BOGo (THe vEePEE TIE TA a HHA Il % tadraaateactase COMMISSION The following document has beta received: Receiving OffiterfEncoder : Reggienaid R. De Gastio cos Receiving Branch SEC Head Office Receipt Date and Time : April 08, 2016 10:86:54 AMI Recelves From Others Company Representative Dee Saurce Company Information SEC Registration No. cogo1e1206. Company Name PHILS. JEON GARMENTS INC Inaustty Classification Company Type ‘Stock Corporation Document information Document iD) 10a202016001462 Bocument Type FINANCIAL STATEMENT.ANNUAL Document Code FS Period Covered December 31, 2015 No. of Days Late Q Department CEDICRMO Remarks 5.0. ROBINSONS cere pEDEE ey | EP DGE TT) Fam re Drsanert oe tase ‘eonday Use Tpa FActcse (ARS [ern] ay COMPANY INFORMATION Siesta Aine ean Tepe ura Atte Bhiis jeoniyahao.com sry ri Ne. a Sechntiere Ara ese Fc Year Aaethiony Meeltey t [2 amr [C3106 ‘CONTACT PERSON INFORMATION cece cert pon UST Daan if Cran Sane cert fonen SERMON a oe TA wept MS. JOSEPHINE MALING i 1 [as itendivaice com ite — ] 2 A Boat met be rept and 1 Onfcons Fu a eo epi orcas ft al he air desta ric en ‘nent scoareace aso wtn nr and aspen con Gontace Person's Addrogs LOT, BLK 5, PHASE Il CEPZ ROSARIO, CAVITE ea im Cnn wii Hy exon cps on dept ee nt alee runt onan ns th comncen reg sce ooce es nee etn Deal eaae cpa fn ayPhils-Jeon Garments, Inc. ‘ AUDITED FINANCIAL STATEMENT ‘For the years ended December 31, 2015 and 2014 c Etoe vEDES March 18, 2016 | Jose Corcuera and Co,, CPAsors. aux 1, rmAsEE Facade ULS-JEON GARMENTS,INC. : EBOD Lies PEPES REFUBLIC OF THE PHILIPPINES ) Ss, STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS ~ ‘The Securities and Exchange Commission SEC Bldg,, EDSA, Greenhills Mandaluyong City ‘The management of PHILS-JEON GARMENTS, INC. is responsible for the preparation and fair presentation of the financial statements for the years ended December 31, 2015 and 2014, In accordance with the prescribed financial reporting, framework indicated therein, This responsibility includes designing and implementing internal controls relevant to the Preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or ervar, selecting and applying appropriate accounting Policies, and making accounting estimates that are reasonable in the circumstances. ‘The board of Directors reviews and approves the financial statements and submit the same to the shareholders. JOSE CORCUERA & CO. CPAs, the independent auditors, appointed by the shareholders has examined the financial statements of the company in accordance with Philippine Standards om Auditing, and in its report to the stockholders, has expressed its opinion on the faicness of presentation upon completion of such examination. 2 LOUIS IK janG Chairyap of the Board oy ie om YANGSON CHOI ~ = ‘Chief Executive Officer / Presidentw w a w & 2 2 g a a 3 2 SUBSCRIBED AND SWORN to, this affiant exhibited to me hi ae Sereceetlin Seslt = ere Gioeil 28 Doe. No: ee Page No. Hr Roll of Attomey’s No. 6497 ook Ne: 1B? NO.0S98567 - O.¢. Chapter Series of 20/0 ‘Aamin Matter No, NP-252 MCLE No, 0022246 TIN No, 140-334-836 PABS [DPRMANNEX/ f=. 4 (PNP Gaz Stuivenh Camp Cram, Qus:27 Gi IR CERT, REG. SABLNESS 9. ” oF0s) : CORCUERA & CO. (CERTIFIED PUBLIC ACCOUNTANTS: No. 0318 ‘The Board of Directors and Shareholders FHILS-JEON GARMENTS, INC, Lot 1, Blk, §, Phase 1, CEPZ,, Raseelo, Cavite, 4106 Report om the Financial Statemestts We hove audited the accompanying financial statements of PHILS-JEON GARMENTS, INC. which compriae the slelements of financial position as at December 31, 2015 and 2014. and the income statement, stateeents of changes in equity and statements of cash flows for the years then ended and a summary of significant accounting policias and other explanatory information. Management's Respoxsibility for the Financial Statements Management is responsible fer the preparation and fair presentation of these financial statements in accurdance with Philippiite Financial Reporting Standards for SMEs, and for such internal controt as management determines i& necessary to enable the preparation of financial statements that are free from material misstatement, whether due te fraud or error. Auulitor's Responsibility ‘Our responsibility is to express an opinion en there financial statements based on our audits, We conducted our audits in accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit 1o obtain ressonable sesurance about whether the financial stalements are free {evn axaterial misstatement. ‘An audit involves performing procedures fo obtain audit evidence about the amounts and disclosures inthe financial statements. The procedures selected depend on the audit's judgment, including the szssesament of risks of material misstatement of the financial statements, whether due 9 fraud or crror. In making those risk assessments, the auditor considers internal conteol relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriste in the circumstances, But not for the purpose of expressing an opinion on the effectiveness of tho entity’s internal euntrel. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by management, 35, swell as evaluating the overail presentation of the financial statements. We beligve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our nu inion. Emphasis of the matter The accompanying financial statements, presenied in Philippine pevos, have bees prepared for the ‘ling with the Socuritiesand Exchenge Commission (SEC), The SEC in its Memorandum Circular No. 1 Series of 2406, Guidelines on the Filing of Functional Currency Financial Staternents, requires entity ‘whose fntoalcstengy is oir tan Pippin pesos on chooses pes ANGAL SHEEN 3 vt ‘eipredaed in Pr lippin pesos, to submit financial statements expressed in Functional currency — and in Philippine pesos. The accompanying financial stalemelte funetional currency financial statements Retirees Village 2, Daang Amuye 1, Tanz Tel. Na, (046) 437-6191 + (046) 437-1 ‘Telefax: (048) 437-6724 + E-mail: josecorcuera_co.cpas@hotmail.comOpinion % Inour opinion. the financial statements present fairly in