Independent
  Auditors' Report



Board
  of Directors and Stockholders of 
  Vitro, S.A. de C.V.
  San Pedro Garza García, N. L.



We have
  audited the accompanying consolidated balance sheets of Vitro, S.A. de C.V.
  and Subsidiaries (the "Company") as of December 31, 2001 and 2002,
  and the related consolidated statements of income, stockholders' equity and
  changes in financial position for each of the three years in the period ended
  December 31, 2002 (all expressed in millions of constant Mexican pesos as of
  December 31, 2002). These financial statements are the responsibility of the
  Company's management. Our responsibility is to express an opinion on these financial
  statements based on our audits. The financial statements of the subsidiaries
  and associated companies named in note 2 b), were audited by other auditors
  whose reports have been furnished to us, and our opinion, regarding the amounts
  reported by these companies, is based solely on the reports of such other auditors.
  The total assets of the companies above mentioned represent 21% in 2001 and
  9% in 2002 of the consolidated total assets, whereas their net sales represent
  9% of the consolidated net sales in 2000, 2001 and 2002.



We conducted
  our audits in accordance with auditing standards generally accepted in the United
  States of America. Those standards require that we plan and perform the audit
  to obtain reasonable assurance about whether the financial statements are free
  of material misstatement. An audit includes examining, on a test basis, evidence
  supporting the amounts and disclosures in the financial statements. An audit
  also includes assessing the accounting principles used and significant estimates
  made by management, as well as evaluating the overall financial statement presentation.
  We believe that our audits provide a reasonable basis for our opinion.



In our
  opinion, based on our audits and the reports of the other auditors, such consolidated
  financial statements present fairly, in all material respects, the financial
  position of Vitro, S.A. de C.V. and Subsidiaries as of December 31, 2001 and
  2002, and the results of their operations and changes in their financial position
  for each of the three years in the period ended December 31 2002, in conformity
  with accounting principles generally accepted in México.



Accounting
  principles generally accepted in Mexico vary in certain significant respects
  from accounting principles generally accepted in the United States of America.
  The application of the latter would have affected the determination of net income
  (loss) for each of the three years in the period ended December 31, 2002 and
  the determination of stockholders' equity at December 31, 2000, 2001 and 2002
  to the extent summarized in note 21.

Our audits
  also comprehended the translation of Mexican peso amounts into United States
  dollar amounts and, in our opinion, such translation has been made in conformity
  with the basis stated in note 2 a). Such United States dollar amounts are presented
  solely for the convenience of readers.



The accompanying
  financial statements have been translated into English language for the convenience
  of readers.



February 7, 2003
  February 27, 2003, as to note 20a)June 20, 2003, as to note 20b)
  June 26, 2003, as to note 21





Vitro, S.A. de C.V. and Subsidiaries
  Consolidated Balance Sheets(Millions of constant Mexican pesos as of December 31, 2002)

|                                                                                  | December
        31, |                     | Millions
        of US dollars (Convenience Translation)
|--------------------------------------------------------------------------------- | -------------------- | ------------------- | --------------------------------------------------------
|ASSETS                                                                            | 2001                 | 2002                |                                                         
|Cash
        and cash equivalents                                                 | Ps.
        1,087    | Ps.
        2,232   |                                                         
|Trade
        receivables, net (note 5)                                           | 1,761                | 2,046               |                                                         
|Other
        receivables                                                         | 1,035                | 1,036               |                                                         
|Inventories
        (note 6)                                                      | 3,423                | 3,809               |                                                         
|Current
        assets of discontinued operations (note 4)                        | 1,240                |                     |                                                         
|Current assets                                                                    | 8,546                | 9,123               |                                                         
|Land
        and buildings (note 7)                                               | 9,413                | 8,712               |                                                         
|Machinery
        and equipment (note 7)                                          | 9,385                | 8,962               |                                                         
|Construction
        in progress                                                  | 609                  | 816                 |                                                         
|Goodwill,
        net of accumulated amortization of Ps. 122 and 
        Ps. 157 | 724                  | 748                 |                                                         
|Intangible
        pension asset                                                  | 701                  | 609                 |                                                         
|Other
        assets                                                              | 1,027                | 1,046               |                                                         
|Non-current
        assets of discontinued operations (note 4)                    | 3,246                |                     |                                                         
|Long - term assets                                                                | 25,105               | 20,893              |                                                         
|                                                                                  |                      |                     |                                                         
|Total
        assets                                                              | Ps.
        33,651   | Ps.
         30,016 |                                                         

|LIABILITIES                                                               |             |                    |  |        
|------------------------------------------------------------------------- | ----------- | ------------------ |  | -------
|Short-term
        borrowings (note 8)                                    | Ps. 3,207   | Ps.
        3,176  |  | $  305 
|Current
        maturities of long-term debt (note 9)                     | 2,795       | 1,602              |  | 153    
|Trade
        payables                                                    | 2,568       | 2,295              |  | 220    
|Accrued
        expenses                                                  | 639         | 676                |  | 64     
|Other
        current liabilities                                         | 1,053       | 1,326              |  | 127    
|Current
        liabilities of discontinued operations (note 4)           | 1,646       |                    |  |        
|Current 
        liabilities                                              | 11,908      | 9,075              |  | 869    
|Long-term
        debt (note 9)                                           | 8,551       | 10,413             |  | 997    
|Seniority
        premiums, pensions and other long-term                  |             |                    |  |        
|liabilities
        (note 10)                                             | 1,248       | 1,380              |  | 132    
|Deferred
        tax liabilities (note 17)                                | 1,412       | 550                |  | 53     
|Longerm
        liabilities of discontinued operations (note 4)           | 821         |                    |  |        
|Long-term
        liabilities                                             | 12,032      | 12,343             |  | 1,182  
|Total
        liabilities                                                 | 23,940      | 21,418             |  | 2,051  
|Commitments
        and contingencies (note 11)                           |             |                    |  |        
|                                                                          |             |                    |  |        
|STOCKHOLDERS'
        EQUITY                                              |             |                    |  |        
|Capital
        stock: no par value, shares issued and                    |             |                    |  |        
|outstanding, 324,000,000                                                  | 324         | 324                |  | 31     
|Restatement
        of capital stock                                      | 5,878       | 5,878              |  | 563    
|Capital
        stock restated                                            | 6,202       | 6,202              |  | 594    
|Treasury
        stock (50,294,020 shares in 2001 and 47,979,489 in 2002) | (547)       | (514)              |  | (49)   
|Paid-in
        capital                                                   | 941         | 915                |  | 87     
|Shortfall
        in restatement of capital                               | (17,073)    | (16,996)           |  | (1,628)
|Cumulative
        effect of deferred taxes                               | (1,484)     | (1,484)            |  | (142)  
|Minimum
        pension liability adjustment                              | (191)       | (298)              |  | (28)   
|Retained
        earnings reserved for                                    |             |                    |  |        
|reacquisition
        of shares of Vitro                                  | 1,300       | 514                |  | 49     
|Retained
        earnings                                                 | 16,934      | 17,598             |  | 1,686  
|Total
        majority interest                                           | 6,082       | 5,937              |  | 569    
|Minority
        interest in consolidated subsidiaries                    | 3,629       | 2,661              |  | 255    
|Total
        stockholders' equity (note 13)                              | 9,711       | 8,598              |  | 824    
|Total
        liabilities and stockholders' equity                        | Ps.  33,651 | Ps.
        30,016 |  | $ 2,875



Vitro, S.A. de C.V. and Subsidiaries
  Consolidated Statements of Income(Millions of constant Mexican pesos as of December 31, 2002,
  except per share amounts)

|                                                                    |                                   | Millions of
          US dollars, except per share amounts (Convenience translation)
|------------------------------------------------------------------- | --------------------------------- | ------------------------------------------------------------------------------------
|                                                                    | Year ended December
          31,
|                                                                    | 2000                              |                                                                                     
|Net
        sales                                                   | Ps.  25,005                       |                                                                                     
|Cost
        of sales                                               | 17,148                            |                                                                                     
|Gross
        profit                                                | 7,857                             |                                                                                     
|General,
        administrative and selling expenses                | 4,752                             |                                                                                     
|Operating
        income                                            | 3,105                             |                                                                                     
|Total
        financing cost (note 14)                              | 1,073                             |                                                                                     
|Income
        (loss) after financing cost                          | 2,032                             |                                                                                     
|Other
        expense, net (note 15)                                | 436                               |                                                                                     
|Income
        (loss) before income tax and workers' profit sharing | 1,596                             |                                                                                     
|Income
        and asset tax (note 17)                              | 581                               |                                                                                     
|Workers'
        profit sharing (note 17)                           | 324                               |                                                                                     
|Net
        income (loss) from continuing operations                | 691                               |                                                                                     
|Net
        income (loss) from discontinued operations (note 4)     | 211                               |                                                                                     
|Income
        on disposal of discontinued operations (note 4)      |                                   |                                                                                     
|Net
        income for the year                                     | Ps.  902                          |                                                                                     
|Net
        income of minority interest                             | Ps.  525                          |                                                                                     
|Net
        income (loss) of majority interest                      | 377                               |                                                                                     
|                                                                    | Ps.  902                          |                                                                                     
|Earnings
        per common share (based on weighted average        |                                   |                                                                                     
|shares
        outstanding of 278,402,173 for 2000,                 |                                   |                                                                                     
|286,078,897 for 2001 and 275,441,504 for 2002):                     |                                   |                                                                                     
|Net
        income (loss) from continuing operations                | Ps. 2.48                          |                                                                                     
|Income
        on disposal of discontinued operations               |                                   |                                                                                     
|Net
        income (loss) from discontinued operations              | 0.76                              |                                                                                     
|Net
        income of minority interest                             | (1.89)                            |                                                                                     
|Net
        income (loss) of majority interest                      | Ps.1.35                           |                                                                                     



Vitro, S.A. de C.V. and Subsidiaries
  Consolidated Statements of Changes in Financial Position(Millions of constant Mexican pesos as of December 31, 2002)

|                                                                       |                                 |           |                   |  | Millions
        of US dollars (Convenience Translation)
|---------------------------------------------------------------------- | ------------------------------- | --------- | ----------------- |  | --------------------------------------------------------
|                                                                       | Year
        ended December 31,
|                                                                       | 2000                            | 2001      | 2002              |  | 2002                                                    
|OPERATING
        ACTIVITIES:                                          |                                 |           |                   |  |                                                         
|Net
        income (loss) from continuing operations                   | Ps.691                          | Ps.  455  | Ps.
        (258) |  | $
        (25)                                          
|Add
        (deduct) non cash items:                                   |                                 |           |                   |  |                                                         
|Depreciation
        and amortization                                  | 1,948                           | 1,929     | 1,908             |  | 183                                                     
|Provision
        for seniority premiums and pensions                  | 211                             | 211       | 187               |  | 18                                                      
|Amortization
        of debt issue costs                               | 50                              | 58        | 51                |  | 5                                                       
|Share
        in net income of unconsolidated associated companies     | (5)                             | (9)       |                   |  |                                                         
|(Gain)
        loss from sale of subsidiaries and associated companies | (60)                            | 124       | (65)              |  | (6)                                                     
|Write-off
        and loss from sale of assets                         | 347                             | 375       | 409               |  | 39                                                      
|Deferred
        income tax and workers' profit sharing                | 256                             | 104       | (848)             |  | (81)                                                    
|                                                                       | 3,438                           | 3,247     | 1,384             |  | 133                                                     
|Increase
        (decrease) in trade payables                          | 101                             | 579       | (272)             |  | (26)                                                    
|Decrease
        (increase) in trade receivables                       | 552                             | 355       | (303)             |  | (29)                                                    
|Decrease
        (increase) in inventories                             | (378)                           | 1         | (534)             |  | (51)                                                    
|Change
        in other current assets and liabilities, net            | 368                             | (277)     | 330               |  | 31                                                      
|Pension
        funding payments                                       | (687)                           | (91)      | (167)             |  | (16)                                                    
|Resources generated from continuing operations                         | 3,394                           | 3,814     | 438               |  | 42                                                      
|Net
        income (loss) from discontinued operations                 | 211                             | 189       | (118)             |  | (11)                                                    
|Proceeds
        from disposal of discontinued operations              |                                 |           | 1,418             |  | 135                                                     
|Operating
        assets and liabilities from discontinued operations  | 331                             | 198       | 166               |  | 16                                                      
|Resources
        generated from operations                            | 3,936                           | 4,201     | 1,904             |  | 182                                                     
|                                                                       |                                 |           |                   |  |                                                         
|FINANCING
        ACTIVITIES:                                          |                                 |           |                   |  |                                                         
|Short-term
        bank loans                                          | 6,651                           | 4,293     | 5,495             |  | 526                                                     
|Long-term
        bank loans                                           | 6,987                           | 6,233     | 3,855             |  | 369                                                     
|Capital
        stock contributed by minority interest                 | 8                               | 107       | 7                 |  | 1                                                       
|Monetary
        effect on liabilities with financing cost             | (1,367)                         | (659)     | (784)             |  | (75)                                                    
|Payment
        of short-term loans                                    | (5,162)                         | (6,491)   | (6,086)           |  | (583)                                                   
|Payment
        of long-term loans                                     | (7,610)                         | (5,098)   | (1,850)           |  | (177)                                                   
|Acquisition
        of treasury stock                                  | (860)                           | (180)     |                   |  |                                                         
|Sale
        of treasury stock                                         | 622                             |           | 24                |  | 2                                                       
|Dividends
        paid to stockholders of Vitro                        | (341)                           | (162)     | (78)              |  | (7)                                                     
|Dividends
        paid to minority interest                            | (396)                           | (293)     | (272)             |  | (26)                                                    
|Effect
        from discontinued operations                            | (397)                           | (224)     | (42)              |  | (4)                                                     
|Resources
        (used in) generated from financing activities        | (1,865)                         | (2,474)   | 269               |  | 26                                                      
|                                                                       |                                 |           |                   |  |                                                         
|INVESTING
        ACTIVITIES:                                          |                                 |           |                   |  |                                                         
|Investment
        in land and buildings and machinery and equipment   | (952)                           | (848)     | (1,018)           |  | (98)                                                    
|Sale
        of land and buildings and machinery and equipment         | 228                             | 133       | 140               |  | 14                                                      
|Investment
        in subsidiaries and associated companies            | (595)                           | (475)     | (9)               |  | (1)                                                     
|Sale
        of subsidiaries and associated companies                  |                                 | 94        | 115               |  | 11                                                      
|Long-term
        investments                                          |                                 | (145)     | (49)              |  | (4)                                                     
|Effect
        from discontinued operations                            | (144)                           | (164)     | (6)               |  | (1)                                                     
|Other                                                                  | (438)                           | (85)      | (201)             |  | (19)                                                    
|Resources
        used in investing activities                         | (1,901)                         | (1,490)   | (1,028)           |  | (98)                                                    
|Net
        increase in cash and cash equivalents                      | 170                             | 237       | 1,145             |  | 110                                                     
|Balance
        at beginning of year                                   | 680                             | 850       | 1,087             |  | 104                                                     
|Balance
        at end of year                                         | Ps.  850                        | Ps. 1,087 | Ps. 2,232         |  | $ 214                                                   



