CAVITE FEEDS MILLING CORPORATION

Brgy. Aguado, Trece Martires City

STATEMENTS OF CHANGES IN EQUITY

###
( Amounts in Philippine Pesos)

Notes 2011 2010 2008

SHARE CAPITAL 15.1

Authorized 50,000,000 shares at Php 1.00 par value

Issued and paid up #REF! #REF!

###

RETAINED EARNINGS, UNAPPROPRIATED

Balance at beginning of year 13,323,236

###
Add (Less):
Net income for the year Err:520 ###
Cash dividend 15.2
Reverted from Retained Earnings, Appropriated 15.3 10,000,000
Appropriation during the year 15.3 (20,000,000)

Balance at end of year Err:520

###

RETAINED EARNINGS, APPROPRIATED FOR

FUTURE PLANT EXPANSION

Balance at beginning of year 10,000,000

###
Add (Less):
Reverted to Retained Earnings, Unappropriated 15.3 (10,000,000)
Appropriation for the year ###
-

Balance at end of year ###

-

RETAINED EARNINGS, APPROPRIATED FOR

STOCK DIVIDENDS

Balance at beginning of year -

Add:
Appropriation during the year 15.3 20,000,000

Balance at end of year 20,000,000

TOTAL EQUITY Err:520

###

See accompanying Notes to Financial Statements.

 FIXTRUCTURE CONSTRUCTION & SUPPLY
May Lhanie Lato Malano, Proprietor

STATEMENT OF FINANCIAL POSITION

AS OF OCTOBER 31, 2017
In Philippine Peso

2017 2017
ASSETS

Current Assets
Cash, Note 6 1,851,934.97 2,056,185.84
Trade and other receivables, Note 7 45,366,971.18 -
Inventory, Note 8 - -
Prepayments and other current assets, Note 9 237,301.12 -
Total Current Assets 47,456,207.27 2,056,185.84

Non-current Assets
Property and equipment, Note 10 400,000.00 400,000.00
Other non-current assets, Note 11 20,000,000.00 -
Total Non-current Assets 20,400,000.00 400,000.00
TOTAL ASSETS 67,856,207.27 2,456,185.84

LIABILITIES AND EQUITY

Current Liabilities
Trade and other payables, Note 12 12,390,442.81 -
Other payables, Note 12 - -
Accrued expenses payable, Note 12 - -
Income tax payable, Notes 12, 19 - -
Total Current Liabilities 12,390,442.81 -

Non-Current Liabilities
Loans and Borrowings, Note 13 -
Advances from related parties, Note 13 - -
Total Non-Current Liabilities - -
Total Liabilities 12,390,442.81 -

Owner's Equity
Owner's Equity, January 1, Note 14 2,456,185.84 -
Additional Investment, Note 14 2,456,185.84
Net income for the periods, Notes 14, 15, 16, 17 3,144,954.13 -
Drawings, Note 14 - -
Total Equity 5,601,139.97 2,456,185.84
TOTAL LIABILITIES AND EQUITY 17,991,582.78 2,456,185.84

See Notes to Financial Statements.

₱ -

(204,250.87)
45,366,971.18
-
237,301.12
45,400,021.43
-
-
-
#VALUE!
20,000,000.00
65,400,021.43
-
-
-
-
12,390,442.81
-
-
-
12,390,442.81
-
-
-
-
-
12,390,442.81
-
-
2,456,185.84

3,144,954.13
-
3,144,954.13
15,535,396.94
 FIXTRUCTURE CONSTRUCTION & SUPPLY
May Lhanie Lato Malano, Proprietor

STATEMENT OF INCOME AND EXPENSES

FOR THE PERIOD ENDED OCTOBER 31, 2017
In Philippine Peso

2017 2017
Sales/Service revenue, Note 15 13,165,648 -
Discounts/Adjustments - -
Net sales, 15 13,165,648 -
Direct costs/Cost of sales, Note 16 8,449,775 -
Gross profit from operations, Note 15, 16 4,715,874 -
Operating expenses, Note 17 1,333,619 -
Finance/Borrowing Costs, Note 17 - -
Total costs and expenses, Note 17 1,333,619 -
Profit before tax, Notes 15, 16, 17 3,382,255 -
Income tax payable, Note 12, 18 237,301 -
Profit (Loss), Notes 15, 16, 17, 18 3,144,954 -
See Notes to Financial Statements.
850,941.00
50,000.00
800,941.00
500,000.00
300,941.00
96,301.12
125,000.00
221,301.12
16,000.00
237,301.12
 FIXTRUCTURE CONSTRUCTION & SUPPLY
May Lhanie Lato Malano, Proprietor

STATEMENTS OF CASH FLOWS

FOR THE PERIOD ENDED OCTOBER 31, 2017
In Philippine Peso

2017 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Profit (Loss) before income tax, Notes 15, 16, 17, 18 3,382,255.25 -
Adjustments for:
Depreciation - -
Operating cash flows before working capital changes 3,382,255.25 -
Decrease (Increase) in operating assets:
Trade and other receivables, Note 7 (45,366,971.18) -
Inventory, Note 8 - -
Prepayments and other current assets, Note 9 (237,301.12) -
Increase (Decrease) in operating liabilities:
Trade and other payables, Note 12 12,390,442.81 -
Other payables, Note 12 - -
Accrued expenses payable, Note 12 - -
Income tax payable, Notes 12, 18 - -
Income tax expense, Notes 12, 18 (237,301.12) -
Cash generated from operations (533,193.16) -
Income tax payment for the year, Note 12, 18 - -
Net cash generated from operating activities (533,193.16) -

