Long Form - MLG & Associates

TNM STYROPOR INDUSTRIES INC.

STATEMENT OF MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS

The management of TNM STYROPOR INDUSTRIES, INC. is responsible for all information and representations contained in the financial statements for the years ended December 31, 200B. The financial statements have been prepared in conformity with generally accepted accounting principles of PFRS and reflect amounts that are based on the best estimates and informed judgment of management with an appropriate considerations to materiality. In this regard, management maintains a system of accounting and reporting which provides for the necessary internal controls to ensure that transactions are properly authorized and recorded; assets are safeguarded against unauthorized use of disposition and liabilities are recognized. The management likewise discloses to the company’s audit committee and to its external auditor: (i) all significant deficiencies in the design or operation of internal controls that could adversely affect its ability to record, process, and report financial date; (ii) material weaknesses in the internal controls; and (iii) any fraud involves management or other employees who exercise significant roles in the internal controls. The Board of Directors reviews the financial statements before such statements are approved and submitted to the stockholders of the company. MLG & Associates, the independent auditors and appointed by the stockholders, have examined the financial statements of the company in accordance with generally accepted auditing standards in the Philippines and has expressed its opinion on the fairness or presentation upon completion of such examination, in its report to the Board of Directors and Stockholders. THADDEO GARCIA PRESIDENT/CHAIRMAN OF THE BOARD OF DIRECTORS MIKAEL SALVACION TREASURER EVELYN SALDIVAR CHIEF ACCOUNTANT

1074 EDSA, CUBAO, QUEZON CITY TEL. NOS.: (02) 981-8902/ (02) 987-7665

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December 31, 200B To MLG & Associates

We are providing this letter in connection with your audit(s) of the financial statements of TNM STYROPOR INDUSTRIES, INC as of December 31, 200B for the purpose of expressing an opinion as to whether the financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows of TNM STYROPOR INDUSTRIES, INC in conformity with generally accepted accounting principles. We confirm that we are responsible for the fair presentation in the financial statements of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement. We confirm, to the best of our knowledge and belief, as of December 31, 200B, the following representations made to you during your audit(s). 1. The financial statements referred to above are fairly presented in conformity with generally accepted accounting principles. 2. We have made available to you all— a. Financial records and related data. b. Minutes of the meetings of stockholders, directors, and committees of directors, or summaries of actions of recent meetings for which minutes have not yet been prepared. 1074 EDSA, CUBAO, QUEZON CITY TEL. NOS.: (02) 981-8902/ (02) 987-7665

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TNM STYROPOR INDUSTRIES INC. 3. There have been no communications from regulatory agencies concerning noncompliance with or deficiencies in financial reporting practices. 4. There are no material transactions that have not been properly recorded in the accounting records underlying the financial statements. 5. There has been no— a. Fraud involving management or employees who have significant roles in internal control. b. Fraud involving others that could have a material effect on the financial statements.

6. The company has no plans or intentions that may materially affect the carrying value or classification of assets and liabilities. 7. The following have been properly recorded or disclosed in the financial statements: a. Related-party transactions, including sales, purchases, loans, transfers, leasing arrangements, and guarantees, and amounts receivable from or payable to related parties. b. Guarantees, whether written or oral, under which the company is contingently liable. c. Significant estimates and material concentrations known to management that are required to be disclosed in accordance with the AICPA’s Statement of Position 94-6, ‘‘Disclosure of Significant Risks and Uncertainties.’’ 8. There are no— a. Violations or possible violations of laws or regulations whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency. b. Unasserted claims or assessments that our lawyer has advised us are probable of assertion and must be disclosed in accordance with Financial Accounting Standards Board (FASB) Statement No. 5, ‘‘Accounting for Contingencies.’’ c. Other liabilities or gain or loss contingencies that are required to be accrued or disclosed by FASB Statement No. 5.


