ABC MANUFACTURING COMPANY

(A Wholly Owned Subsidiary of XYZ Holdings Corporation)
BALANCE SHEETS
DECEMBER 31, 2004 AND 2003

2004

2003

A S S E T S
CURRENT ASSETS
Cash and cash equivalents (Notes 4, 9 and 13)
Marketable equity securities - net (Notes 5, 9 and 18)
Trade and other receivables - net (Notes 6 and 20)
Receivable from a finance lease (Note 23)
Inventories - net (Notes 7, 13 and 20)
Prepayments (Note 8)
Other current assets (Note 12)

P

Total Current Assets
NON-CURRENT ASSETS
Investments in subsidiaries and associate (Note 9)
Interest in joint venture and other long-term investments (Notes 4, 5 and 9)
Receivable from a finance lease (Note 23)
Other receivables - net (Notes 6 and 20)
Property, plant and equipment - net (Notes 3, 10, 13 and 23)
Intangible assets - net (Note 11)
Deferred tax assets (Notes 3 and 19)
Other non-current assets (Note 12)
Total Non-current Assets

TOTAL ASSETS

21,012,102
6,344,082
20,761,621
943,333
60,150,316
8,415,315
2,745,500

P

22,647,248
5,587,082
27,789,760
74,170,968
10,147,031
8,919,455

120,372,269

149,261,544

179,863,915
78,354,977
4,716,667
4,325,321
83,462,132
2,050,000
12,537,494
30,547,028

178,201,394
75,955,147
5,998,512
80,331,153
3,900,000
10,584,259
30,674,685

395,857,534

385,645,150

P

516,229,803

P

534,906,694

P

16,652,700
57,984,652
4,210,321
14,012,101

P

19,339,333
56,922,913
1,543,182
15,008,012

LIABILITIES AND EQUITY
CURRENT LIABILITIES
Interest-bearing loans and borrowings (Notes 4, 7, 10, 13 and 23)
Trade and other payables (Notes 14 and 20)
Income tax payable
Provisions (Notes 15, 17 and 18)
Total Current Liabilities
NON-CURRENT LIABILITIES
Interest-bearing loans and borrowings (Notes 4, 7, 10, 13 and 23)
Due to related parties (Note 20)
Provisions (Notes 15, 17 and 18)
Other non-current liabilities
Total Non-current Liabilities
Total Liabilities
EQUITY
Capital stock (Note 21)
Additional paid-in capital
Treasury shares, at cost
Net unrealized loss on non-current
marketable equity securities (Notes 5 and 9)
Retained earnings (Notes 3 and 21)

(
(

92,813,440

55,000,000
175,461,521
2,150,120
577,043

42,000,000
215,945,513
2,064,500
1,452,333

233,188,684

261,462,346

326,048,458

354,275,786

125,250,000
7,005,000
1,000,000 )

125,250,000
7,005,000
1,000,000 )

3,000,000 )
61,926,345

(
(

2,757,000 )
52,132,908

190,181,345

Total Equity

TOTAL LIABILITIES AND EQUITY

92,859,774

P

See Notes to Financial Statements.

516,229,803

180,630,908

P

534,906,694

391 7.200.146 ( 5.232 5.477 67.172 ) 3.net Depreciation and amortization Doubtful accounts Impairment losses (Note 10) Other operating expenses (Notes 3.150 P 149.094 2.351 ( 136.709.291 ) 4.865.751.117. 20 and 23) INCOME FROM OPERATIONS OTHER INCOME (CHARGES) Finance costs (Note 13) Equity in income of subsidiaries.000 13.478.900.715 13.295 36.020 113. associate and joint venture (Note 9) ( 2003 135.625.496.421 34.022.097. 2004 AND 2003 2004 REVENUES Sale of goods Rendering of services Other revenues (Notes 5.732.277.301 2.575.954.616.000 1.487.783 . 5.880 12.254 NET INCOME P 23.132 4.334. 11.000 9.037 TAX EXPENSE (Note 19) 10.201. 15. P 18.182 7.363.361.512.212 11.523 ) ( 8.037 See Notes to Financial Statements.000 2.465.500.841 9.232.542 3.031.216 13.334.550 114.977.599 8.562 62.462.104 2.821. 18.221.608 9.249 29.ABC MANUFACTURING COMPANY (A Wholly Owned Subsidiary of XYZ Holdings Corporation) STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31. 16 and 20) Cost of services (Note 16) Salaries and employees' benefits (Notes 17 and 20) Foreign currency losses . 18 and 20) P COSTS AND OPERATING EXPENSES Cost of goods sold (Notes 3.000.864.274.947.732.605 1.000.971 148.145 ) INCOME BEFORE TAX 33.717.348.301 3.264.

