WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 A QUICK LOOK AT FALABELLA

· A SOLID PRESENCE IN CHILE, PERU, ARGENTINA AND COLOMBIA

· A TOTAL OF 212 STORES COMPRISING 1.46 MILLION M2 OF SELLING SPACE

· MORE THAN 5 MILLION ACTIVE CMR ACCOUNTS

· 454 FINANCIAL CENTERS

· 12 MALL PLAZAS AND 10 POWER CENTERS (CHILE AND PERU)

· MORE THAN 70 THOUSAND COLLABORATORS IN 4 COUNTRIES

· AN AA RISK RATING WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 · 39 NEW STORES AND MORE THAN 260,000 M2 OF SALES SPACE. · 10 IN CHILE, 16 IN PERU, 5 IN ARGENTINA, 8 IN COLOMBIA. · 26 OPENINGS IN 4Q08

· 3 MALL PLAZAS AND 4 POWER CENTERS WERE OPENED.

· FALABELLA TOOK OVER THE OPERATIONS OF CASA ESTRELLA DEPARTMENT STORE IN COLOMBIA.

· SODIMAC ENTERED ARGENTINA IN A REAL ESTATE ALLIANCE WITH CARREFOUR.

· SODIMAC IS CONCENTRATING ITS CHILEAN LOGISTICAL OPERATIONS IN TWO NEW DCs.

· OPTIMIZATION OF SYSTEMS AND INVENTORY CONTROL AND SYSTEM.

· SODIMAC AND BANCO FALABELLA MAKE SUCCESSFUL BOND ISSUANCES IN THE CHILEAN MARKET.

· CMR CHILE IMPLEMENTED A NEW CREDIT ADMINISTRATION SYSTEM.

· FALABELLA RAISED ITS INTEREST IN PLAZA S.A. TO 59.3%, INCLUDING PLAZA VESPUCIO. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 RELEVANT INDICATORS S.A.C.I. FALABELLA

CONSOLIDATED REVENUES MILLIONS OF DOLLARS*

3,124 2004

3,705 2005

4,187 2006

4,826 2007

5,856 2008

NUMBER OF STORES AND SALES AREA CONSOLIDATED NET INCOME DECEMBER 2008 MILLIONS OF DOLLARS* AREA M2 STORES

DEPARTMENT STORES · CHILE 223,229 40 244 2004 HOME IMPROVEMENT · CHILE 543,901 66 SUPERMARKETS · CHILE 96,420 23 2005 DEPARTMENT STORES · PERU 94,647 15 302 HOME IMPROVEMENT · PERU 93,050 12 HYPERMARKET · PERU 85,523 17 2006 362 DEPARTMENT STORES · ARGENTINA 50,445 9 HOME IMPROVEMENT · ARGENTINA 46,168 4 2007 DEPARTMENT STORES · COLOMBIA 53,670 9 371 HOME IMPROVEMENT · COLOMBIA 170,748 17 TOTAL 1,457,802 212 317 2008

CONSOLIDATED STATEMENT OF INCOME STOCK EVOLUTION MILLIONS OF DOLLARS * PESOS MARKET CAP – MILLIONS OF NOMINAL PESOS/DOLLARS AT CLOSE OF 2008 2008 2007

REVENUES 5,856.2 4,826.5 5,061 1,349 2004 COGS (LESS) (4,177.2) (3,420.0) GROSS MARGIN 1,679.0 1,406.5 5,294 2005 SG&A (LESS) (1,142.0) (887.0) 1,410 OPERATING INCOME 537.0 519.5 EBITDA 674.8 624.4 7,019 2006 1,869 NON-OPERATING INCOME (94.4) (61.7) PROFIT BEFORE TAX AND EXTRAORDINARY ITEMS 442.6 457.8 9,089 2007 INCOME TAX (68.3) (53.0) 2,420 MINORITY INTEREST (57.0) (33.3) NET PROFIT (LOSS) 317.4 371.5 6,272 1,669 2008

* REAL CH$ @ DIC31, 2008, CONVERTED AT EXCHANGE RATE 636.45 CH$/US$ WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 1889 1937 1958 1980 1990 1993 1995 1996 1997 1998 SALVATORE FALABELLA ALBERTO SOLARI JOINS FALABELLA BECOMES FALABELLA IMPLEMENTS FALABELLA ENTERS THE FIRST FALABELLA STORE FALABELLA ENTERS PERU FALABELLA INITIAL PUBLIC VIAJES Y SEGUROS FALABELLA BANCO FALABELLA OPENS THE FIRST THE COMPANY A DEPARTMENT STORE CMR, ITS OWN THE SHOPPING CENTER IN ARGENTINA IS OPENED, THROUGH THE PURCHASE OFFERING ARE CREATED IN PARTNERSHIP IS ESTABLISHED TAILOR SHOP IN CREDIT CARD BUSINESS THROUGH A IN MENDOZA OF SAGA FALABELLA WITH HOME DEPOT CHILE THE COUNTRY 50% INTEREST IN MALL PLAZA

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 THE FIRST FALABELLA STORE ALLIANCES 100% OF HOME DEPOT CHILE FALABELLA ENTERS THE FALABELLA MERGER FALABELLA ACQUIRES IN COLOMBIA, FALABELLA FALABELLA STORES BANCO FALABELLA AND SODIMAC ENTERS ARGENTINA IS INAUGURATED IN WITH COPEC, ENTEL AND IS PURCHASED AND HYPERMARKET INDUSTRY WITH SODIMAC. 88% OF THE SAN FRANCISCO INCREASES ITS INTEREST AND RETAIL FINANCE MALL PLAZA ARE FALABELLA TAKES OVER CASA BUENOS AIRES AND 20% MOVISTAR FOR THE RENAMED HOME STORE THROUGH THE FIRST SUPERMARKET CHAIN IN SODIMAC AND ENTER COLOMBIA LAUNCHED IN PERU ESTRELLA DEPARTMENT STORES OF FARMACIAS AHUMADA USE OF CMR TOTTUS IN PERU LAUNCHES CMR CMR AUTOMOBILES 60% OF IMPERIAL IN COLOMBIA. MALL PLAZA CONSOLIDATES IS PURCHASED IS CREATED IS ACQUIRED ALL OF OPERATIONS UNDER PLAZA S.A., IN WHICH FALABELLA HOLDS 59.3% WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 1889 1937 1958 1980 1990 1993 1995 1996 1997 1998 SALVATORE FALABELLA ALBERTO SOLARI JOINS FALABELLA BECOMES FALABELLA IMPLEMENTS FALABELLA ENTERS THE FIRST FALABELLA STORE FALABELLA ENTERS PERU FALABELLA INITIAL PUBLIC VIAJES Y SEGUROS FALABELLA BANCO FALABELLA OPENS THE FIRST THE COMPANY A DEPARTMENT STORE CMR, ITS OWN THE SHOPPING CENTER IN ARGENTINA IS OPENED, THROUGH THE PURCHASE OFFERING ARE CREATED IN PARTNERSHIP IS ESTABLISHED TAILOR SHOP IN CREDIT CARD BUSINESS THROUGH A IN MENDOZA OF SAGA FALABELLA WITH HOME DEPOT CHILE THE COUNTRY 50% INTEREST IN MALL PLAZA

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 THE FIRST FALABELLA STORE ALLIANCES 100% OF HOME DEPOT CHILE FALABELLA ENTERS THE FALABELLA MERGER FALABELLA ACQUIRES IN COLOMBIA, FALABELLA FALABELLA STORES BANCO FALABELLA AND SODIMAC ENTERS ARGENTINA IS INAUGURATED IN WITH COPEC, ENTEL AND IS PURCHASED AND HYPERMARKET INDUSTRY WITH SODIMAC. 88% OF THE SAN FRANCISCO INCREASES ITS INTEREST AND RETAIL FINANCE MALL PLAZA ARE FALABELLA TAKES OVER CASA BUENOS AIRES AND 20% MOVISTAR FOR THE RENAMED HOME STORE THROUGH THE FIRST SUPERMARKET CHAIN IN SODIMAC AND ENTER COLOMBIA LAUNCHED IN PERU ESTRELLA DEPARTMENT STORES OF FARMACIAS AHUMADA USE OF CMR TOTTUS IN PERU LAUNCHES CMR CMR AUTOMOBILES 60% OF IMPERIAL IN COLOMBIA. MALL PLAZA CONSOLIDATES IS PURCHASED IS CREATED IS ACQUIRED ALL OF OPERATIONS UNDER PLAZA S.A., IN WHICH FALABELLA HOLDS 59.3% WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 LETTER FROM THE CHAIRMAN S.A.C.I. FALABELLA

DEAR SHAREHOLDERS

2008 was a volatile year, impacted by the drive in a healthy Chilean economy in contrast to the world financial crisis. In this context, we were put to great test and we came out ahead, better for it. Key was our good financial planning, our sound vocation for austerity and efficiency, coupled with a strong corporate structure. The result: we met all the goals in our strategic plan.

One of the great milestones in the year was implementing and financing our investment plan in a challenging setting. Although the year ended with a profound economic crisis, Falabella made investments for more than US$600 million that resulted in the inauguration of 39 new stores and 3 malls.

During the year, we placed emphasis on expanding our operations in Peru, a market where the growth rates are relevant and the opportunities are clear. The number of stores rose 52%, going from 29 to a total of 44. In Colombia we took over the operations of Casa Estrella, doubling our operations in reccord time, in a good-sized market with promising growth expectations. Sodimac also began operation in Argentina, as planned, by opening 4 stores. Mall Plaza inaugurated 3 shopping centers, two in Chile and one in Peru. Our consolidated revenues therefore totaled US$5,856 million, an increase of 21.3% annually.

Nonetheless, in the actual world setting, where do our challenges lie? Today, as always, we cannot lose sight of what is most important to us at the end of each day: innovation of value to customers with the highest standard of service and quality products at convenient prices in all segments. Our short-, medium- and long-term view must have that mission in mind, united with our customer vocation. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Our permanent growth as a company is based on fulfilling our mission that must, more than ever, be strengthened and understood by everyone who is a collaborator. We must insist on policies that have given us good results thus far: strong teamwork, which we are constantly perfecting, austerity and efficiency, policies that enable us to control expenses and therefore offer customers more accessible prices every day. Austerity is one of the many things that make a great difference in Falabella.

The way we do our work has been changing over time, mainly because of the dynamics of the business and the application of new technologies. However, our eternal support comes from the good principles that we have inherited: Honor, Dignity and Justice. We want our success to be permanent and we encourage everyone belonging to the company to immerse themselves in the Falabella culture.

So, our goal is to continue developing our strategic plan set through 2012 under which we will grow significantly in all our formats in the countries where we are doing business. This does not preclude the possibility of entering new markets at the right time. The international expansion in countries like Peru and Colombia represents a clear opportunity today on which we will continue to work intensely.

And we have made the decision to begin 2009 prudently. We are moderating our projects on the table according to how markets evolve. We also firmly believe that moments like this may present unusual opportunities for growth of which we want to take advantage. We must therefore be prepared. One clear example of this was the take over of Casa Estrella in Colombia at the end of 2008. For that reason, the flexibility of our investment plan is key. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 11

ANNUAL REPORT

On the other hand, we will continue to move forward in our commitment to contribute to the construction of a sustainable society. We will integrate the concept of sustainability to all the areas of our business. Sodimac is exemplary, having published its first sustainability report early in the year. We promise to follow its lead in our other areas of business. We are also proud of the ongoing improvement in all areas in the annual measurements taken by the Great Place to Work Institute, mostly notably in Tottus, Sodimac and Saga Falabella in Peru, chosen among the 25 best places to work in the country. We will also continue our traditional Support a School Program, now 37 years old, in which we sponsor more than 40,000 children in 55 schools in Chile, Peru, Argentina and Colombia.

Lastly, again I would like to take this opportunity to thank our Board of Directors, management, and all our collaborators in the four countries in which we do business for their commitment and dedication. Combined with excellent teamwork, we have been an innovative, sound leader in the retail industry in Latin America. I invite them to continue meeting our goals and designing the road toward an ever better future for Falabella, for everyone for whom we work every day here, and, consequently, for all the communities in which we are present. Finally, in the name of all of Falabella, I extend my most sincere gratitude to our shareholders, suppliers and customers for their continued trust and support. Falabella would not be possible without all of you.

Reinaldo Solari, Chairman, S.A.C.I. Falabella WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 BOARD OF DIRECTORS S.A.C.I. FALABELLA

CHAIRMAN Reinaldo Solari Magnasco Civil Engineer I.D. Nº 1.720.069-0

VICE-CHAIRMAN Juan Cuneo Solar Business Administrator I.D. Nº 3.066.418-3

DirectorS José Luis del Río Goudie Civil Engineer I.D. Nº 4.773.832-6 Alfredo Moreno Charme Civil Engineer I.D. Nº 6.992.929-K Carlos Heller Solari Entrepreneur I.D. Nº 8.717.000-4 Juan Carlos Cortés Solari Business Administrator I.D. Nº 7.017.522-3 María Cecilia Karlezi Solari Entrepreneur I.D. Nº 7.005.097-8 Sergio Cardone Solari Business Administrator I.D. Nº 5.082.229-K Hernán Büchi Buc Civil Engineer I.D. Nº 5.718.666-6 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 REINALDO SOLARI M. JUAN CUNEO S. PRESIDENT EXECUTIVE VICE-PRESIDENT s.a.c.i. falabella s.a.c.i. falabella MANAGEMENT S.A.C.I. FALABELLA

S.A.C.I. Falabella Corporate CEO Juan Benavides Feliú Business Administrator I.D. Nº 5.633.221-9 Peru Country Manager Cristóbal Irarrázabal Philippi Civil Engineer I.D. Nº 10.216.082-7 Argentina Country Manager Juan Luis Mingo Salazar Civil Engineer I.D. Nº 7.514.489-K Colombia Country Manager Hernán Méndez Bages Industrial Engineer I.D. Nº 79.145.699 Corporate Planning and Development Manager Juan Guillermo Espinosa Fuentes Civil Engineer I.D. Nº 10.111.041-9 Corporate CFO Alejandro González Dale Business Administrator I.D. Nº 10.054.917-4 Corporate Controller Fernando Batlle Moraga Civil Engineer I.D. Nº 5.863.809-9 Corporate IT Officer Pablo Meza Martínez Civil Engineer I.D. Nº 6.699.659-K

DEPARTMENT STORES Corporate Department Store CEO Juan Pablo Montero Schepeler Civil Engineer I.D. Nº 9.357.959-3 Chile Department Store CEO Agustín Solari Álvarez Business Administrator I.D. Nº 8.458.863-6 Peru Department Store CEO Juan Xavier Roca Mendenhall Economist I.D. Nº 710.009.226 Corporate Department Store Merchandises Manager Gonzalo Somoza García Civil Engineer I.D. Nº 22.051.269-K

HOME IMPROVEMENT Corporate Sodimac CEO Sandro Solari Donaggio Civil Engineer I.D. Nº 9.585.729-9 Sodimac Chile CEO Eduardo Mizón Friedemann Civil Engineer I.D. Nº 9.586.083-4 Sodimac Peru CEO Rodrigo Fajardo Zilleruelo Business Administrator I.D. Nº 7.649.739-7 Sodimac Argentina CEO Enrique Gundermann Wylie Civil Engineer I.D. Nº 9.900.567-K Sodimac Colombia CEO Carlos Enrique Moreno Civil Engineer I.D. Nº 70.057.176 Corporate Sodimac Merchandises Manager Francisco Torres Larraín Civil Engineer I.D. Nº 7.006.016-7

SUPERMARKETS Tottus Chile CEO Marcelo Fernandino Pagueguy Civil Engineer I.D. Nº 10.908.442-5 Tottus Peru CEO Juan Fernando Correa Malachowski Industrial Engineer I.D. Nº 10.831.582

RETAIL FINANCE Corporate Financial Retail CEO Gastón Bottazzini Economist I.D. Nº 20.956.892 CMR Chile CEO Claudio Cisternas Duque Business Administrator I.D. Nº 10.174.449-3 Banco Falabella Chile CEO Alejandro Cuevas Merino Business Administrator I.D. Nº 7.813.610-3 Banco Falabella Peru CEO Rafael Rizo Patrón Basurco Business Manager I.D. Nº 07.812.802 CMR Argentina CEO Ricardo Zimerman Heller Licenciate in Business Management I.D. Nº 12.472.903 CMR Colombia CEO Jorge Villarroel Barrera Computer and IT Engineer I.D. Nº 7.935.574-7 Falabella Pro CEO Juan Hermosilla Escobar Financial Administrator I.D. Nº 6.064.545-0 Viajes Falabella CEO Isabella Dallago Muñoz Civil Engineer I.D. Nº 7.083.160-0

REAL ESTATE Sociedad de Rentas Falabella CEO Ricardo Hepp De Los Rios Business Administrator I.D. Nº 7.617.431-8 Executive Vice President, Mall Plaza Fernando de Peña Iver Civil Engineer I.D. Nº 7.556.207-1 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA S.A.C.I. FALABELLA

INVESTMENT IN GROWTH AND EFFICIENCY

We focused our efforts on meeting the growth goals in our strategic plan through 2012 while at the same time controlling costs and improving efficiencies in all areas of the business. We are continuing to consolidate our business model and reinforce our differentiating value proposal in Chile, Peru, Argentina and Colombia.

INVESTMENT PLAN

We announced our five-year investment plan at the end of 2007 that involves doubling the size of the company by 2012. In 2008, we were able to fulfill the objectives proposed for that year entirely, experiencing the greatest growth and the highest investment thus far in Falabella’s history. Investments exceeded US$600 million. Some of the growth achievements in the year were:

· A notable expansion in our operations in Peru, where the number of stores rose 52% compared to the previous year, going from 29 to 44 stores throughout the country.

· We doubled the size of our department store operation in Colombia by taking over the five Casa Estrella stores in Bogotá and Cali. · Sodimac launched its operations in Argentina by opening four stores in greater Buenos Aires. This was an important step toward integrating our format in the four countries. · We increased the total number of stores by 21% in comparison to 2007, with 39 new stores. We ended the year with a total of 212 stores in four countries. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 THE ACHIEVEMENTS AND CHALLENGES IN 2008 HAVE PROVEN THAT FALABELLA IS A SOUND, WELL-STRUCTURED AND RESPONSIBLY MANAGED COMPANY. Juan Benavides, CORPORATE CEO.

In 2009, we will focus on capitalizing the flexibility of our investment plan, · We have had the ability to become major players in the local markets administrating it wisely and being alert and ready to take advantage of any of four countries. This way, the respective investments proced fron local potential extraordinary growth opportunities. sources, either from debt or own cash flow.

In addition, a successful commercial management of our business units FINANCIALLY SOUND generates cash flows that are managed responsibly and used to finance a great part of our investments. Maintaining adequate levels of liquidity facilitates following a flexible investment plan and taking advantage of Sound is the financial position of S.A.C.I. Falabella, reflected by the organic and non-organic growth opportunities. company’s achievements in 2008. Its risk policy is conservative and cash flow management efficient. The result: a flexible organic investment plan by On an other front, in August, we consolidated all Mall Plaza operations into which all growth opportunities can be seized. So in a year when financing one single company, Plaza S.A., in which Falabella holds a 59.3% share. The was scarce, Falabella always had access to it, which shows how well the purpose was to create a flexible, simple structure and be able to project and market trusts in the company: manage its development in Chile and abroad. This step created important opportunities for growth and financing for Mall Plaza, facilitating, among · In March, Sodimac placed one of the most successful bond issues in the other things, its access to financial markets. year for UF 1,500,000 five years maturity, a spread of 67 basis points and a rate of 2.5% annually. CORPORATE STRUCTURE · In April, Banco Falabella placed its first subordinated bond issue for UF 1,700,000 21 years maturity, at a spread of 76 basis points and a rate of Falabella has been able to export its business model successfully to other countries and new areas of business based on a sound corporate structure 3.7% annually. that uses synergies while simultaneously respecting the singularities of each market. This successfully transmits, a common corporate culture focused on · S.A.C.I. Falabella was capable of generating new sources of financing the customer. throughout the year. It issued commercial paper for the first time.

We have corporate managers for all areas of business, in addition to some support areas such as finance, development, and technology and systems. We also have country managers who supervise the joint operations by country.

This structure gives all our customers, anywhere we do business, the same proposal of value. Products, design, quality, services, logistics, technology and processes are alike throughout the group, steadfast cornerstones on which we will continue to build this company, now a powerhouse in Latin America.

CUSTOMER VOCATION

JUAN BENAVIDES F. Ongoing innovation is our mission, through products of quality, at CORPORATE CEO s.a.c.i. falabella convenient prices, with the best service. Through our different areas of WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 17

ANNUAL REPORT

business, we are in permanent contact with customers, which gives us an important competitive advantage. The variety of our retail business also results in greater economies of scale because of which we can offer better quality products at lower prices. Hence, we improve our proposal of value constantly and opportunely, creating a virtuous circle of growth.

TECHNOLOGICAL EXCELLENCE

Our goal is to implement the latest world-class information technology to provide the best levels of security, agility and efficiency in all our operations and thus integrate the diverse business units of the Falabella Group. During 2008, we started the second stage of our technological excellence plan initiated the previous year. We are standardizing IT applications, infrastructure and services in all areas of business in the four countries. The most notable project is the implementation of an IP telephone network and the consolidation of our replica system, a corporate contingency system.

The information technology area is managed by our subsidiary, Administradora CMR Falabella, responsible for maintaining a permanent, smooth and timely display of information. In recent years, we have invested an average of 1.0% of our net annual sales in computer systems and equipment. These investments have helped increase efficiencies in purchasing, distribution, inventory, points of sale and service, always in the intent to benefit and satisfy our customers.

OPTIMIZATION OF THE CHAIN OF SUPPLY

This year we continued to invest in perfecting and permanently updating our logistical process. We are adopting the best practices, developing our strategic logistics plan and continuously adding new measurements that help the supply chain attain world-class indicators. We have continued to adapt the capacity and functionality of the infrastructure used by the chain to the constantly changing needs of our customers. In 2008, Sodimac inaugurated 2 new distribution centers in Chile, one in the city of Coronel and the other in Santiago, both absolutely fresh and modern. The company has another under construction in Colombia and Tottus Peru is working on centralizing its logistical operations in a new DC. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 FALABELLA IN LATIN AMERICA

CHILE · 40 DEPARTMENT STORES · 66 HOME IMPROVEMENT STORES · 23 SUPERMARKETS / HYPERMARKETS · 2.6 MILLION CMR ACTIVE ACCOUNTS · 10 MALL PLAZAS · MORE THAN 43,000 COLLABORATORS · TOTAL SALES SPACE: 863,551 M2 · 10 NET OPENINGS IN 2008

ARGENTINA · 9 DEPARTMENT STORES · 4 HOME IMPROVEMENT STORES · 720 THOUSAND CMR ACTIVE ACCOUNTS · MORE THAN 4 THOUSAND COLLABORATORS · TOTAL SALES SPACE: 96,613 M2 · 5 NET OPENINGS IN 2008 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 PerU · 15 DEPARTMENT STORES · 12 HOME IMPROVEMENT STORES · 17 SUPERMARKETS / HYPERMARKETS · 2 MALL PLAZAS · 1.3 MILLION CMR ACTIVE ACCOUNTS · MORE THAN 16,000 COLLABORATORS · TOTAL SALES SPACE: 273,220 M2 · 16 NET OPENINGS IN 2008

COLOMBIA · 9 DEPARTMENT STORES · 17 HOME IMPROVEMENT STORES · 430 THOUSAND CMR ACTIVE ACCOUNTS · MORE THAN 6 THOUSAND COLLABORATORS · TOTAL SALES SPACE: 224,419 M2 · 8 NET OPENINGS IN 2008 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 AREAS OF BUSINESS DEPARTMENT STORES

OPTIMIZING EFFICIENCIES

Falabella has known how to stay youthful. Innovations, trends leading edge permeate the décor inside its stores and its communications with customers. No doubt our success is because the heart of our business has always been the customer, every step of the way. We have evolved with them and we are getting to know them better every day. Our strategic objective is to offer him or her a unique buying experience: entertaining, sophisticated, high-tech stores, the best service and a mix of products under brands that identify them. And of course, a price-quality ratio that makes them come back to Falabella time and again.

In 2008 we continued to grow in the four countries where we are present, consolidating the capture of synergies regionally, which has helped improve local efficiencies and accelerate our growth.

Undoubtedly one of the great achievements in the year was having more than doubled our operation in Colombia. In November, we took advantage of an excellent opportunity and bid successfully on the purchase of five stores of the traditional Colombian department store franchise called Casa Estrella. This consolidated, and notably improved, our presence in the local market in a very short period of time.

We also opened three new stores in Chile, two in Peru and one in Argentina, making a total of 73. Our consolidated sales amounted to USD 2,192 million at the close of 2008, an increase of 17.3% compared to the previous year and 37.4% of all sales of the Falabella Group.

Our focus throughout the year was placed on improving our operating efficiency at all levels. We will maintain that focus during 2009. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 IN 2008 WE FOCUSED ON IMPROVING OPERATING EFFICIENCIES TO STRENGTHEN OUR INDICATORS FURTHER. THESE IMPROVEMENTS WILL CONTINUE IN 2009. Juan Pablo Montero, CORPORATE DEPARTMENT STORE CEO

2008 A SUMMARY · FALABELLA TOOK OVER OPERATION OF 5 CASA ESTRELLA STORES IN COLOMBIA AND INAUGURATED ONE NEW STORE.

· 3 STORES WERE INAUGURATED IN CHILE, 2 IN PERU AND 1 IN ARGENTINA.

· CONSOLIDATED REVENUES ROSE 17.3%, TO A TOTAL OF US$2,191 mILLION.

· SAGA FALABELLA WAS CHOSEN ONE OF THE 25 BEST PLACES TO WORK IN PERU BY GREAT PLACE TO WORK INSTITUTE.

The emphasis in particular has been on: Chile

· INVENTORY CONTROL has been key to our profitability. We modified We continued consolidating our market leadership by the inauguration of 3 new stores in 2008: Estación Central, in a singular Mall Plaza Alameda; the purchasing processes to speed up inventory turnover, make product San Bernardo in Mall Plaza Sur (both high-tech stores with a product mix locations more visible and, as a result, reduce financial investments. conceived specifically for the respective consumers in sectors that are new to us. The surprise has been quite pleasant); and the Manquehue store, targeted · USE OF DATABASES AND CRM TO BRING US CLOSER TO OUR especially at women. It is located in a consolidated residential sector with CUSTOMERS: We have studied the behavior and preference of our great projections for the near future. This brings us to a total of 40 stores customers to optimize the assortment in each store, now more specifically throughout the nation. We plan on continuing to penetrate new sectors as adapted to the mix of customer tastes. growth opportunities arise.

· INTENSIVE DEVELOPMENT OF OUR OWN BRANDS AND SECOND- PerU GENERATION BRANDS: we offer a wide spectrum of brands through designs and campaigns conceived to satisfy the lifestyles and aspirations We have been in business in Peru since 1995 under the Saga Falabella brand. of each customer. Products of value are offered at convenient prices in all Since then we have been consolidating our presence in Lima while at the segments. same time expanding our operations to provinces. In December 2008, we inaugurated the Atocongo and Bellavista stores, both in Lima, thus expanding · GREEN BUILDING COUNCIL CERTIFICATION: developing sustainable our department store presence in peripheral zones of the city. At the close of the year, we had 15 stores, 95 thousand m2 of floor space and more than 5 stores not only means a commitment to the environment, but also thousand direct collaborators. significant energy savings.

Our great pride and joy is having been ranked for the first time among the During 2009, we will continue to optimize our efficiencies, without losing 25 best places to work in Peru in the measurements of the Great Place to sight of our strategic objective: to provide an incomparable buying experience Work Institute. We also continue to hold our position as one of the 10 largest to our customers. companies in the country that is rated a great workplace. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 23

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Argentina

This year we inaugurated our store in Avellaneda, in Greater Buenos Aires, with floor space of 8,150 m2. At the close of 2008, we reached a total of 9 stores in Argentina, and a growth in sales in USD of 43.6% compared to 2007.

We continued augmenting efficiencies to improve the levels of return. Logistical processes have been standardized with Chile that improved the efficiency of the entire chain of supply, increasing productivity by around 30%. We also focused on optimizing and automating all processes in stores and the back office in line with the implementation of the smart business systems, among others. Our visibility will improve and there were be more detailed information on each transaction.

We are also making a significant effort to strengthen our local suppliers and thus improve their ability to make deliveries on time according to Falabella’s quality standards. In addition to supporting domestic industry, the goal is to provide a greater flexibility and speed that keeps us aligned with the changes in the market.

Colombia

Two years after our first inauguration in Colombia, we took an important step by adding the Casa Estrella stores, which doubled our size and gave us access to new markets in privileged locations: 2 stores are located in the most traditional shopping centers, Unicentro and Galerías, that are widely visited in Bogotá. Two other stores are in a city new to us, Cali, that has approximately 2.5 million inhabitants.

Additionally, in April, we inaugurated our Hayuelos store in Bogota. This means we now have 8 stores and an outlet in Colombia. During 2009, we will be focused on consolidating the new stores, including adaptations and remodeling.

During the year, our sales grew approximately 150% compared to 2007. Our challenge in 2009 is to keep SG&A expenses low and maintain a disciplined control of inventory to face the expected volatility in demand. We will be consolidating our positive work environment to maintain the achievements that helped us earn the distinction of a Great Place to Work. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 AREAS OF BUSINESS HOME IMPROVEMENT

RESPONSIBLE GROWTH

2008 will go down as one of the most dynamic, challenging and transcendental years in the history of Sodimac.

Undoubtedly a great milestone in the year was our entry to a new market, Argentina, where we opened four stores in Greater Buenos Aires with great success. We also continued to develop our formats through 7 inaugurations in Chile, 5 in Peru and 2 new stores in Colombia. This solidified our position as the leading home improvement operator in Latin America and we made significant progress towards the goal in our strategic plan of becoming a company with USD 3.5 billion in sales by 2010.

However, nowadays, after 57 years of experience, Sodimac is not just an efficient, profitable and decidedly commercial company. It is also a mature company, aware of its responsibility for improving the quality of life of all communities in which it is present. Some years back, we charted a course toward the concepts of entrepreneurial social responsibility in our country, declaring our commitments in the first sustainability report published by Sodimac Chile. That report has been certified by Global Reporting Initiative (GRI), a prestigious international agency that prepares a verifiable report based on making policies and actions of companies transparent in three dimensions: economic, social and environmental.

This is part of our objective of wanting to be the company most beloved and admired by its customers, in addition to the leading home improvement operator in Latin America. Our dream is to become America’s Home and seduce the soul of customers in each country where we do business. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 WE ARE A PROFITABLE and a EFFICIENT COMPANY AWARE OF OUR RESPONSIBILITY TO IMPROVE THE QUALITY OF LIFE OF THE COMMUNITIES IN WHICH WE ARE PRESENT. Sandro Solari, CORPORATE SODIMAC CEO.

2008 A SUMMARY · SODIMAC ENTERED ARGENTINA BY OPENING 4 STORES.

· AWARDED THE CARLOS VIAL ESPANTOSO PRIZE FOR 2008

· 2 NEW DISTRIBUTION CENTERS WERE STARTED UP IN CHILE.

· CONSOLIDATED REVENUES INCREASED 22.3% IN COMPARISON TO 2007, TO A TOTAL OF 2,683 MILLION.

· 16 INAUGURATIONS IN 2008 TO A TOTAL OF 99 STORES.

· SODIMAC COLOMBIA REACHED ITS 15TH ANNIVERSARY

· SODIMAC CHILE PUBLISHED A SUSTAINABILITY REPORT CERTIFIED BY GRI.

· SODIMAC PERU WAS RANKED SIXTH PLACE AMONG THE 25 BEST PLACES TO WORK IN THE COUNTRY, ACCORDING TO GREAT PLACE TO WORK INSTITUTE.

Although the immediate future has been dampened by the world economic trust, value the contribution of people to their results, and dare to develop crisis that is now affecting our markets, Sodimac is a sound company that has innovative initiatives of mutual collaboration. taken all the precautions to face this juncture, our priority being to care for our collaborators’ jobs. We will use 2009 to continue to improve and innovate Sodimac was also recognized as the brand most loved by Chilean consumers, our processes in order to have an increasingly more efficient operation and according to the 2008 Corporate Reputation Ranking published by the we will strengthen our philosophy of low-cost operators while ensuring a newspaper La Tercera and Hill Knowlton Captiva. To us, both distinctions responsible growth in our organization. show that our efforts to become a profitable company that grows responsibly and sustainably are on the right path.

CHILE In the early part of the year, we published our first sustainability report, becoming one of the first retailers in Latin America to align with the One historic milestone for our company was receiving the Carlos Vial exigencies of the GRI. That work implied relaying and systematizing several Espantoso Prize for 2008, a recognition awarded annually by the Foundation good practices for which we are well known, and integrating them to our of the same name to distinguish companies that construct labor relations of global business strategy. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 27

ANNUAL REPORT

In terms of investments, we also materialized significant achievements in the PERU year: After four years on the market, Sodimac became the home improvement · We inaugurated two new distribution centers, one in the city of Coronel leader in Peru in 2008. It opened 5 new stores, securing its presence not only and another in Santiago, that are equipped with the highest technology, in Lima, but also in the main provinces in the country. Two were inaugurated will make us much more efficient in our chain of supply and tangibly in Callao, a second store in Trujillo and Ica, as well as one in the historic part of improve service in stores because enough products will reach them on a Lima in an innovative pilot two-floor format specially targeted toward very timely basis. dense urban zones.

· We opened 4 new stores, 3 in new markets: Estación Central, El Bosque The result: an increase of 105% in sales compared to 2007, exceeding US$200 and San Bernardo. The fourth store was the new store in Los Angeles million and all our expectations. For 2009, we must now consolidate this that replaced the old one. Significant expansions were also completed in explosive growth in barely 4 years of operation and 14 stores in the country. Copiapó, Calama and Talca. Sodimac employs more than 3,000 Peruvians directly and we are again proud to be among the 25 best places to work in Peru according to the Great · We continued to work in coordination with Ferreterías Imperial. The Place to Work Institute. This same Institute ranks us as the best retail store in store inaugurated in Concepción in 2007 was followed by a new store in this regard and sixth in the overall ranking. Huechuraba in 2008. In 2009, we plan to inaugurate a store in Temuco.

After an absence of 10 years on the debt market, in March, Sodimac placed COLOMBIA one of the most successful bond issues in the year, a UF 1,500,000 bond at a spread of 67 basis points and a rate of 2.5% annually. It was used to refinance We celebrated our 15th anniversary on the Colombian market in a ceremony liabilities assumed in the purchase of Ferreterías Imperial. attended by President Alvaro Uribe. The President highlighted the work that Sodimac has done in Colombia and the contribution it has made to the country’s development because it is driving the creation and formalization ARGENTINA of microindustries and small enterprises and because it employs more than 3,500 people. We successfully launched our operations in Argentina by the inauguration of 4 Sodimac Homecenters throughout the year. For the time being, we are We closed the year with the inauguration of two stores, to bring the total concentrating our presence in Greater Buenos Aires. Thanks to a strategic to 17 stores located in the cities of Bogota, Medellin, Cali, Barranquilla, alliance with Carrefour, our locations are excellent, in sectors where shoppers Pereira, Ibagué and Cartagena. We also earned USD 625 million in sales abound, giving us a quicker entry to this market. Thus far to date, Argentine in 2008. consumers are very receptive because we stand out against the competition through a combination that supplies everything that Homecenter and After the strong growth in recent years, 2008 was the year when we began Sodimac Constructor can offer. Our goal is to position ourselves as leaders to optimize our chain of supply. With the support of the Corporate Logistics on the market, using our great, always improving team and the know-how Division and in synchrony with the technology of the new DCs in Chile, we of Chile, Peru and Colombia. For 2009, we plan to open a fifth store, also in began construction of a new logistical center in Colombia, to be inaugurated Greater Buenos Aires. during 2009. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 AREAS OF BUSINESS SUPERMARKETS

GROWTH AND CONSOLIDATION

We entered the supermarket business in 2002 with the launching of the Tottus hypermarket chain in Peru. In 2004, we entered the market in Chile through the acquisition of San Francisco Supermarkets, now celebrating its 58th year of doing business. In 2005, we inaugurated the first Tottus Chile, so we do business under both brands in Chile. From the start, we have focused on implementing a strong organic growth plan that resulted in a total of 40 stores in 2008 and a consolidated growth of 39.3% in sales.

During the year, we continued coordinating several areas between Peru and Chile. Of note is the joint work to develop and strengthen the clothing area by launching the Cherokee brand. Through this brand, which has an international presence among renowned retailers in Europe and North America, we have introduced customers to a new concept in clothing purchases in supermarkets. And they like it because of the quality, design and convenient price.

We also continued to develop the system areas together. In addition to installing and consolidating the same operating system in the two countries, in 2008 we began to implement a new state-of-the-art checkout system. The implementation began with a pilot store in Peru in the last quarter and will continue to be implemented throughout the year in the remaining stores in Peru and be launched in Chile. The new checkout system will service the customer more quickly, with greater efficiency and operating stability. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 AFTER AN EXPLOSIVE GROWTH, WE ARE NOW ENTERING A PERIOD OF MATURITY. GROWTH WILL CONTINUE GIVEN THE EFFICIENCIES AND CONTROLLED MANAGEMENT OF VARIABLES IN THE BUSINESS. Marcelo Fernandino, TOTTUS CHILE SUPERMARKET CEO.

2008 A SUMMARY · A 39.3% INCREASE IN CONSOLIDATED SALES COMPARED TO 2007

· TOTTUS CHILE BEGAN THE ROLLOUT OF ITS OWN BRANDS THROUGH THE LAUNCHING OF A SOFT DRINK.

· TOTTUS PERU INAUGURATED 9 STORES, NOW TOTALING 17.

· TOTTUS PERU CHOSEN AS ONE OF THE 25 BEST PLACES TO WORK IN THE COUNTRY BY GREAT PLACE TO WORK INSTITUTE.

· MORE THAN 12 THOUSAND COLLABORATORS BETWEEN CHILE AND PERU.

Chile

Two stores were remodeled in the year, expanding the floor space in financing and suppliers that will be centralized in the new center are Peñaflor by more than 1,000 m2 and the floor space in Buin by more defined. The result: a more efficient supply to our 96,420 m2 of sales than 1,300 m2. In both, Tottus continued with its compact hypermarket space. strategy, which is comfortable, close and, most importantly, human. So there are now 23 supermarkets, 7 San Francisco and 16 Tottus. Our sales In order to increase the supply of quality products with a distinctive rose 15% in the aggregate compared to the previous year and 2% in design, starting in mid-year, we began to introduce our own brands comparable terms. on the market. Thanks to the quality of the teams working in the company, by December we had added soft drinks to the products Considering our future growth plan, since the end of 2008 we have been sold under the Tottus brand. Starting in 2009, emphasis will be on working on a new distribution center. The project involves several stages, developing the more important products and commodities under the first of which will be completed in six months. The investment, quarterly launching plans. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 31

ANNUAL REPORT

Standing out among our campaigns is the Lazy Town campaign in the fruit We also began several projects on logistical optimization in the area and vegetables area towards year-end. A license agreement was made to of fresh and high-demand products, aimed at centralizing logistical make this section exclusive and be able to decorate it with very appealing operations in a new distribution center over the next 16 months. We graphics, designed specially to captivate children and thus encourage already have purchased the land on the outskirts of Lima. them to eat fruits and vegetables and, generally, to eat healthily.

Sales growth in 2008 was more than 90% in comparison to the previous 2008 was the year of growth stabilization and professionalization of year, thanks to the good performance of the actual stores and openings in the teams to prepare the way for a successful 2009, a year in which our 2007 and in 2008. We opened many stores this year, improved organization challenges will be to improve operating efficiency and consolidate sales and made sales that positioned us better to continue growing in the long in the new stores. term.

PERU For the sixth consecutive year, we were also elected one of the 25 best places to work in Peru, according to the measurements of the Great Place During 2008, we inaugurated 9 stores, more than doubling our coverage to Work institute. and thus completing the year with the greatest expansion since our inception. We went from 8 stores in December 2007 to 17 in December Our focus in 2009 is centered on moving forward in the logistical projects 2008. 7 openings occurred in Lima and 2 in the interior cities, including and reducing operating expenses. 2 to 5 stores will be opened in the year, our second store in Trujillo and a store in the city of Ica. Our floor space depending on the construction of some shopping centers where we will increased by 33,038 m2. lease space. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 AREAS OF BUSINESS RETAIL FINANCE

FOCUS ON THE CUSTOMER

Our retail finance area covers the businesses of personal banking, credit cards, travel and insurance. The CMR card is present in all areas of the retail business. Travel and Insurance are located in financial centers, either inside stores or in strategic stand-alone locations in the four countries. The bank does business in Chile and Peru. During 2008, the finance business continued to grow and consolidate, with Banco Falabella and CMR offering more and better financial solutions each day and Travel and Insurance new products and services highly valued by our customers.

At the same time, we progressed in the integration of our operations, concentrating particularly on controlling credit risk and increasing our operating efficiency. We also continued to penetrate the markets in Chile, Peru, Argentina and Colombia further. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 WE FOCUS ON RISK MANAGEMENT AND OPERATING EFFICIENCY. SO, WE CAN TAKE CARE OF THE FINANCIAL NEEDS OF EACH OF OUR CUSTOMERS AT CONVENIENT RATES WITH HIGH-QUALITY SERVICE. Gaston Bottazzini, CORPORATE RETAIL FINANCE CEO.

2008 A SUMMARY · FOR THE SECOND CONSECUTIVE YEAR, CMR WAS AWARDED THE “NATIONAL CONSUMER SATISFACTION PRIZE 2008,” GIVEN BY PROCALIDAD AND CAPITAL MAGAZINE.

· BANCO FALABELLA CHILE WAS CHOSEN NO. 1 IN RETAIL BANKING SERVICE QUALITY BY PROCALIDAD AND CAPITAL MAGAZINE.

· MORE THAN 5.0 MILLION CMR ACTIVE ACCOUNTS IN FOUR COUNTRIES.

· 54 RETAIL FINANCE OFFICES INAUGURATED IN 2008.

· LOAN STOCK OF US$2,799 MILLION AS OF DECEMBER 2008.

· MORE THAN 8 MILLION INSURANCE POLICIES OUTSTANDING AS OF DECEMBER 2008.

· MORE THAN 280,000 PASSENGERS TRAVELLED THROUGH VIAJES FALABELLA DURING 2008.

· COMPLETE AND SUCCESSFUL MIGRATION OF CMR CHILE TO ITS NEW CREDIT SYSTEM.

· BANCO FALABELLA LAUNCHED THE FULL-PACK AND BEGAN TO OPERATE AS AN INSURANCE BROKER IN CHILE.

· BANCO FALABELLA CHILE MADE ITS FIRST SUCCESSFUL SUBORDINATED BOND ISSUE FOR UF 1,700,000, 21 YEARS MATURITY. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 35

ANNUAL REPORT

CHILE TOTAL RETAIL FINANCE LOAN STOCK · USD 2,779 MILLION The year was very competitive in Chile. The players were many and new AS OF DECEMBER 2008 regulations were enacted that signified additional effort to maintain efficiency and quality of service in all the retail finance businesses. Both Banco Falabella ARGENTINA 3% as well as CMR were awarded for their service quality. Another important CHILE · CMR milestone was the complete migration to the new credit system, which COLOMBIA 43% 4% resulted in better response times and a greater agility and flexibility. We will PERU continue with the incorporation of that system to the other countries. 15% CHILE BANK 35% PERU

In Peru, Banco Falabella opened 12 new financial centers, expanding the supply of bank products and thus progressing in the development of its personal banking business. CONSUMER LOANS (GDP) AND NUMBER OF CARDS PER INHABITANT · 2008 ARGENTINA CONSUMER LOANS / GDP CHILE 16%

In Argentina, CMR backed the opening of the first Sodimac store in Buenos COLOMBIA 12% Aires, where a great number of new accounts were opened.

8% PERU ARGENTINA

4% COLOMBIA 0% 0,0 0,2 0,4 0,6 0,8 1,0 1,2 1,4 In Colombia, the coverage of the CMR card, insurance and travel was NO. OF CARDS / NO. OF INHABITANTS increased by the opening of Falabella stores and the inclusion of the Casa NOTES: The size of the circles represents the GDP per capita in each country. In more developed countries, there are more than 2cards per inhabitant and 20% of the GDP in consumer loans. No. of active credit cards. Consumer loans includes credit card debt. Estrella stores. SOURCES: Central Banks, Commissions, Banking Associations, IMF.

WE SEE IMPORTANT DEVELOPMENT POTENTIAL IN ALL COUNTRIES WHERE WE DO BUSINESS. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 CMR RETAIL FINANCE

Nº 1 IN CUSTOMER SERVICE QUALITY

Throughout our 28 years of existence, we have consolidated our leadership and constantly innovated by our services and products. We have kept our promise of low interest rates. Today, CMR is present in all areas of Falabella’s retail business and gives customers in 4 countries the financing they need for their purchases.

During 2008, we continued to grow and fulfill ambitious goals under a commercial strategy adapted to the situation of each country, a conservative risk policy, optimization of synergies with an emphasis on operating efficiency and process consistency, more than ever focused on bringing us even closer to our customers.

We also completed the migration of our entire stock of cards to a new world- class credit system that considerably improves our service quality, simplifies new technology developments, increases security for our customers and gives us greater commercial flexibility.

Along the same lines, we modified our branch model to improve the standard of service, moving towards the self-service mode. Customer satisfaction is high and productivity is very good.

We also improved the services available on our website, www.cmr.cl, and we established new alliances to augment CMR’s coverage. CREDIT CARDS ACTIVE ACCOUNTS MILLIONS OF ACCOUNTS AS OF DECEMBER 2008

All these efforts were recognized by the market. We were awarded the 2004 National Consumer Satisfaction Prize 2008 for the second consecutive year, 3.4 awarded by ProCalidad and Capital magazine. According to a study by Bain & 2005 3.9 Company, CMR is the card most recommended by customers in comparison to bank and other retail cards. 2006 4.3

Internationally, the growth in retail in the different countries worked 2007 4.8 in our favor. In Colombia, CMR earned a profit and the future looks to be very encouraging. And in Argentina, CMR was launched in the recently 2008 5.0 inaugurated Sodimac, increasing its coverage by 30% in one year. CHILE · CMR PERU · BANCO FALABELLA ARGENTINA · CMR COLOMBIA · CMR WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 37

ANNUAL REPORT

BANCO FALABELLA RETAIL FINANCE

INVESTMENT IN PRODUCTS, PROCESSES AND PEOPLE

2008 was a year of improvements in Banco Falabella. It made significant Our reward came quickly: we earned recognition as the number 1 retail investments in products, processes and people. Efforts continued to infuse bank for providing the best-quality service in mass banking, assigned by ProCalidad and Capital Magazine. our values of closeness, trust, vitality and transparency in and outside of the bank. That is how we are taking a great leap toward the development of In its first year of operation, Banco Falabella Peru also successfully personal banking and an integral supply of financial services. consolidated its bank model that concentrates the banking business and the CMR card business in one single place. The year was one of strong growth Our great relevance in the financial industry is proven by the confidence and efficiency improvements. We attracted more than 200 thousand new deposited in us by several investors who bought the bank’s first cards in the year, launched the CMR Visa Platinum and expanded the number subordinated bond issue on the local financial market in April. The issue of stores affiliated to the card by more than 20,000. was for UF 1,700,000, 21 years maturity, at a spread of 0.6%, one of the best placements in 2008. This financing improved the long-term matching and considerably decreased the financial risks implicit in the balance sheet LOAN STOCK MILLIONS OF DOLLARS LOANS structure. DEPOSITS 532 2004 379

Our subsidiary, Banco Falabella Corredores de Seguros Limitada, also began 659 2005 462 to do business in 2008. Having an insurance broker in the group means 816 that the bank’s customers will receive expert assistance in insurance 2006 629 matters. Its range of products to protect customers’ property, life and 2007 901 health is complete, characterized by being simple, with ample coverage, 685 at convenient prices. 986 2008 732

Another example of the bank’s vocation for developing long-term relations with its customers is Full-Pack. This product is the first flat-rate financial RISK RATING services package that includes checking account, credit facility, debit card AS OF DECEMBER 2008 and credit card. Only we have eliminated all additional commissions, making RATING it easier for customers to compare costs. BANKING COMMISSION CATEGORY I

Throughout the year we identified the processes most important to, and RISK RATING AGENCIES · SHORT-TERM SECURITIES N1+ with the greatest impact on customers where we had the opportunity for · LONG-TERM SECURITIES AA- improvement. We perfected them and strengthened areas of support, thus · BILLS OF CREDIT AA- reducing response times to customer requests and increasing the consistency · SUBORDINATED BOND FACILITY A+ · RATING TENDENCY STABLE in the quality of our products and services. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 FALABELLA PRO INSURANCE AND SERVICES – RETAIL FINANCE

INTEGRAL SOLUTIONS

Our Falabella Pro brand entails a wide range of insurance and services that Internationally, we consolidated Falabella Pro’s business model by provide the best solutions and make our customers’ lives easier. transferring the best commercial and operating practices to Argentina, Colombia and Peru. More than 8 million policies were outstanding at the During 2008, we grew 20% in consolidated sales in comparison to 2007, close of 2008. thanks to the ongoing innovation in insurance products and services as well as attractive campaigns and promotions. In Chile, we stabilized the automobile insurance business through dealers, points of sale in Falabella, We are focused permanently on improving the quality of life of our customers Sodimac and Tottus stores, by telephone and by the Internet. by providing protection and services of added value.

EVOLUTION OF POLICY STOCK GROWTH IN CONSOLIDATED SALES MILLIONS GROWTH IN CONSOLIDATED SALES – SALES IN US$ MILLIONS CHILE PERU ARGENTINA COLOMBIA 2004 2.7 2004 111

2005 4.0 2005 153

2006 5.2 2006 188

2007 7.2 2007 218

2008 8.1 2008 273 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 39

ANNUAL REPORT

TRAVEL RETAIL FINANCE

THE MAGIC OF TRAVELLING WITHIN THE REACH OF ALL

People always want to travel to remote or nearby places, relax on a lone beach or fulfill the dream of flying. Whatever their desire may be, they want to live an unforgettable experience.

The everyday work at Viajes Falabella seeks to fulfill the desires of our customers and keep the magic of travelling alive. The travel sector has been put to the test in recent years. That experience has only served to demonstrate that in Viajes Falabella, each new challenge brings a new service with it, a new way of travelling or a technological innovation.

So, we continue to raise our significant share in the recreational and corporate travel markets, concerned in particular for developing new projects and strengthening our virtual presence. For 2009, our challenge is to continue to move forward by adding web technology and adopting the best practices in the industry.

Viajes Falabella has presence in Chile, Peru, Colombia and Argentina and it is now the only regional retail agency with unified products, services and image. This means that we capture important synergies and reach better global agreements. The result: major cost reductions that aim at a more efficient unified technological platform and a constant transfer of benefits to customers.

SALES OF VIAJES FALABELLA SALES IN USD MILLIONS CHILE PERU ARGENTINA COLOMBIA 2004 68

2005 92

2006 105

2007 113

2008 123 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 AREAS OF BUSINESS REAL ESTATE

We have earned a place as a major player in the retail real estate business in Chile through our stand-alone stores, our power centers and our world-class malls in strategic locations. We are repeating this effort in Peru as well. The result: an efficient administration of the construction and maintenance of our fixed assets while optimizing the selection and purchase of locations.

We conduct our real estate operations through our 59.3% interest in Plaza S.A., which directly and indirectly holds 100% of Plaza Vespucio S.A. (owner of Mall Plaza Vespucio), Plaza Oeste S.A. (owner of Mall Plaza Oeste and Mall Plaza Norte), Plaza Antofagasta S.A. (the developer of the Mall Plaza Antofagasta), Plaza Tobalaba S.A. (owner of Mall Plaza Tobalaba), Plaza La Serena S.A. (owner of Mall Plaza La Serena), Plaza del Trebol S.A. (owner of Mall Plaza Trebol and Mall Plaza Los Angeles) and Desarrollo e Inversiones Internacionales S.A., which in turn holds a 20% interest in Aventura Plaza S.A. (a Peruvian company owning Mall Aventura Plaza Trujillo, Mall Aventura Plaza Bellavista and future projects). Plaza S.A. also holds 77.5% of Nuevos Desarrollos S.A. (owner of Mall Plaza Alameda, Mall Plaza Sur and future projects).

Falabella has an equity interest of 40% in Aventura Plaza S.A. through its Peruvian subsidiary Malls Peru S.A. This latter company is developing our power centers and stand-alone stores in Peru, among other projects. Rentas Fallabella S.A. handles these same types of projects in Chile. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 2008 WAS A YEAR OF MANY ACCOMPLISHMENTS. WE BECAME LEADERS IN THE INDUSTRY IN CHILE AND REINFORCED OUR UNIQUE AND DIFFERENT PROPOSAL OF VALUE IN PERU. Fernando de Peña, MALL PLAZA EXECUTIVE VICE-PRESIDENT.

MALL PLAZA REAL ESTATE

A SUCCESSFUL BUSINESS MODEL

Mall Plaza was established in 1990, two years after Plaza Vespucio S.A. was 2008 was marked by important milestones for Mall Plaza: incorporated through the inauguration of Mall Plaza Vespucio in the borough of La Florida in Santiago. 18 years later, we are proud to have 10 successful In August 2008 we consolidated all our operations in one single company, shopping centers in Chile and 2 more in Peru. Plaza S.A., in which Falabella has a 59.3% share. The structure became much more flexible and simpler in projecting and managing our development in A fundamental part of our strategy is to give consumers a proposal of Chile and abroad. This move paves the way to great opportunities for growth value that anticipates their demand and needs and surprises them by our and financing for Mall Plaza and also facilitates, among other things, our supply. We want to create spaces that people associate with value so we access to financial markets. must always be innovating and reinventing ourselves and our processes and projects to provide visitors attractive and novel locations that then become Throughout the year, we invested more than US$260 million in new projects, powerful poles of commercial development that reinforce our leadership in expansions and renovations. In April, we inaugurated Mall Plaza Alameda the industry. in the borough of Estación Central in Santiago. We were able to build the first vertical urban center in Chile in which a people-oriented modern architectural design is combined with a great, commercially viable, vertical integration of supply quite successful thus far to date.

At the end of November we opened Mall Plaza Sur in the borough of San Bernardo, Santiago, the 10th urban center in the chain in Chile, a response to the needs of more than 550 thousand people who live in the zone of influence.

Also in November we inaugurated our second urban center in Peru, Mall Aventura Plaza, located in Callao, unique of its kind for inhabitants in Greater Lima. This new project, which will create 2,300 permanent jobs, involved an investment of US$ 80 million and was built in barely 6 months on land measuring 122,000 m2. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 43

ANNUAL REPORT

2008 A SUMMARY · CONSOLIDATION OF ALL OPERATIONS OF MALL PLAZA IN ONE SINGLE COMPANY, PLAZA S.A., IN WHICH FALABELLA HAS A 59.3% SHARE.

· INVESTMENTS FOR MORE THAN US$260 MILLION IN NEW PRODUCTS, EXPANSIONS AND RENOVATIONS.

· INAUGURATION OF MALL PLAZA ALAMEDA AND MALL PLAZA SUR IN CHILE AND OF MALL AVENTURA PLAZA IN PERU.

· MORE THAN 150 MILLION VISITORS TO MALL PLAZA IN CHILE.

Consumers have responded excellently to Mall Aventura Plaza Trujillo, Plaza Alameda, displaying to residents of the Metropolitan Region and its inaugurated in 2007. We are therefore optimistic about the opening of our surroundings a varied repertoire of dance, art, theater, exhibitions, talks, first shopping center in Greater Lima. Mall Aventura Plaza Callao offers a computers, science and technology. complete supply that makes it the best shopping center in the city. The large department stores of Ripley and Falabella are there, a Tottus Hypermarket Further investment for more than US$105 million is planned over the next and a Home Center, in addition to 100 boutiques. Entertainment includes three years and there will be inaugurations in Arequipa and Santa Anita in a large food court that can seat 1,000 people, 5 traditional restaurants and Lima through Aventura Plaza S.A., a company formed by Falabella, Ripley and a children’s play area. 7 high-tech movie theaters will be opened in March Mall Plaza to develop shopping centers in Peru. In Chile, demand is not yet 2009. There is also a financial and services boulevard where the leading enough to continue building shopping centers, but the offerings in existing financial institutions doing business in Peru have an office. malls will be strengthened, management of the business will be optimized, and once the economic comings and goings have stabilized and consumer In order to end a year marked by growth and the consolidation of our demand reactivates, initiatives on the table will be undertaken. successful business model, we inaugurated the “Aires” space in Mall Plaza Vespucio, a new concept that we had premiered in Mall Plaza Trebol at the end of 2007. It has had a great impact because of the a sophisticated and AWARDS AND RECOGNITIONS IN 2008 differentiating location that gives visitors a unique experience. · For the third consecutive year we were among the 20 top companies in So we continue to respond to the needs of individuals by segmentation. Entrepreneurial Social Responsibility in Chile in the ProHumana Ranking.

And to make a contribution to culture. Starting this year, each of our 10 · The Internal Council of Shopping Centers (ICSC), the most important shopping centers in Chile has a Live Library, a new public library concept that international shopping center association, awarded Mall Plaza offers free access to information, culture and knowledge through written and Antofagasta the highest distinction (a gold medal) for developing a audiovisual materials. There are also three rooms of the National Fine Arts world-class project in the Second Region. Museum (2 in Santiago at Mall Plaza Vespucio and Mall Plaza Norte and 1 in Concepción at Mall Plaza Trebol) and the Mall Plaza Los Angeles Art Room. · Aires in Mall Plaza Trebol was awarded a silver medal by ICSC for its The Room of Sciences, Art and Technology of USACH was opened at Mall marketing campaign. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 COMMERCIAL INNOVATION AND PROJECT MANAGEMENT ARE THE STEPPINGSTONES WE USE TO PROVIDE VALUE TO OUR CUSTOMERS.

RENTAS FALABELLA REAL ESTATE

NEW MARKETS

We own 54 stores through Sociedad de Rentas Falabella in Chile: 16 Project and work management have been excellent as a result of implanting department stores, 31 home improvement and construction hardware stores, our Virtual Store Construction plan, begun at the end of 2007. By including and 8 supermarkets. advanced design technology and integrated contracting through alliances, costs of procurement and construction have been reduced significantly. The Rentas Falabella develops stand-alone stores and power centers located experience has had a positive impact, integrating all teams in an organization in popular zones where there is a great affluence of public. During 2008, unlike what is traditional in the domestic industry. In both aspects, the Rentas Falabella opened the El Bosque Shopping Center. The anchor potential for future projects is huge. stores are Tottus, Homecenter and La Polar. It also opened a Homecenter in Los Angeles and a Tottus in San Fernando. Two new Sodimac During 2009, our focus will be placed on strengthening and consolidating Distribution Centers were also completed, one in Santiago and the other the existing power centers and on continuing to develop projects conceived in Coronel. for emerging segments. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 45

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MALLS PERU REAL ESTATE

MARKING LEADERSHIP IN PERU

Malls Peru is builds and administrates our power centers in Peru. This shopping Sodimac are the anchor stores and the gallery consists of 16 smaller center format generally consists of at least two anchor stores, a gallery of smaller stores. It measures a total of 19,500 m2. stores and a food court. • Atocongo Open Plaza: this enlargement was inaugurated in December, Open Plaza was launched in 2008 as the brand of Malls Peru Shopping Centers. adding Saga Falabella as the third anchor store, together with Tottus and During the year, we also inaugurated two new power centers and we finished Sodimac. The store gallery was enlarged to 31 small stores and a food an important enlargement: court was added.

During the year, Malls Peru also consolidated La Marina Open Plaza and Chiclayo • Canta Callao Open Plaza, inaugurated in October in Lima. Tottus and Open Plaza by including new small stores. Sodimac are the anchor stores and there is a gallery with 11 smaller stores. It measures a total of 17,500 m2. 2009 will be a year for consolidation of Open Plaza as the leading shopping center in Peru. New boutiques will be added to our five shopping centers and • Los Jardines Open Plaza, inaugurated in December in Trujillo: Tottus and diverse promotional activities will be held. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 ENTREPRENEURIAL SOCIAL RESPONSIBILITY S.A.C.I. FALABELLA

SUSTAINABLE DEVELOPMENT

The sustainable development of our business economically, socially and environmentally is key to guaranteeing our present and future growth. It will facilitate co-existing in a harmonic balance and building relations of trust with all our stakeholders.

LABOR RELATIONS

Our collaborators are our engine, the heart of this great company, and our most valuable asset. Without them we would not be a successful international retailer. Our aim is for them to feel proud and content to work in our companies. Their motivation, wellbeing and training is our top priority. We endeavor to develop a pleasant job climate and a corporate culture that affirms the value of each collaborator and encourages his or her personal and professional development. At the same time, we instill a culture of teamwork and collaboration, of common objectives that make everyone participants in our successes and in our growing relevant social role.

It is a source of pride that we can say that Sodimac Chile was awarded, among the 76 companies that were candidates, the Carlos Vial Espantoso 2008 Prize, an annual recognition awarded by the Foundation of the same name to honor companies that build labor relations of trust, that value the contribution of individuals to their results, and that dare to undertake innovative initiatives of mutual collaboration. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 BECAUSE WE BELIEVE IN THE PROFESSIONAL DEVELOPMENT OF OUR WORKERS, TRAINING IS A SYSTEMATIC AND ONGOING LEARNING PROCESS. AS A RESULT, TODAY WE HAVE PEOPLE WITH THE COMPETENCIES REQUIRED BY THE BUSINESS WHO ARE PREPARED FOR FUTURE CHALLENGES.

Among the relevant aspects that were taken into account in honoring Sodimac Sodimac has its own training section (OTEC), the Sodimac School of was the pervasiveness of the job culture existing inside the company as well Excellence, through which it trained 18,731 employees in 2008, 88% of staff. as the in-house development of workers through the “Sodimac School of A total of 606,240 hours of training were instructed with an annual average Excellence Program.” Sodimac also has a low turnover ratio in comparison of 32.4 hours per worker. The School of Academic Excellence has received to other retailers and a high level of unionization. There are relations of trust ISO 9001 Certification and has 13 years of experience. It teaches courses between the union and the company. such as Store Leader Development or provides tools such as higher education scholarships, fairs and expert formation. The same policy is being applied in all areas of Falabella’s businesses with similar results. We can also highlight other projects:

· A retail management program taught by the School of Engineering of the Training and Development University of Chile. This program was aimed at store managers and sales managers and the objective was to give them the necessary tools to make Our objective in training is to provide the tools for each collaborator to the company grow by elevating the levels of productivity and stimulating develop professionally and be able to follow a rising career path in our the improvement of each collaborator. companies. We are working on three general points for the purpose of adding value to our business by deploying all the potential of individuals · We continued to successfully develop e-learning in department stores. and the organization: 600 computers were installed with Internet connection to equip 35 laboratories. · Capitalization of know-how: which looks for the best practices inside the business and transfers the knowledge of our human capital. · The number of hours of English language instruction tripled, available · Creation of synergies in furtherance of the competitiveness of the to collaborators in all of the management areas of the Central Offices business. Economies of scale are negotiated with training providers, thus of Falabella Retail, S.A.C.I. Falabella and Administradora. 209 students optimizing the use of the Sence tax benefit and training accounts. participated, divided into 17 groups that received 13,500 hours of instruction. · Facilitation of the core business that supports the implementation of investment and administration projects and gives preference to the development of individuals according to the needs of the business.

In 2008 in Chile, Falabella’s Training and Development Department saw to the needs of all the Department Store companies (including the distribution center and the central offices), of all Tottus-San Francisco Supermarkets, of all the retail finance companies (CMR, Viajes Falabella, Falabella Pro, Banco Falabella and Administradora CMR) and subsidiaries.

In all, that department trained 69,787 employees in a total of 708,772 hours of instruction. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 49

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Because of our progressive advances, we have saved significantly on resources climate management model was designed, a complete study was and have encouraged and increasingly strengthened the replication of best conducted of good retail practices and more than 20 good practice practices. distribution and sensitization workshops were held with heads and managers. Action plans are targeting and strengthening the weakest climate dimensions, according to the Great Place to Work Institute ORGANIZATIONAL CLIMATE (GPTW).

Because we care about people and about giving them a great place to work, These measures had a positive impact on all our companies. Job our policy is to continuously improve the organizational climate. All our climate measurements improved in 2008 in comparison to the companies are participating in the annual program and measurement of the previous year. Great Place to Work Institute.

The achievements in Peru are important: for the fourth consecutive year, UNION RELATIONS Tottus and Sodimac were elected among the top 25 companies at which to work in the country. For the first time, Saga Falabella also ranked among Trust and mutual respect have marked the long history of relations between the top 25 places and earned a recognition for being among the 10 largest executives and union leaders. Dialogue is smooth and ongoing with the companies in the country that is a great place to work. unions of our different areas of business.

In Chile, an Intercompany Organizational Climate Committee was In Chile, 45.4% of collaborators belong to a union of the companies that solidified through good work practices will be shared. An organizational manage our stores.

NUMBER OF COLLABORATORS AS OF DECEMBER 2008

2008 2007

CHILE 43.795 39.720

PERU 16.286 11.307

ARGENTINA 4.436 3.344

COLOMBIA* 6.324 5.073

TOTAL 70.841 59.444

* INCLUDES SODIMAC COLOMBIA WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 SUPPLIER RELATIONS

During 2008, Falabella Retail was committed to developing SMBs in Chile, In September, Falabella Retail held a Supplier Fair. There, more than 100 small taking a decisive and permanent step in that direction by launching a support and mid-sized companies had the chance to present their products and program to facilitate smaller suppliers’ access to the company. A framework commercial proposals to Falabella executives and buyers. Transactions were document was written and published that sets down the duties and rights materialized with several. that these suppliers will have in their relationship with Falabella Department Stores. It also highlights several exclusive benefits that Falabella offers to accredited companies, such as discounts on the costs of centralized dispatch Sodimac implemented its “Sodimac Commercial Transparency” (SCT) policy and access by suppliers to the on-line management system. announced in 2007 that contains the values, principles and rules on relations with its suppliers. The SCT replaced individual commercial contracts with suppliers, becoming a global framework that encompasses all domestic and foreign suppliers and reflects the commitment of Sodimac to being a larger, profitable and efficient company that is at the same time responsible to its suppliers. Among other things, the SCT included rules that seek to establish a real commitment to social responsibility, not only by Sodimac but also by suppliers.

In that framework, Sodimac held the first Responsible Production Course for Commercial Suppliers in Chile, a pilot experience that was backed by the National Chamber of Commerce and the Inter-American Development Bank.

This course consummated three important objectives:

· Transferring and delivering SR tools to Sodimac suppliers to move towards an increasingly more responsible production.

· Listening to and systematizing their opinions and prioritizing their concerns to discern the more sensitive aspects of Sodimac’s own performance in its relationship with the suppliers for the purpose of overcoming the more important issues.

