JACK-MARGIE FARM, INC.

STATEMENTS OF FINANCIAL POSITION

As of December 31, 2019 and December 31, 2018
(Amounts in Philippine Peso)

Note/s 2019 2018

ASSETS

Current Assets
Cash 3 600,779 1,455,685
Trade and other receivables 4 166,610 424,644
Other current assets 5 200,626 295,005
Total Current Assets 968,015 2,175,334

Non-current Assets
Property and equipment 6 10,634,894 14,026,334
Total Non-current Assets 10,634,894 14,026,334

TOTAL ASSETS 11,602,909 16,201,668

LIABILITIES AND EQUITY

Current Liabilities
Trade and other payables 7 125,933 84,614
Advances payable 8 6,028,482 11,028,482
Income tax payable 14 26,335 28,362
Total Current Liabilities 6,180,750 11,141,458
TOTAL LIABILITIES 6,180,750 11,141,458

Equity
Share capital 9 3,000,000 3,000,000
Retained earnings 2 2,422,159 2,060,210
TOTAL EQUITY 5,422,159 5,060,210

TOTAL LIABILITIES AND EQUITY 11,602,909 16,201,668

See accompanying notes to financial statements
- -
 (854,906)
(258,034)
(94,379)
(1,207,319)