2009 ANNUALREPORT

COVER SHEET

A S 0 9 1 9 6 2 0 6SEC Registration Number

S P L A S H C O R P O R A T I O N A N D

S U B S I D I A R I E S

(Company’s Full Name)

H B C C o r p o r a t e C e n t r e

5 4 8 M i n d a n a o A v e n u e c o r n e r

Q u i r i n o H i g h w a y , Q u e z o n C i t y

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

Ms. Veneranda M. Tomas 984-5555

(Contact Person) (Company Telephone Number)

1 2 3 1 1 7 - A 0 6 1 9Month Day (Form Type) Month Day (Calendar Year) (Annual Meeting)

Not Applicable

(Secondary License Type, If Applicable)

CFD Dept. Requiring this Doc. Amended Articles Number/Section Total Amount of Borrowings

64 P=894,003,397 -0- 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.

SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-A

ANNUAL REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SECTION 141

OF THE CORPORATION CODE OF THE PHILIPPINES 1. For the fiscal year ended December 31, 2009 2. SEC Identification Number AS09196206 3. BIR Tax Identification No. 001-096-221 4. Exact name of issuer as specified in its charter SPLASH CORPORATION 5. PHILIPPINES 6. (SEC Use Only) Province, Country or other jurisdiction of

incorporation or organization Industry Classification Code:

7. HBC Corporate Centre, 548 Mindanao Avenue corner Quirino Highway, Quezon City 1116 Address of principal office Postal Code 8. (02) 984-5555 Issuer's telephone number, including area code 9. Not applicable Former name, former address, and former fiscal year, if changed since last report. 10. Securities registered pursuant to Sections 8 and 12 of the SRC, or Sec. 4 and 8 of the RSA Title of Each Class Number of Shares of Common Stock

Outstanding and Amount of Debt Outstanding Common Shares, P1.00 Par value 710,290,326 shares 11. Are any or all of these securities listed on a Stock Exchange. Yes [ x ] No [ ] If yes, state the name of such stock exchange and the classes of securities listed therein: PHILIPPINE STOCK EXCHANGE Common Shares 12. Check whether the issuer:

(a) has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17.1 thereunder or Section 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of The Corporation Code of the Philippines during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports);

Yes [ x ] No [ ] (b) has been subject to such filing requirements for the past ninety (90) days. Yes [x ] No [ ] 13. State the aggregate market value of the voting stock held by non-affiliates of the registrant. P=600,132,800 (218,230,109 shares @ P=2.75 per share as of April 30, 2010)

TABLE OF CONTENTS

Page No.PART I – BUSINESS AND GENERAL INFORMATION

Item 1 Business 1Item 2 Properties. 2Item 3 Legal Proceedings 2Item 4 Submission of Matters to a Vote of Security Holders 2

PART II – OPERATIONAL AND FINANCIAL INFORMATION

Item 5 Market for Registrant’s Shares and Related Shareholder Matters 8Item 6 Management’s Discussion and Analysis of Financial Condition and

Results of Operations 9

Item 7 Financial Statements and Supplementary Schedules 11Item 8 Information on Independent Auditors and Other Related Matters 11

PART III – CONTROL AND COMPENSATION INFORMATION

Item 9 Directors and Executive Officers 11Item 10 Executive Compensation 15Item 11 Security Ownership of Certain Beneficial Owners, Directors and Officers 16Item 12 Certain Relationships and Related Party Transactions 16 PART IV – CORPORATE GOVERNANCE Item 13 Corporate Governance 17 PART V – EXHIBITS AND SCHEDULES Item 14 Exhibits and Reports on SEC Form 17-C 17

Exhibits Reports on SEC Form 17-C (Current Reports) 18

INDEX TO EXHIBITS 19INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES 21ANNEX A – SUBSIDIARY FINANCIAL STATEMENTS SIGNATURES

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PART I - BUSINESS AND GENERAL INFORMATION Item 1. Business General In this Annual Report unless otherwise indicated by the context,”Company” or “SC” means the parent company. Splash Corporation, “Group” or “Splash” represents Splash Corporation and its consolidated subsidiaries. Splash Corporation was incorporated and registered with the Philippine Securities and Exchange Commission (SEC) on September 30, 1991. On November 15, 2007, the Company’s shares of stock were listed and traded in the Philippine Stock Exchange (PSE). Its registered address is HBC Corporate Centre, 548 Mindanao Avenue corner Quirino Highway, Quezon City. Since the Company’s incorporation in 1991, it has developed or acquired new technologies and services that have broadened and changed considerably the scope of its activities. On August 5, 2009 P.T. Splash Cahaya was incorporated in Indonesia as part of the Company’s move to expand internationally. In December 2009, the Company established Acceleron Distribution Corp. to engage in the distribution of certain brands to large scale supermarkets. The Company decided to expand its distribution channel by going into the direct selling business. Direct selling is a very personal and intimate way of reaching the target market. First Business Center was launched in November 2009. Splash Corporation and its subsidiaries have 302 employees in the Philippines and abroad engaged in the research and development, manufacture and sale of a broad range of health and beauty products. The Group consolidated revenues were P=2,719 million in 2009, compared with P=3,165 million in 2008 and P=3,010 million in 2007. For additional information about the Company’s geographical operation results, see Segments of Business section below. The consolidated financial statements as of December 31, 2008 and each of the two years in the period ended December 31, 2008 presented for comparative purposes pertain only to the financial statements of the Parent Company. There are no material reclassifications, merger, consolidation, or purchase or sale of a significant amount of assets that are not in the ordinary course of business during the period. Segments of Business Segment revenue and profit information and additional financial data and commentary are provided in the Segment Operations section in Part II, Item 6. “Management’s Discussion and Analysis or Plan of Operation, and the consolidated financial statements and related notes in Part II, Item 7. “ Financial Statements and Supplemental Schedules” of this Form 17-A. The Group markets and sells its products and brands in the Philippines and abroad.

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The percentage distribution of the revenues for each of the three years in the period ended December 31, 2009, 2008 and 2007 by each of the Group’s business segment is as follows:

2009 2008 2007Philippines 91% 92% 92%International 9% 8% 8% 100% 100% 100%

The Group has a strong equity in the whitening and exfoliant category in the country. Its product portfolio is continuously created and supported through product innovation, purposive marketing and experienced management. These factors are key to the Group’s success in achieving leading market shares in the different categories where it competes. The Group’s products are categorized as follows, with their percentage contribution to total revenue for each of the three years in the period ended December 31, 2009, 2008 and 2007:

2009 2008 2007 Skin Whitening 45.67% 42.04% 30.49% Skin Exfoliants 33.37% 29.87% 27.83% Hair Care 17.58% 16.48% 18.71% Food Supplements 2.38% 1.44% 0.66% New Markets 1.00% 10.17% 22.31% 100.00% 100.00% 100.00%

In 2009, the Group renamed its product categories from Skin Care into Skin Whitening and Skin Exfoliants; from Naturals into New Markets and from Health and Wellness into Food Supplements. The Group reclassified the prior years’ presentation to conform to the current year’s presentation. Skin White brand leads the Group’s Skin Whitening category contributing revenues of P=1,066 million. These are products scientifically formulated to deliver safe and effective whitening. Maxipeel is the Philippine’s leading skin care brand in the Skin Exfoliant category. The proven effective formulation helps remove dead skin cells to reveal a younger looking skin. The brand has contributed P=930 million in 2009. The Group has Hair Care brands and products that cater to various range of hair care needs. Kolours brand is a market leader in the Premium Hair Dye category. Vitress brand led by the hair cuticle coat line launched in 2009 contributed P=239 million and has opportunities for continued growth. A stable brand in the hair dressing line is Control which contributed P=115 million in revenues Food supplements consist of products with naturally-derived ingredients which promote health and general well-being. Revenues are generated by Theraherb VCO. New Markets category consists of new product innovations that may range from baby care, personal hygiene, cosmetics, and other personal, pharmaceutical and household products.

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Summarized below are the Philippine market shares of the Group’s major brands and product lines:

Brand/Product Line Market Share Market Standing Skin Exfoliants Maxi-peel Exfoliant Solution 85% Market Leader Skin Whitening Skinwhite Lotion 28% Market Leader Extract Lotion 6% Total Whitening Lotion 34% Skinwhite Soap 47% Market Leader Extract Soap 6% Biolink GP Soap 3% Total Whitening Soap 56% Extract Facial Cleanser 7% Market Leader Biolink GP Facial Cleanser 1% Skinwhite Toner/Facial Cleanser 2% Total Whitening Facial Cleanser 10% Hair Care Kolours Hair Dye 50% Market Leader

Distribution Channels The Group primarily sells its products to major supermarkets and drugstore, top wholesalers, large convenience stores, and regional distributors. The regional distributors handle two other major trade groups namely Modern Trade and General Trade. Modern Trade consists of all large accounts outside of the top supermarkets. General Trade is composed of small retail trade outlets including groceries, drugstores, sari-sari stores and market stalls. With the launch of the direct selling business in November 2009, the Company increased its distribution through the independent dealers. Competition All of the Group’s product lines compete with both large and small companies in the country and abroad. In order to succeed, the Group competes by differentiating its product offerings through innovation. It therefore avoids head-to-head competition with large global companies by targeting market niches that it can profitably develop. The Company considers as its principal competitors the following global cosmetic and personal care companies: • Unilever Philippines, Inc. • Colgate Palmolive Phils., Inc. • Procter & Gamble Phils. Inc. • L’Oreal Philippines, Inc. • Beiersdorf AG • Johnson & Johnson, Phils. Inc. • Avon Cosmetics, Inc. Euromonitor data through 2007 shows the Company as seventh (7th), in the list of companies selling cosmetics and toiletries in the country. It is the only Philippine company in the top tier long dominated by multinationals. Unilever Philippines and Colgate Palmolive Phils. Inc. continues to be the dominant competitors, followed by the domestic units of Avon Cosmetics, Procter & Gamble, Johnson & Johnson and Sara Lee.

