Mr. F. G. Tagao

July 17, 1992 Mr. F. G. Tagao Sycip, Gorres, Velayo & Co. P.O. Box 256, Makati Central Post Office 1299 Metro Manila S i r : This refers to your letter of March 20, 1992 requesting clarification on the following statements of the Examiners and Appraisers Department of the SEC relative to conversion of no par value shares to par value: prcd 1. That no par value shares could be converted into par value shares with a uniform or common par value provided that the total peso amount of the outstanding shares after the conversion would remain the same; and 2. That the conversion of no par value shares will not be based or equated with the actual money contributed but on the latest book value of the no par value shares. Relative to the first statement, conversion of no par value shares to par value would be allowable provided there would be no alteration of interest giving rise to a change in the shareholders' percentage interest in the total assets of the corporation. Thus, if the conversion would result in the increase in the number of shares, the same should be allocated to the existing stockholders in proportion to the number of shares held by them without changing the total peso amount of the total outstanding shares. Anent the second statement, the latest book value per share or the average issue value per share will be used as the basis or the ratio for the conversion, in relation to the total issued value which will remain constant after the conversion. In this way, there will be no variance to be accounted for after the conversion. In other words, the individual allocation of the shares as converted shall be based on the average issue value of the no par value shares and not on the individual actual contribution of the stockholders. Please be advised accordingly. llcd Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman