.01
	$	$
CHANGES IN FUNDS
Funds at the beginning of the period (1)	68,920,541	50,156,858
(Decrease) increase in funds	(9,795,963)	133,037,757
Funds at the end of the period (1)	59,124,578	183,194,615
FUNDS GENERATED BY (APPLIED TO) OPERATIONS
Loss for the period	(49,934,220)	(50,545,918)
Add: Items not representing funds disbursements
Allowance for inventory obsolescence	3,038,673	-
Depreciation of fixed assets	130,823,326	81,989,321
Amortization of intangible assets	1,184,280	2,094,110
Allowance for doubtful accounts	17,866,619	13,709,050
Board of Directors' and Surveillance Committee's fees provision (2)	660,093	1,073,954
Provision for contingencies	7,746,956	-
Holding result in subsidiaries and related companies	-	23,007,074
Less: Items not providing funds
Allowance for inventory obsolescence	-	(1,348,150)
Holding result in subsidiaries and related companies	(18,333,278)	-
Result from net exchange differences in subsidiaries and related companies	(58,359,347)	-
Provision for contingencies	-	(4,818,878)
Income tax provision	-	(5,887,898)
Funds provided by (applied to) operations	34,693,102	59,272,665
Net decrease (increase) in assets
Trade receivables	(147,009,060)	7,502,493
Other receivables	(10,452,640)	(6,773,991)
Inventories (3)	(88,701,691)	88,687,910
Net (decrease) increase in liabilities
Trade payables	37,794,686	1,550,267
Social security charges and taxes, other liabilities and provision for contingencies	(31,959,207)	16,566,711
Other operating changes	(240,327,912)	107,533,390
Funds provided by (applied to) operations - Carried forward	(205,634,810)	166,806,055

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

	Period ended on
	06.30.02	06.30.01
	$	$
Brought forward	(205,634,810)	166,806,055
FUNDS GENERATED BY (APPLIED TO) INVESTMENT ACTIVITIES
Increase in investments	-	(174,729)
Net (increase) decrease in other non-current investment	(13,981,849)	5,083,917
Net increase in funds conveyed to the trust (4)	(154,015,351)	-
Net increase in fixed assets and intangible assets (5)	(614,093,186)	(35,403,850)
Net decrease in other assets	1,785,452	635,045
Funds generated by (applied to) investment activities	(780,304,934)	(29,859,617)
FUNDS GENERATED BY (APPLIED TO) FINANCING ACTIVITIES
Net increase (decrease) in short and long-term debt (6)	976,204,531	(3,908,681)
Distribution of profits voted by Shareholders’ Meeting on April 30, 2002	(60,750)	-
Funds generated by (applied to) financing activities	976,143,781	(3,908,681)
(Decrease) increase in funds	(9,795,963)	133,037,757

Note: variations include exchange differences.

1. Cash and banks plus other current investments.
2. The nominal value is $ 481,000.
3. Includes holding results of $ 80,100,718.
4. Includes exchange differences of $ 162,146,055.
5. Includes the capitalization of exchange differences of $ 607,256,629 and holding results of $ 5,506,140.
6. Includes exchange differences of $ 961,625,210.

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 June 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 six months ended June 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

The financial statements were prepared in constant monetary units as required by General Resolution No. 415/02 of the National Securities Commission, reflecting the overall effects of inflation since January 1, 2002. This General Resolution modifies Resolution No. 368/01 of the National Securities Commission, which had suspended the restatement of the financial statements as from September 1, 1995.

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 June 30, 2002, the Company recorded a negative exchange difference (net of inflation) of $ 1,048,735,920, of which $ 607,256,629 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:

1. Advances to suppliers are stated at their current value.
2. 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.

Given the significant changes in the relative prices of inputs, a holding result of $ 80,100,718 was generated during the period (see Exhibit H to the financial statements).

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

NOTE 2 - ACCOUNTING STANDARDS (Contd.)

2.4. Valuation criteria (Contd.)

1. Property included under Other current assets has been valued at acquisition cost, which does not exceed recoverable value.

Other non-current assets are valued at construction cost and include real property mostly 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 $ 5,506,140 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 included in work in progress through the leasing modality these operations were treated as financed purchases. At the end of the period the residual value of vehicles totaled $ 922,819, while $ 9,421,122 corresponded to work in progress.

1. 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 six-month period temporary exchange differences were recognized as result for the period under Result from net exchange differences in subsidiaries and related companies, net of the effect of inflation for the period, corresponding to the result generated by the devaluation of the peso on investments in foreign companies which in the previous quarter had been recognized under shareholders' equity.

f) Other investments

• The investments in government securities were valued at their quotation value, except for government securities, which will be used to settle taxes valued at their tax settlement 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 June 30, 2002 (see Note 8 c) to the financial statements).

NOTES TO THE FINANCIAL STATEMENTS at June 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
• 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 $ 7,104,403.

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

1. 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 $ 18,083,249 were set up to meet threatened civil, labor, commercial and tax lawsuits and other contingent risks.

1. 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 June 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 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.