alli epee the financial position of WW PHILSJEON GARMENTS, INC. as at December 31,2015 aid aa ‘it is Grancial performance Gand ts cash flows for the yesre then ended in Astoionds wh Ak Dlaeets Poanch Repusting. Standards for Shs Ey ghar S of Sut ® sport on Otuer Legal and Regulatory Requirement AE $B Our aucit was conducted for the purpose of forming an opinicc on thebsi, Financial Stalements HB taken as a whole. The supplementary information: judi red winder Revenie- Regulations No, 19-2011 YP on VAT, taxes, cities and license Fees and on Revenue Regulitions Nac 16°2020 on the details of sales and cost of sales per activity and details of other income, ‘a #etfulred by the Bureau of Internal Revenue to be cliseloseel in the Notes to the Financiel Slatuants is presented for purposes of YD additional anaiysis and is not a required pat of Financial Statements prepared in accordance with © Philippine Financial Reporting Standards for Small and Medium-sized Entities. The information i also not required by Securitice Regulation Cede Rule 68, Ae Amended (2011). Such supplementary Information Dias soon subjected to the auditing, prscedtures applied in the audit of the lac financial statements and iy our opinion is fairly stated in all moteril respects in relation bo the basic financial statements fakon 9 2 whole. Jost ee asf MONTE “ORCUERA CoA Coleus ibe BOA Accreditation No. 0315, toned on Nol 2, 2025, effctive wild December 31, 2008 SEC Accreditiins No 1882-A (as individual), Fsgug oe Ma 5,15, ofective until May 4, 2018 SEC Accreditii No, @202-F (Group C), issued on May 5, 5, effective ent May 4, 2018 Tax Identificeric~ No, 107-601-574 BIR Accredils'io- No. 09-005812-4-2014, issued on Febru. 5, 204, effective wll February $, 2017 PTR No, 608153 “sued an January 11, 2016, Tense, Cavite Bik. 4 Lot 9180" cs Village? Daang Amar) i svaa, Cavite ‘March 18, 2° 1-10-2016 Time: 0:12: Www .sec.¢ vv. ph Userwere A, PHILSJEON G. COMPARATIVE MENTS, INC. TATEMENT OF FINANCIAL POSITION 0 az082400% a a = a 708 (RAscets Current Assets 2 coh 75. 75094 3° : 4375.09 i SG Trade and other receivable aaa $B Inventosies 6.287.467 a Somer current acon: ay 140.081 99,088 Total Current Asset BABA 396 er ‘Non-curtent assets Property, Plant dc Fquipment -net 28 22.397,973 24396354 ‘Otberassets 239 317,750 321730 Tobi Nencare sets aT 2asi8 108 TOTAL ASSETS To0.a0 20 35ani a7 ‘Fa ape snc Ses pe | Romp on erin é 9 San Patio Chy ROD ie aa Roce: avis ‘AngauitsRas 2015 De, TIAGILITIES & SHAREHOLDERS EQUITY Curren abilities 5 ‘Tradeond other payables 234,794,559 87580397 B cicscieaneouine : a b = Income tax peysble an 92,902 195,368 Frotal Corrent Liabilities “Bsa BOTS u TOTAL LIABILITIES 95,160,574 (88,077,505 os ‘Boanenorvens tOUITY ‘to Capital stock-P 100-00 par value per share ‘Authorized 200,009 shares, Subcoribed and pideup «152.527 shaves 35,282,700 15,252,700 (Cumulative earnings , beginning, (3,522,595) (4,383,033) [Net income (Net Loss) for the period - P-Kritting on8.162) 2.058.929 [Net income {Net Hose) forthe period - PMain (5573.096) (1589.85) ‘Cumulative earniny + (losses), erating, 2 (9,513,858) (3,939,058) TOTALSHARERO! | FRS EQUITY 57386 Te TOTAL LIABILITI = SHAREHOLDERS EQUITY si 100,899,520 99A1LAaT ie ee EE EEE ‘reece we FilePHILS-JEON GARMENTS, INC. COMPARATIVE INCOME STATEMENT ® 7 a (5 oe Seatac yours endo Desernber 34 Se ae 2014 & i NET SALES 113569.774 2 Ecosrorcoons soup 93623,315) “ (_ GROSS FROFIT Soe pa 14260 Q SOTHERINCOME inae anne wore 2 (GENERAL & ADMINISTRATIVE EXPENSES aauzze (15,206,082 03,817,602) INCOME (L055) OM OPERATION Sasa TH PROVISION FOR INCOME TAX aaiar (505,379) eae ‘ELINCOME: Caza BE amapapeg ae Sa“| PHILS-JEON GARMENTS, INC, STATEMENTS ( » CHANGES IN SHAREHOLDERS’ EQUITY — a wo Total a stareholgers B Equity 2 iS batance st January |.2m4 586570) 11,266,150 ™ NetIncome forthe se" 463975 9.975 8 palangeatDecer 2014 ees? 1525270 SSI) ——_—1,700305 Baimeest Deke 31200 EE EO = 2 Balance eof Jas 2015, pretously = gen . Ha aii spores Bet 18252 aszases) 0.106 Net income for iat ceorzm (0991.25) Balance at Dees «11,2015 153577 __16252,700 a eee Ramee oe a ae : ae st Ra 1-10- aM coy phPHILS-JEON G.\{cMENTS, INC. COMPARATIVE 1 ATEMENT OF CASH FLOWS == Bors me 5 ‘adCash flows from operating activities 3 ‘Bret income (lets) (3,991,259) ® 463975 ip fdiuatmente for: sghguten fe ‘DB __Depreciation nf [23ag7 2 5,078 | SOperaing income Ivars wedi epitel change z 275579, 019,057 Changes in op uaigasses & Habilies: ee o ‘Decreast flince..9e} in= r 2 “Trade and se eeceivatle (1973019 70,132,416 e lnventeric 462,300) Gsar11) e Other cur | assets: (50,994) 733,196 tnerease doer) hs Trade and or payable 7.610.925, (13594920) Other pay: 10,752 (61,794) Income tas able (132.376) 195,368 Caahgenemted fro ~crationd 990921 Taso. 444), Net cash frp oper | 2 seivities 2,339,108 168,606 Cash fiow from ir Reduction in (Ad Property, ply teqpipment 952,765) soi? ‘Adjustmenyi sal of PPE (956,735) (aaaray Other Assets 4,900 13,000) Tetashuslint Thgaetivities Gass (285.055) Net inerease "eer cash 804,644 (217,052) Cash atbervnin rod 4375058 ssht,Ade casH AT 1100, z sa79738_& 4375054 Feeteay Fy a Sime Tascam ne © Sen Pao chy Nd. 548-b5i adr Came WwW. Sac. onPHILS-JEON GARMENTS, INC. NOTES TO THE FINANCIAL STATEMENTS: For the years enced December 31, 2015 and 2014 pepee tiee “toe | “With the Securities and Exchange , eo ‘The primary business purpose of the company is to eligi Pidemaiiverusing, importing and exporting of knitted and woven garments such as but not Hmited to Thins, patities, briefs, other underwear's and. other gorments goods of similar nature, and any all materials, supplies used or employed in or related to the manufacture (of suck Finished goods, ‘The Campany’s registration with the Philippine Economic Zone Authority {PEZA) was approved on September 14. 