COVER SHEET

A S O 9 4 0 0 8 7 4 5 SEC Registration Number

A L A S K A M I L K C O R P O R A T I O N (Company’s Full Name)

6 T H F L R C O R I N T H I A N P L A Z A

1 2 1 P A S E O D E R O X A S M A K A T I C I T Y(Business Address: No., Street City / Town / Province)

SANTIAGO A. POLIDO 840-45-00

Contact Person Company Telephone Number

1 2 3 1 SEC FORM 17-A 0 5 2nd TuesdayMonth Day FORM TYPE Month Day

Fiscal Year Annual Meeting

N/A Secondary License Type, If Applicable

Dept Requiring this Doc Amended Articles Number / Section

Total Amount of Borrowings 2,889 N/A N/A

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

Total No. of Pages: 110

SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-A, AS AMENDED

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, 2008

2. SEC Identification No. : ASO 94-008745 3. BIR Identification No. : 047-003-945-022V 4. Exact name of the issuer as specified in its charter: ALASKA MILK CORPORATION 5. Province, Country or other jurisdiction of incorporation: Makati City, Philippines 6. Industry Classification Code : (SEC Use Only) 7. Address of Principal Office : 6/F Corinthian Plaza, 121 Paseo de Roxas Makati City, 1220 8. Issuer’s Telephone Number : (632) 840-4500 / (632) 840-5921 to 39 9. Former name, former address and former fiscal year, if changes since last report: : N/A

10. Securities registered pursuant to Sections 8 and 12 of the SRC, or Sec. 4 and 8 of the RSA As of December 31, 2008:

Title of Each Class Number of Shares Outstanding Common Shares 898,851,202 shares (P1.00 par value) (net of 68,243,678 Treasury)

11. Are any or all of these securities listed on a Stock Exchange?

( ) Yes ( ) No

All of Alaska Milk Corporation’s 898,851,202 common unclassified shares are listed at the Philippine Stock Exchange (ticker: AMC).

1

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 ( ) No

(b) has been subject to such filing requirements for the past ninety (90) days.

( ) Yes ( ) No

13. Aggregate market value of the voting stock held by non-affiliates.

As of December 31, 2008, a total of 365,387,930 shares are held by non-affiliates1 with an aggregate market value of P1,392,128,013 based on the average closing price of the stock over the last 60 trading days2 prior to filing of this report.

APPLICABLE ONLY TO ISSUERS INVOLVED IN INSOLVENCY/SUSPENSION OF PAYMENTS PROCEEDINGS

DURING THE PRECEDING FIVE YEARS:

14. Check whether the issuer has filed all documents and reports required to be filed by Section 17 of the Code subsequent to the distribution of securities under a plan confirmed by a court or the Commission

( ) Yes ( ) No Not Applicable

DOCUMENTS INCORPORATED BY REFERENCE 15. If any of the following documents are incorporated by reference, briefly describe them and

identify the part of SEC Form 17-A into which the document is incorporated:

(a) Any annual report to security holders: None (b) Any information statement filed pursuant to SRC Rule 20: None (c) Any prospectus filed pursuant to SRC Rule 8.1: None

1 Shares held by Jadestone Investments LLC, Wilfred & Bonnie Uytengsu Foundation, Inc., directors and officers of the Company and treasury shares were deducted from total issued shares to estimate the number of shares held by non-affiliates. 2 Average closing price over 60 trading days covering the period January 14, 2009 to April 8, 2009 was P3.81 per share.

2

TABLE OF CONTENTS

Page No. PART I – BUSINESS AND GENERAL INFORMATION Item 1 Business 4 Item 2 Properties 11 Item 3 Legal Proceedings 12 Item 4 Submission of Matters to a Vote of Security Holders 12 PART II – OPERATIONAL AND FINANCIAL INFORMATION Item 5 Market Price of and Dividends on Common Equity and Related Stockholder Matters 12 Item 6 Management’s Discussion and Analysis or Plan of Operation 14 Item 7 Financial Statements 28 Item 8 Information on Independent Public Accountant and Other Related Matters 28 PART III – CONTROL AND COMPENSATION INFORMATION Item 10 Directors and Executive Officers of the Registrant 33 Item 11 Executive Compensation 42 Item 12 Security Ownership of Certain Beneficial Owners and Management 45 Item 13 Certain Relationships and Related Transactions 48 PART IV – CORPORATE GOVERNANCE Item 14 Compliance with Leading Practice on Corporate Governance 48 PART V – EXHIBITS AND SCHEDULES Item 15 (a) Exhibits 48 (b) Reports on SEC Form 17-C 49 INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES 52

3

PART I – BUSINESS AND GENERAL INFORMATION

Item 1. Business A. Description of Business

(1) Business Development Alaska Milk Corporation (AMC) was incorporated in September 26, 1994, but operations began as early as 1972, through a company called Holland Milk Products, Inc. (HOMPI). HOMPI was a partnership between a Dutch dairy company, Holland Canned Milk International B.V., and General Milling Corporation (GMC), an industrial foods company with interests in flour, feeds and soy bean milling which was founded by current AMC Chairman Mr. Wilfred Uytengsu, Sr.

HOMPI initially manufactured liquid canned milk (evaporated and sweetened condensed milk) and UHT ready-to-drink milk in the 1970s and later expanded to powdered filled milk in the 1980s under the brand ALASKA. Alaska milk products were distributed nationwide through a third party distributor, Alaska Trading Co., Inc. (ATCI).

HOMPI’s operations were subsequently merged with GMC and operated as its milk product division. With the rapid growth of the milk business, the milk division was later spun off as a separate and independent entity and incorporated as Alaska Milk Corporation in September 1994. In January 1995, AMC shares were listed in the Philippine Stock Exchange (PSE). As GMC was primarily focused in industrial foods, GMC eventually divested its interest in AMC in 1998, with the Uytengsu family, together with strategic partners retaining majority ownership in AMC.

With the continued growth of the milk business and realizing the importance of distribution in further expanding markets, AMC absorbed all of the selling and distribution operations of ATCI. The Company has since reorganized its own selling and distribution network and it was at this time that AMC was chosen by Nabisco International and Quaker Oats, Inc. to be its exclusive distributor of Nabisco and Quaker Oats products, respectively, in the Philippines. However, both exclusive distribution agreements were terminated in 2001 following the worldwide acquisition by Philip Morris and Pepsi Co. of Nabisco International and Quaker Oats, Inc., respectively. The disengagement, in turn, put greater focus on the selling and distribution of the core Alaska milk products, which generated higher margins for the Company. Today, AMC offers a wide range of milk products beyond the traditional canned evaporated filled and sweetened condensed filled milk, powdered filled milk and plain and chocolate-flavored UHT milk in Tetra briks. In 2003, the Company introduced an evaporated creamer to complete a value line of liquid canned milk, and repackaged the classic line of evaporated and sweetened condensed filled milk in UHT Tetra briks to offer greater convenience to consumers. In line with its long-term thrust to expand into other categories within the dairy industry, the Company launched in 2003 a UHT-processed All-

4

Purpose Cream – Alaska Crema. Primarily a culinary product, Alaska Crema complements the Company’s line of cooking milk and enhances the taste of a variety of food preparations. In 2008, Alaska Yoghurt Drink, a dairy beverage drink cultured with yoghurt starters, was launched, further expanding the Company’s product portfolio in the ready-to-drink segment. In line with the Company’s strategy to broaden its revenue based through a portfolio of leading brands, Alaska Milk Corporation signed in May 2005 an agreement with Kellogg’s Asia Marketing Inc. to exclusively distribute Kellogg’s line of ready-to-eat cereals in the Philippines. Also, from 2004 to 2006, Alaska Milk Corporation was the licensee of Hershey Foods Corporation for the Hershey UHT chocolate milk drink in the Philippines. The Company has further strengthened its core business by acquiring / licensing the entire liquid canned milk business of Nestle in 2007. Today, AMC has a dominant position in the liquid milk category, accounting for about 80% of the market. (2) Business of Issuer

(a) Description of Registrant

(i) Principal Products, Markets and Revenue Contribution

Alaska has three principal lines of business: liquid canned milk (evaporated and sweetened condensed milk), powdered filled milk, UHT / Ready-to-Drink (RTD) milk (fresh, low-fat and chocolate-flavored) and UHT / Ready-to-Use All-Purpose Cream which are all marketed under the ALASKA brand name. In April 16, 2007, AMC acquired the Alpine, Liberty and Krem-Top brands, including all trademark properties, from global food giant Société Des Produits Nestlé S.A.. Also included in the deal is a long-term licensing agreement for AMC to manufacture and sell the Carnation and Milkmaid brands for liquid canned milk products.

Based on independent market research, the domestic milk market was estimated at P53.5 billion in 2008, broadly dividend into Dietetics (infant formula, growing-up milk, adult nutrition), Powdered Milk (full cream and filled-milk), Liquid Milk (evaporated milk / creamers and condensed milk / creamers), UHT / Ready-to-Drink (RTD) Milk and Non-Fat / Skim Milk. Among the five (5) categories enumerated, Alaska Milk Corporation competes in three (3) categories, namely Powdered Milk, Liquid Milk and RTD Milk. The Dietetics and Non-Fat Milk Categories are largely dominated by multinational companies (e.g. Wyeth, Mead-Johnson’s, Nestle, Abbott). In 2008, retail consumption of liquid canned milk and powdered milk products registered declines year-on-year as consumers put a tighter rein of spending on account of rising food and fuel prices amidst an economic slowdown. The contraction of the Evaporated Milk Market was influenced in part by an unusually short summer period which affected overall demand for cold

5

beverages. The Condensed Milk Market, on the other hand, declined at a much slower rate due to the strong off-take of the economy brands. The Powdered Milk Market likewise contracted as consumers downsize their consumption to the smaller and more affordable pack sizes. The liquid canned milk business accounted for about 60% of the Company’s total revenues while powdered filled milk accounted for over 30%. The balance of the revenues was accounted for by UHT products and by Kellogg’s ready-to-eat cereals.

(ii) Percentage of Revenues and Net Income Contributed by Foreign Sales

All of the Company’s products are distributed and sold within the Philippines. While there were some export sales made to foreign countries in 2008, these contributed less than 1% to the Company’s total revenues and net income.

(iii) Distribution Methods

The Company has eleven (11) warehouses3 coordinated by one main Logistics / Distribution Center in San Pedro, Laguna. The Company sells its products primarily to supermarkets, as well as directly to large wholesalers, convenience stores and regional distributors, which in turn sell the products to other small retailers and down-line accounts (market stalls and sari-sari stores). The Company’s products are sold to more than 250,000 outlets in the Philippines through its direct sales force and regional distributors.

(iv) Status of Publicly-Announced New Products

The Company intends to continuously introduce innovative new products and line extensions in the dairy segment. In 2008, Alaska Yoghurt Drink, an alternative ready-to-drink beverage cultured with yoghurt starters, was launched in the market.

(v) Competition

The Company’s main competitor is Nestle Philippines, Inc. (Nestle). Nestle, a leading multinational corporation is ranked one of the top corporations in the Philippines. Nestle is a market leader in a variety of consumer food categories. It competes in the powdered milk and UHT milk categories. For powdered milk, Nestle’s primary brands are Nido and Bear Brand while for the UHT ready-to-drink milk, their brands are Nestle and Chuckie. Nestle remains and will continue to be a strong competitor in these markets, especially with its strong brands and global capabilities. San Miguel Corporation (SMC) has re-introduced in the market the Magnolia ready-to-drink UHT milk line (Magnolia Fresh Milk, Magnolia Low-Fat Milk and Magnolia Chocolait), capitalizing on

3 Inclusive of liquid milk, powdered milk and UHT products finished goods warehouse in San Pedro, Laguna.

6

the brand’s heritage in the dairy industry. Snow Mountain Dairy Corp., a local company, is also an active participant in the domestic milk market with products marketed under the Angel brand (Evaporated Filled Milk, Evaporada and Condensada). There are a number of other milk brands available in the market, mostly imported, which do not constitute a substantial part of the market. Competition among brands rests first and foremost on product quality, brand history and recognition as well as the ability to distribute products nationwide. While price has not been a platform for competition among major brands, the difficult economic condition has driven consumers to be more price and value conscious in their purchase of milk products. The new entrants have also been aggressive in their pricing and promotions. Alaska has competed effectively in the market despite the presence of multinational corporations. A nationwide distribution network, supported with innovative and cost-effective advertising strategies, enable Alaska to compete effectively against multinational milk manufacturers. Alaska milk products are generally priced at parity with that of its major competitor. Alaska milk products are distributed and sold nationwide through wholesalers, distributors, supermarkets, groceries and convenience / sari-sari stores all over the country. Alaska holds a formidable position in the liquid canned milk and has steadily grown its market share in the powdered milk category.

(vi) Sources and Availability of Raw Materials

The primary raw material required for the manufacture of the Company’s products is skimmed milk powder (SMP) in various types, namely: Heat Stable, Medium Heat and Buttermilk. The bulk of SMP requirements are imported from Australia and New Zealand. Some SMP are also sourced from the U.S. and Europe. The Company has developed strong relationships with its supplier. Tinplates are the next major material. These are sourced primarily from Korea as well as from China and Japan. Other packaging materials as well as other ingredients (i.e. sugar, coconut oil, vitamins, etc.) used in the manufacture of milk are sourced from domestic suppliers. There are alternative suppliers and supplier countries for both SMP and tinplates as well as for locally-sourced processing and packaging materials. Thus, AMC is not dependent upon one or a few suppliers for these essential raw and packaging materials.

