COVER SHEET Sees eere N J ce | for | ‘SEC Relation Nurber ee Ali}9}9{7]-|9jifolo COMPANY NAME TlajGlaly|rialy| [mji|p{xujal{nip{s| |elolx[r] [c]x[ulp],] [1 Nic}.| {cja| [Njo|n[plRiolrir|r] [clo[r]Plo[r[a|t]1[o[N]) PRINCIPAL OFFICE (No, / tot Serangay Oly! Tow (Proves) BiR|cly|.| |tiR{a[n{cla},| [r[alz[i]s]aly],] [sla]tlalnic]a s Ferm ye egg a: ‘Stoota Leese glee AlAlris slelc NifA COMPANY INFORMATION Company's Emel Aderess Company's Telephone Number oble Nunbor - (046) 483-0829 - No.of Stoskhoitors ‘Anal Neetng (Month Day) Fecal Year Month/Day) 1915 Last Saturday of May 1231 ‘CONTACT PERSON INFORMATION ‘The designed conic person MUST bean fic of the Coraran| Name of Gartact Person Emel Aeerse Tetephone Numbers ote Nunber frederick.deocariza@, ie tagaytayhighlands.com (046) 489-0745 Mr, Frederick D, Deocariza CONTACT PERSON’s ADDRESS Brgy. Tranea, Talisay, Batangas TE 1: Tr case of deat rasiralen or casation of cc oth fee Genated oe COMBA paton Gua an sal Fe epated Tse Camason wih ‘ity (3) color dey tom the cecurence thereof th fain and colt contac tals the new contac eran designate, 2 AlBoras mus be propery and comply dp, Fale fo do so shal ued the corporis recor wih fe Carson onder rer-eeep of Notice of Defioncls, Further, nansacot of Nae of Jexaitae coporation fo aby fers deteonls, x C7 ain ©) 'S/RECEIVED \S! | 1 oS‘STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS Cyetenatng the financial statements, management Is responsible for assessing Tagaytay Midlands Gof Club, Ine. abilty to continue as going concem, disclosing, as applicable mates simed cs going Fepaorey taaating the going concer basis of accounting unless management either exiends to lguidars Tagaytay Midlands Golf Club, nc. or to cease operations, or has no realistic alternative but to oot ‘The Bosrd of Directors is responsible for overseeing Tagaytay Midlands Golf Club, Ine. financial reporting process. ‘The Board of Directors reviews and approves the financial statements including the schedules attached therein, and submits the same to the stockholders. SyCip Gorres Velayo & Co., the independent auditors, appointed by the stockholders, has audited the financial statements of Tagaytay Midlands Golf Club, inc. in accordance with Philippine Standards on Auditing, and in jp report to the stockholders, has expressed its opinion on the faimess of presentation upon compistion/ of such examination, lly N Ocier Chairman of the Board exw tinea! ¢pemer! Ma. Clara T. Kramer General Manager Frederick Di Deocariza Financial Contralier Philippines - Tel.: (046) 483-0888 - Fax: (046) 483-0830 www. TagaytayHighlands.comSigned this__th day of SUBSCRIBED AND SWORN to before me this. APRA 2 2010 2017. TAGAYTAY CITY ‘to me their competent evidence of identity, as follows th day of, ‘APR 1 2 2018 2017 affiants exhibiting NAME Competent Evidence of Identity | Date of Issue Place of Issue WILLY N. OCIER PASSPORT# PO955319A November 19, 2016 | DFA MANILA TIN# 101-937-954-000 | JERRY C. TU DLW N11-76-012019 February 2, 2016 | TIN# 106-218-979-000 OFANCREAST | MA. CLARAT. KRAMER PASSPORT# EC2084270 September 13, 2014 | DFANCR TIN# 112-878-419-000 SOUTH PRC# 0047508 November 22,2016 | PRCMANILA | | FREDERICK D. DEOCARIZA TIN 125-284-119-000 Doc. No. _25* ; Page No. __'5\_; Book No. Oy Series of _yal,. exw wm a oy, 7 SN Road BLN er SUT \, CUNHISSION EXPIRES WN IECENBE? 31SGV Building a better working world In connection wi information when it becomes available and, in doing so, consider whether the cther in ‘materially inconsistent with the financial statements or our knowledge obtained in the ante appears to be materially misstated, Management is responsible forthe preparation and fair presentation ofthe financial statements in accordance with PFRSs, and for such intemal control as management determines ic necessary to enable ihe Preparation of financial statements that are fre from material misstatement, whether dae @ have or In Preparing the financial statements, management is responsible for assessing the Golf Club's ability to continue as @ going concer, disclosing, as applicable, matters related to going concem and using the song concem basis of accounting unless management ether intends to liquidate the Golf Club to cease operations, or has no realistic alternative but to do so. ‘Those charged with governance are responsible for overseeing the Golf Club's financial reporting, process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that le assurance is a high level of assurance, but is not a guarantee that an AS part of an audit in accordance with PSAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: *Tdentfy and assess the risks of material misstatement of the financial statements, whether due to fraud & error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material carhgment resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of intemal ecntrol * Obtain an understanding of intemal control relevant tothe audit in order to design audit procedures tit ae appropriate in the circumstances, but not for the purpose of expressing an opinion onthe effectiveness of the Golf Club’s internal control, * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. * Conclude on the appropriateness of management's use of the going concem basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events onditions that may cast significant doubt on the Golf Club's ability to continue as a going concenSGV Builing better working work {fe conclude that a material uncertainty exists, we are required to draw attention in our auditor's rer ote related disclosures inthe financial statements or, ifsuch disclosures ae inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up tothe dite of our auditor's report. However, future events or conditions may eause the Golf Club to cease to continue as a going concer, * Evaluate the overall presentation, structure and content ofthe financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant auait findings, including any significant deficiencies in internal control that we identify during our audit Report on the Supplementary Information Required Under Revenue Regulations No. 15-2010 Our audits were conducted for the purpose of forming an opinion on the basi financial statements taken as a whole. The supplementary information required under Revenue Regulations No, 15-2010 is presented by the management of Tagaytay Midlands Golf Club, Inc. in a separate schedule. Revenue Regulations No, 15-2010 requires the information to be presented in the notes to financial statements. Such information is not a required part of the basic financial statements. The information is also not required by the Securities Regulation Code Rule 68, As Amended (2011). Our opinion on the basic financial statements is not affected by the presentation of the information ina separate schedule SYCIP GORRES VELAYO & CO. fst ans 0. aden Julie Christine ©. Mateo Partner CPA Certificate No, 93542 SEC Accreditation No. 0780-AR-2 (Group A), May 1, 2015, valid until April 30, 2018 ‘Tax Identification No. 198-819-116 BIR Accreditation No, 08-001998-68-2018, February 26, 2018, valid until February 25, 2021 PTR No. 6621309, January 9, 2018, Makati City April 7, 2018TAGAYTAY MIDLANDS GOLF CLUB, INC. (A Nonprofit Corporation) STATEMENTS OF FINANCIAL POSITION ASSETS Current Assets Cash and cash equivalents (Note 5) 168,664,840 P175,837,983 Receivables (Notes 6 and 17) 149,673,459 197,259,136 Inventories (Note 7) 1,188,818 813,634 Other current assets (Note 8) 31,712,180. 14,131,348 Total Current Assets 351,239,297 388,042,101 Noneurrent Assets Property and equipment (Notes 9 and 11) 1,141,841,306 1,151,596,407 Other noncurrent assets 5,364,290 5,763,089 Total Noneurrent Assets 1,147,205,596 1, 157,360,396 P1,498,444,893 _ P1,545,402,497 LIABILITIES AND MEMBERS’ EQUITY Current Liabilities Accounts payable and other current liabilities (Notes 10 and 17) 81,332,918 P142,761,844 Loans payable - current (Note 11) 4,140,197 2,374,185 Total Current Liabilities 85,473,115 145,136,029 Noneurrent Liabilities Loans payable - non-current portion (Note 11) 3,293,719 3,202,630 Pension liability (Note 18) 14,740,912 11,537,271 Total Noneurrent Liabilities 18,034,631 14,739,901 Total Liabilities 103,507,746 159,875,930 Members’ Equity Proprietary certificates (Note 12) 473,800,000 473,800,000 ‘Additional paid-in capital (Note 12) 1,604,806,549 _1,604,806,549 Deficit (682,634,129) (693,248,522) Remeasurement gain (loss) on defined benefit pension plan - net of tax (Note 18) (1,035,273) 168,540 Net Members’ Equity 1,394,937,147 __1,385,526,567 P1,498,444,893_ P1.545,402,407 ‘See accompanying Notes To Finanelal StatementTAGAYTAY MIDLANDS GOLF CLUB, INC. (A Nonprofit Corporation) STATEMENTS OF COMPREHENSIVE INCOME Years Ended December 31 2017 2016 2015 REVENUES Membership dues P129,092,722 126,428,680 125,396,589 Clubhouse operations: Green fees 27,169,722 22,671,455 20,938,504 Food, beverage and sundries 19,364,099 17,176,790 15,804,423 Golf cart and locker rental 17,197,018 14,992,106 13,539,249 Others 1,469,978. 1,455,642 1,632,827 194,293,539 182,724,673 177,311,682 COST OF SALES AND SERVICES (Note 13) (189,565,190) (174,126,498) (177,728,574) GENERAL AND ADMINISTRATIVE EXPENSES (Note 14) 0,250,075) (58,174,356) (29,379,555) INTEREST INCOME (Note 5) 2,173,204 1,985,564 1,435,762 INTEREST EXPENSE (Note 11) (577,146) (405,074) (43,780) FOREIGN EXCHANGE GAIN (LOSS) (492 29,614 21,160 OTHER INCOME (Note 16) 34,912,805 35,088,296 _ 32,660,310 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENSES BEFORE INCOME TAX 10,986,685 __(12,877,781)_ 4,277,005 PROVISION FOR (BENEFIT FROM) INCOME TAX (Note 19) Current 1,416,563 1,463,077 995,007 Deferred (1.044311) (78,580) 4151 372,25, 1.384.497 999,158 NET INCOME (LOSS) 10,614,393 (14,262,278) __ 3,277,847 OTHER COMPREHENSIVE INCOME (LOSS) Not to be reclassified to profit or loss in subsequent periods: Remeasurement gain (loss) on defined benefit pension plan (Note 18) (1,203,813) 1,330,094 616,260 Income tax effect = 399,028) (184,878) (203,813) 931,066 431,382 ‘TOTAL COMPREHENSIVE INCOME (LOSS) P: $80_(P13,331,212)__P: Net Income (Loss) Per Share (Note 20} ‘See accompanying Notes to Financial StatementsJouyoys porounut.s 0} Sa}0N BuydunduovaD 22S CUETO —_—_ PSION TA ‘000008 ELFa Troe Te quaDeG Fe SSoUETET €6E PIII eS ‘UIODUT DATSUOyDUTUTOS [EOL Creed = = 50] SnisURTTIIOG ORO i = £66°P19°01 Es - 2.0 AN DSSTSSRETE OS WOTE TeserEeooa) FS ORTONTA —_OOTOUTELFA Tae T rena TEL DSRS TA OS BITE CSBT EA) _—_—OFSIOSHONTA —_ OOOOUN ELPA DoT Te SquBIG Te HIME Taiceet) 99086 Ger) = 350] SnFSUaYRIAIIOD IO. ‘990°1E6 990186 = = = Hy Jo Tau = SUTOoUT SAISTOyANTUTOD FOO ize) (suczst'v)___- - $80] 78N CLLLSB ROE TE OTS TLD GrEORERLIA) FE DOSTONTA —_OOTDORELPA STOTT ARR Te OUTER CLLR ROE TA OTS TILA) CHEIRCTLDA _—_ PSVORHON TA OOMTOO ELA Sior Te soquiosd ye HOUME ECOL Teer LPR LLTE = = auoDuy aajsuayasdOo (OL TSE Ter TeETEP = = = FEI Jo TU SUIOSUT SAISTOyDIAUIOD TOO Lys'Lic'e bd LoS LTE = = aur0om PN OSS ERIS TA GOST TA) LOU VST HDA) GFSVOFFON TA —_ OOOO ELTA Sloe 1 Aaenaep We ssouereg Taba TaON TPC SIBqUBAL ON X81 0 PN aueja worsuag po pana wo sso7 (ue) uaa inseau9y S10Z GNV 9107 ‘L107 ‘Te AAMWAIAG CANA SUVAN DHL YOK ALINO’ SUANAW NI SADNVHO AO SLNAWALVLS (aoqer0d10,) igoaTuON Vy “ONT ‘A019 ATOD SGNVTCIW AVLAVOVLTAGAYTAY MIDLANDS GOLF CLUB, INC. {A Nonprofit Corporation) STATEMENTS OF CASH FLOWS. Years Ended December 31 207 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES Excess (deficiency) of revenue over expenses before income tax P10,986,645 (P12,877,781) 4,277,005 ‘Adjustments for: Depreciation (Notes 9, 13 and 14) S11S7;549 47,418,333 44,642,495 Pension costs (Notes 15 and 18) 2,353,168 3,400,826 596,616 Interest income (Note 5) @173,204) (1,985,564) (1,435,762) Interest expense (Note 11) $77,146 405,074 43,780 Gain on disposal of property and equipment (Notes 9 and 16) 07,426) - (182,698) Unrealized foreign exchange loss (gain) 492, 29.614) 21,160) income before working capital changes 2.874370 36,331,274 47,920,276 Decrease (increase) in Receivables 47,585,677 20,454,974 4,857,986 Inventories G75,184) 339,022 3,019,086 Other current assets (17,316,788) (8,895,810) _(43349,631) Increase (decrease) in accounts payable and other curent liabilities (61425979) _47,078.245 20,930,634 ‘Tash generated ffom operations 31,342,096 95,307,705 11,678,351 Interest received 1,909,160 1,985,564 1,435,762 Income taxes paid 72,252) (1,463,077) (995,007) Benefits paid (Note 18) 53,340) (880,700) __(600,960) Net cash provided by operating activities, 32,525,664 94,949,492 71,518,146 CASH FLOWS FROM INVESTING ACTIVITIES ‘Adgitons to property and equipment (Note 9) (41,694,488) (41,782,843) 23,982,443) Decrease (increase) in other noncurrent assets 399,699 (1,524,356) (1,780,004) Proceeds from sale of property and equipment 319,466 = 182,698 ‘Net cash used in investing activites (0.975.323) 3,307,199) 05,379,749) CASH FLOWS FROM FINANCING ACTIVITIES Availment of loans (Notes 11 and 22) 5,166,700 4,322,500 2,982,400 Payment of loans (Notes 1 and 22) (309,899) (1,582,380) (145,705) Interest paid (Note 22) ($80,093) (377920) (43.780) ‘Net eash provided by financing activites 1,277,008 2.362.200 2,792,915 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (T6581) $4,004,493 48,731,312 EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (492) 29,614 21,160 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 175,837,983 __ 121,803,876 _73,051,404 CASH AND CASH EQUIVALENTS AT 168,664,840 ‘See accompanying Notes to Financial Staomna Fong Pie t=TAGAYTAY MIDLANDS GOLF CLUB, INC. (A Nonprofit Corporation) NOTES TO FINANCIAL STATEMENTS: |. Corporate Information and Authorization for the Issuance of Financial Statements Corporate Information Tagaytay Midlands Golf Club, Ine. (the Golf Club), a nonprofit corporation, was incorporated and registered with the Philippine Securities and Exchange Commission (SEC) on June 10, 1997. ‘The Golf Club's primary purpose is to promote social, recreational and athletic acti members by providing and maintaining clubhouses and a golf course on a nonprofit basis, the nucleus of which will be the construction, development and maintenance of golf course and other sports and recreational facilities. ‘The registered office address of the Golf Club is Brgy. Tranca, Talisay, Batangas Belle Corporation (Belle), a publicly-listed company in the Philippines, owns 60.93% of the Golf (Club's proprietary certificates as at December 31, 2017 and 2016, respectively, Authorization for the Issuance of Financial Statements ‘The financial statements were approved and authorized for issuance by the Board of Directors (BOD) on April 7, 2018, 2. Basis of Preparation, Statement of Compliance and Changes in Accounting Policies and Disclosures The financial statements ofthe Golf Club have been prepared on a historical cost basis and are presented in Philippine Peso (Peso), which is the Golf Club’s fimetional currency. All values are rounded to the nearest Peso, unless otherwise stated, Statement of Compliance The accompanying financial statements have been prepared in compliance with Philippine Financial Reporting Standards (PFRSs). d Disclosures ig policies adopted are consistent with those of the previous financial year, except that the Golf Club has adopted the following amendments to accounting standards starting January 1. 2017. Adoption of these pronouncements did not have a significant impact on the Golf Club’s financial position or performance unless otherwise indicated. * Amendment to PERS 12, Disclosure of Interests in Other Entities, Clarification of the Scope of the ‘Standard (Part of Annual Improvements to PFRSs 2014 - 2016 Cycle) * Amendments to Philippine Accounting Standards (PAS) 7, Statement of Cash Flows, Disclosure Initiative The amendments require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Golf Club has provided the information for the current Period in Note 22. As allowed under the transition provisions of the standard, the Golf Club did ‘not present comparative information for the year ended December 31, 2016.