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TNM STYROPOR INDUSTRIES INC. 9. The company has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset been pledged as collateral. 10. The company has complied with all aspects of contractual agreements that would have a material effect on the financial statements in the event of noncompliance. To the best of our knowledge and belief, no events have occurred subsequent to the balance-sheet date and through the date of this letter that would require adjustment to or disclosure in the aforementioned financial statements. THADDEO GARCIA PRESIDENT/CHAIRMAN OF THE BOARD OF DIRECTORS MIKAEL SALVACION TREASURER EVELYN SALDIVAR CHIEF ACCOUNTANT


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TNM STYROPOR INDUSTRIES INC. 3

TNM STYROPOR INDUSTRIES, INC. Comparative Balance Sheet For the year ended, December 31, 200A-200B

ASSETS Schedule Current Assets Cash Trade and Other Receivables Inventories Prepaid Expenses Investment in Marketable Securities Other Current Assets Total Current Assets Noncurrent Assets Property, Plant & Equipment Patents Total Noncurrent Assets

1 2 3 4 5

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TOTAL ASSETS

200B

200A

79,532.00 259,837.00 340,694.00 3,850.00 48,125.00 732,038.00

56,722.00 155,746.00 341,540.00 2,900.00 47,625.00 8,900.00 613,433.00

1,333,841.17 6,750.00 1,340,591.17

1,142,462.00 8,250.00 1,150,712.00

2,072,629.17

1,764,145.00

LIABILITIES AND STOCKHOLDER'S EQUITY Current Liabilities Trade & Other Payables Current Portion of Mortgage Payable Income Tax Payable Total current Liabilities

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Noncurrent Liabilities Noncurrent Portion of Mortgage Payable Stockholder's Equity TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY


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396,063.06 24,000.00 177,086.93 597,149.99

196,333.00 24,000.00 23,159.00 243,492.00

148,000.00

172,000.00

1,327,479.18

1,348,653.00

2,072,629.17

1,764,145.00

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TNM STYROPOR INDUSTRIES, INC. Comparative Income Statement For the year ended, December 31, 200A-200B

Schedule Net Sales Cost of Sales Gross Profit Operating Expenses Selling Administrative Total Operating Expenses Operating Income Other Income Total Income Interest Expense Net Income Before Tax Income Tax Net Income After Tax

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2


200B

200A

2,532,235.09 1,320,801.67 1,211,433.42

1,836,652.00 981,079.00 855,573.00

233,346.00 437,796.48 671,142.48 540,290.94 143,778.00 684,068.94 15,762.50 668,306.44 200,491.93 467,814.51

144,178.00 190,396.00 334,574.00 520,999.00 1,500.00 522,499.00 3,545.00 518,954.00 23,159.00 495,795.00

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TNM STYROPOR INDUSTRIES INC. TNM STYROPOR INDUSTRIES, INC. Statement of Comparative Cash flows For the year ended, December 31, 200A-200B

Cash Flow from Operating Activities Cash Inflow Collection from Customers Collection of Notes Receivable Total Cash Outflow Payment for Purchase of Raw Materials Payment of Sales Salaries Payment of Salesman Commission Payment of Salesman's Travelling Expense & Allowances Payment of Advertising Payment of Sales Taxes & Licences Payment of Miscellaneous Selling Expense Payment of Entertainment & Representation Payment of Telephone, Telegram, Cablegram & Post. Payment of Office Salaries Payment of Transportation & Travelling Expense Payment of Licences & Taxes Payment of Repairs & Maintenance - Building Payment of Office Supplies Payment of Professional Fees Payment of Automobile Expense Payment of Dues, Periodicals & Subscriptions Payment of Miscellaneous Office Expenses Payment of Donations Payment of Research and Development Payment of Indirect Labor Payment of Indirect Materials Payment of Power, light & water Payment of Repairs & Maintenance - Machinery & Equipment Payment of Repairs & Maintenance - Delivery Equipment Payment of Gas, oils & Fires Advances Payment of Notes Receivable - Officers & Employees Payment of SSS Payment of Philhealth Payment of Pagibig Payment of Tax Withheld Payment of Insurance Payment of Income Tax Payment of Output Tax Payment of Miscellaneous Factory Expense Payment of Direct Labor Total Net Cash Flow from Operating Activities Cash Flow from Investing Activities Collection from Notes Payable - Trade Payment for Interest on Notes and Mortgage Payment of Mortgage Payment for fixed assets Net Cash Flow from Investing Activities Cash Flow from Financing Activities Dividends paid Issuance of Share Capital Net Cash Flow from Financing Activities Beginning Cash Balance Cash Balance