1590 with Registration No. 904029. The scope of the Company's registered activity with PRZA is to engage in the ‘manufacture of garments such as T-shirts, panties, briefs and other underwear's; incresse in production capacity for ‘several types of underwear's, particularly shorts (drawers), vest, panties, 3/10 sang (short sleeves t-shirt) and T-shirt (expansion) and manufacture aitted fabrichknitting yams. As a zone enlemprise the Company is entitled 10 all ‘benefits and incentives under Republic Act No, 731605 amended. (On July 20, 1985, an extension was granted to the Company covering the period May 1995 te April 1997 as per Notice of income Tax Holiday Extension Approval No. 95015. In June 1997, PEZA approved the Company's application for increase in production capacity under Resolution No. 97-207 dated June 27, 1987, As such the extension project named Factory 2, i entitled to all incentives under Republic Act 7916 fora period of 3 years starting September 1997 and expires August 2000, (On March 18, 2010PEZA approved the Company's application of new activity particularly manufacturing of knitted fabric and knitted yam per Resolution No, G1-I61 as amended. The ssid activity is entitled to Income Tax Holiday and other related incentives starting 2010. The Company started ite commercial operation for the said activity on Jely01,2010. On September 4, 2013, the Securities and Exchangt Commission (SEC) approved the application of the Company to decrease its authorized capital stock from Php100,000,000 t Thp20,000,000 at Phpl00 per shim (éjuity ‘estructuring). The Reduction Surplus of Php75695,900 resulting from the decrease in the subscribed and paid-up ‘capital from Php3,063,400 to Phyp14,967,500 was used to wipe-out the accumulated deficit refleccd in the audited financial statements of the Company as of December 31, 2012, which is Php78, 695,500. During the seme year additions] paid in capita through cash infusion was made. Total adsitiona invent wae Phrpd85,200 divided into. Base tshanes. Ace Daerah ord, fie Retalsubbdribdd Tha aad Pee 8 Php15.252.700, ‘The Company is located at Lot 1, Bik. 5, Phase ll, CEPZ, Rosario, Cavite, 4106, wrurrdhe Snandal: ‘isolithe Company for the year ended DRBiB 31 HOUSINGS authbmtebaTrisece by the Company President on March 18, 2016. The Board of Dizectors ip stil empowered to make amendments even after the date of iseue.2 Summary of Sipnifcant Acaounting Policies “The principal accounting policies applied inthe preperation GEA enemero set out below. Basis of Preparation “The accompanying financial statements have been prepared in ‘Standards for Small and Medium Sized Entities (PFRS for SMEs). ‘ordance with Philippine Financial Reporting €TS8O Ltow bEDEE ‘The Company applied PFRS 1, “First-time Adoption of Philippine Financial Reporting Standards", in preparing the financial statements, with Jaruary 7, 2008 as the date of transition and Janwary 1, 20019 as the date of conversion. Accounting Policies doy The following scoounting standards that have been published and issued by the International Accounting Standards Board (LASB) and adopted by the FRSC which became effective for accounting periods beginning on orafler January 12009 were adopted by the Company: Station Small and Medium — Sized Entities Section 2 = Conceptsand Pervasive Principles Section3 + Financial Statement Presentations Section = Statement of Financial Position, Section 5 - Stulement of Comprehensive Tneame and tncome Statement Section 6 - Statement of Changes in Equity and Stetementof Ineorve and Retained Eamings Section? - Statement of Cash Flows Section 8 - Notes ta Financial Statements Section 10 - Accounting Policies, Estimates and Errors Section 11 + Basic Financial Instruments Section 13 - Inventories Section 17 - Property and Equipment Section20 = Leases Section 21 = Provisions and Contingencies Section22 - Liabilities and Equity Section23 - Revenue Section25 - Borrowing Cost sain - Inpsinggietto] 19-7 Section28 = Employerbetsing ~~~ aoe Section 29 - Income Tax Secion30 - Foreign currency translation, Section 32 - Events After the End of the Reporting Period neat. BERT go PALEY Ste ‘The effects of these new standard, amendments and interpretations on the Company's accounting policies and on the amounts disclosed in the financial statements are summarized as follows: 0:41:23 AM User Name: hansoll Section 1, “Soll and Medium-Sized Entities", PFRS for SME's is intended for Non Publicly Accountable Entities that publish general purpase financial statements for extemal users.£7166 PErte pied were Section 2, “Concepts and Pervasive Principles", describes the objective of fSinancial statements of small and ‘medium-sized entities (SMEs) and the qualities that make-the: useful. It also sets out the concepts and basic principles uf als [BE ee Section 3, “Financial Statement Presentation, pee 2 egies spit pion an entity assesses how to present fitly the effects of transactions and other ai that an, efiity shall snake an. explicit and unreserved staternent of comptiance With PFRS for ray te saree BES of financial statements must be presented at least annually and at Jeast one year comparaii fents and riote data, and items should be consistently presi tl dantel fom on facie nes fair presentation of financial Setanta compliance th the FERS fr SMES oe ust of Reena beets ‘This section prescriber the basis for presentation of seferel Burpee? Bracial slalements for SMEs to ensure comparability both with the entity's financial statements of previous periods and with the financial statements of other entitics. It sets out overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content. Section 4, “Statement of Financial Position”, provides specific requirements on the presentation, classification andi related disclosures of entity's assets, liabilities and oquity as of a specie date. It aloo Sets out the information that Isto be presented in a statement of financial position and how lo present il The sialement of financiel position (sometimes called the balance sheet) presents an entity's asses. liabilities and equity es of» specific date—the end of the reporting period and provides the minimum line items that should be included in the statement of financial position, however, additional line items, heading and subtotals shall be presented if they will be