Vitro, S.A. de C.V. and Subsidiaries
  Consolidated Statements of Stockholders' Equity(Millions of constant Mexican pesos as of December 31, 2002,
  except per share amounts)

|                                        | Capital
        stock | Treasury
        stock
        and paid-in
        capital | Shortfall
        in restatement
        of capital | Cumulative
        
        effect of 
        deferred
        taxes | Minimum
        
        pension 
        liability 
        adjustment | Retained
        
        earnings | Minority
        
        interest | Stock-
        
        holders'
        equity
|--------------------------------------- | --------------------- | ---------------------------------------------------------- | --------------------------------------------------- | --------------------------------------------------------------------- | ----------------------------------------------------------------------- | ---------------------------------- | ---------------------------------- | -----------------------------------------------
|Balance at                              |                       |                                                            |                                                     |                                                                       |                                                                         |                                    |                                    |                                                
|January 1, 2000                         | Ps.  6,202            | Ps. 758                                                    | Ps.(16,452)                                         | Ps.                                                                   | Ps.
        (137)                                                       | Ps.18,358                          | Ps. 4,732                          | Ps. 13,461                                     
|Dividends 
        (Ps. 1.05 per share) |                       |                                                            |                                                     |                                                                       |                                                                         | (341)                              |                                    | (341)                                          
|Decrease
        in minority interest   |                       |                                                            |                                                     |                                                                       |                                                                         |                                    | (524)                              | (524)                                          
|Sale
        of treasury stock          |                       | 698                                                        |                                                     |                                                                       |                                                                         |                                    |                                    | 698                                            
|Paid-in
        capital                 |                       | (53)                                                       |                                                     |                                                                       |                                                                         |                                    |                                    | (53)                                           
|Acquisition
        of  treasury stock  |                       | (860)                                                      |                                                     |                                                                       |                                                                         |                                    |                                    | (860)                                          
|Comprehensive loss (note 13 i)          |                       |                                                            | (265)                                               | (1,484)                                                               | (23)                                                                    | 377                                | (715)                              | (2,110)                                        
|Balance
        at                      |                       |                                                            |                                                     |                                                                       |                                                                         |                                    |                                    |                                                
|December 31, 2000                       | 6,202                 | 543                                                        | (16,717)                                            | (1,484)                                                               | (160)                                                                   | 18,394                             | 3,493                              | 10,271                                         
|Dividends
        (Ps. 1.05 per share)  |                       |                                                            |                                                     |                                                                       |                                                                         | (324)                              |                                    | (324)                                          
|Decrease
        in minority interest   |                       |                                                            |                                                     |                                                                       |                                                                         |                                    | (128)                              | (128)                                          
|Paid-in
        capital                 |                       | 55                                                         |                                                     |                                                                       |                                                                         |                                    |                                    | 55                                             
|Acquisition
        of treasury stock   |                       | (204)                                                      |                                                     |                                                                       |                                                                         |                                    |                                    | (204)                                          
|Comprehensive
        income (note 13i) |                       |                                                            | (356)                                               |                                                                       | (31)                                                                    | 164                                | 264                                | 41                                             
|Balance
        at                      |                       |                                                            |                                                     |                                                                       |                                                                         |                                    |                                    |                                                
|December 31, 2001                       | 6,202                 | 394                                                        | (17,073)                                            | (1,484)                                                               | (191)                                                                   | 18,234                             | 3,629                              | 9,711                                          
|Dividends
        (Ps. 0.25 per share)  |                       |                                                            |                                                     |                                                                       |                                                                         | (78)                               |                                    | (78)                                           
|Decrease
        in minority interest   |                       |                                                            |                                                     |                                                                       |                                                                         |                                    | (1,304)                            | (1,304)                                        
|Paid-in
        capital                 |                       | 7                                                          |                                                     |                                                                       |                                                                         |                                    |                                    | 7                                              
|Comprehensive
        income (note 13i) |                       |                                                            | 77                                                  |                                                                       | (107)                                                                   | (44)                               | 336                                | 262                                            
|Balance at                              |                       |                                                            |                                                     |                                                                       |                                                                         |                                    |                                    |                                                
|December 31, 2002                       | Ps.6,202              | Ps. 401                                                    | Ps.(16,996)                                         | Ps. (1,484)                                                           | Ps. (298)                                                               | Ps.18,112                          | Ps.  2,661                         | Ps. 8,598                                      





Vitro, S.A. de C.V. and Subsidiaries
  Notes to Consolidated Financial Statements(Millions of constant Mexican pesos as of December 31, 2002,
  except per share amounts)

1. Activities of the company



Vitro, S.A. de C.V. ("Vitro") is a holding company, the subsidiaries
  of which manufacture and market glass and plastic containers, thermoformed articles,
  aluminum cans, flat glass for construction and automotive uses, glassware for
  table and kitchen use, fiberglass insulation and reinforcements, chemical products
  and minerals, and capital goods.

2. Basis of presentation and principles of consolidation

a) Basis of presentation

The consolidated financial statements of Vitro and its subsidiaries (the "Company")
  are prepared in accordance with accounting principles generally accepted in
  México ("Mexican GAAP"), as further described in note 3.



The consolidated financial statements presented herein are expressed in millions
  of constant Mexican pesos as of December 31, 2002, except per share amounts.
  However, solely for the convenience of users, the consolidated financial statements
  as of and for the year ended December 31, 2002 have been translated into United
  States (US) dollars at the rate of 10.4393 pesos per one dollar, the rate of
  exchange determined by Banco de México (Mexico's Central Bank) on December
  31, 2002. The translation should not be construed as a representation that the
  peso amounts shown could be converted into US dollars at such rate or at any
  rate.

All references to dollars, in the financial statements and these notes, correspond
  to dollars of the United States of America. b) Consolidated subsidiaries

Those companies in which Vitro holds, directly or indirectly, more than 50%
  of the capital stock or which Vitro controls are included in the consolidated
  financial statements. For those companies in which Vitro has joint control,
  the proportionate consolidation method is used, this method consists in consolidating
  on a proportionate basis the assets, liabilities, stockholders equity and revenues.
  All significant intercompany balances and transactions have been eliminated
  in consolidation.



Vitro's subsidiaries Vitromátic, S. A. de C. V. and subsidiaries (see
  note 18f); Empresas Comegua, S.A. and subsidiaries; and Vitro Flex, S. A. de
  C. V.; as well as certain other subsidiaries and associated companies which
  in the aggregate are not material, are audited by firms of public accountants
  other than the Company's principal auditor.

In order to consolidate the financial statements of subsidiaries located in
  the United States of America, the effects of inflation were taken into consideration
  in accordance with Bulletin B-10, as amended, which is the principal difference
  between US generally accepted accounting principles ("US GAAP") and
  Mexican GAAP for these companies. Such companies' financial statements are initially
  prepared in accordance with US GAAP and are translated into Mexican pesos under
  the current rate method. The assets, liabilities, stockholders' equity (except
  capital stock) and the income statement accounts are translated into Mexican
  pesos using the exchange rate as of the date of the most recent balance sheet
  presented. The cumulative translation adjustment is included as a component
  of stockholders' equity.

c) Investment in associated companies

Associated companies are those companies in which Vitro holds, as a permanent
  investment, less than 50% of the capital stock and maintains significant influence.
  Such investments are accounted for by the equity method.

3. Principal accounting policies

a) Accounting method for the treatment of the effects of inflation

The consolidated financial statements of the Company have been prepared in accordance
  with Bulletin B-10, "Recognition of the Effects of Inflation in Financial
  Information", as amended, issued by the Mexican Institute of Public Accountants
  ("IMCP"), which relates to the recognition of the effects of inflation.
  The Third Amendment to Bulletin B-10 (the "Third Amendment") has been
  adopted in preparing such consolidated financial statements. The Third Amendment
  requires the restatement of all comparative financial statements to constant
  pesos as of the date of the most recent balance sheet presented. For that purpose,
  Vitro's Mexican subsidiaries and associated companies use the "Indice Nacional
  de Precios al Consumidor" (Mexican National Consumer Price Index: "INPC"),
  published by Banco de México; Vitro's US subsidiaries use the Consumer
  Price Index - All Urban Consumers - All Items, Unadjusted ("CPI")
  published by the US Labor Department, and are translated using the exchange
  rate at the end of the last period presented.



Bulletin B-12 set the rules related to the statement of changes in financial
  position. This statement presents the sources and uses of funds during the period
  measured as the differences, in constant pesos, between the beginning and ending
  balances of balance sheet items adjusted by the excess (shortfall) in restatement
  of capital. As required by Bulletin B-12, the monetary effect and the effect
  of changes in exchange rates are not considered non-cash items in the determination
  of resources generated from operations due to the fact they affect the purchasing
  power of the entity.

b) Cash and cash equivalents

Highly liquid short-term investments with original maturity of ninety days or
  less, consisting primarily of Mexican Government Treasury Bonds and money market
  instruments, are classified as cash equivalents. They are valued at the lower
  of acquisition cost plus accrued yields or estimated net realizable value.

c) Financial instruments

Assets and liabilities resulting from any financial instrument, except for such
  instruments held to maturity, are recorded in the balance sheet at fair value.
  The financial instruments held to maturity are valued at their acquisition cost.
  The effects of valuation of the financial instruments, including their cost
  and yield are recorded in the corresponding year in the statement of operations.



Financial instruments for hedging purposes, are valued using the same criteria
  of valuation of the assets or liabilities hedged, and the effect of such valuation
  is recognized in net income, net of costs, expenses, or income from the assets
  or liabilities whose risks are being hedged.

d) Inventories and cost of sales

Inventories are valued at the price of the last purchase made during the year
  or at the latest production cost without exceeding the net realizable value.
  Cost of sales is determined by using the price of the last purchase prior to
  the date of consumption or the latest production cost at the time of sale.

e) Land, buildings, machinery and equipment

Expenditures for land, buildings, machinery and equipment, including renewals
  and improvements that extend useful lives, are capitalized. The Company follows
  the principles of the Fifth Amendment to Bulletin B-10, under which, fixed assets
  are restated under the method of consumer price index adjustment, using the
  INPC. The initial balance to apply the INPC was the net replacement value as
  of December 31, 1996. For machinery and equipment purchased in a foreign country,
  the restatement is based on a general consumer price index from the country
  of origin and the exchange rate at the end of each period.

Maintenance and repair expenses are recorded as costs and expenses in the period
  when they are incurred.

Depreciation is calculated using the straight-line method, taking into consideration
  the estimated useful life of the asset, in order to depreciate the original
  cost and the revaluation. The depreciation begins in the month in which the
  asset is placed in service. The estimated useful lives of the assets are as
  follows:

|                              | Years   
|----------------------------- | --------
|Buildings                     | 20 to 50
|Machinery
      and equipment | 5 to 30 

f) Goodwill

Goodwill is amortized on a straight-line basis over a period of 20 years. Amortization
  expense for the years ended December 31, 2000, 2001 and 2002 was Ps. 18, Ps.
  30 and Ps. 41, respectively.

g) Seniority premiums, retirement plans and severance payments

Seniority premiums and pension plans for all personnel are considered as costs
  in the periods in which services are rendered. Periodic costs are calculated
  in accordance with Bulletin D-3 issued by the IMCP, and the actuarial computations
  were made by an independent actuary, using estimates of the salaries that will
  be in effect at the time of payment. The past service cost is amortized over
  the average period required for workers to reach their retirement age. The method
  used is the projected unit credit. Effective 2000 the Company began funding
  a trust in order to cover the payment of such liabilities.



Severance payments are expensed in the period in which such payments are made.

h) Excess (shortfall) in restatement of capital

This item, which is an element of stockholders' equity, reflects the accumulated
  effect of holding non-monetary assets and the effect of the initial monetary
  position gain or loss. The accumulated effect of holding non-monetary assets
  represents the difference between the specific values of non-monetary assets
  in excess of or below the increase attributable to general inflation as measured
  by the INPC and CPI.i) Restatement of capital stock and retained earnings

Capital stock and retained earnings, for Mexican subsidiaries, are restated
  using the INPC from the respective dates such capital was contributed or net
  income generated to the date of the most recent balance sheet presented. Retained
  earnings for US subsidiaries are restated using the CPI.

j) Employee stock option plan

An employee stock option plan (see note 13b) was adopted in 1998. The Company
  is accounting for stock-based compensation using a fair value based method.
  Compensation cost is measured at the grant date based on the value of the stock
  option award and is recognized over the vesting period.

k) Transactions in foreign currency for Mexican subsidiaries

All transactions in foreign currency are translated at the exchange rate as
  of the date of such transactions. In accordance with the Third Amendment, to
  Bulletin B-10, such transactions are restated using the INPC. Monetary assets
  and liabilities denominated in foreign currency are translated into Mexican
  pesos at the exchange rate at the date of the financial statements. Exchange
  fluctuations are recorded in the statements of operations as part of the total
  financing cost.

l) Revenue recognition

Revenues and related costs are recognized in the period in which risks and benefits
  are transferred to purchasers, which generally coincides with the shipment of
  products to costumers in satisfaction of orders.

m) Gain (loss) from monetary position

The gain (loss) from monetary position reflects the result of holding monetary
  assets and liabilities during periods of inflation. Values stated in current
  monetary units decrease in purchasing power over time. This means that losses
  are incurred by holding monetary assets over time, whereas gains are realized
  by maintaining monetary liabilities. The net effect is presented in the statements
  of operations as part of the total financing cost. For subsidiaries located
  in the US the result from monetary position is calculated using the CPI.

n) Income tax, tax on assets and profit sharing to workers

The Company applies the provisions of the Bulletin D-4 "Accounting Treatment
  of Income Tax, Tax on Assets and Workers' Profit Sharing", issued by the
  IMCP. As required by this bulletin, deferred income taxes are provided for differences
  between the book and tax value of assets and liabilities and deferred workers'
  profit sharing for temporary differences between the financial and adjusted
  tax income, that are expected to reverse in the future. Additionally, tax on
  assets paid in excess of income tax payable is recognized as an asset to the
  extent it is recoverable.

o) Earnings per share

Earnings per share are computed by dividing income by the weighted average number
  of shares outstanding during each period. Diluted earnings per share is no presented
  for periods in which all common stock equivalents are anti-dilutive or periods
  in which the Company records a net loss from continuing operations.

p) Use of estimates

The preparation of financial statements in conformity with generally accepted
  accounting principles, requires management to make estimates and assumptions
  that affect the reported amounts in these consolidated financial statements
  and in the related disclosures. Actual results could differ from those estimated.