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In the skin care segment of the industry, Euromonitor ranked the Company fifth (5th), behind Unilever, Sara Lee, Beiersdorf and Avon. This ranking, however, excludes exfoliant products which is one of the Group’s Company’s principal revenue sources. Sourcing and Access to Raw Materials The Company sources its raw materials (primarily chemicals and fragrances) and packaging materials from accredited local suppliers. The supplier accreditation process considers the following as critical performance criteria: quality, pricing, and timely delivery. Splash Corporation uses raw materials that are commonly and readily available. Value creation comes from the mixture and synergy of the chosen materials. To safeguard the confidentiality of product formulations, these materials are coded and known only to senior research and development officers. The Company purchases its raw material requirements locally to ensure short delivery lead times. Imported raw materials are procured through the representatives or local affiliates of foreign suppliers. Purchases are paid in pesos so that currency risks are not taken. Furthermore, the Company normally has two (2) or more accredited suppliers for each type of raw and packaging material, ensuring uninterrupted availability. The Company avails of 60 to 90 day payment terms provided by suppliers. There is no existing major supply contract. Customer The Company’s principal customer grouping is by account group. The National Account Group (NAG) which is served directly by the Company; and the Modern Trade and General Trade groups which are serviced through distributors (please refer to preceding section, Distribution Channels). The table below summarizes their percent contribution to sales, indicating relative balance of revenue sources:

Account Group % Contribution to Sales Served By 2009 2008 2009 National Accounts 32% 28% 32% SC Modern Trade 31% 31% 31% Distributors General Trade 37% 41% 37% Totals 100% 100% 100%

In 2009, no single customer accounted for 20% or more of the Company’s sales. Sales to the NAG are initiated by Purchase Orders. Distribution arrangements for modern trade and general trade are covered by individual distributorship agreements. These agreements provide for discounts as well as marketing and other support. Transactions with Related Parties Significant related party transactions are shown in Note 18 “Related Party Transactions” under “Notes to Consolidated Financial Statements” of the audited consolidated financial statements of the Company and its subsidiaries.

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Patents and Trademarks Splash Corporation owns over 100 trademarks and it protects these trademarks by registering in the markets where it sells or intends to sell the products. The trademarks of the Company’s core brands (Maxipeel, Extraderm, Skin White, Biolink, Theraherb) are registered in more than 50 countries including the ASEAN group, the European Union, USA, Canada, China/Hongkong, Japan, South Korea, Taiwan, India, Iran, Jordan, Kuwait, Qatar, Saudi Arabia and the UAE.

The Group utilizes formulations covered by Utility Model Patents registered with the Intellectual Property Office of the Philippines. Government Regulation The Group believes that it complies with all the relevant regulatory requirements of the Bureau of Foods and Drugs (BFAD) and equivalent regulatory agencies in every country where its products are sold. The Group regularly monitors the regulatory environment and participates actively in industry associations. This participation enables the Company to proactively prepare for changes in the regulatory environment. As part of regulatory controls for the Cosmetics Industry, the Department of Health (DOH) adopted the ASEAN Harmonized Cosmetic Scheme and ASEAN Technical Documents as long as these do not conflict with Philippine laws. This scheme aims for the mutual recognition of product registration approvals for cosmetics in the member states. The Group sees this as an advantage in terms of being able to compete with the ASEAN countries. Cost and Effects of Compliance with Environmental Laws The Company has consistently complied with all environmental laws and regulations and invests appropriately to ensure compliance. Research and Development The Company established the Splash Research Institute (SRI) to continuously develop, by employing cutting-edge technology, new products that will meet the growing needs of the personal care market. It adopted the “open innovation” concept whereby the Company collaborates with its suppliers to come up with new and better product formulations in a cost effective manner. The Company has also developed a flexible brand and product creation process that allows it to quickly respond to changes in consumer preferences. The Company ensures that there is a ready stream of new products that it can launch at any given time based on a rolling eight-quarter plan. SRI’s departments (Product Research and Development, Packaging Innovations, Product Testing and Documentation, and Skin Research) work interdependently towards creating innovative products which address the felt and latent needs of consumers. The amounts incurred on research activities relating to the development of new products and the improvement of existing products such as but not limited to packaging design, product safety, clinical tests and consumer research were P5.1 million in 2009, P3.4 million in 2008 and P11.0 million in 2007.

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Employees and Labor As of December 31, 2009, the Group has 302 regular employees, of which 105 is managerial and administrative staff. The Group also employed 101 contractual employees mostly deployed at the plant. The Group does not anticipate any substantial increase in the number of its employees in calendar year 2010. The Company is non-unionized. Risk Factors The following information should be read in conjunction with Part II, Item 6. “Management’s Discussion and Analysis or Plan of Operation, and the consolidated financial statements and related notes in Part II, Item 7. “ Financial Statements and Supplemental Schedules” of this Form 17-A. Splash Corporation and its subsidiaries routinely encounter and address risks which are normal in the course of the business. Significant risk factors that could cause the Group’s actual results to differ from the Group’s expectations are as follows: Risk of economic slowdown The lingering effects of the global financial crisis are still felt in the consumer confidence and purchasing power. This, and high inflation may still affect the demand for the Group’s products as consumers re-allocate spending towards basic or essential goods. Regulatory risk The products being manufactured, marketed and sold by the Group are subject to standards and regulations by government and regulatory agencies, particularly the DOH-BFAD and the DTI which from time-to-time may introduce new rules and regulatory policies, or promulgate changes in the interpretation or enforcement of existing laws and regulations. These might directly affect the operations and profitability of the Group and/or may be costly to comply with. Constant monitoring of the regulatory environment and membership with active participation in industry associations and lobby groups mitigate this risk. Product liability risk The Group might inadvertently manufacture and market defective or substandard products which could bring about harmful effects to its customers such as skin irritation and allergies, among others. To mitigate this risk, the Group through Splash Research Institute, undertakes exhaustive clinical testing before a product is introduced to the market. It also follows strict manufacturing standards to prevent the production of defective products. Intellectual Property Rights infringement The Group may experience cases of infringement on its products, inventions, processes and proprietary rights from competitor companies or other groups which may result in reduction in sales and profitability. The Group protects and builds its brands by registering its trademarks with the Bureau of Trademarks of the Philippine Intellectual Property Office. R&D and marketing capabilities The Group’s continuous growth largely depends on the ability of its R&D to develop new and innovative products, and on the ability of its marketing group to create or enhance brand equity.

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Over the years, Splash Corporation has been investing heavily to its R&D capabilities through investments in new technology, state-of-the-art equipment and development of competent and seasoned R&D specialists. The Group recruits talented graduates from the country’s top colleges and universities and develops them into top professionals ready to occupy senior leadership positions in its marketing and selling organization. Rising intensity of competition The personal care business is highly competitive with large multi-national companies aggressively competing for market shares. Extensive R&D and large investments in brand building serve by these companies have become barriers to entry, limiting the number of major players to a few multinational and local companies. Marketing expertise and responsive R&D infrastructures have enabled the Group to meet the challenges of intensified competition. Item 2. Properties Splash Corporation industrial plant area where substantially all of its operations are conducted is currently situated at F. Lazaro Street, West Canumay, Valenzuela City with an estimated lot area of 29,410 square meters and buildings with a total floor area of 20,910 square meters. The properties and structures located in the plant include the following: Production Building, Finished Goods Warehouse, the Splash Research Institute Building, Chemical Storage Building, Soap Plant, Canteen, Power House, Engineering Building, Substation, Recovery Warehouse, Guard House, Multi-purpose Hall, Alcohol Storage, and the Waste Water Treatment Plant. The Company also has a property located at T. Santiago Street, West Canumay, Valenzuela City with an estimated lot area of 7,243 square meters. The building houses the Ang.Hortaleza Foundation (formerly Splash Foundation Inc.) and has a floor area of 5,200 square meters. The foregoing properties have no limitations on their ownership by the Company. Item 3. Legal Proceedings Splash Corporation is a party to some cases and assessments which are pending in courts or are under protest. Management and the Company’s legal counsels strongly believe that the liabilities, if any, that may result from the final outcome of these cases and assessments will not materially affect the Company’s financial position and results of operations. The detailed information of these cases is set forth in Note 29 “Provisions and Contingencies” under “Notes to Consolidated Financial Statements” of the Group’s consolidated financial statements. The Company’s subsidiaries are not a party to any material pending legal proceedings that could be expected to have a material adverse effect on the consolidated financial position or results of operations. Item 4. Submission of Matters to a Vote of Security Holders There were no matters submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.

