2004 - Asianbanks.net

GroupParent Company2003(As20042003(As restated) 2004restated)(In Thousands)Securities Clearing Corporation of thePhilippines (SCCP) (22%) P=– P=11,000 P=– P=11,000Medilink Network, Inc. (40%) 10,000 10,000 – –PCI Travel Corporation (35%) 4,424 4,424 – –Unicorn First Properties (UFP) (35%) 3,500 3,500 3,500 3,500Cameron Granville Asset Management (25%) 31,250 – 31,250 –451,174 550,434 7,580,958 7,560,708Accumulated equity in net earnings (losses):Balance at beginning of year (179,182) (149,503) 6,842,623 5,918,170Equity in net earnings (losses) (21,748) (29,679) 855,279 1,008,060Disposal 77,834 – 7,110 81,714Dividends received – – (1,194,837) (165,321)Accumulated equity in net earnings atthe time of merger – – (3,038,303) (3,038,303)Balance at end of year (123,096) (179,182) 3,471,872 3,804,320Equity in net unrealized loss on ASSof a subsidiary – – (48,581) (63,374)Equity in revaluation increment on land ofsubsidiary – – 17,914 13,450328,078 371,252 11,022,163 11,315,104At cost - other investments 3,099,966 2,804,982 936,035 966,070Less allowance for probable losses (Note 10) 1,146,356 663,077 696,547 322,6101,953,610 2,141,905 239,488 643,460P=2,281,688 P=2,513,157 P=11,261,651 P=11,958,564Under the BSP regulations, the use of the equity method of accounting for investment in shares of stock is allowableonly when ownership is more than 50%. The use of the equity method of accounting for equity interests of 20% to50% is being made for financial reporting purposes only to comply with the Philippine GAAP and is not intended forBSP reporting purposes.The costs of equity investments in subsidiaries have been retroactively adjusted to reflect the new cost basis at thetime of acquisition by the Parent Company.On August 1997, CIGNA and the Parent Company entered into a joint venture agreement to each acquire 30% ofMaxicare in consideration for the amount of P=119.5 million each. On 2004, CIGNA conveyed to the Parent Companyits entire shareholdings in Maxicare (totaling 30%) for a nominal sum of P=1. No other consideration, in cash orproperty, will be paid or delivered by Parent Company to CIGNA in exchange for CIGNA’s shares. With the increaseof the Parent Company’s share from 30% to 60%, the accounts have been included into the Group financialstatements.On December 20, 2004, the BSP approved the capital infusion of the Parent Company to Mindanao DevelopmentBank (MDB) pursuant to the plan of merger between ESB and MDB. On November 23, 2004, the BOD of the ParentCompany approved the conversion of its interbank placements and advances to MDB amounting to P=2.1 billion intocommon shares in accordance with the merger incentives approved by the BSP.On October 24, 2003, a deed of assignment was made and executed with the Philippine American Life and GeneralInsurance Company covering the sale of the Parent Company’s 95% share in Equitable PCI Life InsuranceCorporation (EPCI Life), a formerly wholly owned subsidiary. The estimated gain arising from this transactionamounting to P=1.0 million is temporarily included in Other Liabilities in the statements of condition pending finalarrangements depending on the due diligence review being undertaken on EPCI Life. The Parent Company’sremaining equity in EPCI Life of 5% as of December 31, 2003 is accounted for at cost.- 60-