«Amendments to PAS 12, Income Taxes, Recognition of Deferred Tax Assets for Unrealized Losses Standards Issued but not yet Effective Pronouncements issued but not yet effective are listed below. The Golf Club does not expect that the future adoption of the said pronouncements to have a significant impact on its financial statements unless otherwise indicated. The Golf Club intends to adopt the following pronouncements when they become effective, Effective beginning on or after January 1, 2018 «Amendments to PFRS 2, Share-based Payment, Classification and Measurement of Share-based Payment Transactions ‘The amendments to PFRS 2 address three main areas: the effects of vesting conditions on the ‘measurement of a cash-settled share-based payment transaction; the classification of a share-based payment transaction with net settlement features for withholding tax obligations; and the accounting where a modification to the terms and conditions of a share-based payment transaction ‘changes its classification from cash settled to equity settled. On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application is permitted if elected for all three amendments and if other criteria are met. Early application of the amendments is permitted. ‘The amendments are not applicable to the Golf Club since it has no share-based payment transactions. © Amendments to PFRS 4, Insurance Contracts, Applying PFRS 9, Financial Instrumenis, with PFRS 4 The amendments address concerns arising from implementing PFRS 9, the new financial instruments standard before implementing the new insurance contracts standard. The amendments introduce two options for entities issuing insurance contracts: a temporary exemption ftom applying PERS 9 and an overlay approach. The temporary exemption is first applied for reporting periods beginning on or after January 1, 2018. An entity may elect the overlay approach when it first applies PFRS 9 and apply that approach retrospectively to financial assets designated on transition to PFRS 9. The entity restates comparative information reflecting the overlay approach if, and only if, the entity restates comparative information when applying PFRS 9. ‘The amendments are not applicable to the Golf Club since it has no activities that are predominantly connected with insurance or issue insurance contracts. «PERS 9, Financial Instruments PERS 9 reflects all phases of the financial instruments project and replaces PAS 39, Financial Instruments: Recognition and Measurement, and all previous versions of PERS 9. ‘The standard introduces new requirements for classification and measurement, impairment, and hedge accounting, PFRS 9 is effective for annual periods beginning on or after January 1, 2018, with ‘early application permitted. Retrospective application is required, but providing comparative information is not compulsory. For hedge accounting, the requirements are generally applied prospectively, with some limited exceptions. ‘The Golf Club is currently assessing the impact of adopting PFRS 9.PFRS 15, Revenue from Contracts with Customers PFRS 15 establishes a new five-step model that will apply to revenue arising from contracts with customers. Under PFRS 15, revenue is recognized at an amount that reflects the consideration to ‘which an entity expects to be entitled in exchange for transferring goods or services to a customer. ‘The principles in PFRS 15 provide a more structured approach to measuring and recognizing revenue, ‘The new revenue standard is applicable to all entities and will supersede all current revenue ion requirements under PFRSs. Either a full or modified retrospective application is required for annual periods beginning on or after January 1, 2018, Early adoption is permitted. The Golf Club is currently assessing the impact of adopting PFRS 15. ‘Amendments to PAS 28, Measuring an Associate or Joint Venture at Fair Value (Part of Annual Improvements to PFRSs 2014 - 2016 Cycle) The amendments clarify that an entity that is a venture capital organization, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss. They also clarify that if an entity that is not itseif an investment entity has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate’s or joint venture’s interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which (@) the investment entity associate or joint venture is initially recognized; (b) the associate or joint venture becomes an investment entity; and (¢) the investment entity associate or joint venture first becomes a parent. The amendments should be applied retrospectively, with earlier application permitted. ‘These amendments are not applicable to the Golf Club since the Golf Club does not have any investment in associate or joint venture. Amendments to PAS 40, Investment Property, Transfers of Investment Property ‘The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management's intentions for the use of a property does not provide evidence of a change in use. The amendments should be applied prospectively to changes in use that occur on or after the beginning of the annual reporting period in which the entity first applies the amendments. Retrospective application is only permitted if this is possible without the use of hindsight. ‘These amendments are not applicable to the Golf Club since the Golf Club does not have any investment property Philippine Interpretation International Financial Reporting Interpretations Committee (IFRIC) 22, Foreign Currency Transactions and Advance Consideration ‘The interpretation clarifies that in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognizes the nonmonetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entitymust determine a date of the transactions for each payment or receipt of advance consideration. ‘The interpretation may be applied ona fully retrospective basis. Altematively, an entity, may apply the interpretation prospectively to all assets, expenses and income in its scope that are initially recognized on or after the beginning of the reporting period in which the entity first applies the interpretation or the beginning of a prior reporting period presented as comparative information in the financial statements of the reporting period in which the entity first applies the interpretation The Golf Club is currently assessing the impact of adopting this interpretation. Effective beginning on or after Janui 019 * Amendments to PERS 9, Prepayment Features with Negative Compensation The amendments to PFRS 9 allow debt instruments with negative compensation prepayment features to be measured at amortized cost or fair value through other comprehensive income, An entity shall apply these amendments for annual reporting periods beginning on or after January 1, 2019, Earlier application is permitted, ‘The Golf Club is currently assessing the impact of adopting these amendments to PFRS 9. «PERS 16, Leases PERS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet mode! similar to the accounting for finance leases under PAS 17, Leases. The standard ineludes two recognition ‘exemptions for lessees ~ leases of ‘low-value’ assets (¢.g., personal computers) and short-term leases (i.., leases with a lease term of 12 months or less). At the commencement date ofa lease, a lessee will recognize a liability to make lease payments (i.e. the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e. the rightof-use asset), Lessees will be required to separately recognize the interest expense on the lease liability and the depreciation expense on the right-of-use asset Lessees will be also required to remeasuie the lease liability upon the occurrence of certain events (€-8. @ change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). ‘The lessee will generally recognize the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset, Lessor accounting under PFRS 16 is substantially unchanged from today's accounting under PAS 17. Lessors will continue to classify all leases using the same classification principle as in PAS 17 and distinguish between two types of leases: operating and finance leases, PERS 16 also requires lessees and lessors to make more extensive disclosures than under PAS 17. Early application is permitted, but not before an entity applies PERS 15. A lessee can choose to apply the standard using either a full retrospective or a modified retrospective approach ‘The standard’s transition provisions permit certain reliefs, ‘The Golf Club is currently assessing the impact of adopting PFRS 16,Es ‘+ Amendments to PAS 28, Long-term Interests in Associates and Joint Ventures The amendments to PAS 28 clarify that entities should account for long-term interests in an associate or joint venture to which the equity method is not applied using PFRS 9. Entities shall apply these amendments for annual reporting periods beginning on or after January 1, 2019. Earlier application is permitted. This amendment is not expected to have any impact on the Golf Club. «Philippine Interpretation IFRIC 23, Uncertainty over Income Tax Treatments The interpretation specifically addresses the following: ‘© Whether an entity considers uncertain tax treatments separately © The assumptions an entity makes about the examination of tax treatments by taxation authorities ‘+ How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates ‘+ How an entity considers changes in facts and circumstances ‘An entity must determine whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments. The approach that better predicts the resolution of the uncertainty should be followed. ‘The Golf Club is currently assessing the impact of adopting this interpretation, Deferred effectivity ‘© Amendments to PERS 10, Consolidated Financial Statements and PAS 28, Sale or Contribution of Assets between an Investor and its Associate or Joint Venture ‘The amendments address the conflict between PFRS 10 and PAS 28 in dealing with the loss of control of a subsidiary that is sold or contributed to an associate or joint venture. The amendments clarify that a full gain or loss is recognized when a transfer to an associate or joint venture involves fa business as defined in PFRS 3, Business Combinations. Any gain or loss resulting from the sale ‘or contribution of assets that does not constitute a business, however, is recognized only to the extent of unrelated investors” interests in the associate or joint venture. On January 13, 2016, the Financial Reporting Standards Council postponed the original effective date of January 1, 2016 of the said amendments until the International Accounting Standards Board hhas completed its broader review of the research project on equity accounting that may result in the simplification of accounting for such transactions and of other aspects of accounting for associates and joint ventures. ‘Summary of Significant Accounting and Fina (Current and Noncurrent Classification ‘The Golf Club presents assets and liabilities in the statement of financial position based on current or noncurrent classification.An asset is current when it is: Expected to be realized o intended to be sold or consumed in normal operating cycle Held primarily for the purpose of trading Expected to be realized within twelve months after the reporting period, or Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period All other assets are classified as noncurrent. A liability is current when it is: Expected to be settled in normal operating cycle Held primarily for the purpose of trading Expected to be settled within twelve months after the reporting period, or ‘There is no unconditional right to defer settlement of the liability for at least twelve months after the reporting period All other liabilities are classified as noncurrent, Deferred tax assets and liabilities are classified as noncurrent assets and liabi es, respectively. Cash and Cash Equivalents ‘Cash includes cash on hand and in banks. Cash in bank ears interest at the prevailing bank deposit rates, Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less from date of acquisition and are subject to an insignificant risk of change in value, Determination of Fair Value Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: «in the principal market for the asset or liability; or * inthe absence of a principal market, in the most advantageous market for the asset of liability. ‘The principal or the most advantageous market must be accessible to the Golf Club. ‘The fair value ofan asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. AA fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. ‘The Golf Club uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. Assets and liabilities for which fair value is measuredor disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities; Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognized in the financial statements on a recurring basis, the Golf Club determines whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value ‘measurement as a whole) at the end of each reporting period. The Golf Club determines the policies and procedures for both recurring and non-recurring fair value measurements, For the purpose of fair value disclosures, the Golf Club has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy. “Day 1” Difference Where the transaction price in a non-active market is different from the fair value based on other observable current market transactions in the same instrument or based on a valuation technique whose variables include only data from observable market, the Golf Club recognizes the difference between the transaction price and fair value (a ‘Day 1 difference’) in the statement of comprehensive income unless it qualifies for recognition as some other type of asset. In cases where data used are not observable, the difference between the transaction price and model value is recognized in the statement. of comprehensive income when the inputs become observable or when the instrument is derecognized. For each transaction, the Golf Club determines the appropriate method of recognizing the “Day 1” difference, inancial Assets and Liabilities Date of Recognition ‘The Golf Club recognizes a financial asset or a financial liability in the statement of financial position ‘when it becomes a party to the contractual provisions of the instrument. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Golf Club commits to sell or purchase the asset. Initial Recognition of Financial Instruments Financial assets and liabilities are recognized initially at fair value. Transaction costs that are directly attributable to the acquisition of financial assets and liabilities are included in the initial measurement of all financial assets and liabilities, except for financial instruments measured at fair value through profit o loss (FVPL). Subsequent to initial recognition, the Golf Club classifies its financial assets and liabilities in the following categories: financial assets and liabilities at FVPL, loans and receivables, available-for-sale (APS) financial assets, held-to-maturity (HTM) investments and other financial liabilities. The classification depends on the purpose for which the instruments are acquired and whether they are quoted in an active market. Management determines the classification of its financial instruments at initial recognition and, where allowed and appropriate, re-evaluates such classification at reporting date,‘The Golf Club has no financial assets and financial liabilities classified at FVPL, AFS financial assets and HTM investments as at December 31, 2017 and 2016. Subsequent Measurement The subsequent measurement of financial assets and financial liabilities depends on their classification discussed as follows: © Loans and Receivables. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are not entered into with the intention of immediate or short-term resale and are not designated as financial assets at FVPL or APS financial assets, ‘After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in interest income in the statement of comprehensive income. The losses arising from impairment are recognized in the statement of comprehensive income in interest expense for loans and in operating expenses for receivables. ‘This category includes the Golf Club’s cash and cash equivalents (excluding cash on hand) receivables, and interest receivable presented under “Other current assets” account in the statement of financial position (see Note 21). © Other Financial Liabilities. ‘This category pertains to financial liabilities that are not held for trading or not designated as at FVPL upon the inception of the liability. These include liabilities arising from operations and borrowings. Other financial liabilities are recognized initially at fair value and are subsequently carried at amortized cost, taking into account the impact of applying the EIR. method of amortization (or accretion) for any related premium, discount and any directly attributable transaction costs, Gains and losses are recognized in the statement of comprehensive income when the liabilities are derecognized as well as through the EIR amortization process. ‘As at December 31, 2017 and 2016, this category includes accounts payable and other current liabilities (excluding membership dues collected in advance and statutory payables) and loans payable (see Note 21). Offsetting Financial Instruments Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the asset and settle the liability simultaneously. The Golf Club assesses that it has a currently enforceable right to offset if the right is not contingent on a future event, and is legally enforceable in the normal course of business, event of default, and event of insolvency or bankruptey of the Golf Club and all of the counterparties. Classification of Financial Instruments between Liability and Equity ‘A financial instrument is classified as liability if it provides for a contractual obligation to: ‘© deliver cash or another financial asset to another entity; or «exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the Golf Club; or ‘© satisfy the obligation other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of own equity shares.Ifthe Golf Club does not have an unconditional right to avoid delivering cash or another financial asset to settle its contractual obligation, the obligation meets the definition of