· Establishing objective criteria to rank suppliers. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 51

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THE ENVIRONMENT

Because we are convinced that our commitment to the environment is · Falabella is currently the only retailer in Chile and in the world (except for of great help in building a better world for us and our future generations, the United States) that is in the process of obtaining Commercial Interiors we are continuing to work to satisfy the needs of our customers without Volume Certification, a prototype elaborated under the wing of the U.S. endangering the ecosystem. During 2008, we implemented different projects Green Building Council. and activities that aim at a greener world. · Falabella joined and is a member of the founding group of World Green · Certified Printing: Our 2008 Department Store Christmas Catalog was Building Council (WGBC) that is developing in Chile under the name of printed on renewable forest paper under the PEFC Seal. the Chilean Sustainable Construction Foundation.

· The reusable bag launched by Department Stores was a success its first · Falabella was recognized by the Young Leaders of Chile Foundation as the year. More than 120,000 bags were sold in 2008. Company Most Committed to the Environment.

· Starting in 2007, Sodimac and Tottus introduced degradable bags in their · Sodimac recycled 20,932 kg of electronic waste in 2008 through its stores that take approximately 2 years to degrade as compared to 300 alliance with Recycla, started in 2007 when 95 kg were recycled. Falabella years for traditional plastic bags. Retail also made an alliance with Recycla during 2008. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 COMMITMENT TO THE COMMUNITY

Our commitment to improving the quality of life of individuals extends to all · Through its Good Neighbor Plan, Sodimac is encouraging its collaborators communities in which we do business. Our diverse businesses collaborate to propose aid projects inside their communities and implement with many social aid initiatives, the most notable being: them with materials or resources contributed by the company and the volunteer work of its collaborators. The projects include remodeling, · For 37 years, our department stores have been pioneers in the field of repair and maintenance of orphanages and senior citizen homes, nursery education through the Creating a School Program in which each store schools and community centers. During 2008, 46 stores participated in sponsors a school. Falabella’s collaboration ranges from infrastructure implementing 41 projects with the active participation of workers. projects to family support workshops, reading programs and athletics. At this time, Creating a School is sponsoring more than 40 thousand children · This year the collaborators of Sodimac Chile more than doubled their in 55 schools in Chile, Peru, Argentina and Colombia. contribution to the Telethon in comparison to 2007, with a donation of nearly 108 million Chilean pesos. The contribution by Sodimac’s · Sodimac delivered its first sustainability report under the Global workers also exceeded that of any other group of workers in the Reporting Initiative (GRI) certification, becoming one of the first retailers nation. For more than one month, the company fostered, encouraged in Latin America to be aligned with the GRI requirements. The report and facilitated the time for workers to gather to hold special events in highlights the six principles guiding its ESR policy: labor relations, support of the Telethon in all branches in the country. Collaborators environment, corporate governance and business ethics, commitment to demonstrated their great ability to work as a team and their the community, commerce and responsible procurement, describing how commitment to that charity. each is inserted in the strategic and management plan of the company. The GRI is one of the most prestigious ESR certifications in the world and · Falabella and Sodimac implemented a job exchange for 2000 refugees it sets down universally accepted parameters for transparent, verifiable from Chaiten in the cities of Puerto Montt, Osorno and Valdivia. People reports on the different dimensions of a company. who had to abandon their home and their belongings because of the Chaitén Volcano eruption were able to begin to reconstruct their lives · Mall Plaza increased the number of jobs held by disabled individuals from with a job. 5% to 10%, thus strengthening its alliance with the National Fund for the Disabled (Fonadis). · For more than 6 years, Sodimac Chile has been sponsoring the Our Children Foundation, which helps underprivileged children suffering · For the third consecutive year, Mall Plaza was among the top 20 most from cancer. Spare change was collected at checkout stands and other responsible companies in Chile according to the ranking elaborated by activities were held during 2008. Sodimac Chile collected a total of 355 the Prohumana Foundation. million pesos for the Foundation. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 53

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· In 2008, CMR Falabella contributed an aggregate of 1,382 million pesos · At this time, more than 300 children and adolescents from underprivileged to diverse charity and non-profit organizations, including Christ’s Home, sectors in the boroughs of influence of the Mall Plazas are participating Children and Fatherland Foundation, the Firemen’s Association, the in the Mall Plaza Rugby Schools. These schools form part of its social Burned Children’s Charity (Coaniquem) and Las Rosas Foundation. insertion program and aim at providing sound values and tools for life that will make them people of high value to society. Many participants · During 2008, Sodimac granted 1,200 scholarships to clients who were have achieved outstanding athletic accomplishments and have been members of its Circle of Specialists (CES) to undertake certified education players on the national teams in important international events. in their areas of expertise at different universities and technical institutes. They will thus acquire tools for improvement and betterment that · Mall Plaza implemented the first stable fair for microentrepreneurs, produce social value and strengthen the human capital of the nation. located in the surrounding area of Mall Plaza Tobalaba. In 2009, it will also Created in 2005, the CES currently has 148,652 members comprised of be in the Mall Plaza Sur. A safe space will be provided to show, offer and contractors, specialists and construction professionals throughout Chile. sell products, creating new opportunities for development and business.

· Sodimac Chile and Sence signed an agreement to encourage the · Tottus and San Francisco continued with their intensive collaboration employment of youths. Under this agreement, Sodimac promised to with different institutions in the communities where they do business, foster training programs promoted by Sence, with special emphasis on including the San Bernardo Hospital, Christ’s Home, the Firemen’s those of benefit to youths. Association and the Burned Children’s Charity (COANIQUEM). During 2008, each store worked with the community on different activities in · Since 2006, Sodimac Chile has an alliance with the Tacal Foundation to which the Supermarket already plays a leading role. The work done by integrate physically disabled or mentally challenged youths to jobs in its each store with the community is based on the needs of the surrounding stores. At this time, job opportunities have been offered to 41 youths area. Aid or participation may range from contributing to a charitable with some degree of disability in Sodimac Stores and in its store support cause to organization of a mass activity in conjunction with the offices. municipality. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Identification of the company S.A.C.I. FALABELLA

S.A.C.I. Falabella is an open corporation registered under No. 582 in the Securities Registry of the Securities and Insurance Commission. Its registered offices are at Rosas 1665, Santiago; Phone: 380 2000; Fax: 380 2077; P.O. Box 1737. Its taxpayer identification number is 90.749.000-9.

S.A.C.I. Falabella was originally incorporated under the name of “Sociedad Anónima Comercial Industrial Falabella S.A.C.I.F.” by public deed executed March 19, 1937 before Mr. Jorge Gaete Rojas, Notary of Santiago. It was authorized to do business and declared legally installed by Executive Decree 1420 of April 14, 1937, and the by-laws and that executive decree were registered on page 1181, No. 400, and page 1200, No. 401, of the 1937 Commercial Registry of the Santiago Property Registrar.

The aforesaid by-laws and decree were published in the Official Gazette on April 27, 1937 and in La Nacion newspaper of Santiago on April 27, 29 and 30 and May 3 of the same year.

In the years following its incorporation, the by-laws were amended several times, the most recent amendment being approved by the Special General Shareholders Meeting of the Company held April 24, 2007. The minutes of that meeting were executed to public deed on May 4, 2007, before Mr. Enrique Morgan Torres, Notary of Santiago. An abstract of that deed was published in Official Gazette Edition 38762 on May 14, 2007 and registered on page 19,042, No. 13,904, of the 2007 Commercial Registry of the Santiago Property Registrar. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Identification of the company

Banks Senior Executive Salaries Banco Santander, Banco Crédito Inversiones, BBVA, Banco Estado, The Royal Bank of The salaries of senior executives totaled MMCH$2,638 in 2008. Scotland, Banco Itaú, Banco Security, Banco de Chile, Scotiabank, Corpbanca, Banco Bice, HSBC and Deutsche Bank. Insurance The company carries ample coverage for its material assets subject to all types of operating risks. External auditorS Ernst & Young. Trademarks and patentS The Company has registered a large number of trademarks for the products it sells in the country and abroad. To protect those trademarks, the Company is advised by Silva y Cía. The Legal counsel exclusive leading trademarks of S.A.C.I. Falabella that have been registered and are in effect Cristián Lewin Gómez y Cía. Ltda. are Falabella, Sodimac, Mall Plaza, CMR, Tottus, Basement, Newport, Sybilla, Mica, University Club, Yamp, Fratta, Recco, Commodore, Americanino, Doo, Second Image, Mountain Gear, Dorn, Roberta Allen, Textil Viña, Florencia, Magictouch and Casa Joven. Moreover, a company related Risk rating agencies to Sodimac S.A. owns the Homecenter, Homecenter Sodimac, Home Kids, HUM, Asi de Facil, Feller Rate Clasificadora de Riesgo, Fitch Chile Clasificadora de Riesgo Limitada, Clasificadora Do It, Eco Light, Garrity, Mr. Beef, Kolor, Redline, Bauker, Project Tools, Autostyle, Karson, Topex, de Riesgo Humphreys Ltda. (this latter rates the Sodimac bonds). Klunter, Klimber and Mr Chrixtmas trademarks.

FALABELLA HOLDING COMPANY ORGANIZATION CHART

CHIEF EXECUTIVE OFFICER

CORPORATE FINANCE PLANNING & DEVELOPMENT DIVISION DIVISION

CMR MANAGEMENT COMPTROLLERSHIP DIVISION

DEPARTMENT STORE HOME IMPROVEMENT SUPERMARKET RETAIL FINANCE REAL ESTATE MALL PLAZA PERU ARGENTINA COLOMBIA DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 57 ANNUAL REPORT

DividPERSONALend policy DIVIDEPENDSRSONAL PAID PER SHARE The regular general shareholders meeting has established the dividend policy of distributing at least 30% of the company’s profits in each fiscal year. It will make payment Historic Pesos of at least one interim dividend should the course of the company’s business allow. Final Dividend No. 6 Paid May 2002 5.5 Interim Dividend No. 10 Equity Paid November 2002 5.0 The equity of the company totaled MMCH$1,753,063,701 as of December 31, 2008, divided into 2,391,275,389 shares. Final Dividend No. 7 Paid May 2003 10.0 Interim Dividend No. 11 STAFF Paid November 2003 6.0 Final Dividend No. 8 Parent Company subsidiaries total Paid May 2004 11.0 Managers - Executives 65 202 267 Interim Dividend No. 12 Professionals - Technicians 297 5,842 6,139 Paid November 2004 8.0 Workers 212 60,653 60,865 Final Dividend No. 9 Total 574 66,697 67,271 Paid May 2005 14.0 Interim Dividend No. 13 Paid November 2005 10.0 Final Dividend No. 10 DISTRIBUTABLE PROFITS PERSONAL Paid May 2006 18.0 Thousand of pesos 2008 Interim Dividend No. 14 December 31, 2008 Paid November 2006 12.0 Fiscal year profit 202,013,142 Final Dividend No. 11 Less Paid May 2007 22.0 Interim Dividend No. 15 Distributable fiscal year profit 202,013,142 Paid June 2007 9.0 Dividends paid against fiscal year profits Interim Dividend No. 16 Interim dividend paid in fiscal year 0 Paid November 2007 18.0 Interim dividend paid on distributable profits 0% Interim Dividend No. 17 Amortization of goodwill on investment 1,980 Paid February 2008 18.5 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Identification of the company

Audit Committee the Company held April 29, 2008. The budget was set at UF 750 and a fee of 20 UF per According to article 50-bis of Law 18,046, which was added by Law 19,705 on December meeting attended by each member. Expenses against this budget totaled only UF 233 in 20, 2000, and according to regulations in Circular No. 1526 of the Securities and Insurance the fiscal year. Commission dated February 19, 2001, this annual report must discuss the activities of the During 2008, the Audit Committee held four meetings on February 25, April 25, August Company’s Audit Committee that was elected at a board meeting held April 25, 2006 8 and October 29, 2008, at which it engaged in the study of matters within its purview. and will hold office until the regular general shareholders meeting for 2009. The Audit It extensively analyzed the financial statements of the Company, the reports on those Committee members are Sergio Cardone Solari, Hernán Büchi Buc and Alfredo Moreno financial statements submitted both by executives as well as the external auditors, Charme, who are related to the majority shareholders in the company since it is impossible and it looked in detail into the Uniform Codified Statistical Record (FECU) that must be to determine independent directors pursuant to law. presented at certain times to the Securities and Insurance Commission. Once the financial statements and their accompanying reports were approved, they were submitted to The expense budget of this Audit Committee and the compensation received by each the Board, which also approved them. It also studied the progress in the audit plan and member of the committee were set by the regular general shareholders meeting of processes of the company and its subsidiaries.

OWNERSHIP STRUCTURE

S.A.C.I. FALABELLA 100% INVERSIONES PARMIN S.p.A. *

99% 99,99% 99,99% 99,99% INVERSIONES SERVA LTDA. INVERSIONES FALABELLA LTDA. HOME TRADING S.A DESARROLLOS INMOBILIARIOS S.A. (HOLDING INTERNACIONAL)** 88% 99,99% 99,99% 99,99% 99,99% FALABELLA INV. SOCIEDAD DE RENTAS SUPERMERCADOS SF S.A. FALABELLA RETAIL S.A. FINANCIERAS S.A. SODIMAC S.A. FALABELLA S.A 99,99% 59,3% PROMOTORA CMR PLAZA S.A.

99,99% BANCO FALABELLA

92% VIAJES FALABELLA***

99,5% FALABELLA PRO

*Parmin S.p.A. owns the minority interests where S.A.C.I. Falabella has full ownership either directly or indirectly. ** S.A.C.I. Falabella conducts its international businesses through Inversiones Serva Ltda. *** Promotora CMR holds the remaining 8% in Viajes Falabella. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 59 ANNUAL REPORT

Businesses and Activities Declaration of liability and signature of the annual As discussed in this annual report, the principal business of Falabella is the retail sale of report clothing, accessories and home products through department stores, malls and boutiques, The directors of S.A.C.I. Falabella identified above declare that they are liable for the veracity of all information in this annual report and they themselves have as well as food through hypermarkets and supermarkets. It has also developed Financial signed it. Services (the issuance of credit cards, insurance brokering, banking and travel agency) and the manufacture of textiles. Ownership

Competition comes directly from the three other large department store chains: Name Taxpayer I.D. shares pErcentage Paris, Ripley and La Polar; from multi-purpose stores (Hites, Tricot, Corona and DERSA SA 9599900-K 464,564,937 19.4% Johnson’s) and from boutiques. In Home Improvement, the main competitors are INVERSIONES TERCERA LIGURIA LTDA 77531670-5 264,864,194 11.1% Easy, construction and hardware stores. The leading competitors in hypermarkets and supermarkets are Lider, Jumbo, Santa Isabel, Unimarc and Deca, among other INVERSIONES SAN VITTO LTDA 77945970-5 243,698,146 10.2% chains. The competition in Malls comes mainly from Parque Arauco and Cencosud HELSO DOS S.A. 99556510-2 158,262,845 6.6% Shopping Centers while in Financial Services it consists of different credit cards LUCEC TRES S.A. 99556440-8 158,262,845 6.6% managed by banks and stores, debit cards, consumer loans offered by banks, INVERSIONES Y RENTAS DON ALBERTO CUATRO S.A. 99552470-8 150,666,022 6.3% equalization funds and savings associations. In the specific case of Falabella Pro, the competition is comprised of the insurance brokers forming part of other stores MAPCOR CUATRO S.A. 99556480-7 108,247,346 4.5% (Seguros Presto, Seguros Paris, Seguros Ripley, etc.) and the brokers related to other INVERSIONES Y RENTAS DON ALBERTO DOS S.A. 99552430-9 100,650,523 4.2%

financial institutions. Viajes Falabella competes fundamentally against other travel INVERSIONES Y RENTAS DON ALBERTO TRES S.A. 99552450-3 100,650,523 4.2% agencies like Travel Club, Viajes Paris and Cocha. BANCO DE CHILE POR CUENTA DE TERCEROS CA 97004000-5 52,450,043 2.2%

INPESCA S.A. 79933960-9 49,343,681 2.1%

INVERSIONES AUGURI LTDA 78907330-9 36,890,200 1.5% Investment and Finance Policies Falabella is constantly looking for investment opportunities to make its actual business grow, create synergies or that are simply seen as attractive because the know-how of Falabella is valuable to the development of those businesses. Each investment is studied and evaluated according to cash flow projections and strategic value. The finance policies are established for each particular case, always under board-approved guidelines. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Identification of the company

OWNERSHIP AND CONTROL No. of shares pErcentage Interest taxpayer I.D. The company is controlled by the groups of shareholders described below, who hold GRUPO CORSO JUAN CARLOS CORTÉS SOLARI 2.081.442 0.09% 7.017.522-3 87.74% of the shares into which the capital is divided. These controllers have made a TERESA MATILDE SOLARI FALABELLA 2.229.487 0.09% 4.661.725-8 MARÍA FRANCISCA CORTÉS SOLARI 2.082.186 0.09% 7.017.523-1 joint action agreement pursuant to a master agreement they signed July 23, 2003. SOCIEDAD DE INVERSIONES QUITALMAHUE S.A. 18.300.200 0.77% 94.762.000-2 Partners: Teresa Matilde Solari Falabella 5.1% 4.661.725-8 OWNERSHIP AND CONTROL Juan Carlos Cortés Solari 5.9% 7.017.522-3 María Francisca Cortés Solari 5.9% 7.017.523-1 No. of shares pErcentage Interest taxpayer I.D. Inversiones y Rentas Don Alberto Cuatro S.A. 67.0% 99.552.470-8 Inversiones Corso S.A. 16.2% 96.958.870-6 GRUPO AUGURI

MARÍA LUISA SOLARI FALABELLA 19.478.080 0.81% 4.284.209-5 SOCIEDAD DE INVERSIONES QS S.A. 348.988 0.01% 99.536.400-K MARÍA CECILIA KARLEZI SOLARI 1.808.143 0.08% 7.005.097-8 Partners: INVERSIONES AUGURI LIMITADA 36.890.200 1.54% 78.907.330-9 Teresa Matilde Solari Falabella 16.1% 4.661.725-8 Partners: The partners are listed together with their interests: Juan Carlos Cortés Solari 19.4% 7.017.522-3 María Luisa Solari Falabella 4% 4.284.209-5 María Francisca Cortés Solari 19.4% 7.017.523-1 María Cecilia Karlezi Solari 96% 7.005.097-8 Inversiones Botny Ltda. 22.6% 77.580.120-4

Inversiones Sofía Ltda. 22.6% 77.580.400-9 INVERSIONES Y RENTAS DON ALBERTO TRES S.A 100.650.523 4.21% 99.552.450-3

Partners: INVERSIONES Y RENTAS DON ALBERTO CUATRO S.A. 150.666.022 6.30% 99.552.470-8 Agrícola Cechi Ltda. 40.05% 77.320.101-6 Partners: María Luisa Solari Falabella 59.95% 4.284.209-5 Teresa Matilde Solari Falabella 100.0% 4.661.725-8

Bethia S.A. 0.0% 78.591.370-1 LUCEC TRES S.A. 158.262.845 6.62% 99.556.440-8 María Luisa Solari Falabella 0.0% 4.284.209-5 Partners:

Agrícola Cechi Ltda. 17.3% 77.320.101-6 MAPCOR CUATRO S.A. 108.247.346 4.53% 99.556.480-7 Inversiones y Rentas Don Alberto Tres S.A. 56.3% 99.552.450-3 Partners: María Luisa Solari Falabella 26.5% 4.284.209-5 Inversiones y Rentas Don Alberto S.A. 0.0% 78.074.310-7 Inversiones y Rentas Don Alberto Cuatro S.A. 49.1% 99.552.470-8 GRUPO BETHIA Teresa Matilde Solari Falabella 50.9% 4.661.725-8 BETHIA S.A 4.963.780 0.21% 78.591.370-1

Partners: MAPTER UNO S.p.A. 13.954.363 0.58% 76.839.420-2 Liliana Solari Falabella 51.0% 4.284.210-9 Partners: Carlos Alberto Heller Solari 15.0% 8.717.000-4 Teresa Matilde Solari Falabella 70.8% 4.661.725-8 Andrea Heller Solari 15.0% 8.717.078-0 Inmobiliaria Solcorfa Limitada 0.0% 78.372.850-8 Inversiones Kennedy S.A. 17.0% 76.584.410-K Mapter Uno S.p.A. 29.2% 76.839.420-2 Inversiones y Asesorías Alpes Ltda. 1.0% 77.447.860-4

Inversiones Romy Ltda. 1.0% 77.449.650-5 MAPTER DOS S.p.A. 4.196.649 0.18% 76.839.460-1

Partners: ANDREA HELLER SOLARI 1.627.341 0.07% 8.717.078-0 Teresa Matilde Solari Falabella 70.2% 4.661.725-8 CARLOS HELLER SOLARI 1.627.342 0.07% 8.717.000-4 Inmobiliaria Solcorfa Limitada 0.0% 78.372.850-8 INVERSIONES PRADILLA LIMITADA 28.465.266 1.19% 78.907.320-1 Mapter Dos S.p.A. 29.8% 76.839.460-1 Partners: The partners are listed together with their interests: Liliana Solari Falabella 20.0% 4.284.210-9 GRUPO DERSA Andrea Heller Solari 40.0% 8.717.078-0 DERSA S.A. 464.564.937 19.43% 95.999.000-K Carlos Alberto Heller Solari 40.0% 8.717.000-4 Partners:

This company is controlled by the individuals indicated below through diverse companies. INVERSIONES Y RENTAS DON ALBERTO DOS S.A. 100.650.523 4.21% 99.552.430-9 José Luis del Río Goudie 4.773.832-6 Partners: Bárbara del Río Goudie 4.778.798-K Bethia S.A. 98.1% 78.591.370-1 Juan Pablo del Río Goudie 5.898.685-2 Inversiones y Asesorías Alpes Ltda. 0.9% 77.447.860-4 Felipe del Río Goudie 5.851.869-7 Inversiones Romy Ltda. 0.9% 77.449.650-5 Ignacio del Río Goudie 6.921.717-6

Sebastián del Río Goudie 6.921.716-8 HELSO DOS S.A. 158.262.845 6.62% 99.556.510-2 Carolina del Río Goudie 6.888.500-0 Partners: Víctor Pucci Labatut 6.474.224-8 Inversiones y Rentas Don Alberto Dos S.A. 76.4% 99.552.430-9

Bethia S.A. 23.6% 78.591.370-1 INVERSIONES VITACURA S.A. 5.376.695 0.22% 88.494.700-6

Partners: INVERSIONES PEBLES S.p.A. 5.852.224 0.24% 76.839.490-3 This company is controlled by the individuals indicated below through diverse companies. Partners: José Luis del Río Goudie 4.773.832-6 Inversiones Doña Eliana S.A. 0.0% 77.447.830-2 Bárbara del Río Goudie 4.778.798-K Liliana Solari Falabella 100.0% 4.284.210-9 Juan Pablo del Río Goudie 5.898.685-2 Felipe del Río Goudie 5.851.869-7 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 61 ANNUAL REPORT

No. of shares pErcentage Interest taxpayer I.D. No. of shares pErcentage Interest taxpayer I.D.

Ignacio del Río Goudie 6.921.717-6 Emilia Solari del Sol 12.3% 21.726.275-5 Sebastián del Río Goudie 6.921.716-8 Inés Solari del Sol 12.3% 22.794.830-2 Carolina del Río Goudie 6.888.500-0 INVERSIONES MENEVADO LIMITADA 1.975.001 0.08% 76.242.240-9 INVERSIONES AUSTRAL LIMITADA 14.255.119 0.60% 94.309.000-9 Partners: Partners: Piero Solari Donaggio 33.3% 9.585.725-6 This company is controlled by the individuals indicated below through diverse companies. Sandro Solari Donaggio 33.3% 9.585.729-9 José Luis del Río Goudie 4.773.832-6 Carlo Solari Donaggio 33.3% 9.585.749-3 Bárbara del Río Goudie 4.778.798-K Juan Pablo del Río Goudie 5.898.685-2 INMOBILIARIA TIBERIO LIMITADA 2.723.902 0.11% 76.215.450-1 Felipe del Río Goudie 5.851.869-7 Partners: Ignacio del Río Goudie 6.921.717-6 Asesorías e Inversiones Barolo Limitada 26.4% 78.907.350-3 Sebastián del Río Goudie 6.921.716-8 Asesorías e Inversiones Brunello Limitada 26.4% 78.907.380-5 Carolina del Río Goudie 6.888.500-0 Asesorías e Inversiones Sangiovese Limitada 26.4% 78.907.390-2 Víctor Pucci Labatut 6.474.224-8 Piero Solari Donaggio 0.5% 9.585.725-6 Sandro Solari Donaggio 0.5% 9.585.729-9 INPESCA S.A. 49.343.681 2.06% 79.933.960-9 Carlo Solari Donaggio 0.5% 9.585.749-3 Partners: Inversiones Cowie Chile Limitada 9.5% 77.933.500-3 This company is controlled by the individuals indicated below through diverse companies. Vicenta Donaggio Marchesiello 9.7% 4.989.188-1 José Luis del Río Goudie 4.773.832-6 Bárbara del Río Goudie 4.778.798-K INMOBILIARIA TIBERIO DOS LIMITADA 3.000.000 0.13% 76.346.160-2 Juan Pablo del Río Goudie 5.898.685-2 Partners: Felipe del Río Goudie 5.851.869-7 Asesorías e Inversiones Barolo Limitada 27.0% 78.907.350-3 Ignacio del Río Goudie 6.921.717-6 Asesorías e Inversiones Brunello Limitada 27.0% 78.907.380-5 Sebastián del Río Goudie 6.921.716-8 Asesorías e Inversiones Sangiovese Limitada 27.0% 78.907.390-2 Carolina del Río Goudie 6.888.500-0 Piero Solari Donaggio 0.5% 9.585.725-6 Víctor Pucci Labatut 6.474.224-8 Sandro Solari Donaggio 0.5% 9.585.729-9 Carlo Solari Donaggio 0.5% 9.585.749-3 GRUPO SAN VITTO Vicenta Donaggio Marchesiello 8.8% 4.989.188-1 INVERSIONES SAN VITTO LIMITADA 243.698.146 10.19% 77.945.970-5 Inversiones Cowie Chile Limitada 8.6% 77.933.500-3 Partners: Asesorías e Inversiones Barolo Limitada 1.0% 78.907.350-3 MEGEVE CONSULTING S.A 1.179.195 0.05% 76.177.760-2 Asesorías e Inversiones Brunello Limitada 1.0% 78.907.380-5 Partners: Asesorías e Inversiones Sangiovese Limitada 1.0% 78.907.390-2 Asesorías e Inversiones Barolo Limitada 5.2% 78.907.350-3 Inversiones Cowie Chile Limitada 97.0% 77.933.500-3 Asesorías e Inversiones Brunello Limitada 5.2% 78.907.380-5 Asesorías e Inversiones Sangiovese Limitada 5.2% 78.907.390-2 ASESORÍAS E INVERSIONES BRUNELLO LIMITADA 10.921.515 0.46% 78.907.380-5 Inversiones Cowie Chile Limitada 84.3% 77.933.500-3 Partners: Sandro Solari Donaggio 49.7% 9.585.729-9 GRUPO LIGURIA Piero Solari Donaggio 2.6% 9.585.725-6 INVERSIONES TERCERA LIGURIA LIMITADA 264.864.194 11.08% 77.531.670-5 Carlo Solari Donaggio 0.5% 9.585.749-3 Partners: Nicolás Solari Etcheberry 9.4% 20.343.055-8 Juan Cuneo Solari 17.3% 3.066.418-3 Diego Solari Etcheberry 9.4% 20.343.057-4 Joanna Queirolo Botta 2.6% 3.981.917-1 Cristóbal Solari Etcheberry 9.4% 21.073.942-4 Paola Cuneo Queirolo 15.1% 8.506.868-7 Jacinta Solari Etcheberry 9.4% 21.757.648-2 María Giorgianna Cuneo Queirolo 15.1% 9.667.948-3 Agustina Solari Etcheberry 9.4% 22.200.236-2 Restwood Corporation S.A. 49.8% 59.091.840-7

ASESORÍAS E INVERSIONES BAROLO LIMITADA 10.921.535 0.46% 78.907.350-3 INVERSIONES HISPANA LIMITADA 34.225.794 1.43% 87.091.000-2 Partners: Partners: Piero Solari Donaggio 49.0% 9.585.725-6 Juan Cuneo Solari 10.4% 3.066.418-3 Carlo Solari Donaggio 3.7% 9.585.749-3 Joanna Queirolo Botta 5.0% 3.981.917-1 Sandro Solari Donaggio 0.5% 9.585.729-9 Paola Cuneo Queirolo 42.3% 8.506.868-7 María Ignacia Solari O’Shea 11.7% 20.083.054-7 María Giorgianna Cuneo Queirolo 42.3% 9.667.948-3 Pedro Solari O’Shea 11.7% 20.075.203-1 Vicente Solari O’Shea 11.7% 20.825.464-2 GRUPO AMALFI María José Solari O’Shea 11.7% 21.700.505-1 INVERSORA SAN JUAN Y COMPAÑÍA S.A. 25.429.000 1.06% 76.597.450-K RAPALLO S.A. 1.178.602 0.05% 96.920.680-3 ASESORÍAS E INVERSIONES SANGIOVESE LIMITADA 10.921.495 0.46% 78.907.390-2 RENTAS SAN PEDRO LTDA. 20.291.000 0.85% 76.011.920-2 Partners: IMPORTADORA Y COMERCIALIZADORA AMALFI LTDA 4.620.500 0.19% 87.743.700-0 Carlo Solari Donaggio 46.5% 9.585.749-3 INVERSIONES SODEIA CUATRO LTDA. 519.287 0.02% 87.114.000-6 Sandro Solari Donaggio 3.8% 9.585.729-9 COMPAÑÍA INVERSORA RÍO BUENO LIMITADA 4.000.000 0.17% 78.435.630-2 Piero Solari Donaggio 0.5% 9.585.725-6 Andrea Solari del Sol 12.3% 20.683.153-7 *These companies are controlled by SERGIO CARDONE SOLARI Olivia Solari del Sol 12.3% 20.992.583-4 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 FINANCIAL STATEMENTS S.A.C.I. FALABELLA

Consolidated financial statements 64

Individual financial statements 118

Information on subsidiaries 161

Addresses 174 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

Opinion of Independent Auditors To the Shareholders and Directors of S.A.C.I. Falabella:

1. We have performed an audit of the consolidated general balance sheets of S.A.C.I. Falabella and subsidiaries as of December 31, 2008 and 2007, and of the corresponding consolidated statements of income and cash flow for the years ending on those dates. The management of S.A.C.I. Falabella are responsible for the preparation of those consolidated financial statements (that include the relevant notes). We are responsible for issuing an opinion on those consolidated financial statements based on our audits. The attached Explanatory Analysis and Material Events do not form an integral part of these consolidated financial statements so this opinion does not include them.

2. Our audits were performed according to generally accepted auditing standards of Chile. Those standards require that we plan and perform our work in order to achieve a reasonable certainty that the financial statements are free from material misstatement. An audit includes the examination, on the basis of tests, of evidence supporting the amounts and information disclosed in the financial statements. An audit also includes an evaluation of the accounting principles used and of the material estimates made by the Company’s management, as well as an assessment of the general presentation of the financial statements. We consider our audits to constitute a reasonable basis for our opinion.

3. In our opinion, the aforesaid consolidated financial statements fairly reflect, in all material aspects, the financial situation of S.A.C.I. Falabella and subsidiaries as of December 31, 2008 and 2007 and the results of their operations and cash flow for the years ending on those dates, according to generally accepted accounting principles of Chile.

Eduardo Rodriguez B.

Santiago, February 20, 2009 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 65 ANNUAL REPORT

CONSOLIDATED GENERAL BALANCE SHEET IN Thousand of CHILEAN pesos · December 31, 2008 AND 2007

ASSETS LIABILITIES

IN Thousand of CHILEAN pesos 2008 2007 IN Thousand of CHILEAN pesos 2008 2007

CURRENT ASSETS CURRENT LIABILITIES

Short-term bank debt 595,742,015 482,317,847 Cash 58,564,222 59,320,158 Time deposits 25,876,063 9,116,245 Long-term bank debt expiring within one year 99,804,943 74,748,364 Marketable securities (net) 795,883 8,649,361 Notes (notes) 63,249,966 6,932,130 Sales receivables (net) 790,039,710 830,172,989 Bonds (bonds) expiring within one year 175,712,889 26,530,198 Notes receivable (net) 48,510,677 45,243,935 Long-term bank debt expiring within one year - - Sundry receivables (net) 45,280,022 39,786,121 Dividends payable 196,335 48,358,576 Intercompany notes and accounts receivables 34,794,813 29,897,585 Accounts payable 428,387,247 400,341,263 Notes payable 12,206,402 10,395,932 Inventories (net) 561,478,620 429,597,196 Sundry payables 19,625,190 27,063,148 Recoverable taxes 75,483,074 45,558,106 Intercompany notes and accounts payable 7,041,604 22,308,372 Prepaid expenses 22,646,102 24,789,006 Provisions 46,348,339 35,816,703 Deferred taxes 23,906,522 16,713,131 Withholdings 35,283,341 29,390,374 Other current assets 12,742,667 4,570,866 Income tax 8,715,853 6,164,757 Leasing contracts (net) Prepaid revenues 17,623,220 13,306,839 Leasing assets (net) Deferred liabilties - - Other current liabilities 271,016 504,337 TOTAL CURRENT ASSETS 1,700,118,375 1,543,414,699 TOTAL CURRENT LIABILITIES 1,510,208,360 1,184,178,840

PROPERTY, PLANT AND EQUIPMENT LONG-TERM LIABILITIES

Land 383,522,206 323,832,202 Bank debt 550,244,856 456,588,942 Construction and infrastructure 1,070,032,257 748,233,888 Bonds (bonds) 366,973,843 478,288,117 Machinery and equipment 239,908,971 173,810,514 Long-term notes payable 14,108,086 - Other property, plant and equipment 701,224,424 543,887,287 Long-term sundry payable 574,737 350,364 Gain on technical reappraisal of property, plant and equipment 135,082 2,032,021 Long-term intercompany notes and accounts payable - - Long-term provisions 1,278,236 2,050,273 Accumulated Depreciation (less) -498,256,419 -400,077,273 Long-term deferred taxes 46,788,584 42,759,846 Other long-term liabilities 14,446,304 9,281,102

TOTAL PROPERTY, PLANT AND EQUIPMENT 1,896,566,521 1,391,718,639 TOTAL LONG-TERM LIABILITIES 994,414,646 989,318,644

OTHER ASSETS MINORITY INTEREST 161,954,254 92,521,545

Investment in related companies 203,693,344 198,540,518 EQUITY Investment in other companies 320,379 3,037,819 Paid-in capital 532,495,043 532,295,706 Goodwill 274,113,820 289,068,387 Reserve on capital revaluation - - Negative goodwill (less) -2,537 -5,952 Premium on the sale of treasury stock 3,683,699 2,411,720 Long-term receivables 129,761,751 123,711,728 Other reserves 19,911,981 -34,518,854 Long-term intercompany notes and accounts receivable 964,884 1,336,593 Retained earnings (adds 5.24.51.00 to 5.24.56.00) 1,196,972,979 994,977,598 Long-term deferred taxes - - Future dividend reserves - - Intangibles 232,736,046 220,942,802 Cumulative profits 994,959,837 878,942,792 Amortization (less) -32,187,956 -24,986,266 Cumulative losses (less) - - Fiscal year profit (loss) 202,013,142 236,410,857 Other 13,556,335 14,406,232 Interim Dividends (less) - -120,376,051 Long-term leasing contracts (net) Cumulative superavit (Deficit) in development period - -

TOTAL OTHER ASSETS 822,956,066 826,051,861 TOTAL EQUITY 1,753,063,702 1,495,166,170

TOTAL ASSETS 4,419,640,962 3,761,185,199 TOTAL LIABILITIES AND EQUITY 4,419,640,962 3,761,185,199 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

STATEMENT OF INCOME STATEMENT OF CASH FLOW - DIRECT

IN Thousand of CHILEAN pesos 2008 2007 IN Thousand of CHILEAN pesos 2008 2007

OPERATING INCOME NET FLOW FROM OPERATING ACTIVITIES Collection of sales receivables 4,185,362,977 3,266,165,540 Revenues 3,727,186,511 3,071,798,458 Interest income received 22,601,254 6,447,566 COGS -2,658,579,753 -2,176,660,503 Dividends and other distributions received 23,295,887 28,062,420 Gross margin 1,068,606,758 895,137,955 Other income received 35,026,797 32,131,020 Payment to suppliers and employees (less) -3,683,118,181 -2,852,552,451 SG&A expenses -726,803,288 -564,529,723 Interest paid (less) -85,532,920 -44,472,174 Operating profit (loss) 341,803,470 330,608,232 Income tax paid (less) -55,485,668 -37,504,272 Other expenses paid (less) -45,333,010 -16,710,682 NON-OPERATING INCOME Value-added Tax and other similar taxes paid (less) -103,790,843 -83,281,369 Net flow from operating activities 293,026,293 298,285,598 Interest income 13,322,821 9,184,495 NET FLOW FROM FINANCE ACTIVITIES Profit on investments in related companies 35,352,011 45,704,978 Placement of cash shares 18,588,453 4,989,100 Other non-operating income 39,358,966 26,598,690 Loans obtained 936,723,076 870,498,508 Loss on investment in related companies - - Notes 112,557,137 20,980,370 Documented loans from related companies - - Amortization of goodwill -18,393,046 -18,339,057 Other loans obtained from related companies - - Interest expense -73,485,951 -47,854,034 Other sources of financing 1,829,505 796,352 Other non-operating disbursements -21,078,020 -13,807,745 Dividends payments (less) -69,528,160 -150,706,354 Capital distributions (less) - - Price-level restatement -46,039,018 -38,147,443 Loan payments (less) -814,979,918 -632,561,895 Exchange differential 10,863,701 -2,612,480 Note Payments (less) -25,583,901 -16,800,864 Payment of documented loans from related companies (less) - - Non-operating profit (loss) -60,098,536 -39,272,596 Payment of other loans from related companies (less) - - Payment of issue and placement share expenses (less) - - INCOME BEFORE INCOME TAX AND EXTRAORDINARY ITEMS 281,704,934 291,335,636 Payment of bond issue and placement expenses (less) -1,322,559 -19,784,413

Income tax -43,437,921 -33,739,103 Other investment disbursements (less) -25,907 - Net flow from finance activities 158,257,726 77,410,804 PROFIT (LOSS) BEFORE MINORITY INTEREST 238,267,013 257,596,533 NEW FLOW FROM INVESTMENT ACTIVITIES Minority interest -36,255,851 -21,189,095 Sale of property, plant and equipment 6,406,408 7,685,019 Sale of standing investments 1,100 - PROFIT (LOSS) BEFORE AMORTIZATION OF NG 202,011,162 236,407,438 Sale of other investments - 105,224 Collection of documented loans from related companies - - Amortization of goodwill 1,980 3,419 Collection of other loans from related companies - - Other investment income 26,913,742 4,579,683 Addition of property, plant and equipment (less) -450,244,532 -312,015,103 NET PROFIT (LOSS) 202,013,142 236,410,857 Payment of compounded interest (less) - -2,175,390 Standing investments (less) - -51,234,216 Investment in financial securities (less) - -2,796,010 Documented loans to related companies (less) - - Other loans to related companies (less) -6,940,576 -38,176,316 Other investment disbursements (less) -14,039,330 -6,149,909 Net flow from investment activities -437,903,188 -400,177,018

TOTAL NET FLOW IN THE PERIOD 13,380,831 -24,480,616 EFFECT OF INFLATION ON CASH AND CASH EQUIVALENT -1,306,410 -4,720,291 NET CHANGE IN CASH AND CASH EQUIVALENT 12,074,421 -29,200,907 INITIAL BALANCE OF CASH AND CASH EQUIVALENT 77,162,574 106,286,671

ENDING BALANCE OF CASH AND CASH EQUIVALENT 89,236,995 77,085,764 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 67 ANNUAL REPORT

CONSOLIDATED GENERAL BALANCE SHEET IN Thousand of CHILEAN pesos · December 31, 2008 AND 2007

RECONCILIATION OF NET FLOW FROM OPERATING ACTIVITIES NOTE 1. reGISTRATION IN THE SECURITIES REGISTRY AND NET INCOME a) S.A.C.I. Falabella is an open corporation that is registered under No. 582 of the Securities Registry. IN Thousand of CHILEAN pesos 2008 2007 According to Law No. 18,046, it is regulated by the Securities and Insurance Commission. The Company was organized as a corporation on March 19, 1937 before the Santiago Notary Public, Fiscal year profit (loss) 202,013,142 236,410,857 Jorge Gaete Rojas. Its incorporation was legally authorized by Executive Decree No. 1,424 of April 14, 1937. The line of business of the Company is the retail marketing of any kind of product, in addition to Income from the sale of assets 1,428,703 -297,482 investing or participating in companies or businesses in furtherance of its main line of business. Profit (loss) on the sale of property, plant and equipment 1,779,738 -243,319 Profits on the sale of investments (less) -351,035 -54,163 Loss on the sale of investments - - b) Banco Falabella, a subsidiary, is registered under No. 051 of the Registry of the Banking Profit (loss) on the sale of other assets - - Commission.

Debit (credit) to income not representing cash flow 246,079,657 183,140,231 c) Sodimac S.A., a subsidiary, was registered under No. 850 of the Securities Registry of the Securities and Insurance Commission on October 22, 2004. Fiscal year depreciation 84,694,129 64,859,320 Amortization of intangibles 7,147,552 5,451,960 Write-offs and provisions 133,925,121 108,031,355 NOTE 2. ACCOUNTING STANDARDS Profit accrued on investment in related companies -35,352,011 -45,704,978 Loss accrued on investment in related companies - - Amortization of goodwill 18,393,046 18,339,057 a) Accounting period Amortization of negative goodwill (less) -1,980 -3,419 These consolidated financial statements of S.A.C.I. Falabella and subsidiaries correspond to the fiscal Net price-level restatement 46,039,018 38,147,443 years ending December 31, 2008 and 2007. Net exchange differential -10,863,701 2,612,480 Other credits to income not representing cash flow -8,412,256 -19,672,809 b) Preparation Other debits to income not representing cash flow 10,510,739 11,079,822 As of December 31, 2008 and 2007, the consolidated financial statements of the Parent Company Change in assets affecting cash flow (increase) and its subsidiaries were prepared according to generally accepted accounting principles of Chile and -250,814,982 -288,887,349 decrease standards issued by the Securities and Insurance Commission. The standards issued by the Securities Sales receivables 37,083,256 -164,105,845 and Insurance Commission prevail over generally accepted accounting principles should there be Inventories -154,959,406 -89,247,879 any conflict. Other assets -132,938,832 -35,533,625 The financial statements corresponding to foreign companies have been adjusted to generally accepted accounting principles in Chile and they are denominated in Chilean pesos according to the Change in liabilities affecting cash flow increase 58,063,922 146,730,246 provisions in Technical Bulletin No. 64 of the Chilean Accountants Association. (decrease)

Accounts payable in relation to operating income -22,859,589 111,887,967 c) P resentation Interest payable -4,401,873 10,348,345 The financial statements and their respective notes as of December 31, 2007, have been adjusted Income tax payable (net) 6,811,499 1,314,627 off-the-books by 8.9% for comparison purposes, and some minor reclassifications have been made Other accounts payable in relation to non-operating income 84,073,743 19,791,416 Value-added tax and other similar taxes payable (net) -5,559,858 3,387,891 to the actual balances as of the aforesaid date, which did not affect revenues. Profit (loss) on minority interest 36,255,851 21,189,095 d) C onsolidation NET FLOW FROM OPERATING ACTIVITIES 293,026,293 298,285,598 These consolidated financial statements include the assets, liabilities, results and cash flows of the Parent Company and its subsidiaries. Moreover, the amounts and effects of transactions made between the consolidated companies have been eliminated and the share of minority shareholders has been recognized in the minority interest.

An attached table provides the respective interest percentages, both direct and indirect.

The financial statements of Banco Falabella Chile, Banco Falabella Peru and Financiera CMR of Colombia have been excluded from the consolidation in these consolidated financial statements of S.A.C.I. Falabella and subsidiaries by virtue of circular letters No. 1,426 of March 4, 1999, No. 16,328 of December 4, 2007 and No. 3,228 of February 6, 2009, respectively. Such letters authorized the Company not to consolidate such companies pursuant to article 101 of the Companies Regulations given the differences between the accounting standards used by corporations and those used by banks and financial institutions. However, the investment in those entities has been valued according to the proportional equity method. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

Note 10, Investments in Related Companies, summarizes the financial statements of Banco Falabella Chile, Banco Falabella Peru S.A. and Financiera CMR de Colombia as of December 31, 2008 and 2007. e) P rice-level restatement The consolidated financial statements have been adjusted according to price-level restatement regulations and the generally accepted accounting principles of Chile in order to reflect the variation of the buying power of the currency in the relevant periods. Adjustments have been determined on the basis of the consumer price index, published by the National Statistics Institute, which varied 8.9% in the period between November 30, 2007 and November 30, 2008 (7.4% for the same period of the previous year). f) C onversion Assets and liabilities in foreign currencies have been expressed in Chilean pesos at the observed dollar exchange rates published by the Central Bank of Chile, in effect at the closing dates of the financial statements. Balances expressed in unidades de fomento are shown at the respective closing rate of such unit.

The values as of December 31, 2008 and 2007 are as follows:

conversiOn

In Chilean Pesos 2008 2007

U.S. Dollar 636.45 496.89 Unidad de Fomento 21,452.57 19,622.66 New sol (Peru) 202.56 165.80 Argentine peso 184.32 157.79 Euro 898.81 730.94 Colombian peso 0.28 0.25 g) T ime deposits Time deposits are shown valued at the investment cost, plus adjustments and interest accrued at the closing of each fiscal year. h) M arketable securities Marketable securities correspond mainly to mutual fund shares, which are recorded at the share value at the closing of each fiscal year. i) Inventories This line shows business inventories of the Parent Company and its subsidiaries, which are estimated to have an effective turnover in one year. As of December 31, 2008 and 2007, raw materials, products for sale and materials are valued at their average cost. Inventories in Sodimac S.A. are valued at the price of the last purchase, or otherwise, this price is adjusted by the CPI.

These costs do not exceed the net sale values of the products in stock, and the necessary obsolescence provisions have been established. j) Estimated uncollectibles In order to hedge against the risk of uncollectibles, the Parent Company and its subsidiaries have established global provisions for uncollectibles and notes receivable in effect as of December 31, 2008 and 2007, based on the overdue debt. Moreover, they have established an additional risk matrix based on other factors, such as the total debt per debtor in the system, protests, legal and employment information, delays in payment and the like.

These provisions are shown after deducting sales receivables, notes receivables and sundry receivables in the general balance sheet.

Management considers these provisions to be sufficient and net balances to be recoverable. k) P roperty, plant and equipment Property, plant and equipment are shown valued at their acquisition cost, plus the corresponding legal revaluations accrued as of December 31, 2008 and 2007.

Ongoing works include the financing cost arising in the construction stage and that would have been avoided by not undertaking such construction.

Property, plant and equipment include a piece of land owned by Inmobiliaria Málaga S.A., a subsidiary, located in Valdivia. Its value has been adjusted to the technical reappraisal values made in previous years by the company, pursuant to the instructions by the Securities and Insurance Commission (SVS) (in 2007, there were two pieces of land located in Valdivia and Talcahuano). l) D epreciationProperty, of Plant andEquipment Depreciation has been calculated according to the straight-line method on the adjusted value of the goods based on the remaining useful life. Depreciation in the fiscal year is shown in SG&A and Operating Costs. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 69 ANNUAL REPORT

notes to the CONSOLIDATED GENERAL BALANCE SHEEt IN Thousand of CHILEAN pesos · December 31, 2008 AND 2007

m) Leasing assets Goods received in lease with a purchase option that have the characteristics of a financial lease are recorded as if they would have been acquired by the Company and/or its subsidiaries, recognizing the total obligation and interest on an accrual basis. Given the characteristics of these contracts, these assets are not legally their property, so until the corresponding purchase options are exercised, the Parent Company and/or its subsidiaries may not dispose freely of them. These assets are shown under Other Fixed Assets in Property, Plant and Equipment.

n) L ease-backs These transactions, performed by subsidiaries in Peru, are recorded in the books according to Technical Bulletin No. 49 of the Chilean Accountants Association.

The subsequent lease of the goods is recorded according to the provisions in Note 2 m).

Assets associated with these transactions are classified as Other Assets within Property, Plant and Equipment. Liabilities for these contractual obligations are classified as Short- and Long-term Bank Debt (Notes 13 and 14).

o) I ntangibles Intangibles mainly correspond to trademarks, software developments and contractual relationships, which are amortized directly against income, according to the provisions in the accounting regulations.

p) P repaidExpenses This line corresponds to insurance agreements, advertising and leases paid in advance, which are debited against income as they are consummated.

q) I nvestments in related companies These standing investments are valued taking into account the following criteria:

Standing investments made as from January 1, 2003, are valued using the Equity Value (EV) method, using the acquisition method as the basis for adjusting the equity of the company acquired at the fair value, which consists of valuing the assets and liabilities identifiable according to the provisions in Circular Letter No. 1,697 of the Securities and Insurance Commission and Technical Bulletin No. 72 of the Chilean Accountants Association.

Standing investments made prior to January 1, 2003, in stock, whether or not exchange-traded, and interests in companies that involve the power to exercise a significant influence on the issuer, will be valued according to the Proportional Equity Value (VPP) method established in Circular Letter No. 368, and Technical Bulletin No. 42 of the Chilean Accountants Association, which consists of assigning a value to the investment equivalent to the proportion corresponding to the investor in the equity at book values of the issuer, recognizing any variations proportionally. Significant influence is defined in Circular Letter No. 1,697 of the Securities and Insurance Commission.

According to Technical Bulletin No. 64 of the Chilean Accountants Association and the provisions in Circular Letter No. 5,294 of the Securities and Insurance Commission, standing investments abroad in unstable countries whose activities are not an extension of the operations of the same investor are kept in U.S. dollars and the exchange differential between the exchange rate variation and the Consumer Price Index (CPI) is recorded as a credit or debit in the equity account reserve called “Cumulative Adjustment due to Exchange Differential,” which is shown in Other Reserves. Moreover, for obligations relating to the aforesaid investments, recorded as hedging instruments, such difference is recorded as a match to the same equity reserve account.

The exchange parity used in these financial statements to convert the investments in the Republic of Argentina was 3.453 Argentine pesos per US$1 as of December 31, 2008 (3.149 Argentine pesos per US$1 as of December 31, 2007); the exchange parity used for subsidiaries of Peru was 3.142 Peruvian sols per US$1 as of December 31, 2008 (2.997 Peruvian soles per US$1 as of December 31, 2007) while for Colombian subsidiaries, it was 2,243.59 Colombian pesos per US$1 as of December 31, 2008 (2,014.80 Colombian pesos per US$1 as of December 31, 2007).

r) G oodwill and negative goodwill Goodwill and negative goodwill have been calculated based on the cost incurred (higher or lower) in the acquisition of the rights and stock in companies in relation to the proportional equity in the books of the issuer. The amounts so determined are amortized in terms of ten and twenty years, the expected period of payback.

s) Repurchase and resale agreements The purchases of financial instruments with a resale or repurchase clause are recorded at their acquisition value, plus adjustments and interest accrued at the closing of each fiscal year. The values of outstanding investments thus calculated do not exceed the respective market values of such instruments. These instruments have been classified in the line Other Current Assets.

t) I ncome tax and deferred taxes Income tax is recorded based on the taxable net income, determined according to the regulations in the Income Tax Law.

Deferred taxes arising from all temporary differences, tax losses involving a tax benefit and other events creating differences between the tax base and accounting base of assets and liabilities are recognized in the manner established in Technical Bulletins No. 60 and No. 71 of the Chilean Accountants Association and in the regulations of the Securities and Insurance Commission in Circular Letter No. 1,466 dated January 27, 2000.

The foreign subsidiaries determine their taxable income according to the laws in effect in each country. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements u) B onds S.A.C.I. Falabella, Sodimac S.A., S.A.G.A. Falabella S.A. (Peru) and Patrimonio Autonomo S.A. (Peru) recorded bonds at the closing of each fiscal year at their par value, plus interest and adjustments accrued.

The lower price, financial disbursements and other expenses directly associated with the bond issue at the time of placement are shown in the line Other Short- and Long-term Assets and they are amortized during the term of the respective issue. v) VacationProvision The Parent Company and its subsidiaries record the vacation cost of their personnel as expenses for wages and salaries on an accrual basis. w) Severance indemnity As of December 31, 2008 and 2007, the Parent Company and its subsidiaries have recognized in income the present value of the indemnity agreed upon in individual contracts. Said obligation was determined based on the current value of the accrued cost of the benefit pursuant to Technical Bulletin No. 8 of the Chilean Accountants Association.

The subsidiaries in Peru have established a provision to cover severance indemnities according to the laws in such country.

The other companies did not establish any severance indemnity provisions since they have not made agreements on this benefit with employees. x) Revenues Revenues come from the business of the Parent Company and its subsidiaries and are quantified and recognized in the accounting on an accrual basis, taking into account the economic effect of transactions behind them, i.e. when the transaction results in an increase in equity. y) D erivativeAgreements These agreements are recorded on the books pursuant to the accounting regulations in Technical Bulletin No. 57 of the Chilean Accountants Association.

The net balances receivable or payable in derivative transactions are classified in the accounting in the line Short-term Accounts Payable. In the hedging agreements for bank loan transactions, the net balance receivable or payable is classified in the line Short- or Long-term Bank Debt, depending on the period of the hedged item. z) C omputerSoftware

The Parent Company and its subsidiaries have computer software acquired from third parties, which are shown in Intangibles. a.a) Use of estimates The preparation of the financial statements according to accounting principles generally accepted in Chile requires that the Management make estimates and assumptions affecting the amount of assets and liabilities reported and the information on contingent assets and liabilities as well as the amounts of income and expenses in the period. The real income may differ from these estimates. a.b)C ash flow The following short-term investments have been considered in the preparation of the Cash Flow Statement:

· Time deposits with maturities out to no more than 90 days.

· Financial instruments with resale agreements.

· Mutual fund shares.

· Marketable securities to be converted in 90 days.

The operating flow includes mainly all transactions relating to the business of the Company and those that cannot, by nature, be classified as investment or financing.

The difference between the final balance of cash and cash equivalent as of December 31, 2007 and the beginning balance of cash and cash equivalent as of December 31, 2008, equal to ThCh$76,810, corresponds to the addition of the subsidiaries Plaza Vespucio S.A. to the cash flow. a.c)S tock-based compensation plans The Company has implemented a compensation plan for executives by granting stock options. It records, assesses and discloses these transactions according to the provisions in the International Financial Reporting Standard (IFRS) No. 2. Payments are based on stock and the effect of the fair value of the options offered is recognized in the accounting. They are debited against salary expenses in the period when they become irrevocable. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 71 ANNUAL REPORT

COMPANIES IN THE CONSOLIDATION PERCENTAGE INTEREST Taxpayer 12/31/2008 12/31/2007 Id. No. Company Direct Indirect Total Total 96647930-2 INVERFAL S.A. - 100.00 100.00 100.00 90743000-6 PROMOTORA CMR FALABELLA S.A. - 100.00 100.00 100.00 96573100-8 MAVESA LTDA. - 100.00 100.00 100.00 78722910-7 SUPERMERCADOS SAN FRANCISCO S.A. - 88.00 88.00 100.00 76020706-3 INVERSIONES SERVA LTDA. 100.00 - 100.00 - 0-E FALABELLA SUCURSAL URUGUAY S.A. 100.00 - 100.00 100.00 99500360-0 HOME TRADING S.A. 98.00 2.00 100.00 100.00 99593960-6 DESARROLLOS INMOBILIARIOS S.A. 100.00 - 100.00 100.00 76020391-2 INVERSIONES FALABELLA LTDA. 100.00 - 100.00 - 76020385-8 INVERSIONES PARMIN S.p.A. 100.00 - 100.00 - 76000935-0 PROMOTORA CHILENA DE CAFÉ COLOMBIA S.A. - 65.00 65.00 65.00 78406360-7 PROALTO LTDA. - 100.00 100.00 100.00 76291110-8 PUENTE LTDA. - 100.00 100.00 100.00 89627600-K PROSEGEN LTDA. - 100.00 100.00 100.00 76318540-0 LA DEHESA LTDA. - 100.00 100.00 100.00 78334680-K PROSENOR LTDA. - 100.00 100.00 100.00 76383840-4 PRESERTEL LTDA. - 100.00 100.00 100.00 78151550-7 SEGEPRO LTDA. - 100.00 100.00 100.00 76429790-3 PUENTE ALTO 37 LTDA. - 88.00 88.00 88.00 79731890-6 SEGEQUINTA LTDA. - 100.00 100.00 100.00 76429990-6 NATANIEL LTDA. - 88.00 88.00 88.00 78150440-8 SEGESEXTA LTDA. - 100.00 100.00 100.00 76553390-2 FONTOVA LTDA. - 88.00 88.00 88.00 78015390-3 VESPUCIO LTDA. - 100.00 100.00 100.00 76557960-0 LA CALERA LTDA. - 88.00 88.00 88.00 96579870-6 ECOCYCSA LTDA. - 100.00 100.00 100.00 78526990-K OESTE LTDA. - 100.00 100.00 100.00 76583290-K PUERTO ANTOFAGASTA LTDA. - 88.00 88.00 88.00 78636190-7 PROSEVAL LTDA. - 100.00 100.00 100.00 76662220-8 PLAZA PUENTE ALTO LTDA. - 88.00 88.00 88.00 78625160-5 SEGEBOL LTDA. - 100.00 100.00 100.00 76662120-1 CERRO COLORADO LTDA. - 88.00 88.00 88.00 78738460-9 TRADIS LTDA. - 100.00 100.00 100.00 76661890-1 CERRILLOS LTDA. - 88.00 88.00 88.00 78665660-5 SEGESORNO LTDA. - 100.00 100.00 100.00 76662280-1 LA FLORIDA LTDA. - 88.00 88.00 88.00 78839160-9 PROSECHIL LTDA. - 100.00 100.00 100.00 76665890-3 CALE LTDA. - 100.00 100.00 88.00 78919640-0 TRADISUR LTDA. - 100.00 100.00 100.00 78904400-7 SEGETALCA LTDA. - 100.00 100.00 100.00 76767330-2 ANTOFAGASTA CENTRO LTDA. - 88.00 88.00 88.00 78991740-K SEGENAN LTDA. - 100.00 100.00 100.00 77423730-5 SEGEI LTDA. - 100.00 100.00 100.00 77039380-9 SEGECOP LTDA. - 100.00 100.00 100.00 78745900-5 TRASCIENDE LTDA. - 100.00 100.00 100.00 76644120-3 APORTA LTDA. - 100.00 100.00 100.00 77166470-9 SERENA LTDA. - 100.00 100.00 100.00 77152390-0 TOBALABA LTDA. - 100.00 100.00 100.00 77212050-8 SEGEVALPO LTDA. - 100.00 100.00 100.00 96811120-5 PASEO CENTRO LTDA. - 100.00 100.00 100.00 77462160-1 SEGECUR LTDA. - 100.00 100.00 100.00 77565820-7 PROSER LTDA. - 100.00 100.00 100.00 77598800-2 SEGEMONTT LTDA. - 100.00 100.00 100.00 77622370-0 SEGEQUIL LTDA. - 100.00 100.00 100.00 77880500-6 SEGEANGELES LTDA. - 100.00 100.00 100.00 77962250-9 SEGEHUECHURABA LTDA. - 100.00 100.00 100.00 96678300-1 A.T.C. LTDA. - 100.00 100.00 100.00 79598260-4 ADMINISTRADORA CMR FALABELLA LTDA. - 100.00 100.00 100.00 77612410-9 ADESA LTDA. - 100.00 100.00 100.00 0-E INVERSIONES FALABELLA ARGENTINA S.A. - 99.00 99.00 99.00 0-E FALABELLA S.A. - 99.00 99.00 99.00 0-E CMR ARGENTINA S.A. - 99.00 99.00 99.00 0-E VIAJES FALABELLA S.A. - 99.00 99.00 99.00 0-E GARCÍA HERMANOS Y CÍA. S.A. - 97.00 97.00 97.00 0-E CENTRO LOGÍSTICO APLICADO S.A. - 99.00 99.00 - WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

PERCENTAGE INTEREST Taxpayer 12/31/2008 12/31/2007 Id. No. COMPANY Directo Indirecto Total Total 0-E SERVICIOS DE PERSONAL LOGÍSTICO S.A. - 99.00 99.00 - 0-E INVERSIONES Y SERVICIOS FALABELLA PERÚ S.A. - 88.00 88.00 88.00 0-E SAGA FALABELLA S.A. - 83.00 83.00 83.00 0-E FALABELLA CORREDORA DE SEGUROS S.A.C. - 88.00 88.00 88.00 0-E SODIMAC PERU S.A. - 88.00 88.00 88.00 0-E HIPERMERCADOS TOTTUS S.A. - 88.00 88.00 88.00 0-E VIAJES FALABELLA S.A. - 83.00 83.00 83.00 0-E PATRIMONIO AUTÓNOMO - 86.00 86.00 86.00 0-E FALABELLA SERVICIOS GENERALES S.A.C. - 88.00 88.00 88.00 0-E INMOBILIARIA KAINOS S.A.C. - 88.00 88.00 88.00 0-E FALACUATRO S.A. - 88.00 88.00 88.00 0-E LOGÍSTICA Y DISTRIBUCIÓN S.A.C. - 88.00 88.00 88.00 0-E AVENTURA PLAZA S.A. - 60.00 60.00 88.00 0-E MALLS PERÚ S.A. - 88.00 88.00 88.00 0-E INVERSIONES FALABELLA DE COLOMBIA S.A. - 99.00 99.00 99.00 0-E FALABELLA DE COLOMBIA S.A. - 65.00 65.00 65.00 0-E SERVICIOS Y COBRANZAS FALABELLA DE COLOMBIA S.A. - 65.00 65.00 65.00 0-E GAMMA INMOBILIARIA S.A. - 99.00 99.00 99.00 0-E PROVIDENCIA INMOBILIARIA S.A. - 99.00 99.00 99.00 0-E AGENCIA DE SEGUROS FALABELLA PRO LTDA. - 65.00 65.00 65.00 0-E AGENCIA DE VIAJES Y TURISMO FALABELLA LTDA. - 65.00 65.00 65.00 78566830-8 SOC. DE COBRANZAS LEGALES LEXICOM LTDA. - 100.00 100.00 100.00 77235510-6 SERVICIOS DE EVALUACIONES Y COBRANZAS SEVALCO LTDA. - 100.00 100.00 100.00 76512060-8 SOLUCIONES CREDITICIAS CMR LTDA. - 100.00 100.00 100.00 79530610-2 COMERCIALIZADORA E IMPORTADORA IMPOMAC LTDA. - 100.00 100.00 100.00 96681010-6 TRAINEEMAC S.A. - 100.00 100.00 100.00 78582500-4 HOME LET S.A. - 100.00 100.00 100.00 79553230-7 SOC. DE CRÉDITOS COMERCIALES LTDA. - 100.00 100.00 100.00 96665150-4 SODILOG S.A. - 100.00 100.00 100.00 0-E CENTRO HOGAR SODIMAC ARGENTINA S.A. - 100.00 100.00 100.00 78611350-4 SERVICIOS DE COBRANZA CYSER LTDA. - 100.00 100.00 100.00 0-E HOUSEWARE TRADING CO. - 100.00 100.00 100.00 0-E SHEARVAN CORPORATE S.A. - 100.00 100.00 100.00 77099010-6 SERVICIOS FALABELLA PRO LTDA. - 100.00 100.00 100.00 96847200-3 SERVICIOS E INVERSIONES FAS LTDA. - 100.00 100.00 100.00 78997060-2 VIAJES FALABELLA LTDA. - 100.00 100.00 100.00 96827010-9 SERVICIOS DE EVALUACIÓN DE CRÉDITOS EVALCO LTDA. - 100.00 100.00 100.00 78627210-6 SUPERMERCADOS SAN FRANCISCO BUIN S.A. - 99.00 99.00 88.00 77072750-2 COMERCIAL MONSE LTDA. - 100.00 100.00 100.00 76222370-8 SERVICIOS GENERALES BASCUÑAN LTDA. - 100.00 100.00 100.00 78784800-1 SOCIEDAD DE SERVICIOS DE COMERCIO LTDA. - 100.00 100.00 100.00 78908540-4 NORTE SUR LTDA. - 100.00 100.00 100.00 77261280-K FALABELLA RETAIL S.A. - 100.00 100.00 99.00 0-E FALLBROOKS PROPERTIES LTD - 99.00 99.00 99.00 96520050-9 HOMECENTER S.A. - 100.00 100.00 100.00 99556180-8 SODIMAC TRES S.A. - 100.00 100.00 100.00 96792430-K SODIMAC S.A. - 100.00 100.00 100.00 77132070-8 SOUTH AMERICA TEXTILES LTDA. - 100.00 100.00 100.00 0-E INVERSORA FALKEN S.A. - 99.00 99.00 99.00 0-E TEVER CORP. - 99.00 99.00 99.00 99556170-0 SOCIEDAD DE RENTAS FALABELLA S.A. - 100.00 100.00 100.00 96923590-0 INMOBILIARIA MÁLAGA S.A. - 100.00 100.00 100.00 96653660-8 PLAZA DEL TRÉBOL S.A. - 59.28 59.28 64.00 96795700-3 PLAZA LA SERENA S.A. - 59.28 59.28 64.00 96653650-0 PLAZA OESTE S.A. - 59.28 59.28 64.00 96791560-2 PLAZA TOBALABA S.A. - 59.28 59.28 64.00 99564380-4 DESARROLLOS URBANOS S.A. - 59.28 59.28 64.00 99555550-6 PLAZA ANTOFAGASTA S.A. - 59.28 59.28 64.00 76299850-5 INVERSIONES ALCALA S.A. - 59.28 59.28 64.00 79990670-8 ADMINISTRADORA PLAZA VESPUCIO S.A. - 59.28 59.28 64.00 76883720-1 DESARROLLOS E INVERSIONES INTERNACIONALES S.A. - 59.28 59.28 64.00 96538230-5 PLAZA VESPUCIO S.A. - 59.28 59.28 45.00 76882330-8 PLAZA ALAMEDA S.A. - 59.28 59.28 64.00 76882090-2 PLAZA CORDILLERA S.A. - 59.28 59.28 - 76017019-4 PLAZA S.A. - 59.28 59.28 - 76882200-K PLAZA SAN BERNARDO S.A. - 59.28 59.28 64.00 76034238-6 PLAZA S.p.A. - 59.28 59.28 - 76677940-9 PLAZA VALPARAÍSO S.A. - 59.28 59.28 64.00 96872960-8 PLAZA VIÑA DEL MAR S.A. - 59.28 59.28 64.00 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 73 ANNUAL REPORT

PERCENTAGE INTEREST Taxpayer 12/31/2008 12/31/2007 Id. No. COMPANY Direct Indirect Total Total 76020487-0 AGRÍCOLA Y COMERCIAL RÍO CHAMIZA S.A. - 59.28 59.28 - 0-E TRAINEEMAC S.A. - 100.00 100.00 100.00 0-E INVERSIONES SODMIN S.p.A. - 100.00 100.00 - 76821330-5 IMPERIAL S.A. - 60.00 60.00 60.00 76811460-9 SERVICIOS GENERALES MELIPILLA LTDA. - 100.00 100.00 100.00 76007327-K INVERSIONES VENSER DOS LTDA. - 100.00 100.00 - 76973030-3 SERVICIOS GENERALES PUNTA ARENAS LTDA. - 100.00 100.00 - 76910520-4 SERVICIOS GENERALES COLINA LTDA. - 88.00 88.00 - 76042371-8 INVERSIONES SERVA 2 S.A. - 100.00 100.00 - 76023147-9 NUEVA INVERFIN S.A. - 99.00 99.00 - 76015722-8 SERVICIOS GENERALES ALAMEDA LTDA. - 100.00 100.00 - 76012536-9 SERVICIOS GENERALES MULTIBRANDS LTDA. - 100.00 100.00 - 76014726-5 SERVICIOS GENERALES ESTACIÓN CENTRAL LTDA. - 88.00 88.00 - 76009382-3 SERVICIOS GENERALES MANQUEHUE LTDA. - 100.00 100.00 - 76007317-2 INVERCOL S.A. - 100.00 100.00 - 76033206-2 INVERSIONES Y PRESTACIONES VENSER UNO LTDA. - 100.00 100.00 - 76033208-9 INVERSIONES Y PRESTACIONES VENSER DOS LTDA. - 100.00 100.00 - 76033211-9 INVERSIONES Y PRESTACIONES VENSER TRES LTDA. - 100.00 100.00 - 76039672-9 DINALSA S.A. - 100.00 100.00 - 76042509-5 INVERSIONES Y PRESTACIONES VENSER SEIS LTDA. - 100.00 100.00 - 76046433-3 FALABELLA INVERSIONES FINANCIERAS S.A. - 100.00 100.00 - 76046445-7 CONFECCIONES INDUSTRIALES S.A. - 100.00 100.00 - 76046439-2 APYSER S.A. - 100.00 100.00 - 76025699-4 NUEVA SUPERMERCADOS SAN FRANCISCO S.A. - - - 100.00 76033294-1 SERVICIOS GENERALES SAN BERNARDO LTDA. - 100.00 100.00 - 76033466-9 SERVICIOS GENERALES SAN FERNANDO LTDA. - 88.00 88.00 - 76033452-9 SERVICIOS GENERALES EL BOSQUE LTDA. - 88.00 88.00 - 76035886-K PRESTADORA DE SERVICIOS TELEFÓNICOS LTDA. - 100.00 100.00 - 0-E CLAMIJÚ S.A. - 100.00 100.00 100.00

NOTE 3. ACCOUNTING CHANGES

There were no accounting changes as of December 31, 2008.

