Mr. J. A. Osana

November 15, 2002 SEC OPINION NO. 14-02 Mr. J. A. Osana Tax Division Sycip Gorres Velayo & Co. 6760 Ayala Avenue Makati City S i r : This refers to your letter dated 23 October 2002 requesting the opinion of this Commission on the queries therein. For applications of merger, the audited financial statements of the constituent corporations (surviving and absorbed) as of the date not earlier than 120 days prior to the date of filing of the application and the long-form audit report for absorbed corporation/s are always required. Hence, regardless of the subsequent change in the ownership of Company Y said financial statements and audit report need to be submitted to SEC. Long-form audit report for the surviving corporation is required if the corporation is insolvent. Since the application of merger will be filed with the Commission on or before April 30, 2003, the audited financial statements and long form audit report as of December 31, 2002 are sufficient compliance with the requirement. In addition, the following are required in the processing of the application: 1. List of creditors of the absorbed company/ies; 2. List of creditors of insolvent surviving corporation; 3. Consent of creditors of insolvent constituent corporation; 4. List of stockholders of record of the constituent corporation; 5. Affidavit of publication, and 6. Company data maintenance form. Relative to your second query, Corporation X being the surviving entity shall acquire all the assets of Company Y. Section 80 paragraph 4 of the Corporation Code, provides that: "4. The surviving or the consolidated corporation shall thereupon and thereafter possess all the rights, privileges, immunities and franchises of each of the constituent corporations; and all property, real or personal, and all receivables due on whatever account including subscriptions to shares and other choses in action, and all and every other interest of, or belonging to, or due to each constituent corporation, shall be taken and deemed to be transferred to and vested in such surviving or consolidated corporation without further act or deed." The branches of Company Y need not be closed so as to establish new branches of the surviving company. All properties (including branches) of the absorbed company shall be transferred to the surviving company as result of the merger. Moreover, the name of the absorbed company used in all branches should be changed and the name of the surviving company shall be adopted. Please be guided accordingly. (SGD.) VERNETTE UMALI PACO General Counsel