C SINOPHIL CORPORATION NOTICE OF ANNUAL STOCKHOLDERS MEETING TO ALL

C SINOPHIL CORPORATION NOTICE OF ANNUAL STOCKHOLDERS’ MEETING TO: ALL STOCKHOLDERS NOTICE is hereby given that there will be an annual meeting of the stockholders of Sinophil Corporation on Tuesday, June 17, 2008 at 4:30 p.m., at the Highlands China Palace, Mall of Asia, Pasay City, to consider the following: AGENDA 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Call to Order Proof of Notice of Meeting Certification of Quorum Approval of the Minutes of the Previous Meeting of Stockholders Approval of 2007 Operations and Results Ratification of all Acts of the Board of Directors and Officers Approval of Amendment of Article VII of the Articles of Incorporation to Decrease the Corporation’s Authorized Capital Stock Election of Directors Appointment of SyCip Gorres Velayo & Co. as External Auditors Other Matters Adjournment In accordance with the rules of the Philippine Stock Exchange, the close of business on May 16, 2008 has been fixed as the record date for the determination of the stockholders entitled to notice of and vote at said meeting and any adjournment thereof. Registration for those who are personally attending the meeting will start at 3:30 p.m. and end promptly at 4:30 p.m. All stockholders who will not, are unable, or do not expect to attend the meeting in person are encouraged to fill out, date, sign and send a proxy to the Corporation at 28/F East Tower, PSE Centre, Exchange Road, Ortigas Center, Pasig City, Metro Manila, Philippines. All proxies should be received by the Corporation at least three (3) days before the meeting, or on or before June 14, 2008. Proxies submitted shall be validated by a Committee of Inspectors on June 16, 2008 at 10:00 a.m. at Unit 2803C East Tower, Philippine Stock Exchange Centre, Exchange Road, Ortigas Center, Pasig City. For corporate stockholders, the proxies should be accompanied by a Secretary’s Certification on the appointment of the corporation’s authorized signatory. To avoid inconvenience in registering your attendance at the meeting, you or your proxy are requested to bring identification paper(s) containing a photograph and signature, e.g. passport, driver's license, or credit card. City of Pasig, Metro Manila, June __, 2008. (Sgd.) A. BAYANI K. TAN Corporate Secretary SECURITIES AND EXCHANGE COMMISSION SEC FORM 20-IS Information Statement Pursuant to Section 20 of the Securities Regulation Code 1. Check the appropriate box [ ] Preliminary Information Statement [ ] Definitive Information Statement 2. Name of Registrant as specified in its charter: SINOPHIL CORPORATION 3. Province, country or other jurisdiction of incorporation or organization: Makati City, Metro Manila, Philippines 4. SEC Identification Number: AS093-009289 5. BIR Tax Identification Number: 003-457-827 6. Address of principal office and Postal Code: 28/F, East Tower, PSE Centre, Exchange Road, Ortigas Center, Pasig City, 1605 7. Registrant’s telephone number, including area code: (632) 635-3016 8. Date, time, and place of the meeting of security holders: Date : Time : Venue : June 17, 2008 (Tuesday) 4:30 p.m. Highlands China Palace Mall of Asia, Pasay City 9. Approximate date on which the Information Statement is to be sent or given to security holders: May 26, 2008 10. Securities registered pursuant to Sections 8 and 12 of the Code or Sections 4 and 8 of the RSA (information on number of shares and amount of debt is applicable only to corporate registrants): Title of Each Class Common Stock, P 1.00 par value = Number of Shares of Common Stock Outstanding 8,927,310,000 (As of April 30, 2008) 11. Are any or all of Registrant’s securities listed on a Stock Exchange? Common Shares Preferred Shares Yes [ Yes [ ] ] No [ No [ ] ] If so disclose name of the Exchange: The Philippine Stock Exchange, Inc. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. 1 GENERAL INFORMATION Date, time and place of meeting of security holders (a) Date Time Place June 17, 2008 (Tuesday) 4:30 p.m. Highlands China Palace, Mall of Asia, Pasay City The approximate date on which the Information Statement will be sent or given to security holders is on May 26, 2008. (b) The complete mailing address of the principal office of Sinophil Corporation Company”) is: (“the 28/F, East Tower, PSE Centre, Exchange Road, Ortigas Center, Pasig City 1605 Dissenters’ Right of Appraisal The matters to be voted upon in the Annual Stockholders’ Meeting on June 17, 2008 are not among the instances enumerated in Section 81, Title X of the Corporation Code whereby the right of appraisal, defined to be the right of any stockholder to dissent and demand payment of the fair value of his shares, may be exercised. The instances where the right of appraisal may be exercised are as follows: 1. In case any amendment to the Articles of Incorporation has the effect of changing or restricting the rights of any stockholder or class of shares, or of authorizing preferences in any respect superior to those outstanding shares of any class, or of extending or shortening the term of corporate existence; 2. In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially all of the corporate property and assets as provided in the Corporation Code; and 3. In case of merger or consolidation. In case, the right of appraisal may be exercised, Section 82 of the Corporation Code provides for the appropriate procedure, viz: The appraisal right may be exercised by any stockholder who shall have voted against the proposed corporate action, by making a written demand on the corporation within thirty (30) days after the date on which the vote was taken for payment of the fair value of his shares: Provided, That failure to make the demand within such period shall be deemed a waiver of the appraisal right. If the proposed corporate action is implemented or affected, the corporation shall pay to such stockholder, upon surrender of the certificate(s) of stock representing his shares, the fair value thereof as of the day prior to the date on which the vote was taken, excluding any appreciation or depreciation in anticipation of such corporate action. If within a period of sixty (60) days from the date the corporate action was approved by the stockholders, the withdrawing stockholder and the corporation cannot agree on the fair value of the shares, it shall be determined and appraised by three (3) disinterested persons, one of whom shall be named by the stockholder, another by the corporation and the third by the two thus chosen. The findings of the majority of the appraisers shall be final, and their award shall be paid by the corporation within thirty (30) days after such award is made: Provided, That no payment shall be made to any dissenting stockholder unless the corporation has unrestricted retained earnings in its books to cover such payment: and Provided, further, That upon payment by the corporation of the agreed or awarded price, the stockholder shall forthwith transfer his shares to the corporation. 2 Interest of Certain Persons in or Opposition to Matters to be Acted Upon (a) No person who has been a director or officer or a nominee for election as director of the Company or associate of such persons, have a substantial interest, direct or indirect, in any matter to be acted upon other than the election of directors for the year 2008-2009. The Company is not aware of any director or security holder who intends to oppose any action to be taken by the registrant during the stockholders’ meeting. (b) CONTROL AND COMPENSATION INFORMATION Voting Securities and Principal Holders Thereof (a) As of April 30, 2008, the Registrant had 8,927,310,000 common shares outstanding and each share is entitled to one vote. (b) The record date with respect to the determination of the stockholders entitled to notice of and vote at the Annual Stockholders' Meeting is May 16, 2008. (c) With respect to the election of eleven (11) directors, each stockholder may vote such number of shares for as many as eleven (11) persons he may choose to be elected from the list of nominees, or he may cumulate said shares and give one candidate as many votes as the number of his shares multiplied by eleven (11) shall equal, or he may distribute them on the same principle among as many candidates as he shall see fit, provided that the total number of votes cast by him shall not exceed the number of shares owned by him multiplied by eleven (11). (d) Security ownership of certain record and beneficial owners and management. (1) Security Ownership of Certain Record and Beneficial Owners The persons or groups identified in the table below are known to the Company as directly or indirectly the record or beneficial owners of more than five percent (5%) of the Company’s voting securities as of April 30, 2008: Title of Class Common Name and Address of Record Name of Beneficial Owner Owner and Relationship and Relationship with Record Owner with issuer Belle Corporation Belle Corporation (a) 28/F East Tower, PSE Centre, Ortigas Center, Pasig City Metroplex Berhad Metroplex Berhad (b) Level 10, Grand Seasons Avenue No. 72, Jalang Pahang, Kuala Lumpur, Malaysia PCD Nominee Corporation -Filipino (please see footnote) (c) G/F Makati Stock Exchange, 6767 Ayala Avenue, Makati City Citizenship No. of Shares Held Percent Filipino Malaysian 3,574,716,819 * 2,000,000,000 40.04 22.40 Common Common Filipino 1,502,332,341 16.835 * includes 19 million shares owned by Dominion Asian Equities, Inc. (merged into Belle in 1996). The shares held by Belle Corporation and Metroplex Berhad corporate shareholders shall be voted or disposed of, by the persons who shall be duly authorized by these record or beneficial shareholders for the purpose. The natural person/s that has/have the power to vote on the shares of the foregoing companies shall be determined upon the submission of its proxy form to the Company, which is not later than three (3) days before the date of the meeting. 