NOTE 4. shORT- AND LONG-TERM RECEIVABLES

Short- and Long-Term Receivables include the following items:

a) S ales receivables They correspond mainly to sales to customers who use the credit granted by CMR Falabella in Chile and Argentina.

b) N otes receivable

This line includes mainly notes receivable from customers through sales made by non-Falabella credit cards, bills of exchange and post-dated checks, which are usually payable in 30, 60 and 90 days.

c) S undry receivables

They correspond mainly to:

Sundry receivables

IN Thousand of CHILEAN pesos 2008 2007

Staff current accounts and other receivables 8,159,271 6,618,592 Advances to suppliers, customs agents and others 7,806,183 6,812,468 Rent receivable from third parties 18,311 526,295 Accounts receivables from customers and suppliers 12,277,673 3,626,081 Accounts and loans receivable from third parties 9,648,405 5,208,980 Insurance claims 1,106,799 801,962 Other 6,263,380 6,191,743

Total 45,280,022 39,786,121 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

Below are the short- and long-term receivables as of December 31, 2008 and 2007.

SHORT- AND LONG-TERM RECEIVABLES CURRENT ASSETS Long Term Line Out to 90 days More than 90 days to 1 year Subtotal Total Current Assets (net) 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2008 12/31/2007 12/31/2008 12/31/2007 Sales receivables 606,176,395 604,086,680 238,774,186 226,086,309 844,950,581 790,039,710 830,172,989 125,742,304 120,531,685 Estimated uncollectibles - 54,910,871 Notes receivable 50,427,686 42,421,814 1,851,524 2,822,121 52,279,210 48,510,677 45,243,935 2,664,480 1,848,058 Estimated uncollectibles - 3,768,533 Sundry receivables 34,030,412 37,149,439 12,316,789 2,636,682 46,347,201 45,280,022 39,786,121 1,354,967 1,331,985 Estimated uncollectibles - 1,067,179

Total Long-Term Receivables 129,761,751 123,711,728

NOTE 5. interCOMPANY BALANCES AND TRANSACTIONS

The main intercompany balances receivable and payable are as follows: a) Short-term receivables: 1. BancoFalabella Peru S .A. The balance receivable corresponds to trade account transactions expressed in sols and dollars, mainly with S.A.G.A. Falabella Peru, Hipermercado Tottus and Sodimac Peru.

2. InmobiliariaMall C alamaS. A. The balance receivable corresponds mainly to a trade account transaction expressed in UF, without interest, with Sodimac S.A.

3. BancoFalabella The balance comes from trade account transactions with Falabella Retail S.A. and Administradora CMR Ltda.

4. CMR FalabellaS.A . (Colombia) The balance receivable comes mainly from Servicios y Cobranzas Falabella de Colombia, Falabella de Colombia and Administradora CMR Falabella Ltda. It corresponds to a trade account transaction.

5. AdministradorFinanciero T deransantiago S.A. The balance receivable corresponds to transactions recorded in the trade account, expressed in UF from Promotora CMR Falabella S.A.

6. SodimacColombia S.A . The balance receivable comes mainly from transactions with Sodimac S.A. forming part of the company’s business. b) L ong-term balances receivables: 1. Inv. eInmob. M onte deAsis L tda. The long-term balance receivable comes from trade account transactions with San Francisco Buin S.A. c) S hort-term balances payable: 1. FarmaciasAhumada S.A . (FASA) The balance payable corresponds to transactions mainly with Promotora CMR Falabella S.A. recorded in a trade account, expressed in Chilean pesos, without interest.

2. DercoS. A. The balance payable, mainly by Sodimac S.A., corresponds to the purchase of vehicle items and a crane lease, i.e. transactions forming part of the company’s business, expressed in Chilean pesos, without interest.

3.T ricolorS.A . The balance payable corresponds to transactions with Sodimac S.A. recorded in a trade account, expressed in Chilean pesos, without interest. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 75 ANNUAL REPORT

4. EntelPCS Telecomunicaciones The balance payable corresponds to transactions mainly with Falabella Retail S.A. and S.A.C.I. Falabella recorded in a trade account, expressed in Chilean pesos, without interest.

5. ItalmodS.A . The balance payable corresponds to transactions with Falabella Retail S.A. recorded in a trade account, expressed in Chilean pesos, without interest.

Below are the net intercompany balances receivable and payable.

Notes and Account Receivable Short-term Long-term Taxpayer Id. No. Company 12/31/2008 12/31/2007 12/31/2008 12/31/2007 0-E BANCO FALABELLA PERU S.A. 30,498,899 26,281,646 96951230-0 INMOBILIARIA MALL CALAMA S.A. 1,661,939 1,452,494 96509660-4 BANCO FALABELLA 1,147,442 434,781 0-E CMR FALABELLA S.A., C.F.C. (COLOMBIA) 596,420 312,444 99597320-0 ADMINISTRADOR FINANCIERO DE TRANSANTIAGO S.A. 314,755 188,345 0-E SODIMAC COLOMBIA S.A. 119,284 63,232 0-E OTRAS SOCIEDADES 78,179 82995700-0 DERCOCENTER S.A. 76,252 426,335 77693700-2 INV. E INMOB. MONTE DE ASIS LTDA. 68,670 23,772 964,884 1,336,593 99567210-3 AGUAS NUEVAS S.A. 36,586 90193000-7 EMPRESA EL MERCURIO S.A.P. 30,095 86577500-8 PESQUERA FRIOSUR S.A. 26,697 32,841 90256000-9 SOCIEDAD HIPÓDROMO CHILE S.A. 26,204 1,512 86899700-1 Inmobiliaria Prodeco S.A. 25,464 25,680 96550660-8 CONSTRUCTORA SANTA MARÍA S.A. 21,127 48,233 99520000-7 COMPAÑIA DE PETROLEOS DE CHILE COPEC S.A. 20,551 76011659-9 BANCOFALABELLA CORREDORA DE SEGUROS LTDA. 16,926 92580000-7 EMPRESA NACIONAL DE TELECOMUNICACIONES S.A. 14,077 93061000-3 INDUSTRIA AUTOMOTRIZ FRANCOMECÁNICA S.A. 11,585 3,115 99561030-2 AGUAS ARAUCANÍA S.A. 12,723 95345000-3 ASCOTAN INVERSIONES S.A. 5,940 3,819 96711180-5 INVERSIONES LA HAYA S.A. 5,939 2,112 78572150-0 AGRÍCOLA SUNBERRY S.A. 5,699 2,917 96542880-1 PESQUERA SUR AUSTRAL S.A. 4,970 78103190-9 SOCIEDAD AGRÍCOLA EL CARMEN LTDA. 3,506 224 85697000-0 EMPRESA DE DESARROLLO PESQUERO DE CHILE S.A. 3,331 77403780-2 AGRÍCOLA SAN JOSÉ DE GORBEA LTDA. 3,028 5,831 90212000-9 CLUB HÍPICO DE SANTIAGO S.A. 1,955 1,233 77072500-3 INMOBILIARIA LA SERENA LTDA. 1,907 573 91000000-4 INDUSTRIA NACIONAL DE ALIMENTOS S.A. 1,638 99561010-8 AGUAS DEL ALTIPLANO S.A. 1,969 90413000-1 COMPAÑÍA CERVECERÍAS UNIDAS S.A. 533 78591370-1 BETHIA S.A. 470 378 96537880-4 PESQUERA GRIMAR S.A. 428 602 71644300-0 UNIVERSIDAD DEL DESARROLLO 419 4,467 99012000-5 CÍA. DE SEGUROS DE VIDA CONSORCIO NACIONAL DE SEGUROS S.A. 213 609 96905120-6 LABORUM.COM CHILE S.A. 168 183 99561040-K AGUAS MAGALLANES S.A. - 362 99556040-2 PISCICOLA HORNOPIREN S.A. 68 74 96812740-3 SALMONES FRIOSUR S.A. 35 395 97004000-5 BANCO DE CHILE 77,821 94912000-7 COMERCIAL VIALAT S.A. 3,578 96545450-0 DERCOMAQ S.A. 19,493 95999000-K DERSA S.A. 12 96539380-3 EDICIONES FINANCIERAS S.A. 2,070 96962700-0 FRIOSUR VIII S.A. 180 71238300-3 FUNDACION TELETON 299 94340000-8 IMPORTADORA Y DISTRIBUIDORA ALAMEDA S.A. 3,991 79996090-7 INDUSTRIAS DUROMÁRMOL LTDA. 8,164 88452300-1 ALMAGRO S.A. 1,267 96562380-9 MIS INVERSIONES LTDA. 880 93007000-9 SOCIEDAD QUÍMICA Y MINERA DE CHILE S.A. 2,234 0-E PÉREZ CUESTA S.A.C.I. (ARGENTINA) 173,731 78081820-4 PESQUERA GRIMAR NORTE LTDA. 1,346 76677940-9 PLAZA VALPARAISO S.A. 226,132 79820440-8 TRANSPORTES TOESCA LTDA. 4,296 85487000-9 VIALAT S.A. 877 76299850-5 INVERSIONES ALCALA S.A. 195 94627000-8 PARQUE ARAUCO S.A. 1,304 86685600-1 PROMAC S.A. 228

TOTALS 34,794,813 29,897,585 964,884 1,336,593 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

Notes and accounts payable Short-term Long-term Taxpayer Id. No. Company 12/31/2008 12/31/2007 12/31/2008 12/31/2007 93767000-1 FARMACIAS AHUMADA S.A. 2,227,367 3,279,048 94141000-6 DERCO S.A. 1,219,942 318,874 78318330-7 TRICOLOR S.A. 688,732 609,738 96806980-2 ENTEL PCS TELECOMUNICACIONES S.A. 473,673 273,815 96577470-K ITALMOD S.A. 467,353 857,634 80186300-0 CONSORCIO INDUSTRIAL DE ALIMENTOS S.A. 455,798 205,975 91021000-9 MADECO S.A. 304,738 996,178 78391700-9 INMOBILIARIA E INVERSIONES SANTA CLARA LTDA. 234,132 761,917 0-E SERVICIOS INFORMATICOS S.A. (PERÚ) 174,017 99,681 96658190-5 COPESA PRODUCCIONES E IMPRESOS S.A. 156,231 440 78057000-8 SOTRASER S.A. 147,001 217,339 95946000-0 SOCIEDAD INMOBILIARIA SAN BERNARDO S.A. 120,259 135,878 77075880-7 EFE PUBLICIDAD Y DISEÑO LTDA. 109,506 69,512 96545450-0 DERCOMAQ S.A. 55,038 99597600-5 INMOBILIARIA CERVANTES S.A. 50,735 43,412 99580040-3 EMPRESA PERIODÍSTICA LA CUARTA S.A. 38,521 27,444 77693970-6 INV. E INMOB. SAN FRANCISCO DE EL MONTE LTDA. 28,201 86,934 78187230-K AGRÍCOLA CASAS DEL BOSQUE LTDA. 28,115 28,662 87002500-9 SOC. DE INVERSIONES Y RENTAS LIGURIA LTDA. 21,453 21,369 87736800-9 SOC. DE INVERSIONES Y RENTAS MEGEVE LTDA. 17,073 19,913 79620010-3 ALUMINIOS Y CRISTALES DONAGGIO Y CÍA. 11,280 9,063 78264630-3 COMERCIAL E INVERSIONES NEVADA LTDA. 5,900 94912000-7 COMERCIAL VIALAT S.A. 2,747 96539380-3 EDICIONES FINANCIERAS S.A. 1,379 96812780-2 Friopac S.A. 960 4,919 94627000-8 PARQUE ARAUCO S.A. 531 79996090-7 Industrias Duromármol Ltda. 342 96536560-5 VIVIENDA S.A. 280 61704000-K Corp. Nacional del Cobre de Chile 263 94340000-8 IMPORTADORA Y DISTRIBUIDORA ALAMEDA S.A. 35 85939400-0 INVERSIONES PARAGGI LTDA. 2 1,432,790 99579980-4 EMPRESA PERIODÍSTICA LA TERCERA S.A. 3,694 92580000-7 EMPRESA NACIONAL DE TELECOMUNICACIONES S.A. 41,555 0-E OTRAS SOCIEDADES 56,648 79990670-8 ADMINISTRADORA PLAZA VESPUCIO S.A. 3,896,034 91408000-2 CONSORCIO PERIODÍSTICO DE CHILE S.A. COPESA 493 91000000-4 INDUSTRIA NACIONAL DE ALIMENTOS S.A. 1,167 96521400-3 PAULA EDICIONES S.A. 2,644 96538230-5 PLAZA VESPUCIO S.A. 8,805,602

TOTALS 7,041,604 22,308,372 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 77 ANNUAL REPORT

Transactions

12/31/2008 12/31/2007 Effect on Effect on income income Taxpayer Id. Nature of the (debit)/ (debit)/ Company No. relationship Description of the transaction Amount credit) Amount credit) ADMINISTRADOR FINANCIERO DE TRANSANTIAGO S.A. 99597320-0 COMMON SHAREHOLDERS PRODUCT SALE 137 120 68 58 ADMINISTRADOR FINANCIERO DE TRANSANTIAGO S.A. 99597320-0 COMMON SHAREHOLDERS COLLECTION FEES 1,042,581 876,118 ADMINISTRADOR FINANCIERO DE TRANSANTIAGO S.A. 99597320-0 COMMON SHAREHOLDERS MISCELLANEOUS EXPENSES 184 -184 ADMINISTRADORA PLAZA VESPUCIO S.A. 79990670-8 SUBSIDIARY OF SUBSIDIARY LEASE AND COMMON EXPENSES 2,343,310 -1,969,660 ADMINISTRADORA PLAZA VESPUCIO S.A. 79990670-8 SUBSIDIARY OF SUBSIDIARY RELATED COMPANY TRADE ACCOUNT 5,922,099 ADMINISTRADORA PLAZA VESPUCIO S.A. 79990670-8 SUBSIDIARY OF SUBSIDIARY MISCELLANEOUS EXPENSES 2,990,823 ADMINISTRADORA PLAZA VESPUCIO S.A. 79990670-8 SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 135 115 AERO ANDINA S.A. 77833100-4 RELATED DIRECTOR PRODUCT SALE 18,187 2,653 AGRÍCOLA BELLAVISTA S.A. 96620340-4 RELATED DIRECTOR PRODUCT SALE 27 24 11 10 AGRÍCOLA CASAS DEL BOSQUE LTDA. 78187230-K RELATED DIRECTOR PRODUCT PURCHASE 85,181 72,173 AGRÍCOLA CASAS DEL BOSQUE LTDA. 78187230-K RELATED DIRECTOR PROMOTIONS 2,426 2,038 2,616 2,198 AGRÍCOLA CASAS DEL BOSQUE LTDA. 78187230-K RELATED DIRECTOR ADVERTISING 3,158 2,654 AGRÍCOLA CASAS DEL BOSQUE LTDA. 78187230-K RELATED DIRECTOR PRODUCT SALE 23,622 575 18,857 2,350 AGRÍCOLA CASAS DEL SUR LTDA. 77988540-2 RELATED DIRECTOR PRODUCT SALE 3,416 AGRÍCOLA E INVERSIONES SAN JOSÉ LTDA. 78034820-8 RELATED DIRECTOR PRODUCT SALE 28 AGRÍCOLA SAN JOSÉ DE GORBEA LTDA. 77403780-2 RELATED DIRECTOR MISCELLANEOUS EXPENSES 7,046 6,871 AGRÍCOLA SAN JOSÉ DE GORBEA LTDA. 77403780-2 RELATED DIRECTOR PRODUCT SALE 8,876 7,896 9,157 8,031 AGRÍCOLA SUNBERRY S.A. 78572150-0 RELATED DIRECTOR PRODUCT SALE 6,735 5,722 6,778 5,934 AGUAS ARAUCANÍA S.A. 99561030-2 RELATED DIRECTOR LEASE AND COMMON EXPENSES 19,530 -17,336 22,860 -20,053 AGUAS ARAUCANÍA S.A. 99561030-2 RELATED DIRECTOR MISCELLANEOUS EXPENSES 1,767 -1,485 AGUAS ARAUCANÍA S.A. 99561030-2 RELATED DIRECTOR PRODUCT SALE 14,623 64 20,282 2,867 AGUAS DEL ALTIPLANO S.A. 99561010-8 RELATED DIRECTOR LEASE AND COMMON EXPENSES 13,395 -11,915 20,818 -18,456 AGUAS DEL ALTIPLANO S.A. 99561010-8 RELATED DIRECTOR MISCELLANEOUS EXPENSES 251 -211 AGUAS DEL ALTIPLANO S.A. 99561010-8 RELATED DIRECTOR PRODUCT SALE 7,918 -435 7,082 9 AGUAS MAGALLANES S.A. 99561040-K RELATED DIRECTOR LEASE AND COMMON EXPENSES 3,235 -2,829 5,130 -4,503 AGUAS MAGALLANES S.A. 99561040-K RELATED DIRECTOR PRODUCT SALE 777 -6 5,187 AGUAS NUEVAS S.A. 99567210-3 RELATED DIRECTOR PRODUCT SALE 95,257 164,181 ALMAGRO DIVISIÓN COMISIONES DE CONFIANZA S.A. 96853810-1 RELATED DIRECTOR PRODUCT SALE 111 98 ALMAGRO S.A. 88452300-1 RELATED DIRECTOR PRODUCT SALE 968 859 ALUMINIOS Y CRISTALES DONAGGIO Y CÍA. 79620010-3 RELATED DIRECTOR PRODUCT PURCHASE 142,903 113,356 ALUMINIOS Y CRISTALES DONAGGIO Y CÍA. 79620010-3 RELATED DIRECTOR PROMOTIONS 3,197 2,798 2,740 2,344 ALUMINIOS Y CRISTALES DONAGGIO Y CÍA. 79620010-3 RELATED DIRECTOR TRANSPORTATION SERVICES 1,458 1,232 154 136 ALUMINIOS Y CRISTALES DONAGGIO Y CÍA. 79620010-3 RELATED DIRECTOR PRODUCT SALE 9,330 8,203 4,268 3,776 ASCOTAN INVERSIONES S.A. 95345000-3 RELATED DIRECTOR PRODUCT SALE 21,636 18,535 38,067 32,343 ASESORÍAS E INVERSIONES FDP LTDA, 78368200-1 RELATED DIRECTOR FINANCIAL ASSISTANCE 97,194 -97,194 355,785 -355,785 ASESORÍAS E INVERSIONES FDP LTDA, 78368200-1 RELATED DIRECTOR PRODUCT SALE 173 157 180 158 AZUL AZUL S.A. 76838140-2 RELATED DIRECTOR ADVERTISING 38,975 -33,881 AZUL AZUL S.A. 76838140-2 RELATED DIRECTOR PRODUCT SALE 1,937 1,704 287 244 BANCO DE CHILE 97004000-5 RELATED DIRECTOR LEASE AND COMMON EXPENSES 493,599 454,895 BANCO DE CHILE 97004000-5 RELATED DIRECTOR COLLECTION FEES 25,660 -21,563 BANCO DE CHILE 97004000-5 RELATED DIRECTOR MISCELLANEOUS EXPENSES 96,374 -89,338 BANCO DE CHILE 97004000-5 RELATED DIRECTOR PRODUCT SALE 8,448 7,209 BANCO FALABELLA 96509660-4 SUBSIDIARY LEASE AND COMMON EXPENSES 1,697,148 1,353,490 984,121 1,038,003 BANCO FALABELLA 96509660-4 SUBSIDIARY FINANCIAL ASSISTANCE 442,174 -371,575 BANCO FALABELLA 96509660-4 SUBSIDIARY CREDIT COMMITTEE 24,000 24,000 217,800 217,800 BANCO FALABELLA 96509660-4 SUBSIDIARY COLLECTION FEES 120,243 101,045 379,660 319,042 BANCO FALABELLA 96509660-4 SUBSIDIARY OUTSOURCING FEE 218,246 218,246 BANCO FALABELLA 96509660-4 SUBSIDIARY TRADE ACCOUNT 7,272,845 9,235,422 BANCO FALABELLA 96509660-4 SUBSIDIARY BANK CHARGES 108,598 -91,259 BANCO FALABELLA 96509660-4 SUBSIDIARY MISCELLANEOUS EXPENSES 137,225 -115,313 60,099 -50,201 BANCO FALABELLA 96509660-4 SUBSIDIARY PROMOTIONS 1,072,121 901,540 761,845 640,206 BANCO FALABELLA 96509660-4 SUBSIDIARY PROMOTIONS 2 126,103 106,570 657,620 554,750 BANCO FALABELLA 96509660-4 SUBSIDIARY ADVERTISING 5,370 4,902 BANCO FALABELLA 96509660-4 SUBSIDIARY COMPUTER SERVICES 305,381 256,622 111,137 93,393 BANCO FALABELLA 96509660-4 SUBSIDIARY MANAGEMENT SERVICES 1,681,545 -1,132,237 180,337 151,544 BANCO FALABELLA 96509660-4 SUBSIDIARY COMMUNICATIONS SERVICES 421,941 354,572 276,608 232,444 BANCO FALABELLA 96509660-4 SUBSIDIARY PRODUCT SALE 420,076 69,145 236,069 53,790 BANCO FALABELLA PERÚ S.A. 0-E SUBSIDIARY OF SUBSIDIARY LEASE AND COMMON EXPENSES 1,319,050 1,094,901 817,953 666,992 BANCO FALABELLA PERÚ S.A. 0-E SUBSIDIARY OF SUBSIDIARY COLLECTION FEES 62,271 52,328 22,994 19,323 BANCO FALABELLA PERÚ S.A. 0-E SUBSIDIARY OF SUBSIDIARY SALE FEES 609,978 86,159 411,915 112,859 BANCO FALABELLA PERÚ S.A. 0-E SUBSIDIARY OF SUBSIDIARY FIXED ASSET PURCHASE 47,424 -1,585 16,663 -13,946 BANCO FALABELLA PERÚ S.A. 0-E SUBSIDIARY OF SUBSIDIARY EXCLUSIVITY AGREEMENT 8,849,075 8,817,552 8,365,954 7,989,858 BANCO FALABELLA PERÚ S.A. 0-E SUBSIDIARY OF SUBSIDIARY TRADE ACCOUNT 13,805 10,110 2,026 1,674 BANCO FALABELLA PERÚ S.A. 0-E SUBSIDIARY OF SUBSIDIARY MISCELLANEOUS EXPENSES 340,686 29,268 82,325 11,674 BANCO FALABELLA PERÚ S.A. 0-E SUBSIDIARY OF SUBSIDIARY OTHER TRANSACTIONS WITH RELATED COMPANIES 3,344 2,811 BANCO FALABELLA PERÚ S.A. 0-E SUBSIDIARY OF SUBSIDIARY ADJUSTABLE LOANS 389,629 -356,325 143,745 -88,091 BANCO FALABELLA PERÚ S.A. 0-E SUBSIDIARY OF SUBSIDIARY PROMOTIONS 2,472,012 1,770,779 2,509,404 966,669 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

12/31/2008 12/31/2007 Effect on Effect on income income Taxpayer Nature of the (debit)/ (debit)/ Company Id. No. relationship Description of the transaction Amount credit) Amount credit) BANCO FALABELLA PERÚ S.A. 0-E SUBSIDIARY OF SUBSIDIARY COMPUTER SERVICES 112,063 87,153 119,117 93,597 BANCO FALABELLA PERÚ S.A. 0-E SUBSIDIARY OF SUBSIDIARY MANAGEMENT SERVICES 731,288 -418,864 456,822 -201,376 BANCO FALABELLA PERÚ S.A. 0-E SUBSIDIARY OF SUBSIDIARY COMMUNICATIONS SERVICES 8,163 -6,860 2,717 -2,284 BANCO FALABELLA PERÚ S.A. 0-E SUBSIDIARY OF SUBSIDIARY TRANSPORTATION SERVICES 20,536 17,257 BANCO FALABELLA PERÚ S.A. 0-E SUBSIDIARY OF SUBSIDIARY FIXED ASSET SALE 11,098 9,326 BANCO FALABELLA PERÚ S.A. 0-E SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 272,933 235,210 138,079 118,496 BANCO FALABELLA PERÚ S.A. 0-E SUBSIDIARY OF SUBSIDIARY CMR POINTS 2,713,659 1,320,676 1,272,539 953,307 BANCOFALABELLA CORREDORA DE SEGUROS LTDA. 76011659-9 SUBSIDIARY OF SUBSIDIARY FINANCIAL ASSISTANCE 24,303 24,303 BANCOFALABELLA CORREDORA DE SEGUROS LTDA. 76011659-9 SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 272 BETHIA LTDA. 78591370-1 RELATED DIRECTOR PRODUCT SALE 40 36 CÍA. DE SEGUROS DE VIDA CONSORCIO NACIONAL DE SEGUROS S.A. 99012000-5 RELATED DIRECTOR PRODUCT SALE 114,477 780 1,659 1,440 CÍA. DE SEGUROS DE VIDA CONSORCIO NACIONAL DE SEGUROS S.A. 99012000-5 RELATED DIRECTOR MISCELLANEOUS EXPENSES 336 -283 CLUB HÍPICO DE SANTIAGO S.A. 90212000-9 RELATED DIRECTOR PROMOTIONS 34,061 -28,623 35,105 -29,500 CLUB HÍPICO DE SANTIAGO S.A. 90212000-9 RELATED DIRECTOR PRODUCT SALE 13,717 4,887 16,313 10,862 COMERCIAL E INVERSIONES NEVADA LTDA. 78264630-3 RELATED DIRECTOR PRODUCT PURCHASE 34,819 42,886 COMERCIAL E INVERSIONES NEVADA LTDA. 78264630-3 RELATED DIRECTOR MISCELLANEOUS EXPENSES 3,028 -2,544 COMERCIAL E INVERSIONES NEVADA LTDA. 78264630-3 RELATED DIRECTOR PROMOTIONS 4,760 -4,336 COMERCIAL E INVERSIONES NEVADA LTDA. 78264630-3 RELATED DIRECTOR PRODUCT SALE 1,467 1,291 9,429 8,130 COMERCIAL FRÍOSUR LTDA. 78997880-8 RELATED DIRECTOR PRODUCT SALE 491 51 2,782 24 COMERCIAL VÍALAT S.A. 94912000-7 RELATED DIRECTOR PRODUCT PURCHASE 30 929,032 COMERCIAL VÍALAT S.A. 94912000-7 RELATED DIRECTOR PROMOTIONS 117,113 98,414 COMERCIAL VIALAT S.A. 94912000-7 RELATED DIRECTOR PRODUCT SALE 4,830 86 COMPAÑÍA CERVECERÍAS UNIDAS S.A. 90413000-1 RELATED DIRECTOR PRODUCT SALE 574 509 2,198 1,921 COMPAÑÍA DE PETRÓLEOS DE CHILE COPEC S.A. 99520000-7 RELATED DIRECTOR PRODUCT SALE 75,645 63,648 36,353 31,008 COMPAÑÍA DE PETRÓLEOS DE CHILE COPEC S.A. 99520000-7 RELATED DIRECTOR MISCELLANEOUS EXPENSES 11,293 -9,490 COMPAÑÍA DE PETRÓLEOS DE CHILE COPEC S.A. 99520000-7 RELATED DIRECTOR ADVERTISING 74,949 -74,958 COMPAÑÍA DE PETRÓLEOS DE CHILE COPEC S.A. 99520000-7 RELATED DIRECTOR PRODUCT PURCHASE 61,110 114,849 COMPAÑÍA DE PETRÓLEOS DE CHILE COPEC S.A. 99520000-7 RELATED DIRECTOR ADVERTISING 10,446 -8,795 CONSORCIO INDUSTRIAL DE ALIMENTOS S.A. 80186300-0 RELATED DIRECTOR PRODUCT PURCHASE 2,966,713 1,758,663 CONSORCIO INDUSTRIAL DE ALIMENTOS S.A. 80186300-0 RELATED DIRECTOR PROMOTIONS 308,818 259,511 345,086 289,988 CONSORCIO INDUSTRIAL DE ALIMENTOS S.A. 80186300-0 RELATED DIRECTOR PRODUCT SALE 12,094 10,730 12,894 11,194 CONSORCIO PERIODÍSTICO DE CHILE S.A. COPESA 91408000-2 RELATED DIRECTOR PROMOTIONS 1,167 -981 CONSORCIO PERIODÍSTICO DE CHILE S.A. COPESA 91408000-2 RELATED DIRECTOR PRODUCT SALE 6,259 5,441 5,201 4,530 CONSTRUCTORA SANTA MARÍA S.A. 96550660-8 RELATED DIRECTOR MISCELLANEOUS EXPENSES 3,961 2,554 CONSTRUCTORA SANTA MARÍA S.A. 96550660-8 RELATED DIRECTOR PRODUCT SALE 49,132 41,851 78,741 67,257 CONSULTORA Y AGRÍCOLA RÍO CLARO LTDA. 78169620-K RELATED DIRECTOR MISCELLANEOUS EXPENSES 1,140 714 CONSULTORA Y AGRÍCOLA RÍO CLARO LTDA. 78169620-K RELATED DIRECTOR PRODUCT SALE 1,833 1,601 33 28 COPESA PRODUCCIONES E IMPRESOS S.A. 96658190-5 RELATED DIRECTOR PRODUCT PURCHASE 399 COPESA PRODUCCIONES E IMPRESOS S.A. 96658190-5 RELATED DIRECTOR ADVERTISING 3,038,588 -2,640,087 1,956,129 -1,736,242 CORP. NACIONAL DEL COBRE DE CHILE 61704000-K RELATED DIRECTOR MISCELLANEOUS EXPENSES 33,066 -27,786 CORP. NACIONAL DEL COBRE DE CHILE 61704000-K RELATED DIRECTOR PRODUCT SALE 37,490 31,747 54,331 50,184 DERCO S.A. 94141000-6 RELATED DIRECTOR CRANE LEASE 2,064,237 -1,818,840 1,923,893 -1,684,451 DERCO S.A. 94141000-6 RELATED DIRECTOR LEASE AND COMMON EXPENSES 45,900 38,571 DERCO S.A. 94141000-6 RELATED DIRECTOR PRODUCT PURCHASE 6,055,775 5,516,214 DERCO S.A. 94141000-6 RELATED DIRECTOR MISCELLANEOUS EXPENSES 7,783 6,422 -171 DERCO S.A. 94141000-6 RELATED DIRECTOR MAINTENANCE OF MACHINERY AND EQUIPMENT 32 -28 42 -36 DERCO S.A. 94141000-6 RELATED DIRECTOR PROMOTIONS 40,139 34,531 21,801 18,829 DERCO S.A. 94141000-6 RELATED DIRECTOR IMPORT SERVICES 80,756 81,597 DERCO S.A. 94141000-6 RELATED DIRECTOR TRANSPORTATION SERVICES 112,699 67,417 99,784 87,312 DERCO S.A. 94141000-6 RELATED DIRECTOR PRODUCT SALE 170,837 19,575 276,895 16,995 DERCOCENTER S.A. 82995700-0 RELATED DIRECTOR LEASE AND COMMON EXPENSES 531,726 448,408 849,063 728,101 DERCOCENTER S.A. 82995700-0 RELATED DIRECTOR FIXED ASSET PURCHASE 8,406 DERCOCENTER S.A. 82995700-0 RELATED DIRECTOR MAINTENANCE OF MACHINERY AND EQUIPMENT 3,360 -3,084 17,067 -15,344 DERCOCENTER S.A. 82995700-0 RELATED DIRECTOR PRODUCT SALE 43,751 37,630 28,272 18,638 DERCOMAQ S.A. 96545450-0 RELATED DIRECTOR CRANE LEASE 124,929 -104,982 4,268 -3,586 DERCOMAQ S.A. 96545450-0 RELATED DIRECTOR FIXED ASSET PURCHASE 6,625 DERCOMAQ S.A. 96545450-0 RELATED DIRECTOR PRODUCT PURCHASE 275 DERCOMAQ S.A. 96545450-0 RELATED DIRECTOR MISCELLANEOUS EXPENSES 11,282 -2,521 7,569 -6,036 DERCOMAQ S.A. 96545450-0 RELATED DIRECTOR MAINTENANCE OF MACHINERY AND EQUIPMENT 144,793 -123,965 5,181 -5,140 DERCOMAQ S.A. 96545450-0 RELATED DIRECTOR PRODUCT SALE 189,419 49,089 104,150 14,656 DERSA S.A. 95999000-K RELATED DIRECTOR MISCELLANEOUS EXPENSES 4,557 2,842 DERSA S.A. 95999000-K RELATED DIRECTOR PRODUCT SALE 4,393 122 16,770 1,121 DESARROLLOS OCEÁNICOS S.A. 78893350-9 RELATED DIRECTOR PRODUCT SALE 38 33 56 50 DISTRIBUCIÓN Y SERVICIOS META S.A. 96646430-5 RELATED DIRECTOR PRODUCT SALE 12 11 EDICIONES FINANCIERAS S.A. 96539380-3 RELATED DIRECTOR MISCELLANEOUS EXPENSES 143 -120 111 -94 EDICIONES FINANCIERAS S.A. 96539380-3 RELATED DIRECTOR ADVERTISING 1,866 -1,651 2,667 -2,376 EDICIONES FINANCIERAS S.A. 96539380-3 RELATED DIRECTOR PRODUCT SALE 189 169 4,927 4,214 EFE PUBLICIDAD Y DISEÑO LTDA. 77075880-7 RELATED DIRECTOR PRODUCT PURCHASE 255 1,493 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 79 ANNUAL REPORT

12/31/2008 12/31/2007 Effect on Effect on income income Taxpayer Id. Nature of the (debit)/ (debit)/ Company No. relationship Description of the transaction Amount credit) Amount credit) EFE PUBLICIDAD Y DISEÑO LTDA. 77075880-7 RELATED DIRECTOR MISCELLANEOUS EXPENSES 103,338 -86,839 EFE PUBLICIDAD Y DISEÑO LTDA. 77075880-7 RELATED DIRECTOR PROMOTIONS 954,584 -822,152 1,371,774 -1,171,197 EFE PUBLICIDAD Y DISEÑO LTDA. 77075880-7 RELATED DIRECTOR ADVERTISING 60,505 -50,844 EFE PUBLICIDAD Y DISEÑO LTDA. 77075880-7 RELATED DIRECTOR PRODUCT SALE 27,546 20,818 2,397 2,072 EMPRESA DE DESARROLLO PESQUERO DE CHILE S.A. 85697000-0 RELATED DIRECTOR LEASE AND COMMON EXPENSES 38,295 -33,416 35,498 -31,124 EMPRESA DE DESARROLLO PESQUERO DE CHILE S.A. 85697000-0 RELATED DIRECTOR PRODUCT SALE 44 39 EMPRESA EL MERCURIO S.A.P. 90193000-7 RELATED DIRECTOR PRODUCT PURCHASE 211 EMPRESA EL MERCURIO S.A.P. 90193000-7 RELATED DIRECTOR MISCELLANEOUS EXPENSES 2,599,507 -2,184,461 EMPRESA EL MERCURIO S.A.P. 90193000-7 RELATED DIRECTOR PROMOTIONS 7,793 -7,243 EMPRESA EL MERCURIO S.A.P. 90193000-7 RELATED DIRECTOR ADVERTISING 4,322 -3,729 EMPRESA EL MERCURIO S.A.P. 90193000-7 RELATED DIRECTOR PRODUCT SALE 36,418 30,731 EMPRESA ELÉCTRICA PILMAIQUÉN S.A. 96511810-1 RELATED DIRECTOR PRODUCT SALE 75 68 EMPRESA NACIONAL DE TELECOMUNICACIONES S.A. 92580000-7 RELATED DIRECTOR LEASE AND COMMON EXPENSES 52 -53 EMPRESA NACIONAL DE TELECOMUNICACIONES S.A. 92580000-7 RELATED DIRECTOR COMMUNICATIONS EXPENSES 805,471 -676,871 2,058,468 -1,673,662 EMPRESA NACIONAL DE TELECOMUNICACIONES S.A. 92580000-7 RELATED DIRECTOR COMPUTER SERVICES 141,212 -124,000 EMPRESA NACIONAL DE TELECOMUNICACIONES S.A. 92580000-7 RELATED DIRECTOR COMMUNICATIONS SERVICES 150,012 -131,409 692,682 -582,087 EMPRESA NACIONAL DE TELECOMUNICACIONES S.A. 92580000-7 RELATED DIRECTOR PRODUCT SALE 9,155 8,018 23,654 20,568 EMPRESA PERIODÍSTICA LA CUARTA S.A. 99580040-3 RELATED DIRECTOR PRODUCT PURCHASE 1,037 EMPRESA PERIODÍSTICA LA CUARTA S.A. 99580040-3 RELATED DIRECTOR PROMOTIONS 21,529 -18,091 4,654 -3,911 EMPRESA PERIODÍSTICA LA CUARTA S.A. 99580040-3 RELATED DIRECTOR ADVERTISING 249,339 -213,816 166,587 -146,337 EMPRESA PERIODÍSTICA LA CUARTA S.A. 99580040-3 RELATED DIRECTOR PRODUCT SALE 1,586 1,333 EMPRESA PERIODÍSTICA LA CUARTA S.A. 99580040-3 RELATED DIRECTOR MISCELLANEOUS EXPENSES 90 -76 EMPRESA PERIODÍSTICA LA TERCERA S.A. 99579980-4 RELATED DIRECTOR PROMOTIONS 2,691,913 -2,262,112 909,204 -764,037 EMPRESA PERIODÍSTICA LA TERCERA S.A. 99579980-4 RELATED DIRECTOR ADVERTISING 6,545 -5,598 2,358 -1,981 EMPRESA PERIODÍSTICA LA TERCERA S.A. 99579980-4 RELATED DIRECTOR PRODUCT SALE 223 201 EMPRESAS COPEC S.A. 90690000-9 RELATED DIRECTOR PRODUCT SALE 1,055 886 EMPRESAS DE TRANSPORTE SANTA ANA LTDA. 77821690-6 COMMON SHAREHOLDERS TRANSPORTATION SERVICES 33,747 -28,359 EMPRESAS DE TRANSPORTES ASTUR LTDA. 78887840-0 COMMON SHAREHOLDERS TRANSPORTATION SERVICES 36,724 -30,861 EMPRESAS PENTA S.A. 87107000-8 RELATED DIRECTOR PRODUCT SALE 147 127 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR LEASE AND COMMON EXPENSES 38,822 35,835 2,397 2,015 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR COLLECTION FEES 1,009,628 519,168 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR OUTSOURCING FEE 580,497 487,813 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR PRODUCT PURCHASE 6,276,904 6,457,094 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR RELATED COMPANY TRADE ACCOUNT 47,058 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR COMMUNICATIONS EXPENSES 147,199 -123,754 122,999 -103,270 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR MISCELLANEOUS EXPENSES 201,238 -169,107 35,822 -30,102 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR PROMOTIONS 101,745 85,500 66,826 56,156 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR COMPUTER SERVICES 1,161 976 2,035 1,710 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR COMMUNICATIONS SERVICES 168 -152 895 -787 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR TRANSPORTATION SERVICES 16,426 13,804 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR PRODUCT SALE 657,849 552,830 1,076,069 896,876 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR SALE OF UNIFORMS 4,543 3,818 FARMACIAS AHUMADA S.A. 93767000-1 AFFILIATE LEASE AND COMMON EXPENSES 549,780 479,470 694,100 592,902 FARMACIAS AHUMADA S.A. 93767000-1 AFFILIATE SALE COMMISSIONS 279,060 234,504 379,915 319,257 FARMACIAS AHUMADA S.A. 93767000-1 AFFILIATE PRODUCT PURCHASE 68,295 80,082 FARMACIAS AHUMADA S.A. 93767000-1 AFFILIATE TRADE ACCOUNT 29,992,383 38,980,168 FARMACIAS AHUMADA S.A. 93767000-1 AFFILIATE MISCELLANEOUS EXPENSES 43,607 -37,064 FARMACIAS AHUMADA S.A. 93767000-1 AFFILIATE PRODUCT SALE 210 184 186 163 FEDERACIÓN DE CRIADORES DE CABALLOS CHILENOS 73044000-6 RELATED DIRECTOR PRODUCT SALE 452 386 FRÍOPAC S.A. 96812780-2 RELATED DIRECTOR PRODUCT PURCHASE 29,391 26,145 FRÍOPAC S.A. 96812780-2 RELATED DIRECTOR PRODUCT SALE 833 705 708 617 FRÍOSUR IX S.A. 96962710-8 RELATED DIRECTOR PRODUCT SALE 44 40 168 148 FRÍOSUR X S.A. 96962720-5 RELATED DIRECTOR PRODUCT SALE 1,434 706 1,209 1,030 FUNDACIÓN TELETÓN 71238300-3 RELATED DIRECTOR ADVERTISING 517,499 -456,204 FUNDACIÓN TELETÓN 71238300-3 RELATED DIRECTOR PRODUCT SALE 6,967 5,923 4,671 4,153 IMPORTADORA Y DISTRIBUIDORA ALAMEDA S.A. 94340000-8 RELATED DIRECTOR MAINTENANCE OF MACHINERY AND EQUIPMENT 1 IMPORTADORA Y DISTRIBUIDORA ALAMEDA S.A. 94340000-8 RELATED DIRECTOR PROMOTIONS 64 58 IMPORTADORA Y DISTRIBUIDORA ALAMEDA S.A. 94340000-8 RELATED DIRECTOR PRODUCT SALE 29,381 183 14 12 INDUSTRIA AUTOMOTRIZ FRANCOMECÁNICA S.A. 93061000-3 RELATED DIRECTOR PRODUCT SALE 57,434 17 INDUSTRIAS DUROMÁRMOL LTDA. 79996090-7 RELATED DIRECTOR TRAINING 195 167 INDUSTRIAS DUROMÁRMOL LTDA. 79996090-7 RELATED DIRECTOR PRODUCT PURCHASE 690,670 610,095 INDUSTRIAS DUROMÁRMOL LTDA. 79996090-7 RELATED DIRECTOR PROMOTIONS 2,174 1,895 65 58 INDUSTRIAS DUROMÁRMOL LTDA. 79996090-7 RELATED DIRECTOR IMPORT SERVICES 8,588 7,779 INDUSTRIAS DUROMÁRMOL LTDA. 79996090-7 RELATED DIRECTOR TRANSPORTATION SERVICES 3,496 2,444 4,669 3,600 INDUSTRIAS DUROMÁRMOL LTDA. 79996090-7 RELATED DIRECTOR PRODUCT SALE 4,067 3,564 8,693 7,649 INGENIERÍA E INVERSIONES LTDA. 84890000-1 RELATED DIRECTOR MISCELLANEOUS EXPENSES 1,627 1,595 INGENIERÍA E INVERSIONES LTDA. 84890000-1 RELATED DIRECTOR PRODUCT SALE 92 84 INMOBILIARIA CERVANTES S.A. 99597600-5 AFFILIATE LEASE AND COMMON EXPENSES 43,574 -43,574 47,345 47,345 INMOBILIARIA CERVANTES S.A. 99597600-5 AFFILIATE TRADE ACCOUNT 36,802 37,922 INMOBILIARIA DEL ALBA S.A. 79658420-3 RELATED DIRECTOR PRODUCT SALE 592 515 197 174 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

12/31/2008 12/31/2007 Effect on Effect on income income Taxpayer Id. Nature of the (debit)/ (debit)/ Company No. relationship Description of the transaction Amount credit) Amount credit) INMOBILIARIA E INVERSIONES SANTA CLARA LTDA. 78391700-9 COMMON OWNERS LEASE AND COMMON EXPENSES 2,651,953 -2,228,532 2,260,836 -1,899,880 INMOBILIARIA E INVERSIONES SANTA CLARA LTDA. 78391700-9 COMMON OWNERS ADJUSTABLE LOANS -42,848 INMOBILIARIA E INVERSIONES SANTA CLARA LTDA. 78391700-9 COMMON OWNERS PRODUCT SALE 11,098 9,326 1,727 1,455 INMOBILIARIA LA SERENA LTDA. 77072500-3 RELATED DIRECTOR LEASE AND COMMON EXPENSES 1,051,961 -1,034,540 1,027,218 -1,013,050 INMOBILIARIA LA SERENA LTDA. 77072500-3 RELATED DIRECTOR MISCELLANEOUS EXPENSES 2,480 923 INMOBILIARIA LA SERENA LTDA. 77072500-3 RELATED DIRECTOR PRODUCT SALE 12,621 3,036 8,191 3,192 INMOBILIARIA LAS COLINAS LTDA. 76059320-6 RELATED DIRECTOR PRODUCT SALE 1,418 1,260 INMOBILIARIA MALL CALAMA S.A. 96951230-0 AFFILIATE LEASE AND COMMON EXPENSES 920,308 -805,845 873,267 -764,725 INMOBILIARIA MALL CALAMA S.A. 96951230-0 AFFILIATE TRADE ACCOUNT 320,091 22,917 INMOBILIARIA MALL CALAMA S.A. 96951230-0 AFFILIATE ADJUSTABLE LOANS 124,364 95,024 INMOBILIARIA MALL CALAMA S.A. 96951230-0 AFFILIATE PRODUCT SALE 4,968 4,345 5,917 5,225 INMOBILIARIA PRODECO S.A. 86899700-1 RELATED DIRECTOR LEASE AND COMMON EXPENSES 1,015,315 -990,270 1,136,199 -1,113,452 INMOBILIARIA PRODECO S.A. 86899700-1 RELATED DIRECTOR ADJUSTABLE LOANS 2,175 INMOBILIARIA PRODECO S.A. 86899700-1 RELATED DIRECTOR PRODUCT SALE 26 24 INMOBILIARIA TITANIUM S.A. 99593290-3 RELATED DIRECTOR PRODUCT SALE 46 41 46 39 INV. E INMOB. MONTE DE ASÍS LTDA. 77693700-2 COMMON OWNERS LEASE AND COMMON EXPENSES 1,589,205 -1,445,687 1,661,528 -1,517,611 INV. E INMOB. SAN FRANCISCO DE EL MONTE LTDA. 77693970-6 COMMON OWNERS LEASE AND COMMON EXPENSES 795,646 -708,695 796,170 -713,928 INV. E INMOB. SAN FRANCISCO DE EL MONTE LTDA. 77693970-6 COMMON OWNERS OUTSOURCING FEE 6,851 5,757 8,291 6,966 INV. E INMOB. SAN FRANCISCO DE EL MONTE LTDA. 77693970-6 COMMON OWNERS PRODUCT PURCHASE 18,934 INV. E INMOB. SAN FRANCISCO DE EL MONTE LTDA. 77693970-6 COMMON OWNERS PRODUCT SALE 229,904 194,006 INVERSIONES ALCALÁ S.A. 76299850-5 RELATED DIRECTOR FIXED ASSET PURCHASE 5,020,890 INVERSIONES ALCALÁ S.A. 76299850-5 RELATED DIRECTOR MISCELLANEOUS EXPENSES 1,981 INVERSIONES LA HAYA S.A. 96711180-5 RELATED DIRECTOR FINANCIAL ASSISTANCE 24,531 -24,531 22,474 -22,474 INVERSIONES LAS DOCAS S.A. 96672290-8 RELATED DIRECTOR IMPORT SERVICES 8,157 7,146 INVERSIONES LAS DOCAS S.A. 96672290-8 RELATED DIRECTOR PRODUCT SALE 2,082 1,837 168 150 INVERSIONES MACUL S.A. 96534780-1 RELATED DIRECTOR MISCELLANEOUS EXPENSES 886 1,189 INVERSIONES PARAGGI LTDA. 85939400-0 COMMON OWNERS PURCHASE OF LAND 1,330,611 -7,009 2,880,692 -148,990 INVERSIONES PARAGGI LTDA. 85939400-0 COMMON OWNERS PRODUCT SALE 192 162 INVERSIONES Y CONSTRUCCIONES D Y D LTDA. 87909000-8 RELATED DIRECTOR TECHNICAL ASSISTANCE 64,945 -67,634 71,236 -74,259 ITALMOD S.A. 96577470-K AFFILIATE LEASE AND COMMON EXPENSES 350,489 294,514 262,048 224,417 ITALMOD S.A. 96577470-K AFFILIATE OUTSOURCING FEE 18,618 15,645 19,738 16,588 ITALMOD S.A. 96577470-K AFFILIATE PRODUCT PURCHASE 2,027,932 1,842,821 ITALMOD S.A. 96577470-K AFFILIATE PURCHASE OF UNIFORMS 541,953 -435,392 720,273 -353,219 ITALMOD S.A. 96577470-K AFFILIATE PROMOTIONS 63,559 53,411 95,103 79,918 ITALMOD S.A. 96577470-K AFFILIATE PRODUCT SALE 438,014 366,098 526,109 428,273 JUAN ANDRES FONTAINE Y ASOC. LTDA. 96583390-0 RELATED DIRECTOR FINANCIAL ASSISTANCE 53,271 -53,271 JUAN JOSÉ ROCA 0-E SUBSIDIARY OF SUBSIDIARY MANAGEMENT SERVICES 10,812 -10,812 LABORUM.COM CHILE S.A. 96905120-6 RELATED DIRECTOR MANAGEMENT SERVICES 4,144 -4,007 3,207 -2,725 LABORUM.COM CHILE S.A. 96905120-6 RELATED DIRECTOR PRODUCT SALE 446 397 258 224 LABORUM.COM CHILE S.A. 96905120-6 RELATED DIRECTOR MISCELLANEOUS EXPENSES 2,625 -2,206 LUCCHETTI CHILE S.A. 96568370-4 RELATED DIRECTOR PRODUCT SALE 32 29 MADECO S.A. 91021000-9 RELATED DIRECTOR PRODUCT PURCHASE 6,967,153 7,651,483 MADECO S.A. 91021000-9 RELATED DIRECTOR PROMOTIONS 18,953 17,186 116,444 101,949 MADECO S.A. 91021000-9 RELATED DIRECTOR TRANSPORTATION SERVICES 52,869 47,621 147,420 129,124 MADECO S.A. 91021000-9 RELATED DIRECTOR PRODUCT SALE 2,003 1,749 7,523 2,048 MARÍA SOLEDAD CÁCES MARTÍNEZ 7239495-K COMMON OWNERS LEASE AND COMMON EXPENSES 40,974 -40,974 41,491 -41,491 METALPAR S.A. 96550820-1 RELATED DIRECTOR PRODUCT SALE 175 155 40 35 MIS INVERSIONES LTDA. 96562380-9 RELATED DIRECTOR MISCELLANEOUS EXPENSES 3,085 697 MIS INVERSIONES LTDA. 96562380-9 RELATED DIRECTOR PRODUCT SALE 7,077 6,347 1,371 1,160 MUEBLES IMPERIAL LTDA. 87585600-6 COMMON OWNERS MISCELLANEOUS EXPENSES 136 -114 MUEBLES IMPERIAL LTDA. 87585600-6 COMMON OWNERS PRODUCT SALE 281 236 NICOLÁS MAJLUF LTDA. 78365610-8 COMMON EXECUTIVE TECHNICAL ASSISTANCE 22,434 -23,364 OTRAS SOCIEDADES 0-E AFFILIATE LEASE AND COMMON EXPENSES 8,748 -7,351 OTRAS SOCIEDADES 0-E AFFILIATE MISCELLANEOUS EXPENSES 22,991 -22,991 PARQUE ARAUCO S.A. 94627000-8 RELATED DIRECTOR LEASE AND COMMON EXPENSES 405,811 -341,017 13,602 -11,430 PARQUE ARAUCO S.A. 94627000-8 RELATED DIRECTOR PRODUCT SALE 1,288 1,129 1,411 1,245 PAULA EDICIONES S.A. 96521400-3 RELATED DIRECTOR PROMOTIONS 3,635 -3,055 PAULA EDICIONES S.A. 96521400-3 RELATED DIRECTOR ADVERTISING 20,304 -18,226 15,551 -14,015 PESQUERA FRÍOSUR S.A. 86577500-8 RELATED DIRECTOR PRODUCT SALE 59,430 14,618 73,355 29,873 PESQUERA GRIMAR NORTE LTDA. 78081820-4 RELATED DIRECTOR PRODUCT SALE 72 3,632 PESQUERA GRIMAR S.A. 96537880-4 RELATED DIRECTOR PRODUCT SALE 4,085 136 10,497 350 PESQUERA PACÍFICO SUR S.A. 96847750-1 RELATED DIRECTOR PRODUCT SALE 210 191 677 584 PESQUERA SUR AUSTRAL S.A. 96542880-1 RELATED DIRECTOR PRODUCT SALE 13,102 517 24 20 PISCICOLA HORNOPIREN S.A. 99556040-2 RELATED DIRECTOR PRODUCT SALE 8,634 7,323 17,064 11,747 PLAZA VALPARAÍSO S.A. 76677940-9 SUBSIDIARY OF SUBSIDIARY RELATED COMPANY TRADE ACCOUNT 2,231,116 PLAZA VALPARAÍSO S.A. 76677940-9 SUBSIDIARY OF SUBSIDIARY MISCELLANEOUS EXPENSES 142,001 PLAZA VESPUCIO S.A. 96538230-5 SUBSIDIARY OF SUBSIDIARY FINANCIAL ASSISTANCE 300,114 252,197 PLAZA VESPUCIO S.A. 96538230-5 SUBSIDIARY OF SUBSIDIARY PURCHASE OF LAND 7,711,412 PLAZA VESPUCIO S.A. 96538230-5 SUBSIDIARY OF SUBSIDIARY RELATED COMPANY TRADE ACCOUNT 39,328,351 -205,341 PLAZA VESPUCIO S.A. 96538230-5 SUBSIDIARY OF SUBSIDIARY MISCELLANEOUS EXPENSES 2,785,005 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 81 ANNUAL REPORT

12/31/2008 12/31/2007 Effect on Effect on income income Taxpayer Id. Nature of the (debit)/ (debit)/ Company No. relationship Description of the transaction Amount credit) Amount credit)

PLAZA VESPUCIO S.A. 96538230-5 SUBSIDIARY OF SUBSIDIARY MANAGEMENT SERVICES 1,986 1,986 PROMAC S.A. 86685600-1 RELATED DIRECTOR PRODUCT SALE 13 11 PROMOSERVICE S.A. 96669790-3 RELATED DIRECTOR MISCELLANEOUS EXPENSES 417 -351 566 -513 PROMOSERVICE S.A. 96669790-3 RELATED DIRECTOR PROMOTIONS 927 -779 112 -97 PROMOSERVICE S.A. 96669790-3 RELATED DIRECTOR ADVERTISING 163 -141 SALMONES FRÍOSUR S.A. 96812740-3 RELATED DIRECTOR PRODUCT SALE 6,597 774 4,960 SERVICIOS INFORMÁTICOS S.A. (PERÚ) 0-E SUBSIDIARY OF SUBSIDIARY LEASE AND COMMON EXPENSES 5,627 4,729 4,009 3,368 SERVICIOS INFORMÁTICOS S.A. (PERÚ) 0-E SUBSIDIARY OF SUBSIDIARY TECHNICAL ASSISTANCE 15,652 -13,153 SERVICIOS INFORMÁTICOS S.A. (PERÚ) 0-E SUBSIDIARY OF SUBSIDIARY TRADE ACCOUNT 653 549 SERVICIOS INFORMÁTICOS S.A. (PERÚ) 0-E SUBSIDIARY OF SUBSIDIARY MISCELLANEOUS EXPENSES 98,620 -24,317 42,349 2,200 SERVICIOS INFORMÁTICOS S.A. (PERÚ) 0-E SUBSIDIARY OF SUBSIDIARY OTHER TRANSACTIONS WITH RELATED COMPANIES 1,884 -1,884 SERVICIOS INFORMÁTICOS S.A. (PERÚ) 0-E SUBSIDIARY OF SUBSIDIARY ADJUSTABLE LOANS 7 -5 SERVICIOS INFORMÁTICOS S.A. (PERÚ) 0-E SUBSIDIARY OF SUBSIDIARY COMPUTER SERVICES 215,505 -175,858 87,213 -69,135 SERVICIOS INFORMÁTICOS S.A. (PERÚ) 0-E SUBSIDIARY OF SUBSIDIARY MANAGEMENT SERVICES 827,356 -695,258 316,156 -265,678 SERVICIOS INFORMÁTICOS S.A. (PERÚ) 0-E SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 1,834 1,716 5,120 4,914 SOC. DE INVERSIONES Y RENTAS LIGURIA LTDA. 87002500-9 RELATED DIRECTOR MISCELLANEOUS EXPENSES 245,989 -206,713 246,203 -246,203 SOC. DE INVERSIONES Y RENTAS MEGEVE LTDA. 87736800-9 RELATED DIRECTOR MISCELLANEOUS EXPENSES 245,989 -206,713 246,203 -246,203 SOC. DE INVERSIONES Y RENTAS MEGEVE LTDA. 87736800-9 RELATED DIRECTOR PRODUCT SALE 18,581 SOCIEDAD AGRÍCOLA EL CARMEN LTDA. 78103190-9 RELATED DIRECTOR PRODUCT SALE 16,125 14,174 7,128 6,288 SOCIEDAD COMERCIAL Y EDITORIAL SANTIAGO 79694030-1 RELATED DIRECTOR PRODUCT SALE 76 67 SOCIEDAD DE DESARROLLO E INVERSIONES RYL LTDA. 78478010-4 RELATED DIRECTOR FINANCIAL ASSISTANCE 23,537 -23,537 84,756 -84,756 SOCIEDAD HIPÓDROMO CHILE S.A. 90256000-9 RELATED DIRECTOR PROMOTIONS 58,348 -8,628 34,885 SOCIEDAD HIPÓDROMO CHILE S.A. 90256000-9 RELATED DIRECTOR PRODUCT SALE 15,467 5,796 24,640 17,459 SOCIEDAD INMOBILIARIA SAN BERNARDO S.A. 95946000-0 RELATED DIRECTOR LEASE AND COMMON EXPENSES 1,160,206 -1,042,068 1,352,059 -1,220,097 SOCIEDAD QUÍMICA Y MINERA DE CHILE S.A. 93007000-9 RELATED DIRECTOR PRODUCT SALE 188 -243 6,318 5,444 SODIMAC COLOMBIA S.A. 0-E SUBSIDIARY OF SUBSIDIARY PRODUCT PURCHASE 27,213 SODIMAC COLOMBIA S.A. 0-E SUBSIDIARY OF SUBSIDIARY TRADE ACCOUNT 320 SODIMAC COLOMBIA S.A. 0-E SUBSIDIARY OF SUBSIDIARY MISCELLANEOUS EXPENSES 366,560 279,592 SODIMAC COLOMBIA S.A. 0-E SUBSIDIARY OF SUBSIDIARY ADJUSTABLE LOANS 5,761 -2,555 SODIMAC COLOMBIA S.A. 0-E SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 126,500 128,794 15,050 15,586 SOTRASER S.A. 78057000-8 RELATED DIRECTOR PRODUCT PURCHASE 659,868 SOTRASER S.A. 78057000-8 RELATED DIRECTOR TRANSPORTATION SERVICES 2,176,208 -1,858,534 3,115,789 -2,655,898 SOTRASER S.A. 78057000-8 RELATED DIRECTOR PRODUCT SALE 134,128 111,592 142,144 158,852 TELEMERCADOS EUROPA S.A. 87711200-4 RELATED DIRECTOR PRODUCT PURCHASE 47,036 325,332 TELEMERCADOS EUROPA S.A. 87711200-4 RELATED DIRECTOR PRODUCT SALE 3,781 3,277 607 523 TRANSPORTES SAN ALEJANDRO LTDA. 76212250-2 COMMON SHAREHOLDERS TRANSPORTATION SERVICES 39,396 -33,106 TRANSPORTES SANTA JULIA LTDA. 77921180-0 COMMON SHAREHOLDERS TRANSPORTATION SERVICES 34,730 -29,185 TRICOLOR S.A. 78318330-7 RELATED DIRECTOR TRAINING 2,142 1,870 1,555 1,350 TRICOLOR S.A. 78318330-7 RELATED DIRECTOR PRODUCT PURCHASE 5,772,377 6,259,228 TRICOLOR S.A. 78318330-7 RELATED DIRECTOR PROMOTIONS 141,828 123,553 129,161 112,600 TRICOLOR S.A. 78318330-7 RELATED DIRECTOR MANAGEMENT SERVICES 10,966 9,442 TRICOLOR S.A. 78318330-7 RELATED DIRECTOR TRANSPORTATION SERVICES 121,287 106,063 85,302 74,701 TRICOLOR S.A. 78318330-7 RELATED DIRECTOR PRODUCT SALE 55,347 46,538 12,613 11,140 UNIVERSIDAD DEL DESARROLLO 71644300-0 RELATED DIRECTOR TRAINING 90 -94 UNIVERSIDAD DEL DESARROLLO 71644300-0 RELATED DIRECTOR PRODUCT SALE 19,083 16,812 19,215 16,833 VÍALAT S.A. 85487000-9 RELATED DIRECTOR PRODUCT SALE 1,501 -15,516 9 8 VINOS TURISMO Y GASTRONOMÍA TANINO LTDA. 76552930-1 RELATED DIRECTOR PRODUCT PURCHASE 229 VIÑA INDÓMITA S.A. 99568600-7 RELATED DIRECTOR PRODUCT SALE 1,854 1,633 120 101 VIVERO SAN SEBASTIÁN LTDA. 77170590-1 RELATED DIRECTOR PRODUCT SALE 88 77 78 71 CMR FALABELLA S.A., C.F.C. (COLOMBIA) 0-E SUBSIDIARY OF SUBSIDIARY LEASE AND COMMON EXPENSES 142,152 142,152 43,316 -43,316 CMR FALABELLA S.A., C.F.C. (COLOMBIA) 0-E SUBSIDIARY OF SUBSIDIARY SALE FEES 11,419 11,419 CMR FALABELLA S.A., C.F.C. (COLOMBIA) 0-E SUBSIDIARY OF SUBSIDIARY COMPUTER SERVICES 215,706 215,706 CMR FALABELLA S.A., C.F.C. (COLOMBIA) 0-E SUBSIDIARY OF SUBSIDIARY TRADE ACCOUNT 36,077,264 17,962,116 CMR FALABELLA S.A., C.F.C. (COLOMBIA) 0-E SUBSIDIARY OF SUBSIDIARY MISCELLANEOUS EXPENSES 12,201 12,201 CMR FALABELLA S.A., C.F.C. (COLOMBIA) 0-E SUBSIDIARY OF SUBSIDIARY LATE INTEREST CHARGES 3,676 3,676 23,814 -23,814 CMR FALABELLA S.A., C.F.C. (COLOMBIA) 0-E SUBSIDIARY OF SUBSIDIARY PROMOTIONS 9,783 9,783 60,177 38,395 CMR FALABELLA S.A., C.F.C. (COLOMBIA) 0-E SUBSIDIARY OF SUBSIDIARY COMMUNICATIONS SERVICES 175,960 175,960 23,960 -23,960 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

NOTE 6. inVENTORIES

Itemization 2008 2007 IN Thousand of CHILEAN pesos

Raw materials 1,178,093 2,597,746 Products in process 416,031 68,698 Products for sale 501,989,238 383,933,189 Materials, containers and spare parts 2,445,944 1,350,549 Goods in transit 59,620,438 44,093,954 Obsolescence Provision (less) (4,171,124) (2,446,940) Totals 561,478,620 429,597,196

NOTE 7. deferred TAXES AND INCOME TAXES a) G eneralInformation As of December 31, 2008, the Company has calculated income tax at the rate of 17%, which is the rate prevailing in 2008 pursuant to Law 19753, published in the Official Gazette on September 28, 2001. Deferred taxes have also been calculated and provisioned for on the basis of temporary differences at the rate of 17%, taking into account that the December 31, 2008 balances for the short and long term will be reversed during 2009 and beyond, years when the tax rate will remain the same pursuant to the aforesaid law. b)T axableRetained Earnings The situation of the retained earnings of the Company is as follows as of December 31, 2008 and 2007:

Taxable Retained Earnings 2008 2007 IN Thousand of CHILEAN pesos

Non-Taxable Retained Earnings (FUNT) 584,279 584,635 No credit 100,880,735 48,890,347 10% credit 266,509 266,672 15% credit 53,147,785 26,952,741 16% credit 20,834,005 28,623,330 16.5% credit 20,479,846 16,895,727 17% credit 143,296,074 190,904,969

