Bogo-Mendellin Milling Co., Inc.

September 1, 1999 PSE CIRCULAR FOR BROKERS NO. 2179-99 SUBJECT : Bogo-Mendellin Milling Co ., Inc . Bogo-Medellin Milling Co., Inc. ("BMM") furnished the Exchange a copy of its amended SEC Form 11-A containing BMM's responses to SEC comments on the Financial Statements of its SEC Form 11-A for the fiscal year ended September 30, 1998, stated as follows: SEC Comment BMM's Responses Report of independent Public Report of independent Public Accountants Accountants stating the PTR number of (attached to the amended report) certifying accountant, the complete mailing address of the client and the auditor and the name of the certifying partner. Cash & Cash Equivalents Schedule 1 (attached to the amended report) Accounts Receivables 1. Receivables from related parties Schedule 2 (attached to the amended and from officers, directors and report) employees 2. The allowance for doubtful Basis is 50% of Planters cash advance of accounts provided for the year had P5,094,188 of which 94% was 120 days increased to 1,373.55%. State the old and over. The provision was set up to basis and reason for such cover the risk of non-collection of these provision. accounts. Prepaid Expenses & Other Current Schedule 3 (attached to the amended Assets report) Property, Plant 8 Equipment Schedule E-1 (attached to the amended report) Investment in Shares of Stocks- Mainly other investments representing Basis/reason for presenting the investments in shares of stocks of Manila marketable equity securities under Banking Corporation and Sicogon Island. investment in shares of stocks instead These companies have already cased their of presenting it as current account. operations. Remaining investments zeroed out by Schedule 4 (attached to the amended the valuation allowance. report) Inventory Account (sugar & material Provision for inventory obsolescence was and supplies) Reasons for the based on the Company's policy i.e. 100% discrepancy noted on the allowance for for inventory aged 3 years and above, 50% inventory obsolescence provided for for 2 years and 25% for 1 year. Existing fiscal years 1997 & 1998 as shown in allowance for fiscal year 1996 was deemed the Cash Flow Statement against the sufficient to cover any material losses. Balance Sheet account, taking into consideration that there was no provision for the inventory obsolescence for the year 1996. Accounts Payable & Accrued Schedule 5 (attached to the amended Expenses report Due to an Affiliated Company Revised Schedule 1 and Schedule 1-1 Schedule 1 Indebtedness to affiliate (attached to the amended report) showed no ending balances but the Balance Sheet account for 1998 showed no ending balances but the Balance Sheet account for 1998 showed for a balance of P1,278,758. Explain. Also Cash Flow Statements Interest paid are mainly on bank showed that the company paid interest borrowings during the period which were of P4,292,986 in 1998. The interest paid fully paid before the end of the fiscal year. seem not proportionate to the said loan/obligation giving rise to the interest payment. Income Statement Schedule 6 (attached to the amended Cost of goods sold report) General and Administrative Expense Schedule 7 (attached to the amended Provision for doubtful accounts report) Amount of Depreciation P1,023,050 A copy of BMM's amended SEC Form 11-A is available for reference at the PSE Center and PSE Plaza Libraries. For your information. (SGD.) ATTY. RUBEN L. ALMADRO Officer-in-Charge