3 Belle Corporation. The Board of Directors of Belle Corporation which directs the company’s operations, including its representatives to its investee companies like Sinophil, is composed of: Benito Tan Guat Willy G. Ocier Henry T. Sy, Jr. Gregorio U. Kilayko Washington Sycip Cesar E. A. Virata Rogelio R. Cabuñag Thelmo Y. Cunanan Antonio A. Henson Jacinto C. Ng, Jr. Hans T. Sy a The following persons or group are known to Belle as directly or indirectly the record or beneficial owners of more than five percent (5%) of its voting securities as of April 30, 2008: Name and Address of Record Owner and Relationship with issuer (1) PCD Nominee Corporation – Filipino G/F Makati Stock Exchange, 6767 Ayala Avenue, Makati City (1) PCD Nominee Corporation - Non Filipino G/F Makati Stock Exchange, 6767 Ayala Avenue, Makati City (2) Sysmart Corporation Makati Stock Exchange Bldg., Ayala Avenue, Makati City (2) SM Development Corporation Makati Stock Exchange Bldg., Ayala Avenue, Makati City (1) No. of Shares Held 2,267,889,484 1,839,166,813 Percent 36.18 28.96 965,050,527 15.20 562,491,503 8.86 PCD Nominee Corporation (“PCDNC”) is a wholly-owned subsidiary of Philippine Central Depository, Inc. (“PCD”). The beneficial owners of such shares registered under the name of PCDNC are PCD’s participants who hold the shares in their own behalf or in behalf of their clients. The PCD is prohibited from voting these shares, instead the participants have the power to decide how the PCD shares in Belle are to be voted. The participants of PCD who own more than 5% of the Company’s outstanding capital are as follows: i. The Hongkong Shanghai Banking Corporation Limited – Clients’Account – 25.77% ii. Social Security System – 7.50% iv Government Service Insurance System – 6.04% Mr. Henry Sy, Sr. is the single largest shareholder of Sysmart Corporation and SM Development Corporation b (2) Metroplex Berhad. Metroplex Berhad is a Malaysian-registered company. PCD Nominee Corporation (PCDNC). PCDNC is wholly-owned subsidiary of the Philippine Central Depository, Inc. (PCD). The beneficial owners of the shares under the name of PCDNC are PCD’s participants who hold the shares in their own behalf or in behalf of their respective clients. No single PCD participant currently owns more than 5% of the Corporation’s shares forming part of the “PCDNC- Filipino” accounts. c (2) Security Ownership of Management The following table shows the shares beneficially owned by the directors and executive officers of the Company as of April 30 2008: Title of Class Name of Beneficial Owner Amount* and Nature of Beneficial Ownership 1 Direct 1 Direct 1 Direct 2 Direct 1 Direct Citizenship Percent of Class Common Common Common Common Common Willy N. Ocier Alfredo B. Benitez Jose T. Gabionza Ricardo Leong Jerry C. Tiu Filipino Filipino Filipino Filipino Filipino .00 .00 .00 .00 .00 4 Atty. A.Bayani K. Tan Atty. Edmundo L. Tan Manuel A. Gana All directors, officers, and nominees as a group *Number of shares Common Common Common Common 1 1 1 9 Direct Direct Direct Direct Filipino Filipino Filipino .00 .00 .00 .00 (3) Voting Trust Holders of 5% or More There is no party which holds any voting trust or any similar agreement for 5% or more of Sinophil’s voting securites. Changes in Control In March 1997, the Company entered into a Share Swap Agreement (“Swap Agreement”) with Paxell Limited and Metroplex Berhad. Through the Swap Agreement, the Company acquired forty (40%) percent equity in Legend International Resorts (HK), Ltd. (“LIR”) through a stock swap with Metroplex and other minority shareholders of LIR, resulting in these investors owning 35.5% of Sinophil. On August 23, 2001, a Memorandum of Agreement (“MOA”) was entered into by and among the Company, Belle Corporation, Metroplex and LIR rescinding the Swap Agreement entered into by them in 1997, cancelling all obligations stated therein, reversing all the relevant transactions, and cancelling or returning all the shares of Sinophil and LIR exchanged thereby. To effect the cancellation of Metroplex and Paxell’s investment, Sinophil was to reduce its authorized capital stock. The cancellation of such shares has been presented to its shareholders and has been approved in their meeting held on February 18, 2002. However, due to Metroplex's failure to deliver for cancellation the stock certificates covering 2,000,000,000 shares of their total shareholdings at that time, Sinophil again presented to its shareholders the reduction of its authorized capital stock to the extent of 1,870,000,000 shares, which were the shares already delivered by Metroplex pursuant to MOA. The shareholders, during Sinophil's annual meeting on June 3, 2005, approved the capital reduction, cancellation and delisting of the 1,870,000,000 shares. The reduction of Sinophil’s authorized capital stock was approved by the Securities and Exchange Commission on March 28, 2006. As a result of the partial implementation of the MOA, Belle has become the single biggest shareholder of the Company, with about 40.3% of Sinophil's outstanding common equity after the decrease in capital. On March 30, 2007, the Company purchased from Union Bank of the Philippines (“Union Bank”) its loan to Legend International Resorts (HK) Limited (“LIR”) secured by one billion (1,000,000,000) shares of Sinophil registered under the name of Metroplex. An application to reduce the Corporation’s authorized capital stock by 1,000,000,000 common shares is currently pending with the SEC. After the approval of the decrease in capital, the aforesaid shares used to secure the Union Bank loan will be cancelled, and with this, Belle’s interest in Sinophil will increase to approximately 44%. Directors and Executive Officers Directors and Executive Officers The names, ages and periods of service of all the incumbent Directors and Executive Officers of the Company are as follows: Name Willy N. Ocier Age 51 Position Director, Chairman of the Board Period Served 6/25/99--present Nationality Filipino 5 Alfredo B. Benitez Jose T. Gabionza Ricardo Leong Jerry C. Tiu Atty. A. Bayani K. Tan Atty. Edmundo L. Tan Manuel A. Gana Atty. Michelle San Buenaventura-Dy 40 45 73 50 52 61 50 28 Director, President Director (Independent) Director (Independent) Director (Independent) Director and Corporate Secretary Director Sr. Vice President-Finance & CFO Asst. Corporate Secretary 2/18/02--present 6/25/03--present 5/29/99--present 6/25/99--present 6/23/98--present 6/25/99--present 9/15/00--present 6/21/07--present Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino They shall hold office until the annual meeting held next after their election and until their successors shall have been elected and qualified. Board of Directors The following are the incumbent members of the Board of Directors who are also nominated herein for re-election as members of the Board of Directors for 2008-2009. Also discussed below are their business experiences in the last five (5) years: Willy N. Ocier Mr. Ocier is the Chairman of the Board of Sinophil. He is the Chairman of APC Group, Incorporated and Tagaytay Midlands Golf Club, Inc. and also the Chairman and President of Pacific Online Systems Corporation. He is one of the Vice Chairmen of Belle Corporation and Highlands Prime, Inc. He is also the Vice Chairman of Tagaytay Highlands International Golf Club, Inc. Previously, he was the President and Chief Operating Officer of Eastern Securities Development Corporation. He obtained his Bachelor of Arts (Economics) degree from Ateneo de Manila University. Alfredo B. Benitez Mr. Benitez is currently the President of Sinophil, and is also a Director of the Company. He is also currently a Director of Pacific Online Systems Corporation, Mango Orchard Resources & Development and Manila Building Loan Association. He is the President of AB Gaming and Leisure Specialists, Inc., Highland Gaming Corporation, Insular Gaming Corporation, AB Leisure Exponent, Inc., ABLE Holdings Inc., Bingo Gallery Inc., Binondo Leisure Resources, Inc.