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisitions of non-current assets - -
Net cash used in investing activities - -

CASH FLOWS FROM FINANCING ACTIVITIES

Changes in loans and borrowings, Note 13 - -
Changes in equipment financing, Note 13 - -
Changes in advances from related parties. Note 13 - -
Investments and Drawings, Note 14 - 2,056,185.84
Net cash generated from financing activities - 2,056,185.84

Net cash generated from operations, Note 6 (533,193.16) 2,056,185.84

CASH AT BEGINNING OF YEAR, Note 6 2,385,128.13 -
CASH AT END OF YEAR, Note 6 1,851,934.97 2,056,185.84

See Notes to Financial Statements.

₱ 317,661
211,773.92
105,886.95
427,306.20
 FIXTRUCTURE CONSTRUCTION & SUPPLY
May Lhanie Lato Malano, Proprietor

NOTES TO FINANCIAL STATEMENTS

As of October 31, 2017

1 BUSINESS INFORMATION

Fixtructure Construction & Supply (the Entity), is a domestic enterprise organized and registered with the Department
of Trade and Industries under Certificate Number 04771045 as a construction business enterprise. It is owned and
managed by Ms. May Lhanie Lato Manalo The Entity is engaged in the business of general construction, dealing both
government and private individuals.

Its official business is located at Bagumbayan, Daraga, Albay.

The accompanying financial statements of the Entity for the period ended October 31, 2017 were approved and authorized
for issue by management on November 30, 2017.

2 BASIS FOR PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS

The foregoing financial reporting policies and standards will be adopted by the Entity and implemented whenever
applicable.

2.01 Statement of Compliance

The financial statements of the Entity have been prepared in accordance with the Philippine Financial Reporting Standards
for Small and Medium-sized Entities (PFRS for SMEs), except other standards whenever necessary to achieve fair
presentation of the Entity's financial position, performance and cash flows.

2.02 Basis of Preparation

The financial statements are prepared on a going concern basis under the historical cost convention, except where a
Financial Reporting standard requires an alternative treatment (such as fair values) as disclosed where appropriate in these
financial statements.

2.03 Presentation and Functional Currency

Items included in the financial statements of the Business are measured using Philippine Pesos (Php) which is the currency
of the primary economic environment in which the Business operates (the "functional currency"). All presented financial
information has been rounded to the nearest peso, except when otherwise indicated.

The Business chose to present its financial statements using its functional currency.

2.04 Use of Judgments and Estimates

The preparation of the Business' financial statements requires management to make judgments, estimates and assumptions
that affect the amounts reported in the Business' financial statements and accompanying notes.

Judgments are made by management in the development, selection and disclosure of the Entity's' significant accounting
policies and estimates and the application of these policies and estimates.

The estimates and assumptions are reviewed on an ongoing basis. These are based on management's evaluation of relevant
facts and circumstances as of the reporting date. Actual results could differ from such estimates.

Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only
that period or in the period of the revision and future periods if the revision affects both current and future periods.

2.05 Going Concern Assumption

The Business is not aware of any significant uncertainties that may cast doubts upon the Business' ability to continue as a
going concern despite the change in business priority.

3 SIGNIFICANT ACCOUNTING POLICIES

9
Principal accounting and financial reporting policies applied by Entity in the preparation of financial statements are
enumerated below and are consistently applied to all the years presented, unless otherwise stated.

3.01 Financial Assets

Financial assets are classified as either 'basic financial assets' or 'other financial assets'.

3.01.01 Basic Financial Assets

The Business recognizes basic financial assets only when the entity becomes a party to the contractual provisions of the
instrument.

The Business' basic financial assets as presented in the statement of financial position comprise of cash and cash
equivalent, trade and other receivables. Financial assets may also include financial assets at fair value through profit and
loss, investments in debt and investment in equity securities, whenever applicable.

3.01.02 Cash and cash equivalent

Cash and cash equivalents includes cash on hand and cash in bank. Information on the cash and cash equivalent is
discussed on Note 6, below:

3.01.03 Trade and All Other Receivables

Trade and receivables are recognized initially at the transaction price and subsequently measured at amortized cost using
the effective interest method, less provision for impairment. A provision for impairment of receivables is established when
there is objective evidence that the Business will not be able to collect all amounts due according to the original terms of
the receivables.

The amortized cost of a financial instrument at each reporting date is the net of the following amounts:
• the amount at which the financial instrument is measured at initial recognition,
• minus any repayments of the principal,
• plus or minus the cumulative amortization using the effective interest method of any difference between the amount at
initial recognition and the maturity amount,
• minus any reduction (directly or through the use of an allowance account) for impairment or uncollectibility.

3.01.04 Financial Assets at Fair Value Through Profit or Loss (FVTPL)

Investments is non-convertible preference shares and non-puttable ordinary or preference shares that are publicly traded or
their fair value can otherwise be measured reliably, the Business measures the investment initially and at each reporting
period at fair value with changes in fair value recognized in profit or loss. Fair value is determined based on present market
value.