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PART II – OPERATIONAL AND FINANCIAL INFORMATION Item 5. Market for Registrant’s Shares and Related Stockholder Matters Market Information Splash Corporation common shares are traded at the Philippine Stock Exchange. The table below summarizes the high and low sales prices of the Company’s common shares on the PSE for each of the full quarterly period during 2009 and 2008 and for the first quarter of 2010:

Philippine Stock Exchange High Low

2010 First Quarter 3.45 2.60

2009 First Quarter 3.10 2.40 Second Quarter 3.30 2.48 Third Quarter 3.90 2.75 Fourth Quarter 3.85 3.05

2008 First Quarter 7.70 5.20 Second Quarter 5.50 4.20 Third Quarter 5.60 3.45 Fourth Quarter 6.10 2.80

The number of shareholders of record as of December 31, 2009 was approximately 64. Common shares outstanding were 710,290,326 shares. Shareholders Total public ownership shares as of December 31, 2009 was 30.72%. List of Top 20 Shareholders of record December 31, 2009

Name Number of

Shares Held

Percent to Total

Outstanding

1. Splash Holdings, Inc. 492,009,214 69.27%2. PCD Nominee Corp. (Fil) 122,881,507 17.30%3. PCD Nominee Corp. (Non-Fil.) 93,526,500 13.17%4. Alfredo M. Yao 599,000 00.08%5. William T. Enrile 320,000 00.04%6. Joy O. Go 180,000 00.02%7. Johnny Cobankiat 111,000 00.01%8. Paul L. Gotianse 100,000 00.01%9. Benjamin S. Geli 60,000 00.01%

10. Winston L. Duy 50,000 00.01%11. Annika Sherryn Yao 50,000 00.01%12. David Limqueco Kho 50,000 00.01%13. Nilo C. Zantua 50,000 00.01%14. Quality Investments & Securities Corporation 50,000 00.01%

(Forward)

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Name Number of

Shares Held

Percent to Total

Outstanding15. Alexander D. Dela Paz &/Or Rosanna C. Rabang 25,000 00.00%16. Anna Karenina E. Reyes 23,000 00.00%17. Federico S. Oliveros Jr. 20,000 00.00%18. Selene Bernice O. Li 20,000 00.00%19. Della Louise A. Pablo 15,000 00.00%20. Benjamin Luzod Angel 14,000 00.00%

Dividends Dividends declared and paid for the past three years is shown in Note 17.d “Cash dividends” under “Notes to Consolidated Financial Statements”. Item 6. Management’s Discussion and Analysis of Financial Condition and Results of

Operations Effective January 2009, the Company reorganized its product segments to better align its core brands. Skin care has been further classified into Skin Whitening and Skin Exfoliants. The Group is committed to attaining sustainable leadership positions in these two new product categories. The following analysis should be read in conjunction with the consolidated financial statements: Results of operations In millions of Pesos 2009 2008 2007Net sales 2,721 3,165 3,011Cost of goods sold (1,477) (1,504) (1,475)Gross profit 1,244 1,661 1,536Selling and distribution (891) (1,102) (900)Administrative (350) (301) (311)Operating profit 3 258 325Interest and other charges, net 16 39 (44)Net income 19 297 281Gross profit rate 45.72% 52.48% 51.01%Net income to sales 0.69% 9.38% 9.33%

Net Sales Net sales in 2009 decreased by 14.03% from 2008 mainly due to volume related factors. The Group operations were weakened by challenging conditions both internal and external. Performance of new product launches supported by marketing initiatives in 2008 was affected by the economic conditions and the distributors were not able to support the Company in delivering these products to the market. The Group changes prices and size of the products when necessary to maintain consumer value with consideration to changes in costs and profit objectives. In 2009, the Group ventured to sachet and small packing of certain products to increase market share in General Trade through an exclusive distribution agreement with a distributor. These products were sold at very low prices in anticipation of equivalent increase in market demand; however the distributor did not deliver as expected. The distributor’s operation was affected by the global financial crisis and scaled down its operations in the Philippines; hence the Company decided to disengage with the distributor resulting to negative impact on the net sales.

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Cost of Goods Sold and Gross Profit The Group’s cost to sales ratio was 54.28% in 2009, 47.52% in 2008, and 48.99%. Gross profit rate dropped by 6.76% points from 2008 mainly due to very low introductory prices of new products. Expense The Group’s deliberate effort to rationalize trading terms with its distributors mainly contributed to the decline in the selling expenses. Administrative cost on the other hand increased by P63 million from 2008 mainly due to personnel costs resulting from (1) an adoption of a policy which provides for a compensation for the Board of Directors and (2) reorganization of the Company. In addition, the Group’s transportation and travel also increased mainly due to the Group’s aggressive move to expand its operations and activities. Financial Position In millions of Pesos

2009 2008 Current Assets 3,159 3,548 Noncurrent Assets 43 870 Total Assets 4,102 4,418 Current ratio 0.77 0.80 Current Liabilities 622 850 Noncurrent Liabilities 880 891 Total Liabilities 1,502 1,741 Equity 2,600 2,677 Total Liabilities and Equity 4,102 4,418 Debt to Equity ratio 0.58 0.659

Current Assets The decrease in current assets was mainly due to the decrease in cash and cash equivalents as a result of the following: • The purchase of the Hygienix brand amounting to P100 million, recorded under the Intangible Assets

classified as Noncurrent Assets. • Expenditures from the IPO proceeds related to the development and introduction of new products.

Advertising and promotion amounted to P80 million, pipelining of inventories was P20 million and research and development costs P20 million.

• Cash dividends paid. Current Liabilities The Group’s initiatives to improve sales forecasting and inventory planning translated to reduction in trade payables from third parties at year end. Trade payables from third parties as of December 31, 2009 amounted to P=464 million, 27% reduction from 2008 ending balance of P=638 million. VAT payable also decreased in relation to trade payables. Advertising and promotion decreased significantly, 54% from 2008, partly due to cost reduction efforts and shift of marketing strategy from TV advertising to reduction in introductory price. Equity Details of changes in the equity are discussed in Note 17 in the Notes to Consolidated Financial Statements.

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Item 7. Financial Statements and Supplementary Schedules The consolidated financial statements and schedules listed in the accompanying Index to Financial Statements and Supplementary Schedules (Page 20) are filed as part of this Form 17-A. Item 8. Information on Independent Auditors and Other Related Matters Sycip, Gorres, Velayo (SGV) is the Company’s independent external auditor. There are no disagreements regarding accounting and financial disclosure. Fees totaling P3.0 million to be billed by SGV will be for: a. Audit of the Company’s parent and consolidated financial statements b. Audit of Acceleron Distribution Corp. The fees above exclude out-of-pocket expenses incidental to the auditor’s work. No other audit and non-audit related services were rendered during the year.

PART III – CONTROL AND COMPENSATION INFORMATION

Item 9. Directors and Executive Officers Members of the Board of Directors (as of 30 April 2010)

Name Citizenship Shareholdings % to Total Rolando B. Hortaleza, M.D., Chairman Filipino 1 0.0000001%Rosalinda A. Hortaliza, M.D., Vice-Chairman Filipino 1 0.0000001%Eric Roel E. Domagas, President & COO Filipino 1,000 0.0001408%Allue Krisanne A. Hortaleza Filipino 1 0.0000001%Maurice P. Ligot Filipino 10,000 0.0014079%Rizalino D. Rivera, Independent Director Filipino 15,000 0.0021118%Jimmy T. Yaoksin, Independent Director Filipino 25,000 0.0035197%Total 51,003 Total outstanding shares 710,290,326

The Directors of the Company are elected at the Annual Stockholders’ Meeting to hold office until the next succeeding Annual Meeting or until their respective successors have been elected and qualified. None of the members of the Board of Directors and Officers of the Company own more than 10% of the registrant’s securities.

Directors: Rolando B. Hortaleza, M.D. Dr. Hortaleza, 51, Filipino, is the Chairman of the Board and Chief Executive Officer of Splash Corporation which he co-founded with his wife, Rosalinda, also a medical doctor, in 1985. He is a scion of the Hortaleza family which pioneered the Hortaleza Vaciador and Beauty Supplies, a trail-blazing chain of stores that sells cosmetic products, nippers, scissors and other beauty salon supplies. Dr. Hortaleza also sits as Chairman of Splash Holding, Inc. and Vice-Chairman of the following corporations: HBC, Inc., World Partners Bank and World Partners Finance Corporation. He is also Vice-Chairman of Ang.Hortaleza Foundation.

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Dr. Hortaleza graduated with a Bachelor of Science degree in Preparatory Medicine (Pre-Med) from the University of the East and obtained his degree in Medicine from Our Lady of Fatima University in 1984. Dr. Hortaleza also attended the Owners and Presidents Management Program at the Harvard Business School in Boston, Massachusetts from 1997 to 1998. Rosalinda Ang-Hortaleza, M.D. Dr. Ang-Hortaleza, 52, Filipino, is the Vice-Chairman of Splash Corporation. She also sits as Vice Chairman of Splash Holdings, Inc., and is the Chairman and Chief Executive Officer of HBC, Inc., Ang.Hortaleza Foundation, World Partners Bank, and World Partners Finance Corporation. She graduated with a Bachelor of Science degree in Medical Technology from the University of Santo Tomas in 1980. She obtained her degree in Medicine from Our Lady of Fatima University in 1984. She attended the Advanced Management Program at the Harvard Business School in Boston, Massachusetts in 2000. Maurice P. Ligot. Ms. Ligot, 59, Filipino, has been a Director of Splash Corporation since 2002 and President and Chief Operating Officer of Ang.Hortaleza Foundation since 1997. Ms. Ligot is also a member of the Board of Directors of World Partners Finance Corporation and HBC, Inc. Prior to her present positions; she was with Splash Corporation as Production Manager, Quality Assurance Manager and then Total Quality Manager. Ms. Ligot obtained her Bachelor of Science degree in Pharmacy from the Centro Escolar CEU University where she was Outstanding Alumna of the School of Pharmacy in 2000 and Centennial Awardee in 2007. She earned units in Master of Science in Pharmacy from the University of the Philippines. She also obtained diplomas in Creating Value in CSR from the Asian Institute of Management in Indonesia; Triple Bottomline: Operationalizing The Doing Good from Asian Institute of Management, Philippines; and Corporate Governance from the University of the Philippines. Ms. Ligot was Trustee and Treasurer of the League of Corporate Foundations in 2003 – 2007 and currently, a trustee of Ninoy and Cory Aquino Center for Leadership. Allue Krisanne A. Hortaleza. Ms. Hortaleza, 25, Filipino, is the eldest daughter of Drs. Rolando and Rosalinda Hortaleza and was elected to the Board in 2007. She obtained her Bachelor of Science degree in Management from the Ateneo de Manila University in March 2007. She is currently the Chief-of-staff of the Chairman/CEO of HBC, Inc. Jimmy T. Yaokasin. Mr. Yaokasin, 41, Filipino, was elected to the Board of Splash Corporation on October 1, 2007. He is currently the Chairman of the Board of Trustees of the Development Academy of the Philippines in his capacity as the representative of the Office of the President. He is also a member of the Board of Directors of MRC Allied, Inc., Menlo Capital, Leyte Cable TV Network, Inc. and the YKS Group of Companies. Mr. Yaokasin is an active member of civic and community organizations – Paul Harris Fellow of Rotary International, Gideons International and former National President of the Philippine Jaycees. Mr. Yaokasin obtained his degree in Business Administration major in Accountancy (Magna cum Laude) from the University of the Philippines. He obtained his Master in Business Administration (MBA) under the joint Executive MBA program of the Kellogg School of Management of Northwestern University, Chicago and the Hongkong University of Science and Technology. Mr. Yaokasin is a Certified Public Accountant.

