COVER SHEET. (Company s Full Name) E X P O R t B A n k P l a Z a, C h i n o R O c e S A v E. n u E, C O R. S e n. G i l P u y a t A v e n u e,

Transcription

1 COVER SHEET SEC Registration Number A R T H A L A N D C O R P O R A T I O N (Company s Full Name) E X P O R t B A n k P l a Z a, C h i n o R O c e S A v E n u E, C O R. S e n. G i l P u y a t A v e n u e, M A k A t i C i t y (Business Address: No. Street City/Town/Province) Froilan Q. Tejada (Contact Person) (Company Telephone Number) Q Month Day (Form Type) Month Day (Fiscal Year) (Annual Meeting) (Secondary License Type, If Applicable) Dept. Requiring this Doc. Amended Articles Number/Section Total Amount of Borrowings Total No. of Stockholders Domestic Foreign To be accomplished by SEC Personnel concerned File Number LCU Document ID Cashier

2 ARTHALAND CORPORATION (Company s Full Name) ExportBank Plaza, Chino Roces Avenue Cor. Gil Puyat Ave., Makati City (Company s Address) / (Telephone Number) December 31 (Fiscal year ending) (month & day) Any Day in April (Annual Meeting) SEC FORM 17 Q QUARTERLY REPORT (Form Type) Amendment Designation (If applicable) JUNE 30, 2009 (Period Ended Date) (Secondary License Type & File Number) LCU (Cashier) DTU ASO (SEC Number) Central Receiving Unit File Number Document I.D. 2

3 SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-Q QUARTERLY REPORT PURSUANT TO SECTION 11 OF THE REVISED SECURITIES ACT AND RSA RULE 11(a)-1 (b)(2) THEREUNDER 1. For the quarterly period ended June 30, Commission Identification No. AS BIR TIN Exact name of registrant as specified in its character ARTHALAND CORPORATION 5. Incorporated in Metro Manila, Philippines on August 10, Industry Classification Code. 7. Address of registrant s principal office Postal Code ExportBank Plaza, Chino Roces Avenue Cor. Gil Puyat Ave., Makati City Registrant s Telephone Number : / / / Former name, former address and former fiscal year, if changed since last report: NA 10. Securities registered pursuant to Sections 4 and 8 of the RSA Title of each class Common Shares Number of shares common stock outstanding or amount of debt outstanding. 5,118,095,199 common shares 11. Are any or all of the securities listed on the Philippine Stock Exchange? YES [ X ] NO [ ] 12. Indicate by check mark whether the registrant : 3

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5 ITEM 1. Financial Statements Required under SRC RULE Basic and Diluted Earnings per Share (See attached Income Statement) 2. The accompanying consolidated interim financial statements of Arthaland Corporation were prepared in accordance with accounting principles generally accepted in the Philippines as set forth in Philippine Financial Reporting Standards (PFRS) and Philippine Accounting Standards (PAS). 3. Notes to Financial Statements: a. The accompanying financial statements of Arthaland Corporation and its subsidiaries Urban Property Holdings. Inc. (UPHI), Cazneau Inc., Technopod, Irmo. were prepared in accordance with PFRS. The financial statements have been prepared using the historical cost basis and are presented in Philippine Pesos. b. There is no significant seasonality or cycle of interim operations. c. There are no material events subsequent to the end of the interim period. d. There are no changes in the composition of the issuer during the interim period including business combinations, acquisition or disposal of subsidiaries and long-term investments, restructurings and discontinuing operations. e. There are no material changes in the contingent liabilities or contingent assets since the last annual balance sheet date. f. There are no material contingencies and any other events or transactions that are material to an understanding of the current interim period. 5