relevant to an “understanding of the ontity’s financial position. Section 5, “Statement of Comprehensive Income and Income Statement", provides specific requirements on the resentation, classification and related disclosures of entity’s total comprehensive income for the period - Le. its Financial performance for the period in one or two financial statements. It scts out the information that is to be prevented in those statements and how te present it Section 6, “Statement of Changes in Equity and Statement of Income and Retained Eamings", sets out ‘equirements for presenting the changes in an entity's equity for a period, either in a statement of changes in ‘equity or, if specified conditions are met and an entity chooses, in a statement of income and retained earnings the ‘S08 oF invantonies is ao longer aqseptable Section 2, "Statement of Cash Flows", requires the provision of information about the historical changes in cash and cash equivalents of an entity by moans of a exsh How staternant which classifies each flows during the period from operating, investing and financing activities. Section 8, “Notes to Financial Statements”, sets out the principles underlying information that is to be presented in thenotes ta the financial statements and how to present it. Notes contain information in addition to that presented in the statement of financial postion, stalecnent of comprehensive income, income statement (if presented), oe eee oe saree pies creche Noes prot tans daroplte € Sagentbas fase poets be astten od information about items that do not qualify for recognition ia those statements. In addition to the requirements of ‘his section, nearly every other section of this PFRS requires dizclovures that ary ngrinally présente in the nobes Section 10, “Account et, Estimates and Errors elipinates the, concept of fundamental erot and the MBAS BORE Beooctive apsterion of ehaad Se Niaalay BaD eens Se eee see re how to apply the concept of materiality when applying accounting policies and correcting errors.PEDEE Stow ETHG Section 11, * Basic Financial Instruments’, deals with recognizing, measuring and disclosing: basic financial ‘instruments and. i¢ relevant to all entities. An entity shall recagnize-a financial asset or financial liability only when the entity Becomes a party to the contractual provi lity Is eecognized initially, an entity shall constitutes, in effect, a financing transaction. f. When a financial asset or financial price unless the arrangement ey Section 18, tnventories’, prescribes policies for seins andietoing inieatrles and provides guidencein ea Hips a faliernatives for measurement of inventories. Inventories are measured at the lowed oibig price less cnets to complete and sell Cost ig determined using specific identification, ee micah ‘weighted averege for others, Taventory cost Inchides cost to purchase, cos of conve the asset to present location and condition. Impairment write dawn te net realizable value, Spee ‘measure inventories at the lower of cost and estimated selling price less to complete and sell Section 17, “Property and Equipment,” prescribes the accounting treatment for property equipment so that users ‘of the financial statements can discern information #bout an entity's investment in its property and equipment and the changes in such investment. It prescribes the accounting treatment and related disclosures for property and equipment, investment property, and non-current assets held for sale whose fair value cannot be measured rclisbly without undue cost and effort. Tt provides guidence on initial and subsequent recognition as well as measurement after recognition. It requires depreciation for each significant part of an item of property, plant and equipment: The ctondard also provides guidance on the determination of the exrrying amount of the aecets, the residual valve, depretiation period and derecognition principles to be observed. The principal istuts in accounting, for property and equipment are the recagnition of the asects, the determination of their carrying amounts and the depreciation charges anc impairment losses to be recognized in rclation to them. An entity shall measure an item Cf property and cquipment at initial recognition at its cost. The cost of an item of property and equipment is the ‘cash price equivalent at the recognition date. f payment is deferred beyond normal credit terms, the cost fs the present value of al future payments Section 20, “Leases”, prescribes that lease payments under operating leases shall be recognized as income/expense ona straightline basis unless another basis is more representative of the timing of the benefits obtained by the user of the asset or the payments are structured to inerease in line with expected general inflation. It applies to greements thot transfer thé right to use assets even though substantial services by the lessor may be called for in ‘connection with the operation or maintenance of such essels. This section does nat apply fo agreements that are contracts for services that do not transfer the right to use assets from one conteectiag party 40 the other. Its ‘objective isto prescribe, for lessees and lessors, the appropriate accounting palicies and disclosure to apply in ‘Section 21, “Provisions and Contingencies". It outlines the recognition of provision only when: {a} the entity has an obligation at the reporting date as a result of e past event: (b) it Is probable (ie, more likely than nor) that the ‘entity will be required to transfer economic benefits in settlement: and (¢) the amount of the obligation can be ‘estimated reliably. lis objective ig to ensure that appropriate recognition ctiteria and measurement bases are applied to provisions, contingent fi ies and contingent assets and that suéfisient information is disclosed in the alesis enable uses lo Utdetstand tit nabare ea 3S God a > :17 aM Section 22, “Liabilities and Equity”, establishes principles for classifying financial instruments as either liabilities or equity and addresses accounting for equity instruments issued to