(vii) Dependence on Major Customers

Alaska is not dependent upon a single customer or a few customers that a loss of anyone of them would have a material adverse effect on the Company. The

7

Company has no single customer that, based upon existing sales volume, will account for 20% or more of the Company’s total sales.

(viii) Transactions with and/or Dependence on Related Parties

The Company leases certain parcels of land from the Alaska Milk Corporation Retirement Plan (AMCRP). Both Messrs. Wilfred Uytengsu, Sr. and Wilfred Steven Uytengsu, Jr. are Trustees of the AMCRP. The lease rate is based on market values.

The Company also leases an office / warehouse space in Cebu City from Wentworth Development Corporation (WDC), a company majority owned by the Wilfred and Bonnie Uytengsu Foundation, Inc. The rental fee is based on market rates. The Company charges GenOSI4 and WDC for their share in the expenses incurred by directors and officers common to these companies.

(ix) Patents, Trademarks and Licenses

The Company owns the ALASKA, LIBERTY, ALPINE and KREM-TOP brands. All trademarks used by the Company in its principal products are either registered or pending registration in the name of the Company in the Philippines. To secure these rights, the Company has filed all the necessary documents/requirements for the regular renewal of these rights with the respective offices/agencies where these registrations are obtained. The Company also uses the brand names Carnation and Milkmaid under license from Société Des Produits Nestlé S.A. (Nestlé) for liquid canned milk products for sale in the Philippines. The Company has secured the necessary license to operate as a food distributor in the Philippines as well as all product registrations relative to the importation of Kellogg’s line of ready-to-eat cereals. The Company also owns a number of trademarks registered with the Bureau of Trademarks of the Intellectual Property Office.

(x) Government Approval of Principal Products As a manufacturer of consumer food products, the Company’s products are subject to the approval of the Bureau of Food and Drug Administration

4 GenOSI, Inc. a partnership between the Uytengsu Family and OSI of Chicago, USA, is the exclusive supplier of processed meats for the McDonald’s chain of restaurants in the Philippines. Mr. Wilfred Steven Uytengsu, Jr. is the President of GenOSI.

8

(BFAD). The Company has secured all requisite approvals from the BFAD for all its products.

(xi) Government Regulation

Various government agencies in the Philippines regulate the different aspects of the business of domestic milk manufacturers and suppliers. Republic Act (RA) No. 7394 as enforced by the BFAD is known as the Consumer Act of the Philippines (Act). This empowered the Department of Health to establish standards and quality measures for, among others, milk, and adopt measures for their pure and safe supply. The Act likewise empowered the Department of Trade and Industry (DTI) to implement the laws governing milk producers, manufacturers, and suppliers, or sellers with respect to other sections in the Act dealing with consumer protection, such as labeling, packaging, deceptive sales acts and practices, sales promotions, and advertisement. RA No. 7581, or the Price Act, mandates the Government to impose an automatic freezing of prices of “basic necessities” (including processed milk) in areas where an emergency or “state of calamity” is declared. This power is also exercisable by the President of the Philippines, upon recommendation of the DTI or the Price Coordinating Council. Under normal circumstances, however, prices of milk products are generally not subject to government regulation. The Company complies with the aforesaid laws and has not been cited for any violation thereof. The Company is unaware of any other existing or probable government regulation that may materially impact the normal course of operations of the Company.

(xii) Research and Development

The Company’s Quality Assurance Group and Production personnel concurrently perform Research & Development (R&D) functions. Expenses for R&D during the year 2008 are estimated at P5.8 million or approximately 0.06% of total Company revenues. Expenses for R&D in prior fiscal year were P7.4 million or 0.08% of total Company revenues. Research costs are directly expensed as incurred. There were no development cost incurred in 2008 and 2007. However, as an accounting policy, development cost is carried forward when future recoverability can reasonably regarded as assured. Any expenditure carried forward is amortized in line with the expected future sales from the related project.

9

(xiii) Costs and Effects of Compliance with Environmental Laws

The Company’s operation is subject to various laws enacted for the protection of the environment, including the Pollution Control Law (R.A. No. 3931, as amended by P.D. 984), the Solid Waste Management Act (R.A. No. 9003), the Clean Air Act (R.A. No. 8749), the Environmental Impact Statement System (P.D.1586) and the Laguna Lake Development Authority (LLDA) Act of 1966 (R.A. No. 4850). The Company has consistently complied with the provisions of the aforementioned environmental laws. The milk plant’s waste-water facility discharge has met government standards as prescribed or required by the Laguna Lake Development Authority. The Company has also complied with the Air Emission Standards prescribed by the Department of Natural Resources and Environment. Clearances and permits issued by the LLDA certifying compliance with environmental laws require payment of permit fees amounting to roughly P20,000 per year.

(xiv) Total Number of Employees

Total employee headcount as of December 31, 2008 are as follows: Executives - 13 Managers & Supervisors - 206 Rank & File - 508 Consultant - 1 A total of 347 employees are covered by the present Collective Bargaining Agreement (CBA). The CBA will expire on June 10, 2011. The Company does not expect any significant change in the number of employees in the next twelve (12 months).

(xv) Major Risks

The Company’s performance is affected by general economic and political conditions in the Philippines. Domestic consumption activity is expected to soften on the back of rising job cuts, lower remittances of overseas workers and sluggish exports as major global economies enter into a recession. This will weigh heavily on demand for basic goods and services, milk products included, as consumers prioritize spending given shrinking disposable incomes. Alternative sources of raw materials are used in the Company’s products to manage risks relative to unstable supply conditions and price aberrations. The Company likewise enters into forward contracts to manage its price risks on critical raw and packaging materials. Commodity hedging allows predictability

10

in prices, thus, mitigating the risk of market volatilities. Through hedging, prices of commodities are fixed at levels acceptable to the Company. The Company has foreign exchange exposure largely due to the fluctuations in the value of the Philippine Peso vis-à-vis the US Dollar. Almost all of the Company’s revenues are denominated in Pesos, while a number of raw and packaging material costs are denominated in US Dollars. A sharp depreciation of the Peso will exert pressure on the Company’s operating margins. Prudent fiscal management is employed to temper exposure to changes in earnings as a result of fluctuations of currency rates. The Company manages foreign exchange risk by actively hedging its US Dollar requirements. Cash flows and financial risks are managed to ensure adequate liquidity to the Company.

Item 2. Properties The Company’s production facilities are located in San Pedro, Laguna, 28 kilometers south of Metro Manila, adjacent to the South Superhighway from Manila to Southern Luzon. The plant covers an area of approximately 7.5 hectares containing the facilities for producing liquid canned milk, powdered milk and UHT milk. The San Pedro facility is equipped with its own water and power supplies. AMC leases the land from the Alaska Milk Corporation Retirement Plan (AMCRP) where the production facilities are located. The Company’s main Logistics / Distribution Center is located in San Pedro, Laguna, a 3.9 hectare property that is leased from AMCRP. All other provincial warehouses are likewise leased. The Company’s total lease payments amount to P3.0 million monthly with varying renewal terms as shown below:

PROPERTY LOCATION LEASE TERM

EFFECTIVITY DATE

MONTHLY LEASE (PHP)

Warehouse Pampanga yearly renewal Sep 1, 2006 60,000.00Office/Warehouse Cebu 10 years March 1, 2000 52,481.65Warehouse Naga yearly renewal July 1, 2004 27,750.00Warehouse Bacolod yearly renewal June 15, 2001 52,363.65Warehouse Cagayan de Oro yearly renewal June 15, 2001 78,775.57Warehouse Davao yearly renewal June 15, 2001 55,636.35Warehouse Gen. Santos yearly renewal June 15, 2001 31,418.18Warehouse Iloilo yearly renewal June 15, 2001 52,363.64Warehouse Tacloban yearly renewal June 15, 2001 36,000.00Warehouse Butuan yearly renewal June 15, 2001 22,909.09Residence Makati City 1 year Sep 1, 2008 43,000.00Residence Ayala, Alabang 2 years Mar 17, 2009 89,250.00Land San Pedro, Laguna 25 years Nov. 9, 2004 1,303,096.67Land San Pedro, Laguna 25 years Jan 1, 2006 1,100,000.00TOTAL 3,005,044.80

11

The Company does not intend to acquire any property to be used in the normal course of business in the next twelve (12) months. However, there will be additions to machinery and equipment for the maintenance and upgrade of its production facilities. None of the Company’s properties are under any lien or mortgage. Item 3. Legal Proceedings The Company is either a defendant or plaintiff in several civil cases primarily involving collection of receivables and labor cases. Based on the representation of the Company’s external legal counsel, management is of the opinion that the resolution of such cases will not have a material effect on the Company’s financial position and 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 calendar year covered by this report

PART II – OPERATIONAL AND FINANCIAL INFORMATION Item 5. Market Price of and Dividends on Common Equity and Related Stockholder

Matters (1) Market Information The principal market for AMC’s common equity is the Philippine Stock Exchange (PSE). Following are the high and low price per share for each quarter for the last three (3) years and for the first quarter of 2009:

2006 2007 2008 2009 Quarter High Low High Low High Low High Low 1st 3.80 3.40 4.10 3.40 5.40 4.85 4.00 3.70 2nd 3.65 3.00 5.90 3.85 5.30 4.95 N/A N/A 3rd 3.20 2.85 6.30 5.00 5.00 4.75 N/A N/A 4th 3.90 3.25 5.40 4.80 4.75 3.70 N/A N/A

The market capitalization of AMC as of end-2008, based on the closing price of P3.70 per share and 898,851,202 outstanding shares, was approximately P3.32 billion. As of March 31, 2009, AMC’s market capitalization stood at P3.33 billion based on the P3.75 per share closing price and 887,454,202 outstanding shares.

12

(2) Holders As of December 31, 2008, there are a total of 2,890 holders of common stock of AMC. Following is the list of the top twenty (20) shareholders as of the same date and their corresponding shareholding and percentage of total shares outstanding held by each.

Title of Class Name of Shareholder

Number of Shares Held

Percentage to Total Shares Outstanding

Common Jadestone Investments LLC 474,270,699 52.76% Common PCD Nominee Corp. (Foreign) 160,705,500 17.88% Common Campina Zuivel B.V. 71,202,144 7.92% Common PCD Nominee Corp. (Filipino) 59,736,451 6.65% Common Wilfred & Bonnie Uytengsu Foundation 56,829,566 6.32% Common GF / GMC Group Retirement Plan 11,774,298 1.31% Common Uytengsu Foundation, Inc. 6,142,508 0.68% Common Jensar Holdings Corporation 5,587,534 0.62% Common Mary Ellen Mae U. Kokseng 2,461,614 0.27% Common Chester U. Kokseng 2,461,614 0.27% Common Henry C. Uytengsu, Jr. 2,431,011 0.27% Common Earl U. Kokseng 2,239,328 0.25% Common Raymond U. Kokseng 1,351,014 0.15% Common Edward U. Kokseng 1,351,014 0.15% Common Connie U. Kokseng 1,021,282 0.11% Common Meliton Qua 933,213 0.10% Common Cecilia Qua 933,213 0.10% Common Pua Yok Bing 750,000 0.08% Common Wentworth Uytengsu Memorial Fund 611,694 0.07% Common Ma. Asuncion Qua 603,413 0.07% TOTAL 863,397,110 96.06% (3) Dividends A P0.05 per share regular cash dividend and a P0.25 per share special cash dividend were declared last May 13, 2008. The total P0.30 per share cash dividend was to be paid quarterly at a rate of P0.075 per share for each quarter, beginning June 2008 to March 2009. The amount of dividends that the Company can declare is dictated by the balance of retained earnings it has on its books, the availability of cash and whether or not such retained earnings are intended for future corporate investments. (4) Recent Sales of Unregistered Securities As of December 31, 2008, a total of five million six hundred fifty thousand (5,650,000) shares were issued by AMC to key employees and officers under the Company’s Executive Employee Stock Option Plan (EESOP). The shares were not registered under the Code since said

13

securities is limited in character and that the right / option to purchase the shares of stocks are limited to the Company’s key officers and employees and the small amount involved does not require the registration of such. The exemption to register these shares was confirmed in writing by the Securities and Exchange Commission in its resolution dated June 12, 2002. Item 6. Management’s Discussion and Analysis or Plan of Operation (1) Plan of Operations The domestic milk market is a mature industry that has recently experienced declining trends in consumption, notwithstanding a population of 90 million growing at an average rate of 2.0% annually. The foregoing is largely due to shrinking household incomes largely due to tight economic conditions. Per capita milk consumption in the Philippines remains among the lowest compared to neighboring ASEAN countries. In this environment, price competition is intense with competitors aggressively offering steep discounts in an effort to stimulate incremental demand. In response to competitive pressure, Alaska Milk Corporation will put greater emphasis on product differentiation and improvements in operating efficiencies to increase sales and margins going forward. In addition, the Company will continue to invest in programs that encourage consumption, providing affordable nutrition and quality products to a greater number of people. The Company will likewise continue to focus on growing its core milk business by expanding to other categories within the domestic milk market, either through new product developments or through strategic alliances (i.e. licensing agreements, joint ventures, etc.) or business acquisitions. The Company does not foresee the need to raise additional funds externally to meet its working capital requirements and planned capital expenditure for 2009. Likewise, the Company does not expect any significant change in the number of employees in the next twelve (12) months. (2) Management’s Discussion and Analysis of Financial Condition, Changes in Financial Conditions and Result of Operations 2008 vs. 2007 Results of Operations Following a mild recovery in 2007, domestic consumption of milk products took a downturn in 2008 as consumers put a tighter rein on spending amidst an impending economic slowdown. Based on independent research, retail consumption across all milk categories registered high single-digit rate contractions year-on-year, reflective of a general slowdown in demand for basic goods and services triggered by inflationary concerns. Competition in the milk industry intensified as key players renewed their efforts to gain market share in a mature and sluggish industry amidst an influx of cheaper imported milk products and. The year 2008 likewise saw extraordinary cost inflation in agricultural commodities and rising costs of operations, paring corporate earnings of those in the food and beverage sector.