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Rizalino D. Rivera. Mr. Rivera, 48, Filipino, was elected to the Board of Splash Corporation on 1 October 2007. He is in charge of Management Planning for Digital Alliance which is a group of companies involved in ICT and Broadcast. He is the President of Change Consultants, Inc. which offers consultancy services to top business corporations as well as government organizations, the academe, and development work. Mr. Rivera is the Faculty Chair for the Human Resource Cluster of the Ateneo Graduate School of Business. He is also involved with the Institute of People Power and Development of the Benigno S. Aquino, Jr. Foundation and is a member of the advisory team to former President Corazon C. Aquino. Mr. Rivera has been a senior consultant on human resource management and organizational development for several companies which include Nestle Philippines, Kraft Foods, Jollibee Foods Corporation, Wyeth Philippines, Pfizer, La Farge Cement, HBC, Inc. and the Asian Development Bank. Mr. Rivera has a Bachelor of Arts degree in Political Science from the University of the Philippines. He is a candidate for the Master of Arts in Counseling Psychology program of the Ateneo de Manila University as well as the Master of Science in Organization Development program of the Pepperdine University, U.S.A. Eric Roel E. Domagas. Mr. Domagas, 52, Filipino, was previously the President and Managing Director of Rapp Collins Inc., a full service advertising agency. Prior to this stint, he was the Vice President and Director of the Non Alcoholic Beverage business of San Miguel Corporation. One of the highlights of his role in San Miguel Corporation was to lead and manage the US$ 800 million growth initiatives for the Non Alcoholic Beverage business in seven (7) Asian countries. He also held senior executive positions for Home Cable Television and Vintage Television. Mr. Domagas is a graduate of the University of the Philippines with a degree in Business Administration and has also attended the Management Development Program of the Asian Institute of Management

Independent Directors: Among the seven (7) Directors, Messrs. Jimmy Tiu Yaokasin, Jr. and Rizalino D. Rivera are the independent directors of the Company, having been as such pursuant to Article III, Section 1(a) of the By-Laws of the Corporation. Executive Officers (as of 30 April 2010)

Name Position Rolando B. Hortaleza, M.D. Chief Executive Officer Eric Roel E. Domagas President and Chief Operating Officer Veneranda M. Tomas EVP and Chief Financial Officer Jose G. Vega SVP and GM for Philippine Operations Pedro G. Picornell VP for Research and Supply Chain Management Lynneth P. Malabanan VP for Corporate Services Ace Vincent V. Villareal AVP and Head of International Division Garyzalde O. Morales AVP and Head of Direct Selling

Ms. Veneranda M. Tomas. Ms. Tomas, 55, Filipino, joined the Company in September 2009. She was Senior Vice President & Director of Group Audit at San Miguel Corporation and is currently a member of the Board of Directors of Seaoil Philippines, Inc. She is also the current President of the Institute of Internal Auditors – Philippines, a Fellow of the Institute of Corporate Directors of the Philippines and a member of the faculty of the University of Asia and the Pacific.

-14-

Ms. Tomas holds a Bachelors Degree in Business Administration Major in Accounting from the University of the East. She ranked 2nd place in the CPA Board Examinations. She also completed the academic requirements for Masters Degree in Business Administration in Ateneo de Manila University. She also finished the Strategic Finance and Control course in IMD Switzerland. Mr. Jose G. Vega. Mr. Vega, 45, Filipino, joined Splash Corporation in February 2010. Prior to joining the Company, he was SVP for Sales & Distribution of Digitel Mobile Philippines Inc. He started his career with San Miguel Corporation in 1987 and has held key sales management positions in the conglomerate until his retirement as AVP and Area Sales Manager in 2002. He was also Head of Prepaid Sales, Trade Marketing, National Accounts, International Sales and International Licensing of Globe Telecom from 2003 to 2007. Mr. Vega graduated in 1986 with a degree of Bachelor of Science in Management and Industrial Engineering from the Mapua Institute of Technology, Manila. Mr. Pedro G. Picornell. Mr. Picornell, 56, Spanish, started with the Company on June 15, 2009. He brings with him an extensive experience in supply chain management and general management. He was the former Senior Vice President for Operations of Senbel Fine Chemicals. Prior to this, he was the Managing Director for PT Belfoods Indonesia where he was responsible for all aspects of the business to include Sales, Distribution, Finance and Operational facilities. He also spent 3 years as Manufacturing Manager for Pepsi Cola Indo-beverages covering management of the Manufacturing Facilities, Quality Control, Product Development/Registration and Halal Certification. Prior to this, he handled various management posts in San Miguel Corporation for 23 years covering all fields of Beer Production, Finance Management and Product Development. Mr. Picornell holds a Masters Degree in Business Administration from the University of San Francisco, USA and got his Bachelor’s Degree in Chemical Engineering from De La Salle College, Manila. Ms. Lynneth P. Malabanan. Ms. Malabanan, 38, Filipino, rejoined the Company last April 1, 2010 bringing with her more than 15 years of experience in information Technology, Enterprise Resource Planning, Systems Integration, SAP, Quality Assurance and Business Process Reengineering. She previously held key positions in Logica Philippines, Ayala Land, Inc., Splash Corporation and TPG Corporation. Mr. Ace Vincent V. Villa-real. Mr. Villa-real, 43, Filipino, started his stint with Splash Corporation on April 15, 2009 as Assistant Vice President for Business Development under the same Division. Before joining the Company, Mr. Villa-real held key positions such as Commercial Unit Manager of CPAC Monier Philippines, Inc. and National Sales and Marketing Manager of Taisho Pharmaceuticals (Phils.) Inc. Mr. Villa-real has 18 years of solid experience in Sales and Marketing. Aside from his Bachelor’s Degree in Business Administration, Mr. Villa-real holds a Masters Degree in Business Administration from the University of the Philippines Graduate School of Business.

Garyzalde O. Morales. Mr. Morales, 39, Filipino, began his career at Splash Corporation as member of the Finance group where he was an inventory staff in 1995 and materials analyst in 1996. He moved to Marketing in 1997 and became Marketing Manager. In 2007, he was appointed as the first head of Brand Activation Group. Mr. Morales obtained his Bachelor of Science degree in Commerce, major in Accounting, from the Sacred Heart College in Lucena City, Quezon. He has a Master in Management degree from the Technological University of the Philippines, and Master in Business Administration degree from University of Sto. Tomas.

-15-

Significant Employees While the Company acknowledges that each employee has a role and contribution to make, it also believes that no one is indispensable in the organization. Thus, the loss of an employee or officer will not cause any serious dislocation or disruption in the business of the Company. Nonetheless, the Company endeavors to retain competent and dedicated employees. As a matter of policy, the Company ensures that the maintenance of good relations with a customer or any third party is the responsibility of more than one person. Hence, the success of a transaction, undertaking, or project does not depend on any one employee. Consequently, the Company does not have significant or indispensible employees. Family Relationship With the exception of spouses Dr. Rolando B. Hortaleza and Dr. Rosalinda Ang-Hortaleza and their eldest daughter Allue Krisanne A. Hortaleza who are the Chairman, Vice-Chairman, and Director, respectively, of the Company, there are no family relationships either by consanguinity or affinity up to the fourth (4th) civil degree among the directors, executive officers and nominees for election as directors as of December 31, 2009. Item 10. Executive Compensation Compensation of Directors and Executive Officers: Total Board of Directors remunerations paid in 2009 amounted to P12.5 million. All the members of the Board of Directors are entitled to P20, 000 per diem for attendance in any regular or special meeting. For the year 2009, total salaries, allowances and bonuses for the last two fiscal years and estimated to be paid for the ensuing year to the principal executive, operating and financial officers are summarized in the following compensation table.

Name

Year

Salary (P Mil)

Other Variable Pay (P Mil)

Rolando B. Hortaleza, M.D. Eric Roel E. Domagas Veneranda M. Tomas Pedro G. Picornell Teodulo L. Manlubatan Ma. Regina Gavino Ace Vincent V. Villa-Real Garyzalde O. Morales

CEO and most highly compensated executive officers

Actual 2008 Actual 2009 Estimated 2010

60.028 55.902 57.256

13.170 12.161 12.425

Actual 2008 Actual 2009

31.727 40.541

6.948 8.834

All other officers* as a group unnamed

Estimated 2010 47.372 10.280

* Senior managers and up There are no other cash compensation granted to officers and directors in addition to the above summary of compensation.