Hedge contracts in effects at the end of the period are as follows:

• Currency hedge contracts to cover variations in the rate of exchange of the euro, pound sterling and yen with respect to the US dollars. Purchase operations for US$ 99,227,764 and sales operations for US$ 21,038,866.

• Options to purchase yens for US$ 72,413,992 with an average strike price of 121 ¥/US$ and maturing in July and September 2002.

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 June 30, 2002 (Contd.)

NOTE 3 - COMPOSITION OF BALANCE SHEET ITEMS

	06.30.02		06.30.01
	$	$
CURRENT ASSETS
a) Cash and banks
Cash	5,533,791		405,992
Checks to be deposited	6,604,885		6,511,623
Banks	5,919,026		1,342,352
	18,057,702		8,259,967
b) Other investments
Sight deposits – Other related companies (Exhibit D)	40,333,984		18,669,775
Time Deposits (Exhibit D)	-		156,264,873
Government securities (Exhibit D)	732,892		-
	41,066,876		174,934,648
c) Trade receivables
Ordinary and documented debtors from the domestic market	118,947,644		269,526,309
Related companies Sect. 33 - Law No. 19,550 and amendments	13,235		7,893,251
Other related companies	49,058,463		15,869,561
Export reimbursements/Convergence Factor	34,816,214		11,230,900
Ordinary and documented debtors from foreign markets	210,277,913		109,445,366
Allowance for doubtful accounts (Exhibit E)	(32,650,603)		(39,024,021)
	380,462,866		374,941,366
d) Other receivables
Related companies Sect. 33 - Law No. 19,550 and amendments	9,774,373		4,694,340
Other related companies	10,393,919		6,386,891
Advances and loans to personnel	4,098,369		5,529,391
Receivables from sale of real property	507,585		905,607
Tax credits	14,598,522		19,288,541
Advances to suppliers	4,856,233		2,462,187
Expenses paid in advance	8,542,538		4,456,580
Financial loans	31,030,067		-
Sundry receivables	19,987,676		8,387,076
	103,789,282		52,110,613
e) Other assets
Real property	1,867,237		4,020,650
	1,867,237		4,020,650
NON-CURRENT ASSETS
f) Trade receivables
Ordinary and documented debtors from the domestic market	-		419,963
	-		419,963
g) Other receivables
Related companies Sect. 33 - Law No. 19,550 and amendments	-		1,869,810
Advances and loans to personnel	1,597,801		3,565,722
Receivables from sale of real property	6,286,262		12,888,482
Tax credits	19,643,263		38,441,040
Expenses paid in advance	1,648,706		2,615,584
Sundry receivables	278,076		745,643
	29,454,108		60,126,281
h) Other assets
Real property	2,352,802		2,837,648
	2,352,802		2,837,648

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

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

	06.30.02		06.30.01
	$		$
CURRENT LIABILITIES
i) Accounts payable
Ordinary suppliers	111,063,216		97,351,980
Related companies Sect. 33 - Law No. 19,550 and amendments	377,920		931,499
Other related companies	20,401,923		17,564,387
Notes payable	88,081,955		86,619,842
Unearned interest	(1,891,165)		(751,466)
Advances from customers	-		2,212,269
	218,033,849		203,928,511
j) Short-term debt
Financial	3,839,977		3,174,756
Import/export financing	1,398,781,794		565,935,808
Negotiable Corporate Bonds	261,250,000		53,795,500
Unearned interest	(27,896,308)		(32,861,050)
	1,635,975,463		590,045,014
k) Social security and taxes
Provision for income tax/minimum notional income tax	-		24,548,354
Income tax withholding, advances and others	-		(24,472,713)
Provision for turnover tax	687,107		151,341
Wages and social security	26,059,342		60,500,539
Others sundry	6,707,597		6,869,543
	33,454,046		67,597,064
l) Other liabilities
Other related companies	1,333,013		-
Liabilities due to dismissal and restructuring	7,093,242		7,431,574
Others sundry	1,379,703		3,093,036
	9,805,958		10,524,610
NON-CURRENT LIABILITIES
m) Accounts payable
Other related companies	7,396,141	-
Notes payable	7,739,132	13,473,580
Unearned interest	(615,894)	(860,718)
	14,519,379	12,612,862
n) Long-term debt
Import/export financing	335,257,486	370,059,675
Negotiable Corporate Bonds	104,500,000	161,386,500
Unearned interest	(15,612,859)	(29,258,611)
	424,144,627	502,187,564
o) Social security and taxes
Sundry	15,107,359	12,082,250
	15,107,359	12,082,250
p) Other liabilities
Liabilities due to dismissal and restructuring	5,298,819	1,540,824
	5,298,819	1,540,824

