BIR Ruling [DA-172-06]

March 27, 2006 BIR RULING [DA-172-06] S-40 (C) (2) Merger, amendment Castillo Laman Tan Pantaleon & San Jose Valero Tower, 122 Valero Street Salcedo Village, Makati City Attention: Attys. Yolanda M. Eleazar, J. Gregson A. Castillo & Rochelle A. Dayaon Gentlemen : This refers to your letters dated December 21, 2005 and December 22, 2005 requesting in behalf of your client, Intel Philippines Mfg., Inc . ("IPMI"), for a modification and/or amendment to BIR Ruling No. S-40-007-2005 dated April 25, 2005 relative to the merger of Silicon Properties, Inc . ("SPI") with IPMI. In the aforesaid ruling the substituted bases of the IPMI shares received per SPI shareholder were indicated as follows: SUBSTITUTED BASES OF SHARES RECEIVED PER SPI SHAREHOLDER Retirement Funds Number of Shares Substituted Bases Equitable PCI Bank (in trust for 6,921,812 P154,876,101.59 IPMI Retirement; Fund) Equitable PCI Bank (in trust for 4,229,996 94,646,501.56 ITPI Retirement Fund) Deutsche Bank (in trust for IPMI 4,229,996 94,646,501.56 Retirement Fund) Marvin V. Fausto 1 22.38 Manuel Malabanan 1 22.38 Maria Carina Antonio 1 22.38 TOTAL 15,381,807 P 344,169,171.83 ======== =========== Note: The substituted basis per share is P22.37508063. (The above data were taken from the documents submitted to this Office). However, you subsequently discovered that the substituted bases of the IPMI shares allocated to each SPI shareholder were inadvertently derived from the share of each SPI shareholder in the net asset value of SPI transferred to IPMI, when the correct basis for the IPMI shares received by the stockholders of SPI should have been the same basis as the SPI shares that they had prior to the merger. Thus, to correct the said inadvertence, you are requesting that BIR Ruling No. S-40-007-2005 be amended or modified to reflect the following substituted bases of the shares received per SPI shareholder as follows: SUBSTITUTED BASES OF SHARES RECEIVED PER SPI SHAREHOLDER Retirement Funds Number of IPMI Substituted bases Substituted Basis per Shares allocated to of IPMI Shares share of IPMI shares SPI Shareholders allocated to SPI allocated to SPI shareholders shareholders Equitable PCI Bank (in trust for 6,921,812 P9,449,998.63 P1.36525 IPMI Retirement Fund) Equitable PCI Bank (in trust for 4,229,996 5,796,754.88 P1.37039 ITPI Retirement Fund) Deutsche Bank (in trust for IPMI 4,229,996 5,843,720.32 P1.38150 Retirement Fund) Marvin V. Fausto 1 1.37 P1.36525 Manuel Malabanan 1 1.38 P1.38150 Maria Carina Antonio 1 1.37 P1.37039 TOTAL 15,381,807 P21,090,477.95 ======= ========= In reply, please be informed that your above request is hereby granted. BIR Ruling No. S-40-007-2005 is hereby amended or modified insofar as the substituted bases of the shares received by the SPI shareholders are concerned. Thus, the entries on the table for the substituted bases of shares received per SPI shareholder found in page 8 of said ruling are hereby modified as follows: EDHTAI SUBSTITUTED BASES OF SHARES RECEIVED PER SPI SHAREHOLDER Retirement Funds Number of IPMI Substituted bases Substituted Basis per Shares allocated to of IPMI Shares share of IPMI shares SPI Shareholders allocated to SPI allocated to SPI shareholders shareholders Equitable PCI Bank (in trust for 6,921,812 P9,449,998.63 P1.36525 IPMI Retirement Fund) Equitable PCI Bank (in trust for 4,229,996 5,796,754.88 P1.37039 ITPI Retirement Fund) Deutsche Bank (in trust for IPMI 4,229,996 5,843,720.32 P1.38150 Retirement Fund) Marvin V. Fausto 1 1.37 P1.36525 Manuel Malabanan 1 1.38 P1.38150 Maria Carina Antonio 1 1.37 P1.37039 TOTAL 15,381,807 P21,090,477.95 ======= ========= In view thereof, you are hereby given thirty (30) days from receipt of this letter to comply with the submission of proof of annotation of substituted basis on the shares received by the SPI stockholders. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service