6 ARTHALAND CORPORATION AND SUBSIDIARIES (Formerly, EIB Realty Developers, Inc.) CONSOLIDATED BALANCE SHEETS JUNE 30, 2009 & DECEMBER 31, 2008 (Amounts in Philippine Pesos) A S S E T S JUNE 30, 2009 DECEMBER 31, 2008 INCREASE % UNAUDITED AUDITED (DECREASE) CURRENT ASSETS Cash 116,464,529 6,268, ,196, % Receivables- net 328,575, ,745,842 74,829,425 29% Other current assets 45,528,374 15,201,995 30,326, % Total Current Assets 490,568, ,215, ,352,233 78% NON-CURRENT ASSETS Investment properties - net Property and equipment - net Other non-current assets - net 3,169,853,760 3,174,560,787-4,707,027 0% 12,301,793 12,732, ,994-3% 187,116, ,497, ,918 0% Total Non-current Assets 3,369,271,801 3,373,790,904-4,519,103 0% TOTAL ASSETS 3,859,839,971 3,649,006, ,833,130 6% LIABILITIES AND EQUITY CURRENT LIABILITIES Loans payable Accounts payable, accrued expenses and other liabilities 353,624, ,720, ,904,310 65% 2,987,526,371 2,891,721,498 95,804,873 3% Total Liabilities 3,341,150,706 3,106,441, ,709,183 8% EQUITY Capital stock Retained earnings Net Income Minority Interest 433,757, ,037,518 18,719,618 5% 122,596, ,424, ,313 0% -42,117, ,313-42,290, % 0 4,453,412 4,931, ,952-10% Total Equity 518,689, ,565,318-23,876,053-4% TOTAL LIABILITIES AND EQUITY 3,859,839,971 3,649,006, ,833,130 6% 6

7 ARTHALAND CORPORATION AND SUBSIDIARIES (Formerly, EIB Realty Developers, Inc.) UNAUDITED CONSOLIDATED BALANCE SHEETS JUNE 30, 2009 & JUNE 30, 2008 (Amounts in Philippine Pesos) A S S E T S JUNE 30, 2009 JUNE 30, 2008 INCREASE % (DECREASE) CURRENT ASSETS Cash 116,464,529 25,177,749 91,286, % Receivables- net 328,575, ,086, ,488, % Other current assets 45,528,374 45,528,374 Total Current Assets 490,568, ,264, ,303, % NON-CURRENT ASSETS Investment properties - net Property and equipment - net Other non-current assets - net 3,169,853,760 3,136,193,959 33,659,801 1% 12,301,793 3,419,390 8,882, % 187,116,248 8,852, ,263, % Total Noncurrent Assets 3,369,271,801 3,148,465, ,805,979 7% TOTAL ASSETS 3,859,839,971 3,323,730, ,109,924 16% LIABILITIES AND EQUITY LIABILITIES Loans payable 353,624, ,624,335 Accounts payable, accrued expenses and other liabilities 2,987,526,371 2,859,059, ,466,732 4% Total Liabilities 3,341,150,706 2,859,059, ,091,067 17% EQUITY Capital stock 433,757, ,257, ,500,000 76% Deposits on subscription 50,738,382-50,738, % Advances from a stockholder with 54,000,000-54,000, % Retained earnings 122,596, ,424, ,313 0% Net Income -42,117,719-14,142,809-27,974, % Minority interest 4,453,412 5,393, ,166-17% Total Equity 518,689, ,670,410 54,018,854 12% TOTAL LIABILITIES AND EQUITY 3,859,839,971 3,323,730, ,109,921 16% 7