NOTES TO THE FINANCIAL STATEMENTS at June 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 06.30.02		Total at 06.30.01
	$		$		$	$		$		$	$	$		$		$
Overdue
Trade receivables - fixed rate		9,477,045		37,334,717	12,945,843		7,573,842		21,756,917	5,394,228	1,006,416		2,234,400		97,723,408		74,546,468
Total at June 30, 2002		9,477,045		37,334,717	12,945,843		7,573,842		21,756,917	5,394,228	1,006,416		2,234,400		97,723,408
Total at June 30, 2001		28,953,980		5,700,498	28,385,149		1,094,093		4,808,475	1,534,602	1,630,988		2,438,683				74,546,468
Not yet due
Deposits of funds - fixed rate		41,066,876		-	-		-		-	-	-		-		41,066,876		174,934,648
Deposits of funds - floating rate		-		-	-		-		-	326,467,061	-		40,045,939		366,513,000		19,490,002
Trade receivables - fixed rate		238,107,483		41,436,564	326,800		703,000		-	-	-		-		280,573,847		328,607,984
Trade receivables - without rate		34,816,214		-	-		-		-	-	-		-		34,816,214		11,230,900
Other receivables - fixed rate		6,999,869		542,737	462,977		1,350,176		1,342,451	758,421	488,410		5,504,857		17,449,898		26,401,219
Other receivables - floating rate		3,023,332		5,374,209	15,750		15,750		63,000	-	-		-		8,492,041		6,175,324
Other receivables - without rate		82,437,668		1,299,115	486,408		1,781,291		681,943	20,283,073	231,724		100,229		107,301,451		79,660,351
Total at June 30, 2002		406,451,442		48,652,625	1,291,935		3,850,217		2,087,394	347,508,555	720,134		45,651,025		856,213,327
Total at June 30, 2001		523,492,618		35,918,164	2,698,820		4,354,579		6,185,962	42,189,800	1,514,846		30,145,639				646,500,428
Not yet due
Accounts payable - fixed rate		46,716,413		1,850,736	472,530		1,801,585		6,858,457	1,255,340	79,135		-		59,034,196		126,201,262
Accounts payable – floating rate		-		3,233,342	-		3,163,224		6,326,447	-	-		-		12,723,013		9,873,499
Accounts payable - without rate		154,239,127		6,556,892	-		-		-	-	-		-		160,796,019		80,466,612
Short and long-term debt - fixed rate		425,495,359		42,114,852	26,199,448		101,254,223		214,084,225	22,750,049	15,309,951		13,716,319		860,924,426		403,781,658
Short and long-term debt - floating rate		830,019,707		63,448,741	125,179,808		5,605,559		156,046,382	1,630,675	607,026		-		1,182,537,898		688,450,920
Short and long-term debt - without rate		16,657,766		-	-		-		-	-	-		-		16,657,766		-
Social security and taxes - without rate		14,907,455		10,097,934	8,448,657		-		-	-	-		15,107,359		48,561,405		79,679,314
Other debt - without rate		4,072,727		775,192	698,103		4,259,936		2,628,351	1,669,329	413,717		587,422		15,104,777		13,388,558
Total at June 30, 2002		1,492,108,554		128,077,689	160,998,546		116,084,527		385,943,862	27,305,393	16,409,829		29,411,100		2,356,339,500
Total at June 30, 2001		271,925,474		215,390,824	157,684,026		228,417,999		326,746,377	169,638,135	10,384,259		21,654,729				1,401,841,823

• 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 June 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$ 85,912,384, 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 June 30, 2001 this change of criteria implies:

• A lower assets value of $ 4,205,830 ;

• A lower cost of sales of $ 3,907,435;

• Prior year’s adjustment (see Statement of Changes in Shareholders’ Equity) - loss amounting to $ 8,113,265.

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.

As of June 30, 2002, Comesi San Luis S.A.I.C. shareholders’ equity amounted to $ 8,369,712 and the net loss for the six-month period ended June 30, 2002, to $ 1,506,112.

NOTES TO THE FINANCIAL STATEMENTS at June 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’s share purchase-sale contract established certain conditions and obligations to be met by Amazonia and its shareholders over a term of five years, for which a guarantee for an aggregate amount of up to US$ 150,000,000 was to be provided to the Fondo de Inversiones de Venezuela (F.I.V.) and the Corporación Venezolana de Guayana (C.V.G.). 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. At the date of these financial statements, the maximum risk guaranteed by Siderar amounts to US$ 26,250,000.

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$ 133,629,000.

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 June 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 result of the crisis of the steel industry worldwide, the deterioration of the financial markets, the appreciation of the bolívar and other adverse factors, at December 31, 2001, Sidor has failed to comply with certain commitments assumed under debt restructuring contracts entered into with the Fondo de Inversiones de Venezuela and creditor banks, including: (i) payment of interest falling due on December 18, 2001 as required by the mentioned contracts, (ii) deposits corresponding to payment of interest, in reserve accounts, accrued on certain debts established in the mentioned contracts, (iii) maintaining of certain financial ratios agreed. Those contracts grant creditors the right to accelerate the maturity of these credits.

Based on the above, Amazonia and Sidor have begun negotiations with their creditor banks and the Fondo de Inversiones de Venezuela, to reschedule their debts under satisfactory terms to the parties.