Schedule

200B

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2,488,027.09 5,000.00 2,493,027.09

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589,318.00 43,953.00 42,618.00 13,750.00 11,753.00 98,694.00 2,523.00 8,608.00 6,193.00 109,230.00 17,935.00 6,735.00 3,235.00 19,056.00 15,600.00 5,838.00 2,927.00 10,745.00 3,050.00 100,000.00 86,300.00 50,254.40 13,970.00 8,240.00 4,925.00 17,550.00 66,448.51 8,000.00 70,793.00 12,075.00 10,800.00 16,857.38 12,300.00 219,405.00 12,262.80 8,367.00 348,598.00 2,078,907.09 414,120.00

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200A 1,771,869.00 1,771,869.00 469,821.60 30,719.00 12,985.00 9,268.00 8,150.00 69,085.00 2,188.00 5,126.00 4,071.00 101,037.00 9,130.00 2,013.00 1,910.00 12,633.00 13,150.00 5,921.00 2,832.00 4,513.00 2,050.00 62,136.00 47,670.00 9,779.00 5,661.00 1,875.00 11,790.00 15,854.00 2,900.00 507,080.40 6,298.00 277,501.00 1,715,147.00 56,722.00

12,550.00 15,810.00 24,000.00 314,050.00 (341,310.00) 100,000.00 50,000.00 (50,000.00) 56,722.00 79,532.00

56,722.00

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Notes to Financial Statements December 31, 200B 1. Corporate Information TNM Styropor Industries Inc was incorporated under the laws of the Philippine on August 30, 1989. Its original authorized capital stock was five hundred thousand peso divided into five thousand shares common stocks with par value of Php 100.00. Its raw materials consisted mainly of high expandable polystyrene, styrocell, recycle resin and plastic sheet. Sales were mostly to commercial and industrial companies in Manila and provinces, for all insulation and packaging requirements like inspection molding, vacuum forming, packaging for delicate or fragile items, piping insulation, insulation boards, fish boxes, hamburger packs, lunch packs and food trays. The corporation increased its authorized capital stock from the original five hundred thousand pesos to one million on December 2004 to finance an expansion program. In addition, a mortgaged loan of two hundred thousand pesos was obtained from the allied bank on October 2004. The corporation’s offices and plants were located at 1074 EDSA, Cubao, Quezon city with telephone numbers 981-890 and 987-766 both connecting all departments.

2. Basis of Preparation The financial statements have been prepared on a historical cost basis, except for derivative financial instruments, investments held for trading and available for sale financial assets which have been measured at fair value. The financial statements are presented in Philippine peso, which is the Company’s functional and presentation currency under Philippine Financial Reporting Standards (PFRS). All values are rounded to the nearest peso except when otherwise stated. Statement of Compliance The accompanying financial statements have been prepared in compliance with PFRS. PFRS include statements named PFRS and Philippine Accounting Standards (PAS), including interpretations, issued by Financial Reporting Standards Council.

3. Significant Accounting Policies 3.1 Cash and Cash Equivalents 1074 EDSA, CUBAO, QUEZON CITY TEL. NOS.: (02) 981-8902/ (02) 987-7665