individuals or other particy scting in their capacity as investors in equity instruments (Le. in their capacity 28 owners), wow. gee eae + BBS n GOT cF Pevitan ateional prideinee ve WUE GEy DEUS fe ADAG cased at the fair value of the consideration received or receivable. It prescribes the accounting treatment of revenue arising from certain types of transactions and events. The primary issue in accounting for revenue is determining when to recognize revenue, Revenue is recognized when itis probable that future ceonomic benefit will flow t the entity and these benefits can be measured reliably. This sectian identifies the circumstances in which these itera will be met and, therefore, revenue will be recognized. It also provides practical guidance on the ‘pplication ofthese criteria,=— ee eee oe oe oe es pEret Siew £T6e Section 25, “Borrowing cost", it dafinas borrowing cost as infezet-and other costs arising on an entity's fnanctal Sabie and finance lease eblgations I includes (s) infgred"Gafiehie-fotevlated using tho effective interest ‘metho (b) finance charges in reapect of finance eosey a8 (ge aNfétehces arising from foreign currency borrowings tothe exen! thet they are regarded a a3 * SP = 2 Section 27, "Impairment of Assets", prescribes the pretreat ehtity appiies to ensure that its asses are carried at no more than their recoverable amount if its cartfigi Sunt extéds the amount to be recovered through use or sale of the sect, If thiais the case, thesiiet is descobed tocbe inpslred and the standave requires the entity to recogiixe an impairment loss. The \egitn’ slatpectige-dahen an entity should reverse an impairment loss previously recognized. Nee ae Section 2, “Employee Benefits,” applies to all employee benefits offered by an employer to employees and their ependents and benofieiarier. This section applies to employee benefits under: () formal plans and agreements Detween an enterprise and its ceployses, (i) national, local, industry or multiemployer plans; and informal practices giving rise to a constructive obligation. This section also identities the following categories of employee benefits such a5 short-term employee benefits, post employment benefits, other Jong-term employet benefits and termination benefits. It also deals with accounting and reporting by the plan to all participants as a group, It does not deal with reports to individual participants about their retirement benefit rights. An entity shall recognize the cost af all employee benefiis to which its employees have become enlitied asa result of service rendered 19 the ‘entity curing the reporting period: (0).a3 4 lisbility (b) as an expense, This section shall be applied in the financial Stataznents of rtirement benefit plans where such financial statements are prepared. Section 29, “Income tax,” covers accounting for income lax. It requires an enlity to recognize the curment and future ‘x consequences of transactions and other events that have been recognized in the financial statements. Section 20, ~ Foreign currency translation’, it explains that alll components of the financial sttennécts arc measured in the functional currency. Functional currency isthe primary economit environment in which the entity operates, All transactions entered into in currencies other than the Functional currency are treated as transaction in foreign currency. Assets and lisbilities are translated at the closing rate at the date of the statoment of francis! position: income and expenses at the dates of the transections, All resulting exchange differences are recognized in other ‘comprehensive incor. Section 32, “Events Alter the End ofthe Reporting Pesiod,” defines events after the end of the reporting period and ‘ste out principles for recognizing, measuring and disclosing such events ens afte the end af the reposting period are those events, favorable and unfavorable, that occur between the end of the reporting pttiod aid the sdate when the Financial statements are authorized for issue Ils objective isto prescribe: (a) when an enkiy should adjust its nancial statements for evens after the reporting period: ard (6) Ghe disclosures that an entity shold sive about the date when the financial statements were authorized for issue and about events after the reporting Period. It also requires that an entity should not prepare ils financial statements on a going coneam basis if events after the reporting period indicate thatthe going concern assumption is not appropriate, a : -16— is : 0:19:36 & Section 35, "Related fel Sica” ay hh 6 re ard day 339235 2M the disclosures for related parties. It requires disclosure of the compensation of key mansgement pergostnal, It also ‘squires an elit to include i its financial statements the dgelagvres necessary to draw atenlon fo the posbilty that its financial position and profit oF lose have been affected by the existence of related parties and by SOB Ser piis bmn wim uch paris. ser Name: hansoll ‘The adoption of the above standards, amendments and interpretations, upon which the Cotipany has opted to ‘dopl, dicl not have any significant effect on the Company's froncial statements, These, hawever, require ‘additional disclosures on the Company's financial statenseints,An December 31, 2015, it is the opinion of Management that assets and liabilities were recognized at hence, these were considered deemed cast value; So re (mee *B) Einonclal Accote Financial assets include cash, cash equivalent (if any) i Gosh expenses on a doy to day transaction of the compe accounts. Cash in bank in savings accounts earn int reproduction cost, Lansportation, ete. ast. Cash equivalents if any, arc short-term, highly liquid debt instruments that are readily convertible to known amounts of cash with original maturities of three manths or less and that are subject to an insignificant risk of change in value. £66 Lt6e PEPEE ‘Teste Receivables ‘Trade receivables is a basic financial assets that are intially measured at the transaction price and are subsequently carried at cost or amortized cost less impairment in value. It is