Siderar values its participation in Amazonia through its subsidiary, as indicated in Note 2.4 e) to the financial statements. Due to the financial situation of Sidor, as a result of the events mentioned above, at June 30, 2002 Prosid recorded a provision of U$ 21,000,000 to reduce the value of the investment in Amazonia and the convertible loans. 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$ 36,714,547 at June 30, 2002 due to the recognition of losses corresponding to Amazonia by the equity method of accounting and the abovementioned provision.

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 $ 11,035,653 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 June 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:

	06.30.02		06.30.01
	$		$
Subsidiaries
Comesi San Luis S.A.I.C.	(1,516,312)		1,484,122
Inventory valuation adjustment Comesi San Luis S.A.I.C.	489,474		724,772
Prosid Investments S.C.A. (See Note to Exhibit C)	19,334,790		(25,040,900)
Sub-total result of subsidiaries	18,307,952		(22,832,006)
Related companies
Compañía Afianzadora de Empresas Siderúrgicas S.G.R.	(435,759)		(2,465)
Ecocemento S.A.	-		(137,364)
Information Systems and Technologies N.V.	(2,698)		(11,845)
Lomond Holdings B.V.	463,783		(23,394)
Sub-total result of related companies	25,326		(175,068)
Total result of investments	18,333,278		(23,007,074)

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 August 31, 2002.

NOTE 10 – EXTRAORDINARY RESULTS

The extraordinary result for the six-month period ended June 30, 2001 corresponds to costs generated by dismissals agreed with management-level personnel to align the management structure to the market conditions and the Company's new strategy.

NOTES TO THE FINANCIAL STATEMENTS at June 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 six-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 in May and July, the Company extended the postponement of repayment of 50% of the principal on installment No.1 that had originally been granted in February last. In a similar manner, in July 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 $ 30,782,830 and $ 6,461,174, 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 June 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 $ 898,818,079 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 $ 2.59 (two pesos and fifty-nine cents).

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

NOTE 14 - FINANCIAL SITUATION OF THE COMPANY

As mentioned in the financial statements as of December 31, 2001 and March 31, 2002, the Argentine economic and financial crisis, worsened by the suspension by the financial system of the granting of loans to companies, had an adverse impact on the financial position of the Company because it hindered the normal renewal of the lines of credit upon maturity. In view of this, the Company started negotiations with its creditors in order to adapt the maturity of the loans to the changes in the variables that affect the Company’s business. The bank and financial debts at the close of the period amounted to $ 2,060.1 million, of which $ 1,636.0 million are current debts and $ 424.1 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 six-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 June 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 June 30, 2002

FIXED ASSETS

	06.30.02										06.30.01
						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	44,877,259	-	-	-	44,877,259	-	-	-	-	44,877,259	44,877,259
Industrial buildings and facilities	1,614,784,866	452,597,564	-	25,957,458	2,093,339,888	811,947,027	-	93,334,154	905,281,181	1,188,058,707	805,241,027
Machinery and equipment	796,154,194	154,659,065	-	591,063	951,404,322	586,639,403	-	36,005,644	622,645,047	328,759,275	231,234,763
Vehicles and means of transport	27,516,392	558,088	623,296	-	27,451,184	21,019,105	333,138	1,010,774	21,696,741	5,754,443	7,293,013
Furniture, general machinery and office supplies	33,320,238	-	-	-	33,320,238	29,568,196	-	472,754	30,040,950	3,279,288	4,270,733
Steel spares and supplies	111,018,395	-	23,926,343	-	87,092,052	-	-	-	-	87,092,052	117,213,037
Fixed assets in transit	1,671,463	-	831,656	-	839,807	-	-	-	-	839,807	14,011,969
Work in progress	68,858,238	24,898,170	-	(26,548,521)	67,207,887	-	-	-	-	67,207,887	77,613,354
Advances to suppliers	1,001,641	687,166	-	-	1,688,807	-	-	-	-	1,688,807	3,441,419
Total at June 30, 2002	2,699,202,686	633,400,053	25,381,295	-	3,307,221,444	1,449,173,731	333,138	130,823,326	1,579,663,919	1,727,557,525
Total at June 30, 2001	2,638,241,589	46,012,618	11,276,525	-	2,672,977,682	1,286,459,544	667,757	81,989,321	1,367,781,108		1,305,196,574

(1) Includes the capitalization of exchange differences in relation to commercial, bank and financial debts (see Note 2.3 to the financial statements) and holding results (see Exhibit H 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 June 30, 2002

INTANGIBLE ASSETS

	06.30.02									06.30.01
					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.)	42,729,732	-	-	42,729,732	41,682,676	-	1,047,056	42,729,732	-	3,141,166
Information systems projects	2,473,576	5,741,291	-	8,214,867	90,230	-	137,224	227,454	7,987,413	-
Total at June 30, 2002	45,203,308	5,741,291	-	50,944,599	41,772,906	-	1,184,280	42,957,186	7,987,413
Total at June 30, 2001	42,729,732	-	-	42,729,732	37,494,456	-	2,094,110	39,588,566		3,141,166