8 NOTES TO FINANCIAL STATEMENTS Cash and Cash Equivalents Petty Cash Fund 13,000 Cash in Bank 22,952,246 Investment in Special Savings Account 93,499, ,464,529 Receivables Accounts Receivable - Tenants 8,742,037 Accounts Receivable - PAS 17 37,218,122 Accounts Receivable - EIB 273,614,491 Accounts Receivable-OTHERS 9,000, ,575,267 Other Current Assets Creditable Withholding Taxes 14,383,706 Deferred Charges 4,238,644 Prepayments 26,906,024 45,528,374 Investment Property Building 2,525,014,624 Land and developmental cost 605,232,149 Asset Under Construction 39,606,987 3,169,853,760 Property and Equipment Transportation equipment 8,488,203 Furniture, Fixture & Equipment 2,979,614 Leasehold Rights & Improvements 833,976 12,301,793 Accounts payable and accrued expenses Accounts Payable 18,306,709 Unearned rental 2,208,916 Accrued Expenses Payable 223,111,952 Loans Payable 353,624,335 Non trade Payables 1,573,658 Accounts Payable - EIB 2,655,153,493 Security deposit 46,288,968 Advance Rental 40,882,675 3,341,150,706 8

9 ARTHALAND CORPORATION AND SUBSIDIARIES (Formerly, EIB Realty Developers, Inc.) CONSOLIDATED STATEMENTS OF INCOME REVENUES JANUARY 1 TO JUNE 30, 2009 JANUARY 1 TO DECEMBER 31, 2008 UNAUDITED AUDITED Rental 139,997, ,189,678 Recovery of impairment loss 0 52,700,000 Reversal of provision 0 15,000,000 Interest 72, ,348 Others 11,241 6,034,478 TOTAL INCOME 140,081, ,377,504 OPERATING EXPENSES Depreciation and amortization 33,464,095 64,828,479 Taxes and licenses 20,425,273 37,391,265 Employee benefits 15,680,110 23,569,341 Management and professional fees 3,344,553 17,476,366 Representation 1,732,636 8,004,320 Insurance 2,190,287 2,616,360 Brokerage fees 596,516 2,328,652 Association dues 1,946,319 1,985,856 Power, light and water 1,606,713 1,969,893 Transportation and travel 411,872 1,379,726 Security services 791,828 1,065,120 Supplies 698, ,185 Communications 478, ,612 Advertising 80, ,231 Annual dues and fees 377, ,548 Others 794,371 4,160,657 TOTAL EXPENSES 84,620, ,502,611 OPERATING INCOME (LOSS) 55,460, ,874,893 FINANCE COSTS 98,056, ,358,922 INCOME (LOSS) BEFORE TAX (42,595,671) (484,029) TAX EXPENSE 0 125,701 NET INCOME (LOSS) (42,595,671) (609,730) Equity holders of Parent (42,117,719) 172,313 Minority interest (477,952) (782,043) EARNINGS (LOSS) PER SHARE

10 ARTHALAND CORPORATION AND SUBSIDIARIES (Formerly, EIB Realty Developers, Inc.) UNAUDITED CONSOLIDATED STATEMENTS OF INCOME FOR THE PERIODS JANUARY 01 TO JUNE 30, 2009 AND 2008 JANUARY 1 TO JUNE 30, 2009 JANUARY 1 TO JUNE 30, 2008 Increase % (Decrease) REVENUES Rental 139,997, ,228,382 27,768,943 25% Interest 72,788 36,961 35,826 97% Others 11,241 4,588,623-4,577, % TOTAL INCOME 140,081, ,853,966 23,227,388 20% OPERATING EXPENSES Depreciation and amortization 33,464,095 32,038,756 1,425,339 4% Taxes and licenses 20,425,273 16,038,231 4,387,043 27% Salaries and Wages 15,680,110 5,509,823 10,170, % Management and professional fees 3,344,553 8,654,340-5,309,787-61% Representation 1,732,636 1,982, ,205-13% Insurance 2,190,287 2,958, ,522-26% Brokerage fees 596,516 1,481, ,023-60% Association dues 1,946,319 1,304, ,836 49% Power, light and water 1,606, , , % Transportation and travel 411, ,889 77,983 23% Security services 791, , , % Supplies 698,951 35, , % Communications 478, , ,947 96% Advertising 80,768 14,850 65, % Annual dues and fees 377, , ,815-53% Others 794, ,602-84,230-10% TOTAL EXPENSES 84,620,508 73,369,280 11,251,228 15% OPERATING INCOME (LOSS) 55,460,845 43,484,685 12,525,632 29% FINANCE COSTS 98,056,516 57,947,324 40,109,192 69% INCOME (LOSS) BEFORE TAX -42,595,671-14,462,639-27,583, % TAX EXPENSE NET INCOME (LOSS) -42,595,671-14,462,639-27,583, % Attributable to: Equity holders of Parent -42,117,719-14,142,809-27,672, % Minority interest -477, ,831 89,141-28% EARNINGS (LOSS) PER SHARE