If a reliable measure of fair value is no longer available, the asset's carrying amount at the last date the fair value was
reliably measurable becomes its new cost. Subsequently, the Business measures the asset at this cost amount less
impairment until a reliable measure of fair value becomes available.

3.01.05 Other Financial Assets

Other financial assets include investments in convertible and puttable ordinary and preference shares, options, forwards,
swaps, and other derivatives and financial assets.

The Business recognizes other financial asset only when the entity becomes a party to the contractual provisions of the
instrument.

Other financial assets are initially measured at its fair value, which is normally the transaction price. At the end of each
reporting period, other financial assets are measured at fair value and any changes in fair value is recognized in profit or
loss, except for equity instruments that are not publicly traded and whose fair value cannot otherwise be measured reliably,
and contracts linked to such instruments that, if exercised, will result in delivery of such instruments, in which case is
measured at cost less impairment.

10
If a reliable measure of fair value is no longer available for an equity instrument that is not publicly traded but is measured
at fair value through profit or loss, its fair value at the last date the instrument was reliably measurable is treated as the cost
of the instrument. The instrument is measured at this cost less impairment until a reliable measure of fair value becomes
available.

3.01.06 Effective Interest Method

The effective interest method is a method of calculating the amortized cost of a financial asset (or group of financial
assets) and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial instrument or, when appropriate, a
shorter period, to the carrying amount of the financial asset. The effective interest rate is determined on the basis of the
carrying amount of the financial asset at initial recognition.

3.01.07 Impairment of Financial Instruments Measured at Cost or Amortized Cost

At the end of each reporting period, the Business assesses whether there is objective Business recognizes an impairment
loss in profit or loss immediately.

The Business assesses all equity instruments regardless of significance individually for impairment. For other financial
assets, the Business assesses impairment either individually or grouped on the basis of similar credit risk characteristics.

Objective evidence of impairment could include:

• significant financial difficulty of the issuer or obligor;
• a breach of contract, such as a default or delinquency in interest or principal payments;
• the creditor, for economic or legal reasons relating to the debtor's financial difficulty, granting to the debtor a concession
that the creditor would not otherwise consider;
• it has become probable that the debtor will enter bankruptcy or other financial reorganization; and
• observable data indicating that there has been a measurable decrease in the estimated future cash flows from a group of
financial assets since the initial recognition of those assets, even though the decrease cannot yet be identified with the
individual financial assets in the group, such as adverse national or local economic conditions or adverse changes in
industry conditions.

Other factors may also be evidence of impairment, including significant changes with an adverse effect that have taken
place in the technological, market, economic or legal environment in which the issuer operates.

For instruments measured at amortized cost, the impairment loss is the difference between the asset's carrying amount and
the present value of estimated cash flows discounted at the asset's original effective interest rate. If such a financial
instrument has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest
rate determined under the contract.

For instruments measured at cost less impairment, the impairment loss is the difference between the asset's carrying
amount and the best estimate of the amount that the Business would receive for the asset if it were to be sold at the
reporting date.

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 through profit
or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what
the amortized cost would have been had the impairment not been recognized.

3.01.08 Derecognition of Financial Assets

The Business derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or are
settled, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to
another entity. If the Business despite having retained some significant risks and rewards of ownership, has transferred
control of the asset to another party and the other party has the practical ability to sell the asset in its entirety to an
unrelated third party and is able to exercise that ability unilaterally and without needing to impose additional restrictions
on the transfer, the Business derecognizes the asset and any rights and obligations retained or created in the transfer.

3.02 Fair Value Measurement and Valuation Techniques

The Business uses the following hierarchy to estimate the fair value of financial instruments.
11
• Quoted price for an identical asset in an active market, which is usually the current bid price;
• When quoted prices are unavailable, the price of a recent transaction for an identical asset as long as there has not been a
significant change in economic circumstances or a significant lapse of time since the transaction took place. If the last
transaction price is not a good estimate of fair value, that price is adjusted; or
• If the market for the asset is not active and recent transactions of an identical asset on their own are not a good estimate
of fair value, fair value is measured using a valuation technique. The objective of using a valuation technique is to estimate
what the transaction price would have been on the measurement date in an arm's length exchange motivated by normal
business considerations.

Valuation techniques include using recent arm's length market transactions for an identical asset between knowledgeable,
willing parties, if available, reference to the current fair value of another asset that is substantially the same as the asset
being measured, discounted cash flow analysis and option pricing models. If there is a valuation technique commonly used
by market participants to price the asset and that technique has been demonstrated to provide reliable estimates of prices
obtained in actual market transactions, the Entity uses that technique.

The objective of using a valuation technique is to establish what the transaction price would have been on the
measurement date in an arm's length exchange motivated by normal business considerations. Fair value is estimated on the
basis of the results of a valuation technique that makes maximum use of market inputs, and relies as little as possible on
entity-determined inputs. A valuation technique would be expected to arrive at a reliable estimate of the fair value if (a) it
reasonably reflects how the market could be expected to price the asset, and (b) the inputs to the valuation technique
reasonably represent market expectations and measures of the risk return factors inherent in the asset.