1. See Exhibit H to the financial statements.

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

Financial statements at June 30, 2002

INVESTMENTS

Securities issued in series and investments in other companies

		06.30.02							06.30.01
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	8,886,870	8,286,015	8,286,015	13,186,916
Shares	Prosid Investments S.C.A.	Ordinary, one vote each	1,000.0000 (1)	999,934	99.9934	351,777,158	139,506,069	139,506,069	153,626,920
Related companies:
Shares	Compañía Afianzadora de Empresas Siderúrgicas S.G.R.	Ordinary, one vote each	1.0000	378,000	38.8889	739,444	131,353	131,353	700,637
Shares	Ecocemento S.A.							-	4,832,450
Shares	Information Systems and Technologies N.V.	Ordinary, one vote each	50.0000 (2)	230	25.0000	25,493	14,771	14,771	13,648
Shares	Lomond Holdings N.V.	Ordinary, one vote each	100.0000 (2)	600	25.0000	104,242	551,377	551,377	80,848
Others:
Shares	FO.GA.BA. S.A.P.E.M.	Ordinary, one vote each	1.0000	10,000	0.3100	19,562	-	19,562	19,562
Comesi San Luis S.A.I.C. inventory valuation adjustment						-	(516,600)	(516,600)	(670,977)
Capital contribution to Compañía Afianzadora de Empresas Siderúrgicas S.G.R.								-	44,993
						361,552,769	147,972,985	147,992,547	171,834,997

(1) Amount stated in Uruguayan pesos.

(2) Amount stated in Euros.

Financial statements at June 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	06.30.02	6 months	110	(1,506,112)	8,369,712	08.06.02
Shares	Prosid Investments S.C.A. (1)	Stock participation in Consorcio Siderurgia Amazonia Ltd. and all types of financial transactions	06.30.02	6 months	310,330,747	19,336,066	139,515,277	08.06.02
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	06.30.02	12 months	972,000	(1,396,042)	7,969,987	08.02.02
Shares	Information Systems and Technologies N.V.	Renders information technology services relating to development, advice, sale, planning and consultancy	06.30.02	6 months	167,128	(10,796)	59,082	07.24.02
Shares	Lomond Holdings	Project investment and financing	06.30.02	6 months	797,225	1,855,137	2,205,509	07.24.02
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 June 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 April 1 to June 30, 2002. In addition, a provision has been set up for US$ 21,000,000 on the value of the investment and on the loans convertible into shares.

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

Financial statements at June 30, 2002

OTHER INVESTMENTS

	06.30.02				06.30.01
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	37,506,790	2,827,194	-	40,333,984	18,669,775
Time deposits	6,478,357	-	6,478,357	-	156,264,873
Foreign Government Securities	9,776,436	-	9,776,436	-	-
Argentine Government Securities	1,625,684	-	892,792	732,892	-
Total at the end of the period	55,387,267	2,827,194	17,147,585	41,066,876	174,934,648
OTHER NON-CURRENT INVESTMENTS
Funds conveyed to the trust - Other related companies (Note 5)	172,451,710	154,015,351	-	326,467,061	-
Financial investments in insurance companies (Note 2.4. k))	19,895,857	20,150,082	-	40,045,939	19,490,002
Risk fund Compañía Afianzadora de Empresas Siderúrgicas S.G.R.
Net contributions	21,587,944	(10,552,291)	-	11,035,653	43,106,144
Allowance for doubtful accounts (Exhibit E) (2)	(8,612,577)	(754,820)	(4,384,058)	(4,983,339)	(8,979,690)
Total at the end of the period	205,322,934	162,858,322	(4,384,058)	372,565,314	53,616,456

(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 June 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	40,774,978	17,111,799	25,236,174	32,650,603
* For inventory obsolescence	5,660,359	3,038,673	3,610,039	5,088,993
Total at June 30, 2002	46,435,337	20,150,472	28,846,213	37,739,596
Total at June 30, 2001	44,436,529	11,687,235	10,531,866	45,591,898
Deducted from non-current assets
* For risk fund uncollectibility	8,612,577	754,820	4,384,058	4,983,339
Total at June 30, 2002	8,612,577	754,820	4,384,058	4,983,339
Total at June 30, 2001	8,306,025	673,665	-	8,979,690
Included in current liabilities
* For contingencies	6,031,184	15,018,801	15,702,191	5,347,794
Total at June 30, 2002	6,031,184	15,018,801	15,702,191	5,347,794
Total at June 30, 2001	9,844,886	(162,770)	5,674,296	4,007,820
Included in non-current liabilities
* For contingencies	20,007,300	(7,271,845)	-	12,735,455
Total at June 30, 2002	20,007,300	(7,271,845)	-	12,735,455
Total at June 30, 2001	29,601,046	(4,656,108)	-	24,944,938