4. Discontinued operations



On July 3, 2002, Vitro sold its 51% interest in Vitromátic, S.A. de
  C.V (Vitromátic) the holding company of the subsidiaries who comprised
  the segment Acros - Whirlpool. Vitro sold its ownership in Vitromátic
  to Whirlpool Corporation, who owns the related remaining 49% interest, for $
  148.3 million. Such sale resulted in a gain of Ps. 463 which is presented in
  the consolidated statement of income in the line item "Income on disposal
  of discontinued operations."



The balance sheet and statements of income for
  all periods presented, have been restated to present the balances and results
  of Vitromátic as discontinued operations. The condensed balance sheet
  and income statements of Vitromátic are comprised as follows:

|Condensed Balance sheet:                   |                          
|------------------------------------------ | -------------------------
|                                           | December
        31, 2001
|Cash and cash equivalents                  | Ps. 8                    
|Trade receivables                          | 668                      
|Inventories                                | 479                      
|Other receivables                          | 85                       
|Current assets                             | 1,240                    
|Fixed assets                               | 3,034                    
|Other assets                               | 212                      
|Long-term assets                           | 3,246                    
|Total assets                               | Ps. 4,486                
|                                           |                          
|Trade payables                             | Ps. 965                  
|Short-term borrowings                      | 522                      
|Other current liabilities                  | 159                      
|Current liabilities                        | 1,646                    
|Long-term debt                             | 249                      
|Other long-term liabilities                | 572                      
|Long-term liabilities                      | 821                      
|Total liabilities                          | 2,467                    
|Stockholders' equity                       | 2,019                    
|Total liabilities and stockholders' equity | Ps. 4,486                

Condensed income statements:

|                                             | Year ended December 31, | Period from January 1,
      to June 31, 2002
      (unaudited)
|-------------------------------------------- | ----------------------- | ---------------------------------------------------------------
|                                            
|                                             | 2000                    | 2001                                                           
|Net sales                                    | Ps. 6,115               | Ps. 
        6,306                                             
|Cost of sales                                | 4,877                   | 5,213                                                          
|Gross profit                                 | 1,238                   | 1,093                                                          
|General, administrative and selling expenses | 588                     | 598                                                            
|Operating income                             | 650                     | 495                                                            
|Financing cost and other                     | 275                     | 176                                                            
|Income tax                                   | 164                     | 130                                                            
|Net income (loss)                            | Ps.  211                | Ps.  189                                                       

5. Trade receivables

a) Trade receivables are recorded net of allowance for doubtful accounts of
  Ps. 43 and Ps. 62 at December 31, 2001 and 2002, respectively.



b) Sales of receivables.- The Company has entered into several factoring agreements
  to sell trade accounts receivable. In accordance with the terms of these agreements,
  the Company has the obligation to pay uncollected receivables, in the case of
  non-compliance of clients. The outstanding balance of receivables sold, which
  are deducted from the trade receivables balance, at December 31, 2001 and 2002
  amounted to $ 93 million and $ 99 million. The Company periodically monitors
  collections to provide for any uncollectible account.



6. Inventories

Inventories are summarized as follows:

|                                    | December, 31
|----------------------------------- | ------------
|                                    | 2001        
|Semi-finished and finished products | Ps. 2,497   
|Raw materials                       | 400         
|Packaging materials                 | 89          
|                                    | 2,986       
|Spare parts                         | 243         
|Refractory                          | 51          
|Merchandise in transit              | 118         
|Other                               | 25          
|                                    | Ps. 3,423   

7. Land and buildings, and machinery and equipment

Land and buildings, and machinery and equipment are summarized as follows:

|                         | December, 31
|------------------------ | ------------
|                         | 2001        
|Land                     | Ps. 3,517   
|Buildings                | 10,947      
|Accumulated depreciation | 5,051       
|                         | Ps. 9,413   
|Machinery and equipment  | Ps. 25,708  
|Accumulated depreciation | 16,323      
|                         | Ps. 9,385   

As mentioned in note 3 e), machinery and equipment purchased in a foreign country
  was restated using the CPI of such country.

8. Short-term borrowings



At December 31, 2001 and 2002, short-term borrowings denominated in Mexican
  pesos totaled Ps. 122 and Ps. 71, respectively, and short-term borrowings denominated
  in foreign currency (all of which are denominated in US dollars) totaled Ps.
  3,085 and Ps. 3,105, respectively. During 2002, the Company weighted average
  rate for short-term borrowings in Mexican pesos was 9.45% and for short-term
  borrowings denominated in dollars was 4.28%.



9. Long-term debt
  Long-term debt consists of the following:

|                                                                                                                                                                                     | December 31,
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------
|                                                                                                                                                                                     | 2001        
|I. Foreign Subsidiaries (payable in US Dollars):                                                                                                                                     |             
|Secured debt, floating interest rate based on LIBOR plus a spread between
      2.0% and 2.5%, principal payable in several installments through 2005.                               | Ps. 159     
|Secured debt, fixed interest rate of 5.25%, principal payable in several
      installments through 2008.                                                                            |             
|Unsecured debt, floating interest rate based on LIBOR plus a spread of 1.6%,
      principal payable in  2003.                                                                       | 312         
|Unsecured debt, floating interest rate based on EURIBOR plus a spread of
      2.54%, principal payable in several installments through 2010.                                        |             
|                                                                                                                                                                                     |             
|II. Mexican Subsidiaries (payable in US Dollars):                                                                                                                                    |             
|Secured debt, floating interest rate based on LIBOR plus a spread between
      1.75% and 2.3%, principal payable in several installments through 2007.                              | 2,836       
|Unsecured debt, floating interest rate based on LIBOR plus a spread between
      1.5% and 2.5%, principal payable in several installments through 2008.                             | 1,944       
|Unsecured debt, fixed interest rate of 11.50%, principal payable in several
      installments through 2009.                                                                         |             
|11.375% guaranteed senior unsecured notes due in 2007.                                                                                                                               | 4,022       
|                                                                                                                                                                                     |             
|III. Vitro and Mexican Subsidiaries (payable in Mexican Pesos):                                                                                                                      |             
|Unsecured medium term notes, floating interest rate based on 182 day treasury
      bonds (CETES) plus a spread between of 2.4% and 3.26%, principal payable
      in 2004 and 2008. | 328         
|                                                                                                                                                                                     |             
|IV. Vitro and Mexican Subsidiaries denominated in UDI's (investment units),
      payable in Mexican Pesos :                                                                         |             
|Unsecured debt, interest rate of 8.75%, principal payable in several installments
      through 2006.                                                                                | 229         
|Unsecured medium term notes, fixed interest rate between 9.0% and 10.0%,
      principal payable  in 2002 and 2006.                                                                  | 1,370       
|Unsecured medium term notes, floating rate based on UDI's plus 1.75%, principal
      payable in 2004.                                                                               | 146         
|                                                                                                                                                                                     | 11,346      
|Less current maturities                                                                                                                                                              | 2,795       
|                                                                                                                                                                                     | Ps. 8,551   

(1) A portion of the net proceeds of the sale of the 2009 Senior Notes, in
  the amount of $39.1 million, were used to purchase 13.889% Credit Linked Notes
  issued by the CLN Issuer with an aggregate principal amount of $40 million.
  Under the terms of the 13.889% Credit Linked Notes, upon the occurrence of a
  Credit Event, which includes our bankruptcy or insolvency, noncompliance with
  the terms of our indebtedness which would permit the acceleration thereof, a
  default with respect to our indebtedness, a restructuring of our indebtedness
  or a repudiation of or moratorium with respect to payments of our indebtedness,
  whether by us or a governmental entity, the principal amount of the 13.889%
  Credit Linked Notes will be reduced pursuant to a formula based on the then
  current market price of the 11?% Guaranteed Notes. As a result, if a Credit
  Event occurs and we are not able to cure such Credit Event within the applicable
  period, we may lose the entire amount that we invested in the 13.889% Credit
  Linked Notes. As long as a Credit Event has not occurred, the CLN Issuer is
  generally required to redeem (i) the 13.889% Credit Linked Notes in four annual
  installments, beginning on May 7, 2003 and (ii) a pro rata portion of the 13.889%
  Credit Linked Notes at the time any portion of the 2009 Senior Notes is sold
  by CSFBI.

Concurrently with the issuance of the 2009 Senior Notes and the purchase of
  the 13.889% Credit Linked Notes, we entered into a swap agreement with CSFBI
  pursuant to which we agreed to make certain payments on April 30 of each year,
  beginning on April 30, 2003 and ending on April 30, 2006, to CSFBI calculated
  with respect to an original notional amount of $80 million if a proportional
  part of the 2009 Senior Notes have not been sold by CSFBI at that time and the
  market price of the 11?% Guaranteed Notes has declined from an initial benchmark
  price which is based on the price paid by CSFBI for the 2009 Senior Notes. In
  addition, under the swap agreement, CSFBI may require us to, at any time, make
  payments of all amounts that would be owed by us on all future payment dates
  if the market price of the 11?% Guaranteed Notes has declined to certain levels,
  with any such payments being reduced by payments we would be required to make
  on future payment dates. If certain Termination Events occur, which are similar
  to the Credit Events described above, CSFBI may terminate the swap agreement.
  In that event, we may owe CSFBI an amount calculated as described above with
  respect to declines in the market price of the 2009 Senior Notes for up to $40
  million.

As of December 31, 2002, the interest rate of EURIBOR, CETES and LIBOR were
  2.90%, 6.88% and 1.42%, respectively.

We reclassified short- term borrowings to long- term debt (see note 20).

The schedule of principal payments of long-term debt as of December 31, 2002
  is as follows:

|2004 | Ps.  2,724 
|---- | -----------
|2005 | 1,009      
|2006 | 1,731      
|2007 | 2,708      
|2008 | 2,241      
|     | Ps.  10,413



Certain of the Company's long-term debt agreements contain restrictions and
  covenants that require the maintenance of various financial ratios. The Company
  has complied with the restrictions and covenants during 2002.



Debt of the Company totaling Ps. 2,822 is collateralized
  with fixed assets and trade receivables with a book value of Ps. 4,379 as of
  December 31, 2002.

The Company primarily uses interest rate swaps
  ("interest swaps"), foreign currency forward contracts ("forward
  contracts"), and currency swaps ("currency swaps") to manage
  its exposure to fluctuations in interest and foreign currency exchange rates.
  The Company formally documents all relationships between hedging instruments
  and hedged items, as well as its risk management objectives and strategies for
  undertaking various derivative transactions. It is the Company's policy not
  to enter into derivative financial instruments for speculative purposes.



The Company's Interest Swaps effectively convert a portion of its variable
  rate debt to fixed rate debt. Their forward contracts provide for the purchase
  of foreign currencies at specified future dates at specified exchange rates.
  Further, the Company's currency swaps effectively convert a portion of its UDI's
  denominated debt to dollars and then to mexican pesos denominated debt.

The following table summarizes the derivative financial instruments in place
  as of December 31, 2002:



|Type of transaction | Commence-ment date | Termination date | Fixed interest rate | Variable interest rate               | Notional  amount        | Interest rate cap | Contract currency | Foreign  exchange rate
|------------------- | ------------------ | ---------------- | ------------------- | ------------------------------------ | ----------------------- | ----------------- | ----------------- | ----------------------
|Interest swap       | 29-Jun-00          | 29-Jun-05        | 6.85%               | Libor
      - reviewed each 6 months | 20 million
      USD    |                   |                   |                       
|Interest swap       | 30-Jun-01          | 30-Jun-06        | 5.20%               | Libor
      - reviewed each 3 months | 188 million
      USD   |                   |                   |                       
|Interest cap        | 28-Nov-01          | 28-Nov-06        |                     |                                      | 350 Million
      USD   | 5.9457%           |                   |                       
|Currency swap       | 24-Jan-01          | 12-Oct-06        |                     |                                      | 155
      million UDI's |                   | Dollars           |                       
|Currency swap       | 24-Jan-01          | 7-Jun-06         |                     |                                      | 200
      million UDI's |                   | Dollars           |                       
|Currency swap       | 25-Jan-01          | 12-Oct-04        |                     |                                      | 50
      million UDI's  |                   | Dollars           |                       
|Currency swap       | 17-Apr-02          | 12-Oct-06        |                     |                                      | 47
      million USD    |                   | Pesos             |                       
|Currency swap       | 17-Apr-02          | 7-Jun-06         |                     |                                      | 61
      million USD    |                   | Pesos             |                       
|Currency swap       | 17-Apr-02          | 12-Oct-04        |                     |                                      | 15 millon
      USD     |                   | Pesos             |                       
|Forward contract    | 12-Aug-02          | 12-Aug-07        |                     |                                      | 100
      million USD   |                   | Pesos             | 11.61                 
|Forward contract    | 29-Aug-02          | 12-Aug-07        |                     |                                      | 100
      million USD   |                   | Pesos             | 11.76                 

The effect in the income statement of the above mentioned transactions were:

|                 | Income
        (expense)       
|---------------- | -------------------------------
|                 | Year
        ended December 31,
|                 | 2001                           
|Interest swap    | Ps.  (32)                      
|Forward contract |                                
|Currency swap    | 166                            
|Net              | Ps. 134                        

10. Pension plans and seniority premiums



The disclosures relating to the Company's pension
  plans and seniority premiums required by Bulletin D-3, issued by IMCP, calculated
  as described in note 3 g), together with certain actuarial assumptions utilized
  are presented below as of December 31, 2001 and 2002:

|                                                               | December 31,
|-------------------------------------------------------------- | ------------
|                                                               | 2001        
|Accumulated
      benefit obligation                           | Ps.  1,586  
|                                                               |             
|Projected benefit obligation                                   | Ps.  1,647  
|Plan assets at fair value                                      | (418)       
|Unrecognized net loss                                          | (237)       
|Unrecognized transition obligation                             | (491)       
|Changes in assumptions
        and adjustments from experience | (286)       
|Projected net liability                                        | Ps.  215    
|Additional minimum liability                                   | Ps.  964    
|Net periodic cost (Ps.245for 2000)                             | 210         

At December 31, 2002, the plan assets presented
  above, included 39.2 million shares of Vitro.