14

Despite a challenging business environment brought about by uncertainties in both global and domestic economies, total revenues for 2008 grew by 10% to P9.968 billion from P9.082 billion the previous year. This robust performance was achieved on the back of strong sales volume growth across the Company’s core milk products even while the market contracted. Combined sales volume of the Company’s portfolio of liquid canned milk products posted a modest growth rate primarily realized from a full, 12-month selling period for the acquired and licensed liquid canned milk brands compared to 8½ months selling period in 2007. Marketing investments and promotional efforts in selected key areas were carried out to drive consumption. Localized and tailor-fit communication campaigns were likewise developed to help reinforce the regional heritage of the Carnation, Milkmaid, Alpine and Liberty brands. Similarly, sales volume of the Alaska brand was up year-on-year buoyed by the strong off-take of the economy line - Alaska Evaporada and Alaska Condensada. Continuous brand-building initiatives, especially during high-demand seasons, stimulated consumption notwithstanding the proliferation of lower-priced brands in the market. New advertising materials and increased visibility in retail outlets reinforced top-of-mind awareness for the Alaska brand, especially in the low-price market sector. In the face of growing competition in the mass market, a permanent price roll-back for the Company’s line of Condensada brands was implemented in the last quarter of the year. This strategic pricing decision underpins the Company’s direction towards providing the middle and low-income earners with affordable nutrition. Shelf-off take of the entire Condensada brands improved, reflecting consumers’ receptiveness to the price move. The powdered milk business sustained its strong performance in 2008 with sales volume posting double-digit growth year-on-year, outperforming the market’s contraction. Shelf off-take of Alaska Powdered Filled Milk remains brisk owing to the improvements in product availability. Various sales and distribution drives, supplemented by a new advertising campaign, boosted consumption as well as market share expansion. To address the growing needs of consumers on affordability, new packaging formats were made available in the market. We continue to see the powdered milk segment as one of the strong growth drivers to our business. This is anchored on the country’s demographic profile, with 37% of the population falling below the age of fourteen – our target market. In addition, consumption trends indicate a strong preference for the more affordable powdered filled milk product, which underscores our positioning in the category. The Company’s portfolio of UHT products likewise performed strongly in 2008 alongside with the improvements in retail space and merchandising efforts. Selective advertising support and volume-generating activities translated in market share gains for the Alaska brand across the different UHT segments despite heightened media spending by our competitors in support of their own brands.

15

Combined sales volume of the Company’s ready-to-drink UHT flavored milk line posted substantial growth this year following the re-launch of Alaska Choco. Alongside with the improvement in taste, the product also features a new and more exciting packaging design. Consumer off-take of Alaska Yamoo! was likewise brisk, with sales volume up year-on-year. Similarly, the Company’s plain / white UHT milk achieved double-digit growth in sales volume. Alaska Fresh and Alaska Slim continued to reap expanded consumer acceptance, aided by selected promotional activities. Sales volume likewise grew on the back of the brand’s pricing advantage. In line with our continuing effort to expand the Company’s portfolio of products in other segments within the dairy market, Alaska Yoghurt Drink was launched in April 2008. Alaska Yoghurt Drink is an alternative ready-to-drink beverage, cultured with yoghurt starters and is initially available in strawberry and blueberry flavors. Alaska Crema All-Purpose Cream entered the year at a slow start as consumer demand for the product declined following the selling price increases in 2007. With all indications and factors ushering a continued slowdown in the brand’s off-take, a temporary price roll-back was implemented for Alaska Crema beginning May 2008. Capitalizing on seasonal opportunities, promotional efforts for the brand were likewise executed in the fourth quarter of the year to spur consumption and renew consumer awareness for the brand. As a result, sales volume of Alaska Crema surged, mitigating the volume decline early in the year. Sales volume of our trading business, Kellogg’s, was soft in 2008, reflective of the general downtrend in off-take of branded premium-priced packaged food items in favor of the more affordable mass brands. Notwithstanding the trade-down in the market, additional variants of ready-to-eat cereals and related products are set for launch in 2009. In addition, greater focus in managing key accounts and sustained promotional efforts will be implemented to expand Kellogg’s presence in the up-scale market. Our business continues to be adversely affected by persistent cost pressures in most of our production inputs. Costs for food ingredients dramatically increased in 2008 as declining supplies pushed up the value of agricultural commodities to historically high levels. Costs of packaging materials also increased at an accelerated pace alongside fuel and energy costs. We also have to contend with a higher foreign exchange environment as the Philippine Peso weakened against the US Dollar brought about by the collapse of the global financial markets. Combined with higher sales volume, cost of sales for the year grew by 18% to P7.904 billion from P6.695 billion in 2007. Despite margin pressures attendant to the cost increases mentioned, the Company did not implement a price hike during the year to stave off further declines in consumer demand for milk products. As a result, gross profit for 2008 fell to P2.064 billion from P2.387 billion while gross profit margin for the year dropped to 20.7% from 26.3%. Operating expenses for the year rose 11% to P1.600 billion from P1.437 billion on the back of heightened spending on advertising and other consumer marketing programs to help generate

16

consumer awareness and purchase for our products. Also contributing to the increase in operating expenses is the higher distribution-related charges associated with higher sales volume as well as higher cost of fuel. Altogether, operating income for 2008 narrowed to P464 million from P950 million a year ago. Operating margin was at 4.7% compared to 10.5% the previous year. During the year, net interest expense of P55 million was incurred compared to a net interest income of P21 million in 2007 as the Company drew from its credit line from various banks to fund capital expenditures, cash dividends and acquisition of treasury shares. Including gains from foreign exchange transactions, other income and income tax, net income for the year stood at P291 million or 2.9% of net sales, lower than the reported net income of P667 million in 2007 or 7.3% of net sales. Consequently, earnings per share dropped to P0.32 per share from P0.70 per share in 2007. Financial Condition Notwithstanding a temporary drop in profitability levels, the Company’s financial position remains strong with a current ratio of 1.10:1 and debt-to-equity ratio of 0.80:1 as of end December 2008. Total assets as of December 31, 2008 stood at P6.31 billion, P819 million lower compared to P7.13 billion in 2007 primarily due to lower total inventory, as the cost of primary raw and packaging materials declined towards the fourth quarter of the year from their peak levels a year ago. Cash and cash equivalents ended the year higher at P174 million from P136 million in 2007 as the Company continues to generate strong cash flows from its operations. However, part of the cash inflows was used to pay short-term bank loans and interest and to fund capital expenditures, cash dividends and acquisition of treasury shares. Total liabilities went down to P2.81 billion from P3.39 billion as the Company partially paid down a significant portion of its short-term bank loans during the year. From P800 million in 2007, total bank loans went down to P175 million as of end December 2008. Net income for the year of P291 million, less the cash dividend declared in 2008 amounting to P278 million, increased the retained earnings account by P13 million. Combined with the acquisition of treasury shares totaling P256 million, total stockholders’ equity stood at P3.50 billion from P3.73 billion in 2007. The Company does not anticipate any cash flow or liquidity problems. Commitment for Capital Expenditure Alaska Milk Corporation spent P240 million for project and capital expenditure in 2008 primarily for acquisition of new manufacturing equipment and construction of the Company’s logistics / distribution center.

17

For 2009, AMC has planned capital expenditure of about P200 million, largely for maintenance and upgrade of existing manufacturing facilities. The Company regularly reviews the timing and allocated amounts for these planned projects and adjusts the appropriations accordingly to reflect changes in plans. These projects will be funded through internally generated funds. Key Performance Indicators (KPI) The table below sets forth the comparative key performance indicators of the Company for 2008 and 2007: 2008 2007 Operating Margin 1/ 4.7% 10.5% Return on Sales 2/ 2.9% 7.3% Return on Equity 3/ 8.3% 17.9% Debt to Equity Ratio 4/ 0.80:1.00 0.91:1.00 EBITDA 5/ P789 B P1.199 B 1/ operating income / net sales 2/ net income / net sales 3/ net income / stockholders’ equity 4/ total liabilities / stockholders’ equity 5/ earnings before interest and income tax + depreciation + amortization Material Changes (+/- 5% or more) in the Financial Statements Income Statement Items (2008 vs. 2007) Net Sales – 10% increase from P9.08 billion to P9.97 billion Increase due to higher sales volume sold across the Company’s core businesses (liquid canned milk, powdered milk and UHT ready-to-drink / UHT ready-to-use products). Also contributing to the growth in net sales is the incremental revenues realized from a full, 12-month selling period for the acquired / licensed liquid canned milk brands compared to an 8 ½ months selling period in 2007. Cost of Sales – 18% increase from P6.69 billion to P7.90 billion Increase due to higher sales volume sold combined with substantially higher costs of production inputs, skim milk powder and tinplates in particular. Operating Expense – 11% increase from P1.44 billion to P1.60 billion Increase due primarily to higher advertising, trade support and consumer promotions in support of volume growth. Operating expenses likewise rose on the back of higher distribution-related charges attendant to higher sales volume and higher cost of fuel.

18

Interest Expense on Bank Loans – 978% increase from P5.60 million to P60.32 million Increase due to higher average bank loan balance for 2008 as average working capital requirements of the Company grew given its expanded business portfolio alongside an upsurge in cost of primary raw and packaging materials during the first half of the year. Foreign Exchange Gain - 16% decrease from P16.62 million to P13.98 million Decrease due to reduced Dollar assets of the Company. Gain on Disposal – 514% increase from P1.53 million to P9.43 million Increase due to the disposal of an investment property in 2008. Interest Income – 81% decrease from P26.59 million to P4.95 million Due to the lower average cash balance for 2008. Rent Income – 83% decrease from P2.55 million to P0.43 million Termination of lease agreements following the disposal of a property previously held for investment and re-classification of a condominium property from investment property to property, plant and equipment. Dividend Income and Others – 534% increase from P0.18 million to P1.17 million Increase due to higher dividend income received in 2008 from investments in shares. Provision for Income Tax – 56% decrease from P324.68 million to P142.57 million Decrease due to lower taxable income as a result of the drop in the Company’s earnings. Balance Sheet Items (End-2008 vs. End-2007) Cash and Cash Equivalents – 27% increase from P136.34 million to P173.70 million Increase due to higher cash generated from operations as well as proceeds from disposal of property held for investment, partly offset by payments of bank loans and interests, acquisition of treasury shares, payment of dividends and capital expenditures. Trade and Other Receivables – 8% increase from P821.45 million to P886.05 million Increase due to higher advances to suppliers and receivable from the Bureau of Internal Revenue. Inventories – 27% decrease from P2.677 billion to P1.945 billion Decrease as inventory level of skim milk powder went down to normal levels following a pre-emptive build-up of stock position towards the latter part of 2007. Inventories likewise

19

decreased as unit cost of primary raw and packaging materials declined from their peak levels a year ago. Prepaid Expenses and Other Current Assets – 56% decrease from P93.41 million to P40.74 million Decrease due to lower input taxes, lower prepaid rentals and lower advance payments made for import duties. Property, Plant & Equipment – 10% increase from P1.210 billion to P1.335 billion Increase due to capital expenditures (i.e., acquisition of new / upgrading of plant machineries and equipment and construction of the Company’s logistics / distribution center) and reclassification of property previously held as investment property, net of depreciation for the year. Investment Properties – decrease of P39.08 million Decrease due to the re-classification of a property previously held as investment property to property, plant and equipment and disposal of a condominium property. Intangible Assets – 8% decrease from P1.806 billion to P1.653 billion Decrease due to the amortization of intangible assets, net of additions during the year relative to the Company’s ERP System. Deferred Tax Assets – 29% decrease from P216.85 million to P154.32 million Decrease due to lower accrued expenses and utilization of tax benefits related to Deferred Tax Assets. Net Pension Assets – 6% decrease from P55.15 million to P52.07 million Decrease due to higher net pension expense and lower contributions made. Bank Loans – 78% decrease from P800 million to P175 million Decrease due to the payments of principals, net of availments made during the year. Trade and Other Payables – 22% increase from P1.352 million to P1.648 billion Increase due to higher selling and marketing expenses for the fourth quarter compared to the same period last year. Acceptances Payable – 25% decrease from P1.091 billion to P813.64 million Decrease due to the settlement of maturing obligations on the Company’s import bills as well as the lower value of imported raw materials compared to year-ago levels.

