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C S 2 0 0 4 1 4 5 0 9

SEC Registration Number

C A R M E N C O P P E R C O R P O R A T I O N ( A W h o l

l y O w n e d S u b s i d i a r y o f A t l a s C o n s

o l i d a t e d M i n i n g a n d D e v e l o p m e n t C

o r p o r a t i o n ) (Company’s Full Name)

7 t h F l r . , Q u a d A l p h a C e n t r u m , 1 2 5

P i o n e e r S t . , M a n d a l u y o n g C i t y

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

Noel T. Del Castillo 635-4495 (Contact Person) (Company Telephone Number)

1 2 3 1 A A F S

Month Day (Form Type) Month Day (Calendar Year)

(Annual Meeting)

Not Applicable (Secondary License Type, If Applicable)

Not Applicable Dept. Requiring this Doc. Amended Articles Number/Section

Total Amount of Borrowings

Total No. of Stockholders Domestic Foreign

To be accomplished by SEC Personnel concerned

File Number LCU

Document ID Cashier

S T A M P S Remarks: Please use BLACK ink for scanning purposes.

COVER SHEET

*SGVMC404424*

Report of Independent Auditors The Stockholders and the Board of Directors Carmen Copper Corporation 7th Flr., Quad Alpha Centrum 125 Pioneer Street, Mandaluyong City We have audited the accompanying balance sheet of Carmen Copper Corporation (a wholly owned subsidiary of Atlas Consolidated Mining and Development Corporation) as of December 31, 2004, and the related statements of income, changes in stockholders’ equity and cash flows for the period September 16 to December 31, 2004. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the Philippines. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As discussed in Note 1 to the financial statements, the Company was registered with the Securities and Exchange Commission on September 16, 2004 and has not yet started commercial operations as of December 31, 2004. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Carmen Copper Corporation as of December 31, 2004, and the results of its operations and its cash flows for the period then ended in conformity with accounting principles generally accepted in the Philippines. Jaime F. Del Rosario Partner CPA Certificate No. 56915 SEC Accreditation No. 0076-A Tax Identification No. 102-096-009 PTR No. 1195847, January 3, 2005, Makati City April 14, 2005

SGV & CO SyCip Gorres Velayo & Co.

6760 Ayala Avenue 1226 Makati City Philippines

Phone: (632) 891-0307 Fax: (632) 819-0872 www.sgv.com.ph BOA/PRC Reg. No. 0001 SEC Accreditation No. 0012-F

SGV & Co is a member practice of Ernst & Young Global

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CARMEN COPPER CORPORATION (A Wholly Owned Subsidiary of Atlas Consolidated Mining and Development Corporation) BALANCE SHEET DECEMBER 31, 2004

ASSETS

Current Assets Cash P=26,320 Advances to stockholder (Note 3) 2,427,141

TOTAL ASSETS P=2,453,461

LIABILITY AND STOCKHOLDERS’ EQUITY

Current Liability Accrued expenses P=100,000

Stockholders’ Equity Capital stock - P=1 par value Authorized - 10,000,000 shares Issued - 2,500,000 shares 2,500,000 Deficit (146,539) Total Stockholders’ Equity 2,353,461

TOTAL LIABILITY AND STOCKHOLDERS’ EQUITY P=2,453,461 See accompanying Notes to Financial Statements.

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CARMEN COPPER CORPORATION (A Wholly Owned Subsidiary of Atlas Consolidated Mining and Development Corporation) STATEMENT OF INCOME FOR THE PERIOD SEPTEMBER 16 TO DECEMBER 31, 2004*

REVENUE Interest income P=4,766

EXPENSES Professional fees 100,000 Transportation and travel 23,664 Miscellaneous 26,688 150,352

LOSS BEFORE FINAL TAXES 145,586

FINAL TAXES (Note 4) 953

NET LOSS P=146,539 * The Company was registered with the Securities and Exchange Commission on September 16, 2004 and has not yet started commercial operations as of December 31, 2004. See accompanying Notes to Financial Statements.

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CARMEN COPPER CORPORATION (A Wholly Owned Subsidiary of Atlas Consolidated Mining and Development Corporation) STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE PERIOD SEPTEMBER 16 TO DECEMBER 31, 2004* Capital Stock Deficit Total

Issuance of capital stock P=2,500,000 P=– P=2,500,000

Net loss – (146,539) (146,539)

Balances at December 31, 2004 P=2,500,000 (P=146,539) P=2,353,461 * The Company was registered with the Securities and Exchange Commission on September 16, 2004 and has not yet started commercial operations as of December 31, 2004. See accompanying Notes to Financial Statements.

