2. Financial Highlights Trans-Asia maintained its record of profitability in the fiscal year ended August 31,2000, albeit at a significantly lower level following the windfall earnings registered in the previous fiscal year - and in the wake of the severe difficulties suffered by the Philippine business sector. Consolidated gross revenues reached PhP56.3 million and consolidated net income amounted to PhP4.1 million. Earnings per share amounted to PhP0.005. Retained earnings at the end of FY 2000 amounted to PhP516.1 million. Consolidated total assets also grew to PhP1.41 billion at the close of FY 2000 from PhP1.37 billion at the end of the previous fiscal year. Despite difficult business conditions, your Company increased total current assets to PhP215 million at the end of the fiscal period while keeping total current liabilities low at PhP48.4 million. as of Aug. 2000 CURRENT ASSETS 215,042 TOTAL ASSETS1,411,283 TOTAL LIABILITIES 48,361 STOCKHOLDER’S EQUITY1,362,922 PAID-IN CAPITAL 846,782 TOTAL OPERATING REVENUES 56,328 NET INCOME 4,108 EARNING PER SHARE 0.005 (amount in thousand Philippine Pesos except earnings per share) Investments Trans-Asia’s investments in non-exploration businesses - namely, Trans-Asia Power Generation Corporation, Asia Coal Corporation, Atlas Cement Corporation, and Bacnotan Industrial Park Corporation - together yielded lower earnings after achieving a record high in FY 1999. Union Cement Corporation, in which Trans-Asia has substantial interest through its 10% equity share in Atlas Cement Corporation, continued to suffer from a prolonged market weakness and the onslaught of under valued imports from Taiwan, Indonesia and Japan. After registering a sizeable net income in light of improved prices in the first half of 2000, Union Cement reverted to negative financial results in the succeeding months. Bacnotan Industrial Park Corporation, in which Trans-Asia has a 30% equity share, continues development of its 150-hectare Batangas Union Industrial Park at Balayan Bay in Calaca, Batangas. Its main feature is its world-class port, designed by Kawasaki Steel Corporation of Japan. The industrial estate’s core locator, Bacnotan Steel Industries, Inc., has begun final commissioning of its plant and is expected to start commercial production of billets and reinforcing bars in the early 2001. With an annual capacity of 300,000 metric tons, the plant - a joint venture of the PHINMA Group with Kawasaki Steel, Mitsui and Company and JAIDO along with the Bank of the Philippine Islands and Philippine National Bank - is the biggest and most modern of its kind in the Philippines.

3. Asia Coal Corporation, 28% owned by Trans-Asia, decided to suspend operations starting November 1,2000 after nine successful and profitable years. The globalization of the Philippine cement Industry, brought on by the entry of the world’s four biggest cement corporation, has led to the consolidation of almost all of the industry’s coal requirements. By combining the coal requirements of cement plants under their influence and applying the bargaining strengths of their worldwide networks, the big international corporations can trade favorably with coal producers. Affected are the supply arrangements of 14 of the 18 cement plants in the Philippines, many of which Asia Coal has served as its major customers for nearly a decade. This is taking place while the world coal supply glut continues for the third consecutive year. The consequent heightening of competition in the Philippines coal market, plus the entry of new traders, has caused a drastic drop in the trading margins. Thus Asia Coal’s ability to generate profits is put under great uncertainty. Trans-Asia Power Generation Corporation (TA Power), a 50 - 50 joint venture of Trans-Asia Oil and Union Cement Corporation, registered another year of positive results. TA Power sold 178.3 million kilowatt-hours in FY 2000, earning PhP529.3 million in gross revenue and PhP116.9 million in net income. This success came in spite of many challenges, the most serious of which was the spiraling cost of fuel. The average price of Oman-Dubai, the country’s reference crude, almost double from $12.47 a barrel in July 1999 to $23.19 per barrel in June 2000. The average wholesale posted price of fuel oil consequently rose from PhP5.90 a liter to PhP9.274 a liter during the same period. The cost increases took place while TA Power’s sole customer, the Bulacan plant of Union Cement Corporation, continued to operate at low capacity in the face of a poor construction market and unfair competition from undervalued imports. Both the cement plant and TA Power’s generating plant sought to maximize efficiency in order to overcome the difficulties. TA Power continues its search for other power projects in the light of the recent signing of the Power Industry Restructuring Bill into law. Trans-Asia Power Plant Phinma Plaza, PHINMA Group’s new headquarters in Rockwell Center, Makati City, which is 14.29% owned by Trans-Asia, is nearing completion. Move-in is expected by August 2001.