1. See Exhibit H to the financial statements.

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

Financial statements at June 30, 2002

COST OF SALES

	Period ended on
	06.30.02		06.30.01
	$	$	$	$
1) Inventory at the beginning of the period
Finished products	108,196,415		123,493,300
Production in process	86,859,190		124,317,650
Raw material	67,882,030		97,028,615
Materials	96,132,858		112,777,614
Advances to suppliers	1,014,004		2,207,364
Allowance for obsolescence (Exhibit E)	(5,660,359)	354,424,138	(10,087,425)	449,737,118
2) Purchases of the period		509,249,837		301,938,006
3) Manufacturing expenses (Exhibit H)		315,467,572		356,128,753
Subtotal		1,179,141,547		1,107,803,877
4) Holding results (Exhibit H)		80,100,718		8,083,799
Subtotal		1,259,242,265		1,115,887,676
5) Inventory at the end of the period
Finished products	84,684,191		97,352,396
Products in process	100,370,389		82,574,596
Raw material	157,942,225		81,423,930
Materials	98,779,067		104,641,328
Advances to suppliers	3,400,277		2,972,986
Allowance for obsolescence (Exhibit E)	(5,088,993)	440,087,156	(6,567,877)	362,397,359
COST OF SALES		819,155,109		753,490,317

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

Financial statements at June 30, 2002

FOREIGN CURRENCY ASSETS AND LIABILITIES

			06.30.02				06.30.01
		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
		CURRENT ASSETS
		Cash and banks
		Cash	US$	1,462,411	3.700000	5,410,919		US$	16,941	16,941	33,140
		Checks to be deposited						US$	21,833	21,833	42,710
		Banks	US$	15,299	3.700000	56,607		US$	12,237	12,237	23,938
		Other investments
		Sight deposits - Other related companies	US$	10,901,077	3.700000	40,333,984		US$	7,879,034	7,879,034	15,412,966
		Time deposits						US$	79,881,849	79,881,849	156,264,873
		Trade receivables
		Ordinary and documented debtors from the domestic market.	US$	10,586,226	3.700000	39,169,035		US$	111,236,056	111,236,056	217,599,973
		Related companies Sect. 33 - Law No. 19,550 and amendments						US$	4,034,992	4,034,992	7,893,251
		Other related companies	US$	13,235,447	3.700000	48,971,155		US$	8,112,443	8,112,443	15,869,561
		Export reimbursements/convergence factor	US$	9,409,788	3.700000	34,816,214		US$	5,741,182	5,741,182	11,230,900
		Ordinary and documented debtors from foreign markets	US$	56,785,644	3.700000	210,106,882		US$	55,947,943	55,947,943	109,445,366
			£	30,234	5.656900	171,031
		Allowance for doubtful accounts(Exhibit E)						US$	(19,948,891)	(19,948,891)	(39,024,021)
		Other receivables
		Related companies Sect. 33 - Law No. 19,550 and amendments	US$	376,698	3.700000	1,393,783		US$	2,399,724	2,399,724	4,694,340
		Advances and loans to personnel	US$	256,757	3.700000	950,000
		Other related companies	US$	188,493	3.700000	697,425		US$	450,588	450,588	881,440
		Receivables from sale of real property						US$	205,527	205,527	402,052
		Expenses paid in advance						US$	2,278,182	2,278,182	4,456,580
		Closing of options receivables	US$	8,386,505	3.700000	31,030,067
		Sundry receivables	US$	4,100,332	3.700000	15,171,230		US$	2,322,789	2,322,789	4,543,840
		Total current assets - Carried forward				428,278,332				260,592,429	509,770,909

Financial statements at June 30, 2002

FOREIGN CURRENCY ASSETS AND LIABILITIES (Contd.)

		06.30.02				06.30.01
	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				428,278,332			260,592,429	509,770,909
	NON-CURRENT ASSETS
	Trade receivables
	Notes receivable					US$	214,683	214,683	419,963
	Other receivables
	Related companies Sect. 33 - Law No. 19,550 and amendments					US$	955,838	955,838	1,869,810
	Receivables from sale of real property					US$	351,890	351,890	688,367
	Expenses paid in advance					US$	1,337,074	1,337,074	2,615,584
	Sundry receivables					US$	376,169	376,169	735,862
	Other investments
	Funds conveyed to the trust – Other related companies	US$	85,912,384	3.800000	326,467,061
	Investments in insurance companies	US$	10,538,405	3.800000	40,045,939	US$	9,963,195	9,963,195	19,490,002
	Risk fund Compañía Afianzadora de Empresas Siderúrgicas S.G.R.
	Net contributions					US$	22,035,653	22,035,653	43,106,144
	Allowance for doubtful accounts (Exhibit E)					US$	(4,590,374)	(4,590,374)	(8,979,690)
	Fixed assets
	Other receivables
	Advances to suppliers	US$	178,061	3.700000	658,824	US$	187,176	187,176	366,154
		EURO	26,063	3.663700	95,487	EURO	338,221	285,932	559,340
						DEM	41,501	17,948	35,110
						FRF	1,068,116	137,584	269,142
						ITL	45,000,000	19,620	38,381
						¥	1,649,969	13,208	25,837
	Total non-current assets				367,267,311			31,305,596	61,240,006
	Total assets				795,545,643			291,898,025	571,010,915

Financial statements at June 30, 2002

FOREIGN CURRENCY ASSETS AND LIABILITIES (Contd.)