measured at the undiscounted amount of cath or other consideration expected to be received net of impaiment. Any change ia values recognized in profit ond loss Impairment loss is provided when there is objective evidence that the Company will not be able 10 collect li amounts due in accordonce with the original terms of receivables, The aio! of the impairment loss is determined as the difference between the assets carrying amount and the present value of the estimated cash flows. Dies Recrinables Other recdivables are initially measured at the transaction price and are subscquently stated at amortized sos less provision for impairment, Impairment of receivables is established when there is objective evidence that the ‘Company will nat be able to collect all amounts due according to the original terms of receivables. ewentarics Inventories are asoets ; (1) held for safe in the ordinary course of business (2) in the process of production for such sale (3}in the form of materials or supplies to be consumed in the production process or in the rendering of services. Inventories are initially recognized at cost. The cost of inventories inciudes all costs of purchase, cost of conversion, sd ober costs incurred in bringing the inventories to their present Jocalion and conditions. Inventories are subsequently valued at the lower of cost and selling price less cost lo. complete and scll ( net realizable value } Inventories are assessed for impairment at cach reporting date. Mrnagement then resssesses the selling price less cost to complete and sell (NRV) in each subsequent period to determine if the impaicment losses previously recognized should be reversed, Cost of purchase of invidiGriSsAindiudeh tel pOeenGaprich ofa Meine nolrenibGte basis, uhiport and handling cost and any other directly attrbuteble casts less trade discounts, xebates and similar items. Cost of conversion of inventories include costs directly related to the units of production, suchas direct Inbor and systematic allocation of fixed and variable production overheads that are incurred in converting the materials inte finished Taree Rye eringyepiermined using the moving averags meted Name: hansoll ter Cacrent Ase Other current asscts include tax credits which represent the total of accumulated creditable withholding tax for cuit year and prior year's excess exedit (if any those are carried st fate valu, Other aument asset include prepaid supplies which arewahued athe lower of cost Ge a8 ulieable value. eal incladesprepayanens such st Prepaid taxes and prepaid expenses that arc initially recorded at transaction cost and subsequently measurcd at cost Jess impairment loss, if any: iPraserty, and Eawioment Propesty, plan! cod equipment (PPS) ar tangible asst and services, for rental to others or for administrative pero =e ge ee geek VB ‘The Initial cost of property and equipment compris its idles and aify}directly aticbutable casts of ‘bringing the asset to its working condition and locslidn'far its giendGd yse. These can include the costs of initial delivery and handling, installation and assembly, ang) of banctionlalifje- Expenditures incurred after the property and equipment have been put into operations spih as teary ahd pmaitenance and overhaul costs, are normally charged to operations in tho period the assitaresairunted. OM sihwtiors where it can be clearly demonstrated that the expenditures have scgulted in an inérease li the fifure economic benefits expected to be obtained from the use of an item of properly, and equipment beyond ite originally assessed standard of performance, the expenditures are capitalized as additional costsof property and equipment. Cost also includes any evel retirement obligation and Interest on Lorrowed funds used. When assels are sold or retired, their casts and accumulated depreciation, amortization and impairment losses if any, ore eliminated sm the aceounts and any gain or loss resulting from their dispecal is included in the statement of operations of such period. SR i pst ian ‘ipa yo be used ding mare than one BN Eevee etee ‘Stoo Property and equipment are sated at cost less accumuleted depreciation and amortization and any impairment in value. The following costs are not costs of an item of property and equipment, and the eatily «e¢ognized them as an expense when they are incurred: costs of opening a new facility, costs of intreducing a newr product or service including costs of advenising and promotional activities), costs of conducting business in a new lecation or with a new class of customer (including costs of staff training), administration and other general overhead costs and borrowing costs For financial reporting. purposes, duties and taxes related to the acquisition of property and ‘equipment are capitalized. For income tax reporting purposes, such duties and taxes are treatud 43 deductible expenses in tho year thees ehanges sre incuseed. For financial reporting purposes, depreciation and amortization are calculated on a straight-line basis over the useful lives ofthe assets. ‘The useful life of exch of the property and equipment is estimated based on the pertod over which the asset is expected to be available for use, Such estimation is based on a collective assessment of industry practice and ‘exporicnce with similar esvets, The assets’ residual values, useful lives and depreciation and amortization methed are reviewed, and adjusted if appropriate, 2 each financial year-end. PPE may have significant parts with different useful lives. The cost of an item of PPS is allocated to its significant Parts, with each part depreciated separately only when the parts have significantly diffcrent pattems of benefit Se Date: 1-10-2016 Time: 0:21:0 am If there isan indicatfon that there has been a significant change since the Lact annual reporting date in the pattern by which an entity expects to consume an asset's future economic benefits, the entity shall review its present Gepreciation method and, if current expectations diffe, change the depreciation method to reflect the new pattern. ‘wary RFORP Ee