(since February 2003), Royal Highland Leisure and Resorts Corporation (since May 2002), First Cagayan Leisure and Resorts Corporation (since April 2000) and the Chairman of Zoraymee Holdings Incorporated. He graduated at St. Mary’s College, Williamsburg, Virginia with a degree in B.S. Mathematics in 1988. Jose T. Gabionza Mr. Gabionza is a Director of Sinophil. He is also a Director of APC Group, Inc. (since October 2003), SM Synergy Properties Holding Corporation, and currently serves as Vice President for Credit and Research of SM Development Corporation (since February 2003). He graduated from the University of the East, Cum Laude, and is a Certified Public Accountant. Ricardo Leong Mr. Leong is a Director of Sinophil. He obtained his Bachelor of Science degree in Mathematics from Fordham University, New York. He is currently a member of the Board of Directors of Flexo Manufacturing Corporation. 6 Jerry C. Tiu Mr. Tiu is the President of Tagaytay Highlands International Golf Club, Inc., The Country Club at Tagaytay Highlands, Inc., Tagaytay Midlands Golf Club, Inc., The Spa & Lodge at Tagaytay Highlands, Inc., and Tagaytay Highlands Community Condominium Association, Inc. Concurrently, he is the Chairman of Mega Magazine Publishing, Inc., and former Director of the Manila Polo Club. He holds a Bachelor of Science degree in Commerce (Marketing) from the University of British Columbia. Atty. A. Bayani K. Tan Atty. Tan is a Director and the Corporate Secretary of the Company. He is also currently a Director, Corporate Secretary, or both, of the following reporting companies: First Abacus Financial Holdings Corporation, Belle Corporation, Tagaytay Highlands International Golf Club, Inc., Tagaytay Midlands Golf Club, Inc., The Country Club at Tagaytay Highlands, Inc., The Spa and Lodge at Tagaytay Highlands, Inc., Vantage Equities, Inc., Destiny Financial Plans, Inc., Philequity Funds, Inc., Philequity PSE Index Funds, Inc., Philequity Dollar Income Fund, Inc., Philequity Money Market Fund, Inc. and TKC Steel Corporation. He is the Managing Partner of Tan Venturanza Valdez Law Offices and also a Director, Corporate Secretary, or both of private companies such as Sterling Bank of Asia Inc, Belle Bay City Corporation, Oakridge Properties, Inc., JTKC Equities, Inc., The Discovery Leisure Company, Inc., Goodyear Steel Pipe Corporation, Hella-Phil, Inc., Metro Manila Turf Club, Inc., Monte Oro Resources & Energy Inc., Herway, Inc. and Highlands Gourmet Specialist Corp. Atty. Tan is a member of the Philippine Bar. He holds a Bachelor of Arts Degree from the San Beda College, a Bachelor of Laws Degree from the University of the Philippines College of Law, and a Master of Laws Degree from the New York University School of Law. Atty. Edmundo L. Tan Atty. Tan is a Director of Sinophil. He is also a Director of APC Group, Inc. (since 1999). He is also a Director and Corporate Secretary of PhilCom, Inc. (since 2000) and Corporate Secretary of Philippine Bank of Communications and PBCom Finance (since 2002). He is the Managing Partner of Tan Acut & Lopez Law Offices (1993-present). Previously, he was a Director of Belle Corporation (2000-2002). He is a member of the Integrated Bar of the Philippines and International Law Association (Philippine Branch). He graduated with a Bachelor of Arts degree from De La Salle College, Bacolod and Bachelor of Laws degree from the University of the Philippines. Independent Directors Messrs. Jose T. Gabionza, Ricardo Leong and Jerry C. Tiu were elected as independent directors pursuant to the requirements set forth in Section 38 of the Securities Regulation Code. In compliance with the requirements of the Code of Corporate Governance and the Securities and Exchange Commission’s Guidelines on the Nomination and Election of Independent Directors which have been adopted and made part of the Corporation’s ByLaws, the Nomination Committee, in a meeting held on 11 March 2008, indorsed the respective nominations given in favor of Messrs. Gabionza (by Willy N. Ocier), Leong (by Alfredo B. Benitez), and Tiu (by Ricardo C. Leong). The Nomination Committee has determined that these nominees as independent directors possess all the qualifications and have none of the disqualifications for independent directors as set forth in the Company’s Manual on Corporate Governance. 7 The nominated independent directors are in no way related to the stockholders who nominated them. Executive Officers Manuel A. Gana Mr. Gana is the Senior Vice President for Finance and Chief Financial Officer of both Belle Corporation and the Company. He joined Belle in 1997 as Vice President for Corporate Development and Special Projects, during which time he was also assigned as the Vice President-Finance and Chief Financial Officer for MagiNet Corporation, a subsidiary of the Company. He is a Director of APC Group, Inc. and Pacific Online Systems Corporation. Previously, he was Director of Investment Banking at Nesbitt Burns Securities Inc. in New York. He also previously worked for Bank of Montreal and Merrill Lynch Capital Markets (both in New York), and for Procter & Gamble Philippine Manufacturing Corp. Mr. Gana holds a Master of Business Administration degree from the Wharton School of the University of Pennsylvania. He is a Certified Public Accountant. Atty. Michelle San Buenaventura-Dy Ms. San Buenaventura-Dy is the Assistant Corporate Secretary of the Company and Belle Corporation. She is also currently the Assistant Corporate Secretary of iRemit, Inc., Sterling Bank of Asia Inc (A Savings Bank). Since year 2007, she is also Corporate Secretary of private companies such as Metropolitan Leisure & Tourism Corporation, Highlands Gourmet Specialist Corporation, Highlands China Restaurant Corporation, Parallax Resources, Inc., Highland Gardens Corporation; Director and Corporate Secretary of Subco Technology, Inc. and Securities Plus, Inc.; and Assistant Corporate Secretary of Fidelity Securities, Inc., Pan-Asean Multi-Resources Corporation, Demikk Holdings, Inc., JTKC Realty Corporation, Aldex Realty Corporation, Demikk Realty, Inc., JTKC Land, Inc., HotelSystems Asia, Inc., Donau Deli, Inc., JT Perle Corporation, Metro Manila Turf Club, Inc., Foundation Capital Resources, Inc., Touch Solutions, Inc., Secure-Citiparking Philippines, Corporation, Monte Oro Resources & Energy, Inc., Monte Oro Grid Resources Corporation, iN2Power, Inc, Sinophil Leisure and Resorts Corporation and SLW Development Corporation. She is a Member of the Philippine Bar and is an Associate of Tan Venturanza Valdez Law Offices. She holds Bachelor of Laws (Class of 2005) and Bachelor of Arts in Public Administration (Class of 2000) degrees from the University of the Philippines. Significant Employees There are no other significant employees other than the Directors and Executive Officers as provided for in the Articles and By-Laws of the Corporation and as enumerated above. Family Relationships No director and/or executive officer of Sinophil are related up to the fourth degree by affinity or consanguinity. Involvement in Certain Legal Proceedings As of April 30, 2008, except as provided below, the Company is not aware of any of the following events wherein any of its directors, nominees for election as director, executive officers, underwriter or control person were involved during the past five (5 years): 8 • • • • any bankruptcy petition filed by or against any business of which any of the above persons was a general partner or executive officers either at the time of the bankruptcy or within two years prior to that time; any conviction by final judgment in a criminal proceeding, domestic or foreign, or any criminal proceeding, domestic or foreign, pending against any of the above persons; any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, domestic or foreign, permanently or temporarily enjoining, barring, suspending or otherwise limiting the involvement of any of the above persons in any type of business, securities , commodities or banking activities; and, any finding a domestic or foreign court of competent jurisdiction (in civil action), the SEC or comparable foreign body, or a domestic or foreign exchange or electronic marketplace or self regulatory organization, that any of the above persons has violated a securities or commodities law, and the judgement has not been reversed, suspended, or vacated. As a result of the delay in the delivery of the facilities of the Universal Leisure Club, Inc. (ULC), some of its members have initiated legal actions against ULC, the Universal Rightfield Property Holdings, Inc. (URPHI) and the Universal Leisure Corp. (ULCorp), as well as their respective incumbent and former officers and directors, including their