The fair value of investments in assets that do not have a quoted market price in an active market is reliably measurable if
(a) the variability in the range of reasonable fair value estimates is not significant for that asset, or (b) the probabilities of
the various estimates within the range can be reasonably assessed and used in estimating fair value.

3.03 Inventory

Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined
using the first-in, first-out method. The cost of finished goods and work in progress comprises packaging costs, raw
materials, direct labor, other direct costs and related production overheads (based on normal operating capacity). At each
reporting date, inventories are assessed for impairment. If inventory is impaired, the carrying amount is reduced to its
selling price less costs to complete and sell; the impairment loss is recognized immediately in profit or loss.

The Business groups items of inventory relating to the same product line that have similar purposes or end uses and are
produced and marketed in the same geographical area for the purpose of assessing impairment.

When the circumstances that previously caused inventories to be impaired no longer exist or when there is clear evidence
of an increase in selling price less costs to complete and sell because of changed economic circumstances, a reversal of the
impairment is recognized so that the new carrying amount is the lower of the cost and the revised selling price less costs to
complete and sell. Any impairment reversal in recognized in profit or loss but is limited to the amount of the original
impairment loss recognized.

When inventories are sold, the carrying amount of those inventories is recognized as an expense in the period in which the
related revenue is recognized.

3.04 Investment Property

Investment property, when applicable, are properties held to earn rentals and/or for capital appreciation is measured
initially at its cost, including transaction costs. Subsequent to initial recognition, investment property is carried at fair
value.

If a reliable measure of fair value is no longer available without undue cost or effort for an item of investment property
measured using the fair value model, the asset is accounted for as property, plant and equipment until a reliable measure of
fair value becomes available. Depreciation of the Business' investment property is calculated using the straight-line
method to allocate the cost less its residual value over its estimated useful life of 25 to 40 years.

12
The residual value, useful life and depreciation method of the Entity 's investment property is reviewed, and adjusted
prospectively if appropriate, if there is an indication of a change since the last reporting date.

Rental income from investment property is recognized in profit or loss on a straight-line basis over the lease term.

Transfers to, or from, investment property shall be made when the property first meets, or ceases to meet the definition of
investment property.

Investment property is derecognized by the Entity upon its disposal or when the investment property is permanently
withdrawn from use and no future economic benefits are expected from its disposal.

3.05 Property and Equipment

Property and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses.
Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary
for it to be capable of operating in the manner intended by management.

Estimated future dismantlement costs of items of property and equipment arising from legal or constructive obligations are
recognized as part of statement of financial position and are measured at present value at the time when the obligation was
incurred.

Major spare parts and stand-by equipment qualify as property and equipment when the Entity expects to use them during
more than one period. Similarly, if the spare parts and servicing equipment can be used only in connection with an item of
property and equipment, they are accounted for as property and equipment.

The Entity adds to the carrying amount of an item of property and equipment the cost of replacing parts of such an item
when that cost is incurred if the replacement part is expected to provide incremental future benefits to the Business. The
carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during
the period in which they are incurred.

Land is not depreciated. Depreciation is computed on the straight-line method based on the estimated useful lives of the
assets, whenever applicable, as follows:

Leasehold improvements 10 to 25 years

Office furniture, fixtures and IT equipment 5 to 10 years
Transport vehicles 5 to 10 years
Other assets 5 to 10 years

Leasehold improvements are depreciated over the shorter between the improvements' useful life of 15 years or the lease
term. Lease term is renewable on continuing basis.

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate,
if there is an indication of a significant change since the last reporting date.

Properties in the course of construction for production, rental or administrative purposes, or for purposes not yet
determined, are carried at cost, less any recognized impairment loss. Depreciation of these assets, on the same basis as
other property assets, commences when the assets are ready for their intended use.

The income and related expenses of incidental operations during construction or development of an item of property and
equipment are recognized in profit or loss if those operations are not necessary to bring the item to its intended location
and operating condition.

If there is reasonable certainty that the Business will obtain ownership by the end of the lease term, assets held under
finance leases are depreciated over their expected useful lives on the same basis as owned assets, otherwise the assets are
depreciated over the assets' useful lives of ten years or, where shorter, the term of the relevant lease.

An item of property and equipment is derecognized on disposal or when no future economic benefits are expected from its
use or disposal. Gain or loss arising on the disposal or retirement of an asset is determined as the difference between the
sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

3.06 Impairment of Non-financial Assets other than Inventories

13
At each reporting date, the Entity assesses whether there is any indication that any of its non-financial assets may have
suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an
individual asset, the Business estimates the recoverable amount of the cash-generating unit to which the asset belongs.
When a reasonable and consistent basis of allocation can be identified, assets are also allocated to individual cash-
generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and
consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs to sell and value in use. 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 for which the estimates of future cash flows have not been
adjusted.

If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying
amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognized as an
expense.

Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at
each reporting date. When an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating
unit is increased to the revised estimate of its recoverable amount, but the increased carrying amount does not exceed the
carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating
unit in prior years. A reversal of an impairment loss is recognized as income.

3.07 Financial Liabilities and Equity Instruments

3.07.01 Classification as Debt or Equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the
contractual arrangements.

3.07.02 Financial Liabilities

Financial liabilities are initially measured at fair value inclusive of directly attributable transaction costs. They are
classified as either financial liabilities 'at FVTPL' or 'at amortized cost'.