Total 339,489,233 313,118,421 c) I ncome tax and deferred taxes The debit to income in the period for income tax amounted to M$47,326,671 (M$39,047,464 in 2007). It corresponds to taxes owed by S.A.C.I. Falabella, calculated as of December 31, 2008. The credit to income in the period for deferred taxes amounted to M$419,590 (M$744,557 in 2007), which corresponded to the set of accounting records of S.A.C.I. Falabella for all deferred assets and liabilities outstanding on December 31st, also taking into account the effects of amortization in the complementary asset and liability accounts in which there were balances pending amortization as of this date. d) A ssets and liabilities for deferred taxes

The balances of assets and liabilities for deferred taxes as of December 31, 2008 and 2007 are itemized below:

Deferred tax balances Assets (Liabilities) 2008 2007 IN Thousand of CHILEAN pesos

Short-term assets 30,648,702 20,524,726 Short-term liabilities (6,742,180) (3,811,595)

Subtotal 23,906,522 16,713,131

Long-term assets 35,963,803 22,495,362 Long-term liabilities (82,752,387) (65,255,208)

Subtotal (46,788,584) (42,759,846)

Net balance as of December (22,882,062) (26,046,715) WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 83 ANNUAL REPORT

Deferred taxes 12/31/2008 12/31/2007 Deferred Taxes - Assets Deferred Taxes - Liabilities Deferred Taxes - Assets Deferred Taxes - Liabilities Item Short-term Long-term Short-term Long-term Short-term Long-term Short-term Long-term IN Thousand of CHILEAN pesos

Uncollectibles provision 9,655,327 152,826 7,280,479 Prepaid income 3,046,306 2,203,379 Vacation provision 3,350,956 143,988 2,120,559 Intangibles amortization 29,461,117 28,982,832 Leasing assets 4,119,735 3,822,941 1,417,719 641,966 Manufacturing expenses Depreciation of property, plant and equipment 1,636,261 45,404,623 936,050 33,067,344 Severance indemnities 93,272 92,057 250,087 100,470 192,911 50,501 Other events Carryover tax losses 5,481,705 22,731,252 1,229,939 24,096,123 Forward Hedging 9,715 4,938 Obsolescence provision 1,475,843 1,281,149 Securities fluctuation (Mutual Funds) 7,499 8,166 Capitalized prepaid expenses 4,234,334 2,800,029 Prepaid expenses in bond issue 286,391 154,580 1,200,634 308,005 321,250 1,393,653 Recoverable losses 97,320 18,405 88,879 Difference in valuation of inventories 2,866,659 1,492,550 Realization provision 989,940 626,850 Other 3,671,480 8,789,740 2,251,008 4,696,059 4,184,468 1,490,643 601,437 4,358,777 Other Complementary accounts-net of amortization 2,101,479 3,283 130,668 3,239,865 Valuation provision 1,988,447 5,815,421

TOTALS 30,648,702 35,963,803 6,742,180 82,752,387 20,524,726 22,495,362 3,811,595 65,255,208

Income Tax Item 12/31/2008 12/31/2007 IN Thousand of CHILEAN pesos Current tax expense (tax provision) -47.230.483 -39.405.190 Tax expense adjustment (previous fiscal year) -96.188 357.726 Effect of deferred tax in the fiscal year on assets and liabilities -1.433.428 886.536 Tax benefit from tax losses -357.814 4.157.682 Effect of amortization of complementary deferred asset and liability accounts 1,853,018 -141,979 Effect of deferred tax on assets and liabilities due to change in the valuation provision Other debits or credits to the account 3.826.974 406.122

TOTALS -43.437.921 -33.739.103

NOTE 8. OTHER CURRENT ASSETS

As of December 31, 2008 and 2007, this line breaks down as follows:

Other current assets 2008 2007 IN Thousand of CHILEAN pesos

Short-term deferred expenses - bonds (Note 15) 1,563,598 2,404,976 Forwards 5,927,944 1,107,648 Advances to contractors and others 80,000 87,120 Resale agreements 4,000,827 0 Other 1,170,298 971,122

Total 12,742,667 4,570,866 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

NOTE 9. prOPERTY, PLANT AND EQUIPMENT

Below is information on property, plant and equipment for the fiscal years ending December 31, 2008 and 2007. PROPERTY, PLANT AND EQUIPMENT 2008 2007 Adjusted Cumulative Net Book Adjusted Cumulative Net Book Description Cost Price depreciation Balance Cost Price depreciation Balance IN Thousand of CHILEAN pesos Land 383,522,206 0 383,522,206 323,832,202 0 323,832,202 Buildings and infrastructure 1,070,032,257 (124,311,487) 945,720,770 748,233,888 (77,295,334) 670,938,554 Machinery and equipment 239,908,971 (129,743,235) 110,165,736 173,810,514 (101,775,213) 72,035,301 Other fixed assets: Furniture and accessories 141,525,118 (70,540,445) 70,984,673 109,340,549 (56,356,874) 52,983,675 Facilities 325,102,073 (118,647,266) 206,454,807 294,018,655 (124,498,659) 169,519,996 Lease fixed assets 84,692,483 (17,936,406) 66,756,077 42,013,990 (7,024,970) 34,989,020 Other fixed assets 149,904,750 (37,077,580) 112,827,170 98,514,093 (33,126,223) 65,387,870 Subtotal 2,394,687,858 (498,256,419) 1,896,431,439 1,789,763,891 (400,077,273) 1,389,686,618 Gain due to technical reappraisal of property, plant & equipment 135,082 135,082 2,032,021 2,032,021 Total property, plant and equipment 2,394,822,940 (498,256,419) 1,896,566,521 1,791,795,912 (400,077,273) 1,391,718,639

Assets Technically Reappraised 2008 2007 Adjusted Cumulative Net Book Adjusted Cumulative Net Book IN Thousand of CHILEAN pesos Cost Price depreciation Balance Cost Price depreciation Balance

Land at Gran Bretaña 1325 - Talcahuano 1,896,923 1,896,923 Land at Picarte, no number, Santa Ana Farm – Valdivia 135,082 135,082 135,098 135,098 Total technical reappraisal 135,082 0 135,082 2,032,021 0 2,032,021

Depreciation in the period 2008 2007 IN Thousand of CHILEAN pesos With effect on Operating Costs (21,852,508) (21,284,646) With effect on SG&A (62,841,621) (43,574,674) Total (84,694,129) (64,859,320)

Leased property, plant and equipment IN Thousand of CHILEAN pesos

Bank or financial institution Type of asset Maturity 2008 2007 BANCO SANTANDER - SANTIAGO (CHILE) Electric generator, Caterpillar model GEP 88-1 (contr 423197) February-09 12,709 12,709 BANCO SANTANDER - SANTIAGO (CHILE) Smoothing machine, Homag, mod KAL 310-3A3 license 0-2407.1817 (contr 422956) January-09 47,251 47,252 BANCO SANTANDER - SANTIAGO (CHILE) Smoothing machine, contract (contr 426949) October-09 17,271 17,270 BANCO SANTANDER - SANTIAGO (CHILE) Smoothing machine, contract (contr 426534) September-09 17,726 17,726 BANCO SANTANDER - SANTIAGO (CHILE) Holzma HPP 380/38/38 cutter (contr 425314) April-09 57,573 57,572 BANCO SANTANDER - SANTIAGO (CHILE) Homag 310/4/A3 Veneer machine (contr 425315) April-09 71,966 71,965 BANCO SANTANDER - SANTIAGO (CHILE) Olympia diesel generator (contr 423760) May-09 31,139 31,139 BANCO SANTANDER - SANTIAGO (CHILE) Cutter February-08 69,285 BANCO SANTANDER - SANTIAGO (CHILE) Smoothing machine February-08 44,762 BANCO SANTANDER - SANTIAGO (CHILE) Drill June-08 44,803 BANCO SANTANDER - SANTIAGO (CHILE) Land March-08 97,137 SCOTIABANK (PERÚ) Atocongo Building Shell January-08 7,228,958 SCOTIABANK (PERÚ) Atocongo building shell (expansion), under construction February-19 10,875,707 BANCO DE CREDITO (PERÚ) Building shell December-23 8,560,007 5,348,096 BANCO INTERAMERICANO DE FINANZAS (BIF) PERU Works underway in Canta Callao Mall January-18 4,530,723 SCOTIABANK (PERÚ) Building shell December-13 9,670,400 15,603,471 BANCO CONTINENTAL (PERU) Computer equipment-Furniture and Inputs- Miscellaneous Equipment July-11 4,086,572 3,430,775 IBM S.A. Saga- Computer equipment December-09 55,009 4,603 BANCO CONTINENTAL (PERU) Machinery and equipment December-14 2,505,836 6,471,136 BANCO CONTINENTAL (PERU) Furniture and accessories December-14 555,766 472,089 BANCO CONTINENTAL (PERU) Facilities December-14 7,481,459 2,134,403 AMERICA LEASING Furniture and inputs, miscellaneous equipment, improvements September-10 66,713 56,719 CREDILEASING Pachacutec Land in Villa Maria del Triunfo July-10 125,190 104,002 BANCO CONTINENTAL (PERU) Computer equipment-Furniture and Inputs- Miscellaneous Equipment March-15 11,846,058 IBM S.A. Computer equipment January-09 26,170 BANCO DE CREDITO (PERÚ) Crillon Building Shell November-18 3,443,604 2,280,917 HSBC BANK USA ( CHILE ) Chiclayo Implementation January-14 2,731,984 BANCO DE CREDITO (PERÚ) Huaylas Implementation February-15 3,091,292 AMERICA LEASING Trujillo Implementation October-15 3,051,826 BANCO DE CREDITO (PERÚ) Pachacutec Building Shell November-18 1,272,900 BANCO DE CREDITO (PERÚ) Building shell February-19 3,230,674 CREDILEASING Computer equipment, furniture February-08 4,133,473 SCOTIABANK (PERÚ) Building shell February-18 1,462,686 Subtotal 84,692,483 42,013,990 Cumulative Depreciation (17,936,406) (7,024,970)

Net Total 66,756,077 34,989,020 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 85 ANNUAL REPORT

NOTE 10. inVESTMENTS IN RELATED COMPANIES

1. F alabellaSucursal Uruguay S.A . As of December 31, 2008, the Company owed a loan for MUS$20,000, granted by SCH Overseas Bank Inc. on February 28, 2005. The original loans were invested in stock of Sodimac S.A.

On January 5, 2004, Falabella Sucursal Uruguay S.A. contracted two interest rate and currency SWAPs in order to pay the loans for the purchase of Sodimac S.A., with an account receivable for a total of MUS$20,000 and an account payable for a total of UF 695,005.45 as of December 31, 2008.

2. B ancoFalabella Below is a summary of the financial statements of Banco Falabella, expressed in millions of Chilean pesos as of December 31, 2008 and 2007.

FINANCIAL STATEMENTS OF BANCO FALABELLA IN millons of CHILEAN pesos 2008 2007

ASSETS Cash and loans 641,759 577,163 Financial investments 177,770 68,201 Fixed assets (Net) 13,259 9,988 Other assets 29,937 37,378

Total assets 862,725 692,730

LIABILITIES AND EQUITY

Bank liabilities - 18,522 Deposits and other obligations 702,819 512,654 Other liabilities 69,433 70,778

Total liabilities 772,252 601,954

Net equity 90,473 90,776

Total liabilities and equity 862,725 692,730

INCOME

Revenues 133,725 117,453 COGS (82,612) (63,818)

Gross margin 51,113 53,635 Other operating expenses (38,180) (30,578)

Operating income 12,933 23,057 Non-operating income (5,360) (3,225)

Income before taxes 7,573 19,832 Tax provision (1,247) (3,396)

Net profit (loss) 6,326 16,436

3. Unrealized profits The balance of unrealized profits amounted to M$45,938 (M$50,210 in 2007) as of December 31, 2008, and corresponded to the purchase of merchandise from Italmod S.A.

4. InvestmentsColombia in In 2008, the Falabella group made capital contributions through subsidiaries to Inversiones Falabella de Colombia S.A. for US$10,643, representing 99.9999% of the subscribed and paid-in capital. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

5. BancoFalabella Peru Below is a summary of the financial statements of Banco Falabella Peru as of December 31, 2008 and 2007:

FINANCIAL STATEMENTS OF BANCO FALABELLA PERU 2008 2007 IN millons of CHILEAN pesos

ASSETS

Cash and loans 243,381 167,608 Fixed assets (Net) 8,555 5,171 Other assets 10,573 10,772

Total assets 262,509 183,551

LIABILITIES AND EQUITY

Bank debt 27,974 13,955 Deposits and other obligations 140,545 99,832 Other liabilities 46,280 33,313

Total liabilities 214,799 147,100

Net equity 47,710 36,451

Total liabilities and equity 262,509 183,551

INCOME

Revenues 96,799 62,259 COGS (38,387) (22,887) Gross margin 58,412 39,372 Other operating expenses (35,223) (22,820)

Operating profit (loss) 23,189 16,552 Non-operating profit (loss) 2,285 4,222

Profit (loss) before taxes 25,474 20,774 Tax provision (8,730) (6,150)

Net Profit 16,744 14,624

6. InvestmentsArgentina in In 2008, the Falabella group, through its subsidiaries, made capital contributions in Argentine companies amounting to MUS$43,338, representing 99.9999% of the subscribed and paid-in capital.

7. Division ofFalabella Retail S. A. (formerlyInverfin S.A .) The division of the company was approved by a Special Shareholders Meeting held March 4, 2008, based on the financial statements as of February 29, 2008. Nueva Inverfin S.A. was incorporated. Below is the equity distribution after the division:

Company Equity Number of IN Thousand of CHILEAN pesos shares Falabella Retail (formerly Inverfin) 7,905,677 4,049,266,600 Nueva Inverfin S.A. 13,940,582 4,049,266,600

Total 21,846,259

8. Division ofServa Ltda. The partners in Serva Limitada amended the corporate incorporation deed on March 4, 2008, for the purpose of dividing the company based on the financial statements as of February 29, 2008. Inversiones Serva Ltda. was created. Below is the equity distribution after the division:

Company Equity IN Thousand of CHILEAN pesos

Serva Ltda. 27,336,159 Inversiones Serva Ltda. 11,978,069

Total 39,314,228 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 87 ANNUAL REPORT

9. Corporate reorganizationsMay 2008 in a) Division ofSociedad Rdeentas S. A. Sociedad de Rentas Falabella S.A. was divided into three companies by deed dated May 2, 2008. Two new companies were created and one continued under the same name. The equity distribution after the division was as follows:

Company Equity Number of IN Thousand of CHILEAN pesos shares Sociedad de Rentas Falabella S.A. 294,007,108 141,055,513,153 Sociedad de Rentas Falabella Uno S.A. 5,645,150 3,280,360,771 Sociedad de Rentas Falabella Dos S.A. 500 3,280,360,771

Total 299,652,758

b) Division ofDesarrollos Inmobiliarios S.A. Desarrollos Inmobiliarios S.A. was divided into three companies by deed dated May 2, 2008. Two new companies were created and one continued under the same name. The equity distribution after the division was as follows:

Company Equity Number of IN Thousand of CHILEAN pesos shares Desarrollos Inmobiliarios S.A. 398,705,955 174,202,087,740 Desarrollos Inmobiliarios Uno S.A. 5,645,150 17,420,208,874 Desarrollos Inmobiliarios Dos S.A. 500 17,420,208,874

Total 404,351,605

c) Merger ofDesarrollos Inmobiliarios Uno S .A. andS ociedad Rdeentas Falabella Uno S .A. Sociedad de Rentas Falabella Uno S.A. merged with Desarrollos Inmobiliarios Uno S.A. by deed dated May 2, 2008 because this latter acquired all shares in Sociedad de Rentas Falabella Uno S.A.

d)M erger ofS.A .C.I. Falabella andDesarrollos Inmobiliarios Uno S .A. Desarrollos Inmobiliarios Uno S.A. merged with S.A.C.I. Falabella by deed dated May 2, 2008 because this latter acquired all shares in Desarrollos Inmobiliarios Uno S.A.

e)C apital increaseHome in Trading By public deed dated May 2, 2008, Home Trading S.A. increased its capital by M$296. Such amount will be fully paid in by S.A.C.I. Falabella and Inversiones Venser Ltda. through the contribution of their interests in Desarrollos Inmobiliarios Dos S.A., a subsidiary. As a result, Desarrollos Inmobiliarios Dos S.A. was merged with S.A.C.I. Falabella since the latter company gained possession of all of the shares in the former.

10.C orporate reorganizationsJune 2008 in a) Capital increaseInversiones in Falabella Ltda. and mergerS withervaL tda. By public deed dated June 2, 2008, Inversiones Falabella Ltda. increased its capital by M$15,718,643, which was subscribed and paid in by S.A.C.I. Falabella through the contribution of its interest in the subsidiary Servicios y Administraciones Generales Serva Ltda. (Serva Ltda.).

By public deed dated June 2, 2008, Serva Limitada decreased its capital because Promotora CMR Falabella S.A. withdrew its partnership. Therefore, Inversiones Falabella Limitada became the only partner, thereby causing the merger of both companies. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements b)I nversionesPrestaciones y Venser Limitada By public deed dated June 2, 2008, Inversiones y Prestaciones Venser Ltda. was created. The interests in it are as follows:

Partners IN Thousand of CHILEAN pesos Capital Interest Inversiones Venser Ltda. 499 99.8 % Inversiones Parmin S.p.A. 1 0.2 %

Total 500 100.0 %

By public deed dated June 2, 2008, Inversiones y Prestaciones Venser Ltda. increased its capital by M$64,024,908, which was subscribed and paid in by Inversiones Venser Ltda. c)I nversionesVenser Ltda. By public deed dated June 2, 2008, Inversiones Venser Ltda. increased its capital by M$1,000, which was subscribed and paid in by Inversiones Parmin S.p.A.

By public deed dated June 2, 2008, Inversiones Venser Ltda. decreased its capital because Promotora CMR Falabella S.A. withdrew its partnership. Therefore, the partners are S.A.C.I. Falabella and Inversiones Parmin S.p.A. d)M erger ofInversiones Falabella Ltda. andInversiones Venser Ltda. By public deed dated June 2, 2008, Inversiones Falabella Ltda. and Inversiones Venser Ltda. merged by agreement of their partners, S.A.C.I. Falabella and Inversiones Parmin S.p.A. A true merger took place between Inversiones Falabella Ltda. and Inversiones Venser Ltda. and their balance sheets were added together line by line. e)I nversionesPrestaciones y Venser Ltda. By public deed dated June 2, 2008, Inversiones y Prestaciones Venser Ltda. was divided into seven companies. Below is the equity distribution after the division:

Company Equity IN Thousand of CHILEAN pesos

Inversiones y Prestaciones Venser Ltda. 22,068,806 Inversiones y Prestaciones Venser Uno Ltda. 343,154 Inversiones y Prestaciones Venser Dos Ltda. 139,786 Inversiones y Prestaciones Venser Tres Ltda. 56,928 Inversiones y Prestaciones Venser Cuatro Ltda. 1,570,853 Inversiones y Prestaciones Venser Cinco Ltda. 20,383,171 Inversiones y Prestaciones Venser Seis Ltda. 16,653,554

Total 61,216,252 f) Equity decrease in loan companies By public deed dated June 2, 2008, the capital was decreased in the loan companies because Promotora CMR Falabella S.A., Inversiones Falabella Ltda., Desarrollos Inmobiliarios S.A. and Sodimac S.A. withdrew their partnerships. Therefore, Inversiones y Prestaciones Venser Uno Ltda., Inversiones y Prestaciones Venser Dos Ltda. and Prestaciones Venser Tres Ltda. remained partners. g)M anufacturasV estuariode Mavesa Ltda. M(avesa) By public deed dated June 2, 2008, Mavesa was divided into two companies, thereby organizing a new company in addition to the continuing company. Below is the distribution after the division:

Empresa Equity IN Thousand of CHILEAN pesos

Mavesa Ltda. 12,258,554 Nueva Mavesa Ltda. 631,169

Total 12,889,723

By public deed dated June 2, 2008, S.A.C.I. Falabella purchased the interest of Inversiones Falabella Ltda. in the new company. Therefore, S.A.C.I. Falabella became the only partner, causing a de facto merger of both companies. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 89 ANNUAL REPORT

h) Creation of Falabella Inversiones Financieras S.A., Falabella Servicios S.A. and Falabella Industrias S.A. Falabella Inversiones Financieras S.A., Falabella Servicios S.A. and Falabella Industrias S.A. were incorporated by public deed dated June 2, 2008, as follows:

Partners IN Thousand of CHILEAN pesos Capital Interest Inversiones Falabella Ltda. 499 99.8 % Inversiones Parmin S.p.A. 1 0.2 %

Total 500 100.0 %

i) Capital increaseFalabella in Servicios S.A . By public deed dated June 2, 2008, Falabella Servicios S.A. increased its capital by M$564,642, which was subscribed and paid in by Inversiones Falabella Ltda. through the contribution of interests in its subsidiaries Inversiones y Prestaciones Venser Uno Ltda., Inversiones y Prestaciones Venser Dos Ltda. and Inversiones y Prestaciones Venser Tres Ltda.

j) Capital increaseInversiones in Falabella Ltda. By public deed dated June 2, 2008, Inversiones Falabella Ltda. increased its capital by M$185,012, which was subscribed and paid in by S.A.C.I. Falabella through the contribution of 99% of its interests in the subsidiary Inversiones Venser Dos Ltda., equal to 98.78741807% of such company.

k) Capital increaseInversiones of Parmin S.p. A. By public deed dated June 2, 2008, Inversiones Parmin S.p.A. increased its capital by M$1,868, which was subscribed and paid in by S.A.C.I. Falabella by the contribution of its 1% interest in Inversiones Venser Dos Ltda., equal to 0.99785271% in such company.

l) Capital decreaseInversiones in Venser Dos L tda. By public deed dated June 2, 2008, Inversiones Venser Dos Ltda. decreased its capital when Promotora CMR Falabella S.A. withdrew its partnership. Therefore, Inversiones Falabella Ltda. and Inversiones Parmin S.p.A. became the only partners.

m)C apital increaseFalabella in Servicios S.A . By public deed dated June 2, 2008, Falabella Servicios S.A. increased its capital by M$185,012, which was subscribed and paid in by Inversiones Falabella Ltda. through the contribution of its interest in Inversiones Venser Dos Ltda.

n)I nversionesServa D osS .A. Inversiones Serva Dos S.A. was incorporated by public deed dated June 2, 2008, as follows:

Shareholders Shares Interest Inversiones Serva Ltda. 499 99.8 % Inversiones Parmin S.p.A. 1 0.2 %

Total 500 100.0 %

By public deed dated June 2, 2008, Inversiones Serva Dos S.A. increased its capital by M$15,728,979, which was subscribed and paid in by Inversiones Serva Ltda. through the contribution of the interests it held in its subsidiaries Inverfal S.A., Nueva Inverfin S.A. and Invercol S.A.

o)C apital increaseInversiones in Falabella Ltda. By public deed dated June 2, 2008, Inversiones Falabella Ltda. increased its capital by M$26,983,774, which was subscribed and paid in by S.A.C.I. Falabella through the contribution of its interests in the subsidiaries Promotora CMR Falabella S.A., Mavesa Ltda., Italmod S.A. and South America Textiles Ltda.

p)C apital increaseInversiones in Parmin S.p. A. By public deed dated June 2, 2008, Inversiones Parmin S.p.A. increased its capital by M$220,565, which was subscribed and paid in by S.A.C.I. Falabella through the contribution of 1% of its interest in the subsidiary Inversiones Serva Ltda., equal to 0.996401610% of such company. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements q)C apital decreaseInversiones in Serva L tda. By public deed dated June 2, 2008, Inversiones Serva Ltda. decreased its capital when Promotora CMR Falabella S.A. withdrew as a partner. Therefore, S.A.C.I. Falabella and Inversiones Parmin S.p.A. are the only partners. r) Capital increaseFalabella in Inversiones Financieras S.A . By public deed dated June 2, 2008, Falabella Inversiones Financieras S.A. increased its capital by M$10,749,407, which was subscribed and paid in by Inversiones Falabella Ltda. through the contribution of the interest in its subsidiary Promotora CMR Falabella S.A. s) Capital increaseFalabella in Retail S .A. By public deed dated June 2, 2008, Falabella Retail S.A. increased its capital by M$1,737,467, which was subscribed and paid in by Inversiones Falabella Limitada through the contribution of the interests it held in subsidiaries Comercial Monse Ltda. and South America Textiles Ltda. t) Capital increaseFalabella in Industrias S.A . By public deed dated June 2, 2008, Falabella Industrias S.A. increased its capital by M$15,004,868, which was subscribed and paid in by Inversiones Falabella Limitada through the contribution of the interests it held in subsidiaries Mavesa Ltda. and Italmod S.A. u)P urchase of sharesFalabella in Retail S .A. Pursuant to a stock transfer dated June 2, 2008, Inversiones Parmin S.p.A. acquired 40,492,665 shares in Falabella Retail S.A., equal to an interest of 0.72746950%. The price was M$80,838.

11. M allP lazaTransaction On July 30, 2008, the Falabella Group acquired 14.28% of stock in Plaza Vespucio S.A., assigning, in exchange, 5.24% of its interests in the subsidiaries Plaza del Trebol S.A., Plaza La Serena S.A., Plaza Oeste S.A. and Plaza Tobalaba S.A. This transaction was performed simultaneous to a corporate reorganization that entailed the incorporation of a holding company (Plaza S.A.), organized to hold the interests in all companies in the Mall Plaza Group. The Company has recognized the effects of these transactions according to Technical Bulletin No. 34 of the Chilean Accountants Association on the “Acquisition or Transfer of Assets in Non-Monetary Transactions.” It recorded profits amounting to M$14,439,832, calculated as the difference between the book value of assets transferred and the economic value of the assets acquired.

12. C hangesC inorporate Name In October 2008, the corporate name of the following companies was changed: - Falabella Servicios S.A. was changed to Apyser. - Falabella Industrias S.A. was changed to Confecciones Industriales S.A.

13.C orporateReorganizations October in 2008 a) Capital increaseInversiones in Falabella Ltda. By public deed dated October 1, 2008, Inversiones Falabella Ltda. increased its capital by M$45,123,008, which was subscribed and paid in by SACI Falabella through the contribution of its interests in the subsidiaries Banco Falabella and Procafecol S.A., in addition to the interest in Farmacias Ahumada S.A., a related company. b) Capital increaseFalabella in Retail S .A. By public deed dated October 1, 2008, Falabella Retail S.A. increased its capital by M$18,857,675, which was subscribed and paid in by Inversiones Falabella Ltda. through the contribution of its interest in the subsidiary Procafecol S.A., in addition to its interest in the related company Farmacias Ahumada S.A. c) Capital increaseFalabella in Inversiones Financieras S.A . By public deed dated October 1, 2008, Falabella Inversiones Financieras S.A. increased its capital by M$26,265,333, which was subscribed and paid in by Inversiones Falabella Ltda. through the contribution of its interest in the subsidiary Banco Falabella. d)C apital increaseInversiones in Prestaciones y Venser Cinco Ltda., merger withDinalsa S. A. and change in corporate name By public deed dated October 1, 2008, Invesiones y Prestaciones Venser Cinco Ltda. increased its capital by M$1, which was subscribed and paid in by Inversiones Falabella Ltda. through the contribution of its interest in the subsidiary Dinalsa S.A. - As a result of the aforesaid capital increase, Inversiones y Prestaciones Venser Cinco Ltda. became the only partner in Dinalsa S.A., causing the de facto merger of both companies. - At the same time as the merger of both companies, Inversiones y Prestaciones Venser Cinco Ltda. changed its corporate name to Dinalsa S.A. e)I nversionesParmin S.p. A. purchased a minority interestMonseL tda. in On October 1, 2008, Inversiones Parmin S.p.A. purchased a 0.05% interest in Inversiones y Prestaciones Venser Cuatro Ltda. for the price of M$1,121. No effects on income were recognized since it is a transaction between companies under common control. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 91 ANNUAL REPORT

f) Capital increaseFalabella in Retail S .A. and merger withInversiones Prestaciones y Venser Cuatro Ltda. By public deed dated October 1, 2008, Falabella Retail S.A. increased its capital by M$1,642, which was subscribed and paid in by Inversiones Falabella Ltda. and Inversiones Parmin S.p.A. through the contribution of its interest in Inversiones y Prestaciones Venser Cuatro Ltda. As a result of the aforesaid capital increase, Falabella Retail S.A. became the only partner in Inversiones y Prestaciones Venser Cuatro Limitada, thereby causing the de facto merger of both companies.

14.C ompanyReorganizations November in 2008 a) Division ofDinalsa S. A. By public deed dated November 2, 2008, Dinalsa S.A. was divided into two companies, i.e. Nueva Dinalsa S.A. and the continuing company. Below is the equity distribution after the merger:

Company IN Thousand of CHILEAN pesos Equity Shares Dinalsa S.A. 22,789,814 64,019,631 Nueva Dinalsa S.A. 242,916 64,019,631

Total 23,032,730

b) Capital increaseApyser in (formerlyFalabella Servicios S.A .) and merger withNueva D inalsaS. A. By public deed dated November 2, 2008, Apyser increased its capital by M$224,837, which was subscribed and paid in by Inversiones Falabella Ltda. and Inversiones Parmin S.p.A. through the contribution of its interest in Nueva Dinalsa S.A.

As a result of the aforesaid capital increase, Apyser became the only partner in Nueva Dinalsa S.A., thereby causing the de facto merger of both companies.

c)C apital increaseInversiones in Prestaciones y Venser Uno L tda. By public deed dated November 2, 2008, Inversiones y Prestaciones Venser Uno Ltda. increased its capital by M$93,581, which was subscribed and paid in by Apyser through the contribution of its 44% interest in the subsidiaries Servicios Generales Puente Alto 37 Ltda., Servicios Generales Nataniel Ltda., Servicios Generales Fontova Ltda., Servicios Generales La Calera Ltda., Servicios Generales Puerto Antofagasta Ltda., Servicios Generales Plaza Puente Alto Ltda., Servicios Generales Cerro Colorado Ltda., Servicios Generales Cerrillos Ltda., Servicios Generales La Florida Ltda., Servicios Generales Estacion Central Ltda., Servicios Generales Segunda Region Centro Ltda., Servicios Generales Colina Ltda. and its 43.9375% interest in Inversiones Venser Dos Ltda.

d)C apital increaseInversiones in Prestaciones y Venser Dos L tda. By public deed dated November 2, 2008, Inversiones y Prestaciones Venser Dos Ltda. increased its capital by M$93,581, which was subscribed and paid in by Apyser through the contribution of its 44% interest in the subsidiaries Servicios Generales Puete Alto 37 Ltda., Servicios Generales Nataniel Ltda., Servicios Generales Fontova Ltda., Servicios Generales La Calera Ltda., Servicios Generales Puerto Antofagasta Ltda., Servicios Generales Plaza Puente Alto Ltda., Servicios Generales Cerro Colorado Ltda., Servicios Generales Cerrillos Ltda., Servicios Generales La Florida Ltda., Servicios Generales Estacion Central Ltda., Servicios Generales Segunda Region Centro Ltda., Servicios Generales Colina Ltda. and its 43.9375% interest in Inversiones Venser Dos Ltda.

e)C apital increaseFalabella in Inversiones Financieras S.A . and mergerInversiones of Prestaciones y Venser Ltda. By public deed dated November 2, 2008, Falabella Inversiones Financieras S.A. increased its capital by M$48,921,079, which was subscribed and paid in by Inversiones Falabella Ltda. and Inversiones Parmin S.p.A. through the contribution of its interest in the subsidiaries Inversiones y Prestaciones Venser Limitada, Administradora de Servicios Computacionales y de Credito CMR Falabella Limitada CMR Ltda.., Servicios e Inversiones Fas Limitada, Viajes Falabella Limitada and accounts receivables from SACI Falabella and Invercol.

As a result of the aforesaid capital increase, Falabella Inversiones Financieras S.A. became the only partner in Inversiones y Prestaciones Venser Limitada, thereby causing the de facto merger of both companies.

f) Capital increaseFalabella in Retail S .A. By public deed dated November 2, 2008, Falabella Retail S.A. increased its capital by M$88,465,734, which was subscribed and paid in by SACI Falabella through the assignment of leases and associated financial assets.

g)C apital increaseInversiones in Falabella Ltda. By public deed dated November 2, 2008, Inversiones Falabella Ltda. increased its capital by M$88,465,734, which was subscribed and paid in by SACI Falabella through the contribution of its interest in Falabella Retail S.A. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

15.F inancieraCMR deC olombia Below is a summary of the financial statements of Financiera CMR de Colombia, expressed in millions of Chilean pesos as of December 31, 2008 and 2007.

FINANCIAL STATEMENTS OF FINANCIERA CMR DE COLOMBIA IN Thousand of CHILEAN pesos 2008 2007

ASSETS

Cash and loans 69,517 48,454 Fixed assets (Net) 1,763 1,787 Other assets 1,408 1,092

Total assets 72,363 51,333

LIABILITIES AND EQUITY

Bank liabilities 32,010 32,515 Deposits and other obligations 19,803 2,380 Other liabilities 3,876 3,531

Total liabilities 55,689 38,426

Net equity 16,674 12,907

Total liabilities and equity 71,280 51,333

INCOME Revenues 26,512 11,068 COGS (13,555) (5,103)

Gross margin 12,957 5,965 Other operating expenses (11,145) (6,501)

Operating income 1,812 (536) Non-operating income (1,241) 1,342

Income before taxes 571 806 Tax provision 922 (136)

Net profit (loss) 1,493 670

16. companyReorganizations December in 2008 a) Capital increaseSupermercados in SanF ranciscoS.A . and merger withNueva Supermercados SanF ranciscoS.A . By public deed dated December 1, 2008, Supermercados San Francisco S.A. increased its capital by M$265,535, which was subscribed and paid in by Dinalsa S.A. (through the contribution of its interest in the subsidiary Supermercados San Francisco S.A.) and by the Leyton Family, who contributed 1,619,999 shares in Supermercados San Francisco Buin S.A.

On December 1, 2008, Supermercados San Francisco S.A. purchased the interest held by Promotora CMR Falabella Ltda. in Nueva Supermercados San Francisco S.A. for the price of M$499. There was no effect on income since it was a transaction between companies under common control.

As a result of the aforesaid stock purchase, Supermercados San Francisco S.A. became the only partner in Nueva Supermercados San Francisco S.A., thereby causing a de facto merger between both companies.

Investment Breakdown Percentage Equity of companies at Fiscal year income at Unrealized Book value Currency interest Equity of companies Fiscal year income fair value fair value Accrued revenue Prop. Value / PEV Income of investment Taxpayer Country of controlling Number of Id. No. Company origin investment shares 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007

96509660-4 BANCO FALABELLA CHILE PESOS 3,000,498 99.00 99.00 90,466,000 90,775,951 6,319,000 16,436,791 6,319,000 16,436,791 90,466,000 90,775,951 90,466,000 90,775,951 0-E BANCO FALABELLA PERU S.A. PERU DOLLARS 86,128,120 98.00 98.00 47,710,111 36,450,828 16,744,488 14,624,033 16,501,571 14,411,877 47,017,966 35,922,025 47,017,966 35,922,025 0-E SODIMAC COLOMBIA S.A. COLOMBIA DOLLARS 12,740,000 49.00 35.00 68,294,404 42,403,966 10,803,631 8,403,606 5,293,779 4,117,767 33,464,258 20,777,943 33,464,258 20,777,943 93767000-1 FARMACIAS AHUMADA S.A. CHILE PESOS 30,000,000 20.00 20.00 75,337,090 78,003,116 731,641 8,069,614 146,328 1,613,923 15,067,418 15,600,623 15,067,418 15,600,623 0-E CMR DE COLOMBIA COLOMBIA DOLLARS 65.00 65.00 16,674,368 12,907,309 1,492,967 670,197 970,429 435,628 10,838,339 8,389,751 10,838,339 8,389,751 96577470-K ITALMOD S.A. CHILE PESOS 830,472 50.00 50.00 9,141,206 9,601,216 691,691 1,132,862 345,846 566,431 4,570,603 4,800,608 45,938 50,026 4,524,665 4,750,582 96951230-0 INMOBILIARIA MALL CALAMA S.A. CHILE PESOS 300 25.00 25.00 8,665,647 7,896,985 3,282,982 3,316,190 820,746 829,048 2,166,412 1,974,246 2,166,412 1,974,246 99597600-5 INMOBILIARIA CERVANTES S..A. CHILE PESOS 3,370 33.00 33.00 440,019 442,717 38,775 41,162 13,067 13,872 148,286 149,196 148,286 149,196 96538230-5 PLAZA VESPUCIO S.A. CHILE PESOS 1,620,000 45.00 45.00 44,882,525 8,335,711 16,174,101 4,941,245 7,278,346 20,197,136 20,197,136 79990670-8 ADMINISTRADORA PLAZA VESPUCIO S.A. CHILE PESOS 4,500 - - 16,128,974 6,816,483 1,295 3,065 3,065 TOTALS 203,739,282 198,590,544 45,938 50,026 203,693,344 198,540,518 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 93 ANNUAL REPORT

NOTE 11. GOODWILL AND NEGATIVE GOODWILL Goodwill and Negative Goodwill Goodwill 12/31/2008 12/31/2007 Amount Amount Taxpayer Id. amortized in Goodwill amortized in Goodwill No. Company the period balance the period balance

96653660-8 PLAZA DEL TRÉBOL S.A. 236,965 3,946,308 242,943 4,522,084 96795700-3 PLAZA LA SERENA S.A. 25,149 418,818 21,463 479,926 96653650-0 PLAZA OESTE S.A. 646,761 10,770,845 577,493 12,342,339 96538230-5 PLAZA VESPUCIO S.A. 46,737 3,799,425 45,312 96791560-2 PLAZA TOBALABA S.A. 93,586 1,558,544 92,614 1,785,938 96665150-4 SODILOG S.A. 106,027 96792430-K SODIMAC S.A. 14,210,476 205,688,300 14,210,476 219,898,776 78627210-6 SUPERMERCADOS SAN FRANCISCO BUIN S.A. 1,051,598 16,562,662 1,052,735 17,614,260 96811120-5 SERVICIOS GENERALES PASEO CENTRO LTDA. 2,491 15,953 2,691 93767000-1 FARMACIAS AHUMADA S.A. 389,788 4,210,477 389,789 4,600,264 96509660-4 BANCO FALABELLA 59,283 86,339 60,393 99597600-5 INMOBILIARIA CERVANTES S.A. 9,050 147,818 9,050 156,868 76425420-1 INMOBILIARIA LAS CONDES S.A. 76,948 1,385,056 224,316 1,462,004 0-E SODIMAC COLOMBIA S.A. 386,055 6,434,316 328,227 5,798,716 76821330-5 IMPERIAL S.A. 754,718 13,836,495 496,607 14,591,214 96647930-2 INVERFAL S.A. 403,441 5,354,756 439,713 5,752,914

TOTAL 18,393,046 274,113,820 18,339,057 289,068,387

Negative Goodwill 12/31/2008 12/31/2007 Amount Amount Taxpayer Id. amortized in the Balance negative amortized in the Balance negative No. Company period goodwill period goodwill 96847200-3 SERVICIOS E INVERSIONES FAS LTDA. 1,980 2,537 3,402 5,952 96509660-4 BANCO FALABELLA 17 TOTAL 1,980 2,537 3,419 5,952

NOTE 12. INTANGIBLEs Intangibles break down as follows as of December 31, 2008 and 2007:

Intangibles IN Thousand of CHILEAN pesos 2008 2007 itemization

Trademarks 175,230,828 174,623,459 Software 22,551,063 19,452,837 Royalties 1,282,561 2,933,903 Contractual relations 24,097,864 17,145,181 Goodwill 4,135,834 3,815,077 Other 5,437,896 2,972,345

Subtotal 232,736,046 220,942,802

Cumulative amortization (32,187,956) (24,986,266)

Totals 200,548,090 195,956,536 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

NOTE 13. shORT-TERM BANK DEBT

SHORT-TERM BANK DEBT TYPE OF CURRENCY AND ADJUSTMENT INDEX Taxpayer Dollars Euros Yen Other foreign currencies UF Non-adjustable $ TOTALS Id. No. Bank or Financial Institution 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007

0-E BANCO INTERAMERICANO DE FINANZAS (BIF) PERU 1,188,354 136,749 0 0 0 0 0 0 0 0 0 0 1,188,354 136,749 0-E BANCO AV VILLAS (COLOMBIA) - - - - - 3,575,901 0 0 0 0 3,575,901 0 0-E BANCO BOGOTA (COLOMBIA) 7,571 0 0 0 0 1,335,058 1,403,021 0 0 0 0 1,342,629 1,403,021 0-E ABN AMBRO-BANK S,A, (COLOMBIA) - - 0 0 0 0 448,398 0 0 0 0 0 448,398 0-E BANCO BANSUD S,A, (ARGENTINA) - - - 0 0 0 1,934,499 0 0 0 0 0 1,934,499 0 0-E BANCO BBVA COLOMBIA - - 0 0 0 4,521,272 0 0 0 0 4,521,272 0 0-E BANCO BBVA FRANCÉS (ARGENTINA) - - - 0 0 0 0 14,018,898 0 0 0 0 0 14,018,898 0-E BANCO DE CRÉDITO (COLOMBIA) 47,552 0 0 0 0 3,206,470 0 0 0 0 3,254,022 0 0-E BANCO GNB SUDAMERIS (COLOMBIA) 0 0 0 0 0 0 1,063,781 0 0 0 0 0 1,063,781 0 0-E BANCO INTERNACIONAL DEL PERÚ 0 0 0 0 0 0 2,450,268 0 0 0 0 0 2,450,268 0 0-E BANCO OCCIDENTE S,A, (COLOMBIA) 0 0 0 0 0 1,485,987 0 0 0 0 1,485,987 0 97051000-1 BANCO DEL DESARROLLO (CHILE) 0 0 0 0 0 0 0 0 0 0 0 8,826,690 0 8,826,690 0-E CITIBANK DEL PERÚ 1,203,023 1,479,461 0 0 0 0 6,296 1,406,904 0 0 0 0 1,209,319 2,886,365 0-E BANCO COMAFI (ARGENTINA) 0 0 0 0 0 0 2,285,438 2,121,610 0 0 0 0 2,285,438 2,121,610 97030000-7 BANCO ESTADO (CHILE) 65,290 86,064 0 0 0 0 0 0 1,052,280 0 16,566,655 6,939,152 17,684,225 7,025,216 0-E BANCO DAVIVIENDA (COLOMBIA) 0 0 0 0 0 0 265,945 0 0 0 0 0 265,945 0 96509660-4 BANCO FALABELLA (CHILE) 0 0 0 0 0 0 0 0 0 0 33,292 126,983 33,292 126,983 0-E BANCO CONTINENTAL (PERU) 0 408,014 0 0 0 0 32,122,439 14,376,920 0 0 0 0 32,122,439 14,784,934 0-E BANCO FINANSUR (ARGENTINA) 0 0 0 0 0 0 877,791 0 0 0 0 0 877,791 0 76645030-K BANCO ITAU (CHILE) 0 0 0 0 0 0 0 0 0 0 16,658,356 9,065,647 16,658,356 9,065,647 97951000-4 HSBC BANK USA ( CHILE ) 0 0 0 0 0 0 2,055,304 0 0 0 2,344,315 2,452,045 4,399,619 2,452,045 97919000-K THE ROYAL BANK OF SCOTLAND (RBS) 77,948 549,073 0 0 0 0 0 0 0 0 0 0 77,948 549,073 0-E BANCO INDUSTRIAL AZUL 0 0 0 0 0 0 307,901 0 0 0 0 0 307,901 0 97036000-K BANCO SANTANDER - SANTIAGO (CHILE) 9,848,638 952,640 263,311 173,946 0 0 0 0 47,491,330 14,639,689 67,623,390 82,941,371 125,226,669 98,707,646 97053000-2 BANCO SECURITY (CHILE) 2,153,019 1,768,365 0 0 0 0 0 0 0 0 13 7,948,060 2,153,032 9,716,425 0-E AMERICA LEASING 0 0 0 0 0 0 22,714 18,400 0 0 0 0 22,714 18,400 0-E BANK BOSTON 0 0 0 0 0 0 13,614,700 4,101,092 0 0 0 0 13,614,700 4,101,092 97041000-7 BANKBOSTON N.A. (CHILE) 0 0 0 0 0 0 0 0 0 0 0 5,506,331 0 5,506,331 0-E BBVA 0 0 0 0 0 0 0 0 0 8,584,991 0 0 0 8,584,991 97032000-8 BANCO BBVA CHILE 3,899,879 0 0 0 0 0 0 0 9,777,090 854,763 57,124,259 77,882,542 70,801,228 78,737,305 97080000-K BANCO BICE (CHILE) 0 1,016,399 0 0 0 0 0 0 0 2,350,598 18,140,866 14,336,192 18,140,866 17,703,189 0-E BNP PARIBAS 206,139 0 0 0 0 0 0 0 0 0 0 0 206,139 0 97023000-9 CORPBANCA 0 0 0 0 0 0 0 0 0 14,229,293 13,379,770 28,238,700 13,379,770 42,467,993 0-E INTERBANK (PERÚ) 0 0 0 0 0 0 1,914,890 0 0 0 0 0 1,914,890 0 0-E SCOTIABANK (PERÚ) 0 0 0 0 0 0 15,486,007 11,301,737 0 0 0 0 15,486,007 11,301,737 97018000-1 SCOTIABANK SUD AMERICANO (CHILE) 0 0 0 0 0 0 0 0 0 0 22,369,783 6,403,777 22,369,783 6,403,777 0-E BANCO DE GALICIA Y BUENOS AIRES S.A. (ARGENTINA) 0 0 0 0 0 0 1,942,764 6,832,893 0 0 0 0 1,942,764 6,832,893 0-E BANCO DE CREDITO (PERÚ) 214,512 159,716 0 0 0 0 44,110,638 15,282,965 0 0 0 0 44,325,150 15,442,681 0-E BANCO DE LA CIUDAD DE BUENOS AIRES (ARGENTINA) 0 0 0 0 0 0 1,924,769 1,718,365 0 0 0 0 1,924,769 1,718,365 0-E BANCO DE LA NACION ARGENTINA 0 0 0 0 0 0 0 8,860 0 0 0 0 0 8,860 97006000-6 BANCO DE CRÉDITO E INVERSIONES (CHILE) 199,296 65,557 0 0 0 0 0 0 0 4,944,897 8,710,973 14,914,237 8,910,269 19,924,691 0-E BBVA BANCO FRANCÉS S.A. (ARGENTINA) 0 0 0 0 0 0 12,967,993 0 0 0 0 0 12,967,993 0 0-E BANCO ITAU BUEN AYRE S.A.(ARGENTINA) 0 0 0 0 0 0 1,383,122 3,093,057 0 0 0 0 1,383,122 3,093,057 0-E BANCO PATAGONIA S.A.(ARGENTINA) 0 0 0 0 0 0 5,598,176 0 0 0 0 0 5,598,176 0 0-E BANCO RÍO DE LA PLATA S.A.(ARGENTINA) 0 0 0 0 0 0 5,519,992 859,183 0 0 0 0 5,519,992 859,183 0-E HSBC BANK ARGENTINA S.A. 0 0 0 0 0 0 0 859,183 0 0 0 0 0 859,183 0-E BNP PARIBAS (ARGENTINA) 0 0 0 0 0 0 3,471,297 1,989,823 0 0 0 0 3,471,297 1,989,823 97004000-5 BANCO DE CHILE 20,458,749 17,498,698 230,957 634,246 0 0 0 0 20,789,577 13,417,361 82,624,204 51,844,364 124,103,487 83,394,669 0-E CITIBANK N.A. (ARGENTINA) 0 0 0 0 0 0 2,622,185 1,025,901 0 0 0 0 2,622,185 1,025,901 0-E BANCOLOMBIA 24,796 2,893,231 74,026 2,918,027 74,026 Other

TOTALS 39,594,766 24,120,736 494,268 808,192 0 0 170,966,828 80,941,236 79,110,277 59,021,592 305,575,876 317,426,091 595,742,015 482,317,847

Principal owed 39,366,776 23,864,843 494,061 601,763 148,522,795 76,721,969 77,696,998 57,704,108 295,686,535 309,770,356 561,767,165 468,663,039

WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 95 ANNUAL REPORT

TYPE OF CURRENCY AND ADJUSTMENT INDEX Dollars Euros Yen Other foreign currencies UF Non-adjustable $ TOTALs 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 Annual average interest rate 3.78 4.93 3.53 4.98 12.18 9.20 1.78 1.00 8.54 9.89

Debt in foreign currency (%) 35.43% Debt in local currency (%) 64.57%

NOTE 14. LONG-TERM BANK DEBT

LONG-TERM BANK DEBT Closing date of actual Closing date of previous Years to maturity period period Total long-term as of the Total long-term as of the Currency or Adjustment More than 1 More than 2 More than 3 More than 5 up More than 10 closing of the financial Average annual closing of the financial Taxpayer Id. No. Bank or Financial Institutions Indicator up to 2 up to 3 up to 5 to 10 years statements interest rate statements Amount Term 97006000-6 BANCO DE CRÉDITO E INVERSIONES (CHILE) Dollars Euro Yen UF 3,300,395 3,300,395 8,250,988 19,802,372 6,600,791 5 41,254,941 3.15 72,821,052 Non-adjustable $ 6,513,066 Other currencies - 97004000-5 BANCO DE CHILE Dollars 10,000,000 3,000,000 13,000,000 9.37 Euro Yen UF 9,711,459 9,711,459 19,179,204 48,551,712 20,269,345 5 107,423,179 5.10 65,452,910 Non-adjustable $ 28,918,382 28,918,382 11.28 5,656,974 Other currencies 97030000-7 BANCO ESTADO (CHILE) Dollars 8,903,936 8,903,936 5.36 7,570,174 Euro Yen UF 9,588,567 7,458,475 15,925,389 24,395,014 5,354,317 3 62,721,762 5.28 38,122,266 Non-adjustable $ 16,871,273 Other currencies 97032000-8 BANCO BBVA CHILE Dollars Euro Yen UF 2,860,343 2,860,343 5,720,685 17,162,056 2,860,344 3 31,463,771 3.53 34,190,523 Non-adjustable $ 1,050,000 1,050,000 11.28 6,761,383 Other currencies 97008000-7 CITIBANK N,A, (CHILE) Dollars Euro Yen UF 2,475,297 2,475,297 6,188,241 14,851,779 4,950,593 4 30,941,207 3.64 32,103,439 Non-adjustable $ Other currencies 97023000-9 CORPBANCA Dollars Euro Yen UF 7,802,907 7,435,596 14,309,861 21,910,500 3,960,475 4 55,419,339 4.44 48,390,337 Non-adjustable $ 23,889,019 23,889,019 11.28 22,500,083 Other currencies 0-E SCH OVERSEAS BANK INC Dollars 10,822,264 Euro Yen UF Non-adjustable $ Other currencies 97036000-K BANCO SANTANDER - SANTIAGO (CHILE) Dollars 7,497,666 7,497,666 5.56 8,888,315 Euro Yen UF 3,578,910 3,603,746 7,286,397 7,734,453 2,860,345 2 25,063,851 4.91 29,253,798 Non-adjustable $ 4,791,298 4,791,298 10.32 5,742,341 Other currencies 0-E AMERICA LEASING Dollars Euro Yen UF Non-adjustable $ Other currencies 310,663 313,789 709,911 755,615 2,089,978 8.75 39,382 0-E CREDILEASING Dollars 28,217 28,217 7.75 56,392 Euro Yen UF Non-adjustable $ Other currencies 0-E SCOTIABANK (PERÚ) Dollars Euro Yen UF Non-adjustable $ Other currencies 1,514,840 1,801,091 5,263,207 11,610,555 20,189,693 8.00 18,767,918 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

Closing date of actual Closing date of previous Years to maturity period period Total long-term as of the Total long-term as of the Currency or Adjustment More than 1 More than 2 More than 3 More than 5 up More than 10 closing of the financial Average annual closing of the financial Taxpayer Id. No. Bank or Financial Institutions Indicator up to 2 up to 3 up to 5 to 10 years statements interest rate statements Amount Term

0-E BANCOLOMBIA Dollars 2,418,227 Euro Yen UF Non-adjustable $ Other currencies 0-E BANCO AV VILLAS (COLOMBIA) Dollars 4,126,388 Euro Yen UF Non-adjustable $ Other currencies 0-E BANCO BOGOTÁ (COLOMBIA) Dollars 254,345 Euro Yen UF Non-adjustable $ Other currencies 0-E BANCO DE CRÉDITO (COLOMBIA) Dollars 1,812,842 Euro Yen UF Non-adjustable $ Other currencies 0-E BANCO CONTINENTAL (PERÚ) Dollars Euro Yen UF Non-adjustable $ Other currencies 4,379,924 2,910,905 5,308,127 1,536,990 14,135,946 7.52 9,195,350 0-E BANCO DAVIVIENDA (COLOMBIA) Dollars 335,711 Euro Yen UF Non-adjustable $ Other currencies 0-E BANCO OCCIDENTES.A.(COLOMBIA) Dollars 2,001,142 Euro Yen UF Non-adjustable $ Other currencies 0-E BANCO GNB SUDAMERIS (COLOMBIA) Dollars 1,387,608 Euro Yen UF Non-adjustable $ Other currencies 97080000-K BANCO BICE (CHILE) Dollars Euro Yen UF 11,547,591 878,442 619,615 13,045,648 4.80 Non-adjustable $ 4,125,787 4,125,787 10.68 Other currencies 0-E BANKBOSTON. N,A, (ARGENTINA) Dollars Euro Yen UF Non-adjustable $ Other currencies 276,477 276,477 13.50 708,826 0-E BANCO COMAFI (ARGENTINA) Dollars Euro Yen UF Non-adjustable $ Other currencies 240,538 0-E BANCO ITAÚ BUEN AYRE S.A.(ARGENTINA) Dollars Euro Yen UF Non-adjustable $ Other currencies 10,321,807 10,321,807 16.75 0-E HSBC BANK PERÚ S.A. Dollars Euro Yen UF Non-adjustable $ Other currencies 313,822 349,128 820,504 38,131 1,521,585 11.25 0-E BANCO DE CRÉDITO (PERÚ) Dollars Euro Yen UF Non-adjustable $ Other currencies 823,742 901,485 2,398,813 5,338,458 2,476,187 4 11,938,685 9.45 2,378,480 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 97 ANNUAL REPORT

Closing date of actual Closing date of previous Years to maturity period period Total long-term as of the Total long-term as of the Currency or Adjustment More than 1 More than 2 More than 3 More than 5 up More than 10 closing of the financial Average annual closing of the financial Taxpayer Id. No. Bank or Financial Institutions Indicator up to 2 up to 3 up to 5 to 10 years statements interest rate statements Amount Term

0-E BANCO INTERAMERICANO DE FINANZAS (BIF) PERÚ Dollars Euro Yen UF Non-adjustable $ Other currencies 279,360 303,106 685,694 2,294,032 3,562,192 8.50 0-E IBM S.A. Dollars 2,739 Euro Yen UF Non-adjustable $ Other currencies 0-E BBVA BANCO FRANCÉS S.A.(ARGENTINA) Dollars Euro Yen UF Non-adjustable $ Other currencies 8,791,968 8,791,968 11.15 1,202,856 0-E CORPBANCA Dollars Euro Yen UF Non-adjustable $ 15,441,022 2,437,500 17,878,522 3.76 Other currencies

TOTALS 147,008,022 85,256,134 92,666,636 175,981,667 49,332,397 550,244,856 456,588,942

Debt in foreign currency (%) 18.5800 Debt in local currency 81.4200

NOTE 15. shORT- AND LONG-TERM OBLIGATIONS (NOTES AND BONDS)

a) On November 8, 2001, the Securities and Insurance Commission registered the first issue of adjustable bearer bonds under No. 276 of the Securities Registry, in the name of S.A.C.I. Falabella. The maximum was UF 4,200,000 in two Series, A, divided into Subseries A1 and Subseries A2, and B. The issue was placed in full on December 17, 2001.

On November 8, 2004, the Securities and Insurance Commission registered the second issue of adjustable bearer bonds under Nos. 394 and 395 of the Securities Registry, in the name of S.A.C.I. Falabella. The maximum was UF 10,000,000 in two Series, C and D. The issue was placed in full on December 14, 2004.

On July 7, 2006, the Securities and Insurance Commission registered the third issue of adjustable bearer bonds under Nos. 467 and 468 of the Securities Registry, in the name of S.A.C.I. Falabella. The maximum was UF 8,500,000 in two Series, E and F. The issue was placed in full on August 4, 2006.

Interest on Series A, C and E is payable semi-annually and principal will be amortized semi-annually at maturity. Interest on Series B is payable semi-annually and principal will be amortized semi-annually starting June 1, 2007.

Interest on Series D is payable semi-annually and principal will be amortized semi-annually starting June 1, 2010. Interest on Series F is payable semi-annually and principal will be amortized semi-annually starting January 15, 2022.

Feller Rate Clasificadora de Riesgo Ltda. has assigned a rating of AA to each one of its prime series in the publicly offered securities issued by S.A.C.I. Falabella.

The revenue received in the transactions has been used entirely to finance investments relating to the Company’s business.

The issue is described more completely in the table below.

The direct expenses of issuance and placement have been deferred and they will be amortized proportionally over the period of maturity of the bonds (Series A in 4 years, Series B in 21 years, Series C in 5 years, Series D in 21 years, Series E in 5 years and Series F in 21 years). During the period, M$1,735,272 have been amortized by a debit to income (M$1,981,978 in 2007).

Income in the period was debited for interest on the bonds in the amount of M$16,540,469, M$2,402,986 for the first issue, M$7,488,814 for the second issue and M$6,648,669 for the third issue (M$16,718,511 in 2007, M$2,569,448 for the first issue, M$7,495,333 for the second issue and M$6,653,729 for third issue), which is included in the line Finance Expense in Non-Operating Income. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

On June 30, 2008, the Securities and Insurance Commission registered Line 28, for a maximum of UF 1,000,000, in the Securities Registry.

Line 28 was placed as follows:

Line 28, Series 1A and 2A, in the amount of M$19,658,229, maturing January 14, 2009 and April 15, 2009, respectively. Principal will be paid on those dates. On October 22, 2008, the Securities and Insurance Commission registered lines Nos. 35, 36, 37 and 38 in the Securities Registry, each for a maximum amount of UF 1,000,000.

Lines 35 and 36 were placed as follows:

Line 35, Series 3A and 4A for an amount of M$20,433,142, maturing March 10, 2009 and May 14, 2009, respectively. Principal will be paid on those dates.

Line 36, Series 5A, for an amount of M$10,831,190, maturing January 30, 2009, the date when the principal will be paid.

No placements were registered for Lines 37 and 38 in 2008.

Feller Rate Clasificadora de Riesgo Ltda. has assigned a rating of AA to each of the series of securities issued by S.A.C.I. Falabella. b) Sodimac S.A., a subsidiary of Home Trading S.A., issued and placed adjustable bonds on April 15, 2001 for UF 3,700,000 in two series: B, subdivided into subseries B1 and subseries B2; and C, subdivided into subseries C1 and subseries C2.

Interest on Series B is payable semi-annually while principal will be amortized at the bond maturity. Interest payments on Series C are made semi-annually and principal will be amortized semi-annually starting October 15, 2006.

On October 17, 2005, series B bonds were redeemed early, which was reported as a material event on June 29, 2005.

The company issued adjustable Series D bonds on December 1, 2007 for UF 1,500,000.

The debit to income in the period for interest on the bonds of Sodimac S.A. amounted to M$2,217,573 and M$1,592,251 as of December 31, 2008 and 2007, respectively, which is included in Finance Expense.

In the 2008 fiscal year, issue and placement expenses were deferred and they will be amortized pro rata in the term of each issue. M$170,709 were amortized in 2008 against income (M$60,349 in 2007).

On March 19, 2008, the Company placed the Series D on the market, registered by the Securities and Insurance Commission under No. 521 on December 14, 2007. Such placement totaled 1,500,000 UF, with semi-annual amortizations of adjustments and interest at a rate of 2.5% annually starting June 1, 2008. The capital of said series will be amortized at maturity, i.e., December 1, 2012.

As of December 31, 2008, Sodimac S.A. had a rating of AA-, with a Stable Outlook, according to Fitch Chile Clasificadora de Riesgo Ltda. and a rating of AA, with a Stable Trend, according to Clasificadora de Riesgo Humphreys Ltda. c) S.A.G.A. Falabella S.A., a subsidiary of the Falabella Group, issued two bond series on August 18, 2006 and October 26, 2006, respectively, for a value of 45,000,000 new sols each, equal to M$7,978,514.

On December 10, 2007, S.A.G.A. Falabella S.A. made a third bond issue for 25,000,000 new sols, equal to M$4,432,508 as of June 30, 2008.

On January 11, 2008, S.A.G.A. Falabella made a second short-term securities issue under the first Series A program. The total was M$4,432,508.

On April 24, 2008, S.A.G.A. Falabella S.A. made a first short-term securities issue under the second program in the amount of M$4,432,508.

On June 17, 2005, Autonomous Equity made a bond issue in the amount of M$10,638,018, corresponding to the first issue in the First Series A Program.

On October 26, 2005, Autonomous Equity made a bond issue in the amount of M$3,546,006 corresponding to the second issue in the First Series A Program.

On April 26, 2005, Autonomous Equity made a bond issue in the amount of M$3,546,0068 corresponding to the second issue in the First Series B Program.

On September 29, 2006, Autonomous Equity made a bond issue in the amount of M$3,546,006 corresponding to the second issue in the First Series C Program. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 99 ANNUAL REPORT

On January 29, 2007, Autonomous Equity made a bond issue in the amount of M$4,255,207 corresponding to the third issue in the First Series A Program.

On May 31, 2007, Autonomous Equity made a bond issue in the amount of M$2,659,505 corresponding to the third issue in the First Series B Program.

On February 13, 2008, Autonomous Equity made a bond issue in the amount of M$3,187,982 corresponding to the third issue in the First Series C Program.

On June 11, 2008, Autonomous Equity made a bond issue in the amount of M$4,432,508 corresponding to the third issue in the First Series D Program.

Debit to income in the fiscal year amounted to M$1,178,346 (2008) and M$1,048,554 (2007) as of December 31st of each year.

Issue and placement expenses were deferred and they will be amortized proportionally over the term of each issue. M$43,034 were amortized in 2008 against income (M$24,513 in 2007) on account of this item.