a financial liability. ‘The components of issued financial instruments that contain both liability and equity elements are accounted for separately, with the equity component being assigned the residual amount after deducting from the instrument as a whole the amount separately determined as the fair value of the liability component on the date of issue. Derecognition of Financial Assets and Liabilities Financial Assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Golf Club's statement of financial position) when: + the right to receive cash flows from the asset has expired; * the Golf Club retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a “pass-through” arrangement; or = the Golf Club has transferred its right to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Golf Club has transferred its right to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Golf Club continues to recognize the transferred assct to the extent of the Golf Club’s continuing involvement, In that case, the Golf Club also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Golf Club has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Golf Club could be required to pay. Financial Liabilities A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such exchange or modification is treated as a derecognition of the original liability. The difference in the respective carrying amounts is recognized in the statement of comprehensive income. Impairment of Financial Assets The Golf Club assesses at each reporting date whether a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired, if and only if, there is objective evidence of impairment as a result of one of more events that occurred after the initial recognition of the asset (an incurred loss event) and that loss event has an impact on the estimated future cash flows of the financial asset or a group of financial assets that can be reliably estimated. Objective evidence of impairment may include indications that the borrower or a group of borrowers is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptey or other financial reorganization and where observable-10- {data indicate that there is measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. Assets Carried at Amortized Cost ‘The Golf Club first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. “If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment. Assets that are individually assessed for impairment and for which an ipairment loss is or continues to be recognized are not included in a collective assessment of impairment. If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the financial asset is reduced through use of an allowance account and the amount of the loss is recognized in the statement of comprehensive income. Interest income continues to be acerued on the reduced carrying amount based on the effective interest rate of the asset Future cash flows in a group of financial assets that are collectively evaluated for impairment are estimated on the basis of historical loss experience for assets with c 3k characteristics similar to those in a group. Historical loss experience is adjusted on the basis of current observable data to reflect the effects of current conditions that did not affect the period on which the historical loss experience is based and to remove the effects of conditions in the historical period that do not exist currently, The methodology and assumptions used for estimating future cash flows are reviewed regularly by the Golf Club to reduce any differences between loss estimates and actual loss experience, If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed. Any subsequent reversal of an impairment loss is recognized in the statement of comprehensive income, to the extent that the carrying value of the asset does not exceed what its amortized cost would have been had the impairment not been recognized at the date the impairment is reversed. Inventories Inventories include food, beverage and supplies. Inventories are carried at lower of cost or net realizable value (NRV). The Golf Club's current practice of reporting its ending inventory is based on the moving average method for storeroom items, while weighted average method for direct issuance to outlets. NRV for food and beverage is the estimated selling price in the ordinary course of business, less estimated costs of marketing and distribution. NRV for supplies is the current replacement cost, In determining the NRV, the Golf Club considers any adjustments necessary for obsolescence, Prepaid Expenses Prepaid expenses, which are presented under “Other current assets” are cartied at cost, less amortized portion, These include prepayments of insurance for the Golf Club’s properties, health insurance of directors and officers, advance payments for the monthly golf course maintenance and other prepayments. Advances to Contractors Advances to contractors, which are presented under “Other current assets” are carried at cost, These represent advance payment for construction of an item of property and equipment which will be recouped upon every progress billing payments depending on the percentage of accomplishment.Te Property an ent Property and equipment, except for land, are measured at cost, including transaction costs, less accumulated depreciation and any accumulated impairment in value. Such cost includes the cost of replacing part of the property and equipment when that cost is incurred, ifthe recognition criteria are met, Land is measured at cost, including transaction costs less any accumulated impairment in value, The intial cost of property and equipment consists of its purchase price, including import duties, taxes and any directly attributable costs in bringing the asset to its working condition and location for its intended use. "Expenditures ineurred after the item has been put into operations, such as repairs, maintenance and overhaul costs, are normally recognized as expense in the period such coste are incurred, In situations where it can be clearly demonstrated that the expenditures have improved the condition of the asset beyond the originally assessed standard of performance, the expenditures are capitalized as additional cost of property and equipment. Depreciation of property equipment commences once the property and equipment are available for use computed using the straight-line method over the following estimated useful lives of the assets Years Buildings and improvements 20 Facilities and equipment 210 10 Office furniture, fixtures and equipment 5 ‘Transportation equipment 5 ‘The residual values, useful lives and method of depreciation of the assets are reviewed and adjusted, if appropriate, at each financial year-end. Fully depreciated assets are retained in the accounts until they are no longer in use and no further depreciation is credited or charged to current operation, When each major inspection is performed, the cost is recognized in the carrying amount of property and equipment as a replacement, ifthe recognition criteria are met, Construction in progress represents structures under construction and is stated at cost less any impairment in value. This includes the cost of construction and other direct costs. Cost also includes interest on borrowed funds incurred during the construction period. Construction in progress is not depreciated until such time that the relevant assets are completed and are ready for use. Construction in progress consists of construction costs related to the development of the Midlands West and South Golf Course. Property and equipment js derecognized when either it has been disposed of or when itis permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of property and equipment are recognized in the statement of comprehensive income in the year of retirement or disposal. Computer Software Computer software is capitalized on the basis of the cost incurred to acquire and install the specific software. Computer software is included in the “Other noncurrent assets” in the statement of financial Position. Costs associated with maintaining computer software are expensed as incurred. Capitalized costs are amortized on a straight-line basis over its estimated useful life-12- ‘The estimated useful life of software are reviewed, and adjusted if appropriate, at each financial reporting date to ensure that these are consistent with the expected pattern of economic benefits from items of software. Impairment of Non-financial Assets The Golf Club assesses at each reporting date whether there is any indication that a non-financial asset (ie. property and equipment and computer software) may be impaired. Ifan indication exists, or when ‘an annual impairment testing for an asset is required, the Golf Club estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's (CGU) fair value less costs to sell and its value in use (VIU). Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, When the carrying amount of an asset or CGU exceeds its recoverable ‘amount, the asset or CGU is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, If no such transactions can be identified, an appropriate valuation model is used. Impairment losses are recognized in the statement of comprehensive income. ‘An assessment is made at cach reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss is reversed, only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognized. If such case, the carrying amount of the asset is increased to its recoverable amount. The increased amount cannot exceed the carrying amount that would have been determined, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of comprehensive income. After such a reversal, the depreciation charges are adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, ‘on a systematic basis over its remaining useful life. Members’ Equity Proprietary certificates are measured at par value for all shares issued. Incremental costs directly attributabie to the issuance of new shares are recognized as a deduction from proceeds, net of any tax effects. Proceeds and/or fair value of consideration received in excess of par value are recognized as additional paid-in capital (APIC) Deficit represents cumulative excess of expenses over revenues. Other comprehensive income (OCD ‘OCT comprises items of income and expenses that are not recognized on profit or loss as required or permitted by other PFRS. The Golf Club's OCI actuarial gains or losses from pension benefits are recognized in full in the period in which they occur. Revenue Recognition Revenue and income are recognized to the extent that it is probable that the economic benefits associated with the transaction will flow to the Golf Club and the amount of the revenue can be reliably measured. Revenue and income are measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding VAT. ‘The Golf Club assesses its revenue arrangements against specific criteria in order to determine if itis acting as principal or agent. It is acting as a principal when it has the primary responsibility foraia. providing the goods or services. The Golf Club also acts as a principal when it has the diseretion in establishing the prices and bears inventory and credit risk, Except for “Commission” income, the Golf ‘Club has concluded that it is acting as a principal in all of its revenue arrangements. The following specific recognition criteria must also be met before revenue is recognized: Membership Dues Membership dues are recognized in the applicable membership period. Advance collection of membership dues are recognized in the “Membership dues collected in advance” presented under “Accounts payable and other current liabilities” account in the statement of financial position. Food, Beverage and Sundries Revenue is recognized upon delivery and billing to customers. Green Fees, Golf Cart, Locker Rental and Others Revenues from the use of the Golf Club’s golf course and other amenities and availment of the Golf (Club's services are recognized when services are rendered and amenities are used. Membership Transfer and Assignment Fees Revenue is recognized upon transfer and assignment of member shares. Commission Income Revenue is recognized when the related services are rendered. Commission is computed as a certain percentage of the rental income of units owned by related parties. Interest Income Interest income from bank deposits is recognized as interest accrues using the effective interest method. Other Income Revenue is recognized when there is an incremental economic benefit, other than the usual business operations, that will flow to the Golf Club and the amount of the revenue can be measured reliably. Costs and Expenses Costs and expenses are decreases in economic benefits during the accounting period in the form of ‘outflows or decrease of assets or incurrence of liabilities that result in decrease in members’ equity, other than those relating to distributions to equity participants. Costs and expenses are recognized in the statement of comprehensive income on the basis of systematic and rational allocation procedures when economic benefits are expected to arise over several accounting periods and the association with income can only be broadly or indirectly determined; or immediately when expenditure produces no future economic benefits or when, and to the extent that, future economic benefits do not qualify, cease to qualify, for recognition in the statement of financial position as an asset, Leases ‘The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at inception date and requires an assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset. ‘A reassessment is made after inception of the lease if one of the following applies: ‘a. there is a change in contractual terms, other than a renewal or extension of the agreement, b. a renewal option is exercised or extension granted, unless the term of the renewal or extension was tilly included in the lease term;-14- c. there is a change in the determination of whether the fulfillment is dependent on a specified asset; or d._ there is substantial change to the asset. Where a reassessment is made, lease accounting shall commence or cease from the date when the ‘change in circumstances gave rise to the reassessment for scenarios (a), (c) or (d) and the date of renewal or extension period for scenario (b). ‘The Golf Club determines whether arrangements contain a lease to which lease accounting must be applied. The costs of the agreements that do not take the legal form of @ lease but convey the right to use an asset are separated into lease payments if the entity has the control of the use or access to the asset, or takes essentially all of the outputs of the asset, The said lease component for these arrangements is then accounted for as finance or operating lease. Finance leases, which transfer to the Golf Club substantially all the risks and benefits incidental to ownership of the leased item are capitalized at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases, Operating lease income and expense is recognized in the statement of comprehensive income on a straight-line basis over the lease arrangements. Pension Benefits The Golf Club has an unfunded and noncontributory defined benefits pension plan covering, substantially all of its regular and permanent employees. The obligation and costs of pension benefits of the Golf Club are actuarially computed by professionally qualified independent actuary using, projected unit credit method. The pension liability isthe present value of the defined benefit obligation at the end of the reporting period. Pension costs comprise the following: # Service costs ‘+ Interest cost on defined benefit lability or asset © Remeasurements of defined benefit liability or asset Service costs which include current service costs, past service costs and gains or losses on non-routine settlements are recognized as expense in the statement of comprehensive income. Past service costs are recognized when plan amendment or curtailment occurs. These amounts are calculated periodically by independent qualified actuaries. Interest on the defined benefit lability or asset is the change during the period in the net defined benefit liability or asset that arises from the passage of time which is determined by applying the discount rate based on government bonds to the net defined benefit liability or asset. Interest on the defined benefit liability or asset is recognized as expense or income in the statement of comprehensive income. Remeasurement comprising of actuarial gains and losses are recognized immediately in OCI in the period in which they arise, Remeasurements are not reclassified to profit or loss in subsequent periods, ‘Actuarial valuations are made with sufficient regularity that the amounts recognized in the financial ‘statements do not differ materially from the amounts that would be at the reporting date.