3.07.03 Financial Liabilities at FVTPL

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognized in
profit or loss. The net gain or loss recognized in profit or loss incorporates any interest paid on the financial liability and is
included in the statement of operations.

3.07.04 Financial Liabilities at Amortized Cost

Financial liabilities are subsequently measured at amortized cost using the effective interest method, with interest expense
recognized on an effective yield basis.

The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash
payments through the expected life of the financial liability, or, where appropriate, a shorter period to the net carrying
amount on initial recognition.

3.07.05 Derecognition of Financial Liabilities

The Entity derecognizes financial liabilities when, and only when, the Business' obligations are discharged, cancelled or
expired.

If an existing borrower and lender exchange financial instruments with substantially different terms, the transaction is
accounted for as an extinguishment of the original financial liability and a new financial liability is recognized. Similarly,
a substantial modification of the terms of an existing financial liability or a part of it is accounted for as an extinguishment
of the original financial liability and a new financial liability is recognized. Any difference between the carrying amount of
the financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration
paid, including any non-cash assets transferred or liabilities assumed is recognized in profit or loss.

14
3.08 Borrowing Costs

Borrowing costs are recognized in profit or loss in the period in which they are incurred.

3.09 Employee Benefits

3.09.01 Short-term Benefits

The Entity recognizes a liability net of amounts already paid and an expense for services rendered by employees during the
accounting period. Said benefits are measured at the undiscounted amount expected to be paid in exchange for services
rendered. Short-term benefits given by the Business to its employees include salaries and wages, social security
contributions, short-term compensated absences, profit sharing and bonuses, non-monetary benefits, and other short-term,
non-cash benefit.

3.09.02 Post-employment Benefits

The Entity has no formal retirement plan for its qualified employees. The retirement obligations recognized are computed
on the basis of the provisions of R.A. 7641. The minimum retirement pay due to covered employees is equivalent to one-
half month salary for every year of service, a fraction of at least six (6) months being considered as one whole year.

"One-half month salary" includes all of the following:

a. 15 days salary based on the latest salary rate;

b. Cash equivalent of 5 days or service incentive leave (or vacation leave); and
c. One-twelfth of the 13th month pay (where the 13th month pay is the total basic salary for the last twelve months of
service divided by twelve).

In measuring its defined benefit obligation, the Entity includes both vested and unvested benefits. Also, the following
bases were used:
• estimated future salary increases are ignored;
• future service of current employees is not considered; and
• possible in-service mortality of current employees between the reporting date and the date employees are expected to
begin receiving post-employment benefits are ignored, except for mortality after service.

3.09.03 Other Long-term benefits

Other long-term employee benefits are employee benefits which do not fall due wholly within twelve months after the end
of the period in which the employees render the related service. The amount recognized as a liability for other long-term
employee benefits shall be the net total of the present value of the defined benefit obligation at the end of the reporting
period minus the fair value at the end of the reporting period of plan assets, if any out of which the obligations are to be
settled directly.

3.09.04 Termination Benefits

Provisions are recognized when the Business has a present obligation, whether legal or constructive, as a result of a past
event, it is probable that the Business will be required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at
the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a
provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present
value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a
receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the
receivable can be measured reliably.

3.10 Provisions, Contingent Liabilities and Contingent Assets

3.10.01 Provisions for contingencies

15
Provisions are recognized when the Business has a present obligation, whether legal or constructive, as a result of a past
event, it is probable that the Business will be required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at
the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a
provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present
value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a
receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the
receivable can be measured reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

3.10.02 Contingent Liabilities and Assets

Contingent liabilities and assets are not recognized because their existence will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events not wholly within the control of the Business.

Contingent liabilities are disclosed, unless the possibility of an outflow of resources embodying economic benefits is
remote.

Contingent assets are disclosed only when an inflow of economic benefits is probable.

3.11 Revenue Recognition

Revenue is recognized to the extent that is probable that the economic benefits will flow to the Entity and the revenue can
be measured reliably.

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for
goods and services provided in the normal course of business. Revenue is reduced for estimated customer returns, rebates
and other similar allowances.

3.11.01 Rendering of Services

Revenue from a contract to provide services is recognized by reference to the stage of completion of the contract. Revenue
from rendering of services is recognized when all the following conditions are satisfied:
• the amount of revenue can be measured reliably;
• it is probable that the economic benefits associated with the transaction will flow to the Business;
• the stage of completion of the transaction can be measured reliably; and
• the cost incurred for the transaction and the costs to complete the transaction can be measured reliably.

3.12 Construction Contracts

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognized by reference to
the stage of completion of the contract activity at the end of the reporting period, measured based on the proportion of
contract costs incurred for work performed to date relative to the estimated total contract costs, except where this would
not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included
to the extent that the amount can be measured reliably and its receipt is considered probable.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognized to the extent of
contract costs incurred that it is probable it will be recoverable. Contract costs are recognized as expense in the period in
which they are incurred.

The stage of completion of a transaction or contract is determined through the costs incurred for work performed to date do
not include costs relating to future activity, such as for materials or prepayments.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an
expense immediately.