20

Income Tax Payable – decrease of P77.80 million Decrease due to lower taxable income for 2008. Dividends Payable – 94% increase from P72.73 million to P141.25 million Increase due primarily to the cash dividend of P0.075 per share which remained outstanding as of end December 2008 and became payable on 5 January 2009 due to bank holidays. Obligation under Finance Lease (Current and Noncurrent) – increase of P30.46 million Increase due to a 7-year finance lease agreement between Alaska Milk Corporation and Tetra Pak Philippines, Inc. for a packaging equipment Additional Paid-in Capital – 9% increase from P101.78 million to P110.59 million Increase due to the additional shares issued relative to the Company’s stock option plan for key executives / employees which have a higher exercise price vis-à-vis par value. Retained Earnings (Appropriated) – 72% increase from P945 million to P1.625 billion Increase due to the appropriation of P380 million for capital investment projects and P300 million for the Company’s share buy-back program. Retained Earnings (Unappropriated) – 38% decrease from P1.753 billion to P1.086 billion Decrease due to the appropriation of P680 million for the Company’s capital investment projects and share buy-back program and cash dividend declaration of P278 million, partly offset by net income of P291 million. Treasury Stock – 770% increase from P33.29 million to P289.66 million Increase due to the acquisition of 52.87 million common AMC shares under the Company’s share buy-back program. 2007 vs. 2006 Results of Operations Although performance varied from segment to segment, domestic consumption of milk products recovered in 2007 attendant to an improving economy. Both the Evaporated and Condensed Milk Categories registered low-single digit contractions compared to the market’s double-digit declines a year ago. The Powdered Milk Category, on the other hand, staged a mild recovery during the year, underpinned by the growth of the Filled Milk segment. Through aggressive sales and marketing programs aimed at driving milk consumption, Alaska Milk Corporation capped the year with unparalleled revenues of P9.08 billion, up 53% from P5.92 billion in 2006. The robust revenue growth stemmed from higher sales volumes realized across the Company’s core product lines combined with favorable selling prices.

21

Sales volume of the Company’s liquid canned milk business surged year-on-year driven by the robust off-take of the Alaska brands as well as the additional sales volume generated from the acquired and licensed Nestle liquid canned milk brands. Extensive sales and distribution drives for the Alaska line of liquid canned milk coupled with innovative marketing efforts bolstered consumption especially during the seasonally strong second quarter (summer months) and fourth quarter (Christmas Holiday) of the year. To address the various needs of a highly segmented market, specific campaigns were mounted as competition from lower-priced brands continued to challenge Alaska’s market leadership. Combined with closer management of trade outlets, Alaska Evaporada and Alaska Condensada kept a firm hold of the economy market, with improved presence in Mindanao. Sales volume of the Company’s traditional liquid milk products, Alaska Evaporated Filled Milk and Alaska Sweetened Condensed Filled Milk, likewise registered growth rates on the back of aggressive marketing and sales activities. Concentrated area marketing efforts in key cities of the country were implemented to reinforce the brand’s taste and heritage, especially among mothers and housewives. The acquisition of the Alpine and Liberty brands and licensing of the Carnation and Milkmaid brands have widened Alaska Milk Corporation’s portfolio and revenue base. These brands bring with it a loyal customer following both in retail and food service accounts. In 2007, these brands contributed nearly P2 billion in additional revenues to the Company. Improvements in product availability and brand-building efforts resulted in volume growth and market share gains for the powdered milk business. Trade inventory levels significantly improved going into the second semester with the completion and commissioning of the Company’s new Instant Filled Milk Powder Processing Plant, which enabled us to meet increased demand. The re-launch of Alaska Powdered Filled Milk in July renewed consumer interest for the product. This was supported by a new communication campaign that capitalizes on the brand’s nutritional value and equity on sport. Sales and marketing efforts in modern trade channels likewise bolstered trade movement and consumption activity for the brand. Our portfolio of UHT products also performed considerably well in 2007 as sales volumes posted strong double-digit growth rates year-on-year, notwithstanding minimal and selective advertising support. The Company’s line of ready-to-drink UHT flavored milk, Alaska Choco and Alaska Yamoo!, continued to enjoy strong patronage among the young market. In order to sustain brand awareness, sampling programs in selected supermarkets and primary schools in key areas of GMA, Cebu and Davao were carried out during the year. Our UHT white milk line, Alaska Fresh and Alaska Slim, also achieved double-digit growth rate in sales volume as a result of the brand’s greater presence in modern trade outlets. Pricing also gave Alaska a strong competitive advantage.

22

Alaska Crema All-Purpose Cream continued to perform strongly in the market as consumer off-take remained brisk. Vibrant pack changes and demand-creation activities helped push volumes higher and brought about market share gains. Our distribution tie-up for the Kellogg’s line of ready-to-eat cereals in the Philippines brought in good results during the year. Sales volume of Kellogg’s for the year grew nearly 10% versus year-ago levels, outperforming the category’s low single-digit growth rate. Market share likewise improved on the back of increased distribution levels and marketing synergies. The year 2007 saw inflationary pressures arising from cost increases for many of the Company’s major ingredients and packaging materials. Global prices of skimmed milk powder (SMP), a major component, steadily rose to an all-time high of US$5,000 per metric ton brought about by strong demand amid weak dairy production output. Upward pressure on SMP prices was evident as early as January 2007 and as such, we actively pursued hedging positions for our SMP requirements through forward-buying arrangements. To partly ease the effect of the sharp increases in the cost of production inputs, selling price adjustments were taken in 2007. While this helped alleviate margin pressures, it was certainly not enough to cover the full extent of the cost increases. The combination of higher sales volume and higher SMP prices pushed cost of sales 53% higher to P6.69 billion from P4.38 billion in 2006. This pushed up gross profit for the year by 55% to P2.39 billion from P1.54 billion the previous year. Operating expenses rose 40% to P1.44 billion from P1.03 billion on the back of higher advertising, selling and distribution costs as well as heightened trade support and marketing efforts in support of volume growth. Altogether, these put operating income for the year at P950 million, 85% higher than last year’s operating income of P514 million. Operating margin likewise inched up to 10.5% from 8.7% in 2006. Including net interest income and gains from foreign exchange transactions, net income for the year grew by 66% to P667 million or 7.3% of net sales from P402 million or 6.8% of net sales in 2006. This year’s net income is equivalent to an earnings per share (EPS) of P0.69, P0.27 per share higher than 2006’s EPS of P0.42. Return on equity was 17.9% compared to 12.1% in 2006. Financial Condition The Company’s total assets as of December 2007 amounted to P7.13 billion, P2.0 billion higher than 2006. This was primarily due to the acquisition of Nestle’s liquid canned milk business as well as an increase in working capital requirements. Accounts receivable increased by P256 million to P821 million resulting from higher sales. Inventories of P2.68 billion were higher by P1.75 billion compared to 2006 mainly due to the additional finished goods, raw and packaging materials relative to the business acquisition as well as higher C&F cost of skimmed milk powder.

23

Total liabilities amounted to P3.39 billion largely due to availments of short-term loans for the Company’s working capital requirements, increase in payables attendant to the growth in sales volume and higher cost of imported raw materials. Stockholders’ equity, on the other hand, amounted to P3.73 billion from P3.34 billion in 2006. The increase of P394 million is a result of 2007’s net income of P667 million, net of cash dividends declared amounting to P285 million. The Company’s current ratio was 1.10:1.00 as of December 31, 2007 compared to 2.10:100 in December 2006, while debt-to-equity ratio was 0.91:1.00 in 2007 compared to the previous year’s 0.54:1.00. Key Performance Indicators (KPI) The table below sets forth the comparative key performance indicators of the Company for 2007 and 2006: 2007 2006 Operating Margin 1/ 10.5% 8.7% Return on Sales 2/ 7.3% 6.8% Return on Equity 3/ 17.9% 12.1% Debt to Equity Ratio 4/ 0.91:1.00 0.54:1.00 EBITDA 5/ P1.199 B P632.6 M 1/ operating income / net sales 2/ net income / net sales 3/ net income / stockholders’ equity 4/ total liabilities / stockholders’ equity 5/ earnings before interest and income tax + depreciation + amortization Material Changes (+/- 5% or more) in the Financial Statements Income Statement Items (2007 vs. 2006) Sales – 53% increase from P5.92 billion to P9.08 billion Increase due to the higher sales volume across the Company’s core businesses (liquid canned milk, powdered milk and UHT ready-to-drink / UHT ready-to-use products) combined with higher selling prices. Also contributing to the higher growth rate is the incremental revenues generated from the acquired and licensed liquid canned milk brands. Cost of Sales – 53% increase from P4.38 billion to P6.69 billion Increase in cost of sales attendant to the increase in sales volume as well as higher cost of production inputs.

24

Operating Expense – 40% increase from P1.03 billion to P1.44 billion Increase due primarily to higher advertising, trade support and consumer promotions in support of volume growth as well as higher sales-volume related delivery expenses. In addition, higher personnel cost and depreciation charges pushed operating expenses higher year-on-year. Interest Income –72% decrease from P96.30 million to P26.59 million Decrease in interest income is due to the decline in the Company’s average cash balance as a result of the acquisition of Nestle’s liquid canned milk business and higher working capital requirements. Latter is due to the upsurge in the cost of raw and packaging materials and higher sales volume. Plant expansion investments contributed to the drop in average cash balance. Interest Expense on Short-Term Loans – increase of P5.60 million Interest from peso-denominated short-term loans availed in 2007 for working capital requirements as a result of the drop in the Company’s cash balance. Foreign Exchange Gain - 136% increase from a loss of P46.60 million to a gain of P16.62 million Increase due to the restatement of the Company’s US Dollar-denominated liabilities which was favorably affected by the appreciation of the Philippine Peso vis-à-vis the US Dollar. Rental Income – 5% increase from P2.44 million to P2.55 million Increase in rental income earned from a leased condominium property. Gain on Disposal of Equipment – 78% increase from P0.86 million to P1.54 million Increase due to the disposal of idle Company machinery / equipment. Other Income (Expense) – 77% decrease from – P0.80 million to P0.18 million Decrease due to lower dividend income received in 2007 versus 2006. Provision for Income Tax – 96% increase from P165.66 million to P324.68 million Increase due to higher taxable income. Balance Sheet Items (End-2007 vs. End-2006) Cash and Cash Equivalents – 61% decrease from P352.23 million to P136.34 million Decrease due to higher working capital requirement on account of the substantial increase in the cost of primary raw and packaging materials as well as the acquisition of Nestle’s liquid canned milk business.

25

Short-term Investments – decrease of P1.838 billion Decrease due to the acquisition of Nestle’s liquid canned milk business as well as higher working capital requirement. Trade and Other Receivables – 45% increase from P565.30 million to P821.45 million Increase mainly due to the higher trade receivables on account of higher sales. Inventories – 188% increase from P928.51 million to P2.677 billion Increase due to the additional finished goods, raw and packaging material required relative to the acquisition of Nestle’s liquid canned milk business as well as higher C&F cost of skimmed milk powder. Prepaid Expenses and Other Current Assets – 33% increase from P70.01 million to P93.41 million Increase due to the advance payments made for import-related expenses as well as higher input taxes. Property, Plant & Equipment – 17% increase from P1.03 billion to P1.21 billion Increase due to the acquisition of machineries / equipment and construction in-progress costs incurred relative to the expansion of the Company’s manufacturing facilities. Investment Properties – 6% decrease from P41.42 million to P39.08 million Decrease primarily due to the recognition of depreciation expense for 2007. Deferred Tax Assets – 14% increase from P190.12 million to P216.85 million Increase due to the higher accrued expenses for outside services and other sales-related expenses incurred for which the related withholding taxes have not yet been remitted by the Company to the Bureau of Internal Revenue. Other Non-Current Assets – 12% increase from P59.78 million to P67.15 million Increase due to the higher input VAT related to Company’s purchase of capital equipment which will be utilized as a reduction of output VAT over a period of 60 months. Bank Loans – increase of P800.0 million Increase due to the availment of short-term peso-denominated loans for the Company’s working capital requirements.

