COVER SHEET E I B R E A L T Y D E V E L O P E R S, I N C. (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

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1 COVER SHEET E I B R E A L T Y D E V E L O P E R S, I N C. SEC Registration Number (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 EIB REALTY DEVELOPERS, INC. (Company s Full Name) Exportbank Plaza, Exportbank Drive corner Chino Roces Avenue, 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) MARCH 31, 2008 (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 March 31, Commission Identification No. AS BIR TIN Exact name of registrant as specified in its character EIB REALTY DEVELOPERS, INC. 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. 1,368,095,199 common shares 11. Are any or all of the securities listed on the Philippine Stock Exchange? YES [ X ] NO [ ] 3

4 12. Indicate by check mark whether the registrant : (a) has filed all reports required to be filed by Section I I of the Revised Securities Act (RSA) and RSA Rule (a)-1 thereunder and Sections 26 and 141 ofthe Corporation Code of the Philippines, during the preceding 12 months (or for such shorter period the registrant was required to file such repofts). (b) has been subjecto such filing requirements for the past 90 days. rts IXI Nol l Item 1. Financial Statements See olloched, PART I - FINANCIAL INFORMATION Item 2, Management's Discussion and Analysis of Financial Condifion and Results ofoperations See altached. PART II - OTHER INTORMATION Latest report on SEC I'orm 17-C was filed on 14 March 2008 SIGNATURXS Pursuant to th requir ments ofthe Revised Securities Act, the registrant has duly caused this report to be signed on its behalfby the undersigned thereunto duly authotized. Issuef EIB RXALTY DEVELOPNRS Signature and Title Signature and Title Date

5 ITEM 1. FINANCIAL STATEMENTS EIB REALTY DEVELOPERS, INC. AND SUBSIDIARY UNAUDITED CONSOLIDATED BALANCE SHEETS MARCH 31, 2008 & DECEMBER 31, 2007 MARCH 31, 2008 DECEMBER 31, 2007 UNAUDITED AUDITED ASSETS CURRENT ASSETS Cash and Cash Equivalent 2,244,041 13,633,670 Receivables 119,215,295 56,258,917 Total Current Assets 121,459,336 69,892,587 NON CURRENT ASSETS Investment Properties - Net 3,106,397,172 3,121,744,781 Property and Equipment - Net 979,406 1,039,991 Other Non-Current Assets - Net 15,587,134 11,288,020 Total Non-Current Assets 3,122,963,712 3,134,072,792 TOTAL ASSETS 3,244,423,048 3,203,965,379 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable, Accrued Expenses and Other Liabilities 2,817,821,281 2,775,570,713 Unearned Revenue - TOTAL LIABILITIES 2,817,821,281 2,775,570,713 EQUITY Capital Stock 246,257, ,257,136 Deposits on Subscription Advances from Stochholder with Indefinite Repayment Term 54,000,000 54,000,000 Retained Earnings (Deficit) 122,424,123 (1,104,916,510) Decrease in deficit by capital restructuring 1,121,838,063 Net Income (Loss) (1,654,835) 105,502, ,026, ,681,259 Minority Interest in a Consolidated Subsidiary 5,575,343 5,713,407 TOTAL EQUITY 426,601, ,394,666 TOTAL LIABILITIES AND EQUITY 3,244,423,048 3,203,965,379 5

6 EIB REALTY DEVELOPERS, INC. AND SUBSIDIARY Notes to Financial Statements As of March 31, Cash and Cash Equivalent includes: Cash in Bank 2,239,041 Petty Cash Fund 5,000 2,244,041 2 Receivables include: Accounts Receivable - BIR 3,385 Accounts Receivable 119,211, ,215,295 3 Investment Properties include: Davao Property 9,000,000 Capital Place 342,928,404 Tagaytay Project 149,816,377 Building 2,604,090,286 Building Improvements 562,105 3,106,397,172 4 Property and Equipment Office Equipment 241,079 Office Equipment-Others 17,682 Furniture, Fixture and Equipment 60,977 Leasehold Rights and Improvements 659, ,406 5 Other Assets Input Tax 4,883,057 Prepaid Expenses 238,105 Deferred Charges-Brokerage 2,550,241 Miscellaneous Asset 7,915,731 15,587,134 6 Accounts Payable and Accrued Expenses Accounts Payable 2,730,205,825 Accrued Expense Payable 23,127,900 Security Deposit 31,624,417 Advance Rental 28,418,557 Unearned Rental 2,367,684 Checks Payable 346,415 Output Tax Payable 1,519,230 Withholding Tax Payable 203,683 SSS/PHIC/HDMF Premiums Payable 7,570 2,817,821,281 6

