AUDIT REPORT OF AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT The President and Board of Trustees SM Collegio de Leyte, Inc. Brgy.

Pawing, Palo, Leyte

I have audited the accompanying financial statements of SM COLLEGION DE LEYTE, INC. which comprises the Balance Sheet as of December 31, 2009 with comparative figures as of December 31, 2008 and the related comparative profit and loss statement for the years ended December 31, 2009 and December 31, 2008. Managements Responsibility for the Financial Statements The Board is responsible for the preparation and fair presentation of these financial statements in accordance with generally accepted accounting principles in the Philippines. This responsibility includes: designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors Responsibility My responsibility is to express and opinion on these financial statements based on my audit. I have conducted my audit on accordance with Philippine Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but for the purpose of expressing an opinion of the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the financial statements present fairly, in all material respects, the financial position of SM COLLEGIO DE LEYTE, INC. as of December 31, 2009 and of its financial performance for the period audited in conformity with Generally Accepted Accounting Principles. April 15, 2010. Tacloban City.

SANTIAGO G. LEE, JR. Certified Public Accountant CPA License No. 54440 SEC Accreditation No. 0522-A B.O.A. Reg. No. 0073 12.31.2011 BIR AN: 14-001221-1-2008 P.T.R. 6762989 01.05.2010, Tacloban City Tax Identification No. 102-719-639