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TNM STYROPOR INDUSTRIES INC. Cash includes cash on hands and in banks. The account is recorded at face value. Cash equivalents are short term, highly liquid investments that are readily convertible to known amount of cash with original maturities of three months or less and that are subject to an insignificant risk of changes in value. 3.2 Financial Assets and Liabilities Date of Recognition - The Company recognizes a financial asset or a financial liability in the consolidated balance sheets when it becomes a party to the contractual provisions of the instrument. In the case of a regular way purchase or sale of financial assets, recognition and derecognition, as applicable, is done using settlement date accounting. Initial recognition of Financial Instruments - Financial instruments are recognized initially at fair value, which is the fair value of the consideration given (in case of an asset) or received (in case of a liability). The fair value of the consideration given or received is determined by reference to the transaction price or other market prices. If such market prices are not reliably determinable, the fair value of the consideration is estimated as the sum of all future cash payments or receipts, discounted using the prevailing market rate of interest for similar instruments with similar maturities. The initial measurement of financial instruments, except for those designated at fair value through profit and loss (FVPL), includes transaction cost. Subsequent to initial recognition, the Company classifies its financial assets and liabilities in the following categories: held-to-maturity (HTM) financial assets, available-for-sale (AFS) investments, FVPL financial assets, and loans and receivables. The classification depends on the purpose for which the investments are acquired and whether they are quoted in an active market. Management determines the classification of its financial assets at initial recognition and, where allowed and appropriate, reevaluates such designation at every reporting date. Determination of Fair Value - The fair value for financial instruments traded in active markets at the balance sheet date is based on their quoted market price or dealer price quotation (bid price for long positions and ask price for short positions), without any deduction for transaction costs. When current bid and asking prices are not available, the price of the most recent transaction provides evidence of the current fair value as long as there has not been a significant change in economic circumstances since the time of the transaction.


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TNM STYROPOR INDUSTRIES INC. For all other financial instruments not listed in an active market, the fair value is determined by using appropriate valuation techniques. Valuation techniques includes net present value techniques, comparison to similar instruments for which market observable prices exist, options pricing models, and other relevant valuation models. Where the transaction price in a non-active market is different from the fair value of the other observable current market transactions in the same instrument or based on a valuation technique whose variables include only data from observable market, the Company recognizes the difference between the transaction price and fair value in the consolidated statements of income unless it qualifies for recognition as some other type of asset. In cases where use is made of data which is not observable, the difference between the transaction price and model value is only recognized in the consolidated statements of income when the inputs become observable or when the instrument is derecognized. For each transaction, the Company determines the appropriate method of recognizing the profit amount. Financial Assets Financial Assets at FVPL - Financial assets at FVPL include financial assets held for trading and financial assets designated upon initial recognition as at FVPL. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Gain or losses on investments held for trading are recognized in the consolidated statements of income. Financial assets may be designated by management at initial recognition as at FVPL, when any of the following criteria is met: a. the designation eliminates or significantly reduces the inconsistent treatment that would otherwise arise from measuring the assets or recognizing gains or losses on a different basis; or b. the assets are part of a group of financial assets, financial liabilities or both which are managed and their performance are evaluated on a fair value basis, in accordance with a documented risk management or investment strategy; or c. the financial instrument contains an embedded derivative, unless the embedded derivative does not significantly modify the cash flows or it is clear, with little or no analysis, that it would not be separately recorded. Financial Liabilities Financial Liability at FVPL - Financial liabilities are classified in this category if these result from trading activities or derivative transactions that are 1074 EDSA, CUBAO, QUEZON CITY TEL. NOS.: (02) 981-8902/ (02) 987-7665

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TNM STYROPOR INDUSTRIES INC. not accounted for as accounting hedges, or when the Company elects to designate a financial liability under this category. Other Financial Liabilities - This category pertains to financial liabilities that are not held for trading or not designated as at FVPL upon the inception of the liability. These include liabilities arising from operations or borrowings. The financial liabilities are recognized initially at fair value and are subsequently carried at amortized cost, taking into account the impact of applying the effective interest method of amortization (or accretion) for any related premium, discount and any directly attributable transaction costs. Derecognition of Financial Assets and Liabilities Financial Assets - A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognized when the rights to receive cash flows from the asset have expired; the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass-through’ arrangement; or the Company has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Company has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the Company’s continuing involvement in the asset. Financial Liabilities. A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in profit or loss. Impairment of Financial Assets The Company assesses at balance sheet date whether a financial asset or group of financial assets is impaired. Assets Carried at Amortized Cost - If there is objective evidence that an impairment loss on loans and receivables carried at amortized cost has been incurred, the amount of loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows 1074 EDSA, CUBAO, QUEZON CITY TEL. NOS.: (02) 981-8902/ (02) 987-7665