The balance of expenses to be amortized in the three companies is as follows:

Prepaid Expenses December 2008 IN Thousand of CHILEAN pesos Short-term Short-term Total S.A.C.I. Falabella 909,293 6,576,180 7,485,473 Home Trading S.A. 615,335 330,760 946,095 Inversiones Serva Ltda. 38,970 165,112 204,0825

Total 1,563,598 7,072,052 8,635,650

Prepaid Expenses December 2007 IN Thousand of CHILEAN pesos Short-term Long-term Total S.A.C.I. Falabella 1,889,710 8,036,235 9,925,945 Home Trading S.A. 433,662 103,794 537,456 Inversiones Serva Ltda. 81,604 119,297 200,901

Total 2,404,976 8,259,326 10,664,302

These balances have been classified under the following lines, according to short- and long-term values:

Lines

IN Thousand of CHILEAN pesos 2008 2007

Other Current Assets (Note 8) 1,563,598 2,404,976 Other Assets 7,072,052 8,259,326

Totals 8,635,650 10,664,302 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

BONOS

Nominal amount Terms Face value Registration No. or placed and Bond unit of Placement in Instrument Identification Series outstanding adjustment Interest rate Expiration Interest payment Amortization payment 12/31/2008 12/31/2007 Chile or abroad

Long-term bonds - short-term portion

SVS REG. 252 BSODI-C1 388.637 U.F. 6.25% 04-15-2022 SEMI-ANNUAL SEMI-ANNUAL 372,356 294,531 LOCAL SVS REG. 276 B 2.000.000 U.F. 655% 13/1/26 SEMI-ANNUAL SEMI-ANNUAL 2,881,722 2,884,748 LOCAL FIRST ISSUE – FIRST PROGRAM SINGLE 8.333.540 NEW SOL 6.28% 08-18-2011 QUARTERLY QUARTERLY 1,886,586 1,584,151 FOREIGN SVS REG. 252 BSODI-C2 777.273 U.F. 6.25% 04-15-2022 SEMI-ANNUAL SEMI-ANNUAL 744,723 589,071 LOCAL SVS REG. 395 C 6.500.000 U.F. 3.25% 13/1/13 SEMI-ANNUAL AT MATURITY 374,634 373,175 LOCAL SECOND ISSUE – FIRST PROGRAM SINGLE 8.333.540 NEW SOL 6.03% 10-20-2011 QUARTERLY QUARTERLY 1,886,030 1,601,513 FOREIGN SVS REG. 521 BSODI-D 1.500.000 U.F. 2.50% 13/1/16 SEMI-ANNUAL AT MATURITY 66,626 LOCAL SVS REG. 394 D 3.500.000 U.F. 4.50% 13/1/29 SEMI-ANNUAL SEMI-ANNUAL 278,461 277,378 LOCAL THIRD ISSUE – FIRST PROGRAM SINGLE 4.629.745 NEW SOL 6.22% 13/10/16 QUARTERLY QUARTERLY 963,220 811,983 FOREIGN SVS REG. 467 E 4.500.000 U.F. 3.50% 07-15-2011 SEMI-ANNUAL AT MATURITY 1,535,245 1,529,270 LOCAL SVS REG. 468 F 4.000.000 U.F. 4.25% 07-15-2027 SEMI-ANNUAL SEMI-ANNUAL 1,654,130 1,647,691 LOCAL SHORT-TERM INSTRUMENT SINGLE 4.629.745 NEW SOL 6.41% 07-24-2009 ANNUAL ANNUAL 5,232,150 5,980,474 FOREIGN SVS REG. 395 C 6.500.000 U.F. 3.25% 13/1/13 SEMI-ANNUAL AT MATURITY 139,441,705 LOCAL SHORT-TERM INSTRUMENT B 4.629.745 NEW SOL 6.44% 04-24-2009 ANNUAL ANNUAL 5,289,340 FOREIGN SHORT-TERM INSTRUMENT C 4.629.745 NEW SOL 7.78% 08-22-2009 ANNUAL ANNUAL 5,204,157 FOREIGN FIRST ISSUE – FIRST PROGRAM SERIES A 12.153.724 NEW SOL 5.56% 10/5/12 QUARTERLY QUARTERLY 2,890,496 FOREIGN SECOND ISSUE – FIRST PROGRAM SERIES A 4.051.241 NEW SOL 5.50% 13/5/12 QUARTERLY QUARTERLY 1,275,038 FOREIGN SECOND ISSUE – FIRST PROGRAM SERIES B 4.054.241 NEW SOL 7.38% 7/5/13 QUARTERLY QUARTERLY 742,285 1,256,310 FOREIGN SECOND ISSUE – FIRST PROGRAM SERIES C 4.054.241 NEW SOL 6.12% 13/5/13 QUARTERLY QUARTERLY 1,439,620 1,213,158 FOREIGN THIRD ISSUE – FIRST PROGRAM SERIES A 4.861.490 NEW SOL 6.06% 4/5/14 QUARTERLY QUARTERLY 1,702,595 1,435,678 FOREIGN THIRD ISSUE – FIRST PROGRAM SERIES B 3.038.431 NEW SOL 5.88% 7/5/14 QUARTERLY QUARTERLY 1,048,326 885,533 FOREIGN THIRD ISSUE – FIRST PROGRAM SERIES C 4.051.241 NEW SOL 5.81% 4/5/15 QUARTERLY QUARTERLY 1,342,623 FOREIGN THIRD ISSUE – FIRST PROGRAM SERIES D 5.064.051 NEW SOL 6.69% 10/5/15 QUARTERLY QUARTERLY 1,626,355 FOREIGN

Total - short-term portion 175,712,889 26,530,198

Long-term bonds

SECOND ISSUE – FIRST PROGRAM SERIES B 4.051.241 NEW SOL 7.38% 7/5/13 QUARTERLY QUARTERLY 658,123 FOREIGN SVS REG. 276 B 2.000.000 U.F. 6.50% 13/1/26 SEMI-ANNUAL SEMI-ANNUAL 34,860,426 37,395,884 LOCAL SVS REG. 252 BSODI-C1 388.637 U.F. 6.25% 04-15-2022 SEMI-ANNUAL SEMI-ANNUAL 9,756,465 10,076,133 LOCAL SECOND ISSUE – FIRST PROGRAM SERIES C 4.051.241 NEW SOL 6.12% 13/5/13 QUARTERLY QUARTERLY 1,277,540 FOREIGN SVS REG. 395 C 6.500.000 U.F. 3.25% 13/1/13 SEMI-ANNUAL AT MATURITY 138,898,999 LOCAL SVS REG. 252 BSODI-C2 777.273 U.F. 6.25% 04-15-2022 SEMI-ANNUAL SEMI-ANNUAL 16,143,600 16,528,657 LOCAL THIRD ISSUE – FIRST PROGRAM SERIES A 4.861.490 NEW SOL 6.06% 4/5/14 QUARTERLY QUARTERLY 1,900,988 FOREIGN SVS REG. 394 D 3.500.000 U.F. 4.50% 13/1/29 SEMI-ANNUAL SEMI-ANNUAL 75,083,995 74,791,769 LOCAL SVS REG. 521 BSODI-D 1.500.000 U.F. 2.50% 13/1/16 SEMI-ANNUAL AT MATURITY 32,178,855 LOCAL THIRD ISSUE – FIRST PROGRAM SERIES B 3.038.431 NEW SOL 5.88% 7/5/14 QUARTERLY QUARTERLY 1,413,331 FOREIGN SVS REG. 467 E 4.500.000 U.F. 3.50% 07-15-2011 SEMI-ANNUAL AT MATURITY 96,536,565 96,160,845 LOCAL SVS REG. 468 F 4.000.000 U.F. 4.25% 07-15-2027 SEMI-ANNUAL SEMI-ANNUAL 85,810,280 85,476,307 LOCAL THIRD ISSUE – FIRST PROGRAM SERIES A 4.861.490 NEW SOL 6.06% 4/5/14 QUARTERLY QUARTERLY 439,474 FOREIGN FIRST ISSUE - FIRST PROGRAM SINGLE 8.333.540 NEW SOL 6.28% 08-18-2011 QUARTERLY QUARTERLY 4,814,642 FOREIGN THIRD ISSUE – FIRST PROGRAM SERIE B 3.038.431 NEW SOL 5.88% 7/5/14 QUARTERLY QUARTERLY 544,028 FOREIGN SECOND ISSUE – FIRST PROGRAM SINGLE 8.333.540 NEW SOL 6.03% 10-20-2011 QUARTERLY QUARTERLY 5,174,982 FOREIGN THIRD ISSUE – FIRST PROGRAM SERIES C 4.051.241 NEW SOL 5.81% 4/5/15 QUARTERLY QUARTERLY 1,773,609 FOREIGN THIRD ISSUE – FIRST PROGRAM SINGLE 4.629.745 NEW SOL 6.22% 13/10/16 QUARTERLY QUARTERLY 3,719,917 FOREIGN THIRD ISSUE – FIRST PROGRAM SERIES D 5.064.051 NEW SOL 6.69% 10/5/05 QUARTERLY QUARTERLY 3,075,706 FOREIGN FIRST ISSUE - FIRST PROGRAM SINGLE 8.333.540 NEW SOL 6.28% 08-18-2011 QUARTERLY QUARTERLY 3,555,518 FOREIGN SECOND ISSUE – FIRST PROGRAM SINGLE 8.333.540 NEW SOL 6.03% 10-20-2011 QUARTERLY QUARTERLY 3,989,851 FOREIGN THIRD ISSUE – FIRST PROGRAM SINGLE 4.629.745 NEW SOL 6.22% 13/10/16 QUARTERLY QUARTERLY 3,225,471 FOREIGN

Total long-term 366,973,843 478,288,117 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 101 ANNUAL REPORT

NOTE 16. prOVISIONS AND WRITE-OFFS

This line is comprised in the short and long term as follows as of December 31, 2008 and 2007:

a) Provisions in current liabilities

IN Thousand of CHILEAN pesos 2008 2007

Vacation provision 17,712,954 14,717,890 Bonuses provision 2,727,302 2,542,315 Severance indemnity provision 899,700 1,289,361 Argentina devaluation provision 0 1,354,108 Personnel benefits 15,362,477 11,275,362 Systems and other provisions 586,793 73,513 Legal and other provisions 157,662 211,447 Provisions for other taxes 464,491 361,334 Other provisions 8,436,960 3,991,373

Total provisions in current liabilities 46,348,339 35,816,703

b) Provisions in long-term liabilities

IN Thousand of CHILEAN pesos 2008 2007

Severance indemnity provision 1,278,236 2,050,273 1,278,236 2,050,273

c)W rite-offs The following asset write-offs were recorded as of December 31, 2008 and 2007:

Write-offs

IN Thousand of CHILEAN pesos 2008 2007

Debit to: Write-off of loans 79,476,499 57,591,579 Operating costs Write-off of secured checks 5,348,785 4,750,440 Operating costs Write-off of unsecured checks 436,190 497,890 Operating costs Write-off of unsecured checks 39,049 26,299 SG&A

Write-off of notes 2,487,815 1,450,143 Operating costs Write-off of notes 96,214 95,939 SG&A

Write-off of accounts receivable 107,938 206,539 SG&A

Write-off of Property, plant and equipment 2,911,496 90,648 Non-operating income

Other write-offs 0 8,375 Operating costs

Totals 90,903,986 64,717,852 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

NOTE 17. MINORITY INTEREST

This line recognizes the interest in equity and income of subsidiaries belonging to third parties or companies. As of December 31, 2008 and 2007, the breakdown was: a)M inority interestEquity in

Minority interest in liabilities Subsidiary IN Thousand of CHILEAN pesos 2008 2007 Mall Plaza Group 86,683,267 47,844,137 Inversiones Serva Ltda. 58,279,970 24,918,468 Supermercados San Francisco 4,413,196 9,031,390 Inversiones Imperial S.A. 12,081,366 10,386,005 Other 496,505 341,545

Balances as of December 31 161,954,254 92,521,545 b)M inority interest in fiscal year profit (loss)

Minority Interest in income Profit / (Loss) Subsidiary IN Thousand of CHILEAN pesos 2008 2007 Mall Plaza Group (21,709,846) (13,782,979) Inversiones Serva Ltda. (12,734,210) (4,724,629) Supermercados San Francisco (181,191) (1,431,745) Inversiones Imperial S.A. (1,695,361) (1,408,229) Other (64,757) (158,487)

Balances as of December 31 (36,255,851) (21,189,095)

NOTE 18. CHANGES IN EQUITY a)Below is an itemization of Other Reserves for the fiscal years ending December 31, 2008 and 2007:

Other Reserves

IN Thousand of CHILEAN pesos 2008 2007

Cumulative adjustment of previous fiscal year conversion (32,990,773) (15,297,220) Conversion adjustment for the January-December fiscal year 49,268,826 (20,629,732)

Subtotal 16,278,053 (35,926,952)

Revaluation in the period 117,147 56,739 Executive compensation plan for the previous period 1,366,766 774,915 Executive compensation plan for January-December 2,223,762 645,243 Other (73,747) (68,799)

Total 19,911,981 (34,518,854)

Adjustments for conversion differentials 2008 2007 IN Thousand of CHILEAN pesos Period Cumulative Period Cumulative

Farmacias Ahumada S.A. - - (6,010) 199,110 S.A.C.I. Falabella and subsidiaries 49,286,826 16,278,053 (20,623,722) (36,126,062)

Totals 49,286,826 16,278,053 (20,629,732) (35,926,952) WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 103 ANNUAL REPORT

The cumulative adjustment for exchange differentials as of December 31, 2008 of subsidiary Falabella Sucursal Uruguay S.A. is shown net of the adjustment of bank debt, which was included and adjusted as investment hedging abroad (Note 10, Investment in Related Companies).

b) D ividendPolicy b1) On April 24, 2007, the Regular Shareholders Meeting of the Company approved the distribution of final dividends amounting to $22 per share, against income of the 2006 fiscal year. Such dividend was paid on May 9, 2007. b2) On May 29, 2007, the Board of the Company agreed to distribute an interim dividend amounting to $9 per share, which was paid on June 20, 2007. b3) On October 16, 2007, the Board of the Company agreed to distribute an interim dividend amounting to $18 per share, which was paid on November 14, 2007. b4) On January 29, 2008, the Board of the Company agreed to distribute an interim dividend amounting to $18.50 per share, which will be paid on February 20, 2008.

c) C apital increase The following was agreed upon at the Special Shareholders Meeting held April 24, 2007: c1) to decrease the capital from $455,874,841,735, divided into 2,404,627,566 registered shares in one single series, with no par value, each of the same value, that have been fully issued, subscribed and paid, by the sum of $658,924,679, divided into 3,675,091 registered shares in one single series, with no par value, after which the capital will total $455,215,917,056, divided into 2,400,952,475 registered shares in one single series, with no par value. c2) to increase the capital from $455,215,917,056, divided into 2,400,952,475 registered shares in one single series, with no par value, to $457,011,852,511, through the capitalization of $1,795,935,455 recorded in the equity account entitled “Premium on the Sale of Treasury Stock.” c3) to increase the capital from $457,011,852,511, divided into 2,400,952,475 registered shares in one single series, with no par value, to the sum of $460,864,798,903 through the issuance of 20,236,133 registered cash shares in one single series, with no par value and each of the same value. The Board was authorized to set the price for share placement, and shares will be subscribed and paid in the period of 3 years as from this date. c4) to allocate 10% of the aforesaid capital increase to the Company’s new Executive Compensation Plan. Also approved was allocation of the entire balance not subscribed by the shareholders in that capital increase to this plan in exercise of the preemptive option to do so. The executives will have a period of 5 years as from the meeting to subscribe and pay the shares allocated thereto. c5)to increase the capital from $460,864,798,903, divided into 2,421,188,608 registered shares in one single series, with no par value, to the sum of $508,464,634,207 through issuance of 250,000,000 registered cash shares in one single series, with no par value, each of the same value. The Board was authorized to set the price for share placement, which will be subscribed and paid in the period of 120 days as from this date. c6) On July 23, 2007, the Securities and Insurance Commission approved the capital increase of $3,852,946,392, divided into 20,236,133 registered shares in one single series, with no par value. It was registered under No. 807 of the Securities Registry.

d) P remium on the sale of treasury stock After issuing the shares in August 2007, a premium was recorded for M$2,165,973, which breaks down as follows (historically):

Premium on IN Thousand of CHILEAN pesos Total premium in 2007 2,170,188 Less share registration expenses in Stock Registry (2,299) Less publication expenses (1,916)

Total 2,165,973

e) C apital increase by share issue (historical values)

Capital increase IN Thousand of CHILEAN pesos Number of shares Number of shares Capital date Subscribed Paid increase August 2007 40,373 40,373 7,687 September 2007 887,216 887,216 168,925

Total 927,589 927,589 176,612

f) Stock option for compensation plans At the Special Shareholders Meeting held April 26, 2005, an executive compensation plan was approved that granted stock options exercisable by the executives in a period not to exceed 5 years. At the Special Shareholders Meeting held July 23, 2007, a new executive compensation plan was approved that granted stock options exercisable by the executives in a period not to exceed 5 years. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

The compensation plans offered by Falabella to its executives in 2008 were recorded in the financial statements according to the provisions in International Financial Reporting Standard (IFRS) 2, payments being based on shares.

Whereas the stock options will become irrevocable in 5 years, the services will be received by the Company in that period in the same progression. Hence, the salary expense will accrue in the same period.

The debit to income recognized as of December 2008 was M$2,223,762, with a credit to Other Reserves (M$592,510 in 2007).

In the second quarter of 2008, 914,669 shares were subscribed and paid in after executives exercised their purchase option. This meant a capital increase in the amount of M$187,034 and a premium on the sale of treasury stock in the amount of M$1,193,664.

Changes in Equity 12/31/2008 12/31/2007 Deficit in Capital Future Deficit in Line Capital revaluation Future dividend Retained Interim period of Fiscal year revaluation Premium on dividend Retained Interim period of Fiscal year profit Movements Paid-in capital reserve Premium on sale of shares Other reserves reserves earnings dividends development profit (loss) Paid-in capital reserve sale of shares Other reserves reserves earnings dividends development (loss)

Initial balance 488,793,119 2,214,619 -31,697,754 807,110,002 -110,538,155 217,089,859 453,150,561 1,795,936 -13,398,627 635,119,899 -28,558,505 197,149,591 Distribution of previous fiscal year profits 106,551,704 110,538,155 -217,089,859 168,591,086 28,558,505 -197,149,591 Final dividend for previous fiscal year -52,567,527 Capital increase because of share issue 187,034 1,193,664 176,612 2,165,973 Capitalization of reserves and/or profits 1,795,935 -1,795,935 Cumulative deficit in period of development Other 2,223,762 592,510 Conversion adjustments 49,268,826 -18,943,739 Revaluation of equity 43,514,890 275,416 117,147 81,298,131 33,670,010 48,645 52,102 55,966,544 -1,785,091 Fiscal year profit (loss) 202,013,142 217,089,860 Interim dividends -108,753,064 Final Balance 532,495,043 3,683,699 19,911,981 994,959,837 202,013,142 488,793,118 2,214,619 -31,697,754 807,110,002 -110,538,155 217,089,860 Adjusted Balances 532,295,706 2,411,720 -34,518,854 878,942,792 -120,376,051 236,410,857

NUMBER OF SHARES

Series NUMBER OF SUBSCRIBED SHARES NUMBER OF PAID-IN SHARES NUMBER OF VOTING SHARES

SINGLE 2,391,275,389 2,391,275,389 2,391,275,389

CAPITAL (AMOUNT – Thch$) Series SUBSCRIBED CAPITAL PAID-IN CAPITAL SINGLE 532,495,043 532,495,043

NOTE 19. OTHER NON-OPERATING INCOME AND EXPENSES

As of December 31, 2008 and 2007, this line breaks down as follows:

a) Other non-operating income

IN Thousand of CHILEAN pesos 2008 007

Lease of real estate 721,654 898,689 Profit on sale of property, plant, equipment 1,131,758 333,967 Sale of goods and services 135,806 56,343 Recoverable expenses 2,101,988 389,601 Recoverable write-offs 151,970 2,795,791 Joint venture construction 8,874,462 7,883,003 Provisions reversal 354,187 1,110,071 Mall Plaza share exchange transaction 14,439,832 0 Recoverable taxes 334,303 1,294,749 Mall La Dehesa and Los Rios Contract 0 5,186,491 Other income 11,113,006 6,649,985

Totals 39,358,966 26,598,690 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 105 ANNUAL REPORT

b) Other non-operating expenses

IN Thousand of CHILEAN pesos 2008 2007

Fees (1,564,699) (1,299,690) Retirement of property, plant & equipment (2,911,496) (90,648) Fines and interest (272,224) (100,775) Donations (1,013,130) (288,777) Amortization of fair value (5,382,302) (4,951,154) Losses (140,658) (205,618) Expenses for services and financial assistance (35,377) (36,120) Plasma effect fine (2,591,966) 0 Bank charges (2,046,457) (1,517,873) Other expenses (5,119,711) (5,317,090)

Totals (21,078,020) (13,807,745)

NOTE 20. priCE-LEVEL RESTATEMENT

PRICE LEVEL RESTATEMENT ASSETS (DEBITS) / CREDITS Adjustment index 12/31/2008 12/31/2007

INVENTORIES CPI 12,214,573 10,046,082 PROPERTY, PLANT AND EQUIPMENT CPI 101,267,305 60,361,512 INVESTMENT IN RELATED COMPANIES CPI 33,581,467 49,631,233 TRANSACTIONS WITH RELATED COMPANIES CPI/ UF 13,700,096 6,787,229 INFLATION EFFECT - EXCHANGE DIFFERENTIAL CPI 3,578,353 15,373,573 OTHER NON-MONETARY ASSETS CPI 36,744,419 13,385,464 EXPENSE AND COST ACCOUNTS CPI 64,748,126 46,082,911

TOTAL (DEBITS) CREDITS 265,834,339 201,668,004

LIABILITIES (DEBITS) / CREDITS EQUITY -125,205,584 -95,779,957 BANK LOANS CPI/ UF -54,758,499 -13,685,794 TRANSACTIONS WITH RELATED COMPANIES CPI/ UF -13,605,659 -7,314,772 INFLATION EFFECT - EXCHANGE DIFFERENTIAL CPI -2,525,371 -6,142,434 NON-MONETARY LIABILITIES CPI/ UF -38,651,500 -45,805,319 INCOME ACCOUNTS CPI -77,126,744 -71,087,171

TOTAL (DEBITS) CREDITS -311,873,357 -239,815,447

(LOSS) PROFITS IN PRICE-LEVEL RESTATEMENT -46,039,018 -38,147,443

NOTE 21. exCHANGE DIFFERENTIAL

a)The table below shows the exchange differentials occurring in the adjustment in pesos of assets and liabilities in a foreign currency, after deducting the effect of inflation. The net effect was M$1,052,982 as of December 31, 2008 and M$9,231,139 as of December 31, 2007, which is included in the price-level restatement of the Statement of Income (Note 20, Price-Level Restatement), according to Circular No. 1560 of September 20, 2001, issued by the Securities and Insurance Commission.

b) The net effect of the exchange differential for the 2008 and 2007 fiscal years, arising from the exchange devaluation in subsidiaries, is as follows:

Exchange rate devaluation Profit (Loss) Profit (Loss) 2008 2007

IN Thousand of CHILEAN pesos MUS$ IN Thousand of CHILEAN pesos MUS$ Argentine subsidiaries (1,297,799) (2,039) (599,303) (1,108) Peruvian subsidiaries 3,715,628 5,838 325,485 602 Colombian subsidiaries 2,267,487 3,563 (235,699) (436) Net effect of the fiscal year 4,685,316 7,362 (509,517) (942) WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

Exchange Differential ASSETS (DEBITS) / CREDITS Currency 12/31/2008 12/31/2007 GOODS IN TRANSIT DOLLAR 13,912,654 -2,561,114 EXCHANGE HEDGING DOLLAR TRANSACTIONS WITH RELATED COMPANIES DOLLAR 27,850,806 -11,564,976 ACCOUNTS RECEIVABLE DOLLAR 2,268,842 2,395,256 OTHER ASSETS DOLLAR 269,315 -153,067

Total (Debits) Credits 44,301,617 -11,883,901

LIABILITIES (DEBITS) / CREDITS

EXCHANGE HEDGING DOLLAR 6,996,020 -537,337 FOREIGN SUPPLIERS DOLLAR -10,770,495 4,240,750 FOREIGN SUPPLIERS EURO -447,908 -49,441 FOREIGN SUPPLIERS DANISH CROWN -174,225 5,238 TRANSACTIONS WITH RELATED COMPANIES DOLLAR -29,810,753 8,268,522 ACCOUNTS PAYABLE DOLLAR 335,055 -2,367,335 OTHER LIABILITIES DOLLAR -4,250,926 220,541 CONVERSION ADJUSTMENT DOLLAR 4,685,316 -509,517

Total (Debits) Credits -33,437,916 9,271,421

(Loss) Profits on exchange differential 10,863,701 -2,612,480

NOTE 22. CONTINGENCIES AND RESTRICTIONS a) L awsuits a.1The Parent Company and its subsidiaries are respondents in lawsuits and judicial measures and proceedings were pending as of these dates before the respective courts. The company has not made any provisions for this reason because in the opinion of the Company’s Management, the outcome of these claims will be favorable. The lawsuits pending as of December 31, 2008 were:

Lawsuits Amount Court Origin IN Thousand of CHILEAN pesos Labor courts Discharges and work accidents 2,315,846 Local civil courts Breach of consumer protection law 1,647,502 Civil courts Damages and injuries 4,747,944 Criminal courts Damages and injuries 390,736 Tax matters 15,531,977 Other 4,512,650

TOTAL 29,146,655 a.2 As of this date, a court claim filed by Peru Holding de Turismo S.A. before the 16th Civil Court of Lima, Peru remains unchanged. The process is in the stage of answer to the claim and after the established proceedings have concluded, the final decision should dismiss the claim for lack of grounds in strict application of the law and of the legal concepts involved. a.3 The Peruvian IRS (SUNAT) is auditing the taxation of S.A.G.A. Falabella S.A. for 2000 and 2001. The problems notified are being appealed and our attorneys consider that these contingencies will be resolved in favor of the company. In-house and outside attorneys to the affiliate opine that this lawsuit will have no material impact on the Company, is entirely groundless, and should be dismissed. a.4 The Peruvian IRS (SUNAT) is auditing the taxation of S.A.G.A. Falabella S.A. for 2002. The problems notified are being appealed and our attorneys consider that these contingencies will be resolved in favor of the company. a.5 The Peruvian IRS (SUNAT) has informed S.A.G.A. Falabella S.A. of a fine relating to the temporary tax on net assets corresponding to 2006. The company has filed the corresponding appeal since those fines cannot be applied as it is not a payer of such tax. a.6 The Peruvian IRS (SUNAT) has informed Hipermercado Tottus of a resolution on the calculation of Income Tax. The company has filed the corresponding appeal since such charge is improper. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 107 ANNUAL REPORT

b) B ond issuance (compliance with financial indicators) 1. The indentures signed by S.A.C.I. Falabella and Banco de Chile, this latter as Bondholders Representative and Agent Bank, imposes obligations and limitations on the Company in relation to compliance with financial indicators and other aspects relating to management, the main indicators being:

b.1 B ond issue datedNovember 18, 2001 b.1.1 Assets, present and future, must be kept free of any type of lien, real security, charge, restriction or any type of privilege during the term of the issue for at least the equivalent to 1.3 times the unpaid balance of all unsecured financial debt owed by the Company, including the bond issue.

b.1.2 Revenues from retail sales, the administration of malls and the credit area must be equivalent to at least 70% of the total consolidated revenues of the Company.

b.1.3 Ownership, direct or indirect, of at least 67% of Promotora CMR Falabella S.A.

b.1.4 No joint and several co-debtorships must be granted nor collateral signatures or sureties for third parties, except for subsidiaries.

b.1.5 The ratio between current liabilities and equity must not exceed 1.35. The Company must also maintain this ratio at 1.5 on a consolidated level.

b.1.6 A minimum equity of UF 22,000,000.

b.2 bond issue datedNovember 8, 2004

b.2.1 Revenues from retail sales, the administration of malls and the credit area must be higher than 70% of the total consolidated revenues of the Company.

b.2.2 Essential assets must be preserved, meaning trademarks in which the words “Falabella” or “Sodimac” appear.

b.2.3 No real security can be established on new debt issues when they exceed 10% of individual assets, except as stipulated in the indenture.

b.2.4 The ratio between current liabilities and equity must not exceed 1.35. The Company must also maintain this ratio at 1.5 on a consolidated level.

b.3 bond issue datedJuly 3, 2006

b.3.1 Revenues from retail sales, the administration of malls and the credit area must be higher than 70% of the total consolidated revenues of the Company.

b.3.2 No real security can be established on new debt issues when they exceed 10% of individual assets, except as stipulated in the indenture.

b.3.3 The ratio between current liabilities and equity must not exceed 1.35. The Company must also maintain this ratio at 1.5 on a consolidated level.

2. The indenture agreement of Sodimac S.A. of May 2001 stipulates obligations and limitations for the Company, such as compliance with financial indicators. On the date of preparation of these financial statements, the company was in compliance with all obligations and financial indicators established in such indenture. Moreover, there were no special guaranties in this issue. The financial indicators required by the indenture are as follows: debt 2.5; adjusted debt 1.5 and coverage 3.0.

3. SAGA FalabellaS.A . Bonds

- Date of first bond issue: August 18, 2006. - Date of second bond issue: October 20, 2006. - Date of third bond issue: December 10, 2007. - Date of first bond issue (2nd Securities Program): April 24, 2008. - Date of second bond issue (1st Securities Program): July 24, 2008. - Date of second bond issue (1st Securities Program): August 22, 2008. - It may not enter into or perform leaseback agreements nor grant guarantees in favor of third parties by encumbering its assets in a way where the 1.5 ratio for free financial assets is reduced. It also promised to keep assets free from liens in an amount higher than S/.180,000,000 (approximately M$31,914,055). - Debt ratio no higher than 3.5. - A minimum equity of S/.130,000,000 (M$23,536,627) in 2007 and S/.150,000,000 (M$26,595,046) as from 2007. - Accounts receivables with affiliates and subsidiaries resulting from credit card sales (excluding accounts receivable from Banco Falabella S.A.) must be equal to 8% of total assets. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

4. AutonomousEquity B onds - Issue date of the first Series A bonds: June 17, 2005. - Issue date of the second Series A bonds: October 26, 2005. - Issue date of the second Series B bonds: April 26, 2006. - Issue date of the second Series C bonds: September 29, 2006. - Issue date of the third Series A bonds: January 29, 2007. - Issue date of the third Series B bonds: May 31, 2007. - Issue date of the third Series C bonds: February 13, 2008. - Issue date of the third Series D bonds: June 11, 2008. c) O ther loan agreements (compliance with financial indicators) There are loan agreements signed by S.A.C.I. Falabella and its subsidiaries with financial institutions that impose restrictions and limitations on economic indicators of diverse types that are typical to this type of financing. d) D erivatives agreements In 2008, the Companies signed forwards in U.S. dollars, which generated rights, as of December 31, 2008, amounting to M$878,610,438 and obligations amounting to M$871,440,455. As of December 31, 2007, rights totaled M$34,195,574 and obligations M$34,126,120. e) L etters of credit As of December 31, 2008, the Company had MUS$52,856 in open and non-negotiated letters of credit in commercial banks supporting the future financing of foreign trade transactions. f) L oss recovery There were no losses recoverable as of December 31, 2008. g) B ank bonds As of December 31, 2008, the Company had mainly bank bonds amounting to M$363,186 to secure mainly construction workmanship and contract compliance.

DIRECT GUARANTEES Debtor Balances pending payment Assets compromised at close of financial statements Release of guarantees Guarantee in Type of favor of Name Relatioship guarantee Type Book value 2008 2007 2008 assets 2009 assets 2010 assets

ASSOCIATED MERCHANDISING CORPORATION S.A.C.I. Falabella Parent 0 6,109,920 11,363,377 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 109 ANNUAL REPORT

INDIRECT GUARANTEES Balances pending payment at close of financial Debtor Assets compromised statements Release of guarantees Guarantee in Type of favor of Name Relatioship guarantee Type Book value 2008 2007 2008 assets 2009 assets 2010 assets PUNTO FA, S.L. Comercial Monse Ltda. Subsidiary of Subsidiary SBLC 0 1,411,132 1,213,890 ------Sodimac S.A. Subsidiary of Subsidiary Invoice 0 - 2,120 ------PUNTO FA, S.L. INVERSIONES FALABELLA LTDA. Subsidiary SBLC 0 89,103 151,512 ------Sodimac S.A. Subsidiary of Subsidiary Invoice 0 1,998 - - - 1998 - - - Banco de Crédito e Inversiones (Chile) Shearvan Corporate S.A. Subsidiary of Subsidiary Comfort Letter 0 - 18,938,962 ------Sodimac S.A. Subsidiary of Subsidiary Invoice 0 4,522 - - - 4522 - - - Banco Santander Central Hispano Shearvan Corporate S.A. Subsidiary of Subsidiary SBLC 0 25,458,000 10,822,264 ------Sodimac S.A. Subsidiary of Subsidiary Invoice 0 33,000 - - - 33000 - - - Banco Santander Central Hispano FALABELLA RETAIL S.A. (EX INVERFIN S.A.) Subsidiary of Subsidiary SBLC 0 35,004,750 ------Sodimac S.A. Subsidiary of Subsidiary Invoice 0 - 545 ------Sodimac S.A. Subsidiary of Subsidiary Invoice 0 - 653 ------Sodimac S.A. Subsidiary of Subsidiary Invoice 0 - 941 ------Sodimac S.A. Subsidiary of Subsidiary Invoice 0 - 10,890 ------Sodimac S.A. Subsidiary of Subsidiary Invoice 0 3,648 3,973 - - 3648 - - - Sodimac S.A. Subsidiary of Subsidiary Invoice 0 17,957 17,266 - - 17957 - - - ScotiaBank (Perú) Saga Falabella S.A. (Perú) Subsidiary of Subsidiary SBLC Subsidiary 0 1,400,190 ------Banco de Credito (Perú) Saga Falabella S.A. (Perú) Subsidiary of Subsidiary SBLC Subsidiary 0 455,446 332,042 ------ScotiaBank (Perú) Saga Falabella S.A. (Perú) Subsidiary of Subsidiary Bank bond Subsidiary 0 1,064,357 831,561 ------CitiBank del Perú Saga Falabella S.A. (Perú) Subsidiary of Subsidiary Bank bond Subsidiary 0 12,923,312 8,537,691 ------Banco de Crédito e Inversiones (Chile) Saga Falabella S.A. (Perú) Subsidiary of Subsidiary SBLC Subsidiary 0 402,211 1,385,024 ------Banco de Credito (Perú) Saga Falabella S.A. (Perú) Subsidiary of Subsidiary Bank bond Subsidiary 0 4,455,150 ------Banco Interamericano de Finanzas (Bif) Peru Hipermecados Tottus S.A. Subsidiary of Subsidiary Letter of credit Subsidiary 0 2,283,694 121,205 ------ScotiaBank (Perú) Hipermecados Tottus S.A. Subsidiary of Subsidiary SBLC Subsidiary 0 - 216,445 ------Banco Continental (Perú) Hipermecados Tottus S.A. Subsidiary of Subsidiary Letter of credit Subsidiary 0 - 1,304,550 ------Banco de Crédito e Inversiones (Chile) Inversiones y Servicios Falabella Perú S.A. Subsidiary of Subsidiary SBLC Subsidiary 0 46,127,714 25,689,350 ------BANCO ESTADO (CHILE) PLAZA OESTE S.A. Subsidiary of Subsidiary Mortgage Land 0 19,599,515 ------BANCO DE CHILE PLAZA OESTE S.A. Subsidiary of Subsidiary Mortgage Land 0 9,553,277 ------BANCO ESTADO (CHILE) PLAZA VESPUCIO S.A. Subsidiary of Subsidiary Mortgage Building and land 0 35,256,109 ------BANCO DE CHILE PLAZA OESTE S.A. Subsidiary of Subsidiary Pledge Port Concession 0 6,439,617 ------BANCO SANTANDER - SANTIAGO (CHILE) PLAZA OESTE S.A. Subsidiary of Subsidiary Pledge Building and land 0 17,886,781 ------CORPBANCA PLAZA OESTE S.A. Subsidiary of Subsidiary Pledge Building and land 0 58,500 ------BANCO SANTANDER - SANTIAGO (CHILE) PLAZA OESTE S.A. Subsidiary of Subsidiary Pledge Building and land 0 9,422 ------BANCO DE CHILE PLAZA OESTE S.A. Subsidiary of Subsidiary Pledge Building and land 0 42,024,077 ------

NOTE 23. sANCTIONS

By Exempt Resolution No. 717 dated December 19, 2008, the Securities and Insurance Commission censored Mr. Sandro Solari Donaggio, as General Manager of SODIMAC S.A., for having breached Section III of Circular Letter No. 1481, which obligates regulated companies to send their shareholders registry in a given period. This delay corresponds to the first quarter of 2008.

No other sanctions were applied to this company, its directors or managers by the Securities and Insurance Commission in this fiscal year.

NOTE 24. suBSEQUENT EVENTS

SubsequentEvent 01-09Santiago, January 14, 2009 Pursuant to the stipulations in Article 90 and subparagraph 2 of Article 100 of Law 18,045 and the provisions in General Rules No. 118 and No. 210 of the Securities and Insurance Commission, it was reported that on January 13, 2009, Ripley Retail II Limitada, a subsidiary of Ripley Corp S.A., acquired 22.5% of the capital in Nuevos Desarrollos S.A. (formerly Plaza Alameda S.A.), a company forming part of Grupo Empresarial Plaza S.A., controlled by S.A.C.I. Falabella. Nuevos Desarrollos S.A. is the owner of Plaza Alameda Mall and Plaza Sur Mall pro se and through direct and indirect subsidiaries. Simultaneous to the subscription of the aforesaid shares, S.A.C.I. Falabella, Ripley Corp S.A. and the subsidiaries Ripley Retail Limitada and Ripley Retail II Limitada, Plaza S.A., Plaza Oeste S.A. and Nuevos Desarrollos S.A. signed a joint venture agreement in order to jointly develop the business of construction, acquisition, management, development and exploitation of new malls in Chile, in addition to those now existing, that will be accomplished through Nuevos Desarrollos S.A. and its subsidiaries in the terms and conditions agreed upon in such agreement.

SubsequentEvent 02-09Santiago, January 28, 2009 Pursuant to the stipulations in Article 9 and subparagraph 2 of Article 10 of Law 18,045 and the provisions in General Rule No. 30 of the Commission, it was reported that at the Board Meeting of the Company held on January 27, 2009, the Board agreed upon the following: 1. to issue two bond lines: one in effect for 10 years and another in effect for 30 years. Each line will be for UF 8 million. 2. to limit the amount of the first placement of each bond line to an aggregate of UF 8 million. 3. to begin the pertinent proceedings to register the respective Line in the Securities Registry of the Securities and Insurance Commission. Any of Mr. Juan Cuneo Solari and Juan Benavides Feliu, acting indistinctively, and Mr. Juan Pablo Montero Schepeler and Mr. Alejandro Gonzalez Dale, may jointly set the conditions, terms and time of each issue made on account of the lines and sign agreements and undertake all proceedings necessary for the issue and sale of the respective bonds. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

I Explanatory analysis of financial statements (In reference to Section A.4.1.e.1 of General Rule No. 30)

ASSETS The main financial indicators evolved as follows:

ASSETS ASSETS (IN Thousand of CHILEAN pesos) DEC-08 DEC-07 DEc 08-07 %Var 08-07 Current assets 1,700,118,375 1,543,414,699 156,703,676 10.15% Property, plant and equipment 1,896,566,521 1,391,718,639 504,847,882 36.28% Other assets 822,956,066 826,051,861 -3,095,795 -0.37%

Total assets 4,419,640,962 3,761,185,199 658,455,763 17.51%

CurrentAssets The increase of M$156,703,676 is due mainly to the increase in Inventories (M$131,881,424), Recoverable Taxes (M$29,924,968), Time Deposits (M$16,759,818) and Other Current Assets (M$8,171,801) and a decrease in Sales Receivable (M$40,133,279).

Property,Plant andEquipment Property, plant and equipment rose by M$504,847,882 due mainly to the increase of M$321,798,369 in Buildings and Infrastructure and of M$157,337,137 in Other Fixed Assets.

OtherAssets The decrease of M$3,095,795 came mainly from the decrease in Goodwill (M$14,954,567), which was partially offset by an increase of M$11,793,244 in Intangibles.

LIABILITIES LIABILITIES LIABILITIES (IN Thousand of CHILEAN pesos) DEC-08 DEC-07 DEc 08-07 %Var 08-07 Current liabilities 1,510,208,360 1,184,178,840 326,029,520 27.53% Long-term liabilities 994,414,646 989,318,644 5,096,002 0.52% Minority Interest 161,954,254 92,521,545 69,432,709 75.04% Equity 1,753,063,702 1,495,166,170 257,897,532 17.25%

Total liabilities 4,419,640,962 3,761,185,199 658,455,763 17.51%

CurrentLiabilities Liabilities varied positively by M$326,029,520, mainly coming from an increase in Bonds for M$149,182,691, Short-Term Bank Debt for M$113,424,168 and Notes for M$56,317,836.

Long-TermL iabilities There was an increase of M$5,096,002, mainly the result of the increase in Bank Debt for M$93,655,914, Notes Payable for M$14,108,086, Other Long-Term Liabilities for M$5,165,202 and Long-Term Deferred Taxes for M$4,028,738, which was offset by Bonds amounting to M$111,314,274.

Equity Equity rose by M$257,897,532 because of the following principal variations:

EQUITY IN Thousand of CHILEAN pesos Initial equity at January 1, 2007 1,495,166,170 Profit from December 2007 0 Profit from January to December 2008 202,013,142 Increase in capitalization from premium on sale of shares 1,795,935 Reclassification of premium on sale of shares -1,795,935 Capital increase due to the subscription of stock options 187,034 Premium on the sale of stock options 1,193,664 Translation adjustments from December 2007 0 Translation adjustments from January to December 2008 49,268,826 Fiscal year and other adjustments 5,234,866

Final Equity at 12/31/2008 1,753,063,702 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 111 ANNUAL REPORT Explanatory analysis of financial statements ENDED TO DECEMBER 31, 2008

II Main trends

LIQUIDITY

LIQUIDITY Indicators Units DEC-08 DEC-07 DEc 08-07 Current ratio Times 1.13 1.3 -0.18 Acid-test ratio Times 0.75 0.94 -0.19 Working capital IN Thousand of CHILEAN pesos 189,910,015 359,235,859 -169,325,844 The current ratio was 1.13 as of December 2008 and 1.30 as of December 2007. It decreased basically because of the decrease of 10.15% in Current Assets and Current Liabilities (equal to 27.53%). The Acid-test Ratio decreased from 0.94 in 2007 to 0.75 in 2008 because the increase of 2.23% in Current Assets, net of Inventories, was lower than the 27.53% increase in Current Liabilities.

INDEBTEDNESS

INDEBTEDNESS Indicators Units DEC-08 DEC-07 DEc 08-07 Debt ratio Times 1.31 1.37 -0.06 Short-term debt % 60.30% 54.48% 5.81% Long-term debt % 39.70% 45.52% -5.81% Financial expense coverage(1) Times 5.9 8.38 -2.48 (1) Earnings before taxes, interest, amortization, asset depreciation and extraordinary items were used, divided by interest expenses.

The Debt-Equity Ratio increased from 1.37% in December 2007 to 1.31% in December 2008. This is the result of an increase of 15.23% in all Liabilities in addition to the Minority Interest of 17.25%.

ACTIVITY

ACTIVITY Indicators Units DEC-08 DEC-07 Dec 08-07 Inventory turnover(2) Months 2.53 2.37 0.17 Turnover of property, plant & equipment Times 1.97 2.21 -0.24 Turnover of total assets Times 0.84 0.82 0.03 (2) Calculated as the ratio of inventories to the cost of sale on a monthly basis.

The Inventory Turnover Ratio increased from 2.37 times in 2007 to 2.53 in 2008. This took place because the decrease in COGS was 22.14% while the increase in Inventories was 30.70%. The Annualized Property, Plant and Equipment Ratio dropped from 2.21 as of December 2007 to 1.97 in December 2008 since revenues increased only 21.34% while Property, Plant and Equipment climbed by 36.28%.

INCOME Income for the fiscal years ending December 31, 2008 and 2007 varied as follows:

INCOME STATEMENT OF INCOME (IN Thousand of CHILEAN pesos) DEC-08 DEC-07 Dec 08-07 %Var 08-07 Revenues 3,727,186,511 3,071,798,458 655,388,053 21.34% COGS -2,658,579,753 -2,176,660,503 -481,919,250 22.14% Gross margin 1,068,606,758 895,137,955 173,468,803 19.38% SG&A -726,803,288 -564,529,723 -162,273,565 28.74% Operating profit (loss) 341,803,470 330,608,232 11,195,238 3.39% Profit (loss) on investment in related companies 35,352,011 45,704,978 -10,352,967 -22.65% Net non-operating income and expenses 18,280,946 12,790,945 5,490,001 42.92% Net financial margin -60,163,130 -38,669,539 -21,493,591 55.58% Amortization of goodwill -18,393,046 -18,339,057 -53,989 0.29% Price-level restatement and exchange differential -35,175,317 -40,759,923 5,584,606 -13.70% Non-operating profit (loss) -60,098,536 -39,272,596 -20,825,940 53.03% Income tax -43,437,921 -33,739,103 -9,698,818 28.75% Minority Interest -36,255,851 -21,189,095 -15,066,756 71.11% Amortization of negative goodwill 1,980 3,419 -1,439 -42.09% Net profit 202,013,142 236,410,857 -34,397,715 -14.55% EBITDAEI (*) 433,645,151 400,919,512 32,725,639 8.16% Per-share profit (loss) 84.48 98.9 -14.42 -14.58% (*) Earnings before interest, taxes, depreciation, amortization and extraordinary items. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

The company earned a profit of M$202,013,142 for the fiscal year ending December 31, 2008, including income from interests in subsidiaries and affiliates, determined mainly as follows:

interests in subsidiaries and affiliates

Company (IN Thousand of CHILEAN pesos) DEC-08 DEC-07 Dec 08-07 %Var 08-07 Banco Falabella 6,319,000 16,436,791 -10,117,791 -61.60% Banco Falabella Peru S.A. 16,501,571 14,411,877 2,089,694 14.50% Sodimac Colombia S.A. 5,293,779 4,117,767 1,176,012 28.60% Farmacias Ahumada S.A. (Fasa) 146,328 1,613,923 -1,467,595 -90.90% CMR de Colombia 970,429 435,628 534,801 122.80% Italmod S.A. 345,846 566,431 -220,585 -38.90% Inmobiliaria Mall Calama S.A. 820,746 829,048 -8,302 -1.00% Inmobiliaria Cervantes S.A. 13,067 13,872 -805 -5.80% Mall Plaza Vespucio S.A. 4,941,245 7,278,346 -2,337,101 -32.10% Administradora Plaza Vespucio S.A. 0 1,295 -1,295 -100.00%

(*) Mall Plaza Vespucio began to be consolidated on August 1, 2008.

(a) Gross Margin The gross margin was M$1,068,606,758 and it increased as compared to December 2007, when it was M$895,137,955. This was caused by the rise in Revenues (21.34%), which was partially offset by the increase in COGS (22.14%).

(b) Operating Profit L( oss) The operating profit increased 3.39% as compared to December 2007. Selling, General and Administrative Expenses, corresponding to direct payroll expenses, outsourcing and normal operating expenses, increased 28.74%.

(c) Non-operating profit (loss) There was a non-operating loss of M$60,098,536, which means a drop equal to M$20,825,940, compared to the loss in December 2007 amounting to M$39,272,596. The variation was comprised by the following: • Net Financial Margin: There was a negative change of M$21,493,591 compared to December 2007. • Net Profit on Investments in Related Companies: Profits dropped by M$10,352,967 to a net sum of M$35,352,011 as of December 2008. • Amortization of Goodwill: This item dropped by M$53,989, totaling a loss of M$18,393,046 as of December 31, 2008. • Net Effect of Other Non-Operating Income and Expenses: There was a positive variation of M$5,490,001, equal to a net profit of M$18,280,946 at December 2008, in comparison to M$12,790,945 as of December 2007. • Price-Level Restatement and Exchange Differential: The loss amounting to M$40,759,923 as of December 2007 increased to a loss of M$35,175,317 in December 2008.

(d) Profit (loss) in the fiscal year The profits in the fiscal year amounted to M$202,013,142, equal to a 14.55% decrease as compared to the same period in the previous year.

RETURNS

RETURNS Indicators Units DEC-08 DEC-07 DEc 08-07 Return on equity % 12.44% 16.06% -3.62% Return on assets % 4.94% 7.01% -2.07% Return on operating assets(3) % 10.47% 12.85% -2.39%

(3) Operating assets = Total Assets – Other Assets

Return on Equity The return on equity dropped from 16.06% in December 2007 to 12.44% in December 2008 because of the percentage increase of 19.06% in Equity, higher than the decrease of 14.55% in the fiscal year income, associated with the application of Technical Bulletin No. 72. Return on Assets The return dropped from 7.01% in December 2007 to 4.94% for the same period in 2008 as the percentage increase of 31.04% in total average assets was higher than the decrease of 14.55% in the fiscal year profit. Return on Operating Assets This return dropped from 12.85% as of December 2007 to 10.47% in December 2008 because the average operating assets increased 26.98% while the operating income rose 3.39%. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 113 ANNUAL REPORT

III Book Value and Market Value of Assets (in reference to Sections A.4.1.e.2 and 3 of General Rule No. 30)

The following is important in relation to the assets of greatest relevance:

The values of property, plant and equipment are adjusted according to accounting standards of the Securities and Insurance Commission set down in Circulars No. 550 and 566 of 1985, meaning the net adjusted cost price, net of Cumulative Depreciation.

Depreciation is calculated on the adjusted value of the assets according to the remaining years of useful life that each has.

Investments in related companies acquired prior to January 1, 2003 are shown at their proportional equity value (PPV) while new investments are recognized at the fair value pursuant to Circular No. 1697 of the Securities and Insurance Commission and Technical Bulletin No. 72 of the Chilean Accountants Association.

Intangibles are price-level adjusted and amortized according to Technical Bulletin No. 55 of the Chilean Accountants Association.

Assets expressed in a foreign currency are shown at the exchange rate prevailing at the close of the fiscal year.

Investments in financial instruments under resale or repurchase agreements are shown at their purchase price, plus adjustments and interest accruing at the close of each fiscal year.

Intercompany notes and accounts payables are classified by maturity in the short and long term. Transactions are under arm’s length conditions similar to those usually prevailing on the market.

In summary, assets are shown according to generally accepted accounting principles and standards and instructions issued by the Securities and Insurance Commission, as explained in Note 2 of the Financial Statements.

The market price of one share in SACI Falabella was $1,669.2 as of 12/31/2008. This implies an exchange capitalization of M$3,991,516,879 for the company that results in a market value/book value ratio of 2.28 when compared to the book value of equity for M$1,753,063,702.

The per-share profit of SACI Falabella in the 12-month period through December 2008 was $84.48, resulting in a price-profit ratio of 19.76.

IV Principal Cash Flows

Principal Cash Flows

CASH FLOW (IN Thousand of CHILEAN pesos) DEC-08 DEC-07 Dec 08-07 %Var 08-07 From operating activities 293,026,293 298,285,598 -5,259,305 -1.76% From finance activities 158,257,726 77,410,804 80,846,922 104.44% From investment activities -437,903,188 -400,177,018 -37,726,170 9.43% Effect of inflation on cash and cash equivalent -1,306,410 -4,720,291 3,413,881 -72.32% Net flow in the period 12,074,421 -29,200,907 41,275,328 -141.35%

There was a net positive cash flow of M$12,074,421 in the Company in the period, which breaks down as follows:

Operating activities generated a positive flow of M$293,026,293, which is due to a profit of M$202,013,142 in the period, plus the income not representing cash flow (M$246,079,657), less the net variation of M$192,751,060 in assets and liabilities affecting operating flows.

Finance activities had a positive flow of M$158,257,726, coming mainly from the positive net effect of loans obtained, amounting to M$936,723,076, the positive net effect of payment of loans totaling M$814,979,918.

Investment activities resulted in a negative flow of M$437,903,188, due to the addition of property, plant and equipment amounting to M$450,244,532. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

V Risk Factors

1. Exchange Rate Risk The Chilean peso varies compared to the American dollar and other international currencies. Part of the products offered for sale at our stores are acquired in foreign countries so there is an exposure to an exchange rate fluctuation during the period when those import transactions are pending payment. A similar situation occurred in Peru, Argentina and Colombia.

The Company has a policy of reducing the overall exposure created by this situation and by the composition of assets and liabilities in order to appropriately balance the costs of exchange rate hedging transactions and the probabilities that it best estimates for the occurrence of those exchange rate fluctuations.

The consolidated Company recorded a difference in the assets and liabilities in dollars amounting to M$491,694,101 (in pesos) in December 2008 and M$193,885,148 (in pesos) in December 2007.

In general, the Company does not earn significant income in dollars while the expenses it incurs in dollars are mainly for interest payments on dollar debt. It also makes disbursements to acquire part of its inventories for sale abroad.

2. Interest Rate Risk Interest rate is not a relevant risk for S.A.C.I. Falabella since it maintains a low level of unhedged consolidated debt.

The credit companies in general monitor the matching of terms and rates.

3. Foreign Investment Risk Investment in countries with a risk higher than Chile, such as Argentina, Peru and Colombia, with risk ratings below that of Chile, implies a weighted set of risks higher than what we would have with local investments only. On the contrary, there is the possibility of earning better returns on each of the international markets where it has made its investments. This consideration is in the risk rating reports issued by the two private risk rating companies that have classified the creditworthiness of SACI Falabella as AA.

Total income amounted to M$3,727,186,511 in December 2008 (M$3,071,798,458 in the same period of 2007). Of that amount, 27.48% came from foreign currency (19.07% in 2007).

In Peru, operations developed in a scenario with controlled inflation and an exchange rate of 1 U.S. dollar to 3.142 sols.

4. General Risks of the Economy Our company, which engages in providing commercial service to its customers and convenient credit, is linked, via aggregate consumption, to the conditions that determine it, both real variables as well as expectations. When demand is restricted, the growth rate of its revenue and profits should drop while in expansions the opposite occurs.

5. Specific Trade Risk The Company does not depend exclusively on one particular supplier and its procurement is ample and open to the world. Nor does it have few customers since it services millions in the different socioeconomic strata. The Company merchandises several tens of thousands of different products, so it is not affected by any particular price cycle. Hence, there is no specific risk other than trade in general and department stores in particular.

6. Asset Risk The buildings, infrastructure, facilities and equipment are amply protected from any operating risk through the pertinent insurance policies. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 115 ANNUAL REPORT

MATERIAL EVENTS

Material Event 1/08 Santiago, January 30, 2008 Pursuant to the provisions in General Rule No. 30 and Circular Letter No. 660 of the Securities and Insurance Commission, it was reported that at its Board Meeting held on January 29, 2008, the Board agreed to distribute interim dividends against 2007 income. The resolution stated that a payment of $18.5 per share of the single series will be paid on February 20, 2008. All shareholders registered in the respective company registry on February 14, 2008 shall be entitled to receive such dividend.

Material Event 2/08 Santiago, January 31, 2008 As provided in General Rule No. 30, it was reported that on this date, the ruling by the Antitrust Court on the inquiry regarding the merger of S.A.C.I. Falabella and Distribución y Servicio D&S S.A. was notified. Such ruling rejected the merger.

Material Event 3/08 Santiago, January 31, 2008 Complementing the aforesaid material event, it was reported that S.A.C.I. Falabella and its attorneys are studying the ruling by the Antitrust Court and analyzing eventual actions to be taken, which will be properly disclosed, if taken.

Material Event 4/08 Santiago, March 3, 2008 As provided in article 90 and in the second subparagraph of Article 100 of Law 18,045 and in paragraph 2.2 of Section II of General Rule 30 of the Commission, it was disclosed that on this date the Board of S.A.C.I. Falabella acknowledged the termination, by mutual consent, of the Merger Agreement signed between the controlling shareholders of S.A.C.I. Falabella and the controlling shareholders of Distribución y Servicio D&S S.A. on May 17, 2007.

Material Event 5/08 Santiago, June 11, 2008 Pursuant to the stipulations in Article 9 and subparagraph 2 of Article 10 of Law 18,045, and the provisions in General Rule No. 30 of the Commission, it was disclosed that: At a Board meeting of the Company held on this date, the Board of Directors agreed to approve the issuance of securities against a credit facility (hereinafter the “Line”) and registration of those securities with the Securities and Insurance Commission. The main features of the Line are: a) Maximum amount of issue: The maximum amount of securities issuable against the Line will be one million Unidades de Fomento. b) Maturity of the Line: ten years after its registration in the Securities Registry. c) Type of document: Bearer notes with no obligation to protest. Certificates will be dematerialized. d) Use of Funds: Funds from the placement of securities issued against this Line will be used to pay liabilities and/or working capital. The board authorized any of the Executive Vice-President, Mr. Juan Cuneo Solari, and the CEO, Mr. Juan Benavides Feliu, acting individually, and the Corporate Retail CEO, Mr. Juan Pablo Montero Schepeler and the Corporate CFO, Mr. Alejandro Gonzalez Dale, acting jointly, to set the terms and period for the securities issue against the Line and to represent the company in every act relating thereto. Moreover, it authorized the undersigned to report the aforesaid resolution as a material event.

Material Event 6/08 Santiago, July 30, 2008 Pursuant to the stipulations in Article 9 and subparagraph 2 of Article 10 of Law 18,045, and the provisions in General Rule No. 30 of the Commission, the following has been reported as a material event: Yesterday, the company submitted information and documentation to the Securities and Insurance Commission. Such information provided the special terms of the first placement of securities against the line registered under No. 28 in the Securities Registry. This first placement will be made between August 7 and September 4 and it has the following characteristics: 1. Amount to be placed: $10,000,000,000 in one series. 2. Number of instruments: 70 dematerialized notes amounting to a total of $100,000,000 each. 55 dematerialized notes amounting to $50,000,000 individually each and 25 dematerialized notes amounting individually to $10,000,000 each. 3. Maturity: The principal comes due on January 14, 2009. 4. Interest rate and adjustment: There will be no face interest rate on this issue, it will be placed at a discount and it will not be adjustable. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 Consolidated financial statements

Material Event 7/08 Santiago, September 11, 2008 Pursuant to the stipulations in Article 9 and subparagraph 2 of Article 10 of Law 18,045, and the provisions in General Rule No. 30 of the Commission, the following has been reported as material event: At a Special Board meeting held on September 10, 2008, the Board of Directors agreed to approve the issuance and registration of four securities lines with the Securities and Insurance Commission, with the following characteristics: e) Maximum amount of issue: The maximum amount of the issue of securities against each line will be one million Unidades de Fomento. f) Maturity of each line: ten years after its registration in the Securities Registry. g) Type of document: Bearer notes with no obligation to protest. Certificates will be dematerialized. h) Use of Funds: Funds will be used to pay liabilities and/or working capital. The board authorized any of the Executive Vice-President, Mr. Juan Cuneo Solari, and the CEO, Mr. Juan Benavides Feliu, acting individually, and the Corporate Retail CEO, Mr. Juan Pablo Montero Schepeler and the Corporate CFO, Mr. Alejandro Gonzalez Dale, acting jointly, to set the terms and period for the securities issue against the lines and to represent the company in every act relating thereto. Moreover, it authorized the undersigned to report the aforesaid resolution as a material event

Material Event Santiago, February 18, 2008 In compliance with Articles 9 and 100 of Law 18,045, at its Meeting held February 15, 2008, the Board approved the distribution of the following dividends under the authority granted by the Regular Shareholders Meeting held April 23, 2007: A dividend of $0.354 per share, amounting to $146,512,955 on account of the Retained Earnings Fund from previous fiscal years and the amount of $7,688,416,709 from profits earned in the 2007 fiscal year. Accordingly, a total of $7,834,929,664 was distributed in dividends. The dividend payment was made on February 18, 2008.

Material Event Santiago, March 28, 2008 In compliance with governing rules, it was disclosed that the Regular General Shareholders Meeting of Sodimac S.A. will be held on April 28, 2008 at which matters inherent thereto will be analyzed pursuant to governing rules. All of the shares issued will be present at the meeting.

Material Event Santiago, May 29, 2008 In compliance with governing rules, it was disclosed that at its Meeting held May 27, 2008, the Board decided to convene a Special General Shareholders Meeting to be held on June 16, 2008 at 3:00 p.m. to discuss approval of the merger with the company resulting from the division of Sociedad de Rentas Falabella S.A. All of the shares issued will be present at the meeting.

Material Event Santiago, August 29, 2008 As provided in articles 9 and 100 of Law 18,045, it was disclosed that at its Meeting held on August 26, 2008, under the authority granted by the Regular General Shareholders Meeting held on April 28, 2008, the Board approved the distribution of dividends as follows: A dividend of $0.491 per share on account of the Retained Earnings Fund of the company from previous fiscal years. Accordingly, a total of $10,871,600,867 in dividends was distributed. Payment of such dividends will be made on August 29, 2008.

Material Event Santiago, October 1, 2008 Pursuant to the stipulations in Article 9 and subparagraph 2 of Article 10 of Law 18,045, and the provisions in General Rule No. 30 of the Commission, it was disclosed, under proper authority, that: At a Regular Board Meeting held on September 30, 2008, the Board of Directors agreed to approve the issue and registration of four facilities (the “Lines”) with the following characteristics with the Securities and Insurance Commission: Maximum amount of issue: Two Lines will be for seven and fifty thousand Unidades de Fomento each. The remaining two Lines will be for five hundred thousand Unidades de Fomento each. Maturity of each Line: ten years after its registration in the Securities Registry. Type of documents: Bearer notes with no obligation to protest. Certificates will be dematerialized. Use of Funds: Funds will be used to pay liabilities and/or working capital. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 117 ANNUAL REPORT

Material Event Santiago, December 24, 2008 In compliance with governing rules, it was disclosed that at a special meeting held on this date, the Board of Sodimac S.A. agreed to convene a Special Shareholders Meeting to be held on January 9 at 11:00 a.m. in the company’s offices. Matters to be analyzed will be as follows: • Revocation of the merger by takeover of Sociedad de Rentas Falabella Dos S.A. and the other resolutions adopted at the special shareholders meeting on June 16, 2008. • Approval of the merger by takeover of Sociedad de Rentas Falabella Dos S.A., effective June 30, 2008. • Approval of the balance sheets of the merging companies as of May 31, 2008 and of the pertinent expert reports. • A statement that between May 31, 2008, the date of audited balance sheets based on which the companies were merged, and June 30, 2008, the date when the resolutions adopted will take effect, there were no transactions or material changes that may affect the balances in the financial statements used to adopt the resolution on the merger, notwithstanding the normal changes in balances as a consequence of commercial transactions of the companies in the merger in that period. All of the shares issued will be present at the meeting.

Material Event Santiago, December 30, 2008 Pursuant to the stipulations in Article 9 and subparagraph 2 of Article 10 of Law 18,045, and the provisions in General Rule No. 30 of the Commission, it was disclosed, under proper authority, that: At the meeting held December 29, 2008, the Board of Sodimac S.A. agreed to issue two bond series: one against the bond facility registered under No. 520 and the other against the bond facility registered under No. 521. Both issues are limited to UF 1,500,000. The Board agreed to empower the undersigned to set the terms and time of the aforesaid issues and to sign the agreements and undertake all proceedings necessary for the issuance and sale of the respective bonds. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

Opinion of Independent Auditors To the Shareholders and Directors of S.A.C.I. Falabella:

1. We have performed an audit of the general balance sheets of S.A.C.I. Falabella as of December 31, 2008 and 2007, and of the corresponding statements of income and cash flow for the years ending on those dates. The management of S.A.C.I. Falabella are responsible for the preparation of those financial statements (that include the relevant notes). We are responsible for issuing an opinion on those financial statements based on our audits. The attached Explanatory Analysis and Material Events do not form an integral part of these financial statements so this opinion does not include them.

2. Our audits were performed according to generally accepted auditing standards of Chile. Those standards require that we plan and perform our work in order to achieve a reasonable certainty that the financial statements are free from material misstatement. An audit includes the examination, on the basis of tests, of evidence supporting the amounts and information disclosed in the financial statements. An audit also includes an evaluation of the accounting principles used and of the material estimates made by the Company’s management, as well as an assessment of the general presentation of the financial statements. We consider our audits to constitute a reasonable basis for our opinion.

3. These financial statements have been prepared in order to reflect the individual financial situation of S.A.C.I. Falabella based on the standards described in Note 2 (b), before consolidation, line by line, of the financial statements of the subsidiaries listed in Note 14. Accordingly, these individual financial statements must, for an adequate interpretation, be read and analyzed together with the consolidated financial statements of S.A.C.I. Falabella and subsidiaries. This is required by the accounting principles generally accepted in Chile. This opinion is shown only for information and use by the board and management of S.A.C.I. Falabella and the Securities and Insurance Commission.

4. In our opinion, the aforesaid individual financial statements fairly reflect, in all material aspects, the financial situation of S.A.C.I. Falabella as of December 31, 2008 and 2007 and the results of their operations and cash flow for the years ending on those dates, according to principles described in Note 2 (b).

Eduardo Rodríguez B.

Santiago, February 20, 2009 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 119 ANNUAL REPORT

INDIVIDUAL GENERAL BALANCE SHEETS IN THOUSANDS OF CHILEAN PESOS · AS OF DECEMBER 31, 2008 AND 2007

ASSETS LIABILITIES CURRENT PREVIOUS CURRENT PREVIOUS

TOTAL CURRENT ASSETS 319.982.589 438.353.451 TOTAL CURRENT LIABILITIES 242.133.068 282.601.789

Short-term bank debt 2.979.305 39.200.087 Cash 379.478 22.286.409 Time deposits Long-term bank debt expiring within one year Marketable securities (net) Notes (notes) 51.884.748 Sales receivables (net) 5.379.642 Bonds (bonds) expiring within one year 146.165.897 6.712.262 Notes receivable (net) 100.359 9.143.740 Long-term bank debt expiring within one year Dividends payable 136.895 48.300.433 Sundry receivables (net) 612.730 3.690.365 Accounts payable 4.907.091 85.392.325 Intercompany notes and accounts receivables 251.800.577 258.194.931 Notes payable 1.219.563 Inventories (net) 57.138.363 122.577.296 Sundry payables 27.947 901.592 Recoverable taxes 826.945 605.905 Intercompany notes and accounts payable 24.413.867 89.218.768 Prepaid expenses 249.277 9.766.318 Provisions 1.783.236 2.628.461 Deferred taxes 1.306.230 1.924.017 Withholdings 9.732.303 3.721.881 Income tax 180.582 Other current assets 7.568.630 4.784.828 Prepaid revenues 101.779 5.125.835 Leasing contracts (net) Deferred liabilties Leasing assets (net) Other current liabilities

TOTAL PROPERTY, PLANT AND EQUIPMENT 4.114.878 103.949.464 TOTAL LONG-TERM LIABILITIES 313.430.625 457.304.780

Land Bank debt Bonds (bonds) 292.291.266 432.723.804 Construction and infrastructure 1.720.237 12.253.215 Long-term notes payable Machinery and equipment 190.785 16.537.740 Long-term sundry payable Other property, plant and equipment 8.285.803 169.629.967 Long-term intercompany notes and accounts payable 20.530.985 19.630.912 Gain on technical reappraisal of property, plant and equipment Long-term provisions 35.081 808.378 Accumulated Depreciation (less) -6.081.947 -94.471.458 Long-term deferred taxes 573.293 4.071.221 Other long-term liabilities 70.465 TOTAL OTHER ASSETS 1.984.529.928 1.692.769.824 MINORITY INTEREST Investment in related companies 1.970.421.360 1.665.500.861 TOTAL EQUITY 1.753.063.702 1.495.166.170 Investment in other companies

Goodwill 5.354.756 10.413.571 Paid-in capital 532.495.043 532.295.706 Negative goodwill (less) Reserve on capital revaluation Long-term receivables 53.867 113.957 Premium on the sale of treasury stock 3.683.699 2.411.720 Other reserves 19.911.981 -34.518.854 Long-term intercompany notes and accounts receivable 2.759.677 Retained earnings (adds 5.24.51.00 to 5.24.56.00) 1.196.972.979 994.977.598 Long-term deferred taxes Future dividend reserves Intangibles 539.222 633.247 Cumulative profits 994.959.837 878.942.792 Amortization (less) -134.462 -142.194 Cumulative losses (less) Fiscal year profit (loss) 202.013.142 236.410.857 Other 8.295.185 13.490.705 Interim Dividends (less) -120.376.051 Long-term leasing contracts (net) Cumulative superavit (Deficit) in development period

TOTAL ASSETS 2.308.627.395 2.235.072.739 TOTAL LIABILITIES AND EQUITY 2.308.627.395 2.235.072.739 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

STATEMENT OF INCOME STATEMENT OF CASH FLOW – DIRECT 2008 2007 CURRENT PREVIOUS NET FLOW FROM OPERATING ACTIVITIES M$ M$

OPERATING INCOME 13.392.207 38.043.560 Collection of sales receivables 844.672.208 961.293.647 Interest income received 965.916 771.713 GROSS MARGIN 172.684.225 234.433.902 Dividends and other distributions received 66.331.104 115.902.052 Other income received 11.628.154 19.306.076 Revenues 688.652.579 801.543.944 Payment to suppliers and employees (less) -668.717.212 -889.357.704 COGS (less) -515.968.354 -567.110.042 Interest paid (less) -21.643.561 -3.225.596 SG&A expenses (less) -159.292.018 -196.390.342 Income tax paid (less) -2.029.416 -859.589 Other expenses paid (less) -28.906.302 -20.119.814 NON-OPERATING INCOME 188.711.438 201.603.448 Value-added Tax and other similar taxes paid (less) -12.302.663 -8.607.762 Net flow from operating activities 189.998.228 175.103.023 Interest income 2.416.109 3.091.872 Profit on investments in related companies 210.138.189 231.517.740 NET FLOW FROM FINANCE ACTIVITIES Other non-operating income 5.813.138 13.726.927 Placement of cash shares 1.452.386 2.645.465 Loss on investment in related companies -681.327 -1.948.109 Loans obtained 45.337.655 45.813.768 Amortization of goodwill -749.696 -915.841 Notes 51.276.409 Interest expense -26.465.197 -23.259.236 Documented loans from related companies 157.840.564 7.111.170 Other non-operating disbursements -5.747.241 -2.313.347 Other loans obtained from related companies 123.687.587 22.488.058 Price-level restatement -20.540.218 -17.187.581 Other sources of financing Exchange differential 24.527.681 -1.108.977 Dividends payments (less) -47.766.432 -130.502.605 Capital distributions (less) Loan payments (less) -79.919.125 -13.975.773 PROFIT BEFORE TAX AND EXT. ITEMS 202.103.645 239.647.008 Note Payments (less) -2.660.910 -1.326.844 INCOME TAX -90.503 -3.236.151 Payment of documented loans from related companies (less) -15.993.525 Payment of other loans from related companies (less) -42.549.267 EXTRAORDINARY ITEMS Payment of issue and placement share expenses (less) Payment of bond issue and placement expenses (less) -443.093 -19.214.488 PROFIT (LOSS) BEFORE MINORITY INTEREST 202.013.142 236.410.857 Other investment disbursements (less) -25.907 Net flow from finance activities 190.236.342 -86.961.249 MINORITY INTEREST NEW FLOW FROM INVESTMENT ACTIVITIES PROFIT (LOSS) BEF AMORT OF NG 202.013.142 236.410.857 Sale of property, plant and equipment 487.477 264.174 Sale of standing investments 8.781.477 Amortization of negative goodwill Sale of other investments Collection of documented loans from related companies NET PROFIT (LOSS) 202.013.142 236.410.857 Collection of other loans from related companies 166.634.741 201.511 Other investment income 786.814 66.730 Addition of property, plant and equipment (less) -29.268.732 -43.996.833 Payment of compounded interest (less) -450.573 Standing investments (less) -50.232.928 -20.306.286 Investment in financial securities (less) Documented loans to related companies (less) -451.680.713 Other loans to related companies (less) -33.910.038 -59.436.491 Other investment disbursements (less) -207.061 -719.153 Net flow from investment activities -397.390.440 -115.595.444

TOTAL NET FLOW IN THE PERIOD -17.155.870 -27.453.670

EFFECT OF INFLATION ON CASH AND CASH EQUIVALENT -750.234 -2.823.923 NET CHANGE IN CASH AND CASH EQUIVALENT -17.906.104 -30.277.593 INITIAL BALANCE OF CASH AND CASH EQUIVALENT 22.286.409 52.564.002

ENDING BALANCE OF CASH AND CASH EQUIVALENT 4.380.305 22.286.409 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 121 ANNUAL REPORT

INDIVIDUAL GENERAL BALANCE SHEETS IN THOUSANDS OF CHILEAN PESOS · AS OF DECEMBER 31, 2008 AND 2007

NOTE 1 REGISTRATION IN THE SECURITIES REGISTRY RECONCILIATION OF NET FLOW FROM OPERATING ACTIVITIES AND NET INCOME S.A.C.I. Falabella is an open corporation that is registered under No. 582 of the Securities Registry. According to Law No. 18.046, it is regulated by the Securities and Insurance Commission. CURRENT PREVIOUS

Net profit (loss) 202.013.142 236.410.857 The Company was organized as a corporation on March 19, 1937 before the Santiago Notary Public, Jorge Gaete Rojas. Its incorporation was legally authorized by Executive Decree No. 1.424 of April 14,

Income from the sale of assets 35.720 42.773 1937. The line of business of the Company is the retail marketing of any kind of product, in addition to Profit (loss) on the sale of property, plant and equipment 35.720 42.773 investing or participating in companies or businesses in furtherance of its main line of business. Profits on the sale of investments (less) Loss on the sale of investments Profit (loss) on the sale of other assets NOTE 2 ACCOUNTING STANDARDS

Debit (credit) to income not representing cash flow -192.662.501 -187.346.462 a)A ccounting period These financial statements of S.A.C.I. Falabella correspond to the periods ending December 31, 2008 Fiscal year depreciation 14.729.401 14.638.649 and 2007. Amortization of intangibles 54.054 49.168 Write-offs and provisions 7.630.610 8.756.218 b)P reparation Profit accrued on investment in related companies (loss) -210.138.189 -231.517.740 As of December 31, 2008 and 2007, the financial statements of S.A.C.I. Falabella were prepared Loss accrued on investment in related companies 681.327 1.948.109 according to generally accepted accounting principles of Chile and standards issued by the Securities Amortization of goodwill 749.696 915.841 and Insurance Commission. The standards issued by the Securities and Insurance Commission prevail Amortization of negative goodwill (less) over generally accepted accounting principles should there be any conflict. Net price-level restatement 20.540.218 17.187.581 Net exchange differential -24.527.681 1.108.977 Investments in subsidiaries are recorded in one single line of the general balance sheet and are not, Other credits to income not representing cash flow (less) -2.609.768 -672.385 therefore, consolidated line by line. This treatment does not change the net income of the fiscal year Other debits to income not representing cash flow 227.831 239.120 or equity.