Assumptions:

|                                             | December
        31,
|-------------------------------------------- | --------------------
|                                             | 2001                
|Discount
      rate                          | 5.0%                
|Expected
      rate of return on plan assets | 7.0%                
|Rate
      of compensation increase          | 1.0%                



11. Commitments and contingencies



a) In October, 2000, several subsidiaries of Vitro, S.A. de C.V. which have
  facilities throughout Monterrey, Mexico and the Mexico City area, entered into
  a 15 year energy purchase agreement for approximately 110 MW ("Megawatts")
  of electricity with Tractebel Energía de Monterrey, S. de R..L. de C.V.
  ("Tractebel"). It is expected that Tractebel will commence commercial
  operations during February 2003.





b) The Company's consumption of natural gas during
  2002 was approximately 24,000,000 of British Thermal Units ("MMBTUS"),
  of which, it had covered a total of 14,211,024 MMBTUS with fixed price purchased
  contracts as follows:

|                    | % of coverage  | MMBTUS
|------------------- | -------------- | ------
|over consumption    | coverage price
|Petroleos Mexicanos | 42%            | $4.00 
|Petroleos Mexicanos | 17%            | 4.165 

As of December 31, 2002, the Company maintains
  hedges on the price of natural gas for approximately 42% of its future planned
  consumption with Petróleos Mexicanos at a price of $ 4.00 dollar per
  MMBTUS.



As of February 7, 2003, the market price for MMBTUS
  was $ 5.435 dollars.



c) The Company has several non-cancellable operating lease agreements for the
  rent of warehouses and equipment. Rental expense for the years 2000, 2001 and
  2002 was Ps. 280, Ps. 340 and Ps. 386, respectively.

Future minimum lease payments under these agreements are as follows:

|2004 | 377
|---- | ---
|2005 | 359
|2006 | 365
|2007 | 370

d) The Company is not a party, and none of its assets is subject, to any pending
  legal proceedings nor is the Company subject to any contingent liabilities,
  other than as described in note 11 e) and legal proceedings and contingent liabilities
  arising in the normal course of business and against which the Company is adequately
  insured or indemnified or which the Company believes are not material in the
  aggregate.



e) As part of Anchor's disposal in a transaction approved by the U.S. Bankruptcy
  Court, Vitro provided to the Pension Benefit Guaranty Corporation ("PBGC"),
  a United States governmental agency that guarantees pensions, a limited guarantee
  of Anchor's under funded pension liability. No payments would be made under
  the guarantee unless the PBGC terminated any of Anchor's pension plans, and
  the guarantee would be payable only to the extent the PBGC could not otherwise
  recover the under funded liabilities from the entity that purchased Anchor's
  assets. The amount of the guarantee was originally limited to $70 million. Under
  the guarantee, payments would not begin until August 1, 2002, and would then
  generally be payable in equal semiannual installments over the following 10
  years. Payments would not bear interest. The amount and the term of the guarantee
  would be proportionately reduced if the pension plans were terminated after
  January 31, 2002. Beginning February 2002, the guarantee would be reduced by
  $7 million semiannually until August 1, 2006, when the guarantee would expire
  if the plans did not terminate.



On April 15, 2002, Anchor filed a pre-negotiated
  plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code. On August
  6, 2002, an amended plan of reorganization was confirmed, pursuant to which
  the Anchor pension plan was terminated and the obligations there under were
  assumed by the PBGC in exchange for cash, securities and a commitment of the
  new reorganized entity to make certain future payments. The actual date of the
  termination is not known. The PBGC may consider that this termination of the
  Anchor plan may give rise to claims against Vitro under the limited guarantee.
  There are various certain issues concerning any such possible claims and certain
  defenses that could be asserted by Vitro. It is not possible to estimate the
  amounts, if any, that would be paid with respect to such possible claims; however,
  the total payments required could not exceed $63 million under the terms of
  the guarantee payable in equal bi-annual installments through August 1, 2011.
  If the termination date was after July 31, 2002, then the maximum payments could
  not exceed $56 million payable in equal bi-annual installments through February
  1, 2011. See Note 20.

12. Foreign currency operations



a) At December 31, 2002, the assets and liabilities
  denominated in foreign currency (other than Mexican pesos) of the Company's
  Mexican subsidiaries consist of the following:

|                     | Millions of US Dollars | Millions of Mexican Pesos
|-------------------- | ---------------------- | -------------------------
|Monetary assets      | $132                   | Ps.  1,375               
|Inventories          | 29                     | 298                      
|Fixed assets         | 392                    | 4,096                    
|Monetary liabilities | 987                    | 10,302                   

b) Foreign operations of the Company's Mexican subsidiaries during 2002 consisted
  of the following:

|                      | Millions of US Dollars | Millions of Mexican Pesos
|--------------------- | ---------------------- | -------------------------
|Exports               | $586                   | Ps. 5,993                
|Imports               | 318                    | 3,170                    
|Interest expense, net | 113                    | 1,135                    

c) The condensed financial information of the principal foreign subsidiaries
  of the Company at December 31, 2002 is the following:

|                  | United States of America | Central and South America | Europe  
|----------------- | ------------------------ | ------------------------- | --------
|Net sales         | Ps.  7,730               | Ps.  1,309                | Ps.  867
|Operating income  | 146                      | 156                       | 93      
|Total assets      | 2,413                    | 2,786                     | 1,257   
|Total liabilities | 968                      | 813                       | 583     

d) The exchange rates of the Mexican peso against the US dollar, used for
  purposes of the Company's consolidated financial statements at the following
  dates were:

|December
      31, 1999 | Ps.
        9.4986
|----------------------- | ------------------
|December
      31, 2000 | 9.6098            
|December
      31, 2001 | 9.1695            
|December
      31, 2002 | 10.4394           

On February 7, 2003, the exchange rate was Ps. 10.8979 per one US dollar.

13. Stockholders' equity



a) At December 31, 2001 and 2002, the capital stock of the Company consisted
  of 324,000,000 ordinary, nominative, fully paid common shares, without par value.



b) The Company maintains an Employee Stock Option Plan established in March
  1998 (the "Plan"). The Plan specifies amount of shares, time and initial
  exercise price, which is equal to the average closing price on the Mexican Stock
  Exchange of the common shares on the 20 days prior to the Grant Date, except
  for the options issued during 2000, 2001 and 2002, which were Ps. 11.00, Ps.
  8.27 and Ps. 7.53, respectively. The vesting period of the options is 5 years
  and the life of such options is 10 years. At December 31, 2002, no options have
  been exercised.

The following table summarizes the activity relating to the Plan:

|                                             | 1998       | 1999               | 2000               | 2001              | 2002     
|-------------------------------------------- | ---------- | ------------------ | ------------------ | ----------------- | ---------
|Options granted during the year              | 2,813,300  | 2,893,000          | 4,851,900          | 3,204,800         | 3,941,950
|Options cancelled in 2002                    | 618,820    | 594,500            | 583,000            | 62,000            | 39,600   
|Options outstanding at December 31, 2002     | 2,194,480  | 2,298,500          | 4,268,900          | 3,142,800         | 3,902,350
|Exercisable options                          | 822,250    | 1,357,500          | 1,377,525          | 891,975           | 0        
|Initial exercise price                       | Ps.  31.31 | Ps. 
        14.88 | Ps. 
        11.00 | Ps. 
        8.27 | Ps. 7.53 
|Weighted exercise price at December 31, 2002 | 34.82      | 17.48              | 11.00              | 8.27              | 7.53     

During 2001 the Company repriced 940,950 of the options granted in 1998 to
  Ps. 13.00.



The closing price of the Company's shares on the Mexican Stock Exchange on
  December 31, 2002 was Ps. 8.02.



The exercise price of the options granted in 1998 and 1999 will be determined
  at the time such options are exercised by indexing the initial price using an
  indexing factor based on the cumulative performance of the Company's common
  shares relative to the cumulative performance of the Indice de Precios y Cotizaciones
  of the Mexican Stock Exchange; such indexing factor is subject to certain ceilings
  and floors. There is no indexing factor for the options granted in 2000, 2001
  and 2002.



The estimated fair value of the options was made
  on the Grant Date using the Black-Scholes option-pricing model with the following
  assumptions:

|Risk-free interest rate      | 3.23% 
|---------------------------- | ------
|Expected
      life in years | 8     
|Price
      volatility       | 44.62%
|Dividend Yield               | 0     

Compensation cost charged against income for such
  plan was Ps. 23, Ps. 34 and Ps. 37 for 2000, 2001 and 2002, respectively.



c) As of December 31, 2001 and 2002 the treasury shares held by the Company
  were 50,294,020 and 47,979,489, respectively, which include the shares held
  by Stock Option Trust (see note 13b) which were 24,674,020 as of December 31,
  2001 and 2002.



d) Stockholders' equity, except restated paid-in capital and tax retained earnings
  will be subject to a 35% dividend tax, payable by the Company in the event of
  distribution. Beginning 2003 such tax rate will be reduced by 1 percent each
  year through 2005 to 32%. The tax paid for such dividend can be credited against
  the income tax of the Company during the three years following the payment.



The balance of the stockholders' equity tax accounts, corresponding to the
  contributed capital account and the net consolidated tax income account, as
  of December 31, 2002 are Ps. 1,389 and Ps. 1,111, respectively.

e) Dividends declared and paid:

|Nominal        | Constant | Payment date
|-------------- | -------- | ------------
|March 31, 2000 | 146      | 171         
|March 31, 2000 | 146      | 162         
|April 5, 2001  | 149      | 162         
|April 5, 2001  | 149      |             
|March 14, 2002 | 75       | 78          



(1) This dividend will be paid
  on a date to be determined by the Board of Directors.



f) Minority interest in consolidated subsidiaries consists of the following:

|                                    | December 31,     
|----------------------------------- | -----------------
|                                    | 2001             
|Capital stock                       | Ps. 4,102        
|Shortfall in restatement of capital | (4,378)          
|Retained earnings                   | 3,425            
|Net income for the year             | 480              
|                                    | Ps.
        3,629

g) Majority interest stockholders' equity consists of the following:

|                                     | December 31, 2002
|------------------------------------ | -----------------
|                                     | Nominal Value    
|Capital stock                        | Ps. 324          
|Treasury stock                       | (303)            
|Paid-in capital                      | (121)            
|Shortfall in restatement of capital  |                  
|Cumulative effect of deferred taxes  | (1,259)          
|Minimum pension liability adjustment | (298)            
|Retained earnings                    | (2,395)          
|                                     | Ps. (4,052)      

h) At December 31, 2002, stockholders equity includes
  Ps. 3,615 of retained earnings and other undistributed capital items of the
  subsidiaries.



i) Comprehensive income (loss) that is reflected in the accompanying statements
  of Stockholders ́ Equity, represents the net result of the Company's performance
  each financial year, and consists of net income of each year plus other items
  of comprehensive income of the same period, which in accordance with the Mexican
  GAAP are reflected directly in Stockholders ́ Equity, without affecting
  the income statement. The other items of comprehensive income consist of the
  result of holding non-monetary assets and the minimum pension liability adjustment.
  In addition, in 2000 the comprehensive loss includes the cumulative effect of
  deferred income tax of Ps. 1,484 in majority interest and Ps. 1,125 in minority
  interest. Consequently, comprehensive income of 2001 and 2002, is not comparable
  with 2000.



14. Total financing cost



Following is a disclosure of the most important
  items that are included in total financing cost:

|                                                | Year ended December 31,
|----------------------------------------------- | -----------------------
|                                                | 2000                   
|Interest expense on debt denominated in dollars | Ps.
        1,252      
|Interest expense on debt denominated in pesos   | 432                    
|Interest expense on debt denominated in UDI's   | 188                    
|Restatement of UDI's                            | 164                    
|Interest income                                 | (25)                   
|Exchange loss (gain), net                       | 111                    
|Gain from monetary position                     | (1,303)                
|Other financial expenses                        | 254                    
|Total financing cost                            | Ps.  1,073             



15. Other expense, net



Following is the analysis of other expenses, net:

|                                                                                                 | Year ended December 31,
|------------------------------------------------------------------------------------------------ | -----------------------
|                                                                                                 | 2000                   
|Restructuring charges                                                                            | Ps.
        139        
|Write-off and loss from sale of fixed assets                                                     | 284                    
|(Gain) loss from sale of subsidiaries and associated companies                                   | (60)                   
|Disposition of Manufacturas, Ensamblajes y Fundiciones, S. de R.L. de C.V.
      (see note 18 b) | 76                     
|Other                                                                                            | (3)                    
|                                                                                                 | Ps.  436               

During 2000, 2001 and 2002 the Company downsized its corporate services at headquarters
  and certain business units, which resulted in a charge of Ps. 139, Ps. 302 and
  Ps. 94, respectively.







16. Tax loss carryforwards



At December 31, 2002, the tax loss carryforwards,
  the asset tax to be recovered and the capital losses that can be amortized against
  capital gains consist of the following:

|                | Tax loss carryforwards | Asset Tax         |                  
|--------------- | ---------------------- | ----------------- | -----------------
|Expiration Year | Majority Interest      | Minority Interest | Majority Interest
|2004            | Ps.                    | Ps.               | Ps.  185         
|2005            | 281                    |                   |                  
|2006            |                        |                   |                  
|2007            | 1,741                  |                   |                  
|2008            | 4,586                  | 12                | 172              
|2009            | 64                     | 5                 |                  
|2010            | 463                    | 129               |                  
|2011            | 209                    | 33                |                  
|2012            | 1,133                  | 170               |                  
|                | Ps. 
        8,477     | Ps. 
        349  | Ps.
        357  



17. Income tax , workers' profit sharing and asset tax



a) The Company is subject to income tax and tax on assets for consolidation
  purposes in the proportion of the number of the subsidiary's voting shares that
  Vitro owns. As of January 1, 2002, the proportion is calculated based on the
  average daily equity percentage which the Company owns of its subsidiaries during
  the year. The taxable income of the subsidiaries are consolidated at 60% of
  the mentioned proportion. The monthly tax advances to Secretaría de Hacienda
  y Credito Publico of Vitro as well as its subsidiaries, are made as if they
  have not elected tax consolidation.

b) The income tax and workers' profit sharing included in the Company's results
  are:

|            | Year ended December 31,
|----------- | -----------------------
|            | 2000                   
|Income tax: |                        
|Current     | Ps.  478               
|Deferred    | 90                     
|            | 568                    
|Asset tax   | 13                     
|            | Ps. 581                

|                         | Year ended December 31,
|------------------------ | -----------------------
|                         | 2000                   
|Workers' profit sharing: |                        
|Current                  | Ps. 173                
|Deferred                 | 151                    
|                         | Ps. 324                