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TNM STYROPOR INDUSTRIES INC. (excluding future credit losses) discounted at the financial asset’s original effective interest rate (i.e., the effective interest rate computed at initial recognition). The carrying amount of the asset shall be reduced either directly or through use of an allowance account. The amount of loss shall be recognized in the consolidated statements of income. The Company first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognized are not included in a collective assessment of impairment. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed. Any subsequent reversal of an impairment loss is recognized in the consolidated statements of income, to the extent that the carrying value of the asset does not exceed its amortized cost at the reversal date. Assets Carried at Cost - If there is objective evidence of an impairment loss on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, or of a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Classification of Financial Instruments between Debt and Equity A financial instrument is classified as debt if it provides for a contractual obligation to: a. deliver cash or another financial assets to another entity; or b. exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the Company; or satisfy the obligation other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of own equity shares. If the Company does not have an unconditional right to avoid delivering cash or another financial asset to settle its contractual obligation, the obligation meets the definition of a financial liability. 1074 EDSA, CUBAO, QUEZON CITY TEL. NOS.: (02) 981-8902/ (02) 987-7665

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TNM STYROPOR INDUSTRIES INC. Offsetting Financial Instruments Financial assets and financial liabilities are offset and the net amount is reported in the balance sheets if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the asset and settle the liability simultaneously. This is not generally the case with master netting agreements, and the related assets and liabilities are presented gross in the balance sheets. Inventories Finished goods, goods in process and materials and supplies are valued at the lower of cost and net realizable value. Costs incurred in bringing each inventory to its present location and conditions are accounted for as follows: Finished goods and goods in process Materials and supplies cost includes direct materials and labor and a proportion of manufacturing overhead costs based on normal operating capacity but excluding borrowing costs; costs are determined using the moving-average method; at cost using the moving-average method Net realizable value of finished goods and goods in process is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. Net realizable value of materials and supplies is the current replacement cost. Property, Plant and Equipment Property, plant and equipment, except land, are stated at cost less accumulated depreciation and amortization and any impairment in value. Land is stated at cost less any impairment in value. The initial cost of property, plant and equipment comprises of its purchase price, including import duties, taxes and any directly attributable costs in bringing the asset to its working condition and location for its intended use. Cost also includes any related asset retirement obligation and interest incurred during the construction period on funds borrowed to finance the construction of the projects. Expenditures incurred after the asset has been put into operation, such as repairs, maintenance and overhaul costs, are normally recognized as expense in the period the costs are incurred. In situations where it can be clearly demonstrated that the expenditures have improved the condition of the asset beyond the originally assessed standard of performance, the expenditures are capitalized as an additional cost of property, plant and equipment. 1074 EDSA, CUBAO, QUEZON CITY TEL. NOS.: (02) 981-8902/ (02) 987-7665

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TNM STYROPOR INDUSTRIES INC. Construction in progress represents structures under construction and is stated at cost. This includes the costs of construction, property and equipment and other direct costs. Borrowing costs that are directly attributable to the construction of plant and equipment are capitalized during the construction period. Construction in progress is not depreciated until such time that the relevant assets are ready for use. Depreciation and amortization are computed using the straight-line method over the following estimated useful lives of the assets: The remaining useful lives, residual values and depreciation and amortization method are reviewed periodically to ensure that such periods and method of depreciation and amortization are consistent with the expected pattern of economic benefits from the items of property, plant and equipment. Fully depreciated assets are retained in the accounts until they are no longer in use and no further depreciation and amortization is credited or charged to current operations. When each major inspection is performed, its cost is recognized in the carrying amount of the property, plant and equipment as a replacement if the recognition criteria are satisfied. An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated statements of income in the year the asset is derecognized. Investment Properties Investment properties represent land, land improvements, buildings and building improvements held to earn rentals and/or for capital appreciation. Buildings are measured at cost less accumulated depreciation and any impairment in value. The carrying amount includes the cost of replacing part of an existing investment property at the time the cost is incurred, if the recognition criteria are met, and excludes the costs of day-to-day servicing of an investment property. Land is stated at cost less any impairment in value. Depreciation on buildings is computed using the straight-line method over 5 to 50 years. An investment property is derecognized when it has been disposed of or when it is permanently withdrawn from use and no future economic benefit is expected from its disposal. 1074 EDSA, CUBAO, QUEZON CITY TEL. NOS.: (02) 981-8902/ (02) 987-7665