=15= Income Taxes Current Tax Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. ‘The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the end of the reporting period where the Golf Club operates and generates taxable income. Current tax relating to items recognized directly in equity is recognized statement of comprehensive ineome. equity and not in the Deferred Tax Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognized for all taxable temporary differences, except: where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and «in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and itis probable that the temporary differences will not reverse in the foreseeable future, Deferred tax assets are recognized for all deductible temporary differences and carryforward benefits of unused tax credits from excess minimum corporate income tax (MCIT) over regular corporate income tax (RCIT), and unused net operating loss carryover (NOLCO), to the extent that itis probable that sufficient future taxable profits will be available against which the deductible temporary differences, and the carryforward benefits of MCIT and NOLCO ean be utilized, except: 1s where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or lability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and © in respect of deductible temporary differences associated with investments in subsidiaries, ‘associates and interests in joint ventures, deferred tax assets are recognized only to the extent that itis probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized. ‘The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient future taxable profit will be available to allow all or part of the deferred tax assets to be utilized, Unrecognized deferred tax assets are reassessed at the end of each reporting period and are recognized to the extent that it has become probable that sufficient future taxable profit will allow the deferred tax assets to be recovered. Deferred tax assets and liabilities are measured at tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted as at the end of the reporting period. Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other ‘comprehensive income or directly in equity.a1é- Deferred tax assets and liabilities are offset, if a legally enforceable right exists to offset current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. VAT Revenues, expenses and assets are recognized net of the amount of VAT, if applicable. When VAT from sales of goods and/or services (output VAT) exceeds VAT passed on from purchases of goods or services (input VAT), the excess is recognized as payable in the statement of financial position, When VAT passed on from purchases of goods or services (input VAT) exceeds VAT from sales of goods and/or services (output VAT), the excess is recognized as an asset in the statement of financial position to the extent of the recoverable amount. Net Income (Loss) Per Share Net income (loss) per share is computed by dividing the net income or loss by the weighted average number of shares issued and outstanding during the year. Provisions Provisions are recognized when the Golf Club has a present obligation (legal or constructive) asa result of a past event, if itis probable that an outflow of resources embodying economic benefits will be required to settle the obligation and when a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision duc to the passage of time is recognized as interest expense. Where the Golf Club expects a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the receipt of the reimbursement is virtually certain, Contingencies Contingent liabilities are not recognized in the financial statements, They are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are ‘not recognized in the financial statements but are disclosed when an inflow of economic benefits is probable. Events after the Reporting Per Post year-end events that provide additional information about the Golf Club’s financial position at the reporting date (adjusting events) are reflected in the financial statements. Post year-end events that are not adjusting events are disclosed in the notes to financial statements when material Significant Accounting Judgments and Estimates The preparation of the Golf Club's financial statements in accordance with PFRS requires management to make judgments and estimates that affect the amounts reported in the financial statements and related notes. Judgments and estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may ultimately differ from these estimates. Judgments In the process of applying the Golf Club’s accounting policies, management has made judaments on lease commitments, apart from those involving estimations, which have the most significant effect on the amounts recognized in the financial statements.<7 Distinction between Operating and Finance Leases ‘The Golf Club has entered into lease agreements as a lessor and lessee. Critical judgment was exercised by management to distinguish the lease agreements as either an operating or a finance lease by looking at the transfer or retention of significant risk and rewards of ownership of the properties covered by the agreements. Failure to make the right judgment will result in either overstatement or understatement of assets and liabilities. Management has determined that the Golf Club’s current lease agreements are operating leases. Classification of Leases * Evaluation of Operating Lease ~ Golf Club as Lessee. The Golf Club has entered into various lease contracts covering the land, buildings and equipment for its facilities and employce’s housing, ‘The Golf Club has determined that it has not acquired the significant risks and rewards of ownership of the leased properties because of the following factors: a) the Golf Club will not acquire ownership of the leased properties upon termination of the leases; and b) the Golf Club was not given an option to purchase the leased properties at a price that is sufficiently lower than the fair value at the date of the option, Thus, the leases are accounted as operating leases Rent expense amounted to 904,767, P916,920 and P1,143,055 in 2017, 2016 and 2015, respectively (see Notes 13 and 14), + Evaluation of Operating Lease ~ Golf Club as Lessor. The Golf Club has entered into lease on its land, equipment and room for cellular satellite. The Golf Club has determined that it retains all the significant risks and rewards of ownership of the leased properties because of the following factors: 4) the lessees will not acquire ownership of the leased properties upon termination of the leases: and b) the Golf Club has not given an option to the lessees to purchase the assets at a price that is sufficiently lower than the fair value at the date of the option. Thus, the leases are accounted as operating leases, Rent income amounted to amounted to #204,840, P682,801 and nil in 2017, 2016 and 2015, respectively (see Note 16). Estimates The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that have a significant risk of causing a material adjustment to the carrying, amounts of assets and liabilities within the next financial year follow: Determination of Impairment of Receivables ‘The Golf Club reviews its receivables at each financial reporting date to assess whether a provision for impairment should be recorded in the statement of comprehensive income. Allowance for impairment of receivables is maintained at a level considered adequate to provide for potentially uncollectible receivables. The level of the allowance is evaluated by the management on the basis of factors that affect that collectability of the accounts. These factors include, but not limited to, the age and status of receivables, the length of relationship with the members and related parties, the member's payment behavior and known market factors. ‘The Golf Club reviews the allowance on a continuous basis. Accounts that are specifically identified to be potentially uncollectible are provided with adequate allowance through charges to income in the form of provision for impairment of receivables, Accounts are written off when management believes that the receivables cannot be collected or realized after exhausting all efforts and courses of action. The amount and timing of recorded provision for impairment of receivables for any period would differ if the Golf Club made different judgments or utilized different estimates. An inctease in the Golf Club’s allowance for impairment of receivables would increase the recorded general and administrative expenses and decrease its current assets.e18= Provision for impairment of receivables amounted to 52,493, nil and ®631,032 in 2017, 2016 and 2015, respectively (see Note 14). Income from reversal of allowance for impairment of receivables amounted to nil, P424,412 and nil in 2017, 2016 and 2015, respectively (see Note 16). The carrying values of receivables, net of allowance for impairment, amounted to P149,673,459 and P197,259,136 ‘as at December 31, 2017 and 2016, respectively (see Note 6). Determination of NRV of Inventories The Golf Club writes down the carrying value of inventories whenever NRV of inventories becomes lower than cost due to damage, physical deterioration, obsolescence, changes in prices level or other causes, The carrying value of inventories is reviewed at each financial reporting date for any decline in value, Inventory items identified to be obsolete and unusable are also written off and charged as expense in the statement of comprehensive income. There was no allowance for inventory write-down in 2017, 2016 and 2015. The carrying values of inventories amounted to P1,188,818 and P813,634 as at December 31, 2017 and 2016, respectively (See Note 7). Estimation of Useful Lives of Property and Equipment ‘The useful life of each Golf Club's property and equipment is estimated based on the period over which the property and equipment are expected to be available for use. Such estimations are based on the collective assessment of industry practice, intemal technical evaluation and experience with similar assets. The estimated useful lives of property and equipment are reviewed periodically and updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the property and equipment. It is possible, however, that future financial performance could be materially affected by changes in the amounts and timing of recorded expenses brought about by changes in the factors mentioned above. A reduction in the estimated useful life of any property and equipment would increase the recorded depreciation expense and decrease the carrying value of property and equipment. ‘There was no change in the estimated useful lives of property and equipment in 2017, 2016 and 2015. Determination of Impairment of Property and Equipment and Computer Software The Golf Club assesses whether there are any indicators of impairment for all property and equipment and computer software at each financial reporting date. Property and equipment and computer software are reviewed for impairment when there is an indicator that the carrying amounts may not be recoverable. Determining the VIU of the non-financial assets, which requires the determination of future cash flows expected to be generated from the continued use and ultimate disposition of such assets, requires the Golf Club to make estimates and assumptions that can materially affect the financial statements, Future events could cause the Golf Club to conclude that such non-financial assets are impaired. While itis believed that the assumptions used in the estimation of fair values reflected in the financial statements are appropriate and reasonable, significant changes in these assumptions may materially affect the assessment of recoverable values and any resulting impairment loss could have a material adverse impact on the financial performance. ‘There was no impairment loss recognized in 2017, 2016 and 2015. ‘The carrying values of property and equipment subjected to impairment review amounted to B1,141,841,306 and P1,151,596,407 as at December 31, 2017 and 2016, respectively (see Note 9). The carrying values of computer software subjected to impairment review amounted to P1,201,812 and B517,454 as at December 31, 2017 and 2016, respectively,“19+ Determination and Computation of Pension Costs The present value of the pension liability depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost for pension include the discount rates and rate of future salary increase. In accordance with PERS, actual results that differ from the Golf Club's assumptions are accumulated and amortized over future periods and therefore, generally affect the recognized expense and recorded liability in such future periods, The Golf Club determines the appropriate discount rate at the end of each year, This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension liability. In determining the appropriate discount rate, the Golf Club considers the interest rates on government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability. (Other key assumptions for pension liability are based in part on current market conditions, While it is believed that the Golf Club's assumptions are reasonable and appropriate, significant differences in actual experience or significant changes in assumptions may materially affect the Golf ‘Club’s pension liability Pension liability amounted to P14,740,912 and P11,537,271 as at December 31, 2017 and 2016, respectively (see Note 18). Recognition of Deferred Tax Assets The carrying amount of deferred tax assets is reviewed at each reporting period, Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable Profit will be available against which the deductible temporary differences can be utilized The forecasted availability of taxable profit is based on past and future expectations on revenue and expenses. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The Golf Club recognized deferred tax assets to the extent of deferred tax liabilities amounting to #1,972,337 and P1,972,921 as at December 31, 2017 and 2016, respectively. Deferred tax assets amounting P1 1,898,581 and P14,387,614 as at December 31, 2017 and 2016, respectively, were not recognized in the financial statements because the management believes that future taxable profit will not be available against which the deferred income tax assets can be utilized (see Note 19). Cash and Cash Equivalents 2017 2016 Cash on hand and in banks 55,887,319 P54,031,844 Short-term deposits 112,777,521 121,806,139 168,664,840 __P175,837,983 Interest income on cash in banks and short-term deposits amounted to P2,173,204, P1,985,564 and 1,435,762 in 2017, 2016 and 2015, respectively. Interest receivable, presented as interest receivable in the “Other current assets” account in the statements of financial position, amounted to 264,044 and nil as at Devember 31, 2017 and 2016, respectively (see Note 8).-20- 6. Receivables 2017 2016 Related parties (Note 17) 799,934,707 P145,165,567 ‘Members 47,612,853 50,139,253 Others: 2,811,931 2,587,855 150,359,491 197,892,675 Less allowance for impairment 686,032, 633,539 P149,673,459__P197,259.136 Receivable from related parties consists of charges for the affiliates’ use of the Golf Club's facil ‘This also consists of reimbursement of operating expenses from related parties. These receivables are noninterest-bearing and are due and demandable. Members’ account pertains to uncollected charges for membership dues, guest fees, sale of food and beverage and services rendered and is normally on a 30 to 60 days’ term. Unsettled members’ account for 60 days are considered past due. The Golf Club has the option to put members’ proprietary shares into auction in case of nonpayment of members’ accounts Other receivables mainly pertain to advances to employees and third parties, which are noninterest bearing and generally have 30 to 90 days’ term. Movements in the allowance for impairment of receivables are as follows: 2017 ‘Members: Others Total Balance at beginning of year 633,539 Pe PO33,539 Provision of allowance for impairment (Note 14) 52,493 = 52.493, Balance at end of year 686,032 e 686,032 2016 Members Others Total PI,057,951 P_PL0S7.951 Reversal of allowance for pairment (Note 16) (424,412) - (424,412) Balance at end of year 633,539 E 633,539 2015 ‘Members ‘Others Tora Balance at beginning of year ¥1,672,630 P83,099__-BI,755,729 Provision for impairment (Note 14) 631,032 = 631,032 Write-off 4,245,711) (83,099) (1,328,810) Balance at end of year PI,057,951 PF. P1,057,951 7. Inventories 2017 2016 At cost: Food and beverage 848,170 699,302 Supplies 340,648, 114,332 PI,188,818. PS13,634pais Supplies pertain to fuel, oil and lubricants and other various supplies which are expected to be utilized in a year. ‘The cost of inventories charged to “Cost of sales and services” account in the statements of comprehensive income amounted to P13,745,034, P13,116,103 and P12,942,874 in 2017, 2016 and 2015, respectively (see Note 13), ‘The cost of inventories charged to “General and administrative expenses” account in the statements of comprehensive income amounted to P487,598, P585,879 and P436,209 in 2017, 2016 and 2015, respectively (see Note 14). 