Deferred tax assets (liabilities) presented on
  the balance sheets consist of the following:

|                                                                                     | December 31,
|------------------------------------------------------------------------------------ | ------------
|                                                                                     | 2001        
|Assets:                                                                              |             
|Accounts receivable                                                                  | Ps. 187     
|Tax benefit from the future deduction of inventories held on December 31,
      1986 | 156         
|Reserve for seniority premiums and pensions                                          | 496         
|Tax loss carryforwards                                                               | 2,452       
|Exchange fluctuations                                                                | (40)        
|Asset tax                                                                            | 392         
|                                                                                     | 3,643       
|                                                                                     |             
|Liabilities:                                                                         |             
|Inventories                                                                          | 968         
|Fixed assets                                                                         | 3,698       
|Other                                                                                | 389         
|                                                                                     | 5,055       
|Net liabilities                                                                      | Ps.  1,412  

c) The income tax rate is 35%. In accordance with
  the new income tax law, which became effective on January 1, 2002, the income
  tax rate will be reduced annually by 1% beginning 2003 through 2005. The effect
  of this decrease in the income tax rate was recorded effective January 1, 2002
  and was a decrease in net long-term liabilities and an increase in net income
  of Ps. 36. Following is a reconciliation between the Company's effective income
  tax rate and the statutory rate:

|                                                              | Year ended December 31,
|------------------------------------------------------------- | -----------------------
|                                                              | 2000                   
|Effective income tax rate                                     | 36.4%                  
|Asset tax included as income tax                              |                        
|Loss on sale of subsidiaries                                  |                        
|Difference between tax and accounting basis for monetary gain | (0.6)                  
|Loss from foreign companies and minority interest             | (0.2)                  
|Effect of change in the income tax rate                       |                        
|Other                                                         | (0.6)                  
|Statutory income tax rate                                     | 35.0%                  

d) Changes in stockholders' equity in shortfall
  in restatement of capital and minimum pension liability adjustment are presented
  net of deferred tax effect as follows:

|                                     | Year ended December 31,
|------------------------------------ | -----------------------
|                                     | 2000                   
|Shortfall in restatement of capital  | Ps.  108               
|Minimum pension liability adjustment | 13                     
|                                     | Ps.  121               

18. Business acquisitions and dispositions



a) Acquisition of Harding Glass Inc.- In April 2000, VVP America consummated
  the acquisition of substantially all of the assets of Harding Glass, Inc., for
  an amount of $ 31.4 million. With the acquisition of Harding, VVP America incorporated
  into its operations 5 distribution centers and 118 retail stores located throughout
  the United States. Harding is one of the leading distributors of glass products
  for automotive and construction markets.



b) Disposition of Manufacturas, Ensamblajes y Fundiciones, S. de R. L. de C.V.-
  On August 10, 2000 Vitro and GE México, S.A. de C.V. a subsidiary of
  General Electric Company, a U.S. Corporation, decided to terminate their Joint
  Venture Agreement which in 1997 resulted in the creation of Manufacturas, Ensamblajes
  y Fundiciones, S. de R.L. de C.V. The termination of the joint venture was subject
  to compliance with certain requirements imposed by both parties. Those requirements
  were completed in January 2001, resulting in the closing of such facility. A
  loss of Ps. 76 was recognized in 2000 and is included in Other expense, net.



c) Sale of Regioplast, S.A. de C.V.- On May 21, 2001, Vitro sold its 50% interest
  in Regioplast, S.A. de C.V. to Owens Illinois Inc., former partner of Vitro
  in such company, for an amount of $ 8.0 million. A loss of Ps. 86 was realized
  as a result of this transaction and is included in Other expense, net.



d) Acquisition of Cristalglass Vidrio Aislante, S.A. - On May 4, 2001 the Company
  acquired 60 percent of the outstanding shares of Spain's Cristalglass Vidrio
  Aislante, S.A., holding company of Group Cristalglass. Cristalglass fabricates,
  distributes and sells flat glass for the construction industry. The company
  employs over 300 people. Annual sales are approximately $ 60 million.



e) Ampolletas- On April 15, 2002 the Company sold to Gerresheimer Glas AG,
  its 51% interest in Ampolletas, S.A. for consideration that includes cash, the
  assumption of debt and the assignment of certain receivables, that altogether
  amount to approximately $ 21 million.



f) Vitromatic - On July 3, 2002, Vitro sold its interest in Vitromatic (see
  note 4).

19. Business segment data



The accounting policies of the segments are the same as those described in
  notes 2 and 3. The Company evaluates the performance of its segments on the
  basis of operating income. Intersegment sales and transfers are accounted for
  as if the sales and transfers were to third parties, that is, at current market
  prices.



Vitro's reportable segments are strategic business units that offer different
  products. The segments are managed separately; each requires different manufacturing
  operations, technology and marketing strategies; and each segment primarily
  serves a different customer base.

The Company has three reportable segments: Glass
  Containers, Flat Glass and Glassware. On July 3, 2002, Vitro sold its interest
  in the segment Acros - Whirlpool (see note 4). The principal products of each
  of the segments are summarized below:

|Segment          | Principal products                                                                                                                                 
|---------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|Glass Containers | Glass
      containers, sodium carbonate, borosilicate glass, capital goods, aluminum
      cans, precision components and molds for glass industry
|Flat Glass       | Flat
      glass for the construction and automotive industries and Fiberglass                                                                     
|Glassware        | Glassware
      for table and kitchen use, and plastic disposable thermo fold ware                                                                 

The segment data presented below does not include discontinued operations for
  any of the periods presented.

|                              | Glass
        Containers | Flat
        Glass  | Glassware          | Corporate
        and other | Consolidated       
|----------------------------- | ------------------------ | ------------------- | ------------------ | --------------------------- | -------------------
|December 31, 2000:            |                          |                     |                    |                             |                    
|Net sales                     | Ps. 
        10,258      | Ps. 
        11,624 | Ps.
        3,187  | Ps.
        132             | Ps. 
        25,201
|Interdivisional sales         | 52                       | 102                 | 42                 |                             | 196                
|Consolidated net sales        | 10,206                   | 11,522              | 3,145              | 132                         | 25,005             
|Operating income              | 1,165                    | 1,779               | 546                | (385)                       | 3,105              
|Assets                        | 15,368                   | 11,464              | 3,965              | 159                         | 30,956             
|Capital expenditures          | 407                      | 364                 | 163                | 18                          | 952                
|Depreciation and amortization | 1,019                    | 619                 | 241                | 69                          | 1,948              
|Goodwill                      |                          | 345                 |                    |                             | 345                
|                              |                          |                     |                    |                             |                    
|December 31, 2001:            |                          |                     |                    |                             |                    
|Net sales                     | Ps.
        9,997        | Ps. 
        11,753 | Ps. 
        2,776 | Ps.
        79              | Ps. 
        24,605
|Interdivisional sales         | 64                       | 94                  | 41                 |                             | 199                
|Consolidated net sales        | 9,933                    | 11,659              | 2,735              | 79                          | 24,406             
|Operating income              | 932                      | 1,346               | 346                | (309)                       | 2,315              
|Assets                        | 13,380                   | 11,254              | 3,390              | 1,141                       | 29,165             
|Capital expenditures          | 314                      | 406                 | 91                 | 37                          | 848                
|Depreciation and amortization | 975                      | 616                 | 251                | 87                          | 1,929              
|Goodwill                      |                          | 724                 |                    |                             | 724                
|                              |                          |                     |                    |                             |                    
|December 31, 2002:            |                          |                     |                    |                             |                    
|Net sales                     | Ps. 
        10,012      | Ps. 
        11,380 | Ps.
        2,618  | Ps. 
        117            | Ps. 
        24,127
|Interdivisional sales         | 69                       | 107                 | 29                 |                             | 205                
|Consolidated net sales        | 9,943                    | 11,273              | 2,589              | 117                         | 23,922             
|Operating income              | 1,188                    | 845                 | 260                | (307)                       | 1,986              
|Assets                        | 12,969                   | 11,467              | 3,200              | 2,380                       | 30,016             
|Capital expenditures          | 589                      | 283                 | 125                | 21                          | 1,018              
|Depreciation and amortization | 893                      | 656                 | 264                | 95                          | 1,908              
|Goodwill                      |                          | 748                 |                    |                             | 748                

Export sales from México, substantially
  all of which are denominated in US dollars, are mainly to the United States
  and Canada and were as follows (in million of US dollars):

|Year ended December 31,
|-----------------------
|2000                   
|$
        608          

Certain geographic information about the Company's
  operations and assets is summarized as follows:

|                                                           | Year ended December 31,
|---------------------------------------------------------- | -----------------------
|                                                           | 2000                   
|Net sales (1)  to customers in:                            |                        
|Mexico                                                     | Ps.  12,668            
|All foreign countries, mainly the United States and Canada | 12,337                 
|Consolidated                                               | Ps.  25,005            

Consolidated net sales to any single external customer
  did not equal 10% or more of Vitro's total consolidated net sales.

|                                                                              | December 31,
|----------------------------------------------------------------------------- | ------------
|                                                                              | 2000        
|Land and buildings, machinery and equipment, and construction in progress:    |             
|Mexico                                                                        | Ps.  19,016 
|All foreign countries, mainly Central and South America and the United States | 1,889       
|Consolidated                                                                  | Ps.  20,905 



20. Subsequent events



a) On February 27, 2003, the Company signed a Syndicated
  Facility for $ 201 million through its subsidiary Vitro Plan, S.A. de C.V. Accordingly,
  we reclassified short- term borrowings to long- term debt in the amount of $
  80 million.

b) On June 20, 2003, the Company received a letter
  from the PBGC, noting that the Anchor Plan was terminated effective as of July
  31, 2002, and demanding payments pursuant to the limited guaranty of $7 million
  on or before August 1, 2003 and of $3.5 million semi-annually through August
  1, 2011. There are various issues concerning any demand and certain defenses
  that could be asserted by Vitro. It is not possible to estimate the amounts
  that will ultimately be paid in response to such demand; however, the total
  payments required could not exceed $63 million under the guaranty.

21. Differences between Mexican and United States
  accounting principles

The Company's consolidated financial statements
  are prepared in accordance with Mexican GAAP, which differ in certain significant
  respects from US GAAP. The Mexican GAAP consolidated financial statements include
  the effects of inflation as provided for under Bulletin B-10, as amended (see
  note 3), whereas financial statements prepared under US GAAP are presented on
  a historical basis. However, the following reconciliation to US GAAP does not
  include the reversal of the adjustments required under Bulletin B-10, as amended,
  with the exceptions of the adjustment required by the fifth amendment to Bulletin
  B-10 discussed in note 21h) and the restatement of prior years' balances mentioned
  in note 21i). The application of Bulletin B-10, as amended, represents a comprehensive
  measure of the effects of price level changes in the inflationary Mexican economy
  and, as such, is considered a more meaningful presentation than historical cost-based
  financial reporting for both Mexican and U.S. accounting purposes.

The other principal differences between Mexican
  GAAP and US GAAP and the effect on consolidated net income and consolidated
  stockholders' equity are presented below:

Reconciliation of Net income (loss):

|                                                                         | Year ended December 31, | Millions
        of  US Dollars (Convenience Translation) Year Ended December
        31,
|------------------------------------------------------------------------ | ----------------------- | -----------------------------------------------------------------------------------------
|                                                                         | 2000                    | 2001                                                                                     
|Net income  (loss) of majority interest as reported under Mexican GAAP   | Ps.  377                | Ps.  164                                                                                 
|                                                                         |                         |                                                                                          
|Deferred income tax  *                                                   | 295                     | 82                                                                                       
|Reduction of depreciation expense related to negative goodwill           | (13)                    | 35                                                                                       
|                                                                         |                         |                                                                                          
|Depreciation of the effect of applying the Fifth Amendment               | (157)                   | (188)                                                                                    
|Workers' profit sharing  *                                               | (43)                    | 344                                                                                      
|Pre-operating expenses                                                   | 25                      | 16                                                                                       
|Capitalized interest                                                     | (7)                     | (6)                                                                                      
|Goodwill amortization                                                    |                         |                                                                                          
|Fair
      value of derivative financial instruments                     |                         |                                                                                          
|Effect
      of applying Bulletin B-15                                   | (3)                     | (22)                                                                                     
|Discontinued operations                                                  | 2                       | 22                                                                                       
|Effect
      of the above adjustments on net income of minority interest | 183                     | (60)                                                                                     
|                                                                         |                         |                                                                                          
|TOTAL US GAAP adjustments                                                | 282                     | 223                                                                                      
|                                                                         |                         |                                                                                          
|Net income (loss) under US GAAP                                          | Ps.  659                | Ps.  387                                                                                 
|                                                                         |                         |                                                                                          
|* Net of monetary gain                                                   |                         |                                                                                          

Reconciliation of Stockholders' Equity:

|                                                                                   | Year  ended  December  31, | Millions
        of  US Dollars (Convenience Translation) Year Ended December
        31,
|---------------------------------------------------------------------------------- | -------------------------- | -----------------------------------------------------------------------------------------
|                                                                                   | 2000                       | 2001                                                                                     
|Total stockholders' equity reported under Mexican GAAP                             | Ps.
        10,271         | Ps.
        9,711                                                                        
|                                                                                   |                            |                                                                                          
|Less minority interest included as stockholders' equity under Mexican GAAP         | (3,493)                    | (3,629)                                                                                  
|                                                                                   |                            |                                                                                          
|Majority interest stockholders' equity under Mexican GAAP                          | 6,778                      | 6,082                                                                                    
|US GAAP adjustments:                                                               |                            |                                                                                          
|Deferred income tax:                                                               |                            |                                                                                          
|Effect on retained earnings                                                        | (33)                       | 69                                                                                       
|Effect on excess (shortfall) in restatement of capital                             | (606)                      | (801)                                                                                    
|Reversal of negative goodwill                                                      | (4,492)                    | (4,492)                                                                                  
|Reversal of the accumulated depreciation related to negative goodwill              | 4,265                      | 4,300                                                                                    
|Workers' profit sharing                                                            | (453)                      | (86)                                                                                     
|Preoperating expenses                                                              | (16)                       |                                                                                          
|Capitalized interest                                                               | 99                         | 90                                                                                       
|Goodwill amortization                                                              |                            |                                                                                          
|Effect of applying the Fifth Amendment                                             | 1,535                      | 1,711                                                                                    
|Effect of applying Bulletin B-15                                                   | (50)                       | (233)                                                                                    
|Fair value of derivative financial instruments                                     |                            | 144                                                                                      
|Income on disposal of discontinued operations                                      |                            |                                                                                          
|Effect
      of the above adjustments in stockholders' equity of minority interest | (159)                      | (288)                                                                                    
|                                                                                   |                            |                                                                                          
|Total
      US GAAP adjustments                                                    | 90                         | 414                                                                                      
|                                                                                   |                            |                                                                                          
|Total stockholders' equity under US GAAP                                           | Ps.
        6,868          | Ps.6,496                                                                                 

a) Minority interest

Under Mexican GAAP the minority interest in consolidated
  subsidiaries is presented as a separate component within the stockholders' equity
  section in the consolidated balance sheet. For US GAAP purposes, the minority
  interest is not included in stockholders' equity.

b) Provision for deferred income tax

The Company applies the provisions of the Bulletin
  D-4 "Accounting Treatment of Income Tax, Tax on Assets and Workers' Profit
  Sharing", issued by the IMCP (see notes 3n and 17). As required by this
  bulletin, deferred income taxes are provided for differences between the book
  and tax value of assets and liabilities and deferred workers' profit sharing
  for temporary differences between the financial and adjusted tax income that
  are expected to reverse in the future. Additionally, the tax on assets paid
  is recognized as an asset to the extent it is determined recoverable. For U.S.
  GAAP purposes, the Company has applied Statement of Financial Accounting Standards
  (SFAS) No. 109, "Accounting for Income Taxes" for all periods presented.