former Corporate Secretary, A. Bayani K. Tan. The cases filed include: i. A Complaint for Syndicated Estafa (docketed as I.S. No. 02-50443-F) which was dismissed on 18 June 2003 by the City Prosecutor of Mandaluyong City for lack of probable cause and which dismissal was affirmed on 26 May 2004 by the Department of Justice on a Petition for Review filed by the complainants therein; A criminal case for Estafa and Large-Scale Swindling (docketed as Criminal Case No. Q02-114052) before the Regional Trial Court (RTC) of Quezon City. This case was dismissed by the RTC in its Omnibus Order dated 29 November 2005, which dismissal was affirmed with finality on 22 February 2007 by the RTC due to complainant’s failure to file a proper notice of appeal within the prescribed period. ii. iii. Civil actions for breach of contract and/or annulment of contract, specific performance, quieting of title and reimbursement, damages with request for receivership and preliminary attachment (Civil Case Nos. MC03-075, MC03-077, and MC04-082) before the RTC of Mandaluyong City, which cases have been settled and the RTC Mandaluyong has on 08 February 2006, promulgated a Joint Decision approving the Settlement Agreement, Supplemental Agreement, and Second Supplemental Agreement re: Civil Case Nos. MC03-077 and MC04-082. RTC Mandaluyong, noting the settlement of Civil Case Nos. MC03-077 and MC04-082, has likewise issued an Order dated 18 May 2006 re: Civil Case No. MC03-075 holding that the aforementioned settlement agreement likewise puts an end to Civil Case No. MC03-075, as it involves substantially similar factual antecedents, and holding further that the complaint and counterclaims of the parties are withdrawn with prejudice. Certain Relationships and Related Transactions No director or executive officer or any member of their immediate family has, during the last two years, had a direct or indirect, material interest in a transaction or proposed transaction to which the Company was a party. The Company does not have a parent company. 9 Disagreement with Director No director has resigned nor declined to stand for re-election to the Board of Directors since the date of the last annual meeting of stockholders because of a disagreement with the Company on any matter relating to the latter's operations, policies, or practices. Compensation of Directors and Executive Officers Summary Compensation Table (Annual Compensation) Name and Principal Position Year Salary Bonus/Others Total Annual Compensation Willy N. Ocier Chairman of the Board Alfredo B. Benitez President Manuel A. Gana SVP Finance & CFO All officers and directors as a group (Unnamed) 2008 * 2007 2006 1,721,018 1,721,018 977,859 213,542 213,542 123,903 1,934,560 1,934,560 1,101,762 * 2008 amounts are based on estimates only. Compensation of Directors All directors receive a per diem of P5,000.00 each for every meeting attended. Employment Contracts and Termination of Employment and Change in Control Arrangements There was no compensatory plan or arrangement with respect to named executive officers that resulted or will result from the resignation, retirement or termination of such executive officer or from a change-in-control in the Company. Warrants and Options Outstanding There are no Warrants or Options outstanding. Independent Public Accountants (a) (b) SyCip, Gorres, Velayo & Co., the Company’s external auditors for 2007-2008 will be recommended for re-appointment as such for the current year. Representatives of SyCip, Gorres, Velayo & Co. are expected to be present at the Annual Meeting to respond to appropriate questions and will be given the opportunity to make a statement if they so desire. There was no event in the past five (5) years where SGV and the Company had any disagreement with regard to any matter relating to accounting principles or practices, financial statement disclosure or auditing scope or procedure. (c) 10 (d) In compliance with SEC Memorandum Circular No. 8 Series of 2003, the assignment of SGV’s engagement partner for the Company shall not exceed five (5) consecutive years. OTHER MATTERS Action with Respect to Reports The Company will seek the approval by the stockholders of the Minutes of the June 21, 2007 Stockholders' Meeting during which the following matters were taken up: (1) Call to Order, (2) Proof of Notice of Meeting, (3) Certification of Quorum, (4) Approval of the Minutes of the Previous Stockholders Meeting, (5) Approval of 2006 Operations and Results, (6) Ratification or all Acts of the Board of Directors and Officers (7) Approval of Amendment of Articles of Incorporation to Decrease the Corporation’s Authorized Capital Stock (8) Election of Directors, (9) the Appointment of SyCip Gorres Velayo & Co. as External Auditors, (10) Other Matters and (11) Adjournment. The Company will also seek approval by the stockholders of the 2007 Operations and Reports, contained and discussed in the annual report attached and made part of this Information Statement. Approval of the reports will constitute approval and ratification of the acts of management and of the Board of Directors for the past year. Matters Not Required to be Submitted No action is to be taken with respect to any matter which is not required to be submitted to a vote of security holders. Other Proposed Actions The items covered with respect to the ratification of the acts of the Board of Directors and officers for the past year up to the date of the meeting are those items entered into in the ordinary course of business with those of significance are covered by appropriate disclosures such as: membership in the relevant committees such as the Executive Committee, designation of authorized signatories, financing activities, opening of accounts, appointments in compliance with corporate governance policies and funding support of the projects. Voting Procedures (a) (b) Actions to be taken at the Annual Stockholders’ Meeting shall require the vote of the stockholders representing at least a majority of the Company’s outstanding capital stock. Two inspectors shall be appointed by the Board of Directors before or at each meeting of the stockholders, at which an election of directors shall take place; if no such appointment shall have been made or if the inspectors appointed by the Board of Directors refused to act or fail to attend then the appointment shall be made by the presiding officer of the meeting. Stockholders may vote at all meetings either in person or by proxy duly given in writing in favor of any person of their confidence and each stockholder shall be entitled to one vote for each share of stock standing in his name in the books of the corporation; provided, however, that in the election of Directors, each stockholder shall be entitled to cumulate his votes in the manner provided for by law. The By-Laws of the Company is silent as to the method by which votes are to be counted. In practice, however, the same is done by the raising of hands or viva voce. Upon confirmation by the inspectors that there is a mathematical impossibility for certain nominees to be elected into office based on proxies held and votes present/represented (c) (d) (e) 11 in the meeting, the actual casting and counting of votes for the election of Directors may be dispensed with. Omitted Items Items 8, 9, 10, 11, 12, 13, 14 and 17 are not responded to in this report, the Company having no intention to take any action with respect to the information required therein. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I hereby certify that the information set forth in this report is true, complete and correct. This report is signed in the City of Pasig, Metro Manila on May , 2008. (Sgd.) WILLY N. OCIER Chairman 12 MANAGEMENT REPORT SINOPHIL CORPORATION BUSINESS AND GENERAL INFORMATION Business Sinophil Corporation (“Sinophil” or the “Company”) was incorporated as Sinophil Exploration Co., Inc. on November 26, 1993. Sinophil was organized with oil and gas exploration and development as its primary purpose. The Company, together with other companies (Contractors), were participants to several Geophysical Survey and Exploration Contracts and Non-Exclusive Geophysical Permits entered into with the Philippine Government, through the Department of Energy, covering certain petroleum contract areas in various locations. It had also interests in Dragon Oil Plc (Dragon Oil) and Sinoil Asia Limited (Sinoil). In 1996, with investor interest in oil exploration and mining companies remaining generally soft, the Company's management recommended conversion of Sinophil from an oil exploration company to an investment holding company. In line with the Company's decision to change its primary purpose, the Company assigned its interests in Dragon Oil and Sinoil to Belle Corporation (“Belle”) and/or its subsidiaries. To finance the Company's projects, acquisitions and investments in 1997, private placements of Sinophil's shares were made to several investors, both in the country and overseas. On June 3, 1997, the Securities and Exchange Commission (SEC) approved the Company’s application for a change in primary purposes from oil and gas exploration and development to being an investment holding company. As an investment holding firm, it shall engage in the acquisition by purchase, exchange, assignment or otherwise, hold, own and use for investment any and all properties of every kind and description. Investments As an investment holding firm, the Company invested in various companies involved in gaming, property development, pay-per-view entertainment and information systems . 