16
The percentage of completion method is applied on a cumulative basis in each accounting period to the current estimates
of contract revenue and contract costs. Any effect of a change in the estimate of contract revenue or contract costs, or the
effect of a change in the estimate of the outcome of a contract, is accounted for as a change in accounting estimate.

3.13 Expense Recognition

Expense encompasses losses as well as those expenses that arise in the course of the ordinary activities of the entity.

The Entity recognizes expenses in the statement of income and retained earnings when a decrease in future economic
benefits related to a decrease in an asset or an increase of a liability has arisen that can be measured reliably.

3.14 Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as operating leases.

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the
inception date of whether fulfillment of the arrangement is dependent on the use of a specific asset or the arrangement
conveys a right to use the asset.

3.14.01 The Entity as Lessor

The Entity is not engaged in the business of leasing business.

3.14.02 The Entity as Lessee

As may be necessary, the Entity may contract lease arrangement of various construction equipment on operating lease
agreement ion order to sustain its operations. If the so happen, the following lease policy shall apply:

Operating lease payments are recognized as an expense on a straight-line basis over the lease term, except where another
systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognized as a liability.
The aggregate benefit of incentives is recognized as a reduction of rental expense on a straight-line basis, except where
another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are
consumed.

3.15 Related Parties and Related Party Transactions

Parties are considered related if one party has control, joint control, or significant influence Business, post-employment
benefit plans for the benefit of Business' and close members of the family of any individuals owning directly or indirectly
a significant voting power of the Business that gives them significant influence in the financial and operating policy
decisions of the Business are also considered to be related parties.

A related party transaction is a transfer of resources, services or obligations between related parties, regardless of whether
a price is charged. An entity is related to the Business when it directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with the Business. Transactions between related parties are
accounted for at arm's length prices or on terms similarly offered to non-related entities in an economically comparable
market.

3.16 Current and Deferred Income Tax

The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except that a change
attributable to an item of income or expense recognized as other comprehensive income is also recognized directly in other
comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively
enacted by the reporting date in the country where the Business operates and generates taxable income.
17
 Deferred income tax is recognized on temporary differences (other than temporary differences associated with unremitted
earnings from foreign subsidiaries and associates to the extent that the investment is essentially permanent in duration, or
temporary differences associated with the initial recognition of goodwill) arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the Business.
Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the
reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against
deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered
based on current or future taxable profit.

3.17 Events after the Reporting Date

The Entity identifies subsequent events as events that occurred after the reporting date but before the date when the
financial statements were authorized for issue. Any subsequent events that provide additional information about the
Business' position at the reporting date, adjusting events, are reflected in the financial statements, while subsequent events
that do not require adjustments, non-adjusting events, are disclosed in the notes to financial statements when material.

3.18 Prior Period Errors

The Entity corrects material prior period errors retrospectively in the first set of financial statements authorized for issue
after their discovery by: (a) restating the comparative amounts for the prior period presented in which the error occurred;
or (b) if the error occurred before the earliest prior period presented, restating the opening balances of assets, liabilities and
equity for the earliest prior period presented.

4 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Critical accounting judgments and key source of estimation uncertainty, if materially relevant are disclosed in the notes.
These items may cover specific items such as revenue recognition and others that requires necessary disclosures.

4.01 Critical Judgments in Applying Accounting Policies

Stated below is an example of the critical judgments, apart from those involving estimations that Management has made in
the process of applying the entity's accounting policies and that have most significant effect on the amounts recognized in
financial statements.

4.01.01 Revenue Recognition

In making the judgment, management considered the detailed criteria for the recognition of revenue from the sale of goods
set out in PAS 18 Revenue and, in particular, whether the Business had transferred to the buyer the significant risks and
rewards of ownership of the goods. Following the detailed quantification of the Business' liability in respect of
replacements of goods delivered, and the agreed limitation on the customer's ability to require further to require
replacement of the goods, the directors are satisfied that the significant risks and rewards have been transferred and that
recognition of the revenue in the current year is appropriate, in conjunction with the recognition of an appropriate
provision for the rectification costs.

4.02 Key Sources of Estimation Uncertainty

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 are disclosed.

5. FINANCIAL INSTRUMENTS

The Entity's financial instruments consist of :

2017 2017
Financial Assets
Financial assets measured at fair value through profit or loss
Cash and cash equivalents 1,851,935### 2,056,186
Trade and other receivables 45,366,971 -
18
 Total 47,218,906### 2,056,186

Financial Liabilities
2017 ### 2017
Financial liabilities measured at fair value through profit and loss
Trade and other payables 12,390,443### -
Total 12,390,443### -

6 CASH

For the purpose of the statements of cash flows, cash and cash equivalents include cash on hand and in banks. Cash
equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with maturities
of three months or less from the date of acquisition and that are subject to an insignificant risk of change in value.

Cash and cash equivalents at the end of the reporting period as shown in the statements of cash flows can be reconciled to
the related items in the statement of financial position:
2017 ### 2017
Cash on hand 192,782 -
Cash in bank 1,629,153 2,056,186
Petty cash fund 30,000 -
Total 1,851,935 2,056,186

Cash in bank under savings and time deposits earn interest at the respective bank deposit rates. Time deposits are place for
varying periods of up to three months depending on the immediate cash requirements of the business.