Under SFAS No. 109, deferred tax assets and liabilities
  are recognized for future tax consequences of temporary differences between
  the financial statement carrying amounts of assets and liabilities and their
  tax bases. Deferred tax assets are also recognized for the estimated future
  effects of tax loss carry forwards. Deferred tax assets are reduced by any tax
  benefits that are not expected to be realized.

The significant components of deferred tax assets
  and liabilities, net of discontinued operations, which differ for US GAAP from
  deferred tax assets and liabilities calculated under Mexican GAAP, are presented
  as follows:

|                                               | December 31,      | December 31,      |    
|---------------------------------------------- | ----------------- | ----------------- | ---
|                                               | 2001              | 2002              |    
|DEFERRED TAX ASSETS AND LIABILITIES            |                   |                  
|NONCURRENT:                                    |                   |                   |    
|Assets                                         |                   |                   |    
|Reversal of negative goodwill                  | Ps.
        67    | Ps.
        53    |    
|NOL and tax on assets carryforwards            | 410               | 78                | (1)
|Capital losses                                 | 1,571             | 1,221             | (1)
|Liabilities                                    |                   |                   |    
|Fair value of derivative financial instruments | (51)              | 60                |    
|Buildings and machinery and equipment          | (473)             | (243)             |    
|Stockholders' equity                           | (119)             | (390)             |    
|Other                                          | (21)              | (17)              |    
|Net deferred assets                            | 1,384             | 762               |    
|VALUATION ALLOWANCE                            | (1,981)           | (1,299)           | (1)
|Net deferred tax liability                     | Ps.
        (597) | Ps.
        (537) |    

(1) The valuation allowance at December
  31, 2001 and 2002 of Ps. 1,981 and Ps. 1,299, respectively, includes Ps. 1,571
  and Ps. 1,221, respectively, related to capital losses and Ps. 410 and Ps. 78,
  respectively, related to NOL and tax on assets carryforwards.

c) Negative goodwill and reduction in depreciation
  expense

The Company records as a component of the consolidated
  statements of operations the amortization of the excess of book value over cost
  of certain acquisitions (negative goodwill). The period of amortization for
  negative goodwill is 18 months. Under US GAAP, such excess is recorded as a
  reduction of fixed assets, and depreciation expense is reduced accordingly over
  the life of the related assets.

d) Workers' profit sharing

In accordance with Mexican GAAP the Company determines
  the provision of workers' profit sharing with the partial accrual method (Bulletin
  D-4). For US GAAP purposes the Company accrues for workers' profit sharing based
  on a liability approach similar to accounting for income taxes under SFAS 109.
  If the methodology of SFAS 109 had been used for the year ended December 31,
  2002, the cumulative effect in the results of the Company would have been an
  expense of Ps. 108 and a debit to excess (shortfall) in restatement of capital
  in the amount of Ps. 470. From these amounts the effect in the results for the
  years 2000, 2001 and 2002 would have been an increase (decrease) in the amount
  of Ps. 26, Ps. (129) and Ps.106, respectively.

e) Pre-operating expenses

Pre-operating expenses, which have been deferred
  under Mexican GAAP, are charged to expense as incurred under US GAAP.

f) Capitalized interest

In prior years, the Company has not capitalized
  interest under Mexican GAAP. Beginning in 1999, certain interest on additions
  to buildings and machinery and equipment was capitalized as is required under
  US GAAP. Consequently, the related differences in depreciation on such amounts
  included in buildings and machinery and equipment are presented in the reconciliation
  of net income for the years ended December 31, 2000, 2001 and 2002.

g) Goodwill and Other Intangible Assets

Under Mexican GAAP, goodwill is amortized over a
  straight line basis over 20 years. Effective January 1, 2002, the Company adopted
  SFAS 142, "Goodwill and Other Intangible Assets." SFAS 142 requires
  that goodwill and intangible assets with indefinite lives no longer be amortized,
  but instead tested for impairment at least annually and written-down with a
  charge to operations when the carrying amount exceeds the estimated fair value.
  The cost of intangible assets with determinable useful lives continues to be
  amortized over the useful lives of the assets. In connection with the transition
  provisions for adopting this standard, the Company performed a transitional
  impairment test and found no impairment. The Company also reviewed the classification
  of its intangible assets and determined there were no other intangible assets
  with indefinite lives, requiring reclassification. The Company performed their
  annual impairment test at December 31, 2002 and found no impairment. The effect
  of ceasing amortization of goodwill increased after-tax net income by approximately
  Ps. 41 in the year ended December 31, 2002.

A reconciliation of previously reported net income
  and net income per share to the amounts adjusted to exclude amortization of
  goodwill net of the related income tax effect, is as follows:

|                                           | 2000             | 2001             | 2002              
|------------------------------------------ | ---------------- | ---------------- | ------------------
|Reported net income (loss)                 | Ps.
        659  | Ps.
        387  | Ps. 
        (527)
|Add back:  goodwill amortization           | 18               | 30               |                   
|Adjusted net income (loss)                 | Ps.
        677  | Ps.
        417  | Ps. 
        (527)
|                                           |                  |                  |                   
|Basic and diluted earnings per share       | Ps.
        2.37 | Ps.
        1.35 | Ps.
        (1.91)
|Add back:  goodwill amortization per share | 0.06             | 0.11             |                   
|Adjusted net income (loss) per share       | Ps.
        2.43 | Ps.
        1.46 | Ps.
        (1.91)

The changes in the carrying amount of goodwill for
  the years ended December 31, 2002 and 2001 are as follows:

|Balance as of January 1, 2001    | Ps.
        298
|-------------------------------- | ---------------
|Goodwill acquired                | 381            
|Amortization                     | (30)           
|Changes for effects of inflation | 14             
|Balance as of December 31, 2001  | 663            
|Goodwill acquired                | 10             
|Changes for effects of inflation | 115            
|Balance as of December 31, 2002  | Ps.
        788

h) Effect of applying the Fifth Amendment to Bulletin
  B-10.

As discussed in note 3e), under Mexican GAAP the
  Fifth Amendment to Bulletin B-10 requires the restatement of machinery and equipment
  purchased in a foreign country using the consumer price index of the country
  of origin. For US GAAP purposes, such restatement is based on the INPC.

i) Effect of applying Bulletin B-15.

In 1997, the IMCP issued Bulletin B-15 which specifies
  procedures to be applied in the consolidation of foreign subsidiaries by Mexican
  companies for (i) current year amounts and (ii) prior year amounts, presented
  for comparative purposes. Vitro's accounting policies for the consolidation
  of its foreign subsidiaries are described in notes 2b) and 3a). Such policies
  conform to the requirements of Bulletin B-15.

The staff of the SEC has agreed that the methodology
  of Bulletin B-15 to translate the current year amounts for foreign operations
  will not result in a difference between Mexican GAAP and US GAAP which must
  be reconciled in order to comply with the rules of the SEC.

There are two methods allowed under Bulletin B-15
  to restate prior years amounts for foreign subsidiaries. Vitro uses the method
  which reconsolidates prior years' balances by restating foreign subsidiaries
  (in Vitro's case, principally US subsidiaries) using the current inflation rate
  in the foreign country and translating into pesos using the year end exchange
  rate. The staff of the SEC has stated that the methodologies of Bulletin B-15
  used to restate prior years' balances for comparative purposes do not conform
  to the requirements of SEC Rule 3-20e of Regulation S-X which requires all amounts
  in financial statements to be presented in the same reporting currency. Accordingly,
  in filings with the SEC, the staff requires an adjustment for the difference
  in methodologies of restating prior year balances. These amounts ( Ps. (3) and
  Ps. (22) in 2000 and 2001, respectively, in the reconciliation of net income;
  and Ps. (50) and Ps. (233) in 2000 and 2001, respectively, in the reconciliation
  of stockholders' equity) represent the differences between (i) the balance if
  all amounts were adjusted by the Mexican inflation rate, and (ii) the balance
  used in the primary financial statements to comply with Bulletin B-15.

j) Fair value of derivative financial instruments

Under Mexican GAAP, derivative instruments that
  are considered as a hedge from an accounting perspective, are valued using the
  same criteria of valuation of the assets or liabilities hedged and the effect
  of such valuation is recognized in net income. Under U.S. GAAP, the Company's
  derivative instruments are accounted for as defined by Statement of Financial
  Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging
  Activities (SFAS No. 133). SFAS No. 133 requires that each derivative be stated
  in the balance sheet at its fair value with gains and losses reflected in the
  income statement, except to the extent the derivative qualifies for hedge accounting.
  Derivatives that do qualify for hedge accounting, under SFAS No. 133, should
  be recorded where the effective portion of the derivative's gain or loss is
  initially reported as a component of other comprehensive income (outside earnings)
  and subsequently reclassified into earnings when the forecasted transaction
  affects earnings. SFAS No. 133 further provides specific criteria necessary
  for a derivative to qualify for hedge accounting and requires the discontinuance,
  on a prospective basis, of the accounting of the effective portion recorded
  in other comprehensive income for an existing hedge if the designation of the
  cash flow hedge is removed. Derivatives entered into by the Company in 2002
  do not qualify for hedge accounting, as defined by SFAS No. 133. Additionally,
  the Company removed the designation of a cash flow hedge of those derivatives
  entered into in 2001 and, thus, has discontinued, on a prospective basis, the
  accounting of the effective portion recorded in other comprehensive income.
  The effect of the above at December 31, 2001 and 2002, respectively, was an
  increase in comprehensive income in the amount of Ps. 94 and a decrease in net
  income of Ps. 130. Within the next 12 months, the Company does not anticipate
  that any amounts will be reclassified out of other comprehensive earnings and
  into earnings.

k) Discontinued operations

The basis of the assets and liabilities of Vitromatic
  under US GAAP at the time of the sale in 2002 was different from the basis of
  such assets and liabilities under Mexican GAAP; accordingly, in 2002 the gain
  recorded on disposal of discontinued operations under US GAAP differs from that
  under Mexican GAAP.

l) Other differences and supplemental US GAAP disclosures

1. Pension disclosures.- The Company maintains defined
  benefit pension plans for all of its subsidiaries and seniority premium plans
  for all of its Mexican subsidiaries. For the Mexican companies, the Company
  adopted Bulletin D-3 issued by the IMCP. The accounting treatment for pensions
  set forth in this Bulletin are substantially the same as those set forth in
  Statement of Financial Accounting Standards No. 87 "Employer's Accounting
  for Pensions" ("SFAS 87"). The Company records the pension cost
  determined by actuarial computations, as described in notes 3g) and 10. Significant
  assumptions (weighted average rates) used in determining net periodic pension
  cost and related pension obligations for the benefit plans for 2001 and 2002
  are also described in note 10.

For purposes of determining the cost of pensions
  and seniority premiums under US GAAP, the Company applies SFAS 87. The additional
  pension disclosures under Statement of Financial Accounting Standards No. 132
  "Employers Disclosures about Pensions and Other Post-retirement Benefits"
  ("SFAS 132") which are applicable to the Company, net of discontinued
  operations, are presented below.

|                                                                  | 2001               | 2002              
|----------------------------------------------------------------- | ------------------ | ------------------
|Change in benefit obligation:                                     |                    |                   
|Benefit obligation at beginning of year                           | Ps.
        1,682  | Ps.
        1,807 
|Service cost                                                      | 47                 | 50                
|Interest cost                                                     | 79                 | 77                
|Benefits paid                                                     | (161)              | (175)             
|Benefit obligation at end of year                                 | 1,647              | 1,759             
|                                                                  |                    |                   
|Changes in plan assets:                                           |                    |                   
|Fair value of plan assets at beginning of year                    | 538                | 393               
|Contribution of cash and securities                               | 20                 | 180               
|Return
      on plan assets                                       | 32                 | 27                
|Benefits
      paid                                               | (172)              | (167)             
|Fair
      value of plan assets at end of year (1)                | 418                | 433               
|                                                                  |                    |                   
|Funded status:                                                    | 1,229              | 1,326             
|Unrecognized actuarial loss                                       | (286)              | (515)             
|Unrecognized prior service costs                                  | (728)              | (631)             
|Net
      amount recognized                                       | Ps.
        215    | Ps.
        180   
|                                                                  |                    |                   
|Amounts recognized in the consolidated balance sheet consists of: | Ps. 
        1,179 | Ps. 
        1,251
|Accrued benefit liability                                         | (701)              | (609)             
|Intangible asset                                                  | (263)              | (462)             
|Accumulated other comprehensive income                            | Ps.
        215    | Ps.
        180   

(1) Includes approximately Ps. 314
  as of December 31, 2002, Vitro common shares (39,150,000 shares at market value
  as of December 31, 2002).

Pension and seniority premium costs for 2000, 2001
  and 2002 are summarized below:

|                              | Year ended December 31,
|----------------------------- | -----------------------
|                              | 2000                   
|Service costs                 | Ps.
        43         
|Interest cost                 | 73                     
|Return on plan assets         | (1)                    
|Net amortization and deferral | 131                    
|                              |                        
|Net periodic cost             | Ps.
        246        

2. Proportionate consolidation method.- The subsidiary
  Vitro-American National Can, S.A. de C.V. (Vancan) is a joint venture in which
  the Company has 50% interest and shares the control of the subsidiary with the
  other partner, Rexam. Under Mexican GAAP this company is consolidated using
  the proportionate method. Under US GAAP, the Company's investment in and its
  interest in the net income of Vancan is recorded based on the equity method.

Summary information of the Company's 50% interest
  is as follows:

|                                            | As of and for the  year  ended
|------------------------------------------- | ------------------------------
|                                            | December  31,                 
|                                            | 2001                          
|Current assets                              | Ps.
        150               
|Total assets                                | 402                           
|Total liabilities                           | 177                           
|Stockholders' equity                        | 225                           
|Net sales                                   | 326                           
|Net income                                  | 13                            
|                                            |                               
|Cash flow information-net cash provided by: |                               
|Operating activities                        | 51                            
|Financing activities                        | (30)                          
|Investing activities                        | (8)                           

Under US GAAP, the Company's investment in Vancan
  at December 31, 2001 and 2002 is Ps. 225 and Ps. 243, respectively.