11 ARTHALAND CORPORATION AND SUBSIDIARIES (Formerly, EIB Realty Developers, Inc.) UNAUDITED CONSOLIDATED STATEMENTS OF INCOME FOR THE PERIODS APRIL 01 TO JUNE 30, 2009 AND 2008 Increase April 1-June 30, 2009 April 1-June 30, 2008 (Decrease) REVENUES Rental 81,303,998 54,123,071 27,180,927 50% Interest 53,706 36,532 17,174 47% Others 5,883 7,245 (1,362) -19% TOTAL INCOME 81,363,587 54,166,848 27,196,739 50% OPERATING EXPENSES Depreciation and amortization 16,762,407 16,054, ,586 4% Taxes and licenses 8,603,907 8,064, ,398 7% Salaries and Wages 7,940,861 4,823,168 3,117,693 65% Management and professional fees 1,503,182 4,793,966 (3,290,784) -69% Representation 1,678,666 1,617,443 61,222 4% Insurance 1,204,379 1,483,266 (278,887) -19% Brokerage fees 226, ,355 (485,589) -68% Association dues 1,023, , ,869 24% Power, light and water 932, , , % Transportation and travel 271,002 90, , % Supplies 361,299 28, , % Communications 202,122 40, , % Advertising 16, ,000 Annual dues and fees 222, ,992 Impairment losses 0 168,747 (168,747) -100% Others 502, ,841 (159,763) -24% TOTAL EXPENSES 41,827,068 39,952,452 1,874,616 5% OPERATING INCOME (LOSS) 39,536,519 14,214,395 25,322, % FINANCE COSTS 67,117,223 26,884,233 40,232, % INCOME (LOSS) BEFORE TAX (27,580,704) (12,669,838) (14,910,866) 118% TAX EXPENSE NET INCOME (LOSS) (27,580,704) (12,669,838) (14,910,866) 118% Equity holders of Parent (27,333,442) (12,488,074) (14,845,368) 119% Minority interest (247,262) (181,765) (65,498) 36% EARNINGS (LOSS) PER SHARE

12 ARTHALAND CORPORATION ANDS SUBSIDIARIES (Formerly, EIB Realty Developers, Inc.) UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOW FOR THE PERIODS JANUARY 01 TO JUNE 30, 2009 & CASH FLOW FROM OPERATING ACTIVITIES Income (Loss) Before Income Tax (42,595,671) (14,462,639) Adjustments to reconcile income (loss) before income tax to net cash generated from (used in) operations: Interest Expense 67,117,223 Provision for Probable Losses (390,904) Depreciation and Amortization 33,464,095 32,038,756 Interest Income (72,788) (36,961) Changes in operating assets and liabilities: Decrease (increase) in: Receivables (74,829,425) (93,827,561) Investment Properties (27,188,319) (14,449,178) Property and Equipment (1,140,873) (2,379,399) Other Assets (30,945,295) (29,175,343) Increase (decrease) in: Accounts Payable and Accrued Expenses 178,817,102 83,488,926 Net Cash Generated from (used in) Operations 102,626,049 (39,194,303) Interest Received 72,788 Interest Paid (11,222,026) Net Cash Provided by (used in) Operating Activities 91,476,811 (39,194,303) CASH FLOWS FROM INVESTING ACTIVITY Decrease in Equity Investments and Advances - 50,738,382 CASH FLOWS FROM FINANCING ACTIVITIES Increase/(Decrease) in Notes Payable 18,719,618 - Net Cash Provided by Financing Activities 18,719,618 - NET INCREASE (DECREASE) IN CASH AND CASH 110,196,429 11,544,079 EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 6,268,100 13,633,670 CASH AND CASH EQUIVALENTS AT END OF YEAR 116,464,529 25,177,749 12