The effective interest rate on short-term bank deposits ranges from 1% to 3% in both 2017

7 ACCOUNTS RECEIVABLES

The Entity's receivables is stated as follows:

2017 ### 2017
Contract receivables - Trade 36,709,581 -
Contract receivables - Retentions 7,819,705 -
Accounts receivables - Others 687,685 -
Advances to Officers and Employees 150,000 -
Total 45,366,971 -

8 INVENTORIES

The Entity's inventories is stated as follows:

2017 2017
Merchandise / Supplies Inventories - -
Total - -

The Entity employs physical inventory method to determine its ending inventory.

9 PREPAYMENTS AND OTHER CURRENT ASSETS

The Entity's prepayments and other current assets are stated as follow:
2017 ### 2017
Prepaid tax assets 237,301 -
Prepaid expenses - -
Total 237,301 -

Analysis of the prepaid taxes assets for the period ended October 31, 2017 is as follows:
2017 2017
Total creditable income tax withheld during the first to third quarter - -
Total tax payments made during the first to third quarter 237,301 -
Total for three quarters 237,301 -
Total creditable income tax withheld for the fourth quarter - -
Total creditable income tax 237,301 -
19
 Creditable input VAT - -
Total 237,301 -

10 PROPERTY AND EQUIPMENT

The Entity's property and equipment as of October 31, 2017 consisted of the following:
Accum
Accum
Depreciation, Depreciation for Net Carrying
Cost Depreciation,
Beginning of the the period Amount
Ending of the period
period
Land - - - - -
Building and Impvts. - - - - -
Construction Equip - - - - -
SVC/Transport Equip 400,000 - - - 400,000
Office Furn and Fix. - - - - -
Total 400,000 - - - 400,000
Grand total 400,000 - - - 400,000

The Entity used the straight-line method of deprecation.

11 OTHER NON-CURRENT ASSETS

This account consisted of the following:

2017 ### 2017
Investment property 20,000,000
### -
Total 20,000,000
### -

12 TRADE AND OTHER PAYABLES

The Entity's trade and other payables are stated as follows:

2017 2017
Accounts Payable - Trade 12,390,443
### -
Accounts Payable - Others - -
Accrued Expenses Payable - -
Income Tax Payable - -
Total 12,390,443
### -

13 NON-CURRENT LIABILITIES
The Entity's non-current liabilities are stated as follows:
2017 2017
Loans and Borrowings ###
- -
Advances from Related Parties - -
Total ###
- -

14 OWNER'S EQUITY

The capital of the Entity are as follows:

2017 2017
Malano, Capital, January 1 2,456,186
### -
Add: Investments 2,456,186
Net income After Tax for the Year 3,144,954 -
Total 5,601,140
### 2,456,186
Less: Drawings - -
Malano Capital, October 31 5,601,140
### 2,456,186

15 REVENUE/INCOME

Analysis of the Entity's revenues are as follows

2017 2017
Revenue from Government Contractors 13,165,648
### -
Total 13,165,648
### -

16 DIRECT CHARGES/CONSTRUCTION COSTS

20
 16.01 The following is an analysis of the direct service/construction costs from continuing operations:
2017 2017
Direct charges - Materials, Supplies and Facilities 5,092,049
### -
Direct charges - Salaries, Wages and Benefits 3,316,460 -
Direct charges - Construction Overhead (combined) - -
Direct charges - Depreciation - -
Direct Charges - Others 16,794 -
Direct charges - Rentals 1,119 -
Direct Charges - Repairs and Maintenance 23,352 -
Total 8,449,775
### -

17 OPERATING EXPENSES

17.01 The following is composed of the compensation and other benefits expenses:
2017 2017
Compensation and benefits
Salaries, Wages and Other Benefits 402,587
### -
SSS, Philhealth and Pag Ibig Fund Contributions 77,957 -
Employees Benefits 276,998 -
Total Compensation Expenses 757,542
### -

17.02 The account is composed of the following operating expenses:

2017 2017
Adverting - ### -
Communications, Lights and Water - -
Depreciation - -
Fuel and oil 576,077 -
Insurance - -
Miscellaneous - -
Office and Other Supplies - -
Other Services-Freight Out - -
Professional Fees - -
Repairs and Maintenance - -
Representation - -
Security Services - -
Trainings and Seminars - -
Transportation and Travel - -
Taxes, Licenses and Permits - -
Total 576,077### -

17.03 Finance and Borrowing Costs

Finance/borrowing costs during the year is presented as follows:

2017 2017
Interest Expense and Finance Charges ###
- -
Total ###
- -
Total Operating expenses 1,333,619
### -

18 INCOME TAXES

18.01 Income Tax Recognized in Profit or Loss

Components of income tax expense (benefit) are as follows:

2017 2017
Current tax expense 237,301
### -
Deferred tax expense (benefit) -
Total 237,301
### -

A numerical reconciliation between tax expense (benefit) and the product of accounting profit (loss) multiplied by the tax
rate in October 31, 2017 is as follows:
2017 2017
Accounting profit
3,382,255### -
(loss)
Tax expense (benefit) 3,382,255### -
Tax effect of expenses that are not deductible: - -
21
NOLCO - -
Other income subject to final tax (interest income) - -
Total 3,382,255
### -

18.02 Income Tax Payable/Expense

The Bureau of Internal Revenue promulgated Revenue Regulation No. 16-2005 to implement Title IV of the Republic Act
9337 also known as the Amended Tax Code as well as other provisions of the Value-Added Tax (VAT) Law. This
regulation became effective on November 1, 2005. Among the reforms introduced are as follows:

Interest allowed as deductible expense will be reduced by 42% of the interest income subject to final tax starting
November 1, 2005 until December 21, 2008. Subsequently, the rate will be reduced to 33%.