7 ITEM 1. FINANCIAL STATEMENTS EIB REALTY DEVELOPERS, INC. AND SUBSIDIARY UNAUDITED CONSOLIDATED BALANCE SHEETS MARCH 31, 2008 & MARCH 31, 2007 ASSETS MARCH 31, 2008 MARCH 31, 2007 UNAUDITED UNAUDITED CURRENT ASSETS Cash and Cash Equivalent 2,244,041 27,224,237 Receivables 119,215, ,174 Total Current Assets 121,459,336 28,217,411 NON CURRENT ASSETS Investment Properties - Net 3,106,397, ,203,441 Property and Equipment - Net 979,406 Equity Investments 9,600,000 Other Non-Current Assets - Net 15,587,134 5,072,302 Total Non-Current Assets 3,122,963, ,875,743 TOTAL ASSETS 3,244,423, ,093,154 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable, Accrued Expenses and Other Liabilities 2,817,821,281 21,223,917 Unearned Revenue - 191,521,535 TOTAL LIABILITIES 2,817,821, ,745,452 EQUITY Capital Stock 246,257,136 1,368,095,199 Advances from Stochholder with Indefinite Repayment Term 54,000,000 54,000,000 Retained Earnings (Deficit) 122,424,123 (1,104,916,510) Decrease in deficit by capital restructuring Net Income (Loss) (1,654,835) (1,978,544) 421,026, ,200,145 Minority Interest in a Consolidated Subsidiary 5,575,343 5,147,557 TOTAL EQUITY 426,601, ,347,702 TOTAL LIABILITIES AND EQUITY 3,244,423, ,093,154 7

8 EIB REALTY DEVELOPERS, INC. AND SUBSIDIARY UNAUDITED CONSOLIDATED STATEMENTS OF INCOME FOR THE PERIODS JANUARY 01 TO MARCH 31, 2008 AND 2007 MARCH 31, 2008 MARCH 31, 2007 UNAUDITED UNAUDITED INCOME Interest Income ,427 Rental Income 52,976, ,798 Rental Income-PAS 17 2,816,543 Parking Rental 1,729,000 Parking Fees 582,970 Miscellaneous Income 4,581,378 41,705 TOTAL INCOME 62,687, ,930 EXPENSES Impairment Losses (168,747) (452,234) Management and Professional Fees 1,750, ,440 Employee Benefits 686,655 - Taxes and Licenses 7,973, ,000 Depreciation and Amortization 15,983,935 - Insurance Expense 1,475,543 Annual Dues and Fees 803,778 Opportunity Loss 31,063,091 Other Expenses 4,332,416 2,630,926 Miscellaneous 578,877 - TOTAL EXPENSES 64,480,019 2,612,132 INCOME(LOSS) BEFORE INCOME TAX (1,792,901) (2,064,202) PROVISION FOR (BENEFIT FROM) INCOME TAX - - NET INCOME (LOSS) (1,792,901) (2,064,202) Attributable to: EQUITY HOLDERS OF THE PARENT COMPANY (1,654,835) (1,978,544) MINORITY INTEREST (138,066) (85,659) NET INCOME (LOSS) (1,792,901) (2,064,202) DILUTED/LOSSES PER SHARE ( ) ( ) (NET LOSS/OUTSTANDING NO. OF SHARES) 8