1. 40% equity in Legend International Resorts (HK) Limited (“LIR”) In March 1997, the Company entered into a Share Swap Agreement (“Swap Agreement”) with Paxell Limited and Metroplex Berhad (Malaysian companies, collectively referred to as “Metroplex”). Metroplex is a listed company in Malaysia involved in property development and casino operations through its subsidiary, Legend International Resorts (Hong Kong) Ltd. (“LIR”). Through the Swap Agreement, the Company acquired forty (40%) percent equity in LIR through a stock swap with Metroplex and other minority shareholders of LIR, resulting in these investors owning 35.5% of Sinophil. Under the parties’ agreement, the Company and Metroplex shall jointly pursue future casino and casino-related activities in the Philippines. Sinophil also agreed to have Belle Corporation (“Belle”) as a partner in its Philippine casino operations. In addition, Metroplex agreed to undertake its casino activities internationally through LIR. LIR is the owner and operator of the Subic Legend Resorts and Casinos which has the exclusive franchise to operate casinos in the Subic Bay Special Economic Zone. However, in May 10, 2006, the Philippine Amusement and Gaming Corporation, ordered the immediate stop of the operation of the casino. 13 A dispute on the terms of the Swap Agreement ensued, which subsequently caused Metroplex to withhold financial information of LIR from fiscal 1999 onwards. As a result of such dispute, on March 31, 1998, Metroplex advised the Company that it deemed the 1997 Swap Agreement terminated and will cause the cancellation of the shares covering the LIR shares and the return of the Company’s shares, all of which acts Sinophil, together with Belle, objected to. Because of the dispute and the uncertainties related thereto, the Company recorded such investment in LIR at cost in 1997. On August 4, 1998, the Company, Belle and Metroplex entered into an agreement (“Agreement”) to confirm the validity of the aforementioned Swap Agreement. The terms of the Agreement again included among others, an unconditional guarantee by Metroplex that the combined net income after tax of LIR’s wholly-owned subsidiaries for the year ended January 31, 1999 will be at least US$43 million. Further, should the committed net income not be met, Metroplex shall make up for the shortfall by way of a cash payment to LIR or by way of offset against any amount legitimately ow by LIR to Metroplex such that the said payment can be properly booked by LIR as income for said fiscal year. Such payment must be made before the completion of the audit of LIR’s financial statements or ninety (90) days after the end of its fiscal year ended January 31, 1999. Consequently, the Company began accounting for its investment in LIR using the equity method. On August 23, 2001, with respect to Sinophil’s investment in 40% of the equity of LIR, a Memorandum of Agreement (“MOA”) was entered into by and among the Company, Belle, Metroplex and LIR rescinding the Swap Agreement entered into by them in 1997, cancelling all obligations stated therein, reversing all the relevant transactions, and cancelling or returning all the shares of Sinophil and LIR exchanged thereby. To effect the cancellation of Metroplex Group's investment, Sinophil’s shareholders, during their meeting on February 18, 2002 approved the reduction of its capital stock to the extent of 3,870,000,000 shares held by the former. However, due to Metroplex's failure to deliver for cancellation the stock certificates covering 2,000,000,000 shares of their total shareholdings, Sinophil again presented to its shareholders the reduction of its authorized capital stock to the extent of 1,870,000,000 shares (the “Partial LIR Unwinding”), which were the shares already delivered by Metroplex pursuant to MOA. The shareholders, during Sinophil's annual meeting on June 3, 2005, approved the capital reduction, and the cancellation and delisting of said shares, with the SEC. The Partial LIR Unwinding cancelling the 1,870,000,000 shares was formally approved by the SEC as of March 28, 2006. In view of such plan to rescind the Swap Agreement through the MOA and related means, Sinophil discontinued using the equity method in accounting for its investments in LIR starting February 1, 1999. On March 20, 2007, Sinophil acquired a loan obligation (the “Loan”) of LIR from Union Bank of the Philippines (“Union Bank”), which is secured by one billion shares of the Company’s stock under the name of Metroplex. With the Company’s acquisition of the Loan, the one billion Sinophil shares comprising the collateral for the Loan, were delivered by Union Bank to the Company and its designated Escrow Agent. The said shares will be submitted to the SEC for cancellation in due course pursuant to the MOA, as stated in the preceding paragraph. As of December 31, 2007, one billion (1,000,000,000) Sinophil shares remained outstanding from the Metroplex Group. 2. 30% equity in Metro Manila Turf Club, Inc. ("MMTC") In October 1997, the Company’s board of directors approved management’s proposal to invest in up to 30% of MMTC’s outstanding capital stock. MMTC was granted a horseracing franchise by the Philippine Congress in 1995, whereby MMTC may develop and operate a race track in Luzon, and establish off-track on-line betting shops at any location in the Philippines. 14 On October 5, 2006, a Memorandum of Agreement was entered into by MMTC, Belle, Sinophil and Equitrak Management Corporation (“Equitrak”) to work towards the activation of MMTC’s congressional horse racing franchise and seek equity investors to finance the construction of a race track. The land for the racetrack will also be sourced from Equitrak or via the equity investors. Prior to 2006, MMTC had approximately 121 hectares of land in Tanauan, Batangas, which was originally intended as the site for a racetrack (the “Land”). However, there has been no construction activity on the Land to this date. As a consequence of the Memorandum of Agreement with Equitrak, MMTC returned the land prorata to Belle and Sinophil, as a return of their investments or deposits. 3. 3.9% equity in Belle Bay City Corporation ("BBCC") In March 1997, the Company acquired 4.5% of BBCC, a landholding company that owns approximately 14 hectares in net land area in a reclaimed seafront site along Roxas Boulevard in Parañaque City, which was intended to be the site of the Belle Bay Plaza project. Land and development costs amounted to P1,501,477,310 as of December 31, = 2006. Based on the latest appraisal report dated January 27, 2005 prepared by an independent firm of appraisers, the appraised value of such property is in excess of the carrying cost as of December 31, 2006. In February 2002, BBCC issued additional shares of 253,684,622 common shares for P1 per share. The Company did not subscribe to the additional issuance, resulting in the dilution of its equity interest in BBCC from 4.5% to 3.9%. On June 27, 2003, the Board of Directors of BBCC approved the resolution to amend its articles of incorporation to shorten the corporate term and thus allow BBCC to distribute its land as liquidating dividends to its shareholders. The stockholders of BBCC ratified the resolution on July 10, 2003. On January 27, 2005, the SEC approved the Company's application for dissolution. BBCC is now in the process of subdividing its undeveloped land and distributing the same and other assets to its shareholders. 