First Abacus Financial Holdings Corporation

October 4, 1999 PSE CIRCULAR FOR BROKERS NO. 2491-99 SUBJECT : First Abacus Financial Holdings Corporation First Abacus Financial Holdings Corporation ("FAF" ) furnished the Exchange a copy f its amended SEC Form 11-A for fiscal year ended December 31, 1998 with the following additional information: Item 2 . Properties . . . Several of the company's condominium units were used as collateral to bank loans. . . . Item 7 . Financial Statements . . . Generally accepted accounting principles require that the financial statement of financial services companies should be presented using the unclassified format, hence, we cannot classify the balance sheet accounts into current and non-current. Balance Sheet 1. Cash and Cash Equivalents The Company considers all highly liquid debt instruments with maturity of three months or less from the date of acquisition to be cash equivalents. The consolidated amount of cash equivalents is P24,469,106 as of December 31, 1998. 2. Accounts Payable and Accrued Expenses This account consists of: Trade Payable P170,085,752 Accrued Expenses 30,420,408 Accrued Taxes 6,310,740 4 Other Liabilities 917.927 P211,734,827 3. Bank Loans There are no prohibitions under any loan agreement from declaring dividends without the consent of the creditors. The company's loans are secured by securities, properties and parent company corporate guarantees. 4. Receivables The receivable account is broken down as follows: Equities Margin and Other Loans P768,942,879 Customers/Brokers 283,937,264 Clearing Houses 27,437,250 Officers and Employees 137,116,616 Others 117.564.428 P1,334,998,437 Less: Allowance for Doubtful Accounts 48,148,049 1,286,850,388 As of December 31, 1998, the total receivables from officers and employees amounted to P137,116,616. The Allowance for Doubtful Accounts decreased despite the increase in accounts receivable because of the fact that most of the accounts are current and are secured. cdll 5. Property, Plant Equipment We believe that the proper disclosures were made for Property, Plant and Equipment account . . . Construction in progress amounting to P28,581,754 were completed as of December 31,1998. 6. Other Liabilities Account Please see No. 2 Accounts payable and accrued expenses above. 7. Indebtedness to Unconsolidated Subsidiaries and Affiliates The amount of P101,024,820 shown in Schedule D is presented in the Financial Statements as part of the Accounts Payable and Accrued Expenses Account. This account is current and payable in one year and thus, was not shown separately since RSA Rule 48 Part IV(b) (12) only requires the presentation of non-current advances to unconsolidated subsidiaries and affiliates. 8. Schedules : a. Accumulated Depreciation The difference of P606,667 pertains to unaccounted difference between the 1997 SEC Form 11-A schedule and the breakdown provided by SGV. The balance was no longer adjusted by the external auditors due to immateriality. b. Disclosures We believe the schedules are already informative and there are no footnote disclosures required. 9. Additional Comments : a. Unrealized Foreign Exchange Gain/(Loss) Exchange gains and losses arising from translation of foreign currency denominated assets and liabilities are credited to or charged against income for the period. b. Additional Disclosures on Interest Costs We believe that no disclosure is needed since the Company do not capitalize interest costs but rather charge the interest to current year operations. Item 9 . Directors and Executive Officers of the Registrant . . . The term of office of all directors is one year only or until their successors are elected. . . " Item 11 . Security Ownership of Certain Beneficial Owners and Management (2) Security ownership of Management Number of % age of Shares Class . . . Ownership of Directors and Officers and Officers as a Group Unnamed 131,010,000 10.9797" A copy of FAF's amended SEC Form 11-A is available for reference at the PSE Center and BSE Plaza Libraries. LexLib For your information. (SGD.) JOSE LUIS U. YULO President and CEO