Change in assets affecting cash flow (increase) decrease 133.622.982 109.961.272 These financial statements have been prepared only for purposes of making an individual analysis of Sales receivables 26.009.405 13.557.555 the Company and they must, as a result, be read together with the consolidated financial statements Inventories 38.885.218 -19.056.357 required by the accounting principles generally accepted in Chile. Other assets 68.728.359 115.460.074

S.A.C.I. Falabella is registered as a branch or foreign agency in the Companies Registry of the Cayman Change in liabilities affecting cash flow increase (decrease) 46.988.885 16.034.583 Islands according to the governing laws of that country. Since it has the same corporate name as the Accounts payable in relation to operating income 49.776.510 2.570.171 Parent Company, S.A.C.I. Falabella has adopted the criterion of including assets, liabilities and income Interest payable 1.031.535 -1.201.651 from transactions of that branch in its individual financial statements. Income tax payable (net) -1.283.670 2.139.881 Other accounts payable in relation to non-operating income -12.670.165 4.018.495 c)P resentation Value-added tax and other similar taxes payable (net) 10.134.675 8.507.687 The financial statements and their respective notes as of December 31, 2007, have been adjusted Profit (loss) on minority interest off-the-books by 8.9% for comparison purposes, and some minor reclassifications have been made to the actual balances as of the aforesaid date, which did not affect revenues. NET FLOW FROM OPERATING ACTIVITIES 189.998.228 175.103.023 As a result of a corporate reorganization by the group in 2008, S.A.C.I. Falabella S.A. transferred the retail business to Falabella Retail S.A., a subsidiary, by a contribution and assignment of assets and liabilities. Due to the foregoing, the operating income shown in these financial statements must be complemented as follows: WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

Presentation Revenues 99,426,775 Gross Margin 66,276,512 Operating Income 10,464,643 d)P rice-level restatement The financial statements have been adjusted according to price-level restatement regulations and the generally accepted accounting principles of Chile in order to reflect the variation of the buying power of the currency in the relevant periods. Adjustments have been determined on the basis of the consumer price index, published by the National Statistics Institute, which varied 8.9% in the period between November 30, 2007 and November 30, 2008 (7.4% for the same period in the previous year). e)C onversion Assets and liabilities in foreign currencies have been expressed in Chilean pesos at the observed dollar exchange rates published by the Central Bank of Chile, in effect at the closing dates of the financial statements. Balances expressed in unidades de fomento are shown at the respective closing rate of such unit. The values as of December 31, 2008 and 2007 are as follows:

Conversion 2008 2007 $ $ U.S. Dollar 636.45 496.89 Unidad de Fomento 21,452.57 19,622.66 Euro 898.81 730.94 f)M arketable securities Marketable securities correspond to mutual funds shares, which are recorded at the share value at the closing of each period g)I nventories This line shows business inventories of the Company, which are estimated to have an effective turnover in one year. As of December 31, 2008 y 2007, products for sale and materials are valued at their average cost. These costs do not exceed the net sale values of the products in stock, and the necessary obsolescence provisions have been established. h)E stimated uncollectibles As of December 31, 2008 and 2007, in order to hedge against the risk of uncollectibles, the Company has established global provisions for uncollectibles and notes receivable in effect as of December 31, 2008 and 2007, based on the overdue debt exceeding 90 and 120 days, respectively. These provisions are shown after deducting sales receivables, notes receivables and sundry receivables in the general balance sheet. Management considers these provisions to be sufficient and net balances to be recoverable. i) Property, plant and equipment Property, plant and equipment are shown valued at their acquisition cost, plus the corresponding legal revaluations accrued as of December 31, 2008 and 2007. Ongoing works include the financing cost arising in the construction stage that would have been avoided by not undertaking such construction. j) DepreciationProperty, of Plant andEquipment Depreciation has been calculated according to the straight-line method on the adjusted value of Property, Plant and Equipment and the estimated remaining useful life. Depreciation in the period is shown in SG&A. k)I ntangibles Intangibles mainly correspond to trademarks, which are amortized directly against income, according to the provisions in the accounting regulations. l)P repaidExpenses This line corresponds to insurance agreements, advertising and leases paid in advance, which are debited against income as they are consummated. m)I nvestments in related companies These standing investments are valued taking into account the following criteria:

Standing investments made as from December 31, 2003, are valued using the Equity Value (EV) method and the acquisition method as the basis for adjusting the equity of the company acquired at the fair value, which consists of valuing the assets and liabilities identifiable according to the provisions in Circular Letter No. 1,697 of the Securities and Insurance Commission and Technical Bulletin No. 72 of the Chilean Accountants Association.

Standing investments made prior to December 31, 2003, in stock, whether or not exchange-traded, and interests in companies that involve the power to exercise a significant influence on the issuer, will be valued according to the Proportional Equity Value (PEV) method established in Circular Letter No. 368, and Technical Bulletin No. 42 of the Chilean Accountants Association, which consists of assigning a value to the investment equivalent to the proportion corresponding to the investor in the equity at book values of the issuer and of recognizing any variations proportionally. Significant influence is defined in Circular Letter No. 1,697 of the Securities and Insurance Commission. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 123 ANNUAL REPORT

notes to the INDIVIDUAL GENERAL BALANCE SHEEt IN THOUSANDS OF CHILEAN PESOS · AS OF DECEMBER 31, 2008 AND 2007

According to Technical Bulletin No. 64 of the Chilean Accountants Association and the provisions in Circular Letter No. 5,294 of the Securities and Insurance Commission, standing investments abroad in unstable countries whose activities are not an extension of the operations of the same investor are kept in U.S. dollars and the exchange differential between the exchange rate variation and the Consumer Price Index (CPI) is recorded as a credit or debit in the equity account reserve called “Cumulative Adjustment due to Exchange Differential,” which is shown in Other Reserves. Moreover, the differentials because of the hedging of the aforesaid investments, recorded as hedging instruments, are matched in the accounting to the same equity reserve account.

The exchange parity used in these financial statements to convert the investments in the Republic of Argentina was 3.453 Argentine pesos per US$1 as of December 31, 2008 (3.149 Argentine pesos per US$1 as of December 31, 2007).

n)G oodwill and negative goodwill Goodwill has been calculated based on the cost incurred in the acquisition of the rights and stock in companies in relation to the proportional equity in the books of the issuer. The amounts so determined are amortized over twenty years, the expected period of payback.

o)I ncome tax and deferred taxes Income tax is recorded based on the taxable net income, determined according to the regulations in the Income Tax Law.

Deferred taxes arising from all temporary differences, tax losses involving a tax benefit and other events creating differences between the tax base and accounting base of assets and liabilities are recognized in the manner established in Technical Bulletins No. 60 and No. 71 of the Chilean Accountants Association and in the regulations of the Securities and Insurance Commission in Circular Letter No. 1,466 dated January 27, 2000.

p)B onds andNotes Bonds and Notes are shown at the closing of each period at their par value, plus interest and adjustments accrued.

The lower price, financial disbursements and other expenses directly associated with these obligations at the time of placement are shown in the line Other Short- and Long-term Assets and they are amortized during the term of the respective issue.

q)V acationProvision The Company records the vacation cost of personnel as expenses for wages and salaries on an accrual basis.

r)S everance indemnity The Company has established a severance provision for its employees reflecting the present value according to current employment contracts.

s)R evenues Revenues come from the business of the Company and are quantified and recognized in the accounting on an accrual basis, taking into account the economic effect of transactions behind them, i.e. when the transaction results in an increase in equity.

t)D erivativeAgreements These agreements are recorded on the books pursuant to the accounting regulations in Technical Bulletin No. 57 of the Chilean Accountants Association.

The net balances receivable or payable in derivative transactions are classified in the accounting in the line Short-term Accounts Payable.

u)O therLong-term Liabilities The Company recorded prepaid interest in Other Long-term Assets that is debited to income during the original term of the contract. It also recorded Deferred Expenses in the bond issue. The short-term portion is shown under Other Current Assets.

v)C omputerSoftware The Company has computer software acquired from third parties, which are shown in Property, Plant and Equipment within Other Fixed Assets and they are amortized in a period of 4 years.

w)U se of estimates The preparation of the financial statements according to accounting principles generally accepted in Chile requires that the Management make estimates and assumptions affecting the amount of assets and liabilities reported and the information on contingent assets and liabilities as well as the amounts of income and expenses in the period. The real income may differ from these estimates.

x)C ash flow The following short-term investments have been considered in the preparation of the Cash Flow Statement:

· Time deposits with maturities out to no more than 90 days. · Financial instruments with resale agreements. · Mutual fund shares. · Marketable securities. The operating flow includes mainly all transactions relating to the business of the Company and those that cannot, by nature, be classified as investment or financing. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS y)C ompensation plans The Company has implemented a compensation plan for executives by granting stock options. It records, assesses and discloses these transactions according to the provisions in the International Financial Reporting Standard (NIIF) No. 2 on stock-based payments , recognizing in the accounting the effect of the fair value of the options offered. They are debited against salary expenses in the period when they become irrevocable.

NOTE 3 ACCOUNTING CHANGES

There were no accounting changes as of December 31, 2008.

NOTE 4 MARKETABLE SECURITIES

No aplicable, no se registran saldos en este rubro

NOTE 5 SHORT- AND LONG-TERM RECEIVABLES

Short- and Long-Term Receivables include the following items: a)S ales receivables Sales receivables in 2007 corresponded to receivables from companies and agreements with companies maturing within 90 days. In 2008, this line is zero. b)N otes receivable In 2008, this line included judicial collections and other notes receivable. For 2007, this line included notes receivable on account of sales by non-company credit cards and post-dated checks, which are recoverable mainly within 30, 60 and 90 days. c)S undry receivables They correspond mainly to:

Sundry receivables 2008 2007 MCH$ MCH$ Staff current accounts and other receivables 245,004 894,389 Insurance claims 314,842 522,820 Centralized supplier collections 0 54,261 Advances to suppliers, customs agents and others 312,746 1,021,531 Securities Depositary (DCV) receivables 50,678 55,188 Other accounts receivable from third parties 9,973 1,378,196 Uncollectibles provision -320,513 -236,020 Total 612,730 3,690,365

Below are the short- and long-term receivables as of December 31, 2008 and 2007.

SHORT AND LONG TERM RECEIVABLES CURRENT ASSETS Out to 90 days More than 90 days to 1 year Subtotal Total Current Assets (net) Long Term Line 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2008 12/31/2007 12/31/2008 12/31/2007 Sales receivables 5,379,642 5,379,642 Estimated uncollectibles Notes receivable 137,909 8,602,273 541,467 137,909 100,359 9,143,740 60,300 Estimated uncollectibles 37,550 Sundry receivables 933,243 3,690,365 933,243 612,730 3,690,365 53,867 53,657 Estimated uncollectibles 320,513

Total Long-Term Receivables 53,867 113,957 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 125 ANNUAL REPORT

NOTE 6 INTERCOMPANY BALANCES AND TRANSACTIONS

The main intercompany balances receivable and payable are as follows:

As of December 2008, the Company recorded intercompany balances receivable and payable, mainly with the following companies and for the following reasons:

a)R eceivables: Short-term receivables

1. InverfalS.A . The balance receivable corresponds to trade account transactions expressed in U.S. dollars, without interest.

2. InversionesFalabella Ltda. The balance receivable corresponds to trade account transactions expressed in U.S. dollars and/or UF and/or Chilean pesos, without interest.

3. DesarrollosInmobiliarios S.A. The balance receivable corresponds to transactions forming part of the company’s business, in a trade account, expressed in Chilean pesos, without interest.

4. Empresas Sdeervicio A ydministración The net balances come from service and administration companies corresponding to trade account transactions in the company’s business, expressed in Chilean pesos, without interest.

5. InversionesServa L tda. The balance receivable comes from trade account transactions, expressed in U.S. dollars and/or UF and/or Chilean pesos, without interest.

6. SodimacS.A . The balance receivable comes from trade account transactions, expressed in local currency.

7. Sociedad Rdeentas Falabella S.A . The balance receivable comes from trade account transactions in the company’s business , expressed in Chilean pesos, without interest.

8. SupermercadosSanF ranciscoBuin S .A. The balance receivable comes from trade account transactions, expressed in Chilean pesos, without interest and mainly to a short-term loan, expressed in Chilean pesos at a nominal bank (TAB) rate of 0.60% monthly.

9. InversionesServa D osS .A. The balance receivable comes from trade account transactions, expressed in U.S. dollars, without interest.

10.S hearvanCorporate S.A . The balance receivable comes from trade account transactions, expressed in U.S. dollars, without interest.

11.I nmobiliariaMalaga S. A. The balance comes from trade account transactions, expressed in Chilean pesos, without interest.

12.P romotoraCMR FalabellaS.A . The balance receivable comes from trade account transactions in the company’s business, expressed in Chilean pesos, without interest.

13.C omercialMonse Ltda. The balance receivable comes from trade account transactions in the company’s business, expressed in Chilean pesos.

14.S ociedad Sdeervicios Cdeomercio Ltda. The balance comes from trade account transactions, expressed in UF, without interest.

15.F alabellaRetail S .A. The balance receivable comes from trade account transactions in the company’s business, expressed in Chilean pesos, without interest.

b)B alancesPayable: 1. InvercolS.A . The balance payable comes from trade account transactions, expressed in Chilean pesos, without interest. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

2. ServiciosFalabella PRO Ltda. The balance payable corresponds to transactions recorded in a trade account, expressed in Chilean pesos, without interest.

3. FallbrooksProperties Ltd. The balance payable corresponds to transactions recorded in a trade account, expressed in U.S. dollars, without interest.

4. HomeTrading S.A . The balance payable corresponds to transactions recorded in a trade account, expressed in Chilean pesos, without interest.

5. InversionesPrestaciones y Venser Uno L tda. The balance payable corresponds to transactions recorded in a trade account, expressed in Chilean pesos, without interest. c)L ong-term balances payable 1. FalabellaSucursal Uruguay S.A . The balance payable corresponds mainly to the capital pending payment to Falabella Sucursal Uruguay S.A. in the merger by takeover of Caremody Limited. There are also transactions expressed in Chilean pesos, without interest.

2. InversoraFalken S. A. The balance payable corresponds to transactions recorded in a trade account, expressed in U.S. dollars.

Below are the net intercompany balances receivable and payable. Notes and Accounts Receivable Short Term Long Term Taxpayer Company 12/31/2008 12/31/2007 12/31/2008 12/31/2007 76864900-6 DESARROLLOS E INVERSIONES INMOBILIARIAS S.A. 18 1,968 96545450-0 DERCOMAQ S.A. 181 94141000-6 DERCO S.A. 248 76023147-9 NUEVA INVERFIN S.A. 616 96847200-3 SERVICIOS E INVERSIONES FAS LTDA. 1,135 4,928 0-E OTRAS SOCIEDADES 2,263 78057000-8 SOTRASER S.A. 3,780 76007327-K INVERSIONES VENSER DOS LTDA. 4,008 8,995,936 0-E TEVER CORPORATION S.A. 25,866 0-E FALABELLA DE COLOMBIA S.A 30,091 25,694 99581160-K DINALSA S.A. 88,533 57,528 76020385-8 INVERSIONES PARMIN SPA. 94,503 96577470-K ITALMOD S.A. 96,406 96509660-4 BANCO FALABELLA 158,755 349,277 0-E FALABELLA SUCURSAL URUGUAY S.A. 196,904 0-E INVERSORA FALKEN S.A. 206,482 111,221 0-E FALABELLA S.A. (ARGENTINA) 221,891 178,641 78722910-7 SUPERMERCADOS SAN FRANCISCO S.A. 461,329 76000935-0 PROMOTORA CHILENA DE CAFE COLOMBIA S.A. 464,450 0-E SAGA FALABELLA S.A. (PERÚ) 778,616 161,257 77261280-K FALABELLA RETAIL S.A. (EX INVERFIN S.A.) 967,136 1,430,456 78784800-1 SOC. DE SERVICIOS DE COMERCIO LTDA. (SOSERCOM) 1,241,884 797,707 77072750-2 COMERCIAL MONSE LTDA. 1,686,204 90743000-6 PROMOTORA CMR FALABELLA S.A. 2,341,295 79,210,116 96923590-0 INMOBILIARIA MÁLAGA S.A. 2,526,457 1,901,882 0-E SHEARVAN CORPORATE S.A. 5,586,114 305,852 76042371-8 INVERSIONES SERVA 2 S.A. 6,333,650 78627210-6 SUPERMERCADOS SAN FRANCISCO BUIN S.A. 8,987,416 99556170-0 SOCIEDAD DE RENTAS FALABELLA S.A. 16,288,955 96792430-K SODIMAC S.A. 20,065,162 335,079 76020706-3 INVERSIONES SERVA LTDA. 22,849,684 0-E EMPRESAS DE SERVICIOS Y ADMINISTRACIÓN 23,672,557 28,791,859 99593960-6 DESARROLLOS INMOBILIARIOS S.A. 24,046,681 50,248,270 76020391-2 INVERSIONES FALABELLA LTDA. 41,830,503 96647930-2 INVERFAL S.A. 70,540,804 36,069,009 79598260-4 ADMINISTRADORA CMR FALABELLA LTDA. 2,363,539 97004000-5 BANCO DE CHILE 1,714 0-E CMR ARGENTINA S.A. 2,759,677 99500360-0 HOME TRADING S.A. 167,742 76023773-6 INVERSIONES VENSER LTDA. 29,849,619 77099010-6 SERVICIOS FALABELLA PRO LTDA. 50,768 78722930-1 SERVICIOS Y ADMINISTRACIONES GRALES. SERVA LTDA. 11,749,224 78566830-8 SOC. DE COBRANZAS LEGALES LEXICOM LTDA. 21,977 99556180-8 SODIMAC TRES S.A. 5,011,251 76512060-8 SOLUCIONES CREDITICIAS CMR FALABELLA LTDA. 2,278 77132070-8 SOUTH AMERICA TEXTILES LTDA. 139

TOTALS 251,800,577 258,194,931 2,759,677 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 127 ANNUAL REPORT

Notes and accounts payable Short Term Long Term Taxpayer Company 12/31/2008 12/31/2007 12/31/2008 12/31/2007 85939400-0 INVERSIONES PARAGGI LTDA. 3 1432791 92580000-7 EMPRESA NACIONAL DE TELECOMUNICACIONES S.A. 56 0-E VIAJES FALABELLA S.A. (PERÚ) 86 669 96539380-3 EDICIONES FINANCIERAS S.A. 125 94627000-8 PARQUE ARAUCO S.A. 531 78187230-K AGRÍCOLA CASAS DEL BOSQUE LTDA. 992 25354 61704000-K CORP. NACIONAL DEL COBRE DE CHILE 1595 96653660-8 PLAZA DEL TRÉBOL S.A. 1847 251744 79990670-8 ADMINISTRADORA PLAZA VESPUCIO S.A. 4771 193684 96653650-0 PLAZA OESTE S.A. 26795 389765 96806980-2 ENTEL PCS TELECOMUNICACIONES S.A. 27280 279154 78997060-2 VIAJES FALABELLA LTDA. 43380 2677856 99597600-5 INMOBILIARIA CERVANTES S.A. 43473 43412 76882330-8 PLAZA ALAMEDA S.A. 238726 96811120-5 COMERCIAL TECNOCENTER LTDA. 243875 449524 76046445-7 CONFECCIONES INDUSTRIALES S.A. 300000 79598260-4 ADMINISTRADORA CMR FALABELLA LTDA. 519913 77132070-8 SOUTH AMERICA TEXTILES LTDA. 660000 76033206-2 INVERSIONES Y PRESTACIONES VENSER UNO LTDA. 1655250 99500360-0 HOME TRADING S.A. 2226095 0-E FALLBROOKS PROPERTIES LTDA. 5080586 7029722 77099010-6 SERVICIOS FALABELLA PRO LTDA. 5208564 76007317-2 INVERCOL S.A. 8129924 77072750-2 COMERCIAL MONSE LTDA. 217063 91408000-2 CONSORCIO PERIODÍSTICO DE CHILE S.A. COPESA 493 94141000-6 DERCO S.A. 723 96545450-0 DERCOMAQ S.A. 1553 99580040-3 EMPRESA PERIODÍSTICA LA CUARTA S.A. 7192 99579980-4 EMPRESA PERIODÍSTICA LA TERCERA S.A. 3694 77261280-K FALABELLA RETAIL S.A. (EX INVERFIN S.A.) 0-E FALABELLA SUCURSAL URUGUAY S.A. 38464509 14909652 14851625 93767000-1 FARMACIAS AHUMADA S.A. 14970 0-E INVERSORA FALKEN S.A. 5621333 4779287 96577470-K ITALMOD S.A. 560426 96573100-8 MANUFACTURAS DE VESTUARIOS MAVESA LTDA. 1226677 0-E OTRAS SOCIEDADES 77280 96521400-3 PAULA EDICIONES S.A. 2644 99555550-6 PLAZA ANTOFAGASTA S.A. 178530 96795700-3 PLAZA LA SERENA S.A. 110455 96791560-2 PLAZA TOBALABA S.A. 145160 96538230-5 PLAZA VESPUCIO S.A. 114 99556170-0 SOCIEDAD DE RENTAS FALABELLA S.A. 19328652 78057000-8 SOTRASER S.A. 201154 78627210-6 SUPERMERCADOS SAN FRANCISCO BUIN S.A. 7200262 78722910-7 SUPERMERCADOS SAN FRANCISCO S.A. 8703542

TOTALS 24413867 89218768 20530985 19630912 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

12/31/2008 12/31/2007 Effect on Effect on income income Taxpayer Id. Nature of the (debit)/ (debit)/ Company No. relationship Description of the transaction Amount credit) Amount credit) ADMINISTRADORA CMR FALABELLA LTDA. 79598260-4 SUBSIDIARY OF SUBSIDIARY LEASE AND COMMON EXPENSES 22111 22111 33876 33876 ADMINISTRADORA CMR FALABELLA LTDA. 79598260-4 SUBSIDIARY OF SUBSIDIARY TRADE ACCOUNT 14379247 12299552 ADMINISTRADORA CMR FALABELLA LTDA. 79598260-4 SUBSIDIARY OF SUBSIDIARY PROMOTIONS 2494694 2096381 3549623 2982877 ADMINISTRADORA CMR FALABELLA LTDA. 79598260-4 SUBSIDIARY OF SUBSIDIARY PROMOTIONS 2 143353 120325 393963 331861 ADMINISTRADORA CMR FALABELLA LTDA. 79598260-4 SUBSIDIARY OF SUBSIDIARY COMPUTER SERVICES 8464410 -7112950 12183358 -10238117 ADMINISTRADORA CMR FALABELLA LTDA. 79598260-4 SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 7364322 6225730 ADMINISTRADORA PLAZA VESPUCIO S.A. 79990670-8 SUBSIDIARY OF SUBSIDIARY LEASE AND COMMON EXPENSES 1647597 -1384506 2343310 -1969660 ADMINISTRADORA PLAZA VESPUCIO S.A. 79990670-8 SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 4045 1386 AGRÍCOLA CASAS DEL BOSQUE LTDA. 78187230-K RELATED DIRECTOR PRODUCT PURCHASE 34509 46255 AGRÍCOLA CASAS DEL BOSQUE LTDA. 78187230-K RELATED DIRECTOR PRODUCT SALE 2629 2210 AGUAS ARAUCANÍA S.A. 99561030-2 RELATED DIRECTOR MISCELLANEOUS EXPENSES 1767 -1485 AGUAS ARAUCANÍA S.A. 99561030-2 RELATED DIRECTOR PRODUCT SALE 76 64 AGUAS DEL ALTIPLANO S.A. 99561010-8 RELATED DIRECTOR MISCELLANEOUS EXPENSES 251 -211 AGUAS DEL ALTIPLANO S.A. 99561010-8 RELATED DIRECTOR PRODUCT SALE 517 -435 AGUAS MAGALLANES S.A. 99561040-K RELATED DIRECTOR PRODUCT SALE 7 -6 ALUMINIOS Y CRISTALES DONAGGIO Y CÍA. 79620010-3 RELATED DIRECTOR PRODUCT PURCHASE 333 1488 BANCO DE CHILE 97004000-5 RELATED DIRECTOR MISCELLANEOUS EXPENSES 12576 -10577 BANCO DE CHILE 97004000-5 RELATED DIRECTOR PRODUCT SALE 4673 3917 BANCO FALABELLA 96509660-4 SUBSIDIARY LEASE AND COMMON EXPENSES 256621 240712 371391 337459 BANCO FALABELLA 96509660-4 SUBSIDIARY MISCELLANEOUS EXPENSES 3726 -3131 BANCO FALABELLA 96509660-4 SUBSIDIARY PROMOTIONS 655001 550421 712859 599041 BANCO FALABELLA 96509660-4 SUBSIDIARY PROMOTIONS 2 85467 72422 657620 554750 BANCO FALABELLA 96509660-4 SUBSIDIARY PRODUCT SALE 81524 68508 CLUB HÍPICO DE SANTIAGO S.A. 90212000-9 RELATED DIRECTOR PROMOTIONS 34061 -28623 35105 -29500 CLUB HÍPICO DE SANTIAGO S.A. 90212000-9 RELATED DIRECTOR PRODUCT SALE 4495 3777 12391 10412 COMERCIAL E INVERSIONES NEVADA LTDA. 78264630-3 RELATED DIRECTOR PRODUCT PURCHASE 34819 42886 COMERCIAL MONSE LTDA. 77072750-2 SUBSIDIARY OF SUBSIDIARY PRODUCT PURCHASE 3476052 4390350 COMERCIAL MONSE LTDA. 77072750-2 SUBSIDIARY OF SUBSIDIARY RELATED COMPANY TRADE ACCOUNT 3161960 4208263 COMERCIAL MONSE LTDA. 77072750-2 SUBSIDIARY OF SUBSIDIARY PROMOTIONS 13322 11195 42512 35725 COMERCIAL MONSE LTDA. 77072750-2 SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 8101 6807 COMERCIAL MONSE LTDA. 77072750-2 SUBSIDIARY OF SUBSIDIARY SALE OF UNIFORMS 7257 6098 COMPAÑIA DE PETRÓLEOS DE CHILE COPEC S.A. 99520000-7 RELATED DIRECTOR PRODUCT SALE 2760 2274 22736 18902 CONSORCIO PERIODÍSTICO DE CHILE S.A. COPESA 91408000-2 RELATED DIRECTOR PROMOTIONS 1167 -981 CORP. NACIONAL DEL COBRE DE CHILE 61704000-K RELATED DIRECTOR PRODUCT SALE 32754 27524 17059 17117 DERCO S.A. 94141000-6 RELATED DIRECTOR CRANE LEASE 4190 -4987 DERCO S.A. 94141000-6 RELATED DIRECTOR PRODUCT SALE 9389 7890 10031 8729 DERCOMAQ S.A. 96545450-0 RELATED DIRECTOR CRANE LEASE 4268 -3586 DERCOMAQ S.A. 96545450-0 RELATED DIRECTOR MISCELLANEOUS EXPENSES 6736 -5660 7183 -6036 DERCOMAQ S.A. 96545450-0 RELATED DIRECTOR PRODUCT SALE 398 334 148 176 DESARROLLOS E INVERSIONES INMOBILIARIAS S.A. 76864900-6 SUBSIDIARY OF SUBSIDIARY TRADE ACCOUNT 1607 2965 DESARROLLOS INMOBILIARIOS S.A. 99593960-6 SUBSIDIARY TRADE ACCOUNT 3670460251 54992897 DINALSA S.A. 99581160-K SUBSIDIARY OF SUBSIDIARY TRADE ACCOUNT 33794 25718 EFE PUBLICIDAD Y DISEÑO LTDA. 77075880-7 RELATED DIRECTOR PROMOTIONS 226425 -190273 696534 -585323 EMPRESA EL MERCURIO S.A.P. 90193000-7 RELATED DIRECTOR MISCELLANEOUS EXPENSES 238047 -200040 EMPRESA EL MERCURIO S.A.P. 90193000-7 RELATED DIRECTOR PRODUCT SALE 3316 2786 EMPRESA NACIONAL DE TELECOMUNICACIONES S.A. 92580000-7 RELATED DIRECTOR COMMUNICATIONS EXPENSES 45082 -37884 2058468 -1673662 EMPRESA NACIONAL DE TELECOMUNICACIONES S.A. 92580000-7 RELATED DIRECTOR PRODUCT SALE 3270 2748 EMPRESA PERIODÍSTICA LA TERCERA S.A. 99579980-4 RELATED DIRECTOR PROMOTIONS 2691913 -2262112 909204 764037 EMPRESAS COPEC S.A. 90690000-9 RELATED DIRECTOR PRODUCT SALE 1055 886 EMPRESAS DE SERVICIOS Y ADMINISTRACIÓN 0-E SUBSIDIARY OF SUBSIDIARY LEASE AND COMMON EXPENSES 2800 2800 EMPRESAS DE SERVICIOS Y ADMINISTRACIÓN 0-E SUBSIDIARY OF SUBSIDIARY TRAINING 50420 -50420 EMPRESAS DE SERVICIOS Y ADMINISTRACIÓN 0-E SUBSIDIARY OF SUBSIDIARY RELATED COMPANY TRADE ACCOUNT 103708655 104047359 EMPRESAS DE SERVICIOS Y ADMINISTRACIÓN 0-E SUBSIDIARY OF SUBSIDIARY PROMOTIONS 2 483135 483135 EMPRESAS DE SERVICIOS Y ADMINISTRACIÓN 0-E SUBSIDIARY OF SUBSIDIARY MANAGEMENT SERVICES 65366808 -54357100 79765254 -67029626 EMPRESAS DE SERVICIOS Y ADMINISTRACIÓN 0-E SUBSIDIARY OF SUBSIDIARY TRANSPORTATION SERVICES 9060562 -7613918 8431767 -7085519 EMPRESAS DE SERVICIOS Y ADMINISTRACIÓN 0-E SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 435437 365914 80928 68007 EMPRESAS DE SERVICIOS Y ADMINISTRACIÓN 0-E SUBSIDIARY OF SUBSIDIARY SALE OF UNIFORMS 253356 212904 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR LEASE AND COMMON EXPENSES 22988 19325 2397 2015 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR OUTSOURCING FEE 484334 407004 1005540 515732 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR PRODUCT PURCHASE 3579317 6393557 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR RELATED COMPANY TRADE ACCOUNT 47058 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR PROMOTIONS 53550 45000 66826 56156 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR COMPUTER SERVICES 832 699 2035 1710 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR TRANSPORTATION SERVICES 16426 13804 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR PRODUCT SALE 573304 481768 1075750 896593 ENTEL PCS TELECOMUNICACIONES S.A. 96806980-2 RELATED DIRECTOR SALE OF UNIFORMS 4543 3818 FALABELLA DE COLOMBIA S.A 0-E SUBSIDIARY OF SUBSIDIARY TRADE ACCOUNT 30703 44560 FALABELLA RETAIL S.A. (EX INVERFIN S.A.) 77261280-K SUBSIDIARY OF SUBSIDIARY CHECK ASSIGNMENT 67598 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 129 ANNUAL REPORT

12/31/2008 12/31/2007 Effect on Effect on income income Taxpayer Id. Nature of the (debit)/ (debit)/ Company No. relationship Description of the transaction Amount credit) Amount credit) FALABELLA RETAIL S.A. (EX INVERFIN S.A.) 77261280-K SUBSIDIARY OF SUBSIDIARY PRODUCT PURCHASE 109,310,679 FALABELLA RETAIL S.A. (EX INVERFIN S.A.) 77261280-K SUBSIDIARY OF SUBSIDIARY PRODUCT PURCHASE 54,122 FALABELLA RETAIL S.A. (EX INVERFIN S.A.) 77261280-K SUBSIDIARY OF SUBSIDIARY TRADE ACCOUNT 391,141,927 0 280,474 FALABELLA RETAIL S.A. (EX INVERFIN S.A.) 77261280-K SUBSIDIARY OF SUBSIDIARY MANAGEMENT SERVICES 21,165 -17,786 FALABELLA RETAIL S.A. (EX INVERFIN S.A.) 77261280-K SUBSIDIARY OF SUBSIDIARY MANAGEMENT SERVICES 27,296,852 -22,938,531 FALABELLA RETAIL S.A. (EX INVERFIN S.A.) 77261280-K SUBSIDIARY OF SUBSIDIARY MANAGEMENT SERVICES 245,968 206,696 FALABELLA RETAIL S.A. (EX INVERFIN S.A.) 77261280-K SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 31,361 31,361 FALABELLA RETAIL S.A. (EX INVERFIN S.A.) 77261280-K SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 81,615,482 68,584,439 FALABELLA RETAIL S.A. (EX INVERFIN S.A.) 77261280-K SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 1,197,453 1,006,263 FALABELLA S.A. (ARGENTINA) 0-E SUBSIDIARY OF SUBSIDIARY TRADE ACCOUNT 20,888 20,888 49,590 FALABELLA S.A. (ARGENTINA) 0-E SUBSIDIARY OF SUBSIDIARY MISCELLANEOUS EXPENSES 4,837 4,837 FALABELLA SUCURSAL URUGUAY S.A. 0-E SUBSIDIARY TRADE ACCOUNT 41,366,687 -2,578,510 10,870,935 -2,573,997 FALLBROOKS PROPERTIES LTDA. 0-E SUBSIDIARY OF SUBSIDIARY TRADE ACCOUNT 31,87,677 3,111,402 FARMACIAS AHUMADA S.A. 93767000-1 AFFILIATE PRODUCT PURCHASE 66,200 79,534 FARMACIAS AHUMADA S.A. 93767000-1 AFFILIATE PRODUCT SALE 126 110 HOME TRADING S.A. 99500360-0 SUBSIDIARY TRADE ACCOUNT 27,446,245 6,570,792 IMPERIAL S.A. 76821330-5 SUBSIDIARY OF SUBSIDIARY PRODUCT PURCHASE 5,342 846 INMOBILIARIA CERVANTES S.A. 99597600-5 AFFILIATE LEASE AND COMMON EXPENSES 31,189 -31,189 47,345 -47,345 INMOBILIARIA CERVANTES S.A. 99597600-5 AFFILIATE RELATED COMPANY TRADE ACCOUNT 27,199 37,922 INMOBILIARIA MÁLAGA S.A. 96923590-0 SUBSIDIARY OF SUBSIDIARY TRADE ACCOUNT 586,803 162,833 2,661,835 INMOBILIARIA MÁLAGA S.A. 96923590-0 SUBSIDIARY OF SUBSIDIARY MANAGEMENT SERVICES 501,205 421,181 499,254 -419,542 INVERFAL S.A. 96647930-2 SUBSIDIARY RELATED COMPANY TRADE ACCOUNT 16,644,380 13,681,988 INVERSIONES FALABELLA LTDA. 76020391-2 SUBSIDIARY OF SUBSIDIARY RELATED COMPANY TRADE ACCOUNT 14,916 INVERSIONES PARAGGI LTDA. 85939400-0 COMMON OWNERS PURCHASE OF LAND (INSTALLMENT) 1,330,611 -7,009 2,880,692 -148,990 INVERSIONES PARMIN SPA. 76020385-8 SUBSIDIARY OF SUBSIDIARY RELATED COMPANY TRADE ACCOUNT 94,503 INVERSIONES VENSER DOS LTDA. 76007327-K SUBSIDIARY TRADE ACCOUNT 124,181 INVERSIONES VENSER LTDA. 76023773-6 SUBSIDIARY OF SUBSIDIARY TRADE ACCOUNT 12,247,625 INVERSORA FALKEN S.A. 0-E SUBSIDIARY OF SUBSIDIARY RELATED COMPANY TRADE ACCOUNT 75,680 495 ITALMOD S.A. 96577470-K AFFILIATE PRODUCT PURCHASE 1,242,337 1,842,821 ITALMOD S.A. 96577470-K AFFILIATE PROMOTIONS 48,823 41,028 45,859 38,536 ITALMOD S.A. 96577470-K AFFILIATE PRODUCT SALE 323,248 271,637 438,272 368,295 LABORUM.COM CHILE S.A. 96905120-6 RELATED DIRECTOR MISCELLANEOUS EXPENSES 2,625 -2,206 3,207 -2,695 MANUFACTURAS DE VESTUARIOS MAVESA LTDA. 96573100-8 SUBSIDIARY PRODUCT PURCHASE 7,622,183 10,400,142 MANUFACTURAS DE VESTUARIOS MAVESA LTDA. 96573100-8 SUBSIDIARY PROMOTIONS 7,211 6,073 12,968 10,898 MANUFACTURAS DE VESTUARIOS MAVESA LTDA. 96573100-8 SUBSIDIARY PRODUCT SALE 82,001 68,908 175,073 152,169 NUEVA INVERFIN S.A. 76023147-9 SUBSIDIARY OF SUBSIDIARY TRADE ACCOUNT 491 PAULA EDICIONES S.A. 96521400-3 RELATED DIRECTOR ADVERTISING 2,454 -2,063 9,811 -8,245 PLAZA ALAMEDA S.A. 76882330-8 SUBSIDIARY OF SUBSIDIARY LEASE AND COMMON EXPENSES 639,869 -537,705 PLAZA ANTOFAGASTA S.A. 99555550-6 SUBSIDIARY OF SUBSIDIARY LEASE AND COMMON EXPENSES 1,229,136 -1,032,888 1,586,012 -1,332,782 PLAZA DEL TRÉBOL S.A. 96653660-8 SUBSIDIARY OF SUBSIDIARY LEASE AND COMMON EXPENSES 2,021,943 -1,699,112 2,844,519 -2,390,352 PLAZA LA SERENA S.A. 96795700-3 SUBSIDIARY OF SUBSIDIARY LEASE AND COMMON EXPENSES 968,755 -814,080 1,414,095 -1,188,316 PLAZA OESTE S.A. 96653650-0 SUBSIDIARY OF SUBSIDIARY LEASE AND COMMON EXPENSES 3,079,361 -2,587,698 4,221,284 -3,702,897 PLAZA OESTE S.A. 96653650-0 SUBSIDIARY OF SUBSIDIARY COMPUTER SERVICES 555,589 466,882 PLAZA OESTE S.A. 96653650-0 SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 5,731 4,816 PLAZA TOBALABA S.A. 96791560-2 SUBSIDIARY OF SUBSIDIARY LEASE AND COMMON EXPENSES 1,141,955 -959,626 1,529,626 -1,285,400 PROMOSERVICE S.A. 96669790-3 RELATED DIRECTOR PROMOTIONS 325 -273 2,044 -1,717 PROMOTORA CHILENA DE CAFÉ COLOMBIA S.A. 76000935-0 SUBSIDIARY PRODUCT PURCHASE 7,790 PROMOTORA CHILENA DE CAFÉ COLOMBIA S.A. 76000935-0 SUBSIDIARY TRADE ACCOUNT 435,110 PROMOTORA CHILENA DE CAFÉ COLOMBIA S.A. 76000935-0 SUBSIDIARY MANAGEMENT SERVICES 23,313 19,591 PROMOTORA CHILENA DE CAFÉ COLOMBIA S.A. 76000935-0 SUBSIDIARY PRODUCT SALE 1,105 968 PROMOTORA CMR FALABELLA S.A. 90743000-6 SUBSIDIARY LEASE AND COMMON EXPENSES 368,131 368,131 PROMOTORA CMR FALABELLA S.A. 90743000-6 SUBSIDIARY LEASE AND COMMON EXPENSES 4,245,941 4,245,941 6,335,378 6,335,378 PROMOTORA CMR FALABELLA S.A. 90743000-6 SUBSIDIARY CHECK ASSIGNMENT 3,359,281 3,641,337 PROMOTORA CMR FALABELLA S.A. 90743000-6 SUBSIDIARY EXCLUSIVITY AGREEMENT 21,376,708 21,376,708 19,953,002 19,953,002 PROMOTORA CMR FALABELLA S.A. 90743000-6 SUBSIDIARY TRADE ACCOUNT 371,697,433 -748,767 537,059,605 -165,083 SAGA FALABELLA S.A. (PERÚ) 0-E SUBSIDIARY OF SUBSIDIARY TRADE ACCOUNT 172,813 172,813 SAGA FALABELLA S.A. (PERÚ) 0-E SUBSIDIARY OF SUBSIDIARY PROMOTIONS 58,713 58,713 31,768 -31,768 SAGA FALABELLA S.A. (PERÚ) 0-E SUBSIDIARY OF SUBSIDIARY TECHNICAL ASSISTANCE 766,301 766,301 SERVICIOS E INVERSIONES FAS LTDA. 96847200-3 SUBSIDIARY OF SUBSIDIARY EXTENDED WARRANTY 186,054 -156,348 235,841 -17,412 SERVICIOS E INVERSIONES FAS LTDA. 96847200-3 SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 543,821 -22,201 762,170 642,889 SERVICIOS FALABELLA PRO LTDA. 77099010-6 SUBSIDIARY OF SUBSIDIARY COLLECTION FEE 100,671 84,598 205,650 172,452 SERVICIOS FALABELLA PRO LTDA. 77099010-6 SUBSIDIARY OF SUBSIDIARY PRODUCT PURCHASE 547,843 SERVICIOS FALABELLA PRO LTDA. 77099010-6 SUBSIDIARY OF SUBSIDIARY MISCELLANEOUS EXPENSES 6,553 -4,912 SERVICIOS FALABELLA PRO LTDA. 77099010-6 SUBSIDIARY OF SUBSIDIARY ADJUSTABLE LOANS 22,990,141 45,004 SERVICIOS FALABELLA PRO LTDA. 77099010-6 SUBSIDIARY OF SUBSIDIARY ADJUSTABLE LOANS 0 -75,738 SERVICIOS FALABELLA PRO LTDA. 77099010-6 SUBSIDIARY OF SUBSIDIARY PROMOTIONS 505,936 425,156 1,347,059 1,127,141 SERVICIOS FALABELLA PRO LTDA. 77099010-6 SUBSIDIARY OF SUBSIDIARY PROMOTIONS 2 38,901 32,743 54,427 45,887 SERVICIOS FALABELLA PRO LTDA. 77099010-6 SUBSIDIARY OF SUBSIDIARY COLLECTIONS 1,463,017 0 SERVICIOS FALABELLA PRO LTDA. 77099010-6 SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 621,775 522,500 224,731 196,570 SERVICIOS Y ADMINISTRACIONES GRALES. SERVA LTDA. 78722930-1 SUBSIDIARY TRADE ACCOUNT 3,773,438 1,168,975 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

12/31/2008 12/31/2007 Effect on Effect on income income Taxpayer Id. Nature of the (debit)/ (debit)/ Company No. relationship Description of the transaction Amount credit) Amount credit) SHEARVAN CORPORATE S.A. 0-E SUBSIDIARY OF SUBSIDIARY PRODUCT PURCHASE 30,760,253 31,960,574 SHEARVAN CORPORATE S.A. 0-E SUBSIDIARY OF SUBSIDIARY RELATED COMPANY TRADE ACCOUNT 11,641,918 8,492,833 SOC. DE COBRANZAS LEGALES LEXICOM LTDA. 78566830-8 SUBSIDIARY OF SUBSIDIARY COLLECTION PORTFOLIO 1,521,184 1,971,992 1,971,992 SOC. DE SERVICIOS DE COMERCIO LTDA. (SOSERCOM) 78784800-1 SUBSIDIARY OF SUBSIDIARY PRODUCT PURCHASE 64,107 1,707,992 SOC. DE SERVICIOS DE COMERCIO LTDA. (SOSERCOM) 78784800-1 SUBSIDIARY OF SUBSIDIARY MISCELLANEOUS EXPENSES 20,605 -17315 SOC. DE SERVICIOS DE COMERCIO LTDA. (SOSERCOM) 78784800-1 SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 244,140 205160 184,303 154,876 SOCIEDAD DE RENTAS FALABELLA S.A. 99556170-0 SUBSIDIARY OF SUBSIDIARY LEASE AND COMMON EXPENSES 7,799,579 -5583180 9,272,230 -8,785,491 SOCIEDAD DE RENTAS FALABELLA S.A. 99556170-0 SUBSIDIARY OF SUBSIDIARY FIXED ASSET PURCHASE 37,151 SOCIEDAD DE RENTAS FALABELLA S.A. 99556170-0 SUBSIDIARY OF SUBSIDIARY TRADE ACCOUNT 139,832,938 204,616,393 SOCIEDAD DE RENTAS FALABELLA S.A. 99556170-0 SUBSIDIARY OF SUBSIDIARY ADJUSTABLE LOANS -1226002 SOCIEDAD DE RENTAS FALABELLA S.A. 99556170-0 SUBSIDIARY OF SUBSIDIARY ADJUSTABLE LOANS -1677408 SOCIEDAD DE RENTAS FALABELLA S.A. 99556170-0 SUBSIDIARY OF SUBSIDIARY PROMOTIONS 2 10,786 9064 2,746,800 2,308,236 SOCIEDAD DE RENTAS FALABELLA S.A. 99556170-0 SUBSIDIARY OF SUBSIDIARY MANAGEMENT SERVICES 758,992 637809 826,542 694,574 SALE OF PROPERTY, PLANT & SOCIEDAD DE RENTAS FALABELLA S.A. 99556170-0 SUBSIDIARY OF SUBSIDIARY 59,183 EQUIPMENT SOCIEDAD HIPÓDROMO CHILE S.A. 90256000-9 RELATED DIRECTOR PROMOTIONS 34,515 -28,656 34,885 SOCIEDAD HIPÓDROMO CHILE S.A. 90256000-9 RELATED DIRECTOR PRODUCT SALE 1,331 1,119 14,320 12,035 SODIMAC S.A. 96792430-K SUBSIDIARY OF SUBSIDIARY CREDIT COMMITTEE 47,652 -47,652 260,775 -260775 SODIMAC S.A. 96792430-K SUBSIDIARY OF SUBSIDIARY SALE FEES 46,173 38,801 50,988 42848 SODIMAC S.A. 96792430-K SUBSIDIARY OF SUBSIDIARY PRODUCT PURCHASE 122,642 82,677 SODIMAC S.A. 96792430-K SUBSIDIARY OF SUBSIDIARY TRADE ACCOUNT 14,413 24,223 SODIMAC S.A. 96792430-K SUBSIDIARY OF SUBSIDIARY ADJUSTABLE LOANS 49,600,000 -42,573 SODIMAC S.A. 96792430-K SUBSIDIARY OF SUBSIDIARY ADJUSTABLE LOANS -36,482 SODIMAC S.A. 96792430-K SUBSIDIARY OF SUBSIDIARY PROMOTIONS 2,356,983 1,980,658 3,316,148 2,786,678 SODIMAC S.A. 96792430-K SUBSIDIARY OF SUBSIDIARY PROMOTIONS 2 566,014 475,642 817,455 687,070 SODIMAC S.A. 96792430-K SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 335,748 284,328 422,915 351,588 SOLUCIONES CREDITICIAS CMR FALABELLA LTDA. 76512060-8 SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 39,293 32,952 17,426 14,644 SOTRASER S.A. 78057000-8 RELATED DIRECTOR TRANSPORTATION SERVICES 1,275,575 -1,071,912 2,172,630 -1,825,739 SOTRASER S.A. 78057000-8 RELATED DIRECTOR PRODUCT SALE 114,382 96,120 127,539 149,988 SUPERMERCADOS SAN FRANCISCO BUIN S.A. 78627210-6 SUBSIDIARY OF SUBSIDIARY LEASE AND COMMON EXPENSES 1,164,330 -351,985 473,245 -473,245 SUPERMERCADOS SAN FRANCISCO BUIN S.A. 78627210-6 SUBSIDIARY OF SUBSIDIARY PRODUCT PURCHASE 1,019 1,231 SUPERMERCADOS SAN FRANCISCO BUIN S.A. 78627210-6 SUBSIDIARY OF SUBSIDIARY RELATED COMPANY TRADE ACCOUNT 37,374,074 7,115,188 -4,017 SUPERMERCADOS SAN FRANCISCO BUIN S.A. 78627210-6 SUBSIDIARY OF SUBSIDIARY ADJUSTABLE LOANS 104,856,586 98,608 SUPERMERCADOS SAN FRANCISCO BUIN S.A. 78627210-6 SUBSIDIARY OF SUBSIDIARY ADJUSTABLE LOANS -29,877 SUPERMERCADOS SAN FRANCISCO BUIN S.A. 78627210-6 SUBSIDIARY OF SUBSIDIARY PROMOTIONS 5,507 -2,182 37,540 31,546 SUPERMERCADOS SAN FRANCISCO BUIN S.A. 78627210-6 SUBSIDIARY OF SUBSIDIARY PROMOTIONS 2 2,800 2,800 3,430 3,430 SUPERMERCADOS SAN FRANCISCO BUIN S.A. 78627210-6 SUBSIDIARY OF SUBSIDIARY MANAGEMENT SERVICES 166,903 140,254 22,847 19,199 SUPERMERCADOS SAN FRANCISCO BUIN S.A. 78627210-6 SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 4,060,393 3,412,095 SUPERMERCADOS SAN FRANCISCO S.A. 78722910-7 SUBSIDIARY RELATED COMPANY TRADE ACCOUNT 9,584,579 9,658,349 SUPERMERCADOS SAN FRANCISCO S.A. 78722910-7 SUBSIDIARY ADJUSTABLE LOANS 3,410,562 22,438 SUPERMERCADOS SAN FRANCISCO S.A. 78722910-7 SUBSIDIARY ADJUSTABLE LOANS 0 -11,877 SUPERMERCADOS SAN FRANCISCO S.A. 78722910-7 SUBSIDIARY MANAGEMENT SERVICES 3,873 3,254 SUPERMERCADOS SAN FRANCISCO S.A. 78722910-7 SUBSIDIARY PRODUCT SALE 4,126,996 3,468,636 320,677 269,476 TEVER CORPORATION S.A. 0-E COMMON SHAREHOLDERS TRADE ACCOUNT 25,866 VIAJES FALABELLA LTDA. 78997060-2 SUBSIDIARY OF SUBSIDIARY FINANCIAL ASSISTANCE 120,066 100,896 97,505 91,808 VIAJES FALABELLA LTDA. 78997060-2 SUBSIDIARY OF SUBSIDIARY CHECK ASSIGNMENT 118,549 144,020 VIAJES FALABELLA LTDA. 78997060-2 SUBSIDIARY OF SUBSIDIARY PRODUCT PURCHASE 1,707,745 3,095,085 VIAJES FALABELLA LTDA. 78997060-2 SUBSIDIARY OF SUBSIDIARY PROMOTIONS 283,011 237,824 534,634 449,448 VIAJES FALABELLA LTDA. 78997060-2 SUBSIDIARY OF SUBSIDIARY PROMOTIONS 2 600 504 51,943 43,649 VIAJES FALABELLA LTDA. 78997060-2 SUBSIDIARY OF SUBSIDIARY COLLECTIONS 25,276,612 VIAJES FALABELLA LTDA. 78997060-2 SUBSIDIARY OF SUBSIDIARY PRODUCT SALE 5,892 4,952 1,678 1,569 VIAJES FALABELLA S.A. (PERÚ) 0-E SUBSIDIARY OF SUBSIDIARY PROMOTIONS 15 -13 21

NOTE 7 INVENTORIES

Itemization 2008 2007 MCH$ MCH$ Products for sale 57,359,379 111,140,412 Goods in transit 0 10,961,852 Materials, containers and spare parts 0 904,934 Obsolescence Provision (less) -221,016 -429,902

Totals 57,138,363 122,577,296 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 131 ANNUAL REPORT

NOTE 8 DEFERRED TAXES AND INCOME TAXES

a)G eneralInformation As of December 31, 2008, the Company has calculated income tax at the rate of 17%, which is the rate prevailing in 2008 pursuant to Law 19753, published in the Official Gazette on September 28, 2001. Deferred taxes have also been calculated and provisioned for on the basis of temporary differences at the rate of 17%, taking into account that the December 31, 2008 balances for the short and long term will be reversed during 2009 and beyond, years when the tax rate will remain the same pursuant to the aforesaid law.

b)T axableRetained Earnings The situation of the retained earnings of the Company is as follows as of December 31, 2008 and 2007:

Utilidades tributarias retenidas 2008 2007 MCH$ MCH$ Non-Taxable Retained Earnings (FUNT) 584,279 584,635 No credit 100,880,735 48,890,347 10% credit 266,509 266,672 15% credit 53,147,785 26,952,741 16% credit 20,834,005 28,623,330 16.5% credit 20,479,846 16,895,727 17% credit 143,296,074 190,904,969

Total 339,489,233 313,118,421

c)I ncome tax and deferred taxes The debit to income in the period for income tax amounted to MCH$72,662 (MCH$1,042,699 in 2007). It corresponds to taxes owed by S.A.C.I. Falabella, calculated as of December 31, 2008.

The debit to income in the period for deferred taxes amounted to MCH$17,841 (a debit of MCH$2,193,452 in 2007), which corresponded to the group of deferred assets and liabilities recorded by S.A.C.I. Falabella as outstanding on December 31st, also taking into account the effects of amortization in the complementary asset and liability accounts in which there were balances pending amortization as of this date.

d)A ssets and liabilities for deferred taxes The balances of assets and liabilities for deferred taxes as of December 31, 2008 and 2007 are itemized below:

Deferred tax balances - Assets (Liabilities) 2008 2007 MCH$ MCH$ Short-term assets 1,952,680 2,811,506 Short-term liabilities -646,450 -887,489

Subtotal 1,306,230 1,924,017

Long-term assets 1,371,859 1,722,152 Long-term liabilities -1,945,152 -5,793,373

Subtotal -573,293 -4,071,221

Net balance as of December 732,937 -2,147,204 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

Deferred taxes 12/31/2008 12/31/2007 Deferred Taxes - Assets Deferred Taxes - Liabilities Deferred Taxes - Assets Deferred Taxes - Liabilities Concepts Short-term Long-term Short-term Long-term Short-term Long-term Short-term Long-term Temporary differences Uncollectibles provision 60,871 74,483 Prepaid income 1,176,375 730,578 871,392 1,272,959 Vacation provision 73,896 171,427 Intangibles amortization 43,769 24,885 Leasing assets Manufacturing expenses Depreciation of property, plant and equipment 534,970 3,942,851 Severance indemnities 449 5,964 10,343 137,424 Other events 591,548 138,296 286,884 Obsolescence provision 73,083 Realization provision 622,626 Recoverable losses 53,523 88,879 Capitalized prepaid expenses 438,347 292,231 477,360 937,779 Prepaid expenses in bond issue 154,580 1,117,951 321,250 1,366,160 Forward Hedging 9,715 Differential in tax adjustment of inventories 631,374 849,856 Other Complementary accounts-net of amortization 453,417 Valuation provision

TOTALS 1,952,680 1,371,859 646,450 1,945,152 2,811,506 1,722,152 887,489 5,793,373

Income Tax Item 12/31/2008 12/31/2007 Current tax expense (tax provision) -205,837 -1,055,017 Tax expense adjustment (previous fiscal year) 133,175 12,318 Effect of deferred tax in the fiscal year on assets and liabilities 432,446 -1,960,654 Tax benefit from tax losses Effect of amortization of complementary deferred asset and liability accounts -450,287 -232,798 Effect of deferred tax on assets and liabilities due to change in the valuation provision Other debits or credits to the account

TOTALS -90,503 -3,236,151

NOTE 9 SHORT- AND LONG-TERM LEASING CONTRACTS AND LEASING ASSETS

Not applicable.

NOTE 10 OTHER CURRENT ASSETS

As of December 31, 2008 and 2007, this line breaks down as follows:

2008 2007 THCH$ THCH$ Advances to contractors and others 80,000 87,120 Short-term deferred expenses - bonds (Note 22) 803,284 1,889,710 Resale agreements 4,000,827 0 Other concepts (Note 18-b) 2,684,519 2,807,998

Totals 7,568,630 4,784,828 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 133 ANNUAL REPORT

NOTE 11 INFORMATION ON PURCHASE COMMITMENTS, SALE COMMITMENTS, SALES WITH A REPURCHASE COMMITMENT AND PURCHASES WITH A RESALE COMMITMENT WITH RESPECT TO BEARER INSTRUMENTS OR SECURITIES

Currency of Subscription Code Dates Other party Rate Final price Instrument Id. Market price origijn price Start End

SCOTIABANK REPURCHASE 12/30/2008 02/02/13 CHILEAN PESOS 4.000.000 0,0062% 4.002.480 4.000.827 SUDAMERICANO AGREEMENT

NOTE 12 PROPERTY, PLANT AND EQUIPMENT

Below is information on property, plant and equipment for the fiscal years ending December 31, 2008 and 2007.

PROPERTY, PLANT AND EQUIPMENT 2008 2007 Adjusted Cumulative Net Book Adjusted Cumulative Net Book Cost Price depreciation Balance Cost Price depreciation Balance Description MCH$ MCH$ MCH$ MCH$ MCH$ MCH$

Land 0 0 Construction and infrastructure 1,720,237 (1,041,166) 679,071 12,253,215 (1,899,633) 10,353,582 Machinery and equipment 190,785 (160,718) 30,067 16,537,740 12,325,066) 4,212,674 Other fixed assets: Furniture and accessories 1,337,771 (1,038,186) 299,585 50,932,313 (29,562,103) 21,370,210 Facilities 6,684,904 (3,816,424) 2,868,480 116,622,212 (50,143,436) 66,478,776 Leased assets 0 0 Other 263,128 (24,453) 237,675 2,075,442 (541,220) 1,534,222

Subtotal 10,196,825 (6,081,947) 4,114,878) 198,420,922) (94,471,458) 103,949,464

Gain due to technical reappraisal of property, plant & equipment 0 0

Total property, plant and equipment 10,196,825 (6,081,947) 4,114,878 198,420,922 (94,471,458) 103,949,464

Depreciation in the fiscal year 2008 2007 MCH$ MCH$

With effect on Operating Costs With effect on SG&A (14,729,401) (14,638,649)

Total (14,729,401) (14,638,649)

NOTE 13 LEASE-BACKS

As of December 31, 2008 and 2007, there are no lease-backs.

NOTE 14 INVESTMENTS IN RELATED COMPANIES

1. FalabellaSucursal Uruguay S.A . As of December 31, 2008, the Company owed a loan for MUS$20,000, granted by SCH Overseas Bank Inc. on February 28, 2005. The original loans were invested in stock of Sodimac S.A.

On January 5, 2004, Falabella Sucursal Uruguay S.A. contracted two interest rate and currency SWAPs in order to pay the loans for the purchase of Sodimac S.A., with an account receivable for a total of MUS$20,000 and an account payable for a total of UF 695,005.45 as of December 31, 2008. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

2. Unrealized profits The balance of unrealized profits amounted to MCH$2,853,051 (MCH$3,322,986 in 2007) as of December 31, 2008, and corresponded mainly to:

MCH$2,853,051 (MCH$3,061,384 in 2007) for negative goodwill for 5,611,329,822 shares in Homestore S.A. (now Sodimac S.A.) that S.A.C.I. Falabella transferred to Home Trading S.A. in payment for the capital contribution on August 30, 2002. This amount is being amortized over 20 years and offset in full the goodwill recorded by Home Trading S.A. During the period, MCH$203,748 has been credited to income for the amortization of negative goodwill (a credit of MCH$203,748 in 2007), as shown in Note 28, Other Non-Operating Income and Disbursements.

3. Effect of translationArgentine of subsidiariesFinancial on Statements In Argentine companies, controlled through Inversiones Serva Ltda., the exchange rate of 3.453 Argentine pesos was used per 1 U.S. dollar as of December 31, 2008 (3.149 Argentine pesos per 1 U.S. dollar as of December 31, 2007).

The translation effect of these subsidiaries resulted in a debit to income amounting to MCH$1,297,799, equal to MUS$2,039 (MCH$599,303, equal to MUS$1,107 in 2007).

Investments in Argentina have been valued according to the standards of Technical Bulletin No. 64 of the Chilean Accountants Association. As of December 31, 2008, assets in Argentine companies represent 4.6% (3.5% in 2007) of consolidated assets and revenues represent 6.6% (4.6% in 2007) of consolidated revenues, amounting to MCH$245,811,761 (MCH$142,332,917 in 2007).

The company has evaluated the recovery of goodwill abroad according to Technical Bulletins Nos. 33 and 32.

4. InvestmentsColombia in In 2008, the Falabella group made capital contributions through its subsidiaries to Inversiones Falabella de Colombia S.A. for US$10,643, representing 99.9999% of the subscribed and paid-in capital.

5. InvestmentsArgentina in In 2008, the Falabella group made capital contributions through its subsidiaries in Argentine companies amounting to MUS$43,338, representing 99.9999% of the subscribed and paid-in capital.

6. Division ofFalabella Retail S. A. (formerlyInverfin S.A .) The division of the company was approved by a Special Shareholders Meeting held March 4, 2008, based on the financial statements as of February 29, 2008. Nueva Inverfin S.A. was incorporated. Below is the equity distribution after the division:

Equity Company MCH$ Number of shares

Falabella Retail (formerly Inverfin) 7,905,677 4,049,266,600 Nueva Inverfin S.A. 13,940,582 4,049,266,600

Total 21,846,259

7. Division ofServa Ltda. The partners in Serva Limitada amended the corporate incorporation deed on March 4, 2008, for the purpose of dividing the company based on the financial statements as of February 29, 2008. Inversiones Serva Ltda. was created. Below is the equity distribution after the division:

Equity Company MCH$ Serva Ltda. 27,336,159 Inversiones Serva Ltda. 11,978,069

Total 39,314,228

8. Corporate reorganizationsMay 2008 in a) Division ofSociedad Rdeentas S. A. Sociedad de Rentas Falabella S.A. was divided into three companies by deed dated May 2, 2008. Two new companies were created and one continued under the same name. The equity distribution after the division was as follows: WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 135 ANNUAL REPORT

Equity Company MCH$ Sociedad de Rentas Falabella S.A. 294,007,108 Sociedad de Rentas Falabella Uno S.A. 5,645,150 Sociedad de Rentas Falabella Dos S.A. 500

Total 299,652,758

b)D ivision ofDesarrollos Inmobiliarios S.A. Desarrollos Inmobiliarios S.A. was divided into three companies by deed dated May 2, 2008. Two new companies were created and one continued under the same name. The equity distribution after the division was as follows:

Equity Company MCH$ Desarrollos Inmobiliarios S.A. 398,705,955 Desarrollos Inmobiliarios Uno S.A. 5,645,150 Desarrollos Inmobiliarios Dos S.A. 500

Total 404,351,605

c)M erger ofDesarrollos Inmobiliarios Uno S .A. andS ociedad Rdeentas Falabella Uno S .A. Sociedad de Rentas Falabella Uno S.A. merged with Desarrollos Inmobiliarios Uno S.A. by deed dated May 2, 2008 because this latter acquired all shares in Sociedad de Rentas Falabella Uno S.A.

d)M erger ofS.A .C.I. Falabella andDesarrollos Inmobiliarios Uno S .A. Desarrollos Inmobiliarios Uno S.A. merged with S.A.C.I. Falabella by deed dated May 2, 2008 because this latter acquired all shares in Desarrollos Inmobiliarios Uno S.A.

e)C apital increaseHome in Trading By public deed dated May 2, 2008, Home Trading S.A. increased its capital by MCH$296. Such amount will be fully paid in by S.A.C.I. Falabella and Inversiones Venser Ltda. through the contribution of their interests in Desarrollos Inmobiliarios Dos S.A., a subsidiary. As a result, Desarrollos Inmobiliarios Dos S.A. was merged with S.A.C.I. Falabella since the latter company gained possession of all of the shares in the former.