26

Trade and Other Payables – 46% increase from P927.32 million to P1.352 billion Increase due to higher purchases of local raw materials as well as expenses incurred and accruals made for importation charges and other sales-related expenses on account of the increase in sales. Acceptances Payable – 48% increase from P735.87 million to P1.091 billion Increase due to the additional purchases of raw and packaging materials relative to the increase in sales volume as well as the higher cost of imported raw materials Dividends Payable – 49% increase from P48.94 million to P72.73 million Increase due to the higher cash dividend declaration for 2007 of P0.30 per share from P0.20 per share in 2006. Additional Paid-in Capital – 11% increase from P91.89 million to P101.78 million Increase due to the additional shares issued relative to the Company’s stock option plan for key executives / employees which have a higher exercise price vis-à-vis par value. Retained Earnings (Appropriated) – 11% increase from P850 million to P945 million Increase due to the additional appropriation of P95 million of the Company’s retained earnings for various capital investments. Retained Earnings (Unappropriated) – 20% increase from P1.466 billion to P1.753 billion Increase due to net income generated in 2007 of P667 million net of appropriation of P95 million for various capital investment and cash dividend declaration of P285 million. (3) Trends or Events that will Impact on Net Sales or Income from Operations The Company’s performance is affected by general economic and political conditions in the Philippines. Domestic consumption activity is expected to soften on the back of rising job cuts, lower remittances of overseas workers and sluggish exports as major global economies enter into a recession. This will weigh heavily on demand for basic goods and services, milk products included, as consumers prioritize spending given shrinking disposable incomes. Over the years, competition in the dairy industry has intensified. Free trade has likewise facilitated the entry of imported cheap products into the Philippines. Some of our competitors have financial and marketing resources that can challenge our market position. Milk also competes with other beverages and nutritional products for consumer sales. Skim milk powder is the most significant raw material that we use in all of our products and has a significant impact on the Company’s profitability levels. International price movements of skim milk powder are based on supply and demand. Following the sharp climb in prices in late 2007 and early 2008, world prices of skim milk powder started to trail lower amidst falling

27

global demand and a slowdown of world economies. Quotes are currently under US$2,000 per metric ton. The announcements of the European Union Commission to reinstate subsidy for dairy farmers to offset the steep drop in milk prices over the past seven months is expected to put some pressure on skim milk powder prices in the near term. The United States has also provided similar assistance to its own ailing dairy industry. Demand remains weak with most buyers keeping short on their purchases. Supply remains adequate, with stockpiles in major exporting countries building up due to uncommitted volumes. The stability of the Philippine Peso vis-à-vis the US Dollar will likewise have an impact on the Company’s level of profitability. Rising risk aversion of investors in emerging markets, brought about by the collapse of financial markets, has caused the Peso to weaken against the US Dollar. In view of the continued volatility in the financial markets, the Company actively hedges part of its US Dollar requirements. Item 7. Financial Statements

The Company’s Audited Financial Statements and Schedules for 2008 are filed as part of this SEC Form 17-A. Item 8. Information on Independent Public Accountant and Other Related Matters (1) Independent Public Accountant The Company’s independent public accountant is the accounting firm of SyCip Gorres Velayo & Co. (SGV). The Company’s Audit Committee recommends for approval of the Board the appointment of the external auditor for the ensuing year. The stockholders then approve and ratify the appointment of the external auditor at the annual stockholders’ meeting to be held on May 12, 2009. SGV has not expressed any intention to resign as the Company’s principal auditor nor has it indicated any hesitance to accept re-election after the completion of their last audit. Pursuant to the General Requirements of SRC Rule 68.1 (Qualifications and Reports of Independent Auditors), the Company has engaged SGV & Co. as external auditor of the Company, and Ms. Melinda G. Manto has been the Partner In-charge starting 2007, replacing Mr. Joel M. Sebastian who was SGV & Co.’s Partner In-charge for audit years 2002 to 2006.

(2) Audit Fees and Services Alaska Milk Corporation paid its external auditors the following fees in the past two (2) years: Audit & Audit-related

Fees Tax

Fees * Other

Fees ** 2008 P 990,000 - P 79,692 2007 P 900,000 P 100,000 P 75,403 *Fees paid for business tax advisory services **Fees paid for services rendered related to the Company’s adoption and implementation of Philippine Accounting Standards

28

The audit plans for 2008 and 2007, including services of the external auditor, have been approved by the Company’s Audit Committee (composed of Roberto F. de Ocampo, Wilfred Steven Uytengsu, Jr. and Jose R. Facundo) last November 7, 2008 and November 9, 2007, respectively. (3) Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Adoption of New and Amended Accounting Standards and Interpretations The accounting policies adopted in the preparation of the financial statements are consistent with those of the previous financial year except for the adoption of the following Philippine Interpretations from International Financial Reporting Interpretations Committee (IFRIC) starting January 1, 2008.

Philippine Interpretation IFRIC 11, PFRS 2 – Group and Treasury Share Transactions, requires arrangements whereby an employee is granted rights to an entity’s equity instruments to be accounted for as an equity-settled scheme by the entity even if (a) the entity chooses or is required to buy those equity instruments (e.g., treasury shares) from another party, or (b) the shareholders of the entity provide the equity instruments needed.

Philippine Interpretation IFRIC 12, Service Concession Arrangements covers contractual arrangements arising from entities providing public-to-private service concession arrangements if control of the assets remains in public hands but the private sector operator is responsible for construction activities, as well as for operating and maintaining the public sector infrastructure. As the Company has no public-to-private concession arrangements, the interpretation has no impact on its financial position or performance.

Philippine Interpretation IFRIC 14, PAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction, provides guidance on how to assess the limit on the amount of surplus in a defined benefit scheme that can be recognized as an asset under PAS 19, Employee Benefits.

The adoption of the above interpretations did not have any impact on the financial position or performance of the Company. Future Changes in Accounting Policies The Company did not early adopt the following standards, Philippine Interpretations and amendments that have been approved but are not yet effective:

Revised PFRS 2, Share-based Payment, becomes effective for financial years beginning on or after January 1, 2009. It restricts the definition of a vesting condition to condition that includes and explicit or implicit requirement to provide services. Any other conditions are non-vesting conditions, which have to be taken into account to determine the fair value of the equity instruments granted. In case the award does not vest as a result of a failure to meet a non-vesting condition that is within the control of either the entity or the

29

counterparty, it must be accounted for as a cancellation. The Company is currently assessing the impact of the interpretation on the financial statements.

Revised PFRS 3, Business Combination, and Revised PAS 27, Consolidated and Separate Financial Statements, become effective for financial years beginning on or after July 1, 2009. Revised PFRS 3 introduces a number of changes in the accounting for business combinations occurring after this date that will impact the amount of goodwill recognized, the reported results in the period that an acquisition occurs, and future reported results. Revised PAS 27 requires that a change in the ownership interest of a subsidiary be accounted for as an equity transaction. Therefore, such transaction will no longer give rise to goodwill, nor will it give rise to a gain or loss. Furthermore, the amended standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary. The changes introduced by the revised PFRS 3 must be applied prospectively and will affect future acquisition and transactions with minority interests while the revised PAS 27 must be applied retrospectively subject to certain exceptions. The Company assessed that the adoption of the revised standards will have no impact on the financial statements.

PFRS 8, Operating Segments, becomes effective for financial years beginning on or after January 1, 2009, and will replace PAS 14, Segment Reporting. It adopts a management approach to reporting segment information. The information reported would be that which management uses internally for evaluating the performance of operating segments and allocating resources to those segments. Such information may be different from that reported in the balance sheets and statements of income and companies will need to provide explanations and reconciliations of the differences. The Company is currently assessing the impact of this standard on the financial statements.

Revised PAS 1, Presentation of Financial Statements, becomes effective for financial years beginning on or after January 1, 2009. The standard separates owner and non-owner changes in equity. The statement of changes in equity will include only details of transactions with owners, with all non-owner changes in equity presented as a single line. In addition, the standard introduces the statement of comprehensive income, which presents all items of income and expense recognized in profit or loss, together with all other items of recognized income and expense, either in one single statement, or in two linked statements. The revision also includes changes in titles of some of the financial statements to reflect their function more clearly, although not mandatory for use in the financial statements. The Company is currently assessing the impact of the revised standard on the financial statements.

Revised PAS 23, Borrowing Costs, becomes effective for financial years beginning on or after January 1, 2009. The standard requires capitalization of borrowing costs when such costs relate to a qualifying asset. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. The Company is currently assessing the impact of the revised standard on the financial statements.

PAS 32, Financial Instruments: Presentation, and PAS 1, Presentation of Financial Statements – Puttable Financial Instruments and Obligations Arising on Liquidation

30

(Amendments), become effective for financial years beginning on or after January 1, 2009. The amendment to PAS 32 requires certain puttable financial instruments and obligations arising on liquidation to be classified as equity if certain criteria are met. The amendment to PAS 1 requires disclosure of certain information relating to puttable instruments classified as equity. The Company does not expect that these amendments will have an impact on its financial statements.

PAS 39, Financial Instruments: Recognition and Measurement – Eligible Hedged Items (Amendment), becomes effective for financial years beginning on or after July 1, 2009. The amendment addresses the designation of a one-sided risk in a hedged item, and the designation of inflation as hedged risk or portion in particular situations. It clarifies that an entity is permitted to designate a portion of the fair value changes or cash flow variability of a financial instrument as a hedged item. The Company does not expect that this amendment will have an impact on its financial statements.

Philippine Interpretation IFRIC 13, Customer Loyalty Programmes, became effective for financial years beginning on or after July 1, 2008. It requires customer loyalty award credits to be accounted for as a separate component of the sales transactions in which they are granted and therefore part of the fair value of the consideration received is allocated to the award credits and deferred over the period that the award credits are fulfilled. As the Company has no customer loyalty schemes, the interpretation has no impact on its financial position or performance.

IFRIC 16, Hedges of a Net Investment in a Foreign Operation, becomes effective for financial years beginning on or after October 1, 2008. The interpretation is to be applied prospectively. It provides guidance on the accounting for a hedge of a net investment and in identifying foreign currency risks that qualify for hedge accounting in the hedge of a net investment, where within the group, the hedging instruments can be held in the hedge of a net investment and how an entity should determine the amount of foreign currency gain or loss, relating to both the net investment and the hedging instrument, to be recycled on disposal of the net investment. The Company assessed the adoption of the interpretation will have no impact on the financial statements.

The Company did not early adopt the following amendments to standards that will become effective for financial years beginning on or after January 1, 2009:

Amendment to PFRS 7, Financial Instruments: Disclosures, removes the reference to total interest income as a component of finance costs.

Amendment to PAS 1, Presentation of Financial Statements, provides that assets and liabilities classified as held for trading in accordance with PAS 39, Financial Instruments: Recognition and Measurement, are not automatically classified as current in the balance sheet.

Amendment to PAS 8, Accounting Policies, Change in Accounting Estimates and Errors, clarifies that only implementation guidance that is an integral part of a PFRS is mandatory when selecting accounting policies.

31

Amendment to PAS 10, Events after the Reporting Period, clarifies that dividends declared after the end of the reporting period are not obligations.

Amendment to PAS 16, Property, Plant and Equipment, requires items of property, plant and equipment held for rental that are routinely sold in the ordinary course of business after rental are transferred to inventory when rental ceases and they are held for sale. It also replaces the term “net selling price” with “fair value less cost to sell”.

Amendment to PAS 18, Revenue, replaces the term “direct costs” with “transaction costs” as defined in PAS 39.

Amendment to PAS 19, Employee Benefits, revises the definition of past service costs, return on plan assets, and short-term and other long-term employee benefits. The standard has been revised such that amendments to plans that result in reduction in benefits related to future services are accounted for as curtailment. It deletes the reference to the recognition of contingent liabilities to ensure consistency with PAS 37, Provisions, Contingent Liabilities and Contingent Assets.

Amendment to PAS 23, Borrowing Costs, revises the definition of borrowing costs to consolidate the two types of items that are considered components of borrowing costs into one – the interest expense calculated using the effective interest rate method calculated in accordance with PAS 39.

Amendment to PAS 28, Investment in Associates, establishes that if an associate is accounted for at fair value in accordance with PAS 39, only the requirement of PAS 28 to disclose the nature and extent of any significant restrictions on the ability of the associate to transfer funds to the entity in the form of cash or repayment of loans applies.

Amendment to PAS 31, Interest in Joint Ventures, provides that if a joint venture is accounted for at fair value in accordance with PAS 39, only the requirement of PAS 31 to disclose the commitments of the venturer and the joint venture as well as summary financial information about the assets, liabilities, income and expense applies.

Amendment to PAS 34, Interim Financial Reporting, requires disclosure of earnings per share in interim financial reports if an entity is within the scope of PAS 33, Earnings per Share.

Amendment to PAS 36, Impairment of Assets, requires the disclosure of estimates used to determine recoverable amount. It requires that when discounted cash flows are used to estimate fair value less costs to sell, the same disclosure is required as when discounted cash flows are used to estimate value in use.

Amendment to PAS 38, Intangible Assets, requires that for expenditure on advertising and promotional activities, expense is recognized when the entity either has the right to access the goods or has received the services. In addition, the standard deletes references to there being rarely, if ever, persuasive evidence to support an amortization method for finite life intangible assets that results in a lower amount of accumulated amortization than under the straight-line method, thereby effectively allowing the use of the unit of production method.

32

Amendment to PAS 39, Financial Instruments: Recognition and Measurement, clarifies that changes in circumstances relating to derivatives are not reclassifications and therefore may either be removed from, or included in, the fair value through profit or loss (FVPL) classification after initial recognition. The standard also removes the reference to PAS 39 to a segment when determining whether an instrument qualifies as a hedge. In addition, it requires the use of the revised effective interest rate when measuring a debt instrument on the cessation of fair value hedge accounting.

Amendment to PAS 40, Investment Property, revises the scope such that property under construction or development for future use as an investment property is classified as investment property. If fair value cannot be reliably determined, the investment under construction will be measured at cost until such time as fair value can be determined or construction is complete. Also, the standard revises the conditions for a voluntary change in accounting policy to be consistent with PAS 8 and clarifies that the carrying amount of the investment property held under lease is the valuation obtained, increased by any recognized liability.