			06.30.02				06.30.01
		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
		CURRENT LIABILITIES
		Accounts payable
		Ordinary suppliers	US$	8,964,986	3.800000	34,066,947		US$	7,206,826	7,206,826	14,097,993
		Related companies Sect. 33 - Law No. 19,550 and amendments						US$	476,178	476,178	931,499
		Other related companies	US$	3,141,931	3.800000	11,939,337		US$	2,208,729	2,208,729	4,320,716
		Notes payable	US$	20,436,323	3.800000	77,658,029		US$	43,110,250	43,110,250	84,332,271
			EURO	2,716,883	3.763100	10,223,904		EURO	397,614	337,455	660,129
			£	6,301	5.817400	36,656		£	14,908	21,061	41,200
			¥	4,126,546	0.031767	131,088
			SFR	12,587	2.564343	32,278
								ITL	198,961,276	87,344	170,862
								DEM	1,143,374	496,303	970,868
								ESP	44,546,559	227,232	444,511
		Unearned interest	US$	(497,675)	3.800000	(1,891,165)		US$	(384,146)	(384,146)	(751,466)
		Advances from customers						US$	1,130,901	1,130,901	2,212,269
		Short-term debt
		Import/export financing	US$	238,690,731	3.800000	907,024,777		US$	106,544,952	106,544,952	208,423,235
			¥	393,362,011	0.031767	12,495,931		¥	231,244,516	1,855,506	3,629,741
			EURO	2,098,654	3.763100	7,897,444		EURO	1,245,077	1,056,697	2,067,111
								DEM	158,523	68,810	134,606
		Debt with exchange insurance in US$	¥	14,919,251,210	0.031538	470,523,345		¥	20,619,072,027	179,777,689	351,681,115
		Negotiable Corporate Bonds	US$	68,750,000	3.800000	261,250,000		US$	27,500,000	27,500,000	53,795,500
		Unearned interest	US$	(5,618,748)	3.800000	(21,351,242)		US$	(13,600,257)	(13,600,257)	(26,604,823)
			¥	(179,161,772)	0.031767	(5,691,432)		¥	(200,578,141)	(1,609,439)	(3,148,385)
			EURO	(202,635)	3.763100	(762,536)		EURO	(65,603)	(55,677)	(108,915)
		Unearned interest with exchange insurance in US$						¥	(173,656,208)	(1,533,037)	(2,998,927)
		Total current liabilities – Carried forward				1,763,583,361				354,923,377	694,301,110

Financial statements at June 30, 2002

FOREIGN CURRENCY ASSETS AND LIABILITIES (Contd.)

		06.30.02				06.30.01
	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				1,763,583,361			354,923,377	694,301,110
	NON-CURRENT LIABILITIES
	Accounts payable
	Other related companies	US$	1,946,353	3.800000	7,396,141
	Notes payable	US$	2,036,614	3.800000	7,739,132	US$	6,887,629	6,887,629	13,473,580
	Unearned interest	US$	(162,077)	3.800000	(615,894)	US$	(439,995)	(439,995)	(860,718)
	Long-term debt
	Import/export financing	US$	35,424,732	3.800000	134,613,983	US$	111,048,414	111,048,414	217,232,907
		¥	141,097,019	0.031767	4,482,229	¥	293,442,797	2,354,585	4,606,039
		EURO	4,054,168	3.763100	15,256,239	EURO	4,363,917	3,703,656	7,245,092
	Debt with exchange insurance in US$	¥	5,834,510,982	0.030868	180,099,685	¥	7,932,423,225	72,066,065	140,975,636
	Negotiable Corporate Bonds	US$	27,500,000	3.800000	104,500,000	US$	82,500,000	82,500,000	161,386,500
	Unearned interest	US$	(2,578,184)	3.800000	(9,797,101)	US$	(12,439,728)	(12,439,728)	(24,334,596)
		¥	(141,097,019)	0.031767	(4,482,229)	¥	(293,442,797)	(2,354,585)	(4,606,039)
		EURO	(338,525)	3.763100	(1,273,903)	EURO	(191,526)	(162,548)	(317,976)
	Total non-current liabilities				437,918,282			263,163,493	514,800,425
	Total liabilities				2,201,501,643			618,086,870	1,209,101,535