13 ARTHALAND CORPORATION AND SUBSIDIARIES (Formerly, EIB Realty Developers, Inc.) UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE PERIODS JANUARY 01 TO JUNE 30, 2009 & 2008 CAPITAL STOCK June 30, 2009 June 30, 2008 Common Shares Authorized-16,368,095,199 shares in 2008, 1,368,095,199 shares in 2007 Issued 1,368,095,199 Subscribed during the year ,750,000,000 5,118,095,199 Capital Stock 433,757, ,257,136 Deposit on Subscription 50,738,382 Advances from Stochholder with Indefinite Repayment Term 54,000,000 Retained Earnings(Deficit) 122,596, ,424,123 Net Loss (42,117,719) (14,142,809) 514,235, ,276,832 Minority Interest in a Consolidated Subsidiary 4,453,412 5,393,578 TOTAL EQUITY 518,689, ,670,410 13

14 ARTHALAND CORPORATION AGING OF ACCOUNTS RECEIVABLE AS OF June 30, 2009 Type of Accounts Receivable Total Within 6 Mos. Within 6 Mos. - 1 year a) TRADE RECEIVABLE 1. Tenants 8,742,037 6,716,278 2,025, Sub Total 8,742,037 6,716,278 2,025,759 Less: Allow. For Doubtful Accounts NET TRADE RECEIVABLE 8,742,037 6,716,278 2,025,759 b) NON TRADE RECEIVABLES 1. Others 9,000,617 4,352,478 4,648,139 Sub Total 9,000,617 4,352,478 4,648,139 Less: Allow. For Doubtful Accounts NET NON-TRADE RECEIVABLE 9,000,617 4,352,478 4,648,139 NET RECEIVABLES (A+B) 17,742,654 11,068,756 6,673,898 ACCOUNTS RECEIVABLE DESCRIPTION: Type of Receivable Nature / Description Colletion Period 1. Tenants Rentals Regular billings are made 2. Others Advances and Working Fund Regular billings are made / monthly for daily & emergency exp. reimbursement / replenishment. 14

15 ARTHALAND CORPORATION ITEM 2. Management s Discussion and Analysis of Financial Condition and Results of Operation Comparable Discussion of Interim Period as of 30 June 2009 The consolidated net loss of the Group for the 2nd Quarter of 2009 increased to P Mn compared to a net loss of P Mn for the same period in This is primarily due to increased expenditures related to manpower and interest charges. For the 2nd Quarter of 2009, total expenses was P Mn compared to P Mn of 2 nd Quarter The increase in expenses is primarily due to salaries and wages, Taxes and Licenses and finance charges. As of June 30, 2009, ALCO has 20 employees compared to 6 during the same period in ALCO posted a 50% increase in revenues for the 2nd Quarter of 2009 against the same period in 2008 due to escalation in rental charges retroactive to the 1 st quarter of FINANCIAL CONDITION The Group s aggregate resources was P3.860 Bn as of 30 June There was an increase in assets as a result of increase in paid stock subscriptions, issuance of short-term notes and, increase in receivables due to escalation in rental charges upon lease contract renewals. Impact of New Amendments and Interpretations to Existing Standards (a) Effective in 2008 There are standards and interpretations to published standards that are mandatory for accounting periods beginning on or after 01 January These standards and interpretations, however, are not currently relevant to the Group s operations. Philippine Interpretation Financial Reporting Interpretations Committee (IFRIC) 14: PAS 39 and PFRS 7 (Amendments): Philippine Accounting Standards (PAS) 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction PAS 39, Financial Instruments: Recognition and Measurement and PFRS 7, Financial Instruments: Disclosures 15