The Company expects that these changes will have no material impact on the financial statements. The Company has engaged the services of SGV & Co. during the two most recent fiscal years. There were no disagreements with the Company’s principal accountants as to any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

PART III – CONTROL AND COMPESATION INFORMATION Item 10. Directors and Executive Officers of the Issuer The names of the incumbent directors and executive officers of the Company, including their respective ages, periods of service and directorships in other reporting companies held during the past five (5) years are as follows: MEMBERS OF THE BOARD: Wilfred Uytengsu, Sr. Chairman of the Board Mr. Uytengsu, Filipino, 81 years old, is presently the Chairman of the Board of Alaska Milk Corporation. He founded General Milling Corporation (GMC) in the late 1950s and built it into one of the largest food companies in the Philippines of which he was a board member for almost 40 years until his retirement in early 1998. Mr. Uytengsu also founded Holland Milk Products, Inc. (HOMPI) in the early seventies, the company which first manufactured Alaska Milk products in the Philippines. HOMPI was later merged under the consumer products division of GMC and was subsequently spun-off as AMC. Mr. Uytengsu has been the Chairman of AMC since its incorporation in September 1994 and was the Company’s Chief

33

Executive Officer from 1994 to November 2007. Mr. Uytengsu is the Chairman of the Company’s Nomination Committee and is a member of the Company’s Compensation and Remuneration Committee. He was a former board member of Universal Foods Corporation of Wisconsin, USA, Kuok Philippine Properties, Inc. and Mandarin Oriental Hotel, Manila. Antonio H. Ozaeta Vice Chairman of the Board / Independent Director Mr. Ozaeta, Filipino, 76 years old, has been Vice Chairman of the Board of Directors of AMC since 1998. He has broad management experience in the fields of banking, finance and public utilities. He has been the President of Philippine Trust Company (PHILTRUST Bank) since October 1998. Mr. Ozaeta also served as President and Chief Executive Officer of Philippine Commercial International Bank (PCIBank) for twelve years and was the Chairman of the Board of Manila Electric Company (Meralco) for seven years. He is presently the Chairman of the Boards of Ancel Holdings Corporation (since 2005), Magellan Capital Holdings Corporation (since 1999), Magellan Cogeneration, Inc. (since 1999), Magellan Utilities Development Corporation (since 1990), Philippine Commercial Capital, Inc. (since 2006), PCCI Finance Corporation (since 1992) and PCCI Insurance Brokerage, Inc. (since 2006). He also sits as a member of the boards of PHILTRUST Bank (since 1992), Home Credit Mutual Building & Loan Association (since 2006), Insular Life Assurance Co., Ltd. (since 1997), Insular Health Care, Inc. (since 1998) and Prudential Guarantee & Assurance, Inc. (since 1999) and is also a member of the Board of Trustees of the University of Asia and the Pacific. Mr. Ozaeta was educated at the Ateneo de Manila University (BS Economics), De La Salle University (BSBA) and Harvard University (MBA). Mr. Ozaeta is the Chairman of AMC’s Compensation and Remuneration Committee and is also a member of the Company’s Nomination Committee. Wilfred Steven Uytengsu, Jr. Director / President and Chief Executive Officer Mr. Uytengsu, Filipino, 47 years old, first served as Executive Vice President and Chief Financial Officer of AMC since its incorporation in 1994 and was appointed President of the Company in February 1998 and Chief Executive Officer in November 2007. He is also the President of GenOSI, Inc., the exclusive supplier of processed meats for the McDonald’s chain of restaurants in the Philippines. Mr. Uytengsu is also a member of the Board of Governors of the Philippine Basketball Association and was the Past Chairman of the internationally recognized Young Presidents’ Organization (YPO). Mr. Uytengsu was also Chief Finance Officer and Member of the Board of General Milling Corporation, a diversified industrial and consumer foods company, for over ten years. Mr. Uytengsu graduated from the University of Southern California, with emphasis in the School of Business’ Entrepreneurship Program, in 1983. He was named the Philippines’ 2007 Entrepreneur of the Year and Master Entrepreneur by Ernst & Young. Mr. Uytengsu has been a member of the Board of Directors of AMC since 1994 and is a member of the Company’s Audit Committee.

34

Dr. Roberto F. de Ocampo Independent Director Dr. de Ocampo, Filipino, 63 years old, is a past President of the Asian Institute of Management (AIM), one of Asia’s leading international business and management graduate schools based in the Philippines. He is currently a member of the AIM Board of Trustees and is Chairman of the Board of Advisors of the RFO Center for Public Finance and Regional Economic Cooperation (recently designated as an ADB Regional Knowledge Hub). He served as Secretary of Finance of the Republic of the Philippines from 1994 to 1998 during the presidency of Fidel V. Ramos, and was previously Chairman and Chief Executive Officer of the Development Bank of the Philippines during the presidency of Corazon C. Aquino. Dr. de Ocampo graduated from De La Salle College and Ateneo University in Manila, received an MBA from the University of Michigan, holds a post-graduate diploma from the London School of Economics, and has four doctorate degrees (Honoris Causa). He is the recipient of many international awards including Finance Minister of the Year, Philippine Legion of Honor, ADFIAP Man of the Year, Chevalier of the Legion of Honor of France, Ten Outstanding Young Men Award (TOYM), several Who’s Who Awards and the 2006 Asian HRD Award for Outstanding Contribution to Society. He is also a Member / Advisory Board Member of a number of important global institutions including The Conference Board, the Trilateral Commission, the BOAO Forum for Asia and the Emerging Markets Forum. Dr. de Ocampo has been a Board Member of AMC since 1999 and is the Chairman of the Company’s Audit Committee. Juan B. Santos Independent Director

Mr. Santos, Filipino, 70 years old, was the Chairman and President of Nestle Philippines, Inc. (NPI) from 1987 until his retirement in March 2003. Prior to his appointment as President of NPI, Mr. Santos was the CEO of the Nestle Group of Companies in Thailand and was the CEO of Nestle Singapore Pte. Ltd., on a concurrent capacity as President of NPI, from 1989 to 1995. In 1982, he was given the Agora Award for Marketing Management by the Philippine Marketing Association and was awarded Management of the Year by the Management Association of the Philippines in 1994. He served as Secretary of Trade and Industry of the Republic of the Philippines in 2005. Mr. Santos was a director of San Miguel Corporation, PLDT, Manila Electric Company, Malayan Insurance Company, Inc., Equitable Savings Bank, Inc., PCI Leasing and Finance, Inc., Inter-Milling Holdings Limited and PT Indofood Sukses Makmur Tbk. and was the Chairman of the Advisory Board of Equitable PCIBank. He also served as Chairman of the Ramon Magsaysay Award Foundation, Philippine Business for the Environment and the Foundation for Rural Electrification for Economic Development and was an active member of the Board of Trustees of the Philippine Business for Social Progress. Mr. Santos is currently a Director of Great Pacific Life Assurance Corporation and a Consultant to Marsman Drysdale Group of Companies. He is also a member of the Board of Advisors of Coca Cola Bottler Philippines, Inc. and is a Member of the Board of Trustees of St. Lukes Medical Center. Mr. Santos obtained his degree of Bachelor of Science in Business Administration from the Ateneo de Manila University and post-graduate studies at the Thunderbird Graduate School of Management in Arizona, USA. He also completed an Advanced Management Course at IMD in Lausanne, Switzerland. Mr. Santos was elected

35

director of AMC in May 2007 and is the Chairman of the Company’s Governance Committee and is also a member of the Compensation and Remuneration Committee. Jose R. Facundo Independent Director Mr. Facundo, Filipino, 71 years old, has an extensive career in banking. He served as a Member of the Board and of the Executive Committee and as President of BPI Capital Corporation and was also a Member of the Board and of the Executive Committee of the Bank of the Philippine Islands (BPI). Prior to BPI’s merger with CityTrust Banking Corp., Mr. Facundo served as President and CEO of CityTrust and was a member of its Board and its Executive Committee. Mr. Facundo was also a Senior Managing Director of Ayala Corporation and was a Senior Officer of Citibank Manila. He also served as Chairman and Board Member of the Philippine Clearing House. Mr. Facundo serves as an Adviser to and a Member of the Board of Security Bank Corporation and is a Member of the Boards of Siemens Philippines, Inc and Aboitiz Power Corporation. He graduated from the Ateneo de Manila University with a Bachelor of Arts degree in Engineering and took post graduate studies in Statistics at the University of the Philippines, and in Engineering at the Technical University of Munich. He has been a Board Member of AMC since 1994 and is a member of the Company’s Audit Committee. Grahame S. Tonkin Independent Director Mr. Tonkin, Australian, 63 years old, began to serve as a board member of AMC in 1998 and is a member of the Company’s Governance Committee. He is currently a Director of Food and Beverage Australia Ltd. and Smythe Road Vintners Pty. Ltd. Mr. Tonkin was the Executive Director of Food South Australia from December 2004 to May 2007 and was formerly the Managing Director of Tarac Australia Pty. Ltd. and prior to this, Chief Executive Officer of the Australian Dairy Corporation for six years. He also spent eight years with Inchape, a British marketing and services company, where he served as Chief Executive for its wine and spirits business in the Asia Pacific Region and was actively involved in Inchape’s joint venture operations in Hong Kong, Taiwan, Thailand, Singapore and Malaysia. Mr. Tonkin is a qualified accountant, Fellow CPA, Fellow Chartered Secretary and Fellow of the Australian Institute of Management and Associate of the Australian Institute of Directors. Michael R.B. Uytengsu Director Mr. Uytengsu, American, 41 years old, has been a member of the Company’s Board of Directors since 1998. He began his career as an investment banker with Salomon Brothers’ Project Finance Group in New York and later transferred to Salomon Brothers’ Corporate Finance Department in Hong Kong. Mr. Uytengsu is currently the President of Brookstone Holdings, Inc., a privately held company based in the United States with interests in food manufacturing and real estate. He obtained his Bachelor’s Degree in Business from the University of Southern California.

36

Atty. Ramon S. Esguerra Director Atty. Ramon S. Esguerra, Filipino, 55 years old, began to serve in AMC's Board in 2003. Atty. Esguerra is the Managing Partner of Esguerra & Blanco Law Offices, a law firm that he founded with six (6) other lawyers with known experience and expertise in various areas of Philippine law. Atty. Esguerra's fields of specialization are on Intellectual Property, Real Estate, Settlement of Estates and Estate Planning, Judicial and Quasi-Judicial Litigation. Atty. Esguerra also served in the Philippine's Department of Justice, as Undersecretary in charge of the National Prosecution Service, National Bureau of Investigation, Bureau of Immigration and Witness Protection Security and Benefit Program. Atty. Esguerra is currently the President of the Intellectual Property Association of the Philippines, Inc., Vice-President for Internal Affairs of the Alpha Phi Beta Chancery, Inc., Faculty Adviser of the Alpha Phi Beta Fraternity, Director of the Integrated Bar of the Philippines – Cavite Chapter, a Professional Lecturer on Criminal Law and Remedial Law at the University of the Philippines College of Law and Grand Commander of the Supremo Consejo del Grado 33o Para Filipinas (R.E.A.A.). He was the immediate past President of the Licensing Executives Society of the Philippines, a member of the International Trademark Association of the Philippines and the Asian Patent Attorneys Association, and a member of the Rotary Club, Makati Central. Atty. Esguerra is a graduate of the University of the Philippines College of Law and graduated at the top five of his class and was hailed Chancellor, Order of the Purple Feather, the U.P. College of Law Honor Society. Atty. Esguerra is a member of AMC’s Governance Committee. Dr. Bernardo M. Villegas Independent Director Dr. Villegas, Filipino, 70 years old, has been a Member of the Company’s Board of Directors from 1999 to 2006 and was re-elected in 2008. He is currently a University Professor at the University of the Asia and the Pacific and a Visiting Professor at the IESE Business School in Barcelona, Spain. His special fields of study are developments economics, social economics, business economics and strategic management. He is also a Member of the Boards of Directors of Insular Life, Transnational Diversified, Inc. and Benguet Corporation. He also serves in the Boards of leading non-governmental organizations like the Makati Business Club, Pilipinas Shell Foundation, PHINMA Foundation, the Parents for Education Foundation and Dualtech Foundation. Dr. Villegas has a Ph.D. in Economics from Harvard University and is a Certified Public Accountant, having been one of the CPA board topnotchers in 1958. He obtained his Bachelor’s degrees in Commerce and the Humanities (both Summa Cum Laude) from De La Salle University. Dr. Villegas is a member of the of the Company’s Nomination Committee. The record of attendance of the Company’s directors during the board meetings and stockholders’ meeting held for the year 2008 is indicated below as follows:

37

Regular and Special Meeting

Annual Stockholders’

Meeting & Organizational

Meeting

Director

Feb 12 Mar 11 Aug 7 Nov 11 May 13

Percentage

Wilfred Uytengsu, Sr. P P P P P 100% Antonio H. Ozaeta P P P P P 100% W. Steven Uytengsu, Jr. P P P P P 100% Michael R.B. Uytengsu A A P P P 60% Jose R. Facundo P P P P P 100% Grahame Tonkin P A P P P 80% Roberto F. de Ocampo P P A P P 80% Juan B. Santos P P P P P 100% Bernardo M. Villegas * - - P P - 100% Ramon S. Esguerra P P P P P 100% * Dr. Villegas was re-elected to the Board effective August 7, 2008 Legend: P – Present A – Absent EXECUTIVE OFFICERS: Joselito J. Sarmiento, Jr. Senior Vice President and Chief Financial Officer

Mr. Sarmiento, Filipino, 53 years old, was promoted to Senior Vice President and Chief Financial Officer in 2007. Previously, he was Vice President for Finance and Treasurer (1998 to 2007) and Vice President for Corporate Planning and Assistant Corporate Secretary (1994 to 1998). Prior to AMC, Mr. Sarmiento served as Vice President – Corporate Planning of GMC for 18 years, which involved him in the operations of GMC’s milk division before it was spun-off as AMC. Mr. Sarmiento obtained his Bachelor’s Degree in Accountancy, “Summa Cum Laude” from De La Salle College and his Masters Degree in Business Management, with “Distinction”, from the Asian Institute of Management. He ranked 9th place in the 1975 CPA Board Examination. Arnold L. Abad Vice President – Accounting and Comptroller