9 EIB REALTY DEVELOPERS, INC. AND SUBSIDIARY CONSOLIDATED STATEMENT OF CASH FLOW FOR THE PERIODS JANUARY 01 TO MARCH 31, 2008 & CASH FLOW FROM OPERATING ACTIVITIES Income (Loss) Before Income Tax (1,792,901) (2,064,202) Adjustments to reconcile income (loss) before income tax to net cash generated from (used in) operations: Interest Expense - - Provision for Probable Losses (168,747) - Equity in Net Losses (Earnings) of an Affiliate Depreciation and Amortization 15,983,935 - Interest Income (429) (331,427) Benefit from Deferred Income Tax - - Changes in operating assets and liabilities: Decrease (increase) in: Receivables (62,956,378) - Investment Properties 15,458,245 - Property and Equipment 60,585 Other Assets (20,224,507) (3,591) Increase (decrease) in: Accounts Payable and Accrued Expenses 42,250, ,720 Net Cash Generated from (used in) Operations (11,389,629) (2,244,500) Interest Received - - Income Tax Paid - - Interest Paid Net Cash Provided by (used in) Operating Activities (11,389,629) (2,244,500) CASH FLOWS FROM INVESTING ACTIVITY Decrease in Equity Investments and Advances - - CASH FLOWS FROM FINANCING ACTIVITIES Increase/(Decrease) in Notes Payable - - Decrease in Contract Payable - - Net Cash Provided by Financing Activities - - NET INCREASE (DECREASE) IN CASH AND CASH (11,389,629) (2,244,500) EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 13,633,670 29,468,737 CASH AND CASH EQUIVALENTS AT END OF YEAR 2,244,041 27,224,237 9

10 EIB REALTY DEVELOPERS, INC. AND SUBSIDIARY UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY MARCH 31, 2008 MARCH 31, 2007 UNAUDITED UNAUDITED EQUITY- PHP1 par value Authorized - 2,000,000,000 shares Issued - 1,368,095,199 shares Capital Stock 246,257,136 1,368,095,199 Advances from Stochholder with Indefinite Repayment Term 54,000,000 54,000,000 Retained Earnings (Deficit) 122,424,123 (1,104,916,510) Net Income (Loss) (1,654,835) (1,978,544) 421,026, ,200,145 Minority Interest in a Consolidated Subsidiary 5,575,343 5,147,557 TOTAL EQUITY 426,601, ,347,702 10

11 EIB REALTY DEVELOPERS, INC. AGING OF ACCOUNTS RECEIVABLE AS OF MARCH 31, 2008 ` Type of Accounts Receivable Total 1-3 Mos. 4-6 Mos. 7 Mos. to a) TRADE RECEIVABLE 1. TENANTS 480, , Sub Total 480,637 Less: Allow. For Doubtful Accounts 0 NET TRADE RECEIVABLE 480,637 1 year 1-2 years 3-5 years 5 years - above Past due accounts & items in Litigation b) NON TRADE RECEIVABLES 1. Tenants 2. Bureau of Internal Revenue 9,768,077 9,768, Others 119,716, ,696,282 34, , ,350 Sub Total 129,484,763 Less: Allow. For Doubtful Accounts -10,750,105 NET NON-TRADE RECEIVABLE 118,734,658 NET RECEIVABLES (A+B) 119,215,295 ACCOUNTS RECEIVABLE DESCRIPTION: Type of Receivable Nature / Description Collection Period 1. Tenants Rentals Based on contract agreement- monthly or quarterly 2. Bureau of Internal Revenue Overpayment of 1999 Income For Income Tax payment Tax and various Certificate of application. Creditable tax from tenants. 3. Others Advances and Working Fund Regular billings are made / monthly for daily & emergency exp. reimbursement / replenishment. 11

12 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 EIB Realty Developers, Inc. 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 were prepared in compliance with PFRS. The financial statements have been prepared using the historical cost basis and are presented in Philippine Pesos. In preparing the financial statement in accordance with PFRS, EIB Realty Developers, Inc. (EIBR) and its subsidiary Urban Property Holdings. Inc. (UPHI) (hereinafter, collectively referred to as the Group ) applied certain mandatory exemption and optional exemption from full retrospective application of PFRS. The Group elected to apply the optional exemption from full retrospective application restatement of comparative financial information for PAS 32 and PAS 39. The adjustments required for the differences between the previous GAAP and PAS 32 and PAS 39 were determined and recognized on 01 January 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 with the exception of EIBR s quasi-reorganization, the reduction in the par value of its common shares from P 1.00 per share to P.18 per share, the proposed increase of its authorized capital stock and the acquisition of Exportbank Plaza from EIB. d. There are no changes in the composition of the issuer during the interim period including business combinations, acquisition or disposal of subsidiaries and longterm 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. 12