-16-

Item 11. Security Ownership of Certain Beneficial Owners, Directors and Key Officers All shares of SC's common stock have one vote per share. Major Shareholders do not have voting rights that are different from other holders of shares of SC’s common stock. Based on the latest quarterly information as at March 31, 2010, SC knows no one who beneficially owns 5% or more of SC’s shares of common stock, or collectively Major Shareholder, except as set forth in the following table:

Name and Address of Record Owner and relationship with the Corporation

Citizenship Name of Beneficial Owner and Relationship with Record Owner

No. of shares held % to Total Outstanding

Splash Holdings, Inc. 548 Mindanao Avenue corner Quirino Highway Novaliches Quezon City (Major Stockholder)

Filipino Same as owner 492,009,214 69.27%

PCD Nominee Corp. (Fil) G/F Makati Stock Exchange Bldg. 6767 Ayala Ave., Makati City (Stockholder)

Filipino See Footnote (1) 122,882,507 17.30%

PCD Nominee Corp. (Non Fil) G/F Makati Stock Exchange Bldg. 6767 Ayala Ave., Makati City (Stockholder)

Non-Filipino See Footnote (1) 93,525,500 13.17%

(1) PCD Nominee Corporation, a wholly owned subsidiary of Philippine Central Depository, Inc. (“PCD”), is the registered owner of the

shares in the books of the Corporation’s transfer agent in the Philippines. PCD is the registered owner of shares held by participants in the Philippine Depository and Trust Co., or PDTC, a private company organized to implement an automated book entry system of handling securities transactions in the Philippines. The securities are voted by the trustee’s designated officers who are not known to the Corporation. None of the PCD Nominee Corporation (Foreign account) beneficially owns 5% or more of the Corporation’s common shares.

None of the Company’s directors or officer directly holds 5% or more of the registrant’s outstanding stock as of March 31, 2010. Approximately 86.83% of the outstanding capital stock of SC was registered in the names of Philippine persons. Item 12. Certain Relationships and Related Transactions The Group’s related party relationships and transactions are discussed in detail in Note 18 in the Notes to consolidated financial statements.

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PART IV – CORPORATE GOVERNANCE Item 13. Corporate Governance The Group strives to adopt measures which will improve its corporate governance. Monitoring of regulatory rules on governance is undertaken to conform, where applicable, to leading practices and principles. This is to assure the Company’s shareholders and other stakeholders that the Company conducts its business with the highest level of integrity, transparency and accountability. The Company complied with the Philippine SEC requirement to submit the revised Manual of Corporate Governance in March 2010. Also, the Company participated in the 2009 Corporate Governance Scorecard for Publicly Listed companies prepared by the Institute of Corporate Directors in collaboration with the Philippine Stock Exchange and the Securities and Exchange Commission which serve as the bases of an evaluation system established by the Company to measure or determine the level of compliance of the Board of Directors and top-level management with good governance practices.

PART V – EXHIBITS AND SCHEDULES Item 14. Exhibits and Reports on SEC Form 17-C

(a) Exhibits – See accompanying Index to Exhibits (page 19). The following exhibit is filed as a separate section of this report. (2) Subsidiaries of the Registrant The other exhibits, as indicated in the Index to Exhibits are either not applicable to the Company or require no answer.

(b) Reports on SEC Form 17-C

Reports on SEC Form 17-C (Current Report) have been filed during the last six months period covered by this report.

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SPLASH CORPORATION AND SUBSIDIARIES LIST OF CORPORATE DISCLOSURES/

REPLIES TO SEC LETTERS UNDER SEC FORM 17-C JULY 1, 2009 TO DECEMBER 31, 2009

We reported the following items on SEC Form 17-C during the last two quarters of 2009:

Items Reported Date Filed

1. Assumption of Officer July 1, 2009

2. Results of Board of Directors' Meeting July 10, 2009

3. Statement of Changes in Beneficial Ownership of Securities (Circular No. 4896-2009) July 15, 2009

4. Update on disbursements of proceeds from initial public offering July 16, 2009

5. Payment of penalties assessed by SEC July 20, 2009

6. Resignation of officer July 24, 2009

7. Statement of Changes in Beneficial Ownership of Securities (Circular No. 5353-2009) August 7, 2009

8. Press Release: "Splash Corporation strengthens its overall competitive position in the Personal Care Market" August 13, 2009

9. Organizational movement/assumption of officers August 26, 2009

10. Press Release: "Splash fortifies market position in Malaysia through Carepro Marketing" August 28, 2009

11. Statement of Changes in Beneficial Ownership of Securities (Circular No. 6088-2009) September 11, 2009

12. Statement of Changes in Beneficial Ownership of Securities (Circular No. 6507- 2009) October 7, 2009

13. Assumption of officer October 15, 2009

14. Update on disbursements of proceeds from initial public offering October 16, 2009

15. Resignation of officer November 12, 2009

16. Resignation of director November 12, 2009

17. Results of Special Board of Directors' Meeting: resale of treasury shares November 16, 2009

18. Results of Special Meeting of Board of Directors: appointment of officers and acquisition of trademark November 19, 2009

19. Sale of treasury shares as of December 3, 2009 December 3, 2009

20. Reply to letter of PSE requesting additional information on sale of treasury shares December 4, 2009

21. Sale of treasury shares on December 7, 2009 December 8, 2009

-19-

INDEX TO EXHIBITS

FORM 17-A

No. Page No.

(3) Plan of Acquisition, Reorganization, Arrangement, Liquidation, or Succession *

(5) Instruments Defining the Rights of Security Holders, Including Indentures *

(8) Voting Trust Agreement *

(10) Annual Report to Security Holders, Form 11-Q or Quarterly Report to Security Holders

*

(13) Letter re Change in Certifying Accountant *

(15) Letter re Change in Accounting Principles *

(16) Report Furnished to Security Holders *

(18) Subsidiaries of the Registrant ANNEX

A

(19) Published Report Regarding Matters Submitted to Vote of Security Holders *

(20) Consent of Experts and Independent Counsel *

(21) Power of Attorney *

(29) Additional Exhibits *

___________ * These Exhibits are either not applicable to the Company or require no answer

-20-

EXHIBIT 18 - SUBSIDIARIES OF THE REGISTRANT Please refer to Note 2 of the accompanying Consolidated Financial Statements for details.

-21-

INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES

FORM 17-A, ITEM 7

Consolidated Financial Statements Page No.

Statement of Management’s Responsibility for Financial Statements F-22 Independent Auditor’s Report F-25 Consolidated Balance Sheets as of December 31, 2009 and 2008 F-27 Consolidated Statements of Income

For the years ended December 31, 2009, 2008 and 2007 F-28 Consolidated Statements of Comprehensive Income

For the years ended December 31, 2009, 2008 and 2007 F-29 Consolidated Statements of Changes in Stockholders’ Equity

For the years ended December 31, 2009, 2008 and 2007 F-30 Consolidated Statements of Cash Flows

For the years ended December 31, 2009, 2008 and 2007 F-31 Notes to Consolidated Financial Statements F-32 Supplementary Schedules Independent Auditor’s Report on Supplementary Schedules A. Marketable Securities – (Current Marketable Equity Securities and Other Short Cash Investments) S-1 B. Amounts Receivable from Directors, Officers, Employees, Related Parties And Principal Stockholders (Other than Affiliates) S-2 C. Noncurrent Marketable Equity Securities, Other Long-term Investments in Shares of Stock and Other Long-term Investments S-3 D. Indebtedness to Unconsolidated Subsidiaries and Affiliates * E. Property, Plant and Equipment * F. Accumulated Depreciation * G. Intangible Assets S-4 H. Long-term Debt S-5 I. Indebtedness to Affiliates and Related Parties (Long-term Loans from Related Companies * J. Guarantees of Securities of Other Issuers * K. Capital Stock S-6 L. Reconciliation of Retained Earnings for Dividend Declaration * ___________ * These schedules, which are required by SRC Rule 68.1, have been omitted because they are either not required, not applicable or the information required to be presented is included in the Group’s consolidated financial statements or the notes to consolidated financial statements.

S-1

SPLASH CORPORATION AND SUBSIDIARIES

SCHEDULE A

Marketable Securities (Other Short-term Cash Investments) December 31, 2009

Name of issuing entity and description of each issue

Principal amount of bonds and notes

Amount shown in the balance sheet

Income received and accrued

World Partners Bank 652,805,993 677,001,201 24,195,208 Philippine Bank of Communication 279,025,587 291,667,675 12,642,088 Philippine National Bank 230,091,809 238,439,127 8,347,318 Security Bank 95,210,317 97,390,892 2,180,575 Metrobank 45,636,799 48,481,067 2,844,268 Bank of Commerce 5,112,917 5,291,732 178,815 Totals 1,307,883,422 1,358,271,694 50,388,272

S-2

SPLASH CORPORATION AND SUBSIDIARIES SCHEDULE B

Amounts Receivable from Directors, Officers, Employees, Related Parties and Principal Stockholders

December 31, 2009

Name and designation of Debtor

Balance at Beginning of

Period

Additions

Collections/ Withdrawal

Amounts

Written-Off

Balance at End of Period

Current

Not Current

Total

SHI, Ultimate parent P137,370,246 P- P1,551,129 P- P135,819,117 P- P135,819,117 Total Advances to ultimate Parent Company 137,370,246 - 1,551,129 - 135,819,117 -

135,819,117

Fellow subsidiaries through SHI: WPB 715,866,106 - 38,864,905 - 677,001,201 - 677,001,201 Total Cash Equivalents 715,866,106 - 38,864,905 - 677,001,201 - 677,001,201 Fellow subsidiaries through SHI: HBC 136,456,921 112,146,118 34,563,987 - 214,039,052 - 214,039,052 PTSI 1,121,532 3,810,657 - - 4,932,189 - 4,932,189 Close family members: Hantrade Phils. - 5,447,227 1,605,820 - 3,841,407 - 3,841,407 Individuals - 5,131,632 4,939,814 - 191,818 - 191,818 Total Trade Receivable 137,578,453 126,535,634 41,109,621 - 223,004,466 - 223,004,466 Dr. Rolando B. Hortaleza - 18,112,221 - - 18,112,221 - 18,112,221 Total Other Advances - 18,112,221 - - 18,112,221 - 18,112,221 Fellow subsidiaries through SHI: PTSI Principal Interest receivable