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TNM STYROPOR INDUSTRIES INC. Transfers are made to investment properties when, and only when, there is a change in use, commencement of an operating lease to another party or ending of construction or development. Transfers are made from investment property when, and only when, there is a change in use, evidenced by commencement of the Company’s occupation or commencement of development with a view to sale. Intangible Assets Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at are appropriate and reasonable, significant changes in these assumptions may materially affect the assessment of recoverable values and any resulting impairment loss could have a material adverse impact on the results of operations. Retirement Cost and Other Retirement Benefits. The determination of the Company’s obligation and cost of retirement benefits is dependent on the selection of certain assumptions used by actuaries in calculating such amounts. Those assumptions are described to the consolidated financial statements and include discount rate, expected return on plan assets and salary increase rate. In accordance with PFRS, actual results that differ from the assumptions are accumulated and amortized over future periods and therefore, generally affect the recognized expense and recorded obligation in such future periods. Asset Retirement Obligation - Determining asset retirement obligation requires estimation of the cost of dismantling property and equipment and other costs of restoring the leased properties to their original condition. Contingencies The Company currently has various tax assessments and legal claims. The Company’s estimate of the probable costs for the assessments and claims and assessment of the resolution of these claims have been developed in consultation with in house as well as outside counsel handling the prosecution and defense of these cases and is based on an analysis of potential results. The Company currently does not believe that these tax assessments and legal claims will have a material adverse effect on the consolidated financial position and results of operations. It is possible, however, that future results of operations could be materially affected by 1074 EDSA, CUBAO, QUEZON CITY TEL. NOS.: (02) 981-8902/ (02) 987-7665

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TNM STYROPOR INDUSTRIES INC. changes in the estimates or in the effectiveness of strategies relating to these proceedings.


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TNM STYROPOR INDUSTRIES INC. SCHEDULES Balance Sheet Schedules


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TNM STYROPOR INDUSTRIES INC. Income Statement Schedules


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TNM STYROPOR INDUSTRIES INC. Cash Flow Schedules


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STATEMENT OF MANAGEMENT’S RESPONSIBILITY FOR ANNUAL INCOME TAX RETURN

The management of TNM STYROPOR INDUSTRIES, INC. (the “Company”) is responsible for all information and representations contained in the Annual Income Tax Return for the year ended December 31, 200B. Management is likewise responsible for all information and representations contained in the financial statements accompanying the (Annual Income Tax Return or Annual Information Return) covering the same reporting period. Furthermore, the Management is responsible for all information and representations contained in all the other tax returns filed for the reporting period, including, but not limited, to the value added tax and/or percentage tax returns, withholding tax returns, documentary stamp tax returns, and any and all other tax returns. In this regard, the Management affirms that the attached audited financial statements for the year ended, December 31, 200B and the accompanying Annual Income Tax Return are in accordance with the books and records of TNM STYROPOR INDUSTRIES, INC. complete and correct in all material respects. Management likewise affirms that: a the Annual Income Tax Return has been prepared in accordance with the provisions of the National Internal Revenue Code, as amended, and pertinent tax regulations and other issuances of the Department of Finance and the Bureau of Internal Revenue; b any disparity of figures in the submitted reports arising from the preparation of financial statements pursuant to financial accounting standards and the preparation of the income tax return pursuant to tax accounting rules has been reported as reconciling items and maintained in the company’s books and records in accordance with the requirements of Revenue Regulations No. 8-2007 and other relevant issuances; c the management of TNM STYROPOR INDUSTRIES, INC. has filed all applicable tax returns, reports and statements required to be filed under Philippine tax laws for the reporting period, and all taxes and other impositions shown thereon to be due and payable have been paid for the reporting period, except those contested in good faith. 1074 EDSA, CUBAO, QUEZON CITY TEL. NOS.: (02) 981-8902/ (02) 987-7665

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Signed under oath by:

THADDEO GARCIA PRESIDENT/CHAIRMAN OF THE BOARD OF DIRECTORS

MIKAEL SALVACION TREASURER

EVELYN SALDIVAR CHIEF ACCOUNTANT


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Long Form - MLG & Associates

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