13 EIB REALTY DEVELOPERS, INC. ITEM 2. Management s Discussion and Analysis of Financial Condition and Results or Plan of Operation 2a) Plan of Operation In the special meeting held on 28 January 2008, the stockholders representing more than sixtyseven percent (67%) of all its issued and outstanding common shares which are entitled and qualified to vote, approved the amendment to EIBR s existing Articles of Incorporation consisting of the increase in its authorized capital stock from P246,257, divided 1,368,095,199 common shares at a par value of P0.18 per share, to P2,946,257, divided into 16,368,095,199 common shares also at a par value of P0.18 per share. The rationale behind the proposed increase in EIBR s authorized capital stock is to give way for additional capital infusion by potential investors, which would enable EIBR to develop its existing properties, given the favorable developments in the real estate sector. 2b) Financial Condition and Results of Operation as of December 31, 2007 As of 31 December 2007, the Group s total assets stood at P3.203 Billion, while its total liabilities and equity amounted to P2.775 Billion and P Billion, respectively. Total resources went up by P2.669 Billion compared to 31 December 2006 level of P0.535 Billion. The increase was brought about by the acquisition of Exportbank Plaza, consisting of condominium units that was previously sold by the Company to EIB and re-acquired for a purchase price of P2.62 Billion. On the other hand, professional fees paid for the lifting of coverage and CARP exclusion of Tagaytay Property amounting to P12.44 Million was capitalized and formed part of the project cost. From deposit in bank and money market placements, P15.84 Million was used to fund the Company s operations. The 50% equity investment in One Mckinley Place, Inc. amounting to P10.00 Million was sold, transferred and assigned to Philippine Townships, Inc. in November 27, Total liabilities increased to P Billion from P Million in 31 December 2006 primarily due to the recognition of liabilities to EIB arising from the purchase of Exportbank Plaza, which, based on the Sale and Purchase Agreement will be paid in Documentary stamp tax payable to BIR of P39.30 Million and transfer tax of P15.20 Million on the said purchase was also accrued. Consequently, the remaining balance of the Unearned Revenue representing gain on sale of Exportbank Plaza to EIB in 2002 that was previously deferred has been fully realized upon the reacquisition of the building. Total stockholders equity amounted to P Million in 31 December 2007 compared to P Million in 31 December The par value of its common shares was reduced from P1.00 to P0.18 per share resulting in the decrease in its authorized capital stock from P2.0 Billion to P0.246 Billion. The reduction in the par value eliminated EIBR s deficit amounting to P1.121 Billion. The Company s proposal to increase its authorized capital stock has not yet been approved by the SEC as of end of December