4. Foundation Capital Resources, Inc. (“FCRI”) – 100% subsidiary FCRI was registered with the Securities and Exchange Commission on February 8, 1994 primarily to invest in, purchase, or otherwise acquire and own, hold, use, develop, lease, sell, assign, transfer, mortgage, pledge, exchange, operate, enjoy or otherwise dispose of, securities and other investments as may be permitted by law. 5. Sinophil Leisure and Resorts Corporation (”SLRC”) – 100% subsidiary SLRC was registered with the Securities and Exchange Commission on December 27, 2007 primarily to conduct, maintain, operate and/or invest in amusement, entertainment and recreation businesses including games of chance and skills, which may be allowed by law within the territorial jurisdiction of the Philippines. Financial Performance The Company derives its revenues primarily from investment activities, as follows: Fiscal year ended December 31, Interest 2007 66,319 P66,319 2006 2,566 P2,566 Employees The Company is a holding company whose business is not manpower intensive; hence, its transactions are extremely manageable through temporary secondment of personnel from its affiliates on an as needed basis. This arrangement is also resorted to in keeping with austerity 15 measures adopted due to present economic conditions. These personnel seconded to the Company are not subject to Collective Bargaining Agreements. There were no other supplemental benefits or incentives other that the basic salary and 13th month pay. Competition Sinophil is an investment holding company. The Company has had past investments in various entities involved in gaming, property development, and pay-per-view entertainment and information systems. Gaming: The Company has been historically involved in gaming and gaming-related activities within the country through certain associates. Its interests include the following: a) Legend International Resorts (Hong Kong) Limited ("LIR"), Subic Branch, is the owner and operator of Subic Legend Resorts and Casino (also known as the Legenda Hotel) in Subic Bay. Legenda Hotel is located at the business district of Subic Bay and 15 minutes from Subic Bay International Airport. It has easy access to recreation centers and has 254 guest rooms with all modern facilities and amenities. There are about nine different room type to choose from to enjoy your stay at the Legenda Hotel at affordable rates. The Hotel facilities include, among others, meeting and banquet facilities and restaurants and entertainment. The other major hotel player in Subic Bay area is the Subic International Hotel, which is located at the heart of the Subic Free Port Zone. Subic International Hotel boasts a wide range of 287 guestrooms that are well equipped and decorated with several amenities. Hotel facilities include, among others, business center, banquet and conference facilities, restaurant and bar and golf course. Legenda Hotel is able to effectively compete with other hotel operators primarily on the basis of its central location in the Subic Freeport Zone and its recreational facilities being offered and its competitive room rates. The Company and the controlling shareholders of LIR, Metroplex Berhad, have agreed to exchange all shares in LIR of the Company for all shares in Sinophil held by Metroplex and LIR, in effect unwinding the Company's investment in LIR. The Company is presently awaiting Metroplex' full compliance with this agreement, at which time the Company will cease all involvement with LIR. b) Metro Manila Turf Club, Inc. (MMTC) is the owner of a congressional franchise to engage in horse racing operations. On October 5, 2006, a Memorandum of Agreement was entered into with Equitrak to operationalize its legislative franchise authorizing it to conduct horseracing operations. Should MMTC operate a racetrack in the future, it will compete with other companies which are presently operating race tracks in the country, such as the Philippine Racing Club and Manila Jockey Club. Properties The Company and its subsidiaries do not have principal properties, such as real estate, plant and equipment, mines, patents, etc., except for office equipment. These properties are not subject to mortgage, lien and encumbrances. The Company does not lease any property and it has no intention of acquiring properties in the next twelve (12) months. Legal Proceedings To the best of the Company’s knowledge, aside from what has already been mentioned in the preceding Item 1 (“Business”) and in Item 11.4 (“Change in Control”), neither the Company nor any of its subsidiaries or affiliates is a party to, nor are they involved in, any litigation that will materially affect its interests. Submission of Matters to a Vote of Security Holders 16 There were no matters submitted to a vote of security holders during the calendar year covered by this report. OPERATIONAL AND FINANCIAL INFORMATION Market for Registrant’s Common Equity and Related Stockholder Matters MARKET INFORMATION The principal market where the registrant’s common equity is traded is the Philippine Stock Exchange. The high and low sales prices for each quarter within the last two fiscal years of the registrant’s common shares, as quoted on the Philippine Stock Exchange, are as follows: STOCK PRICES HIGH 2008 First Quarter April 2007 First Quarter Second Quarter Third Quarter Fourth Quarter 2006 First Quarter Second Quarter Third Quarter Fourth Quarter 0.340 0.300 LOW 0.230 0.250 0.380 0.490 0.430 0.490 0.155 0.350 0.260 0.320 0.150 0.170 0.140 0.170 0.125 0.120 0.115 0.125 The Company’s common shares were traded at P0.245 per share on May 08, 2008. SECURITY HOLDERS The number of shareholders of record as of April 30, 2008 was 668. Common shares outstanding as of April 30, 2008 were 8,927,310,000. Top 20 shareholders as of April 30, 2008: Name 1 Belle Corporation 2 Metroplex Berhad 3 PCD Nominee Corporation (Filipino) 4 Integrated Holdings, Incorporated 5 PCD Nominee Corporation (Non-Filipino) 6 Compact Holdings, Incorporated 7 Timpani International Limited 8 Elite Holdings, Incorporated 9 Inpilcom, Incorporated 10 APC Group, Incorporated 11 Richold Investor Corporation 12 Sysmart Development Corporation 13 Bondsway Limited No. of Shares Held % to Total 3,574,716,819* 40.04 2,000,000,000 22.40 1,502,332,341 16.82 320,000,000 3.58 280,191,375 3.14 190,000,000 2.13 158,460,000 1.78 151,400,000 1.70 150,000,000 1.68 100,000,000 1.12 100,000,000 1.12 100,000,000 1.12 89,062,500 1.00 17 14 Eastern Sec. Dev. Corp. 21,432,000 0.24 15 Oscar S. Cu ITF: Anthony Cu 19,500,000 0.22 16 Dominion Asian Equities, Inc. 19,000,000 0.21 17 East Pacific Corporation 16,600,000 0.19 18 Philippine Realty & Holding Corporation 14,264,119 0.16 19 Parkoram Development Limited 14,264,119 0.16 20 East Pacific Investors, Corp. 8,299,900 0.09 * includes 19 million shares owned by Dominion Asian Equities, Inc. (merged into Belle in 1996). DIVIDENDS No dividends were declared from the date of incorporation to the date of this report. The Company’s ability to pay dividends on common equity depends on the existence of unrestricted retained earnings. RECENT SALES OF UNREGISTERED SECURITIES There were no unregistered securities sold within the past three (3) years and there were also no sales of reacquired securities, as well as new issuances of additional shares of stock, securities issued in exchange of property, services, other securities, and new securities resulting from the modification of outstanding securities. MANAGEMENT’S DISCUSSION AND ANALYSIS OF OPERATING PERFORMANCE AND FINANCIAL CONDITION Analysis of Financial Condition and Results of Operation Results of operations (2007 and 2006) The consolidated net loss of Sinophil Corporation (“Sinophil” or the “Company”) for the fiscal year ended December 31, 2007 was P27.5 million. During its fiscal year ended December 31, 2006, Sinophil realized a consolidated net loss of P3.9 million. The net loss for 2007 was mainly due to costs associated with the execution of the LIR Unwinding agreement with Metroplex. On March 30, 2007, the Company incurred P81.6 million in acquisition costs for a loan obligation of LIR from Union Bank of the Philippines (the “Loan”), which was secured by one billion shares of the Company’s stock under the name of Metroplex. With the Company’s acquisition of the Loan, the Company and Metroplex are now in the process of cancelling the shares with SEC in accordance with the Memorandum of Agreement dated August 23, 2001 between the Company, Belle Corporation, the Metroplex Group and LIR (the “LIR Unwinding”). As of December 31, 2007, approval of the cancellation of these shares is still pending with SEC. During 2007, the Company wrote down P35.8 million in investment costs in MMTC. These losses were partly offset by the Company’s reversal of P97.4 million of deferred tax liability related to the unrealized foreign exchange gain from investment in a subsidiary of the Company, the related investment of the Company in such subsidiary was already written-off in prior years. In contrast, Sinophil’s 2006 net loss pertained only to total general and operating expenses of the Company. Sinophil’s total assets decreased to P4,670.2 million as of December 31, 2007 compared to P4,781.0 million as of December 31, 2006 due to losses attributable to the LIR Unwinding. Total liabilities decreased to P52.6 million as of December 31, 2007 from P150.0 million as of December 31, 2006, due to the reversal of the P97.4 million deferred tax liability related to the unrealized foreign exchange gain from a subsidiary of the Company. Stockholders’ equity decreased slightly by to P4,617.6 million as of December 31, 2007, from P4,631.0 million in 2006. 