204,306,921-

-22,062,599

21,538,84713,461,153

--

82,707,0708,601,446

100,061,004-

182,768,074

8,601,446 Total Note Receivable 204,306,921 22,062,599 35,000,000 - 91,308,516 100,061,004 191,369,520 Fellow subsidiaries through SHI: WPB 2,113,969 - 919,887 - 1,194,082 1,194,082 SII 1,287,234 901,449 - - 2,188,683 2,188,683 WPFC 2,787,536 - 7,249 - 2,780,287 2,780,287 Total Due from Related Parties 6,188,739 901,449 927,136 - 6,163,052 - 6,163,052 Total P1,201,310,465 P167,611,903 P117,452,791 P- P1,151,408,573 P100,061,004 P1,251,469,577

S-3


SCHEDULE C

Non-Current Marketable Non-Equity Securities, Other Long Term Investments in Stocks and Other Investments

December 31, 2009

Name of issuing entity and

description of investment

Beginning Balance Additions Deductions Ending Balance Dividends received from

investments not accounted for

by equity method

Number of shares of principal

amount of bonds and

notes

Amount in Pesos

Number of shares o f

principal amount of bonds and

notes

Amount in Pesos

Equity in Earnings/Losses of investees

Others – unrealized valuation

gain (loss)

Distribution of earnings

by investees

Others – unrealized valuation

gain (loss)

Number of shares of principal

amount of bonds and

notes

Amount In Pesos

Available for sale investments Wack Wack

Golf and Country Club

2

P15,600,000 – – – P3,400,000 -- -- 2 P19,000,000

P- GMA 7 100,000 345,000 – – – 435,000 -- -- 100,000 780,000 35,000 Professional Services, Inc.

50,000

200,000,000 – – –

- -- -- 50,000 200,000,000

5,500,000

Total P215,945,000 – P– P– P 3,835,000 P -- P -- P 219,780,000 P 5,535,000

S-4

SPLASH CORPORATION AND SUBSIDIARIES SCHEDULE G

Intangibles Assets – Other Assets December 31, 2009

Description Beginning Balance

Additions at Cost

Charged to Cost and

Expenses*

Charged to other

accounts

Other changes

additions (deductions)

Ending Balance**

Intangible Assets Trademark P- P100,254,464 P- P- P- P100,254,464

Software costs 12,870,511 5,423,839 4,450,173 - - 13,844,177 P12,870,511 P105,678,303 P4,450,173 P- P- P114,098,641

*Represents amortization of intangible assets **See Note 12 – Intangible Assets to the accompanying consolidated financial statements in Item 7

S-5


SCHEDULE H

Long-Term Debt December 31, 2009

Title of issue or

type of obligation

Amount of authorized by

indenture

Amount shown as current

Amount shown as long-term

Debt issuance costs – net of amortization

“offset against FRN in related balance sheet”

Terms Floating Rate Note (FRN)

P1,000,000,000 P50,000,000 P850,000,000 P8,496,603 Issued on August 31, 2007 payable in 5 annual installments. Interest payable quarterly based on the Interest Rate Setting Date by reference to the 3-month PDS Treasury Rate plus a spread of 1.65% (see Note 13 to the consolidated financial statements)

S-6

SPLASH CORPORATION AND SUBSIDIARIES SCHEDULE K

Capital Stock December 31, 2009

Title of Issue

Number of Shares Authorized

Number of Shares issued and outstanding

Number of shares reserved for options, warrants, conversion and other rights

Number of shares held by affiliates

Directors officers and Employees

Others

Common 1,000,000,000 710,290,326 - 492,009,214 51,003 218,230,109

ANNEX A

SUBSIDIARY FINANCIAL STATEMENTS

Financial Statements and Independent Auditors’ Report PT Splash Cahaya December 31, 2009

CONTENTS

Independent Auditors’ Report Page Financial Statements

Balance Sheet 1 Statement of Income 3 Statement of Changes in Equity 4 Statement of Cash Flows 5 Notes to Financial Statements 6

PT SPLASH CAHAYA BALANCE SHEET December 31, 2009

The accompanying notes to financial statements are an integral part of these financial statements

1

A S S E T S

Notes 2 0 0 9 Rp

CURRENT ASSETS Cash 2b,3 1,268,435,163 Trade receivables 2c,4 3,573,098,820 Other receivables 5 2,695,498 Inventories 2d,6 1,205,412,291 Prepaid taxes 2j,12a 67,357,082 Total current assets 6,116,998,854

NON-CURRENT ASSETS

Property and equipment 2e,f,7 375,164,521 Deferred tax assets 2j,12d 1,229,167 Total non-current assets 376,393,688

TOTAL ASSETS 6,493,392,542

PT SPLASH CAHAYA BALANCE SHEET (Continued)

December 31, 2009


2

LIABILITIES AND EQUITY

Notes 2 0 0 9 Rp

CURRENT LIABILITIES Trade payables 8 1,650,839,553 Other payables 9 502,148,299 Due to related party 10 1,880,000,000 Taxes payable 2j,12b 68,479,212 Accrued expenses 11 123,128,202 Total current liabilities 4,224,595,266

NON-CURRENT LIABILITIES Provision for employees’ entitlement 2g,20 − Total non-current liabilities −

EQUITY Capital stock Authorized, issued and fully paid-up 2,000 shares at Rp 1,022,500 (US$ 100) par value each 13 2,045,000,000 Paid in capital from exchange differences 14 (176,400,000) Retained earnings 400,197,276 Total equity 2,268,797,276

TOTAL LIABILITIES AND EQUITY 6,493,392,542

PT SPLASH CAHAYA STATEMENT OF INCOME

For the period from inception (August 27, 2009) up to December 31, 2009


3

Notes 2 0 0 9 Rp

Net sales 2h,15 3,248,271,654 Cost of sales 2h,16 (2,471,723,015) Gross profit 776,548,639 OPERATING EXPENSES Salaries and allowances 2h,17 (56,345,918) Selling expenses 2h,18 (177,779,097) General and administrative expenses 2h,19 (69,598,212) Total operating expenses (303,723,227) Profit from operations 472,825,412 OTHER INCOME (CHARGES) Loss on foreign exchange, net 2i (5,511,183) Miscellaneous expense, net (1,079,000) Total other charges, net (6,590,183) Profit before income tax 466,235,229 Tax income (expense) 2j Current income tax 12c (67,267,120) Deferred tax income 12d 1,229,167 Total tax expense (66,037,953) Net profit for the period 400,197,276

PT SPLASH CAHAYA STATEMENT OF CHANGES IN EQUITY



4

Paid in capital from

Notes

Capital stock exchange

differences Retained

earnings

Total

Rp Rp Rp Rp Balance as of August 27, 2009 – – – – Share capital payments 13,14 2,045,000,000 (176,400,000) – 1,868,600,000 Net profit for the period – – 400,197,276 400,197,276 Balance as of December 31, 2009 2,045,000,000 (176,400,000) 400,197,276 2,268,797,276

PT SPLASH CAHAYA STATEMENT OF CASH FLOWS



5

2 0 0 9

Rp

Cash flows from operating activities Profit before income tax 466,235,229 Adjustments to reconcile profit before income tax to net cash provided by operating activities : Depreciation expense of property and equipment 13,014,534 Unrealized loss on foreign exchange, net 11,400,000

Operating profit before working capital changes 490,649,763 Increase in trade receivables (3,573,098,820) Increase in other receivables (2,695,498) Increase in inventories (1,205,412,291) Increase in prepaid taxes (67,357,082) Increase in trade payables 1,650,839,553 Increase in other payables 502,148,299 Increase in due to related party 1,868,600,000 Increase in taxes payable 1,212,092 Increase in accrued expenses 123,128,202

Cash used in operating activities (211,985,782) Payments of corporate income tax −

Net cash used in operating activities (211,985,782)

Cash flows from investing activities Payments to acquire property and equipment (388,179,055)

Net cash used in investing activities (388,179,055)

Cash flows from financing activities Receipt from issuance of capital stock 1,868,600,000

Net cash provided by financing activities 1,868,600,000

Net increase in Cash 1,268,435,163

Cash at beginning of period −

Cash at end of period 1,268,435,163 Additional schedule of non-cash investing and financing activities Purchasing of property and equipment through other payables 350,000,000

PT SPLASH CAHAYA NOTES TO FINANCIAL STATEMENTS

December 31, 2009

6

1. GENERAL PT Splash Cahaya (the Company) was established within the framework of the Foreign Capital Investment Law No. 1 year 1967, as amended by Law No. 11 year 1970 based on the notarial deed of Syaeful Huda, SH, Mkn No. 02 dated August 5, 2009. It has complied with the Limited Liability Company Law of the Republic of Indonesia No. 40 year 2007 dated August 16, 2007. The Company’s Articles of Association were approved by the Minister of Justice and Human Rights in his decision letter No. AHU–41878.AH.01.01.Tahun 2009 dated August 27, 2009. The publication in State Gazette is still in process. The Company is mainly engaged in business of import, export of beauty merchandise, and manufacturing of soap in accordance with the Article 3 of the Company’s Article of Association and approval from the Capital Investment Coordination Board (“BKPM”) No. 781/I/PMA/2009 dated July 1, 2009. The Company is domiciled at Hero Building II, Jalan Jendral Gatot Subroto, Jakarta Selatan. The Company commenced its commercial operation in November 1, 2009. The Company has 3 employees as of December 31, 2009. The members of the Company’s board of commissioners and directors as of December 31, 2009 is as follows : Board of Commissioners : President Commissioner : Rolando Bonifacio Hortaleza, M.D. Commissioner : Rosalinda Ang Hortaleza, M.D. Board of Directors : President Director : Ms. Marie Sharon B. Rimonte Directors : Mr. Eric Roel Espiritu Domagas Mr. Ramon Gaba Trajano Mr. Vincent Ace Vargas Villa-Real

2. ACCOUNTING POLICIES

A summary of significant accounting policies adopted by the Company, which affect the determination of its financial position and results of its operations are presented below. a. Presentation of Financial Statements

The Company’s financial statements are prepared on the historical cost basis of accounting and in conformity with Statement of Financial Accounting Standard established by the Indonesian Institute of Accountants. The statement of cash flows is prepared using indirect method.