3. Weighted average interest rates.- The weighted
  average interest rates on short-term borrowings outstanding as of December 31,
  2000, 2001 and 2002 were approximately 8.4%, 6.2% and 4.3%, respectively.

4. Fair value of financial instruments.- Statement
  of Financial Accounting Standards No. 107, "Disclosures about Fair Value
  of Financial Instruments" ("SFAS 107") requires disclosure of
  the estimated fair values of certain financial instruments. The carrying amounts
  and estimated fair values of the Company's significant financial instruments
  were as follows:

|                                         | December 31,                   | December 31,
|---------------------------------------- | ------------------------------ | ------------
|2001                                     | 2002                          
|                                         | Carrying Amount (Mexican GAAP) | Fair Value  
|Liabilities:                             |                                |             
|Short-term borrowings                    | 3,207                          | 3,207       
|Long-term debt(1)                        | 11,346                         | 10,866      
|Derivative instruments:                  |                                |             
|Interest swaps                           | -                              | (45)        
|Foreign
      currency forward contracts | 1,517                          | 1,328       

(1) Includes current portion of long-term
  debt.

The fair value of short-term borrowings approximate
  their carrying value due to their short maturities. The fair value of the U.S.
  (dollar denominated) publicly traded long-term debt was Ps. 3,542 and Ps. 1,967
  as of December 31, 2001 and 2002, respectively, and its related book value was
  Ps. 4,022 and Ps. 2,415, respectively. The fair value of the UDI's denominated
  debt was Ps. 1,692 as of December 31, 2002 and its related book value was Ps.
  1,364. The fair value of the remaining long-term debt closely approximates its
  book value of Ps. 7,324 and Ps. 8,236 as of December 31, 2001 and 2002, respectively.

The fair value of long-term investments and long-term
  debt was determined using available quoted market prices or other appropriate
  valuation methodologies that require considerable judgment in interpreting market
  data and developing estimates. Accordingly, the estimates presented above on
  long-term financial instruments are not necessarily indicative of the amounts
  that the Company could realize in a current market exchange. The use of different
  market assumptions and/or estimation methodologies may have a material effect
  on the estimated fair value amounts.

The fair value information presented herein is based
  on information available to management as of December 31, 2001 and 2002. Although
  management is not aware of any factors that would significantly affect the estimated
  fair value amounts, such amounts have not been comprehensively revalued for
  purposes of these financial statements since that date and, therefore, the current
  estimates of fair value may differ significantly from the amounts presented
  herein.

5. Classification of worker's profit sharing.- In
  a US GAAP statement of operations, worker's profit sharing expense would be
  classified as an operating expense.

6. Net sales and operating income.- The use of the
  proportionate consolidation method for Vancan under Mexican GAAP as discussed
  under 21l (2) above, results in differences in net sales and operating income
  as reported under Mexican GAAP and US GAAP, but does not effect net income.

7. Earnings per common share in accordance with
  US GAAP.- Earnings per share in accordance with US GAAP are based on the provisions
  of Statement of Financial Accounting Standards No. 128 "Earnings Per Share"
  ("SFAS 128") and are calculated using the weighted average number
  of common shares outstanding during each period. The stock options granted under
  the Company's Plan (see note 13b) were not dilutive during 2000, 2001 and 2002,
  as the average market price per share of the Company's common stock during the
  period was less than the exercise price per share of the options and due to
  the net loss recorded in 2002. The Company has no other potentially dilutive
  securities. Basic earnings per share are based upon, 278,402,173, 286,078,897
  and 275,441,504 weighted average shares outstanding for 2000, 2001 and 2002,
  respectively.

Earnings (loss) per common share computed in accordance
  with US GAAP are presented below:

|                                                                                                  | Year ended December 31,
|------------------------------------------------------------------------------------------------- | -----------------------
|                                                                                                  | 2000                   
|Earnings (loss) per share.- Basic and diluted earnings (loss)before discontinued
      operations | Ps.
        1.6        
|Discontinued
      operations                                                                     | 0.77                   
|Earnings (loss) per common share                                                                  | Ps.
        2.37       

8. Comprehensive income.- Under US GAAP, Statement
  of Financial Accounting Standards No. 130 "Reporting Comprehensive Income"
  ("SFAS 130"), establishes standards for reporting and display of comprehensive
  income and its components. Vitro's only items of other comprehensive income
  are loss from holding non- monetary assets, unrealized gain (loss) on long-term
  investments and minimum pension liability adjustments.

See note 21m), for Consolidated Financial Statements
  on a US GAAP basis, which reflects the provisions of SFAS 130.

Additional required disclosures under SFAS 130 are
  as follows:

Disclosure of accumulated other comprehensive income
  balances:

|                             | Loss from Holding Non-monetary Assets | Minimum Pension  Liability Adjustment | Fair Value of Financial Instruments
|---------------------------- | ------------------------------------- | ------------------------------------- | -----------------------------------
|Balance at December 31, 2000 | Ps.
        (16,228)                  | Ps.
        (161)                     | Ps.                                
|Bulletin B-15 effect         | (779)                                 |                                       |                                    
|Change for the year          | (209)                                 | (30)                                  | 94                                 
|                             |                                       |                                       |                                    
|Balance at December 31, 2001 | (17,216)                              | (191)                                 | 94                                 
|Bulletin B-15 effect         | 227                                   |                                       |                                    
|Change for the year          | 355                                   | (107)                                 | (94)                               
|Balance at December 31, 2002 | Ps. 
        (16,634)                 | Ps.
        (298)                     | Ps.
        0                      

There were no reclassification adjustments for any
  of the periods presented.

9. Employee stock option plan. - The Plan (see note
  13b) was adopted in 1998. The Company applies SFAS 123 in accounting for its
  Plan under both Mexican GAAP and US GAAP. The disclosures required under US
  GAAP are included in note 13b).

10. Restrictions which limit the payment of dividends
  by the registrant. - The Company derives substantially all of its operating
  income from advances, fees, interest and dividends paid to the Company by its
  subsidiaries. Accordingly, in paying the principal of, premium, if any, interest
  on, and additional amounts, if any, with respect to the Company's indebtedness,
  the Company relies on income from advances, fees, interest and dividends from
  its' subsidiaries, as well as income from the disposition of one or more of
  its subsidiaries, interests therein or assets thereof. Therefore, the Company's
  subsidiaries' ability to pay such dividends or make such distributions are subject
  to (i) such subsidiaries having net income and the requisite amount of paid-in
  capital under Mexican law, (ii) such subsidiaries' shareholders (including the
  Company's joint venture partners) having approved the payment of such dividends
  at the annual shareholders' meeting and (iii) applicable laws and, in certain
  circumstances, restrictions contained in joint venture agreements and debt instruments.
  At December 31, 2002, the amount of restricted retained earnings of the Company's
  consolidated subsidiaries amounted to Ps. 2,579.

11. New accounting pronouncements. - In June 2001,
  the Financial Accounting Standards Board ("FASB") issued SFAS No.
  143, "Accounting for Asset Retirement Obligations", which is effective
  for the Company beginning in 2003. The Company plans to adopt this new standard
  in 2003. SFAS No. 143 addresses financial accounting and reporting for obligations
  associated with the retirement of tangible long-lived assets and the associated
  asset retirement costs. It applies to legal obligations associated with the
  retirement of long-lived assets that result from the acquisition, construction,
  development and/or the normal operation of a long-lived asset, except for certain
  obligations of lessees. This Statement requires that the fair value of a liability
  for an asset retirement obligation be recognized in the year in which it is
  incurred if a reasonable estimate of fair value can be made. The associated
  asset retirement costs are capitalized as part of the carrying amount of the
  long-lived asset. Management is currently evaluating the effects of adopting
  SFAS No. 143, but believes it will not have a material effect on the Company's
  results of operations and financial position.

In April 2002, the FASB issued SFAS No. 145, "Rescission
  of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
  Technical Corrections", which requires that gains and losses from extinguishment
  of debt in all years presented be classified as extraordinary items only if
  they meet the criteria of APB Opinion 30, "Reporting the Results of Operations-Discontinued
  Events and Extraordinary Items". The amendment of SFAS No. 13, "Accounting
  for Leases", eliminates an inconsistency between the required accounting
  for sale-leaseback transactions and the required accounting for certain lease
  modifications that have economic effects that are similar to sale-leaseback
  transactions. The new standard will be effective for financial statements issued
  for fiscal years beginning after May 15, 2002 and lease transactions occurring
  after May 15, 2002, with early application encouraged. The Company plans to
  adopt this new standard in 2003. Management is currently evaluating the effects
  of adopting SFAS No. 145, but believes it will not have a material effect on
  the Company's results of operations and financial position.

In June 2002, the FASB issued SFAS No. 146, "Accounting
  for the Costs Associated with Exit or Disposal Activities." SFAS 146 is
  effective for exit or disposal activities that are initiated after December
  31, 2002 and requires recording costs associated with exit or disposal activities
  at their fair values when a liability has been incurred. Under previous guidance,
  certain exit costs were accrued upon management's commitment to an exit plan,
  which is generally before an actual liability has been incurred. Management
  is currently evaluating the effects of adopting SFAS No. 146, but believes it
  will not have a material effect on the Company's results of operations and financial
  position.

In November 2002, the FASB issued FASB Interpretation
  No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees,
  Including Indirect Guarantees of Indebtedness of Others" ("FIN 45").
  FIN 45 requires that the guarantor recognize, at the inception of certain guarantees,
  a liability for the fair value of the obligation undertaken in issuing such
  guarantee. FIN 45 also requires additional disclosure requirements about the
  guarantor's obligations under certain guarantees that it has issued. The initial
  recognition and measurement provisions of this interpretation are applicable
  on a prospective basis to guarantees issued or modified after December 31, 2002
  and the disclosure requirements are effective for financial statement periods
  ending after December 15, 2002. The Company has disclosed the guarantees subject
  to FIN 45 relating to the PBGC guarantee at note 11e).

In January 2003, the FASB issued Interpretation
  No. 46, "Consolidation of Variable Interest Entities". This interpretation
  of Accounting Research Bulletin No. 51 "Consolidated Financial Statements,"
  addresses consolidation by business enterprises of variable interest entities.
  Under current practice, two enterprises generally have been included in consolidated
  financial statements because one enterprise controls the other through voting
  interests. This interpretation defines the concept of "variable interests"
  and requires existing unconsolidated variable interest entities to be consolidated
  by their primary beneficiaries if the entities do not effectively disperse the
  risks among the parties involved. This interpretation applies immediately to
  variable interest entities created after January 31, 2003, and to variable interest
  entities in which an enterprise obtains an interest after that date. It applies
  in the first fiscal year or interim period beginning after June 15, 2003, to
  variable interest entities in which an enterprise holds a variable interest
  that it acquired before February 1, 2003. The Company does not believe the adoption
  of this interpretation will have a material impact on its financial position
  or results of operations.

In April 2003 the FASB issued SFAS No. 149, "Amendment
  of Statement 133 on Derivative Instruments and Hedging Activities", which
  amends and clarifies financial accounting and reporting for derivative instruments,
  including certain derivative instruments embedded in other contracts and for
  hedging activities under SFAS No. 133. This Statement requires that contracts
  with comparable characteristics be accounted for similarly. The new standard
  will be effective for contracts entered into or modified after June 30, 2003,
  except as stated below and for hedging relationships designated after June 30,
  2003. In addition, except as stated below, all provisions of this Statement
  should be applied prospectively. The provisions of this Statement that relate
  to SFAS No. 133 Implementation Issues that have been effective for fiscal quarters
  that began prior to June 15, 2003 should continue to be applied in accordance
  with their respective effective dates. Management is currently evaluating the
  effects of SFAS 149, but believes it will not have a material effect on the
  Company's results of operations and financial position.

In May 2003, the FASB issued SFAS No. 150, "Accounting
  for Certain Financial Instruments with Characteristics of both Liabilities and
  Equity." SFAS No. 150 aims to eliminate diversity in practice by requiring
  that the following three types of financial instruments be reported as liabilities
  by their issuers 1.) mandatorily redeemable instruments, 2.) forward contracts,
  written put options, and other financial instruments not in the form of shares
  that either obligate or may obligate the issuer to settle its obligation for
  cash or by transferring other assets, and 3.) certain other financial instruments
  that include obligations. The provisions of SFAS No. 150 are effective for financial
  instruments entered into or modified after May 31, 2003 and pre-existing instruments
  effective at the beginning of the first interim period beginning after June
  15, 2003. Management is currently evaluating the effects of SFAS 150, but believes
  it will not have a material effect on the Company's results of operations and
  financial position.

m) Summarized comparative consolidated financial
  statements - U.S. GAAP



CONDENSED CONSOLIDATED BALANCE SHEETS
  US GAAP BASIS
  (Millions of constant Mexican pesos as of December 31, 2002)

|                                                                                                        | 2001               | 2002              
|------------------------------------------------------------------------------------------------------- | ------------------ | ------------------
|ASSETS                                                                                                  |                    |                   
|Cash and cash equivalents                                                                               | Ps.
        1,029  | Ps.
        2,224 
|Trade receivables, net of allowance for doubtful accounts of Ps. 43 and
      Ps. 62                    | 1,646              | 1,977             
|Other receivables                                                                                       | 1,000              | 1,028             
|Inventories                                                                                             | 3,252              | 3,745             
|Discontinued operations                                                                                 | 1,237              |                   
|                                                                                                        |                    |                   
|Current assets                                                                                          | 8,164              | 8,974             
|                                                                                                        |                    |                   
|Long-term investments                                                                                   | 605                | 590               
|Investment in associated companies                                                                      | 224                | 386               
|Land and buildings                                                                                      | 9,311              | 8,708             
|Machinery and equipment                                                                                 | 10,300             | 9,296             
|Construction in progress                                                                                | 607                | 812               
|Excess of cost over fair value of net assets acquired, net of accumulated
      amortization of Ps. 122 | 663                | 788               
|Intangible pension assets                                                                               | 701                | 609               
|Other assets                                                                                            | 525                | 441               
|Discontinued operations                                                                                 | 3,634              |                   
|                                                                                                        |                    |                   
|Total assets                                                                                            | Ps.
        34,734 | Ps.
        30,604
|                                                                                                        |                    |                   
|LIABILITIES                                                                                             |                    |                   
|Short-term borrowings                                                                                   | Ps.
        2,480  | Ps.
        3,176 
|Current portion of long-term debt                                                                       | 3,499              | 1,549             
|Trade payables                                                                                          | 2,427              | 2,235             
|Accrued expenses payable                                                                                | 632                | 674               
|Deferred taxes                                                                                          | 680                | 672               
|Other current liabilities                                                                               | 955                | 1,302             
|Discontinued operations                                                                                 | 1,788              |                   
|Current liabilities                                                                                     | 12,461             | 9,608             
|Long-term debt                                                                                          | 8,463              | 10,412            
|Seniority premiums, pensions and other                                                                  |                    |                   
|long-term liabilities                                                                                   | 1,329              | 1,609             
|Deferred taxes                                                                                          | 1,348              | 429               
|Discontinued operations                                                                                 | 827                |                   
|Long-term liabilities                                                                                   | 11,967             | 12,450            
|Total liabilities                                                                                       | 24,428             | 22,058            
|Minority interest in consolidated subsidiaries                                                          | 3,810              | 2,727             
|                                                                                                        |                    |                   
|STOCKHOLDERS' EQUITY                                                                                    |                    |                   
|Majority interest:                                                                                      |                    |                   
|Capital stock: no par value shares issued and                                                           |                    |                   
|outstanding, 324,000,000 in 2001 and 2002                                                               | 324                | 324               
|Restatement of capital stock                                                                            | 5,878              | 5,878             
|Capital stock restated                                                                                  | 6,202              | 6,202             
|Treasury stock (50,294,020 shares in 2001 and 47,979,489 in 2002)                                       | (547)              | (514)             
|Paid-in capital                                                                                         | 941                | 915               
|Shortfall in restatement of capital                                                                     | (17,216)           | (16,634)          
|Fair value of derivative financial instruments                                                          | 94                 |                   
|Minimum pension liability adjustment                                                                    | (191)              | (298)             
|Retained earnings reserved for reacquisition of shares of Vitro                                         | 1,300              | 1,300             
|Retained earnings                                                                                       | 15,526             | 15,375            
|Net income (loss) for the year                                                                          | 387                | (527)             
|Total stockholders' equity                                                                              | 6,496              | 5,819             
|Total liabilities, minority interest in consolidated subsidiaries and stockholders'
      equity        | Ps.
        34,734 | Ps.
        30,604