18 Below are the comparative key performance indicators of the Company and its majority-owned subsidiary: Dec. 31, 2007 Current ratio Return on assets Current assets over current Liabilities Net income (loss) over Average total assets During the period Net income (loss) over Average stockholders' Equity during the period Dec. 31, 2006 3.86:1.00 5.42:1.00 (0.58%) (0.06%) Return on equity (0.60%) (0.07%) The Company does not foresee any cash flow or liquidity problems over the next twelve (12) months. The Company has no borrowings. No material off-balance sheet transactions, arrangements, obligations, and other relationships of the Company with unconsolidated entities were created during the year. As of December 31, 2007, except for what has been noted in the preceding, there were no material events or uncertainties known to management that had a material impact on past performance, or that would have a material impact on the future operations, in respect of the following: • • • • • • Known trends, demands, commitments, events or uncertainties that would have a material impact on the Company; Material commitments for capital expenditures that are reasonably expected to have a material impact on the Company's short-term or long-term liquidity; Known trends, events or uncertainties that have had or that are reasonably expected to have a material favorable or unfavorable impact on net sales/revenues/income from continuing operations; Significant elements of income or loss that did not arise from the Company's continuing operations; Seasonal aspects that had a material impact on the Company's results of operations; and Financial statements of the Company from the year ended December 31, 2006 to December 31, 2007. Results of operations (2006 and 2005) The consolidated net loss of Sinophil Corporation (“Sinophil” or the “Company”) for fiscal year 2006 of P3.9 million compares to consolidated net income of P98.9 million in 2005. The net loss for 2006 was due to the lack of revenues to offset the Company’s general and administrative expenses. Sinophil’s 2005 net income was attributable mainly to equitized earnings of P102.2 million in Metro Manila Turf Club, Inc. (MMTC), a 30% -owned investee. Equitized earnings from MMTC in 2005 arose mainly from its reversal of a P341.1 million valuation reserve on its Batangas land bank at that time of 121 hectares, which reversal was justified by appraisals thereon conducted during late 2005. MMTC relinquished its land to Belle and Sinophil in 2006, pursuant to its agreement with Equitrak Management Corporation. Total general and administrative expenses of the Company for the year ended December 31, 2006 amounted to P3.9 million, compared to P3.3 million for the year ended December 31, 2005, with higher expenses in 2006 accounted for mainly by legal fees connected with the partial implementation of the Company’s agreement with Legend International Resorts (HK) Limited to reduce its 19 investment therein (the “Partial LIR Unwinding”) which was approved by the SEC as of March 28, 2006. Sinophil’s total assets decreased to P4,781.0 million as of December 31, 2006 compared to P7,584.7 million as of December 31, 2005, with the decrease of P2.8 billion (37%) attributable to the Partial LIR Unwinding. Total liabilities were virtually unchanged at P150.0 million as of December 31, 2006, compared to total liabilities of P150.0 million as of December 31, 2005. Stockholders’ equity decreased by 37.7%, to P4,631.0 million as of December 31, 2006 from P7,434.6 million in 2005. The Company's Partial LIR Unwinding accounts for the decrease in Stockholder's Equity. The Partial LIR Unwinding cancelled the 1,870,000,000 of Sinophil’s shares that were previously held by Metroplex Berhad and its affiliates (the “Metroplex Group”), which were surrendered by the Metroplex Group for this purpose. Below are the comparative key performance indicators of the Company and its majority-owned subsidiary: Dec. 31, 2006 Current ratio Return on assets Current assets over current Liabilities Net income (loss) over Average total assets During the period Net income (loss) over Average stockholders' Equity during the period Dec. 31, 2005 5.42:1.00 5.61:1.00 (0.06%) 1.32% Return on equity (0.07%) 1.34% The Company does not foresee any cash flow or liquidity problems over the next 12 months. The Company has no bank borrowings. No material off-balance sheet transactions, arrangements, obligations, and other relationships of the Company with unconsolidated entities were created during the year. As of December 31, 2006, except for what has been noted in the preceding, there were no material events or uncertainties known to management that had a material impact on past performance, or that would have a material impact on the future operations, in respect of the following: • • • • • • Known trends, demands, commitments, events or uncertainties that would have a material impact on the Company; Material commitments for capital expenditures that are reasonably expected to have a material impact on the Company's short-term or long-term liquidity; Known trends, events or uncertainties that have had or that are reasonably expected to have a material favorable or unfavorable impact on net sales/revenues/income from continuing operations; Significant elements of income or loss that did not arise from the Company's continuing operations; Seasonal aspects that had a material impact on the Company's results of operations; and Material changes in the financial statements of the Company from the year ended December 31, 2005 to December 31, 2006. 20 Results of Operations (First Quarter of 2008 - Unaudited) The consolidated net loss of Sinophil Corporation ("Sinophil" or the "Company") for the three months ended March 31, 2008 amounted to P2.1 million, which compares to a consolidated net loss for the three months ended March 31, 2007 of P21.0 million. During the first quarter of 2008, total expenses and other charges amounted to P2.1 million compared to P118.4 million during the first quarter of 2007. Most of the Company's expenses and charges during the 2007 period were attributable to costs associated with the implementation of the Memorandum of Agreement between the Company, Belle Corporation, Metroplex Berhad and its subsidiaries ("Metroplex") and Legend International Resorts (HK) Limited ("LIR") that was executed on August 23, 2001 (referred to hereinafter as the "LIR Unwinding Agreement"). During the first quarter of 2007, the Company set up a loss provision of P81.6 million for the acquisition costs of a loan obligation (the "Loan") of LIR acquired from Union Bank of the Philippines ("Union Bank"), which was secured by one billion shares of the Company's stock under the name of Metroplex . With the Company's acquisition of the Loan, the Company applied with the Securities and Exchange Commission ("SEC") for the cancellation of the one billion shares comprising the collateral for the Loan, through the LIR Unwinding Agreement(see following paragraph), and is currently awaiting the SEC's approval thereof. Also during the first quarter of 2007, the Company wrote down P35.8 million in investment costs in Metro Manila Turf Club, Inc. which, together with the P81.6 million loss provision on the Loan, comprised the Company's P117.4 million in losses on investments for that period. In contrast, all of the Company's expenses during the first quarter of 2008 consisted of operating, administrative and legal costs. Aside from what has been mentioned in the foregoing, there were no significant elements of income or loss that did not arise from continuing operations, nor were there any seasonal aspects that had a material effect on the results of operations of Sinophil during the first nine months of 2007. On August 23, 2001, with respect to Sinophil’s investment in 40% of the equity of LIR, the LIR Unwinding Agreement was entered into by and among the Company, Belle, Metroplex and LIR rescinding the Swap Agreement entered into by them in 1997, canceling all obligations stated therein, reversing all the relevant transactions, and canceling or returning all the shares of Sinophil and LIR exchanged thereby. To effect the cancellation of the Metroplex's investment, Sinophil's shareholders, during their meeting on February 18, 2002, approved the reduction of its capital stock to the extent of 3.87 billion shares held by the former. However, due to Metroplex's failure to deliver for cancellation the stock certificates covering 2.0 billion shares of their total shareholdings at that time, Sinophil again presented to its shareholders on its meeting on June 3, 2005 a reduction in its authorized capital stock to the extent of 1.87 billion shares (the "Partial LIR Unwinding"). On March 28, 2006, SEC formally approved the Partial LIR Unwinding and the 1.87 billion cancelled Sinophil shares were then delisted with