Mr. Abad, Filipino, 51 years old, was appointed as the Company’s Comptroller and Vice President for Accounting in 2004. He has extensive experience in the fields of accounting and auditing. Mr. Abad began his professional career in 1978 as an Auditor at SyCip Gorres Velayo & Co. Subsequently, he joined First Holdings International Inc. where he served as its Accounting Manager from 1982 – 1987. In 1988, he moved to GMC as a Senior Audit Manager and was later promoted as Director of Internal Audit. Mr. Abad resigned from GMC

38

in 1998 and joined AMC as Comptroller and Director for Accounting. A Certified Public Accountant, Mr. Abad was a consistent Dean’s Lister at the De La Salle University where he obtained his degree in BS Accounting. Maximo Y. Abad Vice President – Engineering

Engr. Abad, Filipino, 83 years old, joined AMC as Vice President for Engineering in 1998. He is responsible for overseeing the civil works construction, machinery and electrical installations of AMC’s manufacturing facilities in San Pedro, Laguna. Prior to joining AMC, he worked with GMC for 37 years, 17 years of which as Vice President for Engineering, managing all engineering requirements of the company, including those of its milk division. Engr. Abad obtained his Bachelor of Science Degree in Mechanical Engineering from the Cebu Institute of Technology and is a Licensed Professional Mechanical Engineer. Ma. Belen M. Fernando Vice President – Marketing

Ms. Fernando, Filipino, 49 years old, was appointed as the Company’s Vice President for Marketing in 2004. She first handled the Alaska Milk business when she joined GMC in 1992 as Group Product Manager. Prior to this, she handled various product categories in food, beverages, pharmaceuticals and personal care during her stint with the Marketing teams of CFC-URC, the Bristol Myers Group and Johnson & Johnson. Ms. Fernando was two-term President of the Philippine Association of National Advertisers (PANA), two-term Chairperson of the PANA Foundation and is currently in the Board of Trustees of the Advertising Standards Council (ASC). Ms. Fernando graduated with honors from the Ateneo de Manila University with a Bachelor of Arts Degree in Economics. She completed her academic units for an MBA program from the Ateneo Graduate School of Business. Franciso T. Idian Vice President - Sales

Mr. Idian, Filipino, 49 years old, joined AMC in January 2005 as Sales Director and was promoted to Vice President for Sales in 2007. Mr. Idian has extensive experience in customer business development having worked with Procter & Gamble for 21 years. The last position he held in Procter & Gamble was Associate Director for Global Retail Account and Capability Team Leader, for the Asean, Australasia and Indian market. Prior to joining AMC, he was the Sales Director for Master Foods Corporation. Mr. Idian graduated Cum Laude from the Union College with a degree in Bachelor of Science in Business Administration, Major in Accounting. Santiago A. Polido Vice President – Corporate Affairs & Corporate Secretary

Mr. Polido, Filipino, 60 years old, joined the Company in 1998 as Head of Corporate Affairs and was promoted to Vice President in 2007. Prior to joining AMC, he was the Vice President

39

for Corporate Services and Corporate Secretary of the Philippine Associated Smelting and Refining Company (PASAR). While in PASAR, he held several senior management positions which involved administrative and human resources duties as well as various corporate services responsibilities. Prior to joining PASAR, he handled corporate legal work at Sycip Salazar Luna Feliciano & Manalo Law Offices. Mr. Polido obtained his degree in A.B. Economics and Bachelor of Laws degree from the University of the Philippines. Aaron D. Fulton Director – Plant Operations Mr. Fulton, New Zealander, 38 years old, was appointed as Director for Plant Operations in May 2007. Prior to joining AMC in January 2007, Mr. Fulton was the Operations Manager for Fonterra, specializing in the relationship management between Fonterra and its consumer arm – Fonterra Brands. He brings with him 19 years of experience in the dairy industry, 14 years of which was in the area of production and operations management. The remaining years were in Supply Chain Management and Customer Service Management. Mr. Fulton graduated with a Masters Degree in Technology Management from Waikato University in 2004. He also has a Post Graduate Diploma in Management Studies and a Diploma in Dairy Technology. Thomas Nilsson Director – UHT Operations Mr. Nilsson, Swedish, 54 years old, joined AMC as Director for UHT Operations in August 2007. Prior to joining AMC, Mr. Nilsson worked for Tetra Pak for 21 years and has extensive international experience. He was the Technical Director for Tetra Pak Philippines from 1999 to 2006. Mr. Nilsson obtained his degree in Mechanical Engineering from Pauli College in Sweden. The directors are elected at each annual stockholders’ meeting by stockholders entitled to vote in accordance with the Company’s By-Laws. Each director holds office until the next annual election and until his successor is duly elected, unless he resigns from office, is incapacitated and is unable to carry out his duties as director, or is removed prior to such election. In compliance with the Manual on Corporate Governance, the Nomination Committee reviewed the nominations and qualifications of the incumbent independent directors who will be nominated for re-election to the Board of Directors during the scheduled annual meeting of stockholders. In approving the nominations for re-election of independent directors, the Nomination Committee took into consideration the Guidelines on the Nomination of Independent Directors prescribed in SRC Rule 38, as amended. The following have been nominated to the Board of Directors of the Company for the ensuing year: WILFRED UYTENGSU, SR. ANTONIO H. OZAETA

WILFRED STEVEN UYTENGSU, JR. DR. ROBERTO F. DE OCAMPO JUAN B. SANTOS JOSE R. FACUNDO

40

GRAHAME S. TONKIN MICHAEL R.B. UYTENGSU ATTY. RAMON S. ESGUERRA DR. BERNARDO M. VILLEGAS The aforementioned nominees were formally nominated to the Nominations Committee of Alaska Milk Corporation (composed of Wilfred Uytengsu, Sr., Antonio H. Ozaeta and Bernardo M. Villegas) by Ms. Shirley R. Arguelles and Ms. Marinela M. San Juan, both shareholders of the Company. In addition, Mr. Antonio H. Ozaeta, Dr. Roberto F. de Ocampo, Mr. Juan B. Santos, Mr. Jose R. Facundo, Mr. Grahame S. Tonkin and Dr. Bernardo M. Villegas are being nominated as independent directors. Ms. Arguelles and Ms. San Juan are not related to any of the nominees for independent directors. The nominees have served as directors of the Company for more than five years except for Mr. Juan B. Santos, who has served as director for two years. The Company has adopted the SRC Rule 38 (Requirements on Nomination and Election of Independent Directors) and compliance herewith has been made. All nominees for independent director possess all the qualifications and none of the disqualifications prescribed under SRC Rule 38. None of the directors resigned or declined to stand for re-election to the Board of Directors since the date of the last annual meeting of security holders because of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. (3) Family Relationships The Company’s Chairman, Mr. Wilfred Uytengsu, Sr. is the father of Messrs. Wilfred Steven Uytengsu, Jr., who is the President and Chief Executive Officer of AMC, and Michael R.B. Uytengsu, who is a member of the Board of Directors. Other than the foregoing, there are no other directors, executive officers, or persons nominated for such positions that have any family relationships up to the fourth civil degree of consanguinity or affinity with any other director or executive officer of the Company. (4) Involvement in Certain Legal Proceedings None of the Directors or Executive Officers has been involved in any legal proceedings for the last five (5) years up to the date of this report that are material to an evaluation of their ability or integrity as a director or executive officer of the Company. a. None of them has been involved in any bankruptcy petition. b. None of them has been convicted by final judgment in a criminal proceeding or being

subject to a pending criminal proceeding, both domestic and foreign. c. None of them has been subject to any order, judgment or decree of any court of competent

jurisdiction (domestic or foreign) permanently or temporarily enjoining, barring, suspending or otherwise limiting their involvement in any type of business, securities commodities or banking activities.

41

d. None of them has been found by a domestic or foreign court of competent jurisdiction (in a

civil action), the Commission or comparable foreign body, or a domestic or foreign exchange or other organized trading market or self regulatory organization, to have violated a securities or commodities law or regulation.

Item 11. Executive Compensation (1) Compensation of Directors and Executive Officers Following is a summary of compensation received by the five highest-paid executive officers and the Company’s key executives and officers as a group:

2007 Name Designation Salary Bonus TOTAL

Wilfred Uytengsu, Sr. Chairman Wilfred Steven Uytengsu, Jr. President & CEO Joselito J. Sarmiento, Jr. SVP - Finance &

CFO

Maximo Y. Abad VP – Engineering Francisco T. Idian VP – Sales Sub-Total 40,642,172.79 10,373,364.76 51,015,537.55Other Officers 17,255,231.49 4,161,852.50 21,417,083.99 TOTAL 57,897,404.28 14,535,217.26 72,432,621.54 2008 Wilfred Uytengsu, Sr. Chairman Wilfred Steven Uytengsu, Jr. President & CEO Joselito J. Sarmiento, Jr. SVP - Finance &

CFO

Maximo Y. Abad VP – Engineering Francisco T. Idian VP – Sales Sub-Total 47,140,792.90 14,823,991.14 61,964,784.04Other Officers 19,441,503.89 4,873,622.50 24,315,126.39 TOTAL 66,582,296.79 19,697,613.64 86,279,910.43

-continued –

42

2009 (Estimates Only) Wilfred Uytengsu, Sr. Chairman Wilfred Steven Uytengsu, Jr. President & CEO Joselito J. Sarmiento, Jr. SVP - Finance &

CFO

Maximo Y. Abad VP – Engineering Francisco T. Idian VP – Sales Sub-Total 48,169,534.44 5,293,140.00 53,462,674.44Other Officers 21,478,072.49 4,374,585.00 25,852,657.49 TOTAL 69,647,606.93 9,667,725.00 79,315,331.93

There are no special employment contracts between the Company and any named executive officer. Eligible officers are covered under the Company’s Retirement Plan. The normal and early retirement benefits shall be a lump sum amount equal to one month salary based on final monthly salary, for every year of credited services. The Directors of the Company are given a per diem of P5,000.00 per meeting. In addition, they are entitled to a profit sharing, which is based on the Company’s operating income. The remuneration is intended to provide a reasonable compensation to the Directors in recognition of their responsibilities and the potential liability they assume as a result of the high standard of best practices required of the Board as a body, and of the Directors individually, under the SEC-promulgated Code of Corporate Governance. Aside from the aforementioned, there are no other arrangements under which any Director of the Company is compensated, whether directly or indirectly. The total compensation paid to non-executive directors for 2008 and 2007 amounted to P4.8 million and P3.5 million, respectively. (2) Executive Employee Stock Option Plan (EESOP) Under the Company’s EESOP, AMC grant stock options to certain key employees of the Company in consideration of the employee’s work performance, position, salary and length of service with the Company. The EESOP does not cover the Chief Executive Officer (CEO), Chief Operating Officer (COO) or any of the members of the Board of Directors. The EESOP is administered by a Committee of three (3) members composed of the CEO, the COO and one other director of the Board. Subject to the provisions of the EESOP, the Committee shall recommend to the Board of Directors employees who are eligible for the option grant, the times when such options are to be granted, the effectivity dates and the number of shares to be allocated to each participant at any given time. Shares covered by any one grant under the EESOP shall be offered for subscription for a period of three (3) years from and after the effectivity date of each grant as may be determined by the Committee formed to administer the EESOP. The number of shares that may be subscribed to by a participant for each subscription shall not be less than ten thousand (10,000)

43

shares. Each grant that may be determined by the Committee under the EESOP shall be subject to the following Vesting Period(s):

(a) 1/3 of the total number of shares under the grant shall be available for exercise upon effectivity of the grant;

(b) 1/3 of the total number of shares under the grant shall be subject to a Vesting Period

of one (1) year from and after the effectivity of the grant; (c) 1/3 of the total number of shares under the grant shall be subject to a Vesting Period

of two (2) years from and after the effectivity of the grant. At any time after the applicable Vesting Period and before the lapse of the three-year duration of any one grant, a participant of the grant may, subject to the provisions of the EESOP and the rules promulgated by the Committee, subscribe to such number of shares as he/she may be allowed to subscribe to as of the Exercise Date. When a participant decides to exercise his privilege under the EESOP, he/she shall do so by means of notice in writing to the Company, together with full payment of the Subscription Price, specifying his/her decision to exercise his/her privilege, the number of shares he/she desires to subscribe to, subject to the provisions of the EESOP and the subscription price. Thereafter, the Company and the participant shall execute a Contract of Subscription with principal terms and conditions on issuance, consideration, and non-transferability of rights. Under the grant, a total of 13,380,000 shares were made available for exercise of the option by the key employees. Out of the 13,380,000 share options granted, 5,650,000 were subscribed, 2,450,000 share options have lapsed, while options to subscribe 5,280,000 shares remain unexercised. Out of the 5,650,000 shares subscribed, 2,355,000 shares were subscribed at a subscription price of P1.94 per share, 710,000 shares were subscribed at a subscription price of P2.72 per share, 2,045,000 shares were subscribed at a subscription price of P3.18 per share, 390,000 shares were subscribed at a subscription price of P3.528 per share while 150,000 shares were subscribed at a subscription price of P4.50 per share.