243.554.345 P 180.342.005.000 7.757.000.000 P 882.908 Net Losses Directly Recognized in Equity P 243.000 - Balance at end of year TREASURY SHARES .000.189.000 ) 882.875.783 ( 61.005.119 12.966 (Notes 3 and 21) As restated Cash dividends (Note 21) Net income 100.000 ) ( ( 2.000.908 13.769 ) 46.582.908 TOTAL EQUITY P 190.345 Balance at end of year 52.000 ) ( 3. issued.000 ) ( 2.000 - P 125.000 ) ( 1.348.000 ) ( 1.000 7.000 ) ( ( 1.908 52.000 ) ( ( 800.000 125.000 25.926.000 52.946.630.888 ( 4. show on the face of the statement the number of authorized.000 ) - Balance at end of year NET UNREALIZED LOSSES ON NON-CURRENT MARKETABLE EQUITY SECURITIES Balance at beginning of year Additional decline in value Balance at end of year RETAINED EARNINGS Balance at beginning of year As previously reported Effects of adoption of new accounting standards .net of tax effects of P1.037 ( 51.255.750.232.757.At Cost Balance at beginning of year Treasury stock acquired ( 1. and subscribed shares and par value. .005.132.000 See Notes to Financial Statements.250.250.600 ) 23.132.250.000 3.000.250.132.994 ) 18.000 7. 1 If there are only few details.ABC MANUFACTURING COMPANY (A Wholly Owned Subsidiary of XYZ Holdings Corporation) STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31.000 3. 2004 AND 2003 2004 2003 1 CAPITAL STOCK (Note 21) Balance at beginning of year Issuance of shares P Balance at end of year ADDITIONAL PAID-IN CAPITAL Balance at beginning of year Premium on shares issued during the year 125.000 ) 200.181.000.000 ) 243.

000 ) 6.264.657 450.750 ) 8.479 ) 348.955.300.620.020.020 400.424.037 10.461 9.652 211.351 ) 7.150 ) 51.000 22.523 450.850.000 ) 462.150 ) 72.768 ) ( 38.876.069.575.000 1.497.771 ) 875.286 2.850.596 7.857 757.826 ) 67.442 ( ( 15.012.338.000 ( ( ( ( ( ( ( ( ( 4.775.437.094 ) 53. plant and equipment Acquisitions of investments 2003 3.625.000 108.572 2.512.777.094 13.146 ) 8.221.000 5.146 809.605.000 20.773 ) 426.794.403.088 247.461 1.015 127.954.428.746 4.291 450.293 ) ( .000 301.805.125 1.013.000.200.249 P 12.478.013 ) 8.847 Net Cash From Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of investments Acquisition of long-term investments Interest received Decrease in other non-current assets Dividends received from an associate Proceeds from sale of property.669.549 1. associate and joint venture Interest expense Dividend income Interest income Operating income before working capital changes Decrease (increase) in marketable equity securities Decrease in trade and other receivables Decrease (increase) in inventories Decrease (Increase) in prepayments Decrease in other current assets Increase (decrease) in trade and other payables Increase (decrease) in other liabilities Decrease in provisions Cash generated from operations Interest paid Cash paid for income taxes P Net Cash Used in Investing Activities Forward 33.587.000 ( ( ( ( ( ( ( ( ( 61.440 ) 14.230.493 ) 560.930.ABC MANUFACTURING COMPANY (A Wholly Owned Subsidiary of XYZ Holdings Corporation) STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31.758 ) ( 19.291 ) 76.530.188 ) 29.626 1. 2004 AND 2003 2004 CASH FLOWS FROM OPERATING ACTIVITIES Income before tax Adjustments for: Depreciation and amortization Amortization of intangible assets Unrealized foreign currency losses Impairment losses Equity in net income of subsidiaries.847.338.500 1.357 ) 62.149 14. plant and equipment Acquisitions of property.290 ) 910.356.906.784 ) 787.043.048 6.038 1.000 ) ( ( 24.402.000 ) 572.

000 ) ( ( ( ( 27.381 P 22. In addition. the Company leased a certain specialized equipment with carrying amount of P5.560 28.855.647.581.342. See Notes to Financial Statements.505.631.248 CASH AND CASH EQUIVALENTS AT END OF YEAR P 21.282 ) ( 1.012.102 5.725.-22004 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from additional borrowings Additional borrowings from related parties Proceeds from the issuance of shares of stock Treasury shares acquired Repayment of amounts due to related parties Cash dividends paid Borrowing repayments Net Cash Used in Financing Activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2003 ( ( ( 50.647.600.6 million as of December 31.100.411.225 ) ( 6.000 ) 36.065.130 56.000 was converted into preferred shares of the bank which acquired the closed bank (see Notes 9 and 12). are carried under finance leases.635. respectively.867 22. a portion of the Company's restricted deposits in a closed bank amounting to P4.800. starting 2004.413. Certain transportation equipment with carrying amounts of P1.642.126. . 2004 and 2003.000 25.197.122 ) 13.5 million under a finance lease for a period of six years.554.019 ) 12.600 ) 40.829 ) ( 43.367 15.000 200.5 million and P1.994 ) 39. (See Notes 3 and 23).248 Supplemental Information on Noncash Investing Activity In 2003.146 ) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 17.