8. Other Current Assets 2017 2016 Deferred input VAT P22,230,278 9,593,029 Creditable withholding tax 5,241,932 3,561,529 Advances to contractors and suppliers 3,317,653 78,407 Prepaid expenses 649,273 898,383 Interest receivable (Note 5) 264,044 P31712180___P14,131,348 Deferred input VAT represents the set-up of input VAT from the Golf Club’s unpaid purchases, and will be reclassified to current input VAT upon payment. CWT withheld from income payments made to Golf Club is deductible against the ineome tax due of the Golf Club for the future taxable quarters. Advances to contractors and suppliers pertain to advance payments made to contractors and suppliers for various projects and services, which are noninterest-bearing and are expected to be applied against billings within a year. Prepaid expenses pertain to unamortized portion of insurance for the Golf Club’s properties, health insurance of directors and officers, advance payments for the monthly golf course maintenance and other prepayments. These are expected to be utilized and consumed within one year. 9. Property and Equipment ‘The rollforward analysis of this account follows: ote Fut, Buildings and Foes and Fixes tnd Taspeaton Cansrtion| Land _inproweens “Equpmen “Equpen ""egupment inPrgres Tata, Povnasgons 34291403 PLIATAAIO ROTTED PIS.e4 S67 PRJeRsIETE oes ‘nanny “eaeaaee "isaseate al as Baponls 5 2 s (2326) Recasication 2 ages = cusss20 __gt7489) A Deven, 172018 Tae GRETA TORT —axOnsTe BIR ID4ISH ‘abt eass7s1¢37qalT ans Doon ‘i Decombey STOT sae Fans Fe i 20 (Forme)-2- fe Duldgs and Fale and Pres snd Transporation Consrcion Ling Tnrenens “Egupmer —Equpmet_"Equpment__inProgess _Totah ‘cumalate Depredation ‘i Deremberat 2018 pacagsyst — wrgdor #3106761 e Beprion Ot 13 and 18) fon niiedone “tags “168277 Dison S = 3360 = = as ‘A Deven 373518 ais waaisan Bane —easn8s Depron Oates 13 and 14) 2 Auras “aka ass = "suisnse Daas = = (97435 = = asta ‘ideconiay SET SPER pach 158 FIVE) — PTR FFs 785 ‘Ne ook alee 2 December 12017 pounassose ppnassie7 angIOgCD — PRBEDE PIDSSORGS PARSSRSST PLLA. 841206 i Becember 12018 yentitine eteceny "insanaye "Busines 0373 _ soe 151. 90407 Certain transportation equipment of the Golf Club are mortgaged as a security for the Golf Club's loans payable (see Note 11). Gain on sale of property and equipment amounting to 27,426, nil and P182,698 in 2017, 2016 and 2013, respectively, were recognized as part of “Other income” account in the statements of comprehensive income (see Note 16). ‘The cost of fully depreciated property and equipment which are still being used amounted to 'P467,787,184 and P4S0,558,373 as at December 31, 2017 and 2016, respectively. “Accounts Payable and Other Current Liabilities 2017 2016 Trade payables 76,846,195 P10,521,629 Membership dues collected in advance 27,198,812 25,353,453 Related parties (Note 17) 17,696,980 42,751,833 Refundable deposit 8,397,800 6,908,959 ‘Accrued expenses: Outside services 6,950,940 3,313,124 Employee benefits 268,984 272,454 Utilities payable 175871 344,011 Real property taxes = 32,049,108 Agency payroll - 663,036 Others 468,164 548,318 Statutory payables 3,691,234 3,783,051 ‘Auctioned membership liability 3,076,017 3,924,369 Retention payable - 271,109 Others (Note 11) 6,561,921 12,057,390 81,332,918 __P142,761,844 ‘Trade payables are noninterest-bearing and are normally on a 30 to 60 days’ term. Membership dues collected in advance pertains to the payments received in advance from the Golf Club's members. This is expected to be realized as revenue within the next financial year. Payable to related partes arises from the use of the Golf Club’s members of the facilites ofthe related parties. This also consists of reimbursement of operating expenses to related partis. These payables are due and demandable.-23- Refundable deposits pertain to cash receipts from members upon assignment of shares. The amount paid is refundable upon completion of terms and conditions. Accrued expenses are noninterest-bearing with terms of 30 to 180 days. Statutory payables mostly pertain to deferred output VAT, net output VAT, withholding taxes and other government taxes. These are normally settled within 30 days. ‘Auctioned membership liability refers to the unclaimed net proceeds or the excess of the bid price over the amount of receivables from delinquent members sold at auction, These are normally claimed within 30 to 180 days. Retention payable pertains to amount withheld to contractors of the Golf Club until the completion of specified conditions based on the agreement. Others include payables to nontrade suppliers. These payables are noninterest-bearing and are normally settled within a year. TT, Loans Payable 2017 2016 Peso eurrency-denominated foan payable in 36 monthly installments or until November 10, 2018 starting November 10, 2015 at 8.93% annual interest, collateralized by a chattel mortgage on transportation equipment 324,795 650,089 eso currency-denominated loan payable in 36 monthly installments or until November 10, 2018 starting November 10, 2015 at 8.93% annual interest, collateralized by a chattel mortgage on transportation equipment 343,524 687,574 Peso currency-denominated loan payable in ‘36 monthly installments or until November 10, 2018 starting November 10, 2015 at 8.93% annual interest, collateralized by a chattel mortgage on transportation equipment 329,076 658,657 Peso currency-denominated loan payable in 36 monthly installments or until May 10, 2019 starting June 10, 2016 at 8.36% annual interest, collateralized by a chattel mortgage on ‘ransportation equipment 424,844 695,916 eso currency-denominated loan payable in 36 monthly installments or until May 10, 2019 Starting June 10, 2016 at 8.36% annual interest, collateralized by a chattel mortgage on ‘transportation equipment 424,844 695,916 eso currency-denominated loan payable in 36 monthly installments or until May 10, 2019 Starting June 10, 2016 at 8.36% annual interest, collateralized by a chattel mortgage on ‘transportation equipment 454,598 744,645 (Forward)24 Peso curreney-denominated loan payable in 36 monthly installments or until May 10, 2019 starting June 10, 2016 at 8.36% annual interest, collateralized by a chattel mortgage on transportation equipment Peso currency-denominated loan payable in "36 monthly installments or until July 10, 2019 starting August 10, 2016 at 8.36% annual interest, collateralized by a chattel mortgage on ‘transportation equipment Peso currency-denominated loan payable in 36 monthly installments or until March 5, 2020 starting March 31, 2017 at 8.36% annual interest, collateralized by a chattel mortgage on transportation equipment eso currency-denominated loan payable in '36 monthly installments or until March 5, 2020 starting March 31, 2017 at 8.36% annual interest, collateralized by @ chattel mortgage on transportation equipment Peso currency-clenominated loan payable in ‘36 monthly installments or until June 30, 2020 starting August 2, 2017 at 8.36% annual interest, collateralized by a chattel mortgage on transportation equipment Peso currency-denominated loan payable in 36 monthly installments or until June 30, 2020 starting August 2, 2017 at 8.36% annual interest, collateralized by a chattel mortgage on transportation equipment Peso currency-denominated loan payable in 36 monthly installments or until June 30, 2020 starting August 2, 2017 at 8.36% annual interest, collateralized by a chattel mortgage on 2017 454,598, 446348 655,519 655,519 973,417 973,417 973,417 2016 744,645 699,373 transportation equipment 433,916 3576815 Total Less current portion 4,140,197, 3,293,719 2,374,185 73,202,630 Certain transportation equipment are held as security for the three-year loans (see Note 9) ‘The Golf Club paid loans amounting to P3,309,599 and P1,582,380 in 2 Interest expense on loans payable amounted to B577,146, P40S,074 and P43,780 in 2017, 2016 and 2015, respectively. As at December 31, 2017 and 2016, interest payable included in “Others” in "Accouns ilities” account amounted to P24,207 and B27,154, respectively (see Note 10). payable and other current it 1017 and 2016, respectively.256 12, Members’ Equity Track Record of Registration of Seourities The following summarizes the information on the Golf Club's registration of securities under the Securities Regulation Code: Authorized Number of Date of SEC Approval Shares __ Shares Issued IssuelOffer Price Tuly 23,1997 6,000 4,738 P1,500,000 10 3,000,000 “The authorized capital stock ofthe Golf Club amounted to P600,000,000 divided into 6,000 shares with par value of B100,000 per share. The details of the Golf Club's proprietary certificates and APIC as at December 31, 2017 and 2016 are as follow: ‘Authorized and subscribed 600,000,000 Receivable (126,200,000) Proprietary certificates 473,800,000 Excess of pre-agreed amount of development cost over total par value of shares 2,044,000,000 Receivable, (439,193,451) Proprietary certificates P1,604,806,549 “The Golf Club is an exelusive club and is organized on a nonprofit bass forthe sole benefit ofits members, “The ownership of all shares of stock of the Golf Club is subject to the following restrictive conditions: a. No issuance or transfer of shares of stock of the Golf Club which would reduce the stock ownership of Philippine citizens or nationals to less than the minimam percentage of the outstanding capital Stock required by any applicable provisions of the Constitution, law, or regulation to be owned by Philippine citizens or nationals, shall be made or effected by, or shall be recorded in the books of the Golf Club. b. No holder, of any class of shares of the Golf Club shall have, as such holder any preemptive right to acquire, purchase, or subscribe for any share of the capital stock of any class of the Golf Club Whieh it may issue or sell, whether out of the number of shares authorized by the Articles of Incorporation as originally filed, or by any amendment thereof, or out of shares ofthe capital stock of any class ofthe Golf Club acquired by it after the issue thereof; nor shall any holder of any class of shares of the Golf Club have, as such shareholder, have any preemptive right to acquire, purchase, or subscribe for any obligation which the Golf Club may issue or sell that shall be convertible into or exchangeable for any shares of the capital stock of any class of the Golf Club orto which shall be attached or appertain any warrant or any instrument that shall confer upon the cwner of such obligation, warrant, or instrument the right to subscribe for, or to acquire or purchase from the Golf Club, any share of its capital stock of any class. ¢. No profit shall inure to the exclusive benefit of any of its shareholders, hence, no dividends shall be destared in their favor. Shareholders shall be entitled only to a pro-rata share of the asset of the Golf Club at the time of the dissolution or liquidation of the Golf Club.=26- d. The members of the Golf Club shall be subject to the payment of monthly dues amounting to 4,600 and other dues and assessments and subject to such rules and conditions as may be prescribed in the By-Laws or by the BOD to meet the expenses for the general operations of the Golf Club, and the maintenance and improvement of its premises and facilities, in addition to such fees as may be charged for the actual use of the facilities. In the case of a shareholder who is a corporate shareholder, the designated representative shall be initially billed for such dues. In case ‘of nonpayment by the representative, the corporate shareholder shall be ultimately liable for the payment of such dues. Such dues together with all other obligations of the shareholders to the Golf Club, shall constitute a first lien on the shares, second only to any lien in favor of the national or local government, and in the event of delinquency such shares may be ordered sold by the BOD in the manner provided in the By-Laws to satisfy said dues or other obligations of the shareholders. ¢. Any shareholder selling o disposing of his/ts share(s) in the Golf Club shall pay a transfor fee in such amount as may be determined by the BOD from time to time. Said transfer fee shall be le ‘and collected at the time of transfer in the Golf Club’s Stock and Transfer Book. Any transfer of shares, except transfer by hereditary succession, made in violations of these conditions shall be null and void and shall not be recorded in the books of the Golf Club. f Aholder ofa share of stock of the Golf Club is not an ipso facto member of the Golf Club, and he must file an application for Golf Club membership, which shall be subject to the approval of the BOD. If an application for membership of a sharcholder is disapproved by the BOD, the shareholder shall dispose of his share within a period of 60 days from notice of such disapproval. In the event of his failure to affect such transfer, his share shall be offered for sale at auction in the ‘manner prescribed in the By-Laws or by the BOD. ‘a. Incase any shareholder or member shall violate the provisions of the Articles of Incorporation or the By-Laws or the rules and regulations of the Golf Club, or the resolutions duly promulgated by the BOD or the shareholders, or commit any other act or conduct which the BOD may deem injurious to the interest or hostile to the objects of the Golf Club, such shareholder or member may bbe expelled by the BOD in the manner provided in the By-Laws upon proper notice and hearing. A shareholder/member who is so expelled shall then cease to be a shareholder/member and shall have no right with respect to his share except the right to demand payment therefore in accordance with these By-Laws. The Golf Club shall have a period of 30 days from the expulsion of the shareholder to make payment of his share/s, and upon such payment the shareholder shall forthwith transfer and assign the share/s held by him as directed by the Golf Club. h, All certificates of stock of the Golf Club shall contain an appropriate reference to the foregoing limitations and restrictions, and stock may be issued or transferred in the books of the Golf Club only in accordance with the terms and provisions of such limitations and restrictions. Development Agreement The Golf Club entered into a Development Agreement (DA) with Belle for the construction and development of a36-hole golf course on April 17, 1997. The said DA was amended on December 15, 1999. ‘The terms of the amended DA call for as many subscriptions as there are shares, such that the shares to be issued to Belle as the development progresses will be in proportion to pre-agreed amount of development cost, inclusive of the initial capital contribution. “The excess of such development cost over the total par value of the Golf Club’s shares of stock shall constitute APIC of the Golf Club. In 2013, 18 holes have been constructed. In 2015, additional 9 holes ‘were built, pending formal delivery or transfer to the Golf Club as at December 31, 2017.-27- 13. Cost of Sales and Services Cost of Sales (Note 7) 2017 2016 2015 Food cost P4392,615 ___P4329,202__‘ 4,591,979 Beverage cost 1,592,798 1,450,660 1,490,403 Sundry inventory cost 653,010 728,392 691,629, P6,638,423 6,508,254 6,774,011 Cost of Services 2017 2016 2015 Depreciation (Note 9) *P50,004,685 46,311,241 43,620,756 Personnel costs (Note 15) 44,834,058 31,461,449 30,006,332 Repairs and maintenance (Notes 17 and 23) 28,396,320 24,635,446 28,914,362 Communication, light and water (Note 17) 17,028,664 19,070,472, 23,829,808 Outside services 9,073,596 16,604,632 18,963,509 Taxes and licenses 6,539,513 6,669,313 5,881,785 Club tournament 5,519,454 5,949,222 4,911,615 Supplies (Note 7) 5,074,542 4,744,824 3,939,830 Fuel and oil (Note 7) 2,032,069 1,863,025 2,229,033 Laundry 1,911,264 1,823,897 1,733,543, ‘Transportation and travel 1,197,467 973,220 910,988 Bank charges 1,065,401 510,191 333,805 Insurance 722,469 535,429 265,461 Rent 704,809 708,326 777,869 Entertainment, amusement and reoreation (EAR) 693,172, 466,312 463,931 Dues and subscriptions 313,987 72,048 95,497 ‘Waste disposal 303,520 329,270 412,179 Banquet - - 133,563, Others 7,511,777, 4,889,927 3,530,697 P182,926,767__P167,618,244 _ P170,954,563 14, General and Administrative Expenses 2017 2016 2015 Taxes and licenses 76,454,237 ___P6,579,251 5,187,589 Outside services 6,368,574 6,500,947 7,329,559 Personnel costs (Note 15) 6,358,371 5,533,070 3,327,567 Repairs and maintenance (Notes 17) 3,002,687 2,508,282 $,703,303 Depreciation (Note 9) 1,152,864 1,107,092 1,021,739 Bank charges 1,065,401 510,191 333,805 (Forward)28 2017 2016 2015 ‘Communication, light and water (Note 17) P758,679 126,442 ———1,639,661 Insurance 537,032 367,875 57,423 Waste disposal 303,519 329,270 406,230 ‘Transportation and travel 272,006 272,767 320,317 ‘Supplies (Note 7) 255,304 244,693 295,685 Fuel and oil (Note 7) 232,294 341,186 140,524 Rent 199,958 208,594 365,186 Laundry 61,111 13,942 16,790 Provision for impairment of receivables (Note 6) 52,493 - 631,032 EAR 37,887 63,610 22,830 Provision - 30,934,692 - Others 3,137,688, 2,532,752, 1,980,315 P30,250,075___P58,174,356___P29,379,555, 15. Personnel Costs 2017 2016 2015 Salaries and wages 28,544,070 __P16,674,982 15,299,022 Employee benefits and others 20,295,191 16,918,711 17,438,261 Pension costs (Note 18) 2,353,168 3,400,826 596,616 51,192,429 P36,994.519___P33,333,899) 16. Other Income 2017 2016 2015 Reversal of accruals 10,359,545 PO,876,539 __P5,770,600 Commission 6,311,388 6,766,172 7,365,347 Membership transfer fees 5,598,214 5,610,651 7,000,000 Assignment fees 3,897,321 3,721,239 2,821,398 Income from members” fund assessment 3,065,268 2,963,929 2,966,607 Members” penalties and charges 1,556,617 2,215,581 3,155,103 Ticket sales 487,251 423,080 420,265 Service charge revenue 384,012 307,181 1,212,679 Rental income (Note 23) 204,840 682,801 - Gain on sale of property and equipment (Note 9) 27,426 - 182,698 Income from reversal of allowance for impairment of receivables (Note 6) - 424,412 = Banguet electricity charge = = 124,734 Others 3,020,923, 2,096,711 1,640,879 P34,912,805__P35,088,296___P32.660,310 ‘Commission income includes share of the Golf Club to the income of its concessionaires and green fees,-29- Membership transfer fees include income derived from transfer of right by an individual member through selling of shares and transfer of right through change of designee by a corporate member: Assignment fees refer to income arising from assignment of members? right to any other party for the right to use the facilities of the Golf Club. Income from members” fund assessment pertains to the monthly fund assessment charged by the Golf Club to each member. Members’ penalties and charges pertain to collection from members for late payments of membership dues and other charges. Service charges pertain to a percentage of food and beverage sales charged against guests and non- members Others pertain to income derived from various events held by the Golf Club which include wedding ceremonies, seminars, golf tournaments, among others. 