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

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

Financial statements at June 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	06.30.02	06.30.01
	$	$	$	$	$	$	$	$
Surveillance Committee's and Directors' fees	-	-	660,093	-	-	-	660,093	1,073,954
Salaries, wages and social security	84,688,183	5,810,068	18,201,414	-	-	-	108,699,665	155,263,894
Office expenses	891,527	214,862	1,424,374	-	-	-	2,530,763	4,924,925
Maintenance expenses and security services for buildings, installation and equipment	45,295,490	3,401	1,791,154	-	-	-	47,090,045	87,374,267
Fees for technical assistance, external advice and commissions	264,938	18,409,948	1,851,461	-	-	-	20,526,347	13,149,076
Taxes, tariffs and contributions	-	-	3,616,557	-	-	-	3,616,557	6,269,126
Third party services	45,739,986	196,903	7,441,859	-	-	-	53,378,748	70,188,904
Operating IT services	-	-	5,022,467	-	-	-	5,022,467	7,577,601
Canteen and refreshment	1,354,023	10,534	92,132	-	-	-	1,456,689	2,695,890
Rents	135,504	-	332,627	-	-	-	468,131	448,541
Personnel transportation	2,122,494	-	140,530	-	-	-	2,263,024	3,209,395
Publicity and advertising	4,328	68,640	151,139	-	-	-	224,107	584,153
Charge for (recovery from) provision for contingencies	-	-	-	-	-	7,746,956	7,746,956	(4,818,878)
Charge for allowance for doubtful accounts	-	17,866,619	-	-	-	-	17,866,619	13,709,050
Freight and transportation	11,599,948	7,044,979	10,100	-	-	-	18,655,027	25,814,890
Amortization of intangible assets	-	-	-	-	-	1,184,280	1,184,280	2,094,110
Depreciation of fixed assets	130,823,326	-	-	-	-	-	130,823,326	81,989,321
Recovery from sale of scrap	(15,032,636)	-	-	-	-	-	(15,032,636)	(23,158,100)
External warehouse expenses	88,699	-	-	-	-	-	88,699	149,958
Inventory obsolescence	3,038,673	-	-	-	-	-	3,038,673	(1,348,150)
Severance pay and restructuring costs	-	-	-	-	-	15,095,363	15,095,363	22,551,371
Interests and other financing expenses	-	-	-	(4,682,097)	119,541,252	-	114,859,155	47,464,290
Exchange differences generated by (1):
Trade receivables	-	-	-	(129,482,194)	-	-	(129,482,194)	204,910
Other investments	-	-	-	(184,033,368)	-	-	(184,033,368)	-
Accounts payable (2)	-	-	-	-	54,518,309	-	54,518,309	(163,043)
Short and long- term debt (2)	-	-	-	-	375,749,286	-	375,749,286	(578,920)
Others	-	-	-	(9,453,028)	11,211,696	-	1,758,668	422,837
Holding results on inventories	-	-	-	(80,100,718)	-	-	(80,100,718)	(8,083,799)
Holding results on fixed assets	-	-	-	5,506,140	-	-	5,506,140	7,217,298
Result of exposure to inflation	-	-	-	159,510,132	(99,119,229)	-	60,390,903	-
Other ordinary income and expenses	4,453,089	568,178	5,609,496	-	-	1,137,093	11,767,856	62,068
Total at June 30, 2002	315,467,572	50,194,132	46,345,403	(242,735,133)	461,901,314	25,163,692	656,336,980
Total at June 30, 2001	356,128,753	39,729,033	66,233,096	(2,890,467)	49,374,040	7,714,484		516,288,939

(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 June 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 06.30.02	Total at 06.30.01
	$	$	$	$	$	$
Subsidiaries
Comesi San Luis S.A.I.C.	2,754,188	(24,980)	-	-	2,729,208	10,061,024
Subtotal	2,754,188	(24,980)	-	-	2,729,208	10,061,024
Related companies
Siderca S.A.I.C.	-	-	-	-	-	4,434,412
Compañía Afianzadora de Empresas Siderúrgicas S.G.R.	-	-	4,947,753	-	4,947,753	1,427,598
Ecocemento S.A.	-	-	-	-	-	4,195,818
Consorcio Siderurgia Amazonia Ltd.	1,371,498	-	-	-	1,371,498	1,731,237
Siderúrgica del Orinoco C.A.	-	-	-	-	-	(622,727)
Subtotal	1,371,498	-	4,947,753	-	6,319,251	11,166,338
Other related companies (2)	40,232,610	(48,829,785)	-	3,284,809	(5,312,366)	(16,627,528)
Total at June 30, 2002	44,358,296	(48,854,765)	4,947,753	3,284,809	3,736,093
Total at June 30, 2001	51,697,728	(48,358,448)	1,525,408	(264,854)		4,599,834

1. Amounts in brackets represent losses or disbursements.
2. 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

1. We have carried out a limited review of the balance sheets of Siderar Sociedad Anónima Industrial y Comercial at June 30, 2002 and 2001, and the related statements of income and of sources and uses of funds for the six-month periods then ended, and the statement of changes in shareholders’ equity for the six-month period ended June 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 six-month periods ended June 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.
2. 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.
3. 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 June 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 Note 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 $ 2,060 million (of which $ 1,636 million are current and $ 424 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.
4. 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 June 30, 2001, which are shown for comparative purposes, have also been restated into constant currency of June 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 June 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 $ 607 million. Those capitalized exchange differences should be absorbed by future adjustments for inflation to be made by the Company.
5. 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 six-month period ended June 30, 2002. Consequently, Siderar has valued the investment in these companies based on the financial statements at March 31, 2002 plus estimated operating results for the last quarter and a provision to reduce the value of the related assets.
6. 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 June 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, August 7, 2002

PRICE WATERHOUSE & CO. By (Partner)
Ruben O. Vega