16 Philippine Interpretation IFRIC 11: Philippine Interpretation IFRIC 12: Group and Treasury Share Transactions Service Concession Arrangements The first time application of the standard and the amendment has not resulted in any prior period adjustments of cash flows, net income or balance sheet line items. (b) Effective Subsequent to 2008 There are new and amended standards that are effective for periods subsequent to The following new standards, effective for annual periods beginning on or after 01 January 2009 are relevant to the Group, and which the Group will apply in accordance with their transitional provisions. PAS 1 (Revised 2007): PAS 40 (Amendment): Presentation of Financial Statements PAS 40, Investment Property Below is a discussion of the possible impact of these accounting standards. (i) PAS 1 (Revised 2007), Presentation of Financial Statements (effective from January 1, 2009). The amendment requires an entity to present all items of income and expense recognized in the period in a single statement of comprehensive income or in two statements: a separate income statement and a statement of comprehensive income. The income statement shall disclose income and expense recognized in profit and loss in the same way as the current version of PAS 1. The statement of comprehensive income shall disclose profit or loss for the period, plus each component of income and expense recognized outside of profit and loss classified by nature (e.g., gains or losses on available for-sale assets or translation differences related to foreign operations). Changes in equity arising from transactions with owners are excluded from the statement of comprehensive income (e.g., dividends and capital increase). An entity would also be required to include in its set of financial statements a statement showing its financial position (or balance sheet) at the beginning of the previous period when the entity retrospectively applies an accounting policy or makes a retrospective restatement. The Group will apply PAS 1 (Revised 2007) in its 2009 financial statements. (ii) PAS 40 (Amendment), Investment Property. This standard is amended to include property under construction or development for future use as investment property in its definition of investment property. This results in such property being within the scope of PAS 40; previously, it was within the scope of PAS 16. Also, if an entity s policy is to measure investment property at fair value, but during construction or development of an investment property the entity is unable to reliably measure its fair value, then the entity would be permitted to measure the investment property at cost until construction or development is complete. At such time, the entity would be able to measure the investment property at fair value. Minor amendments are made to several other standards; however, those amendments are not expected to have any material impact on the Company s financial statements. 16

17 RISK MANAGEMENT OBJECTIVES AND POLICIES The Group is exposed to a variety of financial risks which result from both its operating and investing activities. The Group s risk management is coordinated with its Parent, in close cooperation with the Board of Directors, and focuses on actively securing the Group s short- to medium-term cash flows by minimizing the exposure to financial markets. Long-term financial investments are managed to generate lasting returns. The Group does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risks to which the Group is exposed to as described below. Credit Risk Analysis The Group s exposure to credit risk is limited to the carrying amount of financial assets recognized as of 30 June Generally, the maximum credit risk exposure of financial assets is the carrying amount of the financial assets as shown on the face of the balance sheet. Credit risk, therefore, is only disclosed in circumstances where the maximum potential loss differs significantly from the financial asset s carrying amount. For advances to subsidiaries and associate, the Group is not exposed to significant risk more than the carrying amount of the advances since such net assets of the subsidiary and associate are sufficient to cover the Group s investments and advances. Liquidity Risk Liquidity risk is the risk that there are insufficient funds available to adequately meet the credit demands of the Group s customers and repay liabilities on maturity. The Group closely monitors the current and prospective maturity structure of its resources and liabilities and the market condition to guide pricing and asset/liability allocation strategies to manage its liquidity risks. 17