17. Related Party Disclosures Related parties are entities and individuals that have the ability to directly or indirectly through one or more intermediaries, contro! or are controlled by, or under common control with the Golf Club, including holding companies, subsidiaries and fellow subsidiaries. Associates and individuals owning, directly or indirectly, an interest in the voting power of the Golf Club that gives them significant influence over the entities, key management personnel, including directors and officers of the Golf Club ‘and close members of the family of these individuals and companies associated with these individuals also constitute related parties. In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form, The following table provides the summary of outstanding balances as at December 31, 2017 and 2016 for the transactions that have been entered into with related parties: Classification ‘Terms Conditions 2017 2016 ‘Shareholder Belle Payables Due and demandable, Unsecured (2.674937) (646,055) noninterest-bearing ‘Related party with common set of directors ‘Tagaytay Highlands International Golf ‘Club, Ine, (THIGCD) Receivables Due and demandable, Unsecured, no 99,340,568 145,003,402 noninterest-bearing impairment ‘The Country Club at Tagaytay Highlands, Ine, (TCCTHD) Payables, Due and demandable, Unsecured (41.520,154) (38,562,340) noninterest-bearing (Forward)-30- Classification ‘Terms Conditions 2017 2016. ‘The Spa and Lodge at Tagaytay Highlands, Ine. (TSLTHT) Payables Due and demandable, Unsecured (P1,816,900) (2,039,413) noninterest-bearing ‘Tagaytay Highlands Community ‘Condominium Assoc. Inc, (THCCAD Payables Due and demandable, Unsecured (040,987) (1,179,991) noninterest-bearing ‘Homeowners Association, Inc, (THPCCOAN) Payables Dueand demandable, Unsecured (744,032) (624,034) ‘noninterest-bearing Highlands Prime, Ine, (HPI) Receivables Due and demandable, Unsecured, no 441,683 = noninteres-bearing impairment ‘Tagaytay Midlands Condominium ‘Community Association, Ine. (T™MCCAn) Receivables Due and demandable, Unsecured, no 78,439 7914 noninteres-bearing impairment Woodridge Association/ Woodlands Point/ Woodlands Place Receivables Due and demandable, Unsecured, no 39,195 82482 noninterest-bearing impairment Horizon Association Receivables Due and demandable, Unsecured, no 32,283 71,809 noninteres-bearing impairment Greenland Community Homeowners ‘Association, Inc. (GCHAD Receivables Due and demandable, Unsecured, no 1,786 e noninteres-bearing impairment Side Receivables Due and demandable, Unsecured, no 823 - noninterest-bearing impairment ‘Receivables (Nave 6) P99,934,707 F145, 165,567 Payables (Note 10) 17,636,980) (42,751,833; The following table provides the summary of transactions entered with related parties for the years ended December 31, 2017, 2016 and 2015: December 31 (Classification a0T 2016 205 Shareholder Belle Payment o club 1429902 298,456 828,803 Reimbursement of expenses 451,733 2,163,288 1,967,537 Electricity expense 328,813 - - ‘Water/maintenance expense 185226 2,398,492 1,931,626 Staifhouse rental S46 2721 3.687 Salesirevenue 1,786 5.255 3907 Insurance = = 53,989 ues and subscriptions = - 2357 (Forward)pale December 31 (Clasification 207 2016, 205 ‘elated par with ‘common set of directors ‘THIGCI Sales P2S,171054 —P5,231,083P14,941,573 Reimbursement of expenses 1LA1707T1 12,088,312 14,484,450 Electrcitywater 4530083 5,226,180 5,409,996 Salaries and wages 1,066,276 472,586 3,344,828 Employee benefits "750,127 323081 210,325 Maintenance toolsKitchen fueGasoline 355,860 562,182 3,636,805 Repairs and maintenance 327,281 319,765 39,138 Food cost/Beverage cost 188282 226789 198,715, ‘Transferred pension liability = = 3,725,370 ‘TCCTAI Sales 43,654,462 14,953,397 14,088,085 Reimbursement of expenses 11,037,412, 2299.10 2,679.832 Food cost/Beverage cost $533,827 4842939 5.956.596 General supplies 438,743, ‘504,588 1,058,101 Employee benefits 432,277 552152 214,124 Repairs and maintenance 345871 6,550 42871 Salaries and wages - = 607.399 (Club events 3 = 91,262 TSLTHI Reimbursement of expenses 329,947 = - Room and Spa charges 319,090 571632 3,601,890 Employee Benefits (Shuttle) 196,168 200268 © 141,780 Food cosi/Beverage cost 36,602 $5612 224,485 ‘Massage fee s = 32923, BDO cash card S es 32.863 THCCAL Room revenue share of members 668,855 201,395 $5,333 House rental 319,188, 208750 140,406 Unit maintenance/Uuiliy charges 110,664 281,705 215,594, THPCCOAL Room revenue share of members 744,032 324,033 29251 HPL Reimbursement of expenses 441,643 44,626 109,170 Real property tx (payment) = - 87825 ‘TMCCAL Employee benefits = 19,205 = Electrcity/water = - 3,894 Woodridge Reimbursement of expenses 3247 82.402 41,365 “Association! ‘Woodlands Point! Woodlands Place Horizon Association Reimbursement of expenses 39,856 171,809 82,953, GCHAL Reimbursement of expenses 1,786 - - Hil Side Reimbursement of expenses 23 = E “Terms and Conditions of Transactions with Related Parties (Outstanding balances of related party receivables and payables at period-end are settled in cash. There have been no guarantees provided or received for any related party receivables or payables. The Golf Club did not make any provision for impairment on receivables from related parties, An assessment is ‘year through examination of the financial position of the related party and undertaken each finan the market in which the related party operates.32+ Belle The Golf Club has an agreement with Belle wherein Belle will provide water distribution and repairs and maintenance works on the Golf Club’s facilities. Other transactions with Belle consist of cost charges and Belle’s use of the Golf Club’s amenities and facilities and availment of services. ‘Transactions with THIGCI and TCCTHI Reciprocity Agreements, On October 6, 1999, the Golf Club entered into a Reciprocity Agreement with THIGCI and TCCTHI (both are also majority-owned by Belle), whereby members of the Golf Club, THIGCI and TCCTHI will be allowed to enjoy the use of each other's facilites, subject to rules and regulations. This agreement shall remain in effect until mutually terminated by the parties. Reimbursement of Operating Expenses. The three clubs also have transactions for reimbursement of operating expenses such as contract services, repairs and maintenance and utilities, among others. Transfer of Pension Liability. In 2015, THIGCI transferred pension liability to the Golf Club amounting to B5,725,370 pertaining to the employees of the Golf Club as at December 31, 2015 (see Note 18), TSLTHI Transactions with TSLTHI pertain to payments of food and beverage costs, room and spa, massage charges, and shuttle services of association’s employees, ‘The association collects from the Golf Club payments received from association’s customers using the Golf Club’s credit card terminal and association dues of the association members who are also Golf Club members. ‘HPI Transactions with HPI pertain to payments of certain expenses made by the Golf Club in behalf and subject to reimbursement by the former. Woodridge Association/ Woodlands Point/ Woodlands Place and Horizon Associati Transactions with Woodridge Association/Woodlands Point/Woodlands Place and Horizon Association pertain to payments received from shuttle services of association’s employees. ‘Transactions with Community and Condominium Homeowner's Associations Transactions with TMCCAl, THCCAI, THPCCOAI and GCHAT pertain to share in expenses such as electric and water consumption, shuttle services of association’s employees, engineering and cleaning, supplies used in their operations and room revenue share of members. (On the other hand, the association collects from the Golf Club payments received from association's customers using the Golf Club's credit card terminal and association dues of the association members who are also Golf Club members. Others Total compensation paid to key management personnel representing short-term employee benefits amounted to P6,974,171, P5,477,080 and P5,211,538 in 2017, 2016 and 2015, respectively.ihe 18, Pension Liability ‘The Golf Club has an unfunded and noncontributory defined benefit pension plan covering all regular and permanent employees. The benefits are based on employees” projected salaries and number of years of service. The Golf Club’s latest actuarial valuation report is as at December 31, 2017. Under the existing regulatory framework, Republic Act 7641 requires a provision for retirement pay to qualified private sector employees in the absence of any retirement plan in the entity, provided however that the employee’s retirement benefits under any collective bargaining and other agreements shall not be less than those provided under the law. The law does not require minimum funding of the plan. ‘The following tables summarize the components of pension costs recognized in “Cost of sales and services” and “General and administrative expenses” accounts in the statements of comprehensive income and the “Pension liability” recognized in the statements of financial position. Changes in present value of defined benefit obligation of the Golf Club follow: 2017 2016 2015 Balance at beginning of period PUL S37.271___P10347,239 75,242,473 Pension costs (Note 15) Current service cost 1,764,767 1,807,867 366,471 Past service cost - 1,093,187 - Interest cost on benefit obligation 588,401 499,772, 230,145 2,353,168 3,400,826 596,616 Remeasurement losses (gains) in OCI Actuarial changes due to experience adjustments 1,992,912 (1,012,883) 2,570,270 Actuarial changes arising from changes in financial assumptions (789,099) GI7211)___G,186,530) 1,203,813 7,330,094) (616,260) Benefits paid (353,340) (880,700) (600,960) ‘Transferred lability (Note 17) = = 3,725,370 Balance at end of period P14 740,912 ___PILS37,271___—‘#10,347,239 ‘The principal assumptions used to determine pension liability are as follows: 2017 2016 Discount rate 5.83% 5.10% Salary increase rate 4.00% 4.00% Mortality rate 2001 CSO Table 1994 GAM Disability rate 1952 Disability Study 1952 Disability Study Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics and experience in the Philippines.=34- ‘The sensitivity analysis below has been determined based on reasonably possible changes of each significant assumption on the defined benefit obligation as at December 31, assuming if all other assumptions were held constant: Impact on Pension Liability Increase (Decrease) 2017 2016 Discount rate H% (#972,743) (1,070,348) 1% 1,099,716 1,245,281 Salary increase rate 4% 960,115 1,247,153 “1% (866,551) (1,102,477) ‘Shown below is the maturity analysis of the undiscounted benefit payments as at December 31, 2017 Amount Not exceeding one year 3,224,028, More than one year but not exceeding two years 2,347,269 More than two years but not exceeding five years 3,747,385 More than five years but not exceeding ten years 11,843,249 ‘The Golf Club has no retirement plan assets as at December 31, 2017 and 2016 and has no definite plans of making any contributions as fund assets in 2018. However, the Golf Club ensures that there will be sufficient assets to pay the pension benefits as they fall due while attempting to mitigate the various risks of the plan. ‘The weighted average duration of the defined benefit obligation is 7 years and 16 years as at December 31, 2017 and 2016, respectively. 19, Income Taxes 1, The components of the provision for current income tax are as follows: 2017 2016 2015 RCT PI044,311 Be MCIT - 1,065,987 707,903, Final tex on interest ineome 372,252 397,090 287,104 P1,416,563___P1,463,077 995,007 b, The components of deferred tax assets (liabilities) as at December 31 are as follows: 2017 2016 Deferred tax assets Pension liability PLTI7611 1,789,843 Membership dues collected in advance 254,726 183,078 1,972,337 1,972,921 Deferred tax Tiabilities: Receivable arising from transferred pension liability (4,717,611) (1,717,611) (Forward)2355 2017 2016 ‘Accrued rent income (254,726) ___ (P174,194y Remeasurement gains on defined benefit pension plan - (72,232) Unrealized foreign exchange gain = (8,884) (0972337) 1,972,921) Deferred tax assets - net Deferred tax asset on pension liability is recognized to the extent of deferred tax uuneared income on receivable arising from transferred pension liability (see Note 18). ility on Deferred tax assets on the following deductible temporary differences were not recognized since ‘management believes that itis not probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilized: 2017 2016 ‘Membership dues collected in advance (Note 10) 726,349,725 24,743,193 Pension liability (Note 18) 9,015,542 5,811,901 Excess of MCIT over RCIT 906,794 1,951,105 Allowance for impairment of receivables (Note 6) 686,032 633,539 Members’ fund assessment collected in advance* 587,500 549,700 Unrealized foreign exchange loss 492 - NOLCO - 9,716,698 “Included as part of "Others" under “Accounts payable and other eurrent liabilities account inthe statements of financial position (see Note 10) Unrecognized deferred income tax assets from the above deductible temporary difference amounted to P1 1,898,581 and P14,387,614 as at December 31, 2017 and 2016, respectively. As at December 31, 2017, the carry forward benefits of MCIT and NOLCO that can be claimed as tax credit against RCIT and deduction against taxable income, respectively, are as follows: NOLCO Beginning. Balance Still Period Incurred __Expiry Year Balance _Applied/Expired Available 122014 2017 P5,859,609 —(#5,859,609) Pe 122016 2019 3,857,089 (3,857,089) P9,716,698. (PO, 716,698) e McIr Beginning. Balance Still Period Incurred Expiry Year Balance _Applied/Expired Available 122014 2017 PIT7215 (177,215) Pe 122015, 2018 707,903 (707,903) - 122016 2019 1,065,987 (159,193) 906,794 P1951,105, P1,044,311 906,79436+ €. A reconciliation between the provision for (benefit from) income tax computed at the statutory income tax rate and the provision for income tax as shown on the statements of comprehensive income follows: 2017 2016 2015 Provision for (benefit from) income tax at statutory tax rate of 30% 3,295,994 (P3,863,334)—_P,283,101 Income tax effects of: Change in unrecognized deferred tax assets (2,850,177) 1,327,052 (1,482,337) Interest income subjected to final tax at a lower rate (651,961) (595,669) (430,729) Final tax on interest income 372,252 397,090 287,104 Nondeductible expenses 206,144 16,693 51,375 Expired NOLCO - 3,427,984 = Expired MCIT = 614,681 1,290,644 P372,252_PI384,497 'P999,158. —_ TS Tax Reform for Acceleration and Inclusion Act (TRAIN) Law RA No. 10963 or the TRAIN Law was signed into law on December 19, 2017 and took effect January 1, 2018, making the new tax law enacted as at the reporting date, Although the TRAIN Law changes existing tax law and includes several provisions that will generally affect businesses on a prospective basis, the management assessed that the same will not have any significant impact on the financial statement balances as at the reporting date. 20. Net Income (Loss) Per Share ‘The Golf Club’s net income (loss) per share is computed as follows: 2017 2016 2015 Net income (lossy P10,614,393 (14,262,278) __P3,277,847 Divided by weighted average number of shares issued and outstanding 4,738 4,738 4,738 Net income (loss) per share 2,240 3,010) P692 27. Financial Risk Management Objectives and Policies ‘The Golf Club's principal financial assets comprise of cash and cash equivalents. The main purpose of these financial assets is to raise finances for the Golf Club’s operations. The Golf Club has various other financial assets and liabilities such as receivables and accounts payable and other current liabilities, which arise directly from its operations. ‘The main risks arising from the Golf Club’s financial assets and financial liabilities are liquidity risk and credit risk, The Golf Club’s BOD and management review and agree on policies for managing each of these risks as summarized below.2375 Liquidity risk is defined as the risk that the Golf Club will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. ‘The Golf Club monitors its risk to a shortage of funds through monitoring of financial assets and projected cash flows from operations, The Golf Club’s objectives to manage its liquidity profile are: a) to ensure that adequate funding is available at all times; b) to meet commitments as they arise without incurring unnecessary costs; and c) to be able to access funding when needed at the least possible cost. ‘The analysis of financial assets into maturity groupings is based on the remaining period from the reporting date to the contractual maturity date or if earlier, the expected date on which the assets will be realized. For financial liabilities, the maturity grouping is based on the remaining period from the reporting date to the contractual maturity date. When a counterparty has a choice of when the amount is paid, the liability is allocated to the earliest period in which the Golf Club ean be required to pay ‘The table below summarizes the maturity profile of the Golf Club’s financial liabilities as at December 31, 2017 and 2016 based on contractual undiscounted payments. ‘The table also analyzes the maturity profile of the Golf Club’s financial assets to provide a complete view of the Golf Club's contractual commitments and liquidity. 