44

Item 12. Security Ownership of Certain Beneficial Owners and Management (1) Security Ownership of Certain Record and Beneficial Owners as of December 31, 2008:

Title of Class

Name and Address of Record Owner and

Relationship with Issuer

Name of Beneficial Owner and Relationship

with Record Owner

Citizenship of Record

Owner

No. of Shares Held

Percent

Held

Common

Jadestone Investments LLC5 2180 Sand Hill Road, Suite 340, Menlo Park, CA 94025, USA (Stockholder)

N.A.

American

474,270,699

- record -

52.76%

Common

Common

Common

PCD Nominee Corp.6 G/F Makati Stock Exchange 6767 Ayala Avenue, Makati City

- The Hongkong & Shanghai Banking Corp. Ltd.7 33/F West Tower, Tektite Bldg, Pasig City Standard Chartered Bank8 6756 Ayala Avenue, Makati City Citibank N.A.9 11/F Citibank Tower 8741 Paseo de Roxas, Makati City

Various Shareholders10

Various Shareholders10

Various Shareholders10

Foreign

Foreign

Foreign

90,614,000 - beneficial -

56,360,000 - beneficial -

9,557,000 - beneficial -

10.08%

6.27%

1.06%

5 Jadestone Investments LLC, a company owned by the Uytengsu Family, is a shareholder of Alaska Milk Corporation (AMC) and owns 52.76% of AMC’s total issued and outstanding capital stock. The General Manager of Jadestone Investments LLC, Mr. Wilfred Steven Uytengsu, Jr., is concurrently the President and Chief Operating Officer of Alaska Milk Corporation. Shares owned by Jadestone Investments LLC are voted through its appointed proxy, Mr. Wilfred Steven Uytengsu, Jr. 6 Registered owner of shares held by participants in the Philippine Central Depository, Inc. (PCD), a private company organized to implement an automated book entry system of handling securities in the Philippines. Shares lodged with the PCD are voted through its appointed proxy. 7 The Hongkong & Shanghai Banking Corp. Ltd. (HSBC) is a participant of PCD. The clients, stockholders of Alaska Milk Corporation, of HSBC have the power to decide how the shareholdings are to be voted through its appointed proxy. HSBC is not related to Alaska Milk Corporation 8 Standard Chartered Bank is a participant of PCD. The clients, stockholders of Alaska Milk Corporation, of Standard Chartered Bank, have the power to decide how the shareholdings are to be voted through its appointed proxy. Standard Chartered Bank is not related to Alaska Milk Corporation.

45

Title of Class

Name and Address of Record Owner and

Relationship with Issuer

Name of Beneficial Owner and Relationship

with Record Owner

Citizenship of Record

Owner

No. of Shares Held

Percent

Held

Common

Campina Zuivel B.V.11 Hogeweg 9, Zaltbommel The Netherlands 5301 LB (Stockholder)

N.A.

Dutch

71,202,144 - record -

7.92 %

Common

PCD Nominee Corp. G/F Makati Stock Exchange 6767 Ayala Avenue, Makati City

Various Shareholders12

Filipino

59,736,451

- beneficial -

6.65%

Common

Wilfred & Bonnie Uytengsu Foundation, Inc.13 6/F Corinthian Plaza, 121 Paseo de Roxas Makati City (Stockholder)

N.A.

Filipino

56,829,566 - record -

6.32%

The Hongkong & Shanghai Banking Corp. Ltd., Standard Chartered Bank and Citibank N.A are custodian banks for various beneficial foreign shareholders, under PCD Nominee Corp., who exercise voting powers on Alaska Milk Corporation shares.

9 Citibank N.A. is a participant of PCD. The clients, stockholders of Alaska Milk Corporation, of Citibank N.A. have the power to decide how the shareholdings are to be voted through its appointed proxy. Citibank N.A. is not related to Alaska Milk Corporation. 10 The Company has no record of beneficial owners of shares lodged with PCD. None of these stockholders has shares registered in their names equivalent to more than 5% of the voting securities of the Company. 11 Campina Zuivel B.V. is a shareholder of Alaska Milk Corporation and owns 7.92% of AMC’s total issued and outstanding capital stock. Campina Zuivel B.V. is one of Europe’s leading dairy firms, producing a range of consumer and industrial products with Netherlands, Belgium and Germany as its main markets. Shares owned by Campina Zuivel B.V. are voted through its appointed proxy. Campina Zuivel B.V. is not related to Alaska Milk Corporation. 12 The Company has no record of beneficial owners of shares lodged with PCD. None of these stockholders has shares registered in their names equivalent to more than 5% of the voting securities of the Company. 13 Wilfred & Bonnie Uytengsu Foundation, Inc., a non-stock and non-profit association, is a shareholder of Alaska Milk Corporation and owns 6.32% of AMC’s total issued and outstanding capital stock. Shares owned by Wilfred and Bonnie Uytengsu Foundation, Inc. are voted through its appointed proxy, Mr. Wilfred Uytengsu, Sr.

46

(2) Security Ownership of Management as of December 31, 2008: The following are the number of shares comprising the Company’s capital stock (all of which are voting shares) owned of record by the directors, Chief Executive Officer and key officers of the Company as of December 31, 2008:

Title of Class

Name of Beneficial Owner

Amount & Nature of Beneficial Ownership

Citizenship Percent Ownership

Common Wilfred Uytengsu, Sr. 240,003 – r Filipino 0.027% Common Wilfred Steven Uytengsu, Jr. 240,001 – r Filipino 0.027% Common Michael R.B. Uytengsu 240,000 – r American 0.027% Common Antonio H. Ozaeta 200,250 – r Filipino 0.022% Common Jose R. Facundo 135,001 – r Filipino 0.015% Common Grahame Tonkin 250 – r Australian * Common Roberto F. de Ocampo 250 – r Filipino * Common Bernardo M. Villegas 250 – r Filipino * Common Juan B. Santos 1 – r Filipino * Common Ramon S. Esguerra 1 – r Filipino * Common Joselito J. Sarmiento Jr. 500,000 – r Filipino 0.056% Common Maximo Y. Abad 279,500 – r Filipino 0.031% Common Santiago A. Polido 150,000 – r Filipino 0.017% Common Ma. Belen M. Fernando 116,500 – r Filipino 0.013% Common Arnold L. Abad 111,000 – r Filipino 0.012% Common Francisco T. Idian 50,000 – r Filipino 0.006% Common Aaron D. Fulton 50,000 – r New Zealander 0.006% Common Thomas Nilsson 50,000 – r Swedish 0.006% All Directors and Officers as a Group 2,363,007 0.263% * less than 0.005% (3) Voting Trust Holders of 5% or More The Company knows of no persons holding more than 5% of common shares under a Voting Trust Agreement or any such similar agreement. (4) Changes in Control No change of control in the Company has occurred since the beginning of its last fiscal year. There are no existing arrangements that may henceforth result in a change in control of the Company.

47

Item 13. Certain Relationships and Related Transactions The Company leases certain parcels of land from the Alaska Milk Corporation Retirement Plan (AMCRP). Both Messrs. Wilfred Uytengsu, Sr. and Wilfred Steven Uytengsu, Jr. are Trustees of the AMCRP. The lease rates are based on market values. The Company also leases an office / warehouse space in Cebu City from Wentworth Development Corporation (WDC), a company majority owned by the Wilfred & Bonnie Uytengsu Foundation, Inc. The rental fee is based on market rates. The Company charges GenOSI14 and WDC for their share in the expenses incurred by directors and officers common to these companies.

PART IV – CORPORATE GOVERNANCE Item 14. Compliance with Leading Practice on Corporate Governance In compliance with the Manual on Corporate Governance, the Nomination Committee reviewed the nominations and qualifications of the incumbent independent directors who will be nominated for re-election to the Board of Directors during the scheduled annual meeting of stockholders. In reviewing the nominations for re-election of independent directors, the Nomination Committee took into consideration the Guidelines on the Nomination of Independent Directors prescribed in SRC Rule 38, as amended. The Company has adopted the SEC Corporate Governance Self Rating Form to evaluate the level of compliance of the Company with its Manual on Corporate Governance. In addition, the Compliance Officer reviews on a periodic basis the level of compliance of its directors, officers and employees with the leading practices and principles on good corporate governance as embodied in the Company’s Manual. To date, the Company has substantially complied with the provisions of its Manual on Corporate Governance. Likewise, Alaska Milk Corporation has consistently strived to raise its level of financial reporting in compliance with Philippine Financial Reporting Standards.

PART V – EXHIBITS AND SCHEDULES Item 15. Exhibits and Reports on SEC Form 17-C (a) Exhibits See accompanying Index to Exhibits (page 52)

14 GenOSI, Inc. is a partnership between the Uytengsu Family and OSI of Chicago and is the exclusive supplier of processed meats to the McDonald’s chain of restaurant in the Philippines. Mr. Wilfred Steven Uytengsu, Jr. is the President of GenOSI.

48

(b) Reports on SEC Form 17-C In addition to its quarterly earnings report for 2008 (SEC Form 17-Q), the Company reported the following under Item 9 (Other Events) of SEC Form 17-C:

a. On May 13, 2008 Results of the Annual Stockholders’ Meeting and Organizational Meeting of the Board of Directors

b. On May 13, 2008 Certifications on Qualifications of Messrs. Jose R. Facundo,

Roberto F. de Ocampo, Antonio H. Ozaeta, Grahame Tonkin and Juan B. Santos as Independent Directors of Alaska Milk Corporation

c. On May 14, 2008 Disclosure Statement on the Results of Operations of Alaska

Milk Corporation for the Quarter Ending March 31, 2008

d. On July 9, 2008 Approval of the Amended Articles of Incorporation and Amended By-Laws of Alaska Milk Corporation by the Securities and Exchange Commission

e. On August 7, 2008 Election of Dr. Bernardo M. Villegas as director of Alaska

Milk Corporation

f. On August 27, 2008 Increase in the limit of the Company’s Share Buy-Back Program to purchase AMC shares from P200 million to P300 million

g. On August 28, 2008 Purchase of Twelve Million Five Hundred Thirty Three

Thousand (12,533,000) AMC shares at P4.95 per share under the Company’s Share Buy-Back Program

h. On October 6, 2008 Purchase of Fourteen Million Seven Hundred Forty Seven

Thousand (14,747,000) AMC shares at P4.50 per share under the Company’s Share Buy-Back Program

i. On November 11, 2008 Increase in the limit of the Company’s Share Buy-Back

Program to purchase AMC shares from P300 million to P500 million

j. On December 5, 2008 Postponement of the payment date of the cash dividend of P0.075 per share to all stockholders of record as of December 3, 2008 from December 29, 2008 to January 5, 2009 due to the declaration of December 26 and 29, 2008 as special non-working holidays

k. On January 5, 2009 Purchase of Ten Million (10,000,000) AMC shares at P3.80

per share under the Company’s Share Buy-Back Program

l. On January 14, 2009 Certification on Compliance with Manual on Corporate Governance and Attendance of Members of Board of Directors for 2008

49

m. On February 12, 2009 Purchase of Eighty Thousand (80,000) AMC shares at P3.85 per share under the Company’s Share Buy-Back Program

n. On February 23, 2009 Purchase of One Million Two Hundred Seventeen Thousand

(1,217,000) AMC shares at P3.85 per share under the Company’s Share Buy-Back Program

o. On February 24, 2009 Reorganization of the Company’s Compensation and

Remuneration Committee and Nomination Committee and the creation of a Governance Committee and approval of the Board of the Policy on Conflict of Interest

p. On February 25, 2009 Disclosure Statement on the Results of Operations

(Unaudited) of Alaska Milk Corporation for the Year Ending December 31, 2008

q. On March 9, 2009 Purchase of One Hundred Thousand (100,000) AMC shares at P3.70 per share under the Company’s Share Buy-Back Program

50

51

ALASKA MILK CORPORATION Index to Financial Statements and Supplementary Schedules

SEC Form 17-A, Item 7

Page No. Financial Statements Statement of Management’s Responsibility for Financial Statements 53 Report of Independent Auditors 54 Balance Sheets as of December 31, 2008 and 2007 56 Statements of Income for each of the three years in the period ended December 31, 2008 57 Statements of Changes in Stockholders’ Equity for each of the three years in the period ended December 31, 2008 58 Statements of Cash Flows for each of the three years in the period ended December 31, 2008 59 Notes to Financial Statements 61 Supplementary Schedules Report of Independent Auditors on Supplementary Schedules 105 A. Financial Instruments (Cash Equivalents, Investment Held-to-maturity and

Investments Available-for-sale) 106 B. Amounts Receivable from Directors, Officers, Employees, Related Parties

and Principal Stockholders (Other than Affiliates) * C. Non-current Marketable Equity Securities, Other Long-Term Investments,

and Other Investments * D. Indebtedness to Unconsolidated Subsidiaries and Affiliates * E. Property, Plant and Equipment * F. Accumulated Depreciation and Amortization * G. Intangible Assets 107 H. Accumulated Amortization – Intangible Assets 108 I. Long-term Debt * J. Indebtedness to Affiliates and Related Parties (Long-term Loans from

Related Companies) * K. Guarantees of Securities of Other Issuers * L. Capital Stock 109 M. Retained Earnings Available for Dividend Declaration 110 _______________________ * These schedules, which are required by Section 17 of 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 Company’s financial statements or the notes to financial statements.

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

100

101

102

103

104

105