18 Key Performance Indicators June 2009 December 2008 Capital Adequacy Ratio Total Equity to Total Assets Ratio 13.75% 13.16% Liquidity Liquid to Total Assets Ratio 3.02% 0.17% Profitability Return on Average Equity -8.03% 0.13% Cost Efficiency Cost to Income 37.96% 76.04% The Group s Capital Adequacy Ratio (CAR) stood at 13.75%, a minimal increase of 0.59% compared to last year s level of %. CAR is computed by dividing the Total Average Stockholder s Equity over the Total Assets: June 2009 Dec Total Average Stockholder s Equity P Mn P Mn Total Assets P 3, Mn P 3, Mn Ratio 13.75% 13.16% Liquidity ratio increased to 3.02% in June, 2009 from 0.17% in December, 2008.Liquidity ratio indicates the proportion of total assets which can be readily converted into cash. It also measures the extent to which the assets can be converted into cash to meet its liquidity requirements. Liquid assets include cash and other cash items. Below is the computation for the Liquidity Ratio: June 2009 Dec Total Liquid Assets (P) P Mn P Mn Total Assets P 3, Mn P 3, Mn Ratio 3.02% 0.17% The ratio of the Group s return on average equity (ROE) decreased from negative 0.13% in December 2008 to negative 7.78 % in June The Return on Average Equity Ratio is calculated as follows: June 2009 Dec Total Income (Loss)(P) P ( Mn) P (0.609 Mn) Total Average Stockholders Equity P Mn P Mn Ratio -8.03% -0.13% 18

19 Cost to income ratio decreased to 37.96% in June 2009 from 76.04% in December, 2008.Cost to income ratio pertains to the ratio of expenses to gross income. Expenses include taxes and licenses, management and professional fees, and miscellaneous expenses. Below is the computation of the said ratio: June 2009 Dec Total Expenses (P) P Mn P Mn Total Gross Income P Mn P Mn Ratio 37.96% 76.04% Discussion and Analysis of Materials Events (1) i. The increase in ALCO s authorized capital stock was approved on 24 December This gave way to additional capital infusion by investors which will enable the Company to generate the liquidity required for future developments. On May 28, 2009, the Parent received P18.72 million as partial payment to the subscription receivable. As of May 28, 2009, total payments received on the subscription of new shares amounted to P million. ii. There are no other known trends, commitments, events or uncertainties that will have a material impact on ALCO s liquidity within the next twelve (12) months except for those mentioned above. (2) i. There are no material commitments as of the date of this Report for capital expenditures. ii. There are no events that will trigger any direct or contingent financial obligation that is material to the Group or any default or acceleration of an obligation for the period. (3) There is nothing to disclose regarding any material off-balance sheet transactions, arrangements, obligations (including contingent obligations) and other relationships of ALCO with unconsolidated entities or other persons created during the reporting period. (4) There are no other significant elements of income or loss that did not arise from ALCO s operations or borrowings for its projects. (5) The causes of the material changes of 5% or more from period to period of the following accounts are as follows: Balance Sheet Accounts June 30, 2009 versus end 2008 (i) (ii) 1,758% increase in Cash and Cash Equivalent largely due to proceeds from short term notes payable and partial payments to the subscription receivable in anticipation of project funding requirements. 29% increase in Receivables primarily due to outstanding rent from various tenants; 19

20 (iii) (iv) 199% increase in Other Non-Current Assets mainly due to Creditable Withholding taxes deducted by Tenants, Rental deposits and increase in Prepaid Expenses related to the projects; and 8% increase in Total Liabilities is due to issuance of short term notes. Income statement - Q versus Q (i) (ii) (iii) (iv) 50% increase in Gross income primarily due to the adjustments in rental charges retroactive 1 st quarter of this year and interest earned from special savings account; 7% increase in Taxes is due to local taxes based on last year s gross receipts; Substantial increase in Salaries and Wages, and related expenses as Transportation and Office Supplies - due to increase in personnel from 6 in 2008 to 20 in 2009; and 150% increase in Interest Expenses due to bank loan which was availed in July nothing follows - 20