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On December 14, 2001, Grupo Cementos de Chihuahua, S.A. de C.V. issued through the Mexican Stock Exchange certificates for a <br />total of Ps. 1,200,000 (12,000,000 certificates with a face value of Ps.1oo each). The specified annual interest rate is 11.5%, which <br />shall remain fixed over the term of the issue. Interest is payable semiannually, effective on June 14, 2002. <br />The principal amount is to be repaid in a single payment on December 14, 2oo6 (the maturity date of the issue). The resources <br />obtained from the issue were used to repay the debt contracted to acquire the assets of Dacotah Cement. The certificates are <br />unsecured and are guaranteed by Cementos de Chihuahua, S.A. de C.V. and GCC Cemento, S.A. de C.V. <br />During the year ended December 31, 2001, the Company entered into cross currency swaps whereby it converted to the U.S. dollar <br />the principal and interest on the certificates placed through the Mexican Stock Exchange for a total of Ps. 1,200,ooo. This was <br />done as a strategy to achieve a balance between the currency in which financial liabilities are denominated and the liabilities in <br />the country in which cash flows are generated. <br />At December 31, 2001, the long-term debt due under the revolving and tern loan to Comerica Bank is guaranteed by the assets <br />of Rio Grande Portland Cement Corp. and Rio Grande Materials Inc. <br />Some long-term debt contracts contain minor restrictive covenants and other established financial ratios which, if not observed <br />or corrected within a defined period of time to the satisfaction of the creditors could result in the debts being called in. At <br />December 31, 2001, the companies have observed all financial ratios and the terms of restrictive covenants. <br />8 Fv6EpCLnarlcyPtzitia? _ <br />The company has the following U.S. dollar denominated assets and liabilities at December 31, 2001 and 2000: <br />2001 2000 <br />Current assets USD 116,235 USD 67,401 <br />Total assets USD 116,235 USD 67,401 <br />Short-term liabilities 26,5o9 26,m1 <br />Long-term liabilities 257.930 64,109 <br />Total liabilities 284.439 <br />11 90,120 <br />Net short position USD 168,204 USD 22,719 <br />The exchange rates used to translate the U.S. dollar denominated assets and liabilities to Mexican pesos at D ecember 31, 2001 and <br />2000 were Ps. 9.15 and Ps. 9.57, respectively. The exchange rate at February 25, 2002 is Ps. 9.10.