2017 Ducand Demandable Within 1 Year More than 1 year Total cial Assets Loans and receivables: ‘Cash and cash equivalents P168,664,840 e 168,664,840 Receivables: Related partes 99,934,707 - - 99,934,707 Members = 46926821 = 46,926,821 Others - 2,781,738 - 2,781,738 Interest receivable a ‘264,044 a ‘26s.044 F265 599,547 __F49,972,603. 318,572,150 Financial Liabilities (Other financial liabilities: ‘Trade payables 6,846,195 PR P6.846,195 Payable io related parties 17,696,980, - - 17,696,980 Acerued expenses - 7,863,989 - 7,863,959 Refundable deposit 8,397,800 - 8397,800 ‘Auctioned membership liability = 3,076,017 = 3,076,017 Loans payable** - 4,602,623 3,478,604 8078227 Other payables = 6,561,921 = 6,561,921 17,696,900 P37,348,51S __P3,75.604 ___PS8,521,099 “Ecuding advances or Iiudaton amoung fo P30, 195 "Including tre interes payments amoung to P64, 311 2016 Dae and Demandable Within 1 Year__More than 1 year Total Financial Assets Loans and receivables: Cash and cash equivalents 175,837,983 a BB175.837,983 Receivables: Related partes 145,165,567 - - 145,165,567 Members = 49,505,714 = 4gisosin Others 7 2,467,855 = 2.467.855 PD, 003,550___P51,973,569 E9719=38- 2016 Dus and Demandable Within 1 Year More than 1 year Total Financial Labilives (Other financial Liabilities: ‘Trade payables B —P10,521,629 PB 10,521,629 Payable to related parties 42,751,833, e - 42,751,833 ‘Accrued expenses** - 5,140,983 - 5,140,983, Refundable deposit 6,908,959 6'908,959 ‘Auctioned membership lability 3,924,369 - 3.924.369 Retention payable 271,109 - 27,109 Loans payable*** 2,759,597 3,391,564 6,451,161 Other payables 12/087,390 = 12037390, Fi sv Soa __P87.727.393 “Exatading advances or Tuaton amounting wo P120.000 **Encluding accrued expenses pertaining to real proper taxes amouating o P3204, 108 5 cling futur ntret payments moun P74 346 Credit Risk Credit risk is most likely limited to the risk arising from the inability of a debtor to make payments when due. The Golf Club trades only with recognized and creditworthy third parties. It is the Golf Club's practice that all members are subject to credit verification procedures. ‘The Golf Club's exposure to credit risk is related primarily to the collection of members’ monthly dues and reccivable from related parties. The Golf Club’s policy is to monitor the receivable balances on an ongoing basis, which causes the exposure to bad debts to be insignificant. The Golf Club has also the option to put into auction numbers” proprietary shares in case of non-payment of members account. As at December 31, 2017 and 2016, credit risk is concentrated on the Golf Club’s receivable from related parties or 65.48% and 72.48% of total receivables, respectively (see Note 6). ‘The table below shows the maximum exposure to credit risk for the Golf Club’s financial assets as at December 31, 2017 and 2016, without taking account of any collateral and other credit enhancements: Gross Maximum Exposure Net Maximum Exposure) 2017 2016 2017 2016 Cash and cash equivalents® 167,643,898 PIT#,850,677 P166,143,898 __P173,350,677 Receivables: Related parties 99,934,707 145,165,567 99,934,707 145,165,567 Members 46,926,821 49,505,714 = - Others** 2,781,738, 2,467,855 2,781,738 2,267,855 Interest receivable 264,044 264,044 317,551,208 PSTI,DEO813 _P269,124,387 __7520,984,099 "Wrcas Jnana acs Iefore ting to account ay calteral held or other vedi enhanconens or offing arrargemants Or Insurance incase of bank deposits and far markt valve of cub shares n case of recerabe from members. Gods nance eset fer taking ine account an colaeral held a eer credit enhancements or offsting arrangements oF Insurance incase of bank deposits and fir marke! value of club shares case of receivable from member. eluding cash on hand amounting to P020,542 and B987,306 at December 31,2017 and 2016, respective, +"Eelaaing advances for liguidaton amounting f9P30,193 and P120,000 as at December 31,2017 and 2016, respective<39- ‘The table below shows the aging analysis of the Golf Club’s financial assets as at December 31, 2017 and 2016: 207 Nater Fan Dae tat pir Past Doe ‘Over or imgatred__ 1-50 Dans ops Subtotal pared Taree egnaions? — FIST 6a = * = = * Reveabes owed pues nama 79198 TEsss0s sn 934 TT = sssazor Member ‘Somais aaa Soyrass Seen S860. AT SI2S Oien™ : = = = = Enis arose S = = = 2 Thea FEL Gsie WTS PHRTTRION_ FILA Fase PTR “Enchaing aah on and amoung o PT020.942, **Eschding advances for liquidation amounting f P30,193, 2o16 Naber Fa a a Tae Past Dae ‘Owe ocinpuied _1-30Dys 31-60 coDig Sutra tase To Tabada agua PTET = = = = ATOR Receiee eed pues = genio gansss —apg010s s,s 67 — usissser Mente assaast re Sasso ose Deka ass ier 2155, = = es a = 2s Fa) — ORT PsP TN “Eclaing ah on and amounting 1 P9S7,306. ‘+ Bxedingadhonces for ligula. amounting to 120,000. The table below shows the credit quality of the Golf Club’s financial assets that are neither past due nor impaired as at December 31 based on historical experience with the corresponding third parties: 2017 High Grade Standard Grade Total ‘Cash and cash equivalents® 167,643,898 P PI6T 643,898 Receivables: Members 23,230,190 - 23,239,190 Others** — 2,781,738 2,781,738 Interest receivable - 264,044 264,044 7268,599,547___P49,972,603__P318,572,150. “Eictadng cat on and amoung to FI OR0972 **icluding advances for liquidation ameuntng to P30,193, 2016 High Grade Standard Grade Toul ‘Cash and cash equivalents® 174,850,677 B- PI74,850,677 Receivables: Members 25,381,457 = 25,381,457 Others** = 2,467,855 2,467,855. P200,252,134 __P2,467,855__P202,699,989 “Eichedng cask on banc amounting Yo PVB7 105. "Excluding advonces or gudaton amounting o P120,000, Cash in banks and short-term placements have high probability of recovery. This classification is based ‘on the good credit standing or rating of the counter party. redit Quality of Financial Assets ‘The eredit quality of financial assets is managed by the Golf Club using high grade and standard grade as internal eredit ratings.-40- High Grade Pertains to counterparty who is not expected by the Golf Club to default in settling its obligations, thus credit risk exposure is minimal. This normally includes large prime financial institutions, companies, government agencies and individual buyers. Credit quality was determined based on the credit standing of the counterparty. Standard Grade Other financial assets not belonging to high grade financial assets are included in this eategory. The primary objective of the Golf Club's capital management is to ensure that it maintains a strong. credit rating and healthy capital ratios in order to support its business and maximize member value. The Golf Club manages the capital structure and makes adjustments to it in the light of changes in economic conditions. To maintain or adjust the capital structure, the Golf Club may increase monthly membership dues. There were no changes made in the objectives, policies or processes for the year ended December 31, 2017 and 2016. ‘The Golf Club considers the following as its capital: 2017 2016 Proprietary certificates 473,800,000 P473,800,000 APIC 1,604,806,549 —_1,604,806,549 Deficit (682,634,129) _ (693,248,522) P1,395,972,420 _ P1,385,358,027 The Golf Club’s strategy was to maintain the debt-to-equity ratio at a manageable level. The debt-to-equity ratio as at December 31 is as follows: 2017 2016 Total liabilities (a) P103,507,746 __ P159,875,930 Total members’ equity (b) 1,394,937,147__1,385,526,567 Debi-to-equity ratio (a/b) 0 0. Fair Value of Financial Instruments The carrying values of cash and cash equivalents, receivables, accounts payable and other current liabilities and loans payable approximate their fair values. Fair Value Hierarchy. ‘The Golf Club has no financial instruments measured and to be disclosed at fair value. 22. ‘Changes in Liabilities Arising from Financing Activities January 1, Cash Flows December 31, 2017 ___Additions Used 2017 Loans payable 5,576,815 P5,166,700 _(P3,309,599) 7,433,916 Interest payable 27154 577,146 (580,093) 24,207 Total liabilities from financing activities 5,603,969 __P5.743,846__(P3,889,692) _P7,458,123oat 23. Significant Agreements Reciprocity Agreement On August 24, 2001, the Golf Club entered into a Reciprocity Agreement with Mission Hills Golf Club (Mission Hills) located in Shenzhen, Guangdong Province, People’s Republic of China whereby Golf Club members will be allowed to enjoy and use the Mission Hills’ facilities, subject to Mission Hills’ rules and regulations, and Mission Hills” members will be allowed to use the Golf Club’s facilities, ‘subject to the Golf Club’s rules and regulations. This agreement shall remain in effect until mutually terminated by the parties. Golf Course Maintenance Agreement ‘The Golf Club and THIGCI entered into a Golf Course Maintenance Agreement with Pacific Links Golf Development, Inc. (formerly known as Sta. Elena Properties, Inc.) for the maintenance of the Golf Club's golf course and related facilities up to August 2011. In 2016, they entered into a new contract with Golforce Inc. which started in June 2016. Repairs and maintenance and outside services recognized by the Golf Club amounted to P13,335,51 1, 16,089,357 and P23,742,964 in 2017, 2016 and 2015, respectively. Contract Services The Golf Club, THIGCI and TCCTHI (Clubs) entered into a Service Agreement (SA) with Sol Manpower, San Roque Human Resources Corporation and Pipols Synergy (collectively referred to as the “Contractors”) wherein the Contractors shall provide manpower for Various projects, hotels and related services required by the Clubs. The term of the SA is one year effective March 1, 2011 and shall be considered automatically renewed every year under the same terms and conditions unless otherwise terminated. Outside services recognized by the Golf Club amounted to P1,691,691, 10,542,896 and P12,144,208 in 2017, 2016 and 2015, respectively. “The Golf Club entered into a contract with Lifeline Ambulance Rescue, Inc. (Lifeline) wherein Lifeline will provide a dedicated ambulance standby to respond to any medical emergencies within the Club, The term of the contract is effective from August 16, 2014 to August 15, 2017 subject to yearly performance evaluation and renewal upon mutual agreement of the parties. On August 9, 2017, Lifeline ‘agrees with the renewal of membership for a period of three (3) years from August 16, 2017 to ‘August 15, 2020. Standby ambulance fees recognized by the Golf Club amounted to #748,087, 714,286 and P688,095 in 2017, 2016 and 2015, respectively. Seourity Services The Golf Club, THIGCI and TCCTHI (Clubs) entered into security service agreement with Saint Anthony Security and Investigation Agency and Eagle Corinthians Integrated Security, Inc. (Contractors) wherein the contractors will supply professional security services to the Club effective ‘August 2014 until July 2017. The contract was then renewed for another three (3) years effective ‘August 2017 until July 2020. Security services that had been recognized by the Golf Club amounted to B8,073,704, 6,556,688 and P7,087,242 in 2017, 2016 and 2015, respectively. Maintenance Services The Golf Club entered into a Memorandum of Agreement (MOA) with Groundseape Management Corp. (referred to as the Contractor”) wherein the Contractor will provide manpower and maintenance services (specifically cleaning, gardening and landscaping services) to the Clubs. The term of the MOA is effective for three years beginning August 16, 2013 to August 15, 2016, renewable annually upon the parties’ mutual written consent. Latest renewal of the agreement resulted to a modification of the term effectivity to October 1, 2015 until September 30, 2016, However, the agreement is terminated and ceased in June 2015 upon sending a written notice by the Golf Club to the Contractor. The Golf Club entered into a new landscaping and groundskeeping service agreement with Golforee, Inc.-42- effective October 2016. Repairs and maintenance and outside services recognized by the Golf Club amounted to P5,911,071, P2,673,704 and P2,878,750 in 2017, 2016 and 2015, respectively. The Golf Club entered into an agreement with Mansion Maintenance, for Janitorial and Sanitation Service. The term of the contract was effective for one year beginning from September 1, 2015 to August 31, 2016. However, the Golf Club had requested for the extension of the agreement until ‘November 30, 2016. In December 2016, the Golf Club entered into a new janitorial service agreement with Help U Clean Systems, Ine. Repairs and maintenance and outside services recognized by the Golf Club amounted to P2,964,420, 2,060,084 and P2,008,344 in 2017, 2016 and 2015, respectively ‘The Golf Club entered into an agreement with Creative Proverbs Enterprises, that will provide all the facilities and building maintenance needs of the Golf Club such as maintenance tools and equipment, supply of all specified materials and also, the Management, supervision and personnel with full authority. The term of the contract was effective for two (2) years beginning on November 16, 2016 until November 15, 2018 unless pre-terminated by a written notice at least thirty (30) days prior to effectivity. Facilities and building maintenance recognized by the Golf Club amounted to P2,840,086, 486,387 and nil in 2017, 2016 and 2015, respectively. Cell Site The Golf Club has entered into a MOA with Smart Communications, Inc. (Smart), wherein Smart will lease the land owned by the Golf Club for cell sites situated in the area. The agreement is effective from August 12, 2013 until August 11, 2023 unless earlier terminated, and may be renewed for a period to be mutually agreed upon by both parties. Cell site rental income recognized by the Golf Club amounted to 204,840, P682,801 and nil in 2017, 2016 and 2015, respectively. 24. ‘Supplementary Information Required Under Revenue Regulations (RR) No. 15-2010 ‘The Bureau of Internal Revenue has issued RR No. 15-2010 which requires certain tax information to be disclosed in the notes to financial statements, The Golf Club presented the required supplementary tax information as a separate schedule attached to its annual income tax return,‘SyOp Gorres Voloyo & Co, Tel (632) 891.0907 BOAIPRC Rag. No. 0001 (6760 Ayala Avenue Fax (632) 8190872 December 14,2015, vai uns Decomber 31, 2018 ‘26 Marat Chy ‘eycamih ‘SEC Accreditation No, D012-FR-4t (Group A) Bullaing a better sippines foverber 10, 2018, vals rte November 8, 2018 ‘working world God N (0.2018, vais INDEPENDENT AUDITOR’S REPORT ON THE SUPPLEMENTARY INFORMATION REQUIRED UNDER REVENUE REGULATIONS NO. 15-2010 ‘The Board of Directors and Members ‘Tagaytay Midlands Golf Club, Inc. Bray. Tranca, Talisay, Batangas We have audited in accordance with Philippine Standards on Auditing, the financial statements of Tagaytay Midlands Golf Club, Inc. (a nonprofit corporation) as at December 31, 2017 and 2016 and for cach of the three years in the period ended December 31,2017 and have issued our report thereon dated April 7, 2018 which contained an unqualified opinion on those financial statements. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information required under Revenue Regulations No. 15-2010 for the year ended December 31, 2017 is presented for purposes of filing with the Bureau of Internal Revenue and is not a required part of the basic financial statements. The information is also not required by Securities Regulation Code Rule 68, As Amended (2011). Revenue Regulations No. 15-2010 require the information to be presented in the notes to financial statements. Such information is the responsibility of the management of Tagaytay Midlands Golf Club, Inc. The information has been subjected to the auditing procedures applied in our audit of the basic financial statements. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. SYCIP GORRES VELAYO & CO. rts Chadd 0s hae Julie Christine 0. Mateo Partner CPA Certificate No. 93542 SEC Accreditation No. 0780-AR-2 (Group A), May 1, 2015, valid until April 30, 2018 ‘Tax Identification No. 198-819-116 BIR Accreditation No. 08-001998-68-2018, February 26, 2018, valid until February 25, 2021 PTR No. 6621309, January 9, 2018, Makati City April 7, 2018TAGAYTAY MIDLANDS GOLF CLUB, INC. SUPPLEMENTARY INFORMATION REQUIRED UNDER REVENUE REGULATIONS NO. 15-2010 FOR THE YEAR ENDED DECEMBER 31, 2017 In compliance with the requirements set forth by Revenue Regulations No. 15-2010 hereunder are the information on taxes, duties and license fees paid or accrued during the taxable year: a. Value Added Tax ‘The Golf Club is a VAT-registered entity with VAT output tax declarati year based on the sales/receipts amounting to P299,849,267. of P35,981,912 for the Details of the Golf Clubs input VAT are as follows: Beginning: Beginning input tax deferred on capital goods exceeding PI million 4,954,273, Current year’s domestic purchases/payments for: Goods other than capital goods 13,526,585 Domestic purchase of goods other than capital goods 6,091,608 Capital goods subject to amortization 2,696,079 Capital goods not subject to amortization 387,477 Applied output VAT (21,678,676) Total available input VAT at end of the year 5,977,346 Less input tax deferred on capital goods 5,977,346 Balance at December 31, 2017 As at December 31, 2017, the Golf Club has an outstanding VAT payable amounting to 2,188,846. b. The documentary stamp tax paid on transfer of the Golf Club shares amounted to P196,366 presented as “Others” in taxes and licenses. ¢. Other taxes and license fees paid for the year pertain to: Real property taxes 11,879,366 Business permits 907,468 Community tax certificate 10,550 Others 196,366 P12,993.750. d. The amounts of withholding taxes paid/declared for the year ended December 31, 2017 amounted to: Outstanding. Total Balance Expanded withholding taxes P4,330,961 *P483,739 Withholding taxes on compensation and benefits 2,685,961 215,587 P7,016,922, 699,326‘The Golf Club has not conducted any transaction that requires payments of custom duties and excise taxes. ‘The Golf Club is not involved in any tax cases under preliminary investigation, litigation and prosecution in courts or bodies outside the Bureau of Internal Revenue as at December 31, 2017.TAGAYTAY MIDLANDS GOLF CLUB, INC. {A Nonprofit Corporation) SCHEDULE OF ALL THE EFFECTIVE STANDARDS AND INTERPRETATIONS Framework for the Preparation and Presentation of Financial ‘Statements Conceptual Framework Phase A: Objectives and qualitative [characteristics PFRSs Practice Statement Management Commentary v Philippine Financial Reporting Standards PFRS 1 (Revised) JAmendments to PFRS | and PAS 27: Cost of an Investment in a Subsidiary, J Associate ‘Amendments to PFRS 1: Additional Exemptions for First-time Adopters ‘Amendment to PPRS 1: Limited Exemption from Comparative PFRS 7 Disclosures for First-time v Adopters ‘Amendments to PERS 1: Severe Hyperinflation and [Removal of Fixed Date for First-time Adopters ‘Amendments to PERS 1; Government Loans [Amendments to PFRS 1: Borrowing Costs ‘Amendment to PFRS 1: Meaning of Effective PFRSs PFRS2 | Share-based Payment ‘Amendments to PFRS 2: Vesting Conditions and Cancellations ‘Amendments to PFRS 2: Group Cash Settled Share-based Payment Transactions Amendment to PERS 2: Definition of Vesting Condition v | Amendments to PFRS 2, Share-based Payment, ‘Classification and Measurement of Share-based ‘Not Early Adopted Payment Transactions* PFRS3 [Business Combinations a (Sevse8) Amendment to PFRS 3: Aevountng for Conlngon [Consideration in a Business Combination ‘Amendment to PERS 3: Scope Exceptions for Joint [Arrangements PFRS4 [Insurance Contracts 2 |Amendments to PAS 39 and PFRS 4: (Guarantee Contracts ly Controlled Entity or A < S[sfstats inanei‘Amendments to PFRS 4, Applying PFRS 9 with PFRS 4* Not Barly Adopted PFRS 5 ‘Non-current Assets Held for Sale and Discontinued Operations ‘Amendments to PERS 5: Changes in Methods of Disposals PFRS 6 [Exploration for and Evaluation of Mineral Resources PFRS7 Financial Instruments: Disclosures Amendments to PAS 39 and PFRS 7; Reclassification of Financial Assets ‘Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets - Effective Date and Trensition Amendments to PFRS 7: Improving Disclosures about Financial Instruments ‘Amendments to PFRS 7; Disclosures - Transfers of | Financial Assets ‘Amendments to PERS 7: Disclosures - Offsetting Financial Assets and Financial Liat ‘Amendments to PFRS 7: Mandatory Effective Date of PERS 9 and Transition Disclosures ‘Amendments to PFRS [Contracts isclosures - Servicing Amendments to PFRS 7: Applicability of the Amondments to PFRS 7 to Condensed Interim Financial Statements PFRS 8 Operating Segments ‘Amendments to PERS 8: Aggregation of Operating ‘Segments and Reconeiliatian of the Total of the Reportable Segments’ Assets to the Entity’s Assets PFRS 9 Financial Instruments* ‘Not Early Adopted ‘Amendments to PFRS 9: Prepayment Features with Negative Compensation* Not Barly Adopted PERS 10 | Consolidated Financial Statements ‘Amendments to PERS 10, PFRS 12 and PAS 27: Investment Entities Amendments to PFRS 10 and PAS 28: Sale or ‘Contribution of Assets Between an Investor and its [Associate or Joint Venture* Not Early Adopted ‘Amendments to PFRS 10, PFRS 12 and PAS 28: Applying the Consolidation Exception PERS 11 Joint Arrangements‘Amendments to PFRS 11: Accounting for Acquisitions of Interests in Joint Operations PFRS 12 Disclosure of Interests in Other Entities ‘Amendments to PFRS 10, PERS 12 and PAS 27: Investment Entities ‘Amendments to PFRS 10, PFRS 12 and PAS 28: Applying the Consolidation Exception Amendment to PFRS 12, Clarification of the Scope of the Standard PERS 13, Fair Value Measurement Amendment to PFRS 13: Short-term Receivables and Payables Amendment to PFRS 13: Portfolio Exception PERS 14 Regulatory Deferral Accounts PERS 15 [Revenue from Contracts with Customers* ‘Not Barly Adopted PFRS 16 Leases* Not Barly Adopted Philippine Accounting Standards PAS 1 Presentation of Financial Statements (Revised) [Amendment to PAS 1; Capital Dsslosures [Amendments to PAS 32 and PAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation ‘Amendments to PAS 1: Presentation of tems of Other Comprehensive Income ‘Amendments to PAS 1; Clarification of the Requirements for Comparative Information [Amendments to PAS 1: Disclosure Init PAS2 Inventories PAS7 Statement of Cash Flows ‘Amendments to PAS 7; Statement of Cash Flows - Disclosure Initiatives PASS Accounting Policies, Changes in Accounting Estimates and Errors PAS10 | Events after the Reporting Period PAS 11 [Construction Contracis Pasi2 [Income Taxes [Amendment to PAS 12 - Deferred Tax: Recovery of [Underlying Assets‘Amendments to PAS 12- Recognition of Defered Tax |, Assets for Unrealized Losses PAS 16 [Property, Plant and Equipment 7 Amendments to PAS 16: Classification of Servicing Equipment ‘Amenciments to PAS 16 and PAS 38: Propery, Plan and Equipment - Revaluation Method - Proportionate Restatement of Accumulated Depreciation ‘Amendment to PAS 16 and PAS 38: Clarification of Acceptable Methods of Depreciation ané Amortization ‘Amendment to PAS 16 and PAS 41; Bearer Plants PASI7 [Lenses 7 PASI8 [Revenue v PAS19 | Employee Benefits a Amendments fo PAS 19: Actuarial Gains and Losses, Bs [Group Plans and Disclosures PAS19 | Employee Benefits 7 (Amende@) | mendments to PAS 19; Defined Bene Plans [Employee Contribution ‘Amendments to PAS 19: Regional Market Issue > Regarding Discount Rate PAS 20 [Accounting for Government Grants and Disclosure of Government Assistance PAS21 | The Effects of Changes in Foreign Exchange Rates v “Amendment: Net Investment in a Foreign Operation PAS23 [Borrowing Costs F Revised) PAS24 | Relaiod Party Disclosures zi (Revised) [Amendments to PAS 24: Key Management Personnel v PAS26 [Accounting and Reporting by Retirement Benefit Plans PAS27 | Consolidated and Separate Financial Statements PAS27 | Separate Financial Sioments (Amended) Tmendments to PERS 10, PFRS 12 end PAS 27, Tnvestiment Entities [Amendments to PAS 27: Equity Method in Separate Financial Statements [PAS 28 | Investments in Associates Tavestments in Assooites and Foint VenturesPAS 28 (Amended) Amendments to PFRS 10 and PAS 28: Sale or Contribution of Assets Between an Investor and its Associate or Joint Venture* ‘Not Early Adopted ‘Amendments to PFRS 10 and PAS 28: Applying the Consolidation Exception ‘Amendments to PAS 28: Long-term Interest in ‘Associates and Joint Ventures* Not Early Adopted Amendments to PAS 28, Measuring an Associate or Joint Venture at Fair Value* Not Early Adopted PAS 29 Financial Reporting in Hyperinflationary Beonomies PAS 31 Interests in Joint Ventures PAS32 Financial Instruments: Presentation ‘Amendments to PAS 32 and PAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation [Amendment to PAS 32: Classification of Rights Issues ‘Amendments to PAS 32: Offsetting Financial Assets and Financial Liabil Amendments to PAS 32: Tax Effect of Distribution to Holders of Equity Instruments PAS33 Eamings per Share PAS 34 Interim Financial Reporting ‘Amendments to PAS 34: Interim Financial Reporting [and Segment Information for Total Assets and Liabilities ‘Amendments fo PAS 3 PAS36 Impairment of Assets ‘Amendments to PAS 36: Revoverable Amount Disclosures for Non-Financial Assets PAS37 Provisions, Contingent Liabilities and Contingent Assets PAS 38 Intangible Assets Amendments to PAS 16 and PAS 38: Revaluation /Method - Proportionate Restatement of Accumulated [Depreciation / Amortization Amendment to PAS 16 and PAS 38; Clarification of [Acceptable Methods of Depreciation and Amortization PAS39 Financial Instruments: Recognition and Measurement Amendments to PAS 39: Transition and Initial [Recognition of Financial Assets and Financial Liabilities | Amendments to PAS 39: Cash Flow Hedge Accounting of Forecast Intragroup Transactions[Amendments to PAS 39: The Fair Value Option v ‘Amendments to PAS 39 and PFRS 47 Financial y Guarantee Contracts |Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets ‘Amendments to PAS 39 and PFRS 7: Reclassification of| Financial Assets - Effective Date and Transition ‘Amendments to Philippine Interpretation By IFRIC 9 and PAS 39: Embedded Derivatives ‘Amendment to PAS 39: Eligible Hedged lems v Amendments to PAS 39: Novation of Derivatives and yy Continuation of Hedge Accounting PAS40 [Investment Property v ‘Amendments to PAS 40: Clariying the Interelationship [between PFRS 3 and PAS 40 when Classifying Property v 48 Investment Property or Owner-Occupied Property [Amendments to PAS 40, Transfers of Investment Piper Not Early Adopted Pas41 | Agriculture v ‘Amendment to PAS 16 and PAS 41: Bearer Plants v Philippine tnterpretations TFRIC1 | Changes in Existing Decommissioning, Restoration and y Similar Liabilities TFRIC2 | Members’ Share in Co-operative Entities and Similar y Instruments IRIC 4 [Determining Whether an Arrangement Contains a Lease TFRICS v IFRIC 6 |Lisbilites arising from Participating ina Specific ¥ Market - Waste Electrical and Electronic Equipment IFRIC7 | Applying the Restatement Approach under PAS 29, y Financial Reporting in Hyperinflationary Economies HFRIC8 [Scope of PFRS2 v TFRIC9 [Reassessment of Embedded Derivatives ¥ [Amendments to Philippine Interpretation z IFRIC 9 and PAS 39: Embedded Derivatives IFRIC 10 [Interim Financial Reporting and Impairment v TFRIC 11 |PFRS 2 - Group and Treasury Share Transactions v TRRIC 12 _ [Service Concession Arangements 4TFRIC 13 [Customer Loyalty Programmes v TFRIC 14 | The Limit on a Defined Benefit Asset, Minimum ils Funding Requirements and their Interaction ‘Amendments to Philippine Interpretations IFRIC 14, iy Prepayments of a Minimum Funding Requirement IFRIC 15 _ | Agreements for the Construction of Real Estate Not Early Adopied TFRIC 16 _| Hedges of a Net Investment in a Foreign Operation IFRIC 17 __| Distributions of Non-cash Assots to Owners v HFRIC 18 [Transfers of Assets from Customers TFRIC 19 [Extinguishing Financial Liabilities with Equity E Instruments TFRIC20 | Stripping Costs in the Production Phase of a Surface i Mine TFRIC2 [Levies v HFRIC 22 “| Foreign Cuirrency Transactions and Advance (Consideration* Ne nae TFRIC 23 __ [Uncertainty over Income Tax Treatments” Not Barly Adopted SIC7 Introduction of the Euro ¥ SIC-10 | Government Assistance - No Specifie Relation to aS Operating Activities SIC-12 [Consolidation - Special Purpose Entities v ‘Amendment to SIC 12: Scope of SIC 12 v SIC-13__| Jointly Controlied Entities - Non-Monetary 2 (Contributions by Venturers SIC-15 | Operating Leases — Incentives iw [StC-25 | Income Taxes - Changes in the Tax Status oF an Entity or 9 its Shareholders Stc-27 [Evaluating the Substance of Transactions Involving he |, Legal Form of a Lease SIC-29__| Service Concession Arrangements: Disclosures v stc-31 Revenue - Barter Transactions Involving Advertising a Services [SIC-32___ [Intangible Assets - Web Site Coats 7] "Standards and interpretations which will be effecive subsequent fo Decanber 31, 7017. Note: Standards and interpretations tagged at "Not Applicable” are thse standards and interpretations which were adopted ‘ou the entiy has no significant covered wansaction as at and forthe year ended December 31, POI?Q2ChSoree Velyo&.co, To: (632) 891 0907 © BOMPRE Rep. No. 0001 6700 Aya avers Fax (632) 819.0872 December 14,2018, vail unt December 31, 2018 1226 Makeb Cay eycompn ‘SEC Accreditation No, OO12-FR-4 (Group A) Bulng a beter Philppnes November 10,2018, vali unt November 8, 2018 INDEPENDENT AUDITOR'S REPORT The Board of Directors and Members ‘Tagaytay Midlands Golf Club, Ine, Brgy. Tranca, Talisay, Batangas {We have audited the accompanying financial statements of Tagaytay Midlands Golf Club, Ine. (@ nonprofit corporation) as at and forthe year ended December 31, 2017, on which we have rendered the attached report dated April 7, 2018, {1 compliance with Securities Regulation Code Rule 68, As Amended (2011), we are stating that the Golf ‘Club has one (1) stockholder owning one hundred (100) or more shares SYCIP GORRES VELAYO & CO, & haaLins 0. abe Julie Christine 0. Mateo Partner CPA Certificate No. 93542 SEC Accreditation No, 0780-AR-2 (Group A), May 1, 2015, valid until April 30, 2018 ‘Tax Identification No. 198-819-116 BIR Accreditation No. 08-001! 998-68-2018, February 26, 2018, valid until February 25, 2021 PTR No. 6621309, January 9, 2018, Makati City April 7, 2018S¥Cip Gores Velayo 8 Co. Tel (632) 2910307 BOAIPRC Reg. No. 0001, 700-Aya Avenue Fax (692) 8100872 December 14, 2078, vali unl December 91, 2018 ‘228 Makati Cy eyeomiph SEC Accredtation No. O0%2-FR-4 (Group A), Building a better Phitpinee ‘ovember vals unl November 8, 2018, working werid ‘November 10,2018, val nt 9,201 INDEPENDENT AUDITOR'S REPORT ‘The Board of Directors and Members Tagaytay Midlands Golf Club, Inc. Brgy, Tranca, Talisay, Batangas Report on the Audit of the Financial Statements Ont We have audited the financial statements of Tagaytay Midlands Golf Club, Inc. (the Golf Club), 4 nonprofit corporation, which comprise the statements of financial position as at December 31, 2017 and 2016, and the statements of comprehensive income, statements of changes in members’ equity and statements of cash flows for each of the three years in the period ended December 31, 2017, and notes to the financial statements, including a summary of significant accounting policies, In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Golf Club as at December 31, 2017 and 2016, and its financial performance and its cash flows for each of the three years in the period ended December 31, 2017, in accordance with Philippine Financial Reporting Standards (PFRS). Basis for Opinion We conducted our audits in accordance with Philippine Standards on Auditing (PSAs), Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Golf Club in aecordance with the Code of Ethies for Professional Accountants in the Philippines (Code of Ethics) together with the ethical requirements that are relevant to our audit of the financial statements in the Philippines, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethies. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion, Other Information ‘Management is responsible for the other information. The other information comprises the information included in the SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A and Annual Report for the year ended December 31, 2017, but does not include the financial statements and our auditor's report thereon. The SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A and Annual Report for the year ended December 31, 2017 are expected to be made available to us after the date of this auditor's report. Our opinion on the financial statements does not cover the other information and we will not express any form of assurance conclusion thereon,