PT SPLASH CAHAYA NOTES TO FINANCIAL STATEMENTS (Continued)

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2. ACCOUNTING POLICIES (Continued)

a. Presentation of Financial Statements (Continued) The Company’s financial statements covered for the period from inception (August 27, 2009) up to December 31, 2009.

b. Cash Cash and banks comprise of cash on hand, and amounts repayable on demand with banks which are readily convertible into known amounts of cash without notice.

c. Trade Receivables Trade receivables are recorded net of an allowance for doubtful accounts. Allowance for doubtful accounts is set-up based on a review of the collectibility of outstanding amounts. Amounts are written-off as bad debts during the period in which they are determined to be not collectible.

d. Inventories Raw materials and merchandise inventories are stated at cost or net realizable value whichever is lower. Costs of the Company’s inventories are carried on the weighted average method. Cost includes all expenditures directly attributable to the manufacturing process as well as suitable portions of related production overheads, based on normal operating activity. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. A provision for obsolete and slow moving inventory is determined on the basis of estimated future usage or sale of individual inventory items. The amount of any write-down of inventories to net realizable value and all losses of inventories are recognized as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realizable value, is recognized as a reduction in the amount of inventories recognized as an expense in the period in which the reversal occurs. PSAK No. 14 (Revised 2008), “Inventories” was applied by the Company effective January 1, 2009.


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e. Property and Equipment Initially, an item of property and equipment is measured at its cost, which comprises its purchase price and any cost directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by management, and also include the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. The cost of self-constructed assets is determined using the same principles as for an acquired asset. Subsequent expenditures such as replacement and major inspection are added to the carrying amount of the asset when it is probable that future economic benefits will flow to the Company and the cost of the item can be measured reliably. The carrying amount of those parts that are replaced or any remaining carrying amounts of the cost of the previous inspection is derecognized. The costs of day-to-day servicing of an asset are recognized as an expense in the period in which they are incurred. Depreciation is recognized on straight-line basis to write down the depreciable amount of property and equipment. The estimated useful lives of the assets are as follows : Years Motor vehicle 5 Furniture and fixture 4 Tool and equipment 5Computer 4 The residual values, useful lives and depreciation method are reviewed at each balance sheet date to ensure that such residual values, useful lives and depreciation method are consistent with the expected pattern of economic benefits from those assets. When an asset is disposed of or when no future economic benefits are expected from its use or disposal, the cost and accumulated depreciation and impairment losses, if any, are removed from the accounts. Any resulting gain or loss from derecognition of an item of property and equipment is included in the statements of income. The Company applied PSAK No. 16 on Property, Plant and Equipment (Revised 2007), which supersedes PSAK No. 16 on Fixed Assets and Other Assets (1994), and PSAK No. 17 on Accounting for Depreciation (1994). Based on the revised PSAK, an entity shall choose either the cost model or revaluation model as its accounting policy and shall apply that policy to an entire class of property and equipment.


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e. Property and Equipment (Continued) The Company chose to adopt the cost model; accordingly, the Company’s property and equipments, are carried at cost less accumulated depreciation and accumulated impairment losses, if any.

f. Impairment of property and equipment At each balance sheets date, the Company reviews whether there is any indication that an asset may be impaired. Property and equipment are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of an asset’s net selling price and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows.

g. Employee Entitlements Employee entitlements to service and compensation payments relating to the employees’ separation, gratuity and compensation are recognized. A provision is made for the estimated liability as a result of past services rendered by employees up to the balance sheet date and is calculated based on the Manpower Law No. 13/2003 issued by the Government of Republic Indonesia in April 2003.

h. Revenue and Expenses Recognition Revenue from sale is recognized when the goods are delivered to the customers. Expenses are recognized when these are incurred.

i. Foreign Currency Transaction and Balances The Company's books and records are maintained in Indonesian Rupiah. Transactions denominated in foreign currencies are converted into Rupiah at the exchange rate prevailing at the date of the transactions. At the balance sheet date, monetary assets and liabilities denominated in foreign currencies are translated into Rupiah at the middle rate of Bank Indonesia ruling at that date (US$ 1 = Rp 9,400 as of December 31, 2009). Gains or losses arising from foreign exchange transactions are credited or charged to the statement of income in the current period.


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2. ACCOUNTING POLICIES (Continued) j. Income Tax

Income tax is computed on the basis of taxable income for the period. Deferred income tax is provided for the timing differences in the recognition of income and expenses for financial reporting and income tax purposes. The accounting treatment is in conformity with the Statement of Financial Accounting Standard (PSAK) No. 46 about Accounting for income taxes. Deferred tax is accounted for using the current tax tariff or tariff substantially applicable at the balance sheet date. Deferred tax is charged or credited to the statement of income in the current period.

k. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in Indonesia requires management to make estimates and assumptions that affect : − The reported amounts of assets and liabilities and disclosure of contingent assets and

liabilities at the date of the financial statements. − The reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management’s best knowledge of current events and activities, actual results may differ from those estimates.

3. CASH

2 0 0 9 Rp Cash on hand 6,000,000 Cash in bank : The Hongkong and Shanghai Banking Corporation Limited, Jakarta Branch

Rupiah account 328,241,167 US Dollar account 934,193,996 1,262,435,163 Total 1,268,435,163


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4. TRADE RECEIVABLES The balance as of December 31, 2009 of Rp 3,573,098,820 represents receivables from third party (PT Parit Padang). Based on the review of the status of individual trade receivable accounts at the end of the period, the Company’s management do not provide an allowance for doubtful accounts, because the management believes that the receivables are fully collectible

5. OTHER RECEIVABLES

2 0 0 9 Rp Third party : Employees 2,695,498

6. INVENTORIES

2 0 0 9 Rp Raw materials 599,516,988 Merchandise inventories 605,895,303 Total 1,205,412,291

7. PROPERTY AND EQUIPMENTS

The details of property and equipments are as follows : 2 0 0 9

Motor Vehicle

Furniture and

Fixture

Tool and

Equipment

Computer

Total Rp Rp Rp Rp Gross carrying amount : Balance August 27, 2009 – – – – – Addition 210,000,000 14,368,245 100,000,000 63,810,810 388,179,055 Disposal – – – – – Balance December 31, 2009 210,000,000 14,368,245 100,000,000 63,810,810 388,179,055


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7. PROPERTY AND EQUIPMENTS (Continued)

2 0 0 9

Motor Vehicle

Furniture and

Fixture

Tool and

Equipment

Computer

Total Rp Rp Rp Rp

Accumulated depreciation and impairment :

Balance August 27, 2009 – – – – – Depreciation 7,000,000 598,677 3,333,334 2,082,523 13,014,534 Disposal – – – – –

Balance December 31, 2009 7,000,000 598,677 3,333,334 2,082,523 13,014,534 Net carrying amount, December 31, 2009 203,000,000 13,769,568 96,666,666

61,728,287

375,164,521

2 0 0 9 Rp

Depreciation expenses are allocated to : General and administrative expenses 13,014,534 All property and equipments totaling Rp 388,179,055 are purchased from related party (PT Splash Indonesia). As of December 31, 2009, property and equipment were not covered by insurance against losses from fire and other risk due to the insurance are still covered by PT Splash Indonesia (in liquidation) insurance which is still in force as of December 31, 2009.

8. TRADE PAYABLES

2 0 0 9 Rp

Third parties : PT Interact Corporation 156,686,605 PT Mane Indonesia 90,515,733 PT Cahaya Subur Prima 88,893,624 PT Indocare Citra Pacific 62,280,000

398,375,962

Related party : PT Splash Indonesia 1,252,463,591

Total 1,650,839,553


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8. TRADE PAYABLES (Continued) Payable to PT Cahaya Subur Prima represents payable to third party toll manufacturer.

9. OTHER PAYABLES

2 0 0 9 Rp Third parties :

PT Parit Padang 64,097,064 PT Citra Mandiri Aryatunggal 17,916,195 PT Alfa Surya Expressindo 8,100,000 Others (individual below Rp 8,000,000) 27,035,040 117,148,299

Related party : PT Splash Indonesia 385,000,000

Total 502,148,299 Net payables to related party (PT Splash Indonesia) represent payable on purchasing of property and equipments.

10. DUE TO RELATED PARTY

2 0 0 9 Rp Related party : Splash Corporation, Philippines (US$ 200,000) 1,880,000,000 Represents advances from Splash Corporation, Philippines for working capital, interest free, no fixed repayment schedule, and no formal written agreement.


