GRACE CORPORATION

Financial Statements
December 31, 2011 and 2010

And

Independent Auditor’s Report

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 COVER SHEET

1 0 0 7 0 0
SEC Registration Number

G R A C E C O R P O R A T I O N

(Company’s Full Name)

1 2 N I N O Y A Q U I N O A V E N U E , P A R A N A Q U E

C I T Y , P H I L I P I N E S

(Business Address: No. Street City/Town/Province)

John Carlos Wee (632)990-4236

(Contact Person) (Company Telephone Number)

1 2 3 1 A A F S 0 4 2 7
Month Day (Form Type) Month Day
(Fiscal Year) (Annual Meeting)

(Secondary License Type, If Applicable)

SEC
Dept. Requiring this Doc. Amended Articles Number/Section

Total Amount of Borrowings

5
Total No. of Stockholders Domestic Foreign

To be accomplished by SEC Personnel concerned

File Number LCU

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Makati City, Philippines
mabugat.firm@gmail.com
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 Document ID Cashier

STAMPS
Remarks: Please use BLACK ink for scanning purposes.

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Makati City, Philippines
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 GRACE CORPORATION
STATEMENTS OF FINANCIAL POSITION

December 31

2011 2010

ASSETS

Current Assets
Cash and cash equivalents P
= 14,232,094.00 P
= 1,100,000.00
Financial Assets 2,545,000.00 1,150,000.00
Short-Term Investments 6,500,000.00 -
Trade and Other Receivables 11,465,840.00 13,750,000.00
Merchandise Inventory 4,078,935.27 900,000.00
Prepayments 400,000.00 500,000.00
Total Current Assets 39,221,944.27 17,400,000.00

Noncurrent Assets
Property and equipment 73,405,136.43 61,180,000.00
Intangible assets - 1,000,000.00
Total Noncurrent Assets 73,405,136.43 62,180,000.00
=112,627,080.70 =
P P 79,580,000.00

LIABILITIES AND EQUITY

Current Liabilities
Trade and Other Payables 20,044,839.40 1,450,500.00
Notes Payable 13,106,500.00 21,000,000.00
Total Current Liabilities 33,151,339.40 22,450,500.00

Equity
Ordinary Share Capital 70,000,000.00 45,000,000.00
Subscribed Ordinary Share Capital 5,000,000.00 -
Subscription Receivable- Ordinary Share Capital 2,625,000.00 -

123 Lava Bldg., Bangkok St.

Makati City, Philippines
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 Premium in Excess of Par 5,250,000.00 3,500,000.00
Retained earnings 1,850,741.30 8,629,500.00
Total Equity 79,475,741.30 57,129,500.00
=112,627,080.70 =
P P 79,580,000.00

See accompanying Notes to Financial Statements.

123 Lava Bldg., Bangkok St.

Makati City, Philippines
mabugat.firm@gmail.com
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 GRACE CORPORATION
STATEMENTS OF COMPREHENSIVE INCOME

Years Ended December 31

2011 2010

REVENUE
Net Sales =110,644,079.43 =
P P 53,439,000.00
110,644,079.43 53,439,000.00

COSTS AND OPERATING EXPENSES

Cost Of Sales 55,978,882.62 34,785,500.00
Operating Expense 40,745,663.45 9,688,500.00
Finance Cost 2,208,880.27 445,500.00
98,933,426.34 44,919,500.00

OTHER INCOME
Interest income 308,560.00 110,000.00
Others - net 1,632,504.00 -
1,941,064.00 110,000.00

INCOME BEFORE INCOME TAX 13,651,717.09 8,629,500.00

PROVISION FOR INCOME TAX 4,095,515.13 2,588,850.00

NET INCOME =9,556,201.96

P = 6,040,650.00
P

See accompanying Notes to Financial Statements.

123 Lava Bldg., Bangkok St.

Makati City, Philippines
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 GRACE CORPORATION
STATEMENT OF CASH FLOWS

Years Ended December 31

2011 2010

CASH FLOWS FROM OPERATING ACTIVITIES

Income before income tax =12,015,095.08
P =8,629,500.00
P
Adjustments for:
Depreciation 4,087,946.90
Amortization
Bad Debts Expense 958,730.00 280,000.00
Gain on Sale of Securities 1,630,000.00
Unrealized Gain/ Losses 2,085,000.00
Interest Income 308,560.00 (110,000.00)
Interest Expense 113,880.27 445,500.00
Operating income before changes in working capital 21,199,212.25 9,245,000.00
Changes in operating assets and liabilities:
Decrease (increase) in:
Marketable Securities (13,132,094.00) (140,000.00)
Trade and Other Receivables 2,969,895.00 (4,300,000.00)
Merchandise Inventory (1939,307.61) (200,000.00)
Prepaid Expense 100,000.00 (190,000.00)
Increase (decrease) in:
Trade and Other Payable 17,306,649.27 31,500.00
Income Tax Payable
Net cash generated from operations 4,446,500.00
Accrued Expenses paid (3,506,500.00)
Income Tax paid
Net cash provided by operating activities 26, 504,354.91 940,000.00

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisitions of property and equipment (20,000,000.00) -
Acquisition of Short- term Investments (5,580,000.00)
Recognition of Amortization Cost as Intangible Asset -
PCIB Time Deposit -
Proceeds from sale of securities 2,080,000.00
Cash used in investing activities (23,500,000.00)

CASH FLOWS FROM FINANCING ACTIVITIES

Due to Related Party -
Payment of Notes Payable -
Increase in Notes Payable (7,893,500.00) 7,000,000.00
Subscription Receivable

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 Issuance of Shares
Dividends paid
Cash used in Financing Activities 7,000,000.00

NET INCREASE (DECREASE) IN CASH AND

CASH EQUIVALENTS 940,000.00

CASH AND CASH EQUIVALENTS

AT BEGINNING OF YEAR 160,000.00

CASH AND CASH EQUIVALENTS

AT END OF YEAR P
=1,100,000.00

See accompanying Notes to Financial Statements.

123 Lava Bldg., Bangkok St.

Makati City, Philippines
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 GRACE CORPORATION
STATEMENTS OF CHANGES IN EQUITY

Years Ended December 31

2011 2010

CAPITALSTOCK - P = par value

Authorized, issued and (no.) outstanding shares =70,000,000.00 P
P =45, 000, 000.00

RETAINED EARNINGS
4, 481, 456.00
Balance at beginning of year
Net income 9, 556, 201.96 6, 040, 650.00
Cash dividends (7, 500, 000.00)
Balance at end of year 6, 537, 657.96 6, 040, 650.00
=76, 537, 657.96 P
P =51, 040, 500.00

See accompanying Notes to Financial Statements.

123 Lava Bldg., Bangkok St.

Makati City, Philippines
mabugat.firm@gmail.com
09123456789