change asa chongein an acomnigein ame: hansoll Factors such as a change in how an asset is used, significant unexpected weer and tear, technological advancement, and changes in market prices may indicate thi the residual value or useful life of an asset has changed since the ‘ost recent annual reporting date, If such indicators are present, anentity shall revicw its previous estimates and, if current expectations differ, amend fhe residual value, depreciation method or useful Life. The entity shall account For the change in residual value, depreciation method or useful life as a change in an accounting estimata, An iter of @TUG Ltoe PEPEE property and equipment: derecognized upon disposal ar when no future economic benefits are expected from its 180 oF disposal, Any gain or los on derecogrtion ofan item of prapasty and equipment is recognised in profit cF Joss when the item is derecognized (unless Section 20 Leases fequiseasther en a gale and lensebnch) such gainis pat recognized ag revenue. is ee NY Rona inure eeeSlsewieets) GS : iS yd PPE is tested for impairment when there is an indication, that (Bissieref fay be. {indicators is assessed ateach reporting date. Vas { (Qtr Nom-Current Assets = ‘This acount includes rental deposit for factory Building, Caltexcash Pledge’ oxygen tank, printer and electric meter. Iimpoicment of New financial Assets ‘The Company assesses as at reporting date whether there ican indication that an agset may be impaired. IFany such Indication exists, or when annual impairment testing for an ascot is required, the Company makes an estimate of the asset's recoverable amount. An asset's tacoverible amount is calculated as the higher of the asset's or cashe generating unit's fbir value less costs o-sell and its value in use or ils net selling price and is determined for an individual assct, unless the asset does not generate cash inflows that are largely independent of those assets or ‘groups of assets, Where the carrying amount of an asset exceeds it recoverable amount, the seect is considered Impaired and is written down toils recoverable amount. In ascegsing vac in Use, the estimated futare cash flows are discounted to their present value using a pre-tax discount cate that reflects current market sssesomcntof the time value of money and the riske specific to the ssscts Impaiemant lasses are recognized in the statements of income in those expense categories consistent with the function ofthe impaired assct. ‘An assessment is made at each reporting date as to whether there is an iadiention that previously rocognized impairment losses may no longer exist of mdy have decreased. If such indication exists, the recoverable amount estimated. A previously reeognived impairment lass it revered 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 that is the case, the carrying amount of the asset is increased to its recoverable amount the increased amount cannot exceed the éncrying amount that would have been determined, net of depreciation and amortization, had no impairment less that has been recognized for the asset in prior years, Such reversal is recognized in the statements of income unless the asset isenrried at revalued amount, in which case the reversal is treated as revaluotion increase. After such a reversal, the spreciation charge is adjusted in future periods to allocate the asset's revised carrying amour, less any residual value, ona systematic basis over its remaining useful life EinancialLiabtities Financial liability is recognized only when the Company becomes a party to its contractual provision. Finanelal Uisbilities arc initially measured at the transaction price . Measurement subsequent to initial recognition = (2) at amortized cost using the effective interest method (2) at the undiseounted amount of cath or other condderation expected tf paid ules the sanggeret sirstiteg nse Ga Gsapngstqnsatiog the arrangement constitute a Anancing transaction, the Company shall measure the ib ty at the present value of the future payments discounted at o market rate of interest fora similar debt equity. Finsrciallisbilitics are recognized when the Company becomes a patty to the contractual provisions ef the WW CSOs ON User Name: hansoll ‘Trade and other payables are liabilities to pay for goods or services thet have been received or supplied and have been invoiced or formally agreed with the supplier. Trade payables are not intercst bearing, ‘Accruals, are liabilities to pay for goods or services that have been received of supplied but have not been paid, invoiced or formally agreed with the supplier, including amounts due to employees. It i¢ necessary (0 estimate the amount or timing of accruals, however, the uncertainty is generally much less than for provisions, 3BEbG TOO PEPEE ‘noome Tax Payable Income taxes payable in respect ofthe taxable protit forthe’ recognized a a liability. IF the amount already paid) recognized as asset. i “fF: Lnpeid current tax and prior periods ic zaman Gas for those periods, the excess is Neh § ae NBh Corrent tx assets and Tails for the current add: pHor pfrlod re aveasurbd4t the amotint expected to be ‘covered from or paid to the taxation authorities, Thetak rates a tSClaws usgd fo compule the amount are thowe that ae onc or eubstantvely ented bythe Dalaneyphoeitaie =o). =e Deferred income tax, ifany. is provided, using tho balance & Elance sheet date between the i bases of asses and Usb purpore, imying amounts for financial reporting Deferred income tax liabilities, f any, are recognized for ail taxable temporary differences. Deferted income tax asset are recognized for all deductible temporary differences and carry forward benefits of unusad nee apersting Toss carryover (NOLCO), to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and corry forward of NOLCO can be utilized. ‘The carrying amoun| of deferred lax assets, fany, is reviewed at each balance shect date and reduced to the extent that is no longer probable that sufficient taxable profit will be avsilable to allow all or part of the deferred income tecasset fo be