Republic Act (RA) 9504 was approved giving corporate tax payers an option to claim itemized deduction or optional
standard deduction (OSD) equivalent to 40% of the gross sales. Once the option is made at the beginning of the taxable
year, it shall be irrevocable for the taxable year for which the option was made.

22
19 SUPPLEMENTARY INFORMATION UNDER REVENUE REGULATIONS 15-2010

Revenue Regulations (RR) No. 21-2002 prescribing additional procedural and/or documentary requirements in connection
with the preparation and submission of financial statements accompanying income tax returns was amended under RR 15-
2010. The amendment that became effective on December 28, 2010 requires the inclusion in the notes to financial
statements, information on taxes, duties and license fees paid or accrued during the year in addition to what is required
under the Philippine Financial Reporting Standards and such other standards and/or conventions.

Below are the additional information required by RR 15-2010. This information is presented for purposes of filing with the
BIR and is not a required part of the basic financial statements.

20.01 Taxes, Duties and Licenses Paid or Accrued

The details of the Business' taxes, duties and licenses fees paid or accrued in 2016 are as follows:

19.01.01 VAT Output Tax

Details on the Business' VAT output tax declared during the year are as follows:
Vatable Zero-rated Vat-exempt Total

Revenue ₱ 13,165,648.38 ₱ - ₱ ###

- ₱ 13,165,648.38
Total ₱ 13,165,648.38 ₱ - ₱ ###
- ₱ 13,165,648.38

Output VAT ₱ 1,579,877.81 ₱ - ₱ ###

- ₱ 1,579,877.81

23
 19.01.02 VAT Input Tax

An analysis of the Entity's VAT input tax claimed during the year is as follows:
Balance, January 1 ₱ ###
- ₱ -
Current year's domestic
purchases/payments for:
Goods other than for resale or
5,668,125.60 680,175.07
manufacture
Services lodged under cost of goods sold 41,265.26 4,951.83
Total available input tax ₱ 5,709,390.87
### ₱ 685,126.90
Purchases not entitled to VAT in put 0.00 0.00
Claims for tax credit/refund and other adjustments 0.00 5,707,048.83
Total VAT payments during the year 0.00 0.00
Total In Put VAT ₱ ###
- ₱ 6,392,175.73
Balance, December 31 ₱ ###
- ₱ (4,812,297.93)

19.01.03 Other Taxes and Licenses

An analysis of the Entity's taxes, licenses and permits during the year is as follows:
2016

RCT ₱ 500.00
ARF 500.00
Mayor's permit, taxes and fees (1,000.00)
Total -

19.01.04 Withholding taxes

For the year ended December 31, 2016, the Entity has collected and accordingly remitted to the BIR the following
withholding taxes.
2016

Withholding tax on compensation under BIR Form 1601 C ### ₱ -

Expanded withholding on income payments under BIR Form 1601 E 6,000.00
Total ### ₱ 6,000.00

20 SUPPLEMENTARY INFORMATION UNDER REVENUE REGULATIONS 19-2014

RR No. 19-2014 that prescribes the use of new income tax forms starting with calendar year 2014 became effective on
December 9, 2014. Companies are now required to include, as part of the notes to the financial statements, the schedules
and information on taxable income and deductions.

Below are the additional information required by RR 19-2014. This information is presented for purposes of filing with the
BIR and is not a required part of the basic financial statements.

20.01 Revenue

Taxable revenue for the year ended December 31, 2016 consists of:
Per financial Per income tax
statements return

Revenue from private entities ₱ 13,165,648.38

### ₱ 13,165,648.38
Total ₱ 13,165,648.38
### ₱ 13,165,648.38

20.02 Direct costs

Deductible service costs for the year ended December 31, 2016 consist of:
Per financial Per income tax
24
 statements return

Total direct service costs

Total direct costs ₱ 8,449,774.51

### ₱ 8,449,774.51
Total ₱ 8,449,774.51
### ₱ 8,449,774.51

20.03 Allowable deductions

Itemized deductions for the ended December 31, 2016 consist of:
Per financial Per income tax
statements return
Salaries, Wages and Other Benefits 402,587.30 402,587.30
SSS, Philhealth and Pag Ibig Fund Contributions 77,957.01 77,957.01
Employees Benefits 276,997.64 276,997.64
Adverting - -
Communications, Lights and Water ###
- -
Depreciation - -
Fuel and oil 576,076.67 576,076.67
Insurance - -
Miscellaneous - -
Office and Other Supplies - -
Other Services-Freight Out - -
Professional Fees - -
Repairs and Maintenance - -
Representation - -
Security Services - -
Trainings and Seminars - -
Transportation and Travel - -
Taxes, Licenses and Permits - -
Total ₱ 1,333,618.62 1,333,618.62

25
114,000.44

26
3,382,255.25

27
0.00

28