9. Corporate reorganizationsJune 2008 in a) Capital increaseInversiones in Falabella Ltda. and mergerS withervaL tda. By public deed dated June 2, 2008, Inversiones Falabella Ltda. increased its capital by MCH$15,718,643, which was subscribed and paid in by S.A.C.I. Falabella through the contribution of its interest in the subsidiary Servicios y Administraciones Generales Serva Ltda. (Serva Ltda.).

By public deed dated June 2, 2008, Serva Limitada decreased its capital because Promotora CMR Falabella S.A. withdrew its partnership. Therefore, Inversiones Falabella Limitada became the only partner, thereby causing the merger of both companies.

b)I nversionesPrestaciones y Venser Limitada By public deed dated June 2, 2008, Inversiones y Prestaciones Venser Ltda. was created. The interests in it are as follows:

Partners Capital Interest Inversiones Venser Ltda. (MCH$) 499 99.80% Inversiones Parmin S.p.A. (MCH$) 1 0.20% Total (MCH$) 500 100.00%

By public deed dated June 2, 2008, Inversiones y Prestaciones Venser Ltda. increased its capital by MCH$64,024,908, which was subscribed and paid in by Inversiones Venser Ltda.

c)I nversionesVenser Ltda. By public deed dated June 2, 2008, Inversiones Venser Ltda. increased its capital by MCH$1,000, which was subscribed and paid in by Inversiones Parmin S.p.A.

By public deed dated June 2, 2008, Inversiones Venser Ltda. decreased its capital because Promotora CMR Falabella S.A. withdrew its partnership. Therefore, partners are S.A.C.I. Falabella and Inversiones Parmin S.p.A. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS d)M erger ofInversiones Falabella Ltda. andInversiones Venser Ltda. By public deed dated June 2, 2008, Inversiones Falabella Ltda. and Inversiones Venser Ltda. merged by agreement of their partners, S.A.C.I. Falabella and Inversiones Parmin S.p.A. A true merger took place between Inversiones Falabella Ltda. and Inversiones Venser Ltda. and their balance sheets were added together line by line. e)I nversionesPrestaciones y Venser Ltda. By public deed dated June 2, 2008, Inversiones y Prestaciones Venser Ltda. was divided into seven companies. Below is the equity distribution after the division:

Equity Company MCH$ Inversiones y Prestaciones Venser Ltda. 22,068,806 Inversiones y Prestaciones Venser Uno Ltda. 343,154 Inversiones y Prestaciones Venser Dos Ltda. 139,786 Inversiones y Prestaciones Venser Tres Ltda. 56,928 Inversiones y Prestaciones Venser Cuatro Ltda. 1,570,853 Inversiones y Prestaciones Venser Cinco Ltda. 20,383,171 Inversiones y Prestaciones Venser Seis Ltda. 16,653,554

Total 61,216,252 f) Equity decrease in loan companies By public deed dated June 2, 2008, the capital was decreased in the loan companies because Promotora CMR Falabella S.A., Inversiones Falabella Ltda., Desarrollos Inmobiliarios S.A. and Sodimac S.A. withdrew their partnerships. Therefore, Inversiones y Prestaciones Venser Uno Ltda., Inversiones y Prestaciones Venser Dos Ltda. and Prestaciones Venser Tres Ltda. remained partners. g)M anufacturasV estuariode Mavesa Ltda. M(avesa) By public deed dated June 2, 2008, Mavesa was divided into two companies, thereby organizing a new company in addition to the continuing company. Below is the distribution after the division:

Equity Company MCH$ Mavesa Ltda. 12,258,554 Nueva Mavesa Ltda. 631,169

Total 12,889,723

By public deed dated June 2, 2008, S.A.C.I. Falabella purchased the interest of Inversiones Falabella Ltda. in the new company. Therefore, S.A.C.I. Falabella became the only partner, causing a de facto merger of both companies. h)C reation Fofalabella Inversiones Financieras S.A ., FalabellaServicios S.A . andFalabella Industrias S.A . Falabella Inversiones Financieras S.A., Falabella Servicios S.A. and Falabella Industrias S.A. were incorporated by public deed dated June 2, 2008, as follows:

Partners Capital Interest Inversiones Falabella Ltda. 499 99.80% Inversiones Parmin S.p.A. 1 0.20%

Total 500 100.00% i) Capital increaseFalabella in Servicios S.A . By public deed dated June 2, 2008, Falabella Servicios S.A. increased its capital by MCH$564,642, which was subscribed and paid in by Inversiones Falabella Ltda. through the contribution of interests in its subsidiaries Inversiones y Prestaciones Venser Uno Ltda., Inversiones y Prestaciones Venser Dos Ltda. and Inversiones y Prestaciones Venser Tres Ltda. j) Capital increaseInversiones in Falabella Ltda. By public deed dated June 2, 2008, Inversiones Falabella Ltda. increased its capital by MCH$185,012, which was subscribed and paid in by S.A.C.I. Falabella through the contribution of 99% of its interests in the subsidiary Inversiones Venser Dos Ltda., equal to 98.78741807% of such company. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 137 ANNUAL REPORT

k) Capital increaseInversiones of Parmin S.p. A. By public deed dated June 2, 2008, Inversiones Parmin S.p.A. increased its capital by MCH$1,868, which was subscribed and paid in by S.A.C.I. Falabella by the contribution of its 1% interest in Inversiones Venser Dos Ltda., equal to 0.99785271% in such company.

l) Capital decreaseInversiones in Venser Dos L tda. By public deed dated June 2, 2008, Inversiones Venser Dos Ltda. decreased its capital when Promotora CMR Falabella S.A. withdrew its partnership. Therefore, Inversiones Falabella Ltda. and Inversiones Parmin S.p.A. became the only partners.

m)C apital increaseFalabella in Servicios S.A . By public deed dated June 2, 2008, Falabella Servicios S.A. increased its capital by MCH$185,012, which was subscribed and paid in by Inversiones Falabella Ltda. through the contribution of its interest in Inversiones Venser Dos Ltda.

n)I nversionesServa D osS .A. Inversiones Serva Dos S.A. was incorporated by public deed dated June 2, 2008, as follows:

Shareholders Shares Interest Inversiones Serva Ltda. 499 99.80% Inversiones Parmin S.p.A. 1 0.20%

Total 500 100.00%

By public deed dated June 2, 2008, Inversiones Serva Dos S.A. increased its capital by MCH$15,728,979, which was subscribed and paid in by Inversiones Serva Ltda. through the contribution of the interests it held in its subsidiaries Inverfal S.A., Nueva Inverfin S.A. and Invercol S.A.

o)C apital increaseInversiones in Falabella Ltda. By public deed dated June 2, 2008, Inversiones Falabella Ltda. increased its capital by MCH$26,983,774, which was subscribed and paid in by S.A.C.I. Falabella through the contribution of its interests in the subsidiaries Promotora CMR Falabella S.A., Mavesa Ltda., Italmod S.A. and South America Textiles Ltda.

p)C apital increaseInversiones in Parmin S.p. A. By public deed dated June 2, 2008, Inversiones Parmin S.p.A. increased its capital by MCH$220,565, which was subscribed and paid in by S.A.C.I. Falabella through the contribution of 1% of its interest in the subsidiary Inversiones Serva Ltda., equal to 0.996401610% of such company.

q)C apital decreaseInversiones in Serva L tda. By public deed dated June 2, 2008, Inversiones Serva Ltda. decreased its capital when Promotora CMR Falabella S.A. withdrew as a partner. Therefore, S.A.C.I. Falabella and Inversiones Parmin S.p.A. are the only partners.

r) Capital increaseFalabella in Inversiones Financieras S.A . By public deed dated June 2, 2008, Falabella Inversiones Financieras S.A. increased its capital by MCH$10,749,407, which was subscribed and paid in by Inversiones Falabella Ltda. through the contribution of the interest in its subsidiary Promotora CMR Falabella S.A.

s) Capital increaseFalabella in Retail S .A. By public deed dated June 2, 2008, Falabella Retail S.A. increased its capital by MCH$1,737,467, which was subscribed and paid in by Inversiones Falabella Limitada through the contribution of the interests it held in subsidiaries Comercial Monse Ltda. and South America Textiles Ltda.

t) Capital increaseFalabella in Industrias S.A . By public deed dated June 2, 2008, Falabella Industrias S.A. increased its capital by MCH$15,004,868, which was subscribed and paid in by Inversiones Falabella Limitada through the contribution of the interests it held in subsidiaries Mavesa Ltda. and Italmod S.A.

u)P urchase of sharesFalabella in Retail S .A. Pursuant to a stock transfer dated June 2, 2008, Inversiones Parmin S.p.A. acquired 40,492,665 shares in Falabella Retail S.A., equal to an interest of 0.72746950%. The price was MCH$80,838.

10.M allP lazaTransaction On July 30, 2008, the Falabella Group acquired 14.28% of the stock in Plaza Vespucio S.A., assigning, in exchange, 5.24% of its interests in the subsidiaries Plaza del Trebol S.A., Plaza La Serena S.A., Plaza Oeste S.A. and Plaza Tobalaba S.A. This transaction was performed simultaneous to a corporate reorganization that entailed the incorporation of a holding company (Plaza S.A.), organized to hold the interests in all companies in the Mall Plaza Group. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

The Company has recognized the effects of these transactions according to Technical Bulletin No. 34 of the Chilean Accountants Association on the “Acquisition or Transfer of Assets in Non-Monetary Transactions.” It recorded profits amounting to MCH$14,439,832, calculated as the difference between the book value of assets transferred and the economic value of the assets acquired.

11.C hanges Cinorporate Name In October 2008, the corporate name of the following companies was changed: - Falabella Servicios S.A. was changed to Apyser. - Falabella Industrias S.A. was changed to Confecciones Industriales S.A.

12.C orporateReorganizations October in 2008 a) Capital increaseInversiones in Falabella Ltda. By public deed dated October 1, 2008, Inversiones Falabella Ltda. increased its capital by MCH$45,123,008, which was subscribed and paid in by SACI Falabella through the contribution of its interests in the subsidiaries Banco Falabella and Procafecol S.A., in addition to the interest in Farmacias Ahumada S.A., a related company. b)C apital increaseFalabella in Retail S .A. By public deed dated October 1, 2008, Falabella Retail S.A. increased its capital by MCH$18,857,675, which was subscribed and paid in by Inversiones Falabella Ltda. through the contribution of its interest in the subsidiary Procafecol S.A., in addition to its interest in the related company Farmacias Ahumada S.A. c)C apital increaseFalabella in Inversiones Financieras S.A . By public deed dated October 1, 2008, Falabella Inversiones Financieras S.A. increased its capital by MCH$26,265,333, which was subscribed and paid in by Inversiones Falabella Ltda. through the contribution of its interest in the subsidiary Banco Falabella. d)C apital increaseInversiones in Prestaciones y Venser Cinco Ltda., merger withDinalsa S. A. and change in corporate name By public deed dated October 1, 2008, Invesiones y Prestaciones Venser Cinco Ltda. increased its capital by MCH$1, which was subscribed and paid in by Inversiones Falabella Ltda. through the contribution of its interest in the subsidiary Dinalsa S.A.

- As a result of the aforesaid capital increase, Inversiones y Prestaciones Venser Cinco Ltda. became the only partner in Dinalsa S.A., causing the de facto merger of both companies.

- At the same time as the merger of both companies, Inversiones y Prestaciones Venser Cinco Ltda. changed its corporate name to Dinalsa S.A. e)I nversionesParmin S.p. A. purchased a minority interestMonseL tda. in On October 1, 2008, Inversiones Parmin S.p.A. purchased a 0.05% interest in Inversiones y Prestaciones Venser Cuatro Ltda. for the price of MCH$1,121. No effects on income were recognized since it is a transaction between companies under common control. f) Capital increaseFalabella in Retail S .A. and merger withInversiones Prestaciones y Venser Cuatro Ltda. By public deed dated October 1, 2008, Falabella Retail S.A. increased its capital by MCH$1,642, which was subscribed and paid in by Inversiones Falabella Ltda. and Inversiones Parmin S.p.A. through the contribution of its interest in Inversiones y Prestaciones Venser Cuatro Ltda.

- As a result of the aforesaid capital increase, Falabella Retail S.A. became the only partner in Inversiones y Prestaciones Venser Cuatro Limitada, thereby causing the de facto merger of both companies.

13.C ompanyReorganizations November in 2008 a) Division ofDinalsa S. A. By public deed dated November 2, 2008, Dinalsa S.A. was divided into two companies, i.e. Nueva Dinalsa S.A. and the continuing company. Below is the equity distribution after the merger:

Equity Company THCH$ Dinalsa S.A. 22,789,814 Nueva Dinalsa S.A. 242,916

Total 23,032,730 b)C apital increaseApyser in (formerlyFalabella Servicios S.A .) and merger withNueva D inalsaS. A. By public deed dated November 2, 2008, Apyser increased its capital by MCH$224,837, which was subscribed and paid in by Inversiones Falabella Ltda. and Inversiones Parmin S.p.A. through the contribution of its interest in Nueva Dinalsa S.A. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 139 ANNUAL REPORT

As a result of the aforesaid capital increase, Apyser became the only partner in Nueva Dinalsa S.A., thereby causing the de facto merger of both companies.

c)C apital increaseInversiones in Prestaciones y Venser Uno L tda. By public deed dated November 2, 2008, Inversiones y Prestaciones Venser Uno Ltda. increased its capital by MCH$93,581, which was subscribed and paid in by Apyser through the contribution of its 44% interest in the subsidiaries Servicios Generales Puente Alto 37 Ltda., Servicios Generales Nataniel Ltda., Servicios Generales Fontova Ltda., Servicios Generales La Calera Ltda., Servicios Generales Puerto Antofagasta Ltda., Servicios Generales Plaza Puente Alto Ltda., Servicios Generales Cerro Colorado Ltda., Servicios Generales Cerrillos Ltda., Servicios Generales La Florida Ltda., Servicios Generales Estacion Central Ltda., Servicios Generales Segunda Region Centro Ltda., Servicios Generales Colina Ltda. and its 43.9375% interest in Inversiones Venser Dos Ltda.

d)C apital increaseInversiones in Prestaciones y Venser Dos L tda. By public deed dated November 2, 2008, Inversiones y Prestaciones Venser Dos Ltda. increased its capital by MCH$93,581, which was subscribed and paid in by Apyser through the contribution of its 44% interest in the subsidiaries Servicios Generales Puente Alto 37 Ltda., Servicios Generales Nataniel Ltda., Servicios Generales Fontova Ltda., Servicios Generales La Calera Ltda., Servicios Generales Puerto Antofagasta Ltda., Servicios Generales Plaza Puente Alto Ltda., Servicios Generales Cerro Colorado Ltda., Servicios Generales Cerrillos Ltda., Servicios Generales La Florida Ltda., Servicios Generales Estacion Central Ltda., Servicios Generales Segunda Region Centro Ltda., Servicios Generales Colina Ltda. and its 43.9375% interest in Inversiones Venser Dos Ltda.

e)C apital increaseFalabella in Inversiones Financieras S.A . and mergerInversiones of Prestaciones y Venser Ltda. By public deed dated November 2, 2008, Falabella Inversiones Financieras S.A. increased its capital by MCH$48,921,079, which was subscribed and paid in by Inversiones Falabella Ltda. and Inversiones Parmin S.p.A. through the contribution of its interest in the subsidiaries Inversiones y Prestaciones Venser Limitada, Administradora de Servicios Computacionales y de Credito CMR Falabella Limitada CMR Ltda.., Servicios e Inversiones Fas Limitada, Viajes Falabella Limitada and accounts receivables from SACI Falabella and Invercol.

As a result of the aforesaid capital increase, Falabella Inversiones Financieras S.A. became the only partner in Inversiones y Prestaciones Venser Limitada, thereby causing the de facto merger of both companies.

f) Capital increaseFalabella in Retail S .A. By public deed dated November 2, 2008, Falabella Retail S.A. increased its capital by MCH$88,465,734, which was subscribed and paid in by SACI Falabella through the assignment of leases and associated financial assets.

g)C apital increaseInversiones in Falabella Ltda. By public deed dated November 2, 2008, Inversiones Falabella Ltda. increased its capital by MCH$88,465,734, which was subscribed and paid in by SACI Falabella through the contribution of its interest in Falabella Retail S.A.

14.C ompanyReorganizations December in 2008 a) Capital increaseSupermercados in SanF ranciscoS.A . and merger withNueva Supermercados SanF ranciscoS.A . - By public deed dated December 1, 2008, Supermercados San Francisco S.A. increased its capital by MCH$265,535, which was subscribed and paid in by Dinalsa S.A. (through the contribution of its interest in the subsidiary Supermercados San Francisco S.A.) and by the Leyton Family, who contributed 1,619,999 shares in Supermercados San Francisco Buin S.A.

- On December 1, 2008, Supermercados San Francisco S.A. purchased the interest held by Promotora CMR Falabella Ltda. in Nueva Supermercados San Francisco S.A. for the price of MCH$499. There was no effect on income since it was a transaction between companies under common control.

- As a result of the aforesaid stock purchase, Supermercados San Francisco S.A. became the only partner in Nueva Supermercados San Francisco S.A., thereby causing a de facto merger between both companies. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

Investment Breakdown Equity of companies at Fiscal year income at Currency Percentage interest Equity of companies Fiscal year income fair value fair value Accrued revenue Prop. Value / PEV Unrealized income Book value of investment Taxpayer Country of controlling Number of Id. No. Company origin investment shares 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007

99500360-0 HOMETRADING S.A. CHILE PESOS 16,775,649,617 99.00000 99.00000 513,429,166 512,897,695 26,322,296 36,246,170 513,429,166 512,897,695 26,322,296 36,246,170 25,348,530 35,390,954 494,435,396 493,923,556 2,853,051 3,061,384 491,582,345 490,862,172 99593960-6 DESARROLLOS INMOBILIARIOS S.A. CHILE PESOS 174,202,087,740 99.00000 0.00000 474,837,942 418,296,369 61,121,936 48,293,747 474,837,942 418,296,369 61,121,936 48,293,747 61,121,936 48,293,747 474,837,939 418,296,365 474,837,939 418,296,365 90743000-6 PROMOTORA CMR FALABELLA LTDA. CHILE PESOS 32150912 99.00000 99.00000 377,851,525 64,900,542 30,064,166 64,897,946 377,836,411 377,836,411 96647930-2 INVERFAL S.A CHILE PESOS 8,144,151,445 99.00000 99.00000 133,608,845 35,209,375 6,888,394 35,209,374 133,608,845 133,608,845 96509660-4 BANCO FALABELLA CHILE PESOS 3,000,498 99.00000 99.00000 90,775,951 16,436,791 6,383,551 16,436,786 90,775,921 90,775,921 78722910-7 VENSER LTDA. CHILE PESOS 99.00000 89.00000 1,713,319 78722930-1 SERVA LTDA. CHILE PESOS 85.00000 85.00000 42,630,549 12,164,127 3,919,261 12,006,947 36,235,967 36,235,967 96573100-8 MAVESA LTDA. CHILE PESOS 99.00000 99.00000 13,822,700 -1,948,304 -69,845 -1,948,109 13,821,318 211,576 13,609,742 93767000-1 FARMACIAS AHUMADA S.A. CHILE PESOS 30,000,000 20.00000 20.00000 78,003,116 8,069,614 -30,400 1,613,923 15,600,623 15,600,623 96577470-K ITALMOD S.A CHILE PESOS 830,472 50.00000 50.00000 9,601,216 1,132,862 219,459 566,431 4,800,608 50,026 4,750,582 0-E FALABELLA SUCURSAL URUGUAY S.A. URUGUAY DOLARES 100.00000 100.00000 3,610,044 1,177,633 155,986 24,976 155,987 24,976 3,610,044 1,177,633 3,610,044 1,177,633 76864900-6 DESARROLLOS E INVERSIONES INMOBILIARIAS S.A. CHILE PESOS 212,912,876 143,121,774 53,359,171 19,947,572 1 1 3 4 3 4 76864900-6 PROMOTORA CHILENA DE CAFE COLOMBIA S.A. CHILE PESOS 20 65.00000 0.00000 577,877 707 -130,603 460 375,620 375,620 76023773-6 INVERSIONES VENSER LTDA. CHILE PESOS 99.85328 78,173,404 14,351,106 4,953,914 14,324,323 78,058,710 78,058,710 76007327-K INVERSIONES VENSER 2 LTDA. CHILE PESOS 99.78527 4,321,546 1,040,788 -819,350 1,038,553 4,312,266 4,312,266 76020706-3 INVERSIONES SERVA LTDA. CHILE PESOS 85.00000 219,877,760 20,388,381 20,021,578 217,678,982 217,678,982 76020391-2 INVERSIONES FALABELLA LTDA. 780,310,226 56,365,876 51,404,058 780,300,738 780,300,738 76020385-8 INVERSIONES PARMIN SPA 2,411,309 26,225 26,225 2,411,309 2,411,309

TOTALS 1,973,274,411 1,668,823,847 2,853,051 3,322,986 1,970,421,360 1,665,500,861

NOTE 15 INVESTMENTS IN OTHER COMPANIES

As of December 31, 2008 and 2007, there are no Investments in Other Companies.

NOTE 16 GOODWILL AND NEGATIVE GOODWILL Goodwill 12/31/2008 12/31/2007 Amount amortized in Amount amortized in the Taxpayer Id. No. Company the period Goodwill balance period Goodwill balance 96647930-2 INVERFAL S.A. 403,441 5,354,756 439,713 5,752,914 93767000-1 FARMACIAS AHUMADA S.A. (FASA) 286,972 389,788 4,600,265 96509660-4 BANCO FALABELLA 59,283 86,340 60,392

TOTAL 749,696 5,,354,756 915,841 10,413,571

NOTE 17 INTANGIBLES

Intangibles break down as follows as of December 31, 2008 and 2007:

Intangibles 2008 2007 MCH$ MCH$ Trademarks 539,222 633,247

Subtotal 539,222 633,247

Cumulative amortization -134,462 -142,194

Totals 404,760 491,053

Amortization in the fiscal year -54,054 -49,168 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 141 ANNUAL REPORT

NOTE 18 OTHER (ASSETS)

As of December 31, 2008 and 2007, this line is as follows:

OTHER (ASSETS) 2008 2007 MCH$ MCH$ a) Balance of deferred expenses for long-term bond issue (Note 22) 6,576,180 8,036,236 b) Other 1,719,005 5,454,469

Totals 8,295,185 13,490,705

b.1) Prepaid interest corresponds to a payment made by Falabella Sucursal Uruguay S.A., a subsidiary, and recognized by S.A.C.I. Falabella starting November 4, 2003.

b.2) Interest will be amortized in 82 equal, successive installments. 62 have already been amortized. The short-term portion is shown in Note 10, Other Current Assets.

NOTE 19 SHORT-TERM BANK DEBT

TYPE OF CURRENCY AND ADJUSTMENT INDEX Taxpayer Dollars Euro Yen Other foreign currency UF Non-adjustable $ TOTALS Bank or financial institution Id. No. 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 Short-term (code 5.21.10.10) 97919000-K THE ROYAL BANK OF SCOTLAND (RBS) 77,948 549,073 77,948 549,073 97053000-2 BANCO SECURITY (CHILE) 74,410 74,410 97036000-K BANCO SANTANDER - SANTIAGO (CHILE) 949,410 952,640 17,507 173,946 1,841,473 37,524,428 2,808,390 38,651,014 76645030-K BANCO ITAÚ (CHILE) 18,557 18,557 Other

TOTALS 1,101,768 1,501,713 17,507 173,946 1,860,030 37,524,428 2,979,305 39,200,087

Principal owed 1,101,335 1,491,987 17,506 172,661 1,860,030 37,524,428 2,978,871 39,189,076

TYPE OF CURRENCY AND ADJUSTMENT INDEX Taxpayer Dollars Euro Yen Other foreign currency UF Non-adjustable $ TOTALs Bank or financial institution Id. No. 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 12/31/2008 12/31/2007 Annual average interest rate 2.65% 5.24% 0.20% 4.33% 10.71% 32.10%

Debt in foreign currency (%) 37.5600 Debt in local currency (%) 6.4400

NOTE 20 OTHER CURRENT LIABILITIES

There were no significant balances recorded in this line as of December 31, 2008 and 2007.

NOTE 21 LONG-TERM BANK DEBT

There were no balances recorded in this line as of December 31, 2008 and 2007.

NOTE 22 SHORT- AND LONG-TERM OBLIGATIONS (NOTES AND BONDS)

On November 8, 2001, the Securities and Insurance Commission registered the first issue of adjustable bearer bonds under No. 276 of the Securities Registry, in the name of S.A.C.I. Falabella. The maximum was UF 4,200,000 in two Series, A, divided into Subseries A1 and Subseries A2, and B. The issue was placed in full on December 17, 2001. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

On November 8, 2004, the Securities and Insurance Commission registered the second issue of adjustable bearer bonds under Nos. 394 and 395 of the Securities Registry, in the name of S.A.C.I. Falabella. The maximum was UF 10,000,000 in two Series, C and D. The issue was placed in full on December 14, 2004.

On July 7, 2006, the Securities and Insurance Commission registered the third issue of adjustable bearer bonds under Nos. 467 and 468 of the Securities Registry, in the name of S.A.C.I. Falabella. The maximum was UF 8,500,000 in two Series, E and F. The issue was placed in full on August 4, 2006.

Interest on Series A, C and E is payable semi-annually and principal will be amortized semi-annually at maturity. Interest on Series B is payable semi-annually and principal will be amortized semi-annually starting June 1, 2007.

Interest on Series D is payable semi-annually and principal will be amortized semi-annually starting June 1, 2010. Interest on Series F is payable semi-annually and principal will be amortized semi-annually starting January 15, 2022.

Feller Rate Clasificadora de Riesgo Ltda. has assigned a rating of AA to each one of its prime series in the publicly offered securities issued by S.A.C.I. Falabella. The revenue received in the transactions has been used entirely to finance investments relating to the Company’s business.

The issue is described more completely in the table below.

The direct expenses of issuance and placement have been deferred and they will be amortized proportionally over the period of maturity of the bonds (Series A in 4 years, Series B in 21 years, Series C in 5 years, Series D in 21 years, Series E in 5 years and Series F in 21 years). During the period, MCH$1,735,272 have been amortized by a debit to income (MCH$1,981,978 in 2007). The balance of expenses to be amortized amounted to MCH$7,379,463 as of December 31, 2008 (MCH$9,925,946 in 2007) and they have been classified in the following lines, according to short- and long-term portions:

2008 First Second Third TotalS issue issue issue MCH$ MCH$ MCH$ MCH$ Other Current Assets (Note 10) 38,509 216,003 548,772 803,284 Other Assets (Note 18) 497,439 3,222,039 2,856,702 6,576,180

535,948 3,438,042 3,405,474 7,379,464

2007 First Second Third TotalS issue issue issue MCH$ MCH$ MCH$ MCH$ Other Current Assets (Note 10) 41,936 1,250,161 597,613 1,889,710 Other Assets (Note 18) 583,648 3,744,028 3,708,560 8,036,236

625,584 4,994,189 4,306,173 9,925,946

Income in the period was debited for interest on the bonds in the amount of MCH$16,540,469, MCH$2,402,986 for the first issue, MCH$7,488,814 for the second issue and MCH$6,648,669 for the third issue (MCH$16,718,511 in 2007, MCH$2,569,448 for the first issue, MCH$7,495,333 for the second issue and MCH$6,653,729 for third issue), which is included in the line Finance Expense in Non-Operating Income.

On June 30, 2008, the Securities and Insurance Commission registered Line 28, for a maximum of UF 1,000,000, in the Securities Registry.

Line 28 was placed as follows: Line 28, Series 1A and 2A, in the amount of MCH$19,658,229, maturing January 14, 2009 and April 15, 2009, respectively. Principal will be paid on those dates.

On October 22, 2008, the Securities and Insurance Commission registered lines Nos. 35, 36, 37 and 38 in the Securities Registry, each for a maximum amount of UF 1,000,000.

Lines 35 and 36 were placed as follows: Line 35, Series 3A and 4A for an amount of MCH$20,433,142, maturing March 10, 2009 and May 14, 2009, respectively. Principal will be paid on those dates.

Line 36, Series 5A, for an amount of MCH$10,831,190, maturing January 30, 2009, the date when the principal will be paid. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 143 ANNUAL REPORT

There were no placements under Lines 37 and 38 in 2008.

Feller Rate Clasificadora de Riesgo Ltda. has rated each of the series in the marketable securities lines of S.A.C.I. Falabella AA.

Face value Registration No. Or instrument Maturity of note Placement in Chile or identification Series Unit of adjustment Nominal amount or facility Interest rate 12/31/2008 12/31/2007 abroad

28 SERIES 1 A CHILEAN PESO 9,660,591 14/01/2009 0.68% 9,969,343 LOCAL 28 SERIES 2 A CHILEAN PESO 9,997,638 15/04/2009 0.75% 10,317,562 LOCAL 35 SERIES 3 A CHILEAN PESO 9,695,635 10/03/2009 0.78% 9,824,990 LOCAL 35 SERIES 4 A CHILEAN PESO 4,776,037 14/05/2009 0.79% 4,830,446 LOCAL 35 SERIES 4 A CHILEAN PESO 5,961,470 14/05/2009 0.80% 6,027,938 LOCAL 36 SERIES 5 A CHILEAN PESO 6,546,564 30/01/2009 0.79% 6,598,282 LOCAL 36 SERIES 5 A CHILEAN PESO 4,284,626 30/01/2009 0.79% 4,316,187 LOCAL

TOTALS 51,884,748

Nominal amount Bond Terms Face value Placement Registration No. Or placed and unit of Interest Interest Amortization in Chile or instrument identification SerieS outstanding adjustment rate Expiration payment payment 12/31/2008 12/31/2007 abroad

Long-term bonds - short-term portion

REG. SVS 276 B 2,000,000 U.F. 6.5% 01/12/2022 SEMI-ANNUAL SEMI-ANNUAL 2,881,722 2,884,748 LOCAL REG. SVS 395 C 6,500,000 U.F. 3.25% 01/12/2009 SEMI-ANNUAL AT MATURITY 374,634 373,175 LOCAL REG. SVS 394 D 3,500,000 U.F. 4.5% 01/12/2025 SEMI-ANNUAL SEMI-ANNUAL 278,461 277,378 LOCAL REG. SVS 467 E 4,500,000 U.F. 3.5% 15/07/2011 SEMI-ANNUAL AT MATURITY 1,535,245 1,529,270 LOCAL REG. SVS 468 F 4,000,000 U.F. 4.25% 15/07/2027 SEMI-ANNUAL SEMI-ANNUAL 1,654,130 1,647,691 LOCAL REG. SVS 395 C 6,500,000 U.F. 3.25% 01/12/2009 SEMI-ANNUAL AT MATURITY 139,441,705 LOCAL

Total - short-term portion 146,165,897 6,712,262 Long-term bonds

REG. SVS 276 B 2,000,000 U.F. 6.5% 01/12/2022 SEMI-ANNUAL SEMI-ANNUAL 34,860,426 37,395,884 LOCAL REG. SVS 395 C 6,500,000 U.F. 3.25% 01/12/2009 SEMI-ANNUAL AT MATURITY 138,898,999 LOCAL REG. SVS 394 D 3,500,000 U.F. 4.5% 01/12/2025 SEMI-ANNUAL SEMI-ANNUAL 75,083,995 74,791,769 LOCAL REG. SVS 467 E 4,500,000 U.F. 3.5% 15/07/2011 SEMI-ANNUAL AT MATURITY 96,536,565 96,160,845 LOCAL REG. SVS 468 F 4,000,000 U.F. 4.25% 15/07/2027 SEMI-ANNUAL SEMI-ANNUAL 85,810,280 85,476,307 LOCAL

Total long-term 292,291,266432,723,804

NOTE 23 PROVISIONS AND WRITE-OFFS

This line is comprised in the short and long term as follows as of December 31, 2008 and 2007:

a) Provisions in current liabilities 2008 2007

MCH$ MCH$ Vacation provision 434,685 1,008,394 Bonuses provision 120,780 230,062 Severance indemnity provision 2,640 60,846 Personnel benefits 936,367 950,685 Other provisions 288,764 378,474

Total provisions in current liabilities 1,783,236 2,628,461 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

b) Provisions in long-term liabilities 2008 2007

MCH$ MCH$

Severance indemnity provision 35,081 808,378 35,081 808,378 Total provisiones a largo plazo 35.081 808.378 c)W rite-offs The following asset write-offs were recorded as of December 31, 2008 and 2007:

Write-offs 2007 2007 Debit to: MCH$ MCH$ Property, plant and equipment 442,905 333,213 Non-operating income Accounts receivable 0 1,959 SG&A expenses Notes receivable 0 29,581 SG&A expenses

Totals 442,905 364,753

NOTE 24 SEVERANCE INDEMNITY

The short- and long-term balances for severance indemnities as of December 31, 2008 and 2007 are included in Note 23, Provisions and Write-offs.

NOTE 25 OTHER LONG-TERM LIABILITIES

This line did not record significant balances as of December 31, 2008 and 2007.

NOTE 26. MINORITY INTEREST

Not applicable.

NOTE 27. CHANGES IN EQUITY a) Below is an itemization of Other Reserves for the fiscal years ending December 31, 2008 and 2007:

2008 2007 MCH$ MCH$ Cumulative adjustment of previous fiscal year conversion (32,990,773) (15,297,220) Conversion adjustment for the January-December fiscal year 49,268,826 (20,629,732) Subtotal 16,278,053 (35,926,952) Revaluation in the period 117,147 56,739 Executive compensation plan for the previous period 1,366,766 774,915 Executive compensation plan for January-December 2,223,762 645,243 Other (73,747) (68,799) Total 19,911,981 (34,518,854) WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 145 ANNUAL REPORT

Adjustments for conversion differentials:

2008 2007 Period Cumulative Period Cumulative MCH$ MCH$ MCH$ MCH$ Farmacias Ahumada S.A. - - -6.010 199.110 S.A.C.I. Falabella and subsidiaries 49,286,826 16,278,053 -20.623.722 -36.126.062

Totals 49,286,826 16,278,053 -20.629.732 -35.926.952

The cumulative adjustment for exchange differentials as of December 31, 2008 of Falabella Sucursal Uruguay S.A. is shown net of the adjustment of bank debt, which was included and adjusted as investment hedging abroad (Note 14, Investment in Related Companies).

b)D ividendPolicy b1) On April 24, 2007, the Regular Shareholders Meeting of the Company approved the distribution of final dividends amounting to $22 per share, against income of 2006 fiscal year. Such dividend was paid on May 9, 2007.

b2) On May 29, 2007, the Board of the Company agreed to distribute an interim dividend amounting to $9 per share, which was paid on June 20, 2007.

b3) On October 16, 2007, the Board of the Company agreed to distribute an interim dividend amounting to $18 per share, which was paid on November 14, 2007.

b4) On January 29, 2008, the Board of the Company agreed to distribute an interim dividend amounting to $18.50 per share, which was paid on February 20, 2008.

c)C apital increase The following was agreed at the Special Shareholders Meeting held April 24, 2007:

c1) to decrease the capital of $455,874,841,735, divided into 2,404,627,566 registered shares in one single series, with no par value, each of the same value, that have been fully issued, subscribed and paid, by the sum of $658,924,679, divided into 3,675,091 registered shares in one single series, with no par value, after which the capital will total $455,215,917,056, divided into 2,400,952,475 registered shares in one single series, with no par value.

c2) to increase the capital from $455,215,917,056, divided into 2,400,952,475 registered shares in one single series, with no par value, to $457,011,852,511, through the capitalization of $1,795,935,455 registered in the equity account entitled “Premium on the Sale of Treasury Stock.”

c3) to increase the capital from $457,011,852,511, divided into 2,400,952,475 registered shares in one single series, with no par value, to the sum of $460,864,798,903 through the issuance of 20,236,133 registered cash shares in one single series, with no par value and each of the same value. The Board was authorized to set the price for share placement, and shares will be subscribed and paid in the period of 3 years as from this date.

c4) to allocate 10% of the aforesaid capital increase to the Company’s new Executive Compensation Plan. Also approved was allocation of the entire balance not subscribed by the shareholders in that capital increase to this plan in exercise of the preemptive option to do so. The executives will have a period of 5 years as from the meeting to subscribe and pay the shares allocated thereto.

c5) to increase the capital from $460,864,798,903, divided into 2,421,188,608 registered shares in one single series, with no par value, to the sum of $508,464,634,207 through issuance of 250,000,000 registered cash shares in one single series, with no par value, each of the same value. The Board was authorized to set the price for share placement, which will be subscribed and paid in the period of 120 days as from this date.

c6) On July 23, 2007, the Securities and Insurance Commission approved the capital increase of $3,852,946,392, divided into 20,236,133 registered shares in one single series, with no par value. It was registered under No. 807 of the Securities Registry. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS d)P remium on the sale of treasury stock After issuing the shares in August 2007, a premium was recorded for MCH$2,165,973, which breaks down as follows (historically):

MCH$ Total premium in 2007 2,170,188 Less share registration expenses in Stock Registry (2,299) Less publication expenses (1,916)

Total 2,165,973 e)A umento Cdeapital con emisiónAcciones de (valores históricos)

Number of shares Number of shares Capital increase Date Subscribed Paid MCH$ August 2007 40,373 40,373 7,687 September 2007 887,216 887,216 168,925

Total 927,589 927,589 176,612 f)S tock options for compensation plans At the Special Shareholders Meeting held April 26, 2005, an executive compensation plan was approved that granted stock options exercisable by the executives in a period not to exceed 5 years.

At the Special Shareholders Meeting held July 23, 2007, a new executive compensation plan was approved that granted stock options exercisable by the executives in a period not to exceed 5 years.

The compensation plans offered by Falabella to its executives in 2008 were recorded in the financial statements according to the provisions in International Financial Reporting Standard (IFRS) 2, stock-based payments.

Whereas the stock options will become irrevocable in 5 years, the services will be received by the Company in that period in the same progression. Hence, the salary expense will accrue in the same period.

The debit to income recognized as of December 2008 was MCH$2,223,762, with a credit to Other Reserves (MCH$592,510 in 2007).

In the second quarter of 2008, 914,669 shares were subscribed and paid in after executives exercised their purchase option. This meant a capital increase in the amount of MCH$187,034 and a premium on the sale of treasury stock in the amount of MCH$1,193,664.

Changes in Equity 12/31/2008 12/31/2007 Capital Deficit in Capital Future Deficit in Paid-in revaluation Premium on sale Future dividend Retained Interim period of Fiscal year revaluation Premium on sale Other dividend Retained period of Fiscal year Line capital reserve of shares Other reserves reserves earnings dividends development profit (loss) Paid-in capital reserve of shares reserves reserves earnings Interim dividends development profit (loss) Initial balance 488,793,119 2,214,619 -31,697,754 807,110,002 -110,538,155 217,089,859 453,150,561 1,795,936-13,398,627 635,119,899 -28,558,505 197,149,591 Distribution of previous fiscal year profits 106,551,704 110,538,155 -217,089,859 168,591,086 28,558,505 -197,149,591 Final dividend for previous fiscal year -52,567,527 Capital increase because of share issue 187,034 1,193,664 176,612 2,165,973 Capitalization of reserves and/or profits 1,795,935 -1,795,935 Cumulative deficit in period of development Other 2,223,762 592,510 Conversion adjustments 49,268,826 -18,943,739 Revaluation of equity 43,514,890 275,416 117,147 81,298,131 33,670,010 48,645 52,102 55,966,544 -1,785,091 Fiscal year profit (loss) 202,013,142 217,089,860 Interim dividends -108,753,064

Final Balance 532,495,043 3,683,699 19,911,981 994,959,837 202,013,142 488,793,118 2,214,619-31,697,754 807,110,002 -110,538,155 217,089,860

Adjusted Balances 532,295,706 2,411,720 -34,518,854 878,942,792 -120,376,051 236,410,857 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 147 ANNUAL REPORT

NUMBER OF SHARES SerieS NUMBER OF SUBSCRIBED SHARES NUMBER OF PAID-IN SHARES NUMBER OF VOTING SHARES SINGLE 2,391,275,389 2,391,275,389 2,391,275,389

SerieS SUBSCRIBED CAPITAL PAID-IN CAPITAL SINGLE 532,495,043 532,495,043

NOTE 28 OTHER NON-OPERATING INCOME AND EXPENSES

As of December 31, 2008 and 2007, this line breaks down as follows:

a) Other non-operating income 2008 2007 MCH$ MCH$ Lease of real estate 726,740 831,808 Amortization of unrealized profit (Note 14.2a) 203,748 203,748 Cash recovery and surpluses 2,282,336 625,286 Recoverable write-offs 0 2,795,791 Mall La Dehesa and Los Rios Contract 0 5,186,491 Insurance fees 281,791 0 Internet 193,574 385,534 Food court leases 127,354 182,660 Miscellaneous assistance 766,301 2,000,889 Other income 1,231,294 1,514,720

Totals 5,813,138 13,726,927

b) Other non-operating expenses 2008 2007 MCH$ MCH$ Fees -1,170,348 -1,299,690 Retirement of property, plant & equipment -1,518,322 -42,789 Plasma effect fine -2,591,966 0 Other expenses -466,605 -970,868

Totals -5,747,421 -2,313,347 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

NOTE 29 PRICE-LEVEL RESTATEMENT

PRICE-LEVEL RESTATEMENT Adjustment index 12/31/2008 12/31/2007

ASSETS (DEBITS) / CREDITS

INVENTORIES CPI PROPERTY, PLANT AND EQUIPMENT CPI 8,033,960 6,518,174 INVESTMENT IN RELATED COMPANIES CPI 138,860,441 106,306,252 TRANSACTIONS WITH RELATED COMPANIES CPI/ UF 1,195,525 230,478 INFLATION EFFECT - EXCHANGE DIFFERENTIAL CPI 2,922,042 4,752,152 OTHER NON-MONETARY ASSETS CPI 272,401 154,740 EXPENSE AND COST ACCOUNTS CPI TOTAL (DEBITS) CREDITS 151,284,369 117,961,796

LIABILITIES (DEBITS) / CREDITS

EQUITY CPI -125,205,584 -95,779,957 BANK LOANS CPI/ UF -88,079 TRANSACTIONS WITH RELATED COMPANIES CPI/ UF -5,634,018 -4,020,001 INFLATION EFFECT - EXCHANGE DIFFERENTIAL CPI -1,398,609 -5,614,667 NON-MONETARY LIABILITIES CPI/ UF -38,744,230 -28,926,846 INCOME ACCOUNTS CPI -842,146 -719,827

TOTAL (DEBITS) CREDITS IPC -171,824,587 -135,149,377

(LOSS) PROFITS IN PRICE-LEVEL RESTATEMENT -20,540,218 -17,187,581

NOTE 30 EXCHANGE DIFFERENTIAL

Exchange Differential ASSETS (DEBITS) / CREDITS Currency 12/31/2008 12/31/2007 GOODS IN TRANSIT DOLLAR/EURO -672,907 -1,479,844 EXCHANGE HEDGING DOLLAR TRANSACTIONS WITH RELATED COMPANIES DOLLAR/EURO 21,683,005 -7,276,819 ACCOUNTS RECEIVABLE DOLLAR/EURO 101,522 -254,790 OTHER ASSETS DOLLAR/EURO 65,495 23,603

Total (Debits) Credits 21,177,115 -8,987,850

LIABILITIES (DEBITS) / CREDITS

EXCHANGE HEDGING DOLLAR/SOL 4,829,165 -529,930 FOREIGN SUPPLIERS DOLLAR/EURO -74,696 2,102,291 FOREIGN SUPPLIERS EURO FOREIGN SUPPLIERS DANISH CROWN TRANSACTIONS WITH RELATED COMPANIES DOLLAR/EURO -1,437,496 5,282,226 ACCOUNTS PAYABLE DOLLAR OTHER LIABILITIES DOLLAR/EURO 33,593 1,024,286 CONVERSION ADJUSTMENT DOLLAR

Total (Debits) Credits 3,350,566 7,878,873

(Loss) Profits on exchange differential 24,527,681 -1,108,977

NOTE 31 EXTRAORDINARY ITEMS

There are no extraordinary items as of December 31, 2008 and 2007. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 149 ANNUAL REPORT

NOTE 32 EXPENSES OF ISSUANCE AND PLACEMENT OF EQUITY SECURITIES AND DEBT SECURITIES

EXPENSES OF ISSUANCE AND PLACEMENT OF EQUITY SECURITIES There were no such expenses in 2008. On July 23, 2007, by Resolution No. 807, the Securities and Insurance Commission approved the capital increase that had been previously authorized by the Special General Shareholders Meeting held on April 24, 2007. Expenses incurred in the aforesaid capital increase were as follows (historical):

Amount in MCH$ Expenses of registration in the Securities Registry 2,299 Publication expenses 1,915

Total 4,214

These disbursements have been recorded under “premium on the sale of treasury stock” in compliance with Circular Letter No. 1736 of the Securities and Insurance Commission, dated January 13, 2005 (see Note 27 d).

DIRECT EXPENSES IN THE ISSUANCE AND PLACEMENT OF NEGOTIABLE INSTRUMENTS The direct expenses in the issuance and placement of negotiable instruments amounted to MCH$350,188 in the 2008 fiscal year, breaking down as follows (historical data):

Amount in MCH$ Legal and financial assistance and fees 52,094 Stamp taxes 296,963 Other 1,131

Total 350,188

These expenses have been deferred and they are being amortized proportionally over the period of each placement. The net balance to be amortized in the short-term amounted to MCH$106,010, which is discussed in Note 22. No negotiable instruments were issued in 2007.

NOTE 33 STATEMENT OF CASH FLOW

There are no financing or investment activities that materially affect the future flows of the company.

NOTE 34 DERIVATIVE CONTRACTS

DERIVATIVE CONTRACTS CONTRACT DESCRIPTION Value Accounts affected Term or Purchase/ Transaction or item of the Assets / Liabilities Effects on results Type of Type of Value of Specific expiry sale protected protected derivative contract the contract item Name Amount Realized Unrealized date Position Name Amount item FR CI 3,244,600 I QUARTER 2009 DOLLAR P ACCOUNTS PAYABLE 22,631 -22,631 FR CI 38,945,550 IV QUARTER 2009 NEW SOL (PERU) S ACCOUNTS PAYABLE 1,162,958 1,162,958 FR CCTE 139,340,000 I QUARTER 2009 UF S PAYMENT FLOWS IN UF 139,340,000 ACCOUNTS PAYABLE 61,069 -61,069 FR CI 21,353,500 I QUARTER 2009 UF S ACCOUNTS PAYABLE 92,630 -92,630 FR CCTE 307,422,750 III QUARTER 2009 UF P PAYMENT FLOWS IN UF 307,422,750 ACCOUNTS PAYABLE 4,639,569 -4,639,569 S CCTE 6,435,771 III QUARTER 2009 UF P PAYMENT FLOWS IN UF 6,435,771 ACCOUNTS PAYABLE 122,437 -122,437 FR CCTE 88,675,000 IV QUARTER 2009 UF P PAYMENT FLOWS IN UF 88,675,000 ACCOUNTS PAYABLE 1,370,831 -1,370,831 FR CCTE 67,155,000 I QUARTER 2010 UF P PAYMENT FLOWS IN UF 67,155,000 ACCOUNTS PAYABLE 1,149,645 -1,149,645 FR CI 22,479,500 I QUARTER 2010 UF P ACCOUNTS PAYABLE 511,748 -511,748 S CI 21,452,570 I QUARTER 2010 UF P ACCOUNTS PAYABLE 593,095 -593,095 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

NOTE 35 CONTINGENCIES AND RESTRICTIONS a)L awsuits

Judicial claims have been filed against the Company, mainly for alleged breaches of the Consumer Protection Law, and civil claims. The amount of those claims and eventual indemnities requested by third parties did not exceed MCH$1,151,519 as of December 31, 2008 and 2007 (MCH$374,434 as of December 31, 2007). There are judicial proceedings and acts pending before the respective courts. The company has not established provisions for these claims because the outcome should be in its favor, in the opinion of the Company’s management.

b)B ond issuance (compliance with financial indicators)

The indentures signed by S.A.C.I. Falabella and Banco de Chile, this latter as Bondholders Representative and Agent Bank, imposes obligations and limitations on the Company in relation to compliance with financial indicators and other aspects relating to management, the main indicators being: b.1 Bond issue dated November 8, 2001 b.1.1 Assets, present and future, must be kept free of any type of lien, real security, charge, restriction or any type of privilege during the term of the issue for at least the equivalent to 1.3 times the unpaid balance of all unsecured financial debt owed by the Company, including the bond issue. b.1.2 Revenues from retail sales, the administration of malls and the credit area must be equivalent to at least 70% of the total consolidated revenues of the Company. b.1.3 Ownership, direct or indirect, of at least 67% of Promotora CMR Falabella S.A. b.1.4 No joint and several co-debtorships must be granted nor collateral signatures or sureties for third parties, except for subsidiaries. b.1.5 The ratio between current liabilities and equity must not exceed 1.35. The Company must also maintain this ratio at 1.5 on a consolidated level. b.1.6 A minimum equity of UF 22,000,000. b.2 Bond issue dated November 8, 2004 b.2.1 Revenues from retail sales, the administration of malls and the credit area must be higher than 70% of the total consolidated revenues of the Company. b.2.2 Essential assets must be preserved, meaning trademarks in which the words “Falabella” or “Sodimac” appear. b.2.3 No real security can be established on new debt issues when they exceed 10% of individual assets, except as stipulated in the indenture. b.2.4 The ratio between current liabilities and equity must not exceed 1.35. The Company must also maintain this ratio at 1.5 on a consolidated level. b.3 Bond issue dated July 3, 2006 b.3.1 Revenues from retail sales, the administration of malls and the credit area must be higher than 70% of the total consolidated revenues of the Company. b.3.2 No real security can be established on new debt issues when they exceed 10% of individual assets, except as stipulated in the indenture. b.3.3 The ratio between current liabilities and equity must not exceed 1.35. The Company must also maintain this ratio at 1.5 on a consolidated level.

c)O ther loan agreements (compliance with financial indicators)

There are loan agreements signed by S.A.C.I. Falabella with financial institutions that impose restrictions and limitations on economic indicators of diverse types that are typical to this type of financing.

d)D erivatives agreements

In the 2008 fiscal year, the Company signed forwards in U.S. dollars and UF, which generated rights, as of December 31, 2008, amounting to MCH$716,504,241 and obligations amounting to MCH$723,904,938. As of December 31, 2007, rights totaled MCH$2,787,807 and obligations MCH$2,782,085. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 151 ANNUAL REPORT

e)L etters of credit As of December 31, 2008, the Company had MUS$4,853 in open and non-negotiated letters of credit in commercial banks supporting the future financing of foreign trade transactions.

f)L oss recovery

There were no losses recoverable as of December 31, 2008.

g)B ank bonds

As of December 31, 2008, the Company had mainly bank bonds amounting to MCH$42,341 to secure mainly construction workmanship and contract compliance.

DIRECT GUARANTEES Assets Balances pending payment Debtor compromised at close of Type of Book financial statements Release of guarantees Guarantee in favor of Name Relationship guarantee Type value 12/31/2008 12/31/2007 12/31/2009 Assets 12/31/2010 Assets 12/31/2011 Assets ASSOCIATED MERCHANDISING CORPORATION S.A.C.I. FALABELLA PARENT COMPANY 6,109,920 11,363,377

INDIRECT GUARANTEES Balances pending payment Assets at close of Debtor compromised financial statements Release of guarantees Book Guarantee in favor of Name Relationship Type of guarantee Type value 12/31/2008 12/31/2007 12/31/2009 Assets 12/31/2010 Assets 12/31/2011 Assets PUNTO FA, S.L. COMERCIAL MONSE LTDA. SUBSIDIARY STANDBY LETTER OFCR 1,411,132 1,213,890 PUNTO FA, S.L. INVERSIONES FALABELLA LTDA. SUBSIDIARY STANDBY LETTER OFCR 89,103 151,512 BANCO DE CRÉDITO E INVERSIONES (CHILE) SHEARVAN CORPORATE S.A. SUBSIDIARY CONFORT LETTER 18,938,962 BANCO SANTANDER CENTRAL HISPANO SHEARVAN CORPORATE S.A. SUBSIDIARY STANDBY LETTER OFCR 25,458,000 10,822,264 BANCO SANTANDER CENTRAL HISPANO FALABELLA RETAIL S.A. (EX INVERFIN S.A.) SUBSIDIARY STANDBY LETTER OFCR 35,004,750

NOTE 36 THIRD-PARTY GUARANTEES

The following guarantees had been received from third parties as of December 31, 2008:

Amount in Relationship with Transaction Secured Granted by MCH$ the Company To secure the correct execution of works through final commissioning 58,003 MBC Master Builder Corporativo Ltda. Contractor To secure the correct execution of works through final commissioning 6,298 DIIT Chile S.A. Contractor To secure the correct execution of works through final commissioning 10,590 PRIM Clima Ltda. Contractor To secure works and operating performance of electric and climatization facilities 8,310 Termosistema Ltda. Contractor To secure works and operating performance of electric and climatization facilities 30,947 Técnica ELEMEC Chile S.A. Contractor WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

NOTE 37 LOCAL AND FOREIGN CURRENCY

Assets Amount Amount Line Currency 12/31/2008 12/31/2007

Current assets

CASH ADJUSTABLE $ NON-ADJUSTABLE $ 356,478 22,275,488 DOLLAR 11,734 3,795 EUROS 11,266 7,126 TIME DEPOSITS DOLLAR MARKETABLE SECURITIES ADJUSTABLE $ SALES RECEIVABLE NON-ADJUSTABLE $ 5,379,642 NOTES RECEIVABLE NON-ADJUSTABLE $ 100,359 9,143,740 SUNDRY RECEIVABLE ADJUSTABLE $ 59,166 212,771 NON-ADJUSTABLE $ 238,722 2,733,227 DOLLAR 314,842 744,367 INTERCOMPANY NOTES AND ACCOUNTS ADJUSTABLE $ 34,254,458 NON-ADJUSTABLE $ 123,034,813 258,194,931 DOLLAR 93,316,606 EURO 1,194,700 INVENTORIES ADJUSTABLE $ 111,615,444 NON-ADJUSTABLE $ 57,138,363 10,961,852 RECOVERABLE TAXES ADJUSTABLE $ 705,095 NON-ADJUSTABLE $ 121,850 605,905 PREPAID EXPENSES ADJUSTABLE $ 252,812 NON-ADJUSTABLE $ 249,277 9,513,506 DEFERRED TAXES NON-ADJUSTABLE $ 1,306,230 1,924,017 OTHER CURRENT ASSETS NON-ADJUSTABLE $ 3,567,803 4,784,828 ADJUSTABLE $ 4,000,827

Property, plant and equipment

MACHINERY AND EQUIPMENT ADJUSTABLE $ 190,785 16,537,740 OTHER PROPERTY, PLANT AND EQUIPMENT ADJUSTABLE $ 10,006,040 165,175,682 NON-ADJUSTABLE $ 15,278,741 DOLLAR 1,428,759 DEPRECIATION ADJUSTABLE $ -6,081,947 -94,471,458

Other assets

INVESTMENT IN RELATED COMPANIES ADJUSTABLE $ 1,970,421,360 1,665,500,861 GOODWILL ADJUSTABLE $ 5,354,756 10,413,571 LONG-TERM RECEIVABLE ADJUSTABLE $ 53,867 53,657 NON-ADJUSTABLE $ 60,300 L-T INTERCOMPANY NOTES AND ACCOUNTS DOLLAR 2,759,677 INTANGIBLES ADJUSTABLE $ 539,222 633,247 AMORTIZATION ADJUSTABLE $ -134,462 -142,194 OTHER NON-ADJUSTABLE $ 15,638,738 13,490,705

Total Assets ADJUSTABLE $ 2,019,369,167 1,875,782,133 NON-ADJUSTABLE $ 201,752,633 354,346,882 DOLLAR 93,643,182 4,936,598 EURO 1,205,966 7,126 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 153 ANNUAL REPORT

Current liabilities Up to 90 days 90 days to 1 year 12/31/2008 12/31/2007 12/31/2008 12/31/2007 Annual Annual Annual Annual average average int. average int. average int. LINE Currency Amount int. rate Amount rate Amount rate Amount rate S-T BANK DEBT NON-ADJUSTABLE $ 1,860,030 37,524,428 DOLLAR 1,101,768 1,501,713 EUROS 17,507 173,946 NOTES NON-ADJUSTABLE $ 51,884,748 S-T BONDS ADJUSTABLE $ 3,189,375 3,89% 695,190 142,976,522 6,0% 6,017,072 DIVIDENDS PAYABLE NON-ADJUSTABLE $ 136,895 48,300,433 ACCOUNTS PAYABLE NON-ADJUSTABLE $ 4,883,751 84,338,673 DOLLAR 23,340 1,053,652 NOTES PAYABLE NON-ADJUSTABLE $ 1,219,563 SUNDRY PAYABLE DOLLAR 27,947 901,592 INTERCOMPANY NOTES AND ACCOUNTS PAYABLE ADJUSTABLE $ 10,356,019 NON-ADJUSTABLE $ 8,977,176 89,218,768 DOLLAR 5,080,672 PROVISIONS NON-ADJUSTABLE $ 1,345,911 2,628,461 437,325 WITHHOLDINGS NON-ADJUSTABLE $ 9,732,303 3,721,881 PREPAID INCOME NON-ADJUSTABLE $ 101,779 5,125,835 INCOME TAX NON-ADJUSTABLE $ 180,582

TOTAL CURRENT LIABILITIES NON-ADJUSTABLE $ 27,037,845 272,258,624 52,322,073 0 DOLLAR 6,233,727 3,456,957 0 0 EURO 17,507 173,946 0 0 ADJUSTABLE $ 13,545,394 695,190 142,976,522 6,017,072

Long-term liabilities (12/31/2008) 1 to 3 years 3 to 5 years 5 to 10 years more than 10 years Annual Annual Annual Annual average Amount average int. Amount average int. Amount average int. Amount LINE Currency int. rate rate rate rate BANK DEBT ADJUSTABLE $ L-T OBLIGATIONS ADJUSTABLE $ 12,402,266 3.42% 111,285,207 3.73% 36,871,605 5.23% 131,732,188 4.50% L-T INTERCOMPANY NOTES AND ACCOUNTS PAYABLE ADJUSTABLE $ 14,909,652 DOLLARS 5,621,333 LONG-TERM PROVISIONS NON-ADJUSTABLE $ 35,081 DEFERRED TAXES NON-ADJUSTABLE $ 573,293

TOTAL LONG-TERM LIABILITIES ADJUSTABLE $ 27,311,918 111,285,207 36,871,605 131,732,188 DOLLARS 5,621,333 0 0 0 NON-ADJUSTABLE $ 608,374 0 0 0

Long-term Liabilities (previous period) 1 to 3 years 3 to 5 years 5 to 10 years more than 10 years Annual Annual Annual average int. average int. Annual average average int. LINE Currency Monto rate Monto rate Monto int. rate Monto rate BANK DEBT ADJUSTABLE $ L-T OBLIGATIONS ADJUSTABLE $ 146,578,510 3.39% 110,852,086 3.73% 36,728,101 138,565,107 L-T INTERCOMANY NOTES AND ACCOUNTS PAYABLE ADJUSTABLE $ 14,851,625 DOLLARS 4,779,287 LONG-TERM PROVISIONS DOLLARS 808,378 DEFERRED TAXES NON-ADJUSTABLE $ 4,071,221 OTHER LONG-TERM LIABILITIES ADJUSTABLE $ 70,465

TOTAL LONG-TERM LIABILITIES ADJUSTABLE $ 161,500,600 110,852,086 36,728,101 138,565,107 DOLLARS 5,587,665 0 0 0 NON-ADJUSTABLE $ 4,071,221 0 0 0 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

NOTE 38 SANCTIONS

As of December 31, 2008 and 2007, no sanctions have been applied to the Company.

NOTE 39 SUBSEQUENT EVENTS

MaterialEvent, Santiago, January 14, 2009 Pursuant to the stipulations in subparagraph 2 of Articles 90 and 100 of Law 18,045 and the provisions in General Rules No. 118 and No. 210 of the Securities and Insurance Commission, a material event was reported that on January 13, 2009, Ripley Retail II Limitada, a subsidiary of Ripley Corp S.A., acquired 22.5% of the capital in Nuevos Desarrollos S.A. (formerly Plaza Alameda S.A.), a company forming part of Grupo Empresarial Plaza S.A., controlled by S.A.C.I. Falabella. Nuevos Desarrollos S.A. is the owner of Plaza Alameda Mall and Plaza Sur Mall pro se and through direct and indirect subsidiaries.

Simultaneous to the subscription of the aforesaid shares, S.A.C.I. Falabella, Ripley Corp S.A. and the subsidiaries Ripley Retail Limitada and Ripley Retail II Limitada, Plaza S.A., Plaza Oeste S.A. and Nuevos Desarrollos S.A. signed a joint venture agreement in order to jointly develop the business of construction, acquisition, management, development and exploitation of new malls in Chile, in addition to those now existing, that will be accomplished through Nuevos Desarrollos S.A. and its subsidiaries in the terms and conditions agreed upon in such agreement.

MaterialEvent, Santiago, January 28, 2009 Pursuant to the stipulations in Article 9 and subparagraph 2 of Article 10 of Law 18,045 and the provisions in General Rule No. 30 of the Commission, the material event was reported that at the Board Meeting of the Company held on January 27, 2009, the Board agreed upon the following:

1. to issue two bond lines: one in effect for 10 years and another in effect for 30 years. Each line will be for UF 8 million. 2. to limit the amount of the first placement of each bond line to an aggregate of UF 8 million. 3. to begin the pertinent proceedings to register the respective Line in the Securities Registry of the Securities and Insurance Commission. Any of Mr. Juan Cuneo Solari and Juan Benavides Feliu, acting indistinctively, and Mr. Juan Pablo Montero Schepeler and Mr. Alejandro Gonzalez Dale, were empowered to jointly set the conditions, terms and time of each issue made on account of the lines and sign agreements and undertake all proceedings necessary for the issue and sale of the respective bonds.

NOTE 40 COMPANIES SUBJECT TO SPECIAL STANDARDS

Not applicable.

NOTE 41 ENVIRONMENT

The Company has not made disbursements to improve and/or invest in production processes, facilities or other disbursements directly or indirectly relating to environmental protection. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 155 ANNUAL REPORT Explanatory analysis of financial statements ENDED TO DECEMBER 31, 2008

I. Explanatory analysis of financial statements (In reference to Section A.4.1.e.1 of General Rule No. 30)

ASSETS The main financial indicators evolved as follows:

ASSETS ASSETS (MCH$) DEc-08 DEc-07 DEc 08-07 %Var. 08-07

Current assets 319,982,589 438,353,451 (118,370,862) -27.00% Property, plant and equipment 4,114,878 103,949,464 (99,834,586) -96.04% Other assets 1,984,529,928 1,692,769,824 291,760,104 17.24%

Total assets 2,308,627,395 2,235,072,739 73,554,656 3.29%

CurrentAssets The decrease of MCH$118,370,862 occurred mainly in the following lines: Inventories (MCH$65,438,933), Cash (MCH$21,906,931), Prepaid Expenses (MCH$9,517,041), Notes and Accounts Receivable (MCH$9,043,381) and Intercompany Notes and Accounts Receivable (MCH$6,394,354).

Property,Plant andEquipment Property, plant and equipment decreased by MCH$99,834,586 as compared to the same date in the previous year, due mainly to the decrease of MCH$161,344,164 in Other Property, Plant and Equipment and of MCH$16,346,955 in Machinery and Equipment, which was offset by a decrease in Cumulative Depreciation for MCH$88,389,511.

OtherAssets The increase of MCH$291,760,104 came mainly from the increase in Investment in Related Companies (MCH$304,920,499), which was offset by a decrease of MCH$5,195,520 in Other, in addition to Goodwill in the amount of MCH$5,058,815.

LIABILITIES LIABILITIES (MCH$) DEc-08 DEc-07 DEc 08-07 %Var. 08-07

Current liabilities 242,133,068 282,601,789 (40,468,721) -14.32% Long-term liabilities 313,430,625 457,304,780 (143,874,155) -31.46% Equity 1,753,063,702 1,495,166,170 257,897,532 17.25%

Total liabilities 2,308,627,395 2,235,072,739 73,554,656 3.29%

CurrentLiabilities Liabilities varied negatively by MCH$40,468,721, mainly coming from a decrease in Accounts Payable for MCH$80,485,234 and Intercompany Notes and Accounts Payable for MCH$64,804,901 and Dividends Payable for MCH$48,163,538, which was offset by Bonds for MCH$139,453,635.

Long-TermL iabilities There was a decrease of MCH$143,874,155. This variation mainly came from a decrease in Bonds for MCH$140,432,538 and Long-Term Deferred Taxes for MCH$3,497,928. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

Equity

Equity rose by MCH$257,897,532 because of the following principal variations:

EQUITY: MCH$ Initial equity at January 1, 2007 1,495,166,170 Profit from December 2007 0 Profit from January to December 2008 202,013,142 Increase in capitalization from premium on sale of shares 1,795,935 Reclassification of premium on sale of shares (1,795,935) Capital increase due to the subscription of stock options 187,034 Premium on the sale of stock options 1,193,664 Translation adjustments from December 2007 0 Translation adjustments from January to December 2008 49,268,826 Fiscal year and other adjustments 5,234,866

Final Equity at 12/31/2008 1,753,063,702

II. Main trends

LIQUIDITY Indicators Units Dec 2008 Dec 2007 Dec 2008-2007

Current ratio Times 1.32 1.55 -0.23 Acid-test ratio Times 1.09 1.12 -0.03 Working capital THCH$ 77,849,521 155,751,662 (77,902,141)

The current ratio was 1.32 as of December 2008 and 1.55 as of December 2007. It decreased basically because of the drop of 27.00% in Current Assets, while Current Liabilities decreased, but in a lesser proportion (14.32%). The Acid-Test Ratio decreased from 1.12 in 2007 to 1.09 in 2008 because Current Assets, net of Inventories, decreased 16.76% while Current Liabilities only fell 14.32%.

INDEBTEDNESS Indicators Units Dec 2008 Dec 2007 Dec 2008-2007

Debt ratio Times 0.32 0.49 -0.18 Short-term debt % 43.58% 38.19% 5.39% Long-term debt % 56.42% 61.81% -5.39% Financial expense coverage(1) Times 1.06 2.27 -1.20

(1) Earnings before taxes, interest, amortization, asset depreciation and extraordinary items were used, divided by interest expenses.

The Debt-Equity Ratio decreased from 0.49% in December 2007 to 0.32% in December 2008. This is the result mainly of a decrease of 24.91% in all Liabilities (Current Liabilities + Long-term Liabilities). Equity plus Minority Interest increased 17.25%. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 157 ANNUAL REPORT

ACTIVITY Indicators Units Dec 2008 Dec 2007 Dec 2008-2007

Total assets MCH$ 2.308.627.395 2.235.072.739 73.554.656 Inventory turnover2 Months 1.33 2.59 -1.26 Turnover of property, plant & equipment Times 167.36 7.71 159.65 Turnover of total assets Times 0.30 0.36 -0.06

2 Calculated as the ratio of inventories to the cost of sale on a monthly basis.

Total Assets increased MCH$73,554,656, comprised of Investments in Related Companies for MCH$304,920,499 that were offset by a decrease in Other Property, Plant and Equipment for MCH$161,344,164 and a decrease in Inventories amounting to MCH$65,438,933.