uillized. Unrecognized deferred tax assets are reassessed at cach balance date and arg recognized to the extent that it has become probable that future laxable profit will allow the deferred tax asset fo be secoverad. Deferred tax asset and Habilities, any. are measured at the tax rates expected In the yeor when te asset is realivet or the Hebility is settled, based on tox rates and tax laws that have been enacted or substantively enacted at the balance sheet date. ‘The Company is uncer the 5% preferential tax regime. Other income generated were taxed based on RCIT, Taxable Profit differs from net profit as rcporled in the statements of operations, because i excludes ltems of income or expense that arc tnxable or decucuble in other years arid it further excludes items that are never taxable or deductible, After the company's ITH the tax applicable is 5% preferential tax and RCIT. Value-Adtiod Tx a tof the amount of walug-odied tax Where the value-added tax incurred on 9 purchase of assets or services is not recoverable from the texation aethorty in which case the value-add taxis recognized as part of the costs of acquisition af the asel or as part of the expense item as applicable; and ‘The net acount of value-added tax recoverable from, or payable te, Use laxation authority is included as part of ‘other curtent assets or payables inthe balance sheets, ‘The Compony io TEZA reppierteuerpig mbeomPaE VARI ma: OQ: 22:42 An Duete KB Produce Due to KB, Produce fers to the cash advannots made by he customer to Phile-Jeon Garments fe, forthe purchase of sewong machines, Thisis not interest bearing. no collateral and ne definite call period. Ww, SEE gov .ph User Nama: hansoil 4 Banca! instrument contrat (hat gives rise to financial asset of one entity and = nancial lability or equity instrument of another entity, Financial instruments could be asic er complex (da not mee! the conditions of being basis) Financial instruments. are recognized only when the Campany becomes a patty to its contractsal provisions21a vErEE Ttéea Financial instruments that normally qualify as being “basic” are cash, race and notes receivables and payable, loans frombanks and third parties, commensal papers and oo iPad apace and cnr debt insteuments. Financial instruments that do not meot the condi Sek wl aepietdsiked securtes and repurchase agreements, aptions, rights, warrants, Futures, forwafgaintraclt ard uiest ratedsgwaps that can be settled in cash ‘or by exchanging another financial instruments, Padbieg instruinerts, ‘cbmmihignis to make a foan to another entity, investments in another entity's equity instramen{s caren onset and non puttsble oedinary shares and preference shares and investments in eS iat ‘On initial recognition, Basie financial instruments sxe mde ye measured at the present value of the future payments if payments if payment ie deferred or i¢ financed st an interest that is nota market rate. Subiequent [At the end of each reporting period, basic debt instruments are measured at amortized cost using the effective interest method, Commitments to receive a Toan are measured at cost Jess impairment. investments in non- convertible ond nor-puttable ordinary sharés or prefesence shares are measured at fait value through profit or loss if value cen be measured selibly, otherwise a the cost less impairment. termination of Fair Vatue For all financial instruments not listed in an active market, the fair value is determined by using appropriate ‘valuation techniques. Valuation techniques include net present value techniques, compotison to similar instruments for which market observable prices exis oplions pricing models, and other relevant valuation models. ‘The fair value for any financial instruments traded in active markets at the balance sheet date is based on their quoted market price or dealer price quotations (bid price for Jong. positions and ask price for short positions), Without any deduction for transaction costs, When current bid and acking prices are not available, the price af the most recint transiction provides evidence of the current Jair value ag long as there hasnt been a significant change in economic circumstances since the time of the transection. Inypuirment of Finan Assets ‘The Company assesses at exch balance sheet date whether there is objective evidence that a financial asset or group ‘of financial assets is impaired. A financial azoct or a group of financial assetsis deemed to be impaired if, and only if there is objective evidence of impairment as 2 result of onc or more events that has occurred after the initial recognition of the acset (an incurred “ioss event’) and that loss event (or events) has an impact on the estimated! future exch Bows of the financial assot or the group of financial assets What can be reliably estimated. Evidence of impairment may inchide indications that the borrower or a group of borrowers is experiencing significant financial difficulty, defoult or delinquency in interest or principal payments, the probability that they will enter bankruptcy ‘or other financial reorganization and where observable data indicate that there is measurable decrease in the ‘ectmated future cash Noyys. suchas changes ip rears. qn efanomig conditions thancoreiane wi etaue For the purpase ofa collective evaluation of impairment, financial asseis are grouped on the basts of such credit risk -characteristics as industry, past-due status and term. ‘yrorwy Fatesteestdleyeie queygep of naneiel eset that ere collptively oval faripsss fed on the wae Thiet eat Talia ‘experience for assets with credit risk tener to thas Tet the! istorical Joss experience is adjusted on the basis of current observable data to reflect the effects of current conditions thal did not afectthe period on which the historical loss experience fc bacad and to remave the effects of conditions in the historical period that do nat exist curently. The avethodslogy and assumptions weed for estimating folate codh flows are reviewed regularly by the Company 19 reduce any differences between Toss estimates and actual loss experience.