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CARMEN COPPER CORPORATION (A Wholly Owned Subsidiary of Atlas Consolidated Mining and Development Corporation) STATEMENT OF CASH FLOWS FOR THE PERIOD SEPTEMBER 16 TO DECEMBER 31, 2004* CASH FLOWS FROM INVESTING ACTIVITIES Loss before final taxes (P=145,586) Advances to stockholder (2,427,141) Increase in accrued expenses 100,000 Final taxes paid (953) Net cash used in investing activities (2,473,680)

CASH FLOW FROM FINANCING ACTIVITY Proceeds from issuance of capital stock 2,500,000

CASH AS AT DECEMBER 31, 2004 P=26,320 * The Company was registered with the Securities and Exchange Commission on September 16, 2004 and has not yet started commercial operations as of December 31, 2004. See accompanying Notes to Financial Statements.

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CARMEN COPPER CORPORATION (A Wholly Owned Subsidiary of Atlas Consolidated Mining and Development Corporation) NOTES TO FINANCIAL STATEMENTS 1. Corporate Information and Status of Operations

a. Corporate Information

Carmen Copper Corporation (the Company) is a wholly owned subsidiary of Atlas Consolidated Mining and Development Corporation (ACMDC), a company incorporated in the Philippines on September 16, 2004, primarily to engage in the business of searching, prospecting, exploration and location of ores and mineral resources and to conduct all ground and airbone geophysical surveys, geochemical surveys and other work or means commonly regarded as exploration work for the purpose of determining the existence of mineral resources, extent, quality and quantity and the feasibility of mining them for profit. The Company had no employees in 2004. The administrative and financial matters of the Company are being handle by employees of ACMDC. The registered office address of the Company is 7th Flr., Quad Alpha Centrum, 125 Pioneer Street, Mandaluyong City.

b. Status of Operations

As of April 14, 2005, the Company has not yet started commercial operations. The financial statements of the Company as of and for the period September 16 to December 31, 2004 were authorized for issue by the Board of Directors on April 14, 2005.

2. Summary of Significant Accounting Policies Basis of Preparation The accompanying financial statements are prepared in conformity with accounting principles

generally accepted in the Philippines under the historical cost convention.

Revised Accounting Standards Effective in 2005 Revised accounting standards based on International Accounting Standards, referred to as Philippine Accounting Standards (PAS), will become effective in 2005. The Company will adopt the following revised accounting standards effective January 1, 2005:

• PAS 1, Presentation of Financial Statements, provides a framework within which an entity

assesses how to present fairly the effects of transactions and other events; provides the base criteria for classifying liabilities as current or noncurrent; prohibits the presentation of income from operating activities and extraordinary items as separate line items in the statement of income; and specifies the disclosures about key sources of estimation, uncertainty and judgments management has made in the process of applying the entity’s accounting policies.

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• PAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, removes the concept of fundamental error and the allowed alternative to retrospective application of voluntary changes in accounting policies and retrospective restatement to correct prior period errors. It defines material omissions or misstatements, and describes how to apply the concept of materiality when applying accounting policies and correcting error.

• PAS 10, Events After the Balance Sheet Date, provides a limited clarification of the

accounting for dividends declared after the balance sheet date. • PAS 24, Related Party Disclosures, provides additional guidance and clarity in the scope of

the standard, including the definitions and disclosures for related parties. It also requires disclosure of the compensation of key management personnel by benefit type.

The Company does not expect any significant changes in the accounting policies when it adopts the above revised standards in 2005.

Cash Cash consists of cash on hand and in banks. Revenue Revenue is recognized to the extent that it is probable that the economic benefits will flow to the

Company and the revenue can be reliably measured. Interest income from bank deposits is recognized as interest accrues taking into account the effective yield on the asset.

Provisions Provisions are recognized when (a) the Company has a present obligation (legal or constructive)

as a result of a past event, (b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and (c) a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as interest expense.

Income Taxes Deferred income tax is provided, using the balance sheet liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognized for all taxable temporary differences, including asset revaluations. Deferred income tax assets are recognized for all deductible temporary differences, carryforward of unused tax credits from excess minimum corporate income tax (MCIT) and net operating losses carryover (NOLCO), to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and carryforward of unused tax credits and unused tax losses can be utilized. Deferred income tax, however, is not recognized when it arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

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The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax assets to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

Contingencies Contingent liabilities are not recognized in the financial statements. These are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are not recognized in the financial statements but disclosed when an inflow of economic benefits is probable.

Subsequent Events Post year-end events that provide additional information about the Company’s position at the balance sheet date (adjusting events) are reflected in the financial statements. Post year-end events that are not adjusting events are disclosed in the notes to financial statements when material.

3. Related Party Disclosure Advances to stockholder refers to cash advances subject to liquidation for the payment of the Company’s administrative expenses.

4. Income Taxes

Final taxes refer to the 20% final tax on passive interest income earned from bank deposits denominated in Philippine pesos. There is no provision for current income tax because the Company is in a net tax loss position. Furthermore, the Company will not be subjected to MCIT until January 1, 2008. The Company’s deferred tax asset as of December 31, 2004, amounting to P=48,018, represents the tax effect of NOLCO and has not been recognized in the balance sheet since management believes it is more likely that it will not be utilized.