The Inventory Turnover Ratio decreased from 2.59 times in December 2007 to 1.33 in December 2008. This took place because the decrease in Inventories was 53.39%, which was partially offset by the 9.02% decrease in COGS.

The Annualized Property, Plant and Equipment Ratio increased from 7.71 as of December 2007 to 167.36 in 2008 since Property, Plant and Equipment decreased by 96.04%.

The Annualized Asset Ratio decreased from 0.36 as of December 2007 to 0.30 in 2008 since Annualized Revenues dropped 14.08% and Total Assets increased by 3.29%.

INCOME Income for the fiscal years ending December 31, 2008 and 2007 varied as follows:

INCOME STATEMENT OF INCOME (THCH$) DEc-08 DEc-07 DEc 08-07 %Var. 08-07

Revenues 688,652,579 801,543,944 (112,891,365) -14.08% COGS (515,968,354) (567,110,042) 51,141,688 -9.02% Gross margin 172,684,225 234,433,902 (61,749,677) -26.34% SG&A (159,292,018) (196,390,342) 37,098,324 -18.89% Operating profit (loss) 13,392,207 38,043,560 (24,651,353) -64.80% Profit (loss) on investment in related companies 209,456,862 229,569,631 (20,112,769) -8.76% Net non-operating income and expenses 65,897 11,413,580 (11,347,683) -99.42% Net financial margin (24,049,088) (20,167,364) (3,881,724) 19.25% Amortization of goodwill (749,696) (915,841) 166,145 -18.14% Price-level restatement and exchange differential 3,987,463 (18,296,558) 22,284,021 Non-operating profit (loss) 188,711,438 201,603,448 (12,892,010) -6.39% Income tax (90,503) (3,236,151) 3,145,648 -97.20% Amortization of negative goodwill 0 0 0 Net profit 202,013,142 236,410,857 (34,397,715) -14.55% EBITDAEI (*) 28,175,662 52,731,377 (24,555,715) -46.57% Per-share profit (loss) 84.48 98.90 (14.42) -14.58%

(*) Earnings before interest, taxes, depreciation, amortization and extraordinary items.

The Company earned a profit of MCH$202,013,142 for the fiscal year ending December 31, 2008, determined mainly by the following factors: WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

(a) Gross Margin The gross margin was MCH$172,684,225 and it increased as compared to December 2007, when it was MCH$234,433,902.

(b) Operating Profit L( oss) The operating profit was MCH$13,392,207 as compared to MCH$38,043,560 in December 2007.

(c) Non-operating profit (loss) There was a non-operating profit of MCH$188,711,438, which means a drop equal to MCH$12,892,010, or 6.39%, compared to December 2007. The variation was comprised by the following:

Net Profit on Investments in Related Companies: Profits dropped by MCH$20,112,769 to a net sum of MCH$209,456,862 as of December 2008.

Non-operating Income and Expenses: There was a negative variation of MCH$11,347,683, resulting in a net profit of MCH$65,897 in December 2008.

RETURNS Indicators Units Dec 2008 Dec 2007 Dec 2008-2007 Return on equity % 12.44% 16.06% -3.62% Return on assets % 8.89% 10.88% -1.99% Return on operating assets(3) % 3.09% 7.29% -4.20%

(3) Operating assets = Total Assets – Other Assets

Return on Equity The return on equity dropped from 16.06% in December 2007 to 12.44% in December 2008 because of the decrease of 14.55% in the Net Profit.

Return on Assets The return dropped from 10.88% in December 2007 to 8.89% in December 2008 as the total average assets increased 3.29% and the average Net Profit decreased 14.55%.

Return on Operating Assets This return dropped from 7.29% as of December 2007 to 3.09% in December 2008 because Operating Income decreased 64.80%. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 159 ANNUAL REPORT

III Book Value and Market Value of Assets (in reference to Sections A.4.1.e.2 and 3 of General Rule No. 30)

The following is important in relation to the assets of greatest relevance:

The values of property, plant and equipment are adjusted according to accounting standards of the Securities and Insurance Commission set down in Circulars No. 550 and 566 of 1985, meaning the net adjusted cost price, net of Cumulative Depreciation.

Depreciation is calculated on the adjusted value of the assets according to the remaining years of useful life that each has.

Investments in related companies acquired prior to January 1, 2003 are shown at their proportional equity value (PEV) while new investments are recognized at the fair value pursuant to Circular No. 1697 of the Securities and Insurance Commission and Technical Bulletin No. 72 of the Chilean Accountants Association.

Intangibles are price-level adjusted and amortized according to Technical Bulletin No. 55 of the Chilean Accountants Association.

Assets expressed in a foreign currency are shown at the exchange rate prevailing at the close of the fiscal year.

Investments in financial instruments under resale or repurchase agreements are shown at their purchase price, plus adjustments and interest accruing at the close of each fiscal year.

Intercompany notes and accounts payables are classified by maturity in the short and long term. Transactions are under arm’s length conditions similar to those usually prevailing on the market.

In summary, assets are shown according to generally accepted accounting principles and standards and instructions issued by the Securities and Insurance Commission, as explained in Note 2 of the Financial Statements.

The market price of one share in SACI Falabella was $1,669.2 as of 12/31/2008. This implies an exchange capitalization of MCH$3,991,516,879 for the company that results in a market value/book value ratio of 2.28 when compared to the book value of equity for MCH$1,753,063,702.

The per-share profit of SACI Falabella in the 12-month period through December 2008 was $84.48, resulting in a price-profit ratio of 19.76.

IV Principal Cash Flows

FLUJOS DE EFECTIVO (CASH FLOW MCH$) DEc-08 DEc-07 DEc 08-07 %Var. 08-07 De la Operación 189,998,228 175,103,023 14,895,205 8.51% De financiamiento 190,236,342 (86,961,249) 277,197,591 -318.76% De Inversión (397,390,440) (115,595,444) (281,794,996) 243.78% Inflación sobre efectivo y efectivo equivalente (750,234) (2,823,923) 2,073,689 -73.43% Variación Neta del Efectivo y Efectivo Equivalente (17,906,104) (30,277,593) 12,371,489 -40.86%

There was a net negative cash flow of MCH$17,906,104 in the Company in the period, which breaks down as follows:

Operating activities generated a positive flow of MCH$189,998,228, which is due to a profit of MCH$202,013,142 in the period, less the income not representing cash flow (MCH$192,662,501), plus the net variation of MCH$180,611,867 in assets and liabilities affecting operating flows.

Finance activities had a positive flow of MCH$190,236,342, coming mainly from documented loans from related companies, amounting to MCH$157,840,564.

Investment activities resulted in a negative flow of MCH$397,390,440, due to documented loans to related companies ($451,680,713) and standing investments ($50,232,928), which were offset by the collection of other loans to related companies amounting to MCH$166,634,741. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INDIVIDUAL FINANCIAL STATEMENTS

V Risk Factors

1. Exchange Rate Risk The Chilean peso varies compared to the American dollar and other international currencies. Part of the products offered for sale at our stores are acquired in foreign countries so there is an exposure to an exchange rate fluctuation during the period when those import transactions are pending payment.

The Company has a policy of reducing the overall exposure created by this situation and by the composition of assets and liabilities in order to appropriately balance the costs of exchange rate hedging transactions and the probabilities that it best estimates for the occurrence of those exchange rate fluctuations.

Imported merchandise in transit is a hedge for liabilities acquired in foreign trade transactions. Moreover, the company has acquired forwards to hedge a significant portion of the commitments and its policy is to make this type of hedge through the maturity of such transactions. This hedge is complemented by a cash position in dollars.

The dollar debt is shown in Note 19 and was MCH$1,101,768 at 12/31/2008 and MCH$1,378,983 at 12/31/2007.

In general, the company does not individually earn income or disburse significant expenses in dollars, except as indicated for inventories.

2. Interest Rate Risk Interest rate is not a relevant risk for S.A.C.I. Falabella since it maintains a low level of debt assumed at a variable interest rate.

3. Foreign Investment Risk The exchange rate of 3.453 Argentine pesos per 1 U.S. dollar was used in the conversion of figures for Argentine subsidiaries in these financial statements as of December 31, 2008.

Moreover, at December 31, 2008, assets of subsidiaries in Argentina represented 4.74% (3.57% in 2007) of the consolidated assets of the company. Revenues from Argentina totaled MCH$245,811,761 (MCH$142,332,917 in 2007) as of the same date and they represented 6.60% (4.63% in 2007) of consolidated revenues.

4. General Risks of the Economy Our company, which engages in providing commercial service to its customers and convenient credit, is linked, via aggregate consumption, to the conditions that determine it, both real variables as well as expectations. When demand is restricted, the growth rate of its revenue and profits should drop while in expansions the opposite occurs.

5. Specific Trade Risk The Company does not depend excessively on one particular supplier and its procurement is ample and open to the world. Nor does it have few customers since it services millions in the different socioeconomic strata. The Company merchandises several tens of thousands of different products, so it is not affected by any price cycle. Hence, there is no specific risk other than trade in general and department stores in particular.

6. Asset Risk The buildings, infrastructure, facilities and equipment are amply protected from any operating risk through the pertinent insurance policies. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 161 ANNUAL REPORT

INFORMATION ON SUBSIDIARIES Inversiones Serva Limitada In Thousands of Chilean pesos INVERSIONES SERVA LTDA. is a limited liability company under Act 3918, the Commercial Code and as of December 31, 2008 and 2007 Civil Code. It was split off from Servicios y Administraciones Generales Serva Ltda. by public deed dated March 4, 2008, notarized by Mr. Enrique Morgan Torres of Santiago.

The pro-forma financial statements of Inversiones Serva Ltda. as of December 31, 2007 are provided below to facilitate comparison and analysis of financial information.

Business The company can invest in all types of corporeal or incorporeal chattel or real estate and, in particular, be a shareholder or partner in any type of company in Chile or abroad.

Subscribed and Paid-in Capital The capital of the company was MCH$15,466,246 as of December 31, 2008, 99.00% owned by S.A.C.I. Falabella and 1.00% by Inversiones Parmin S.p.A.

Interest in Assets of S.A.C.I. Falabella 9.43%

Commercial Relationship to Parent Company Its subsidiaries provide support services to the Parent Company.

Company Officers Legal Representative: Mr. Juan Benavides F.

Balance Sheet 2008 2007 December 31 ThCh$ ThCh$ Total assets 996,155,977 597,161,452 Total liabilities 776,278,217 441,978,515 Equity 219,877,760 155,182,937 Fiscal year profit 20,388,381 29,835,876

Statement of Income 2008 2007 December 31 ThCh$ ThCh$ Gross margin 305,929,682 175,013,753 SG&A expenses (262,469,387) (142,619,479) Operating profit (loss) 43,460,295 32,394,274 Non-operating profit (loss) 1,257,780 18,160,775 Fiscal year profit 20,388,381 29,835,876 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INFORMATION ON SUBSIDIARIES

CMR FALABELLA DE COLOMBIA S.A. FALABELLA SUCURSAL URUGUAY S.A.

CMR FALABELLA DE COLOMBIA S.A. was registered in the registry of the Financial Superintendency It was incorporated as a branch of S.A.C.I. Falabella on June 28, 1999 in the Oriental Republic of of Colombia by Resolution SB 1545 dated October 7, 2005. Uruguay.

Business Finance. Business The company engages in setting up and exploiting stores, factories, the purchase and sale, Subscribed and Paid-in Capital distribution, import and export of products in department stores, regular stores and supermarkets The capital of the company was MCH$21,196,114 as of December 31, 2008, 64.993% owned by and any type of property business, whether in Uruguay or abroad. Inversiones Falabella de Colombia S.A., 0.003433% by Inversora Falken S.A., 0.003433% by Tever Corp and 35.0000134% by Organizacion Corona S.A. Subscribed and Paid-in Capital

The capital of the company was MCH$6,325,557 as of December 31, 2008, wholly owned by S.A.C.I. Interest in Assets of S.A.C.I. Falabella Falabella. 0.47%

Commercial Relationship to Parent Company Interest in Assets of S.A.C.I. Falabella None. 0.16%

Company Officers Commercial Relationship to Parent Company Directors: mr. Juan Cuneo Solari It is an extension of the parent company but there are no business relations with it. mr. Hernán Mendez Bages mr. Carlo Solari Donnagio

mr. Francisco Díaz Salazar mr. Rodolfo Prada Serrano Company Officers Chief Executive Officer: mr. Jorge Alberto Villarroel Barrera Chairman: Mr. Cristian Lewin G. Legal Representative: mr. Jorge Alberto Villarroel Barrera Directors: Mr. Alberto Morgan L. Mrs. Martha Cristina Ruiz León Mr. Alejandro González D.

Balance Sheet Balance Sheet 2008 2007 2008 2007 December 31 ThCh$ ThCh$ December 31 ThCh$ ThCh$ Total assets 72,363,598 51,333,406 Total assets 23,031,736 64,201,605 Total liabilities 55,689,230 147,099,688 Total liabilities 19,421,693 63,023,973 Equity 16,674,368 12,907,309 Equity 3,610,043 1,177,632 Fiscal year profit 1,492,967 670,197 Fiscal year profit 155,986 (24,976)

Statement of Income Statement of Income 2008 2007 2008 2007 December 31 ThCh$ ThCh$ December 31 ThCh$ ThCh$ Gross margin 12,957,050 5,964,589 Gross margin - - SG&A expenses (11,144,740) (6,500,786) SG&A expenses (14,924) (27,640) Operating profit (loss) 1,812,310 (536,197) Operating profit (loss) (14,924) (27,640) Non-operating profit (loss) (1,241,463) 1,341,793 Non-operating profit (loss) 170,910 52,616 Fiscal year profit 1,492,967 670,197 Fiscal year profit 155,986 (24,976) WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 163 ANNUAL REPORT

BANCO FALABELLA S.A. DESARROLLOS INMOBILIARIOS S.A.

BANCO FALABELLA S.A. is registered under number 051 in the registry kept by the Banking DESARROLLOS INMOBILIARIOS S.A. is a closed corporation incorporated in Santiago by public deed Commission. dated December 31, 2004, notarized by Mr. Roberto Puga Pino, alternate to Mr. Alberto Mozo Aguilar, regular notary public. Business Banking. Business It buys, sells, subdivides, divides, exploits, leases and generally acquires or conveys any type of, or Subscribed and Paid-in Capital rights to, real estate, administrates the yields thereof and develops any property activity related The capital of the company was MCH$35,286 as of December 31, 2008, 99.9999667% owned by directly or indirectly to the foregoing. The company may form part of other companies of any nature Falabella Inversiones Financieras S.A. and 0.0000333% by Desarrollos Inmobiliarios S.A. whatsoever and conduct any other business agreed by the partners.

Interest in Assets of S.A.C.I. Falabella Subscribed and Paid-in Capital 3.92% The subscribed and paid-in capital of the company was MCH$235,419,652 as of December 31, 2008, 99.99999943% owned by S.A.C.I. Falabella and 0.00000057% by Inversiones Parmin SpA. Commercial Relationship to Parent Company Mainly money desk transactions. Interest in Assets of S.A.C.I. Falabella

20.57% Company Officers

Chairman: Mr. Sergio Cardone S. Commercial Relationship to Parent Company Vice-Chairman: Mr. Carlo Solari D. It performs store lease transactions with the parent company through its subsidiary, Sociedad de Directors: Mr. Cristian Lewin G. Rentas Falabella S.A. Mr. Alex Harasic D.

Mr. Edmundo Hermosilla H. Company Officers Mrs. Paola Cuneo Q. Chairman: Mr. Juan Cuneo S. Mr. Felipe del Río G. Mr. Gonzalo Rojas V. Directors: Mr. Sergio Cardone S. Mr. Julio Fernández T. Mr. Juan Benavides F. Chief Executive Officer: Mr. Rodrigo Jullian P. Chief Executive Officer: Mr. Alejandro Cuevas M.

Balance Sheet Balance Sheet 2008 2007 2008 2007 December 31 ThCh$ ThCh$ December 31 ThCh$ ThCh$ Total assets 1,290,539,388 1,037,490,735 Total assets 811,817,110 692,730,188 Total liabilities 815,701,446 619,194,365 Total liabilities 723,196,050 601,954,237 Equity 474,837,942 418,296,370 Equity 88,621,060 90,775,951 Fiscal year profit 61,121,936 48,293,747 Fiscal year profit 6,969,556 16,436,791

Statement of Income Statement of Income 2008 2007 2008 2007 December 31 ThCh$ ThCh$ December 31 ThCh$ ThCh$ Gross margin 111,709,274 87,719,987 Gross margin 50,631,857 53,635,148 SG&A expenses (17,148,592) (19,875,289) SG&A expenses (39,353,364) (30,578,231) Operating profit (loss) 94,560,682 67,844,698 Operating profit (loss) 11,275,492 23,056,917 Non-operating profit (loss) 1,652,951 2,987,993 Non-operating profit (loss) (3,059,087) (3,224,784) Fiscal year profit 61,121,936 48,293,747 Fiscal year profit 6,969,556 16,436,791 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INFORMATION ON SUBSIDIARIES

HOME TRADING S.A. INVERSIONES FALABELLA LIMITADA

HOME TRADING S.A. is a closed corporation incorporated by public deed dated July 31, 2002, INVERSIONES FALABELLA LTDA. is a limited liability company under Act 3918, the Commercial Code notarized by Mr. Alberto Mozo Aguilar. and Civil Code. It was incorporated by public deed dated May 2, 2008, notarized by Mr. Guillermo Le-Font Campos, notary public of Santiago. Business The pro-forma financial statements of Inversiones Falabella Ltda. as of December 31, 2007 are The search for, registration and commercialization of trademarks and commercial patents, provided below to facilitate comparison and analysis of financial information. investment projects, computer software and, generally, any other creation; and the search for products, merchandise and services for the development of companies engaging in the business of Business home improvement centers. The company may invest in any type of company in furtherance of its Investment in all types of stocks, bonds, debentures, shares or interests in companies and any business provided it is complementary to the company’s business. instrument and/or bearer securities and other revenue-generating bearer securities.

Subscribed and Paid-in Capital Subscribed and Paid-in Capital The capital of the company was MCH$182,826,868 as of December 31, 2008, 96.30060565% The capital of the company was MCH$217,420,461 as of December 31, 2008, 99.998784% owned owned by S.A.C.I. Falabella and 3.69939435% by Inversiones y Prestaciones Venser 6 Limitada. by S.A.C.I. Falabella and 0.001216% by Inversiones Parmin Spa.

Interest in Assets of S.A.C.I. Falabella Interest in Assets of S.A.C.I. Falabella 21.29% 33.80%

Commercial Relationship to Parent Company Commercial Relationship to Parent Company None. None.

Company Officers Company Officers Chairman: Mr. Juan Cuneo S. Legal Representative: Mr. Reinaldo Solari M. Directors: Mr. Juan Benavides F. Mr. Juan Cuneo S. Mr. Sandro Solari D. Mr. Juan Benavides F. Chief Executive Officer: Mr. Sandro Solari D. Mr. Juan Pablo Montero S. Mr. Juan Guillermo Espinosa F. Mr. Alejandro González D.

Balance Sheet Balance Sheet 2008 2007 2008 2007 December 31 ThCh$ ThCh$ December 31 ThCh$ ThCh$ Total assets 857,913,487 816,444,227 Total assets 1,349,566,424 1,431,581,001 Total liabilities 344,484,321 303,546,531 Total liabilities 569,256,198 636,680,779 Equity 513,429,166 512,897,696 Equity 780,310,226 794,900,222 Fiscal year profit 26,322,296 36,246,170 Fiscal year profit 56,365,876 70,987,990

Statement of Income Statement of Income 2008 2007 2008 2007 December 31 ThCh$ ThCh$ December 31 ThCh$ ThCh$ Gross margin 302,383,077 284,025,143 Gross margin 29,820,522 196,607,379

SG&A expenses (245,952,892) (222,771,510) SG&A expenses (34,841,129) Operating profit (loss) 56,430,185 61,253,633 (164,915,164) Operating profit (loss) 132,905,358 161,766,250 Non-operating profit (loss) (19,945,276) (20,394,798) Non-operating profit (loss) (25,367,250) (38,238,034) Fiscal year profit 26,322,296 36,246,170 Fiscal year profit 56,365,876 70,987,990 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 165 ANNUAL REPORT

INVERSIONES PARMIN SPA BANCO FALABELLA PERU S.A.

INVERSIONES PARMIN SpA is a joint stock company incorporated within the purview of Paragraph BANCO FALABELLA PERU S.A. is registered under number 142 in the registry kept by the Banking, Eighth, Title VII, Book II of the Commercial Code. It was incorporated on May 2, 2008 before Mr. Insurance and Health Care Commission of Peru. Guillermo Le-Font Campos, notary public of Santiago. Business Business Banking. Investments in any way in any type of corporeal and incorporeal real estate or chattel; in bearer

securities, bonds, debentures, promissory notes or other commercial and financial instruments Subscribed and Paid-in Capital and exploitation and administration of the same; participation in any type of civil or commercial The capital of the company was MCH$21,196,114 as of December 31, 2008, 98.549270% owned company, whether a general partnership or limited company. The company may be a limited partner or manager in limited companies, stock corporations, companies limited by shares or limited liability by Inversiones y Servicios Falabella Peru S.A., 1.036239% by Mr. Juan Pablo Montero Schepeler and companies, regardless of the business in which they engage. 0.414491% by Inversiones RRPB E.I.R.I.

Subscribed and Paid-in Capital Interest in Assets of S.A.C.I. Falabella The subscribed and paid-in capital of the company was MCH$222,934 as of December 31, 2008, 2.04% wholly owned by S.A.C.I. Falabella. Commercial Relationship to Parent Company Interest in Assets of S.A.C.I. Falabella Mainly money desk transactions. 0.10% Company Officers Commercial Relationship to Parent Company Chairman: Mr. Juan Benavides Feliu None. Vice-Chairman: Mr. Carlo Solari Donaggio Directors: Mr. Juan Xavier Roca Mendenhall Company Officers Mr. Alonso Rey Bustamante Managers: Mr. Reinaldo Solari M. Mr. Cristobal Irarrázabal Philippi Mr. Juan Cuneo S. Mr. Gastón Bottazzini Mr. Juan Benavides F. Mr. Juan Pablo Montero S. Mr. Fernando Martín Zavala Lombardi Mr. Juan Guillermo Espinosa F. Chief Executive Officer: Mr. Rafael Rizo Patrón Basurco Mr. Alejandro Gonzalez D.

Balance Sheet Balance Sheet 2008 2008 2007 December 31 ThCh$ December 31 ThCh$ ThCh$ Total assets 2,507,955 Total assets 262.509.295 183.550.517 Total liabilities 96,646 Total liabilities 214.799.184 147.099.688 Equity 2,411,309 Equity 47.710.111 36.450.829 Fiscal year profit 26,225 Fiscal year profit 16.744.488 14.624.033

Statement of Income Statement of Income 2008 2008 2007 December 31 ThCh$ December 31 ThCh$ ThCh$ Gross margin - Gross margin 58.412.075 39.371.795 SG&A expenses (13,465) SG&A expenses (35.223.267) (22.819.398) Operating profit (loss) (13,465) Operating profit (loss) 23.188.808 16.552.397 Non-operating profit (loss) 37,392 Non-operating profit (loss) 2.285.135 4.221.695 Fiscal year profit 26,225 Fiscal year profit 16.744.488 14.624.033 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 INFORMATION ON AFFILIATES

INFORMATION ON AFFILIATES DIRECT AND INDIRECT SUBSCRIBED AND PAID- FISCAL YEAR SHARE IT REPRESENTS IN BOARD OF DIRECTORS BUSINESS RELATIONSHIP WITH THE CORPORATE NAME AND TYPE OF COMPANY Business GENERAL INFORMATION INTEREST IN CAPITAL Equity PROFIT (LOSS ASSETS OF SACI FALABELLA AND MANAGEMENT PARENT COMPANY

Italmod S.A. Manufacture, fabrication, import and exploitation of any A closed corporation incorporated January 2, 1990, 50% ThCh$ 8,955,885 ThCh$ 9,141,206 ThCh$ 692 0.20% Chairman Juan Cuneo S. Sells products it manufactures to type of clothing item. notarized by the Notary Public Mr. Enrique Morgan Directors Hugo Cuneo S. its upstream affiliate. Torres. Cristián Lewin G. Arturo Strazza F. Ernesto Strazza S. Manager Arturo Strazza F.

Farmacias Ahumada S.A. Manufacture of toiletries, cosmetics, chemicals and An open corporation incorporated November 28, 1997. 20% ThCh$ ThCh$ ThCh$ 731,641 0.65% Chairman José Codner Ch. No relevant transactions with its pharmaceuticals; distribution, import, export and sale On October 15, 1997, the Company was registered 54,429,913 75,337,090 Directors Eduardo Bellinghausen P. upstream affiliate. of similar products from other industries, both in the under No. 629 in the Securities Registry of the Securities Gabriel Berczely A. country and abroad, and the representation of national and Insurance Commission and it is subject to oversight Alexander Fernández M. and foreign firms in these businesses. by that Commission. Jaime Sinay A. Ernesto Labatut S. Pablo Lamarca C. Juan Cuneo S. Juan Benavides F. Manager Marcelo Weisselberger A..

Sodimac Colombia S.A. Sale and merchandising of products and services for A closed corporation incorporated September 2, 1994 49% ThCh$ ThCh$ ThCh$ 10,803,631 1.45% Chairman Francisco Díaz S. No relevant transactions with its construction, decoration, remodeling and furnishing of in the 42nd Notarial Office of the District of Bogotá in 12,370,338 68,294,404 Directors Alvaro Echavarría O. upstream affiliate. the home and complements. Colombia. Pedro Navaz S. Juan Cuneo S. Sandro Solari D. Rodolfo Prada S. Jhon Peláez B. Julio Ayerbe M. Alfredo Moreno Ch. Ricardo Hepp de los R. Manager Carlos Enrique Moreno M.

Inmobiliaria Mall Calama S.A. Purchase, lease and administration of real estate. A closed corporation incorporated April 5, 2001, 25% ThCh$ 3,871,251 ThCh$ 8,665,647 ThCh$ 3,282,982 0.09% Chairman Nicolás Ibáñez S. Leases properties to its upstream notarized by Mr. Samuel Klecky. Directors Lázaro Calderón V. affiliate. Sandro Solari D. Sebastián Rozas H. Eduardo Mizón F. Sergio Hidalgo H. Víctor Ide B. Manager Rodrigo de Diego C.

The complete financial statements of the subsidiaries and affiliates of S.A.C.I. Fallabella are available to the public in the Falabella offices and at the Securities and Insurance Commission. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 167 ANNUAL REPORT

INFORMATION ON AFFILIATES DIRECT AND INDIRECT SUBSCRIBED AND PAID- FISCAL YEAR SHARE IT REPRESENTS IN BOARD OF DIRECTORS BUSINESS RELATIONSHIP WITH THE CORPORATE NAME AND TYPE OF COMPANY Business GENERAL INFORMATION INTEREST IN CAPITAL Equity PROFIT (LOSS ASSETS OF SACI FALABELLA AND MANAGEMENT PARENT COMPANY

Italmod S.A. Manufacture, fabrication, import and exploitation of any A closed corporation incorporated January 2, 1990, 50% ThCh$ 8,955,885 ThCh$ 9,141,206 ThCh$ 692 0.20% Chairman Juan Cuneo S. Sells products it manufactures to type of clothing item. notarized by the Notary Public Mr. Enrique Morgan Directors Hugo Cuneo S. its upstream affiliate. Torres. Cristián Lewin G. Arturo Strazza F. Ernesto Strazza S. Manager Arturo Strazza F.

Farmacias Ahumada S.A. Manufacture of toiletries, cosmetics, chemicals and An open corporation incorporated November 28, 1997. 20% ThCh$ ThCh$ ThCh$ 731,641 0.65% Chairman José Codner Ch. No relevant transactions with its pharmaceuticals; distribution, import, export and sale On October 15, 1997, the Company was registered 54,429,913 75,337,090 Directors Eduardo Bellinghausen P. upstream affiliate. of similar products from other industries, both in the under No. 629 in the Securities Registry of the Securities Gabriel Berczely A. country and abroad, and the representation of national and Insurance Commission and it is subject to oversight Alexander Fernández M. and foreign firms in these businesses. by that Commission. Jaime Sinay A. Ernesto Labatut S. Pablo Lamarca C. Juan Cuneo S. Juan Benavides F. Manager Marcelo Weisselberger A..

Sodimac Colombia S.A. Sale and merchandising of products and services for A closed corporation incorporated September 2, 1994 49% ThCh$ ThCh$ ThCh$ 10,803,631 1.45% Chairman Francisco Díaz S. No relevant transactions with its construction, decoration, remodeling and furnishing of in the 42nd Notarial Office of the District of Bogotá in 12,370,338 68,294,404 Directors Alvaro Echavarría O. upstream affiliate. the home and complements. Colombia. Pedro Navaz S. Juan Cuneo S. Sandro Solari D. Rodolfo Prada S. Jhon Peláez B. Julio Ayerbe M. Alfredo Moreno Ch. Ricardo Hepp de los R. Manager Carlos Enrique Moreno M.

Inmobiliaria Mall Calama S.A. Purchase, lease and administration of real estate. A closed corporation incorporated April 5, 2001, 25% ThCh$ 3,871,251 ThCh$ 8,665,647 ThCh$ 3,282,982 0.09% Chairman Nicolás Ibáñez S. Leases properties to its upstream notarized by Mr. Samuel Klecky. Directors Lázaro Calderón V. affiliate. Sandro Solari D. Sebastián Rozas H. Eduardo Mizón F. Sergio Hidalgo H. Víctor Ide B. Manager Rodrigo de Diego C.

The complete financial statements of the subsidiaries and affiliates of S.A.C.I. Fallabella are available to the public in the Falabella offices and at the Securities and Insurance Commission. WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 IINFORMATION OF the company

principales inmuebles de s.a.c.i. falabella

INMUEBLE DIRECCION CIUDAD USO FOJAS NUMERO AÑO

Linares Calle León Bustos s/n Linares Tienda Sodimac 167 293 2007 La Serena O’Higgins 201 La Serena Superm. Tottus 2.409 2.216 2007 Punta Arenas Avda. Pdte. Eduardo Frei M. s/n Punta Arenas Tienda Sodimac 465 829 2007 Talca Alameda B. O’Higgins Nº1530 Talca Superm. Tottus 12.177 5.433 2006 Puente Alto Avda. Concha y Toro 1477 Santiago Superm. Tottus 3.987 5.800 2005 Tradis Av. Lo Espejo 3200 LT 2, Cerrillos Santiago Centro Distribución 5.927 9.466 2006 Megacenter Rosario Norte 969 Santiago Centro Comercial 5.932 9.474 2006 Bodega Av. Jorge Hirmas 2560 Santiago Bodega Sodimac 5.930 9.469 2006 Rosas Rosas 1657 1663 Santiago Oficinas Centrales 12.199 19.792 2006 Calama Balmaceda 2902 Calama Tienda Falabella 2.915 6.572 2005 Copiapó Colipi 484 E 101 1 er. Subterráneo Copiapó Tienda Falabella 2.748 1.937 2005 Copiapó Colipi 484 E 101 1 er. Piso Copiapó Tienda Falabella 2.753 1.941 2005 Copiapó Colipi 484 LC E 201 2do. Piso Copiapó Tienda Falabella 2.749 1.938 2005 Copiapó Colipi 484 LC E 301 3er. Piso Copiapó Tienda Falabella 2.750 1.939 2005 Copiapó Colipi 484 E 301 P 4 Plaza Real Copiapó Tienda Falabella 2.751 1.940 2005 Valparaíso Independencia 1806 Valparaíso Tienda Falabella 4.439 3.248 2005 Viña del Mar Plaza Sucre 234 AL 250 Viña del Mar Tienda Falabella 3.624 4.734 2005 Rancagua Cuevas Esq. Estado Rancagua Tienda Falabella 8.269 6.998 2005 Curicó Merced 511 Curicó Tienda Falabella 4699vta 2.793 2005 Talca 1 Norte 1453 Talca Tienda Falabella 15.833 6.692 2005 Talca 8 Oriente 1253 Talca Tienda Falabella 15.836 6.695 2005 Concepción Barros Arana 802 Concepción Tienda Falabella 2.478 1.427 2005 Concepción Barros Arana 826 848 Concepción Tienda Falabella 2.478 1.427 2005 Concepción Avda. Gral. Bonilla 2396 al 2528 Concepción Tienda Falabella 2.478 1.428 2005 Temuco Claro Solar 671 Temuco Tienda Falabella 18.974 9.529 2005 Temuco Claro Solar 677 Temuco Tienda Falabella 18.975 9.530 2005 Temuco Vicuña Mackenna 570 Temuco Tienda Falabella 18.974 9.528 2005 Temuco Vicuña Mackenna 590 Temuco Tienda Falabella 18.973 9.572 2005 Temuco Arturo Prat 574 580 Temuco Tienda Falabella 18.972 9.525 2005 Valdivia Picarte 1160 Valdivia Tienda Falabella 1.149 1.483 2005 Osorno Ramirez 840 Piso 1° Osorno Tienda Falabella 3.702 3.206 2005 Osorno Ramirez 840 Piso 2° Osorno Tienda Falabella 3.703 3.207 2005 Lyon Nueva de Lyon 70 L C 1 Santiago Tienda Falabella 3.553 4.286 2006 Lyon Nueva de Lyon 96 BX 330 Santiago Tienda Falabella 5.928 9.468 2006 Ahumada 25 Ahumada 25 35 Santiago Tienda Falabella 5.533 9.257 2006 Ahumada 25 Ahumada 15 LC Santiago Tienda Falabella 5.538 9.264 2006 Ahumada 25 Ahumada 19 L C Santiago Tienda Falabella 5.534 9.259 2006 Ahumada 25 Ahumada 23 L C Santiago Tienda Falabella 5.539 9.266 2006 Ahumada 242 Ahumada 242 L C 246 Santiago Tienda Falabella 12.198 19.791 2006 Ahumada 165 Ahumada 165 Santiago Tienda Falabella 12.198 19.790 2006 Ahumada 366 Ahumada 366 Santiago Tienda Falabella 5.552 9.285 2006 La Reina Jorge Alessandri 1347 Santiago Tienda Sodimac 63.490 69.070 2005 La Florida Americo Vespucio 7310 Santiago Tienda Sodimac 63.490 69.071 2005 Ñuñoa Vicuña Mackenna 1700 Santiago Tienda Sodimac 16.915 17.686 2005 Peñalolen Avda. José Pedro Alessandri 6400 Santiago Tienda Sodimac 86.596 79.185 2004 Viña del Mar Quillota 980 Viña del Mar Terreno Sodimac 7.639 10.049 2002 Renca Panamericana Norte 3092 Santiago Tienda Sodimac 86.597 79.187 2004 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 169 ANNUAL REPORT

REMUNERACION GENERAL PAGOS A DIRECTORES - 2007 ThCh$ R.U.T. Director Dietas Comité Participación Total Año 2007 1.720.069-0 Reinaldo Solari Magnasco 5.021 234.198 239.219 3.066.418-3 Juan Cuneo Solari 5.021 117.099 122.120 5.082.229-K Sergio Cardone Solari 5.021 1.666 117.099 123.786 5.718.666-6 Hernan Buchi Buc 5.021 1.666 117.099 123.786 8.717.000-4 Carlos Heller Solari 5.021 117.099 122.120 7.017.522-3 Juan Carlos Cortés Solari 5.021 117.099 122.120 4.773.832-6 Jose Luis del Río Goudi 5.021 117.099 122.120 6.992.929-K Alfredo Moreno Charme 5.021 1.247 117.099 123.368 7.005.097-8 María Cecilia Karlezi Solari 5.021 117.099 122.120

TOTAL 45.191 4.579 1.170.989 1.220.759

REMUNERACION GENERAL PAGOS A DIRECTORES - 2008 ThCh$ R.U.T. Director Dietas Comité Participación Total Año 2007 1.720.069-0 Reinaldo Solari Magnasco 5.456 - 88.443 93.899 3.066.418-3 Juan Cuneo Solari 5.456 - 44.222 49.677 5.082.229-K Sergio Cardone Solari 5.456 1.812 44.222 51.489 5.718.666-6 Hernan Buchi Buc 5.456 1.369 44.222 51.046 8.717.000-4 Carlos Heller Solari 5.456 - 44.222 49.677 7.017.522-3 Juan Carlos Cortés Solari 5.456 - 44.222 49.677 4.773.832-6 Jose Luis del Río Goudi 5.456 - 44.222 49.677 6.992.929-K Alfredo Moreno Charme 5.456 1.812 44.222 51.489 7.005.097-8 María Cecilia Karlezi Solari 5.456 - 44.222 49.677

TOTAL 49.101 4.992 442.217 496.310

REMUNERACION pagada a directores y administradOres en filiales año 2008-2007 ThCh$ 2007 2006 RUT DIRECTORES DINALSA MALLs sODIMAC CMR BANCO TOTAL TOTAL*

3.066.418-3 Juan Cuneo Solari 22.139 5.462 4.515 32.115 34.565 5.082.229-K Sergio Cardone Solari 22.139 4.431 26.570 29.166 8.717.000-4 Carlos Heller Solari 5.462 793 6.254 8.102 7.017.522-3 Juan Carlos Cortés Solari 4.091 5.462 4.896 14.449 11.056 4.773.832-6 Jose Luis del Río Goudi 938 5.462 6.400 4.921 6.992.929-K Alfredo Moreno Charme 4.530 18.571 5.462 3.805 32.368 22.962 7.005.097-8 María Cecilia Karlezi Solari 4.999 5.462 10.461 11.314

TOTALES 14.558 62.849 32.769 14.009 4.431 128.616 122.085

*Monto en miles de pesos de 2007 ajustado por corrección monetaria de 2008. (CM= 8,9%) WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 IINFORMATION OF the company

TRANSACCIONES DE ACCIONES POR PARTES RELACIONADAS

Vendedor / Relacionado Fecha de la transacción Número de Acciones Precio Unitario Monto Día.Mes.Año Transadas Transacción ($) Total (ThCh$)

LEÓN SCHLEYER ANDRÉS / EJECUTIVO 10/04/08 33.333 - ARRAU GARCÍA-HUIDOBRO MIGUEL / EJECUTIVO 11/04/08 40.000 - RIOS REYES LUIS FELIPE / EJECUTIVO 16/04/08 26.666 - ANATIBIA LEIVA MARCO / EJECUTIVO 17/04/08 26.666 - HERMOSILLA ESCOBAR JUAN JORGE / EJECUTIVO 18/04/08 40.000 - TORRES LARRAÍN FRANCISCO / EJECUTIVO 21/04/08 46.666 - BARREIRO FITZGERALD PATRICIA ESTHER / EJECUTIVO 21/04/08 33.333 - SILVA PEREZ PATRICIO IGNACIO / EJECUTIVO 21/04/08 33.333 - SOLARI DONAGGIO SANDRO / EJECUTIVO 22/04/08 72.000 - FERNANDINO PAGUEGUY MARCELO JUAN / EJECUTIVO 22/04/08 40.000 - SOLARI ALVAREZ AGUSTÍN ALBERTO / EJECUTIVO 24/04/08 56.000 - REYES CASTRO MANUEL / EJECUTIVO 28/04/08 40.000 - GUNDERMANN WYLIE ENRIQUE ARMIN / EJECUTIVO 28/04/08 40.000 - SOMOZA GARCIA GONZALO HERNAN / EJECUTIVO 28/04/08 53.333 - COELLO LIZANA AUGUSTO / EJECUTIVO 02/05/08 66.666 2.480,40 165.358.346 VALLAURI FLORES FRANCISCO / EJECUTIVO 05/05/08 40.000 2.480,40 99.216.000 PRIETO MENDEZ MACARENA / EJECUTIVO 22/05/08 33.333 - ZIMERMAN HELLER RICARDO EDMUNDO / EJECUTIVO 28/05/08 12.000 2.620,00 31.440.000 JULLLIAN POPE RODRIGO / EJECUTIVO 29/05/08 33.333 2.625,20 87.505.792 ZIMERMAN HELLER RICARDO EDMUNDO / EJECUTIVO 30/05/08 12.000 2.645,00 31.740.000 ZIMERMAN HELLER RICARDO EDMUNDO / EJECUTIVO 03/06/08 9.333 2.556,30 23.857.948 NAZAL AHUILE SORAYA VIVIANNE / EJECUTIVO 04/06/08 33.333 2.529,50 84.315.824 CUNEO SOLARI HUGO / EJECUTIVO 12/06/08 78.865 2.530,00 199.528.450 GARCIA DANS OSVALO ROBERTO / EJECUTIVO 19/06/08 33.333 2.408,00 80.265.864 GARNHAM MEZZANO MARIA ALICIA / CONYUGE 14/07/08 31.250 1.990,00 62.187.500 LAFRENTZ HEINSEN GERMANA / EJECUTIVO 30/07/08 33.333 2.208,70 73.622.597 SWINBURN LARRAIN JUAN ENRIQUE / EJECUTIVO 17/12/08 37.564 553,00 20.772.892 IMPORTADORA Y COMERCIALIZADORA AMALFI LTDA. / ACCIONISTA MAYORITARIO 23/12/08 62.000 - RAPALLO SA /ACCIONISTA MAYORITARIO 23/12/08 179.000 -

COMPRADOR / Relacionado Fecha de la transacción Número de Acciones Precio Unitario Monto Día.Mes.Año Transadas Transacción ($) Total (ThCh$)

LEÓN SCHLEYER ANDRÉS / EJECUTIVO 10/04/08 33.333 1.497,79 49.925.834 ARRAU GARCÍA-HUIDOBRO MIGUEL / EJECUTIVO 11/04/08 40.000 1.498,19 59.927.600 RIOS REYES LUIS FELIPE / EJECUTIVO 16/04/08 26.666 1.500,18 40.003.800 ANATIBIA LEIVA MARCO / EJECUTIVO 17/04/08 26.666 1.500,58 40.014.466 HERMOSILLA ESCOBAR JUAN JORGE / EJECUTIVO 18/04/08 40.000 1.500,98 60.039.200 TORRES LARRAÍN FRANCISCO / EJECUTIVO 21/04/08 46.666 1.502,17 70.100.265 BARREIRO FITZGERALD PATRICIA ESTHER / EJECUTIVO 21/04/08 33.333 1.502,17 50.071.833 SILVA PEREZ PATRICIO IGNACIO / EJECUTIVO 21/04/08 33.333 1.502,17 50.071.833 SOLARI DONAGGIO SANDRO / EJECUTIVO 22/04/08 72.000 1.502,57 108.185.040 FERNANDINO PAGUEGUY MARCELO JUAN / EJECUTIVO 22/04/08 40.000 1.502,57 60.102.800 SOLARI ALVAREZ AGUSTÍN ALBERTO / EJECUTIVO 24/04/08 56.000 1.503,37 84.188.720 REYES CASTRO MANUEL / EJECUTIVO 28/04/08 40.000 1.504,97 60.198.800 GUNDERMANN WYLIE ENRIQUE ARMIN / EJECUTIVO 28/04/08 40.000 1.504,97 60.198.800 SOMOZA GARCIA GONZALO HERNAN / EJECUTIVO 28/04/08 53.333 1.504,97 80.264.565 COELLO LIZANA AUGUSTO / EJECUTIVO 02/05/08 66.666 1.506,57 100.436.996 VALLAURI FLORES FRANCISCO / EJECUTIVO 05/05/08 40.000 1.507,77 60.310.800 PRIETO MENDEZ MACARENA / EJECUTIVO 22/05/08 33.333 1.511,90 50.396.163 ZIMERMAN HELLER RICARDO EDMUNDO / EJECUTIVO 28/05/08 12.000 1.513,07 18.156.840 JULLLIAN POPE RODRIGO / EJECUTIVO 29/05/08 33.333 1.513,26 50.441.496 ZIMERMAN HELLER RICARDO EDMUNDO / EJECUTIVO 30/05/08 12.000 1.513,46 18.161.520 ZIMERMAN HELLER RICARDO EDMUNDO / EJECUTIVO 03/06/08 9.333 1.514,24 14.132.402 NAZAL AHUILE SORAYA VIVIANNE / EJECUTIVO 04/06/08 33.333 1.514,43 50.480.495 GARCIA DANS OSVALO ROBERTO / EJECUTIVO 19/06/08 33.333 1.521,45 50.714.493 REYES CASTRO MANUEL / EJECUTIVO 04/07/08 38.778 2.190,00 84.923.820 LAFRENTZ HEINSEN GERMANA / EJECUTIVO 30/07/08 33.333 1.549,14 51.637.484 INV. SODEIA CUATRO LTDA. / ACCIONISTA MAYORITARIO 30/12/08 241.000 1.656,92 399.317.720 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 171 ANNUAL REPORT

ESTADISTICAS DE ACCIONES FALABELLA

N° Acciones Transadas Monto Total $ Precio Promedio $

Primer Trimestre 2006 39.932.687 58.384.710.699 1.462 Segundo Trimestre 2006 50.346.723 81.178.841.336 1.612 Tercer Trimestre 2006 49.014.551 78.225.689.347 1.596 Cuarto Trimestre 2006 56.455.922 100.364.489.893 1.778

Primer Trimestre 2007 68.881.859 154.388.686.538 2.241 Segundo Trimestre 2007 98.016.059 257.305.794.111 2.625 Tercer Trimestre 2007 64.263.728 163.412.985.788 2.543 Cuarto Trimestre 2007 84.063.008 224.785.572.371 2.674

Primer Trimestre 2008 84.919.674 202.514.090.871 2.385 Segundo Trimestre 2008 57.675.569 143.389.631.211 2.486 Tercer Trimestre 2008 48.027.861 96.122.703.478 2.001 Cuarto Trimestre 2008 52.540.111 87.756.181.746 1.670

WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 IINFORMATION OF the company

Mall Antofagasta SUPERMERCADOS SAN FRANCISCO DIRECCIONES Balmaceda # 2355/ Antofagasta (55) 462200 Talagante CHILE Calama Eyzaguirre 715,Talagante, (2) 8152209 Balmaceda # 2902/ Calama (55) 645500 FALABELLA El Monte SANTIAGO Copiapó Los Libertadores 316,El Monte, (2) 8181107 O´higgins # 739 / Copiapó (52) 354670 Falabella CD San Bernardo Estación Rosas # 1665 / Santiago Centro (2) 3802000 La Serena Arturo Prat 117, San Bernardo, (2) 8562000 Alberto Solari # 1400/ La Serena (51) 474700 Falabella Centro Rengo, Condell 100,Rengo, (72) 686070 Ahumada # 312/ 2° piso / Santiago Centro (2) 3878520 Valparaíso Independencia # 1806 / Valparaíso (32-2) 354740 Peñaflor Plaza Vespucio Alcalde Luis Araya Cereceda 1047, Peñaflor, (2) 8128575 Av.Vicuña Mackenna # 7110/ La Florida (2) 3803200 Viña Sucre # 250 / Viña del Mar (32-2) 384480 Melipilla Alto las Condes Serrano 395, Melipilla, (2) 8321001 Av. Kennedy # 9001/ Las Condes (2) 3803000 Mall La Calera Prolongación J.J.Perez # 12010, local 1201/ Talagante Cordillera Plaza Tobalaba La Calera (33) 334000 Caletera Los Aromos 0441,Talagante, (2) 4512482 Av.Camilo Henriquez # 3296/ Puente Alto (2) 3802800 Quilpué Plaza Norte Av. Portales # 802/ Quilpué (32-2) 264950 HIPERMERCADOS TOTTUS Av. Américo Vespucio # 1737/ Huechuraba (2) 3802500 Rancagua Puente Alto Parque Arauco Sargento Cuevas # 405 / Rancagua (72) 744800 Av. Concha y Toro 1477, Puente Alto, (2) 3878451 Av. Kennedy # 5413/ Las Condes (2) 3803400 San Fernando Nataniel Plaza Lyon Chillán # 744 / San Fernando (72) 744150 Nataniel Cox 620, Santiago Centro, (2) 2437502 Nueva de Lyon # 064/ Providencia (2) 3803600 Talca La Calera Plaza Oeste 1 Norte # 1485 / Talca (71) 205826 Av. Américo Vespucio # 1501/ Cerrillos (2) 3803800 Prolongación J.J.Pérez 12010, La Calera, (33)335060 Curicó Antofagasta Plaza Puente Peña # 615/ Curicó ( 75) 744400 Puente # 530/ Santiago Centro (2) 3862200 Balmaceda 2355, Antofagasta, 55) 645550 Chillán La Dehesa Antofagasta II El Roble # 770 (42) 205848 La Dehesa # 1445/ La Dehesa (2) 5892200 Condell 2639, Antofagasta, (55) 463389 Concepción Tradis Fontova Barros Arana # 802 / Concepción (41) 625300 Av. Lo Espejo # 3200/ Cerrillos (2) 3802300 Pedro Fontova 5810, Conchalí, (2) 3878118 Plaza El Trébol Melipilla Plaza Oeste Jorge Alessandri # 31177 / Concepción (41) 634000 Vargas # 457/ Melipilla (2) 5878100 Av.A.Vespucio 1501, Cerrillos (2) 3858761 CD Palomares Apumanque La Florida Av. Gral. Bonilla # 2484 / Concepción (41) 405600 Apumanque local 603 y 701/ Las Condes (2) 3858730 Américo Vespucio 7310, La Florida, (2) 5929700 Los Angeles Manquehue Megacenter Valdivia # 472 / Los Angeles (43) 405700 Manquehue 326 Las Condes / Santiago (2) 8262200 Kennedy 5601, Las Condes, (2) 5929720 Temuco Estación Central Colina Arturo Prat # 570 / Temuco (45) 954880 Av. Lib.Bernardo O’Higgins 3470 / Santiago (2) Av Concepción 47, Colina (2) 5929755 5912200 Pucón Av. Bernardo O´higgins # 112 / Pucón (45) 554200 Puente Alto II San Bernardo Eyzaguirre 105, Puente Alto, (2) 3858754 Av. Jorge Alessandri N° 20040 San Bernardo (2) 3982200 Mall Valdivia Arauco # 561 Local 2775 / Valdivia (63) 263050 San Antonio Barros Luco 1399, San Antonio, (35) 233445 FALABELLA Osorno Regiones Eleuterio Ramirez # 840 / Osorno (64) 454500 Buin San Martin 174, Buin (2) 8212410 Puerto Montt Arica Juan Soler Manfredini # 101 / Puerto Montt (65) San Bernardo Plaza 21 de Mayo # 393 / Arica (58) 252616 324250 B.O’Higgins 528, San Bernardo, (2) 8592009

Iquique Punta Arenas Tottus Alameda Héroes de la Concepción # 2555/ Iquique (57) 394900 Av. Frei Montalva # 01110 / Punta Arenas (61) 208465 Av. Bdo. Ohiggins 3470, Estación Central , (2) 5929775 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 173 ANNUAL REPORT

Tottus El Bosque HC San Bernardo Hc Punta Arenas Gran Avenida N° 10375, El Bosque, (2) 3878400 San José de Nos N° 69 San Bernardo Avda. Pdte. Eduardo Frei M. Nº 01400 Santiago (2) 7381000 Punta Arenas ( 61) 213043 Tottus San Fernando Carampagne N° 681, San Fernando, (72) 3872400 Hc El Belloto SODIMAC Freire Nº2411, Quilpué ( 32) 2928035 REGIONES SODIMAC Co Rancagua SANTIAGO Hc Angol Viña del Mar Nº330, Rancagua ( 72) 241147 Av. Bdo O´Higgins 1744 , Angol ( 45) 200700 Hc San Miguel Hc Rancagua Gran Avda. José Miguel Carrera #5514, Hc Antofagasta Av. Albert Einstein Nº297, Rancagua ( 72) 216199 Santiago (2) 7381000 Balmaceda # 2355, Interior Recinto Antofagasta ( 55) 251630 Co Reñaca Alto Av. Las Maravillas 60, Reñaca ( 32) 2874001 Co Cantagallo, Av. Las Condes Nº12422, Santiago (2) 2172886 Co Antofagasta Av. Antonio Rendic Nº6852,Antofagasta ( 55) 238788 Hc San Felipe Tocornal #2810, San Felipe ( 34) 510124 Co Ñuñoa Hc Arica Vicuña Mackenna Nº680,Santiago (2) 6351005 Hc Talca Av. Santa María 2981, Arica ( 58) 218578 Av. Circunvalación, 2 Norte #3344,Talca ( 71) 207000 Hc Ñuñoa Av. Américo Vespucio Sur Nº925,Santiago (2) 7381000 Hc Calama Co Talcahuano Balmaceda #3398, Calama ( 55) 367600 Colón Nº1891,Talcahuano ( 41) 2546105 Hc Las Condes Av. Las Condes Nº11049, Santiago (2) 7381000 Co Castro Hc Temuco Caupolican Av. B. O’higgins Nº681, Castro ( 65) 635114 Caupolicán Nº1151, Temuco ( 45) 211442 Hc La Florida Vicuña Mackenna Oriente Nº6331 Hc Chillán Hc Temuco Cautín Santiago (2) 7381000 Av. Ecuador Nº 599, Chillán ( 42) 434900 Caupolican Nº 0457, Temuco ( 45) 207000

Co Maipu Hc Concepción Hc Valdivia Av. Pajaritos Nº2418, Santiago (2) 5312411 Los Carrera Nº1175, Concepción ( 41) 2225923 Av. Picarte #3349,Valdivia ( 63) 263000

Hc Nueva La Florida Hc Mall Plaza Concepción Co Vallenar Av.José Pedro Alessandri #6402,Santiago (2) 7381000 Av. Pdte. Jorge Alessandri 3177,Concepción ( 41) 2638000 Merced #501, Vallenar ( 51) 611898 Hc El Trebol Hc Huechuraba Co Valparaíso Autopista Concep-Talcahuano 9200 Yungay Nº2516, Valparaíso ( 32) 2221215 Av. Americo Vespucio Nº 1737, Santiago (2) 7381000 Concepción ( 41) 2404500 HC Villarrica Co La Florida Hc Copiapó Saturnino Epulef Nº 1580, Villarrica ( 45) 296000 Av. Vicuña Mackenna Nº9101, Santiago (2) 2263800 Panamericana Sur 140, Copiapó ( 52) 212419 Co Viña del Mar Hc Ñuble Hc Coquimbo Limache Nº3119, Viña del Mar ( 32) 2671537 Av. Vicuña Mackenna Nº 1700,Santiago (2) 7381000 Ruta 5 Norte 849, Coquimbo ( 51) 558 500 Hc Viña del Mar Hc La Reina Hc Coyhaique 15 Norte Nº961, Viña del Mar ( 32) 2684066 Av. Pdte. Jorge Alessandri 1347, Santiago (2) 7381000 Av. Ogana 869, Coyhaique ( 67) 231576

Hc Puente Alto Hc Curico IMPERIAL Av. Concha y Toro Nº1315, Santiago (2) 7381000 Av. Carlos Condell 1192 ,Curicó ( 75) 310271 Santa Rosa Hc Parque Arauco Hc Iquique Santa Rosa 7876 - 7850, La Granja (2) 3997000 Av. Pdte. Kennedy 5601,Santiago (2) 7381000 Héroes de la Concepción nº 2311,Iquique ( 57) 480707 Mapocho Mapocho 5906,Quinta Normal (2) 3997130 Co Huechuraba Hc Calera Pedro Fontova 5810, Santiago (2) 7381000 Prolongación JJ Pérez # 12.010 La Calera Maipú La Calera ( 33) 333500 Hc Maipú Alberto Llona 1153, Maipu (2) 3997110 Av. Pajaritos Nº4444, Santiago (2) 7381000 Hc La Serena Vespucio Av. Fco. de Aguirre Nº02, La Serena ( 51) 204600 Hc Plaza Vespucio Av. Américo Vespucio 1030, Peñalolén (2) 3997120 Americo Vespucio 7310, Santiago (2) 7381000 Hc Linares Florida Av. León Bustos 0376, Linares ( 73) 561500 Av. Vicuña Mackenna 7901, La Florida (2) 3997190 Hc Plaza Oeste Americo Vespucio 1501, Santiago (2) 7381000 Hc Los Angeles Valparaíso Av. Alemania N° 850, Los Angeles ( 43) 452600 Av. Independencia 3033, Valparaíso ( 32) 230443 HC Estación Central San Francisco de Borja N° 402, Santiago (2) 7381000 Hc Osorno Concepción René Soriano Nº2619, Osorno ( 64) 330200 Tucapel 1259, Concepción ( 41) 2291000 HC El Bosque Gran Avda. José Miguel Carrera # 10375 Hc Puerto Montt Huechuraba Santiago (2) 7381000 Av. Presidente Ibañez Nº 650, Puerto Montt ( 65) 352500 Av. Americo Vespucio 1399, Santiago (2) 3997000 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 IINFORMATION OF the company

MALL PLAZA Atocongo Canta Callao Av. Circunvalación N° 1803 Av. Canta Callao S/N Esquina Av. Bertello , Vespucio San Juan de Miraflores (51 1) 411 2825 Callao (51 044) 419677 Vicuña Mackena N° 7110/ La Florida (2) 5857400 Los Jardines Oeste Av. Americo Vespucio N° 1501/ Cerrillos (2) 5857600 FALABELLA Av. America Norte N° 1245 Los Jardines de la Libertad Provincias Trujillo (51 044) 599700 Trébol Avenida Jorge Alessandri 3177 /Talcahuano (2) 2906600 Trujillo Bellavista Jr. Pizarro Nº748 Trujillo (51 044) 599 500 Av. Mrcal Oscar R. Benavides N° 3866 Urb. Tobalaba El Aguila , Callo (51-044) 419200 Camilo Henriquez N° 3692/Puente Alto (2) 5857700 Trujillo Mall Av. Mansiche S/N Caserio Cortijo Trujillo (51 044) 481 030 La Serena Ica Av. Alberto Solari N° 1400 (56-51) 472000 Chiclayo Express Minka,Cal. N. Rivera de Viejo N° 1105 Urb. Calle San José 563-567 Centro Chiclayo (51 074) 599 500 La Moderna Ica Ica (51-056) 599700 Los Angeles Valdivia N° 440 Los Angeles (56-43) 451000 Piura Chincha Esq. r. Arequipa Nº 802 y Huancavelica Nº551 Cal. Leopoldo Carrillo N° 0 Ica Chincha Norte Piura (51 073) 599 500 Chincha Alta (051-1) 6110400 Av. Americo Vespucio N° 1737 Huechuraba (2) 5857800 Arequipa Antofagasta Av. Ejército Nº793 – Cayma Arequipa (51 054) 599 500 Balmaceda 2355 Antofagasta (56-55) 533000 TOTTUS Cajamarca Alameda Jr. Sor Manuela Gil Nº 151 Urb. Antequera Av. Bernardo O’Higgins N° 3470 San Carlos Cajamarca (51 076) 599 500 Calle Antequera Nro. 777 of. 401 - San Isidro 513-9400 Estación Central (2) 5857300 Ica Megaplaza Sur Calle Lima N° 429 - 433 - 411 Alfredo Mendiola Nro. 3698 - Independencia - Av. Presidente Jorge Alessandri 20040 Ica Cercado (51 056) 599 500 Centro Comercial Mega Plaza 511-7800 San Bernardo (2) 7702700

SODIMAC Begonias Av.Las Begonias 785 Urb. Jardín - San Isidro San Miguel 513-7260 PERÚ Avenida La Marina 2355, Urb. Maranga 1era Etapa (Ancla 1), San Miguel, Lima (51 1) 2119400 La Marina Av. La Marina # 2355 Urbanización Maranga 1era. Mega Plaza FALABELLA Etapa San Miguel - Ancla 2 411-2830 LIMA Avenida Industrial 3515 Independencia, Lima (51 1) 3153200 Atocongo San Isidro Av. Paseo e la República 3220, San Isidro (51 1) 211 Atocongo Av. Circunvalación 1803 - 6100 Avenida Circunvalación 1803 San Juan de Miraflores 217-2230 San Juan de Miraflores, Lima (51 1) 2117600 Jockey Plaza Chorrillos Av. Javier Prado Este Nº 4200 Javier Prado Av. Defensores del Morro 1350 319-9630 Jockey Plaza Shopping Center. (51 1) 313 4040 Avenida Javier Prado Este 1059 La Victoria Lima (51 1) 4192000 Trujillo Lima Centro Av. Mansiche s/n. Caserío el Cortijo (51 044) 599-800 Jr. de La Unión Nº 517 - Jr. Ucayali 132 - 146 Asia Lima Cercado (51 1) 311 7070 Centro Comercial “Boulevard Sur Plaza” a la altura del kilómetro 97.5 de la carretera Panamericana Sur Ex Fundo Chiclayo San Miguel La Isla – distrito de Asia., Lima (51 1) 2112636 Av. Victor Raul Haya de la Torre # 150 - 250 Urb. San Av. La Marina Nº 2100 – Urb. Pando (51 1) 411 2800 Eduardo - Chiclayo Chiclayo (51 074) 599-800 Miraflores Calle Victor Raúl Haya de la Torre 150, Urb. Federico Av Arequipa 5280 Miraflores (51 1) 213 6330 Villareal, Lambayeque, Chiclayo (51 074) 599700 Quilca Av. Lima 4208 Urb. Bocanegra - Callao 213-2100 Lima La Merced Ica Calle Nicolás de Rivera El Viejo 1105, Jr. de La Unión Nº 630 Lima Cercado (51 1) 311 7070 Saenz Peña Urb. La Moderna, Ica (51 056) 616000 Av. Saenz Peña 471 /Callao (51 1) 215 8500 Mega Plaza Av. Industrial 3515 - 3517 Int A09; Trujillo Independencia (51 1) 511 2300 Avenida Mansiche s/n, La Libertad Canta Callao Trujillo (51 044) 599700 Carretera Canta Callao 378 - Callao (51 1) 613 8585 Bellavista Av. Mariscal Oscar R. Benavides N° 3866 Centro de Lima Crillón Bellavista- Callao (51 1) 411 2818 Av. Tacna N° 640 , Lima (51-219) 2195900 Av. Tacna 655 - Lima (51 1) 619 7272 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 S.A.C.I. FALABELLA 175 ANNUAL REPORT

La Polvora SODIMAC Norte Jr. Ancash - El Agustino (51 1) 613 8590 Autopista Norte 175 - 50, Bogotá (57 1) 6017000 Sodimac San Martín Puente Piedra Av. San Martín 421 - San Martín (54 11) 4959 0000 Avenida 68 Sur Av. Puente Piedra Sur 322 - Puente Piedra (51 1) 619 Avenida 68 No. 37 - 37 Sur, Bogotá (57 1) 7709090 7280 Sodimac Malvinas Argentinas Ruta 8 y Ruta 202 (Arturo Llia 3770) Américas Los Jardines Los Polvorines (54 11) 4667 9100 Carrera 44 No. 15 - 01, Bogotá (57 1) 4056666 Av. América Norte 1245 - Urb. Los Jardines / Trujillo (51 44) 599 801 Sodimac San Justo Av. Don Bosco 2680 San Justo (54 11) 4696 6990 Suba Bellavista Avenida Carrera 104 No. 148-07, Bogotá (57 1) Av. Mariscal Oscar R. Benavides N° 3866 Urb. El Aguila, Sodimac Villa Tesei 6621230 Bellavista - Callao (51 1) 613 7676 Av. Gobernador Vergara 1910 - Hurlingham (54 11) 4489 8700 Soacha Ica Minka Carrera 7 No. 32 - 35 Local 177, Bogotá (57 1) Calle Chiclayo 147 Cercado de Ica (51 56) 599 800 7306506

Pachacutec COLOMBIA Barranquilla Av. Pachacutec 6321 - Tablada de Lurín - Carrera 53 No. 99 - 160, Barranquilla (57 055) Villa María del Triunfo (51 1) 619 7285 FALABELLA 3670099

Santa fe Cali Norte AVENTURA PLAZA Calle 185 N° 45 – 03 Local 1-149, Avenida 6A No. 35 - 00, Barrio Santa Mónica Bogotá. (571) 742 04 04 Aventura Plaza Trujillo Cali (57 052) 6876000 Av. America Oeste N° 750 Urb. El Ingenio/ Suba Trujillo 044 604600 Calle 146 A N° 106-20, entrada II, Cali Sur Bogotá. (571) 594 02 10 Simon Bolivar Carrera 100 No. 16 - 251 Aventura Plaza Bellavista Cali (57 052) 6858533 Av. Oscar Benevides N° 3800, Bellavista/Callao San Diego 6276211 Carrera 43 N° 36-04, Cartagena Centro Comercial San Diego, Avenida El Lago con calle 29 B Medellín. (574) 356 91 80 Cartagena (57 055) 6723251 ARGENTINA Hayuelos Ibague Calle 20 Nº 82-52 (57 1) 419 22 22 FALABELLA Carrera 5 No. 83 - 100 El Jardin Ibagué (57 058) 2708236 Unicentro Bogotá Unicenter Avenida 15 N° 123-30 Local 1-13 (57 1) 213 41 11 Martínez 1640, Buenos Aires (54 11) 4717 1477 Medellin Los Industriales Galerías Bogotá Avenida Los Industriales No. 14 - 135 Florida Calle 53 N° 25-35 (57 1) 600 22 33 Medellín (57 054) 3197777 Florida 202 – 343 - 662, Buenos Aires. (54 11) 5950 5000 Unicentro Cali Medellin San Juan Calle 5 Cruce Paso Ancho - San Juan Calle 44 # 65-100, Medellín (57 054) Alto Avellaneda Centro Comercial Unicentro Loc. 209 (57 2) 339 65 55 4936000 Güemes N° 897 (1873) Avellaneda / Provincia de Buenos Aires (54-11) 4354-9100 Chipichape Cali Pereira Calle 48 N N° 6N-35 Local 406 (57 2) 659 22 49 Rosario Avenida Sur No. 46 - 06, Pereira (57 056) 3138300 Córdoba 1101, Rosario (54 341) 420 3500 Outlet Bima Centro Comercial Bima Autopista Norte Bello Local 4-113 (57 1) 676 00 07 San juan Diagonal 51 Nº 34-16, Medellín (57 054) 4547400 Tucumán 163 Sur, San Juan (54 264) 420 2454 SODIMAC Molinos Medellín Mendoza Calle 30 A Nº 82 A - 26 Ctro. Comercial Los Molinos Mendoza Plaza Shopping, Av. Acceso Este Lateral Norte El Dorado Local 1131, Medellín (57 054) 3695520 3280, Mendoza (54 261) 421 0870 Calle 50 No. 82 - 55, Bogotá (57 1) 4578100 Cúcuta Córdoba Calle 80 Avenida Diagonal Santander Nº 11-200 Nuevo Centro Shopping, Duarte Quiroz 1400, Córdoba Avenida 68 No. 80 - 77, Bogotá (57 1) 4375250 (54 351) 488 8800 Cúcuta (57 054) 5754848 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 DESING INTERFAZ DISEÑO WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3 WorldReginfo - d4f693d4-7853-4f26-9005-3e49cf4926c3