CONSOLIDATED STATEMENTS OF OPERATIONS
  US GAAP BASIS
  (Millions of constant Mexican pesos as of December 31, 2002)

|                                                                      | Year
        Ended December 31,
|--------------------------------------------------------------------- | -------------------------------
|                                                                      | 2000                           
|Net sales                                                             | Ps.
        24,424             
|Cost of sales                                                         | 16,845                         
|                                                                      |                                
|Gross profit                                                          | 7,579                          
|General, administrative and selling expenses                          | 5,469                          
|                                                                      |                                
|Operating income                                                      | 2,110                          
|                                                                      |                                
|Interest expense                                                      | 2,291                          
|Interest income                                                       | 42                             
|Exchange loss (gain), net                                             | 109                            
|Gain from monetary position                                           | 1,292                          
|Total financing cost                                                  | 1,066                          
|                                                                      |                                
|Income (loss) after financing                                         | 1,044                          
|Other income (loss), net                                              | (12)                           
|Share in net income of unconsolidated associated companies            | 26                             
|                                                                      |                                
|Income (loss) from continuing operations before income tax            | 1,058                          
|Income tax expense                                                    | 272                            
|                                                                      |                                
|Net income (loss) from continuing operations before minority interest | 786                            
|Discontinued operations                                               | 214                            
|Income on disposal of discontinued operations                         |                                
|Minority interest                                                     | (341)                          
|Net income  (loss)                                                    | Ps. 
        659               



CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS'
  EQUITY
  US GAAP BASIS
  (Millions of constant Mexican pesos as of December 31, 2002)

|                                            | Capital stock     | Treasury stock     | Paid-In capital   | Shortfall in restatement of capital | Other             | Retained earnings  | Compre-
        hensive income | Stockholders'equity
|------------------------------------------- | ----------------- | ------------------ | ----------------- | ----------------------------------- | ----------------- | ------------------ | ------------------------------ | -------------------
|Balance at January 01, 2000                 | Ps.
        6,202 | Ps.
        (498)  | Ps.
        1,254 | Ps.
        (16,552)                | Ps.
        (136) | Ps.
        16,740 |                                | Ps.
        7,010  
|Comprehensive income:                       |                   |                    |                   |                                     |                   |                    |                                |                    
|Net income                                  |                   |                    |                   |                                     |                   | 659                | Ps. 
        659               | 659                
|Bulletin B-15 adjustments                   |                   |                    |                   | 470                                 |                   | (545)              |                                | (75)               
|Other comprehensive income:                 |                   |                    |                   |                                     |                   |                    |                                |                    
|Minimum pension liability adjustment        |                   |                    |                   |                                     | (36)              |                    | (36)                           | (36)               
|Loss from holding non-monetary assets       |                   |                    |                   | (376)                               |                   |                    | (376)                          | (376)              
|Deferred taxes allocation                   |                   |                    |                   | 40                                  | 12                |                    | 52                             | 52                 
|Effect of applying the Fifth Amendment      |                   |                    |                   | 199                                 |                   |                    | 199                            | 199                
|Deferred workers' profit sharing allocation |                   |                    |                   | (9)                                 |                   |                    | (9)                            | (9)                
|Other comprehensive loss                    |                   |                    |                   |                                     |                   |                    | (170)                          |                    
|Comprehensive income                        |                   |                    |                   |                                     |                   |                    | Ps. 
        489               |                    
|Dividends (Ps.1.05 pesos per share)         |                   |                    |                   |                                     |                   | (342)              |                                | (342)              
|Sales of  treasury stock                    |                   | 1,013              | (313)             |                                     |                   |                    |                                | 700                
|Paid in capital                             |                   |                    | (53)              |                                     |                   |                    |                                | (53)               
|Acquisition of treasury stock               |                   | (861)              |                   |                                     |                   |                    |                                | (861)              
|                                            |                   |                    |                   |                                     |                   |                    |                                |                    
|Balance at December 31, 2000                | Ps 
        6,202 | Ps.
        (346)  | Ps. 
        888  | Ps.
        (16,228)                | Ps.
        (160) | Ps.
        16,512 |                                | Ps. 
        6,868 
|Comprehensive income:                       |                   |                    |                   |                                     |                   |                    |                                |                    
|Net income                                  |                   |                    |                   |                                     |                   | 387                | Ps. 
        387               | 387                
|Bulletin B-15 adjustments                   |                   |                    |                   | (779)                               |                   | 638                |                                | (141)              
|Other comprehensive income:                 |                   |                    |                   |                                     |                   |                    |                                |                    
|Minimum pension liability adjustment        |                   |                    |                   |                                     | (48)              |                    | (48)                           | (48)               
|Loss from holding non-monetary assets       |                   |                    |                   | (550)                               |                   |                    | (550)                          | (550)              
|Deferred taxes allocation                   |                   |                    |                   | 68                                  | (33)              |                    | 35                             | 35                 
|Effect of applying the Fifth Amendment      |                   |                    |                   | 294                                 |                   |                    | 294                            | 294                
|Deferred workers' profit sharing allocation |                   |                    |                   | (21)                                |                   |                    | (21)                           | (21)               
|Fair value of financial instruments         |                   |                    |                   |                                     | 144               |                    | 144                            | 144                
|Other comprehensive loss                    |                   |                    |                   |                                     |                   |                    | (146)                          |                    
|Comprehensive income                        |                   |                    |                   |                                     |                   |                    | Ps. 
        241               |                    
|Dividends (Ps. 1.05 pesos per share)        |                   |                    |                   |                                     |                   | (324)              |                                | (324)              
|Paid in capital                             |                   |                    | 53                |                                     |                   |                    |                                | 53                 
|Acquisition of treasury stock               |                   | (201)              |                   |                                     |                   |                    |                                | (201)              
|                                            |                   |                    |                   |                                     |                   |                    |                                |                    
|Balance at December 31, 2001                | Ps 
        6,202 | Ps. 
        (547) | Ps.
        941   | Ps.
        (17,216)                | Ps.
        (97)  | Ps.
        17,213 |                                | Ps.
        6,496  
|Comprehensive income:                       |                   |                    |                   |                                     |                   |                    |                                |                    
|Net loss                                    |                   |                    |                   |                                     |                   | (527)              | Ps. 
        (527)             | (527)
        (233)
|Bulletin B-15 adjustments                   |                   |                    |                   | 227                                 |                   | (460)              |                                |                    
|Other comprehensive income:                 |                   |                    |                   |                                     |                   |                    |                                |                    
|Minimum pension liability adjustment        |                   |                    |                   |                                     | (166)             |                    | (166)                          | (166)              
|Loss from holding non-monetary assets       |                   |                    |                   | 31                                  |                   |                    | 31                             | 31                 
|Deferred taxes allocation                   |                   |                    |                   | 615                                 | 109               |                    | 724                            | 724                
|Effect of applying the Fifth Amendment      |                   |                    |                   | (283)                               |                   |                    | (283)                          | (283)              
|Deferred workers' profit sharing allocation |                   |                    |                   | (8)                                 |                   |                    | (8)                            | (8)                
|Fair value of financial instruments         |                   |                    |                   |                                     | (144)             |                    | (144)                          | (144)              
|Other comprehensive income                  |                   |                    |                   |                                     |                   |                    | 154                            |                    
|Comprehensive loss                          |                   |                    |                   |                                     |                   |                    | Ps. 
        (373)             |                    
|Dividends (Ps. 0.25  pesos per share)       |                   |                    |                   |                                     |                   | (78)               |                                | (78)               
|Paid in capital                             |                   |                    | (26)              |                                     |                   |                    |                                | (26)               
|Sales of treasury stock                     |                   | 33                 |                   |                                     |                   |                    |                                | 33                 
|Balance at December 31, 2002                | Ps 
        6,202 | Ps.
        (514)  | Ps.
        915   | Ps.
        (16,634)                | Ps.
        (298) | Ps.
        16,148 |                                | Ps.
        5,819  



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
  US GAAP BASIS *
  (Millions of nominal pesos)



|                                                                                                                    | 2000             | 2001               | 2002             
|------------------------------------------------------------------------------------------------------------------- | ---------------- | ------------------ | -----------------
|OPERATING ACTIVITIES:                                                                                               |                  |                    |                  
|Net income (loss) from continuing operations in constant pesos                                                      | Ps. 
        786 | Ps.
        702    | Ps.
        (652)
|Effect of constant pesos                                                                                            | (107)            | (37)               | (42)             
|Net income (loss) from continuing operations in nominal pesos                                                       | 679              | 665                | (694)            
|Add (deduct) non cash items:                                                                                        |                  |                    |                  
|Depreciation and amortization                                                                                       | 1,813            | 1,894              | 1,965            
|Provision for seniority premiums, pension and other long-term liabilities                                           | 183              | 196                | 182              
|Amortization of debt issue cost                                                                                     | 42               | 54                 | 50               
|Share in net income of unconsolidated associated companies                                                          | (21)             | (20)               | (10)             
|Fair value of derivative financial instruments                                                                      |                  |                    | 176              
|(Gain) loss from sale of subsidiaries and associated companies                                                      | (55)             | 114                | (64)             
|Write-off and loss from sale of fixed assets                                                                        | 282              | 348                | 395              
|Deferred income tax and workers' profit sharing                                                                     | (31)             | (310)              | (761)            
|Gain from monetary position                                                                                         | (1,122)          | (601)              | (757)            
|Exchange loss (gain)                                                                                                | 104              | (530)              | 1,495            
|                                                                                                                    | 1,874            | 1,810              | 1,977            
|Increase (decrease) in trade payables                                                                               | 149              | 625                | (131)            
|Decrease (increase) in trade receivables                                                                            | 376              | 244                | (322)            
|(Increase) decrease in inventories                                                                                  | (313)            | 7                  | (503)            
|Change in other current assets and liabilities, net                                                                 | 421              | (287)              | 335              
|Pension funding payments                                                                                            | (617)            | (86)               | (167)            
|Cash provided by continuing operations                                                                              | 1,890            | 2,313              | 1,189            
|Net income (loss) from discontinued operations                                                                      | 186              | 197                | (116)            
|Proceeds from disposal of discontinued operations                                                                   |                  |                    | 1,390            
|Operating assets and liabilities from discontinued operations                                                       | 209              | 106                | 164              
|Cash provided by operating activities                                                                               | 2,285            | 2,616              | 2,627            
|                                                                                                                    |                  |                    |                  
|INVESTING ACTIVITIES:                                                                                               |                  |                    |                  
|Sales of land and buildings and machinery and equipment                                                             | 202              | 122                | 138              
|Investment in land and buildings and machinery and equipment                                                        | (830)            | (777)              | (985)            
|Investment in subsidiaries and associated companies                                                                 | (510)            | (445)              | (9)              
|Sale of subsidiaries and associated companies                                                                       |                  | 76                 | 111              
|Long -term receivables                                                                                              |                  | (137)              | (49)             
|Effect from discontinued operations                                                                                 | (128)            | (147)              | (6)              
|Other                                                                                                               | (419)            | (80)               | (204)            
|Cash used in investing activities                                                                                   | (1,685)          | (1,388)            | (1,004)          
|                                                                                                                    |                  |                    |                  
|FINANCING ACTIVITIES:                                                                                               |                  |                    |                  
|Short-term borrowings                                                                                               | 5,815            | 4,119              | 4,640            
|Issuance of long-term debt                                                                                          | 5,916            | 6,196              | 2,793            
|Capital stock contributed by minority interest                                                                      | 8                | 97                 | 7                
|Payment of short-term borrowings                                                                                    | (4,473)          | (5,935)            | (5,801)          
|Payment of long-term debt                                                                                           | (6,581)          | (4,723)            | (1,779)          
|Acquisition of treasury stock                                                                                       | (744)            | (169)              |                  
|Sale of  treasury stock                                                                                             | 551              |                    | 24               
|Dividends paid to stockholders of Vitro                                                                             | (292)            | (149)              | (75)             
|Dividends paid to minority interests                                                                                | (340)            | (266)              | (257)            
|Effect from discontinued operations                                                                                 | (267)            | (156)              | (42)             
|Cash used in financing activities                                                                                   | (407)            | (986)              | (490)            
|Net increase in cash and cash equivalents                                                                           | 193              | 242                | 1,133            
|Monetary and exchange rate effect on cash and cash equivalents                                                      | (4)              | (23)               | 118              
|Balance
      at beginning of year                                                                                  | 565              | 754                | 973              
|Balance
      at end of year                                                                                        | Ps. 
        754 | Ps. 
        973   | Ps.
        2,224
|                                                                                                                    |                  |                    |                  
|Net cash provided by operating activities reflects net cash payments of
      interest and income taxes as follows: |                  |                    |                  
|Interest                                                                                                            | Ps. 1,833        | Ps. 
        1,729 | Ps.  1,536       
|Income taxes                                                                                                        | 354              | 194                | 148