the Philippine Stock Exchange. The 1.0 billion Sinophil shares used as collateral by LIR for the Loan were delivered by Union Bank to the Company during 2007, and approval by the SEC for cancellation thereof is currently pending. As of March 31, 2008, 1.0 billion Sinophil shares still remained outstanding from Metroplex. Sinophil’s total assets amounted to P4,647.6 million as of March 31, 2008, or slightly lower (by less than 1%) compared to P4,670.2 million as of December 31, 2007. The Company's total liabilities were virtually unchanged, at approximately P52.6 million as of both March 31, 2008 and December 31, 2007. The Company's stockholder's equity decreased slightly by about P22.6 million (or less than 1%), to P4,595.0 million as of March 31, 2008 from P4,617.6 million as of December 31, 2007, due to the Company's P2.1 million net loss and P20.5 million in unrealized mark-to-market losses on investments during the current quarter. There were no material contingent assets and liabilities as of March 31, 2008. There were also neither issuances of additional shares of stock nor payment or declaration of dividends made during the first quarter of 2008. Below are the comparative key performance indicators of the Company and its subsidiaries: 21 Current ratio Return on assets Return on equity Current assets over current liabilities Annualized net income (loss) over average total assets during the period Annualized net income (loss) over average stockholders' equity during the period March 31, 2008 (unaudited) 3:78:1.00 (0.0461%) (0.0466%) March 31, 2007 (unaudited) 5:40:1.00 (0.443%) (0.595%) December 31, 2007 (audited) 3:85:1.00 (0.582%) (0.453%) The Company does not foresee any liquidity problem over the next 12 months. The key performance indicators of the Company has changed materially as compared to the same period last year. As of March 31, 2008, except for what has been noted in the preceding, there were no material events or uncertainties known to management that had a material impact on past performance, or that would have a material impact on the future operations, in respect of the following: • • • • • • Known trends, demands, commitments, events or uncertainties that would have a material impact on the Company; Material commitments for capital expenditures that are reasonably expected to have a material impact on the Company's short-term or long-term liquidity; Known trends, events or uncertainties that have had or that are reasonably expected to have a material favorable or unfavorable impact on net sales/revenues/income from continuing operations; Significant elements of income or loss that did not arise from the Company's continuing operations; Seasonal aspects that had a material impact on the Company's results of operations; and Financial statements of the Company for the periods ended December 31, 2007 to March 31, 2008, except those mentioned above. 2008 Plan of Operation In addition to continued efforts towards the completion of the full LIR Unwinding, Sinophil’s management is considering various opportunities relative to new business ventures, the implementation of which will depend on economic conditions in the future. Key Variable and other Qualitative and Quantitative Factor The Company expects no material commitments for capital expenditures and expected funds in 2008. To the best of the Company’s knowledge, aside from what has already been mentioned in the preceding, there are no known trends, events or uncertainties that will have a material impact on sales; no significant elements of income or loss that did not arise from continuing operations aside from those disclosed in the Notes to the Audited Financial Statements; and no seasonal aspects with material effect on results of operations. Sinophil maintains sufficient cash balances to meet minimum operational requirements, as determined by management from time to time. Additional cash requirements are sourced from affiliates. To the best of the Company’s knowledge, there are no known trends, events or uncertainties that will have a material impact on its liquidity. Financial Statements: The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the Philippines. The summary of significant accounting principles and compositions of various accounts are disclosed in the Notes to the Audited Financial Statements, which form part of this Form 20-IS. 22 Information on Independent Accountant and Other Related Matters a1. External Audit Fees Audit and Audit-Related Fees The aggregate fees paid by the Company for professional services (including Value Added Tax) rendered by the external auditor for the audit of financial statements for the years ended December 31, 2007 and 2006 and estimated audit fee to be paid in 2008 follow: (P000's omitted) 2008 (estimated) P224 2007 P224 2006 P224 a2. There were no other assurance and related services by the external auditor that are reasonably related to the performance of the audit or review of the registrant's financial statements. b. Tax Fees There were no professional services rendered by the external auditor for tax accounting compliance, advice, planning and any other form of tax services in each of the last two years. c. All Other Fees There were no other professional services rendered by the external auditors for each of the last two (2) years other than item (a) and (b) above. d. The Audit Committee's approval policies and procedures for the above services The Audit Committee has the oversight responsibility over the audit function and activities of the Company's internal and external auditors. It provides assurance that financial disclosures made by the management as presented in the Auditor's report reasonably reflect the financial condition; the result of operation; and the plans and long-term commitments; and (b) internal controls are operating as intended. The Audit Committee has the responsibility to recommend an external auditor to be selected and appointed by the stockholders during each annual stockholder's meeting. It reviews the audit coverage of the External Auditors and deliberates on their audit report prior to endorsement to the Board of Directors and presented to the stockholder's for approval. DIRECTORS AND EXECUTIVE OFFICERS Please refer to the portion of this Information Statement on "Directors and Executive Officers". COMPLIANCE WITH CORPORATE GOVERNANCE PRACTICES Sinophil Corporation has concretized its commitment to corporate governance in compliance with the initiative of the Securities and Exchange Commission under Memorandum Circular No. 2, Series of 2002. On 22 August 2002, the company formally adopted a Manual on Corporate Governance which provided for, among others, a compliance officer specifically for corporate governance, the duties and responsibilities of a director and the creation of board committees. These committees are comprised of a nomination committee for selecting directors and passing 23 upon their qualifications, a compensation and remuneration committee to look into an appropriate rewards system and an audit committee to review financial and accounting matters. The current members of the aforesaid committees for the calendar year 2007 were appointed on 21 June 2007. As proof of compliance with the leading practices and principles in good corporate governance, Sinophil, on 30 January 2008, submitted to the SEC the Compliance Officer’s report on (i) the Corporation’s Compliance with its Manual on Corporate Governance, and (ii) the directors’ attendance records. Sinophil continues to welcome the nomination and election of independent directors, abiding by the requirements of law, as well as to help guarantee proper decision-making at the board level. The composition of the rest of the board further assures that decisions are based on objective assessments, reasonable appraisals, open discussions and principled consensus, all in the best interest of the corporation and its stakeholders. The Company is not aware of any non-compliance with its Manual of Corporate Governance, by any of its officers or employees. Under the Manual of Corporate Governance of the Company, the Compliance Committee is responsible for monitoring compliance with the provisions and requirements, as well as violations of the Manual of Corporate Governance. The Company's Manual of Corporate Governance shall be subject to annual review unless the same frequency is amended by the Board. * * * UPON WRITTEN REQUEST OF ANY SHAREHOLDER OF RECORD ENTITLED TO NOTICE OF AND VOTE AT THE MEETING, THE COMPANY SHALL FURNISH SUCH SHAREHOLDER WITH A COPY OF THE COMPANY’S ANNUAL REPORT ON SEC FORM 17-A WITHOUT CHARGE. ANY SUCH WRITTEN REQUEST SHALL BE ADDRESSED TO: THE CORPORATE SECRETARY SINOPHIL CORPORATION 28F EAST TOWER, PSE CENTRE EXCHANGE ROAD, ORTIGAS CENTER PASIG CITY, PHILIPPINES. f:\data\clients\285\corp\sinophil 20-is 2008 -preliminary.doc ABKT\JCN\MBSB\RSR\285-2-22 24