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11. ACCRUED EXPENSES 2 0 0 9 Rp Advertising and promotion 86,541,906 Professional fee 27,000,000 Employees’ benefit 6,566,668Others 3,019,628 Total 123,128,202

12. TAXATIONS

a. Prepaid taxes

2 0 0 9 Rp Value added tax 67,357,082

b. Taxes payable

2 0 0 9 Rp Income tax article 21 24,775Income tax article 23 1,187,317Estimated corporate income tax payable 67,267,120 Total 68,479,212

c. Corporate Income Tax

A reconciliation between profit before income tax as shown in the statement of income and estimated taxable profit which were calculated by the Company for the period from inception (August 27, 2009) up to December 31, 2009 is as follows :

2 0 0 9 Rp Profit before income tax as per statement of income 466,235,229


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12. TAXATIONS (Continued)

c. Corporate Income Tax (Continued)

2 0 0 9 Rp Fiscal adjustments consisted of : Permanent differences : Non-deductible expenses 9,327,534 Timing differences : Depreciation expense of property and equipment 4,916,667 Estimated taxable profit for the period 480,479,430 Estimated corporate income tax at tax rate 14% 67,267,120 Prepaid taxes : Income tax article 25 – Estimated corporate income tax payable 67,267,120

d. Deferred Tax Assets (Liabilities) The calculation of deferred tax assets and deferred tax liabilities with the maximum tax tariff of 25% in 2009 is as follows : 2 0 0 9

As of

August 27, 2009

Credited (charged) to the

statement of income for the

year

Valuation Correction

As of December 31,

2009

Rp Rp Rp Deferred tax assets (liabilities) : Depreciation expense of property and equipment − 1,376,667 (147,500 ) 1,229,167 • A reconciliation between the total tax expense and the amounts computed by applying the

effective tax rate to profit before income tax is as follows : 2 0 0 9 Rp Profit before income tax as per statement of income 466,235,229


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12. TAXATIONS (Continued)

d. Deferred Tax Assets (Liabilities) (Continued)

2 0 0 9 Rp

Tax loss (benefit) at tax rate 28% 130,693,363

Tax facility portion (50% tax tariff) for turnover up to Rp 4,800,000,000 (67,267,120)

Tax effect of non-deductible expense/(non taxable income) : Non-deductible expenses 2,611,710

Total tax expense 66,037,953

e. Administration • Under the taxation laws of Indonesia, the Company submits tax returns on the basis of self

assessment. The tax authorities may assess or amend taxes within 5 years after the date of the tax become payable.

• On September 23, 2008, the Government of Republic Indonesia approved the new revised

Income Tax law effective January 1, 2009. The revision includes among others, changes the effective rate from 30% to 28% in 2009, and to 25% in 2010. In addition to the impact on the current income tax for 2009, the revision will also impact the deferred income tax previously set up to reflect the reduction in effective tax rate.

13. CAPITAL STOCK

Pursuant to the notarial deed No. 02 dated August 5, 2009 of Syaeful Huda, SH, Mkn, the Company’s authorized capital amounted to Rp 2,045,000,000 (equivalent to US$ 200,000), consisting of 2,000 shares with a par value per share of Rp 1,022,500 (equivalent to US$ 100). Issued and fully paid up capital were 2,000 shares. The composition of shareholders as of December 31, 2009 is as follows :

Number of Percentage of Shareholders shares ownership Par value % US$ Rp

Splash Corporation, Philippines 1,980 99.00 198,000 2,024,550,000 Splash Holdings Inc, Philippines 20 1.00 2,000 20,450,000

Total 2,000 100.00 200,000 2,045,000,000


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14. PAID-IN CAPITAL FROM EXCHANGE DIFFERENCES The capital of the Company is stated in the articles of incorporation in both Indonesian Rupiah and United States Dollar currencies. Paid-in Capital from exchange differences represents the exchange differences between Rupiah equivalent to the United States dollar as stated in the articles of incorporation and the prevailing exchange rates at the dates when the capitals were paid in.

15. NET SALES

2 0 0 9 Rp Net sales derived from : Gross sales 3,821,496,064 Sales discount (573,224,410) Total 3,248,271,654

16. COST OF SALES

2 0 0 9 Rp Merchandise inventory Beginning balance – Purchases 2,323,326,585

Available for use 2,323,326,585 Ending balance (605,895,303)

Cost of sales – merchandise 1,717,431,282 S o a p Raw materials : Beginning balance – Purchases 1,267,478,037

Available for use 1,267,478,037 Ending balance (599,516,988)

Raw material used 667,961,049

Toll manufacturing expense 86,330,684

Cost of sales – soap 754,291,733 Total cost of sales 2,471,723,015


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17. SALARIES AND ALLOWANCES 2 0 0 9 Rp Salaries 47,797,500 Other allowances 8,322,424 Overtime 225,994 Total 56,345,918

18. SELLING EXPENSES

2 0 0 9 Rp Promotion 164,909,333 Freight and delivery 10,564,362 Representation 2,305,402 Total 177,779,097

19. GENERAL AND ADMINISTRATIVE EXPENSES

2 0 0 9 Rp Professional fee 25,000,000 Depreciation expense of property and equipment 13,014,534 Traveling and accommodation 7,250,542 Repair and maintenance 6,889,628License 5,750,000 Communication 5,672,263 Supplies and photocopy 4,425,400 Others 1,595,845 Total 69,598,212


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20. PROVISION FOR EMPLOYEES’ ENTITLEMENTS On June 20, 2000, the Ministry of Manpower issued Decree No. Kep-150/Men/2000, amending the Decree of Ministry of Manpower No. 03/Men/1996, regarding the Settlement of Work Dismissal and Determination of Separation, Appreciation and Compensation Payments in Companies. This decree requires companies to pay their employees termination, appreciation and compensation benefits in case of employment dismissal based on the employees’ number of years of services provided the conditions set forth in the Decree are met. Further, in April 2003 the Government of Republic Indonesia issued Labor Law No. 13/2003 replacing the Kep-150/Men/2000. The Company is required to provide for employees’ benefits in accordance with the Labor Law, however such provision is not deemed necessary as the Company is considered a start-up.

21. RELATED PARTY TRANSACTIONS AND BALANCES

a. Nature of Relationships

Name of related parties Nature of relationships

Splash Holdings Inc., Philippines Shareholder Splash Corporation, Philippines ShareholderPT Splash Indonesia Affiliated company

b. Related parties transactions

In conducting its business, the Company entered into certain business and financial transactions with the related parties. These transactions are normally made at normal price and conditions as of they were done with non-related parties. These transactions are as follows : 1. Purchase of raw materials and merchandise inventories from related party (PT Splash

Indonesia) for the period from inception (August 27, 2009) up to December 31, 2009 was Rp 3,117,001,230.

2. Purchase of property and equipments from related party (PT Splash Indonesia) for the period

from inception (August 27, 2009) up to December 31, 2009 was Rp 388,179,055. 3. Trade payables to related party (PT Splash Indonesia) as of December 31, 2009 was

Rp 1,252,463,591. 4. Other payables to related party (PT Splash Indonesia) as of December 31, 2009 was

Rp 385,000,000. 5. Due to related party (Splash Corporation, Philippines) as of December 31, 2009 was

Rp 1,880,000,000.


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22. SIGNIFICANT AGREEMENTS • Independent Contractor Agreement

On November 2, 2009, the Company entered into Memorandum of Understanding (MOU) with PT Cahaya Subur Prima as the contractor for the processing and packaging of the Company’s soap products in accordance with the product specifications and packaging design provided by the Company. The MOU will be for a period of six months and will be automatically terminated upon the occurrence of the following events, whichever comes earlier: a. If six months have lapsed and the parties failed to sign and execute a Toll Manufacturing

Agreement; or

b. The parties have signed and executed a Toll Manufacturing Agreement.

• Distribution Agreement 1. On November 2, 2009 the Company entered into a MOU with PT Parit Padang engaging PT

Parit Padang as its distributor to sell and distribute products produced by the Company in the areas and territories within Indonesia as will be determined or agreed by both parties. The Company will extend to the distributor certain discounts based on the billing price / list price for goods purchased with a 45-day payment term and to be covered with Post Dated Check. Additional discounts are given for early payment or cash with order discounts based on agreed rates in the contract. The MOU will be for a period of six months and will be automatically terminated upon the occurrence of the following events, whichever comes earlier: a. If six months have lapsed and the parties failed to sign and execute a Distribution

Agreement; or

b. The parties have signed and executed a Distribution Agreement. 2. On November 25, 2009, the Company entered into a distribution agreement with PT

Tigaraksa Satria Tbk (TRS) with no definite termination or renewal date. Under the agreement, the Company engages TRS as its distributor to sell and distribute products produced by the Company in the areas and territories within Indonesia as will be determined or agreed by both parties. The Company will extend to the distributor certain discounts based on the billing price / list price for goods purchased with a 60-day payment term and to be covered with Post Dated Check. Additional discounts are given for early payment or cash with order discounts based on agreed rates in the contract.


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23. ECONOMIC CONDITION The year 2009 is dubbed as an extremely difficult moment following the global economic crisis in 2008 and 2007. In Indonesia, the economic situation started showing some uncertainty in mid-2008, persisting onto the first half of 2009 as the global financial crisis continued to threaten the national economy. In the first quarter of 2009, Indonesia felt the negative impact of the crisis, affecting its real property sector, export performance, financial market and Rupiah exchange rate. The second quarter of 2009 saw a reversal in these indicators’ trends. The rising trend in Indonesia’s Gross Domestic Product (GDP) growth started in the third quarter of 2009 indicating the start of economic recovery. Further more, inflation in 2009 has been relatively low, exerting less pressure on the tightening monetary policy. These factors have proven that the Indonesia economy is quite resistant to the effects of the global economic crisis. The government is also helping the business community in preparing facilities and infrastructure in anticipation of the global economy recovery. In view of the more optimistic economic outlook for Indonesia, the Company will aim to ride the tide of a more vibrant Indonesian consumer market. In 2009, the economy has initiated a distribution drive that serves as a foundation for its long-term business strategy. In 2010, the Company will solidify this foundation though its brand building initiatives that would propel demand for its products in the personal care industry.

24. PREPARATION AND COMPLETION OF THE FINANCIAL STATEMENTS

The Company’s directors are responsible for the preparation of the financial statements. The financial statements are completed on April 8, 2010.