14 In terms of profitability, the Group performed better in 2007 compared to EIBR s net income in 2007 was P Million compared to 2006 net loss of P Million. Gross income of P Million in 2007 is mainly attributable to the full realization of gain on sale of Exportbank Plaza to EIB in 2002 amounting to P Million which was previously deferred and to the recovery of its accounts receivable which was fully provided for amounting to P2.20 Million. Operating expenses went down by P Million due to the lower impairment loss which is on the Exportbank Plaza amounting to P Million representing taxes and other expenses related to its purchase which was capitalized. Management fees amounting to P3.11 Million and quasi re-organizational costs of P2.59 Million were likewise incurred in Impairment losses went down by P Million due to the set up of provisioning in 2006 on advances to OMP amounting to P Million which management deemed to be uncollectible. December c) Comparable Discussion of Interim Period as of 31 March 2008 The Group s aggregate resources was registered at P3.244 Billion, while total liabilities and equity amounted to P2.810 Billion and P Million respectively, as of 31 March Comparing March 2008 against year-end 2007 level, total resources increased by P Million. The increase was largely due to the booking of receivable from EIB amounting to P62.96 Million on the rental collections covering the period from January to March 2008 from various tenants of Exportbank Plaza. There is likewise an increase in Other Non-Current Assets amounting to P4.5 Million.due to the payment of compromise settlement and absolute mutual release and quitclaim of PR Builders on UPHI. However, the decrease in the levels of deposit in bank amounting to P11.39 Million was used to fund the day to day operations of EIBR while the decrease in Investment Properties worth P Million was brought about by the depreciation of the building for three (3) months. On the other hand, total liabilities went up by P42.25 Million from P2.768 Billion in 31 December 2007 to P2.810 Billion in 31 March 2008 attributable to the opportunity loss incurred by EIB due to the deferment of the payment of the purchase price of EIB Plaza and to the various expenses advanced by Exportbank. In terms of profitability, the Group performed better in 2007 compared to Net loss in 31 March 2008 is P1.90Mn compared to a net income of P113M in December 2007.Total expenses likewise declined by P146.56Mn from P211.15Mn to P64.59Mn which was due primarily to the set up of allowance for the impairment loss recognized on the building for P183.21Mn and P15.0Mn impairment loss on OMP in 2007, respectively. However, there was an increase in depreciation and amortization in the building amounting to P16.09Mn and in miscellaneous expenses of P31.063Mn representing opportunity loss incurred by EIBR due to the deferment of the payment on the purchase of Exportbank Plaza from EIB. On a quarter to quarter basis, total assets of the Group for the 1 st quarter of 2008 was at P3.244Bn or P2.711Bn higher compared to the total assets of P533.09Mn as of end of 1 st quarter of This was brought about by the acquisition of Exportbank Plaza amounting to P2.620Bn from EIB. There was a decrease in cash & cash equivalent of P24.98Mn to fund the liquidity requirements for its operations and re-organizational costs while receivable went up by P118.22Mn due to the set of accounts receivable from EIB on the collections of office and parking rentals from various tenants of Exportbank Plaza.. An increase of P10.51Mn was reflected in Other Non-Current Assets as a result of the transfer of various balance sheet accounts related to the purchase of the EIB Plaza such as Deferred Charges for Brokerage Fees and Miscellaneous Asset amounting P2.55Mn and P7.91Mn, respectively. 14

15 Total liabilities of the Group as of 1 st quarter of 2008 increased by P2.597Bn from P212.74Mn compared to P2.809Bn in the same quarter of 2007 due to the set up of P2.620Bn payable to EIB on the acquisition of the building and other building related expenses advanced by EIB. However, deferred revenue went down by P191.52Mn as the Company fully realized the gain on the sale of Exportbank Plaza condominium units to EIB in July Total equity amounted to P Mn in the 1 st quarter of 2008 compared to P315.20Mn for the same period in 2007 while minority interest in 2008 and 2007 amounted to P5.58Mn and P5.15.Mn, respectively. EIBR ended the 1st quarter of 2008, with a total gross revenue of P62.69Mn compared to P0.55Mn in the 1 st quarter of The increase was largely due to gross income from office and parking rentals of various tenants of Exportbank Plaza amounting to P58.11Mn and the reversal of long outstanding accounts payable to miscellaneous income amounting to P4.58Mn. Total expenses in March 2008 went up to P64.48Mn compared to P2.61Mn in March 2007 or by P61.87Mn. The main contibutor in the increase was the reimbursement of opportunity loss incurred by EIB on the deferment of the payment on the sale of EIB Plaza to EIBR worth P31.06Mn. This was followed by the increase in the depreciation of the building amounting to P15.98Mn. Furthermore, taxes and licenses went up by P7.83Mn from P.0.15Mn to P7.97Mn brought about by the payment of real property tax on the building while management and professional fees including employee benefits also increased by P1.46Mn and P0.69Mn due to the hiring of additional consultants and employees. On the other hand, insurance expense and other expenses significantly increased by P1.48Mn and P1.70Mn, respectively, as a result also in the acquisition of the building and in the payment of organizational costs. Impact of New Standards, Amendments and Interpretations to Existing Standards (a) Effective in 2007 that are Relevant to the Group In 2007, the Company adopted the following new standards relevant to the Group that are effective for periods starting (i) PAS 1 (Amendment), Presentation of Financial Statements. PAS 1 introduces new disclosures on the Group s capital management objectives, existing policies and procedures in each annual financial report. The amendments to PAS 1 were introduced to complement the adoption of PFRS 7. The Group s capital management objectives are: To ensure the Group s ability to continue as a going concern; and To build adequate capital to carry on its business. The Group monitors capital on the basis of the carrying amount of equity as presented on the face of the consolidated balance sheet. (ii) PFRS 7, Financial Instruments: Disclosures. PFRS 7 introduces new disclosures to improve the information about financial instruments. It requires the disclosure of qualitative and quantitative information about exposure to risks arising from 15

16 financial instruments, particularly a maturity analysis that shows the remaining contractual maturities of financial liabilities. PFRS 7 replaced the disclosure requirements in PAS 32, Financial Instruments: Disclosure and Presentation. The new disclosures under PFRS 7 are required to be made for all periods presented. However, the Group availed of the transitional relief with regard to the disclosure of the maturity analysis granted by the FRSC and presented only the relevant new disclosures required by PFRS 7 for The Group s 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 Company, 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 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. Key Performance Indicators March 2008 December 2007 Capital Adequacy Ratio Total Equity to Total Assets 13.42% Ratio 11.72% +Asset Quality Non-Performing Asset Ratio 17.09% 15.30% Liquidity Liquid to Total Assets Ratio 0.78% 0.43% Profitability Return on Average Equity -0.44% 28.23% Cost Efficiency Cost to Income 49.69% 5.61% The Group s Capital Adequacy Ratio (CAR) stood at 13.42%, a minimal decrease of 1.70% compared to last year s level of 11.72%. Decline in risk assets was brought about by the decrease in the level of deposits by P11.39Mn to fund its operations and reorganization. CAR is computed by dividing the Total Average Stockholder s Equity over the Total Assets: 16

17 Total Average Stockholder s Equity (P) M M Total Assets 3, M 3, M Ratio 13.42% 11.72% As of March 31, 2008, the Group s NPA ratio is 17.09% compared to 15.30% as of end of December 31, 2007, an increase of 1.79%. The NPA ratio is calculated as follows: Total Non-Performing Assets (P) 554.4M M Total Assets 3, M 3, M Ratio 17.09% 15.30% 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: Total Liquid Assets (P) 25.18M M Total Assets 3, M 3, M Ratio 0.78% 0.42% The ratio of the Group s return on average equity (ROE) decreased from 30% to negative 0.44 % in March The Return on Average Equity Ratio is calculated as follows: Total Income (Loss) (P) M M Total Average Stockholders Equity M M Ratio -0.44% 28.23% 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: Total Expenses (P) M 11.06M Total Gross Income M M Ratio 49.69% 5.61% 17

18 Discussion and Analysis of Materials Events (1) i. EIBR s acquisition of Exportbank Plaza Condominium Units from EIB in 28 December 2007 will have a material impact on its liquidity in 2008, when payment will become due. The proposed increase in EIBR s authorized capital stock will give way to additional capital infusion by potential investors which will enable the Company to generate the liquidity required by this purchase. ii. There are no other known trends, commitments, events or uncertainties that will have a material impact on EIBR s liquidity within the next twelve (12) months except for those mentioned above. (2) i. There are no material commitments as yet 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) i. There is nothing to disclose regarding any material off-balance sheet transactions, arrangements, obligations (including contingent obligations) and other relationships of EIBR 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 the EIBR 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 i. Cash and Cash Equivalent The decrease of 91.76% from P27.22 Million to P2.24 Million was brought about by the withdrawal of its deposit in bank and money market placements to fund EIBR s day-today operations. ii. Receivables The increase of P Million from P0.99 Million to P Million in 2008 and 2007, respectively, was due to the collection of rental from various tenants and to the transfer of certain balance sheet accounts related to the purchase of Exportbank Plaza from EIB. iii. Investment Properties Went up by P2.616 Billion compared to the 2007 balance of P Million attributed mainly to the purchase of Exportbank Plaza from EIB. iv. Other Non-Current Assets EIBR purchased some FFE and renovated its office amounting to P1.04 Million. Certain assets were transferred and acquired from EIB due to the purchase of Exportbank Plaza such as Deferred Brokerage Fees and Miscellaneous Assets amounting to P3.32 Million and P3.42 Million, respectively. 18

19 v. Accounts Payable and Accrued Expenses The increase of P2.797 Billion from P21.22 Million in 2007 to P2.818 Billion in 2008 resulted from the recognition of liabilities to EIB on its purchase of Exportbank Plaza. and transfer of related balance sheet accounts. vi. Unearned Revenue The remaining unearned revenue pertaining to the previous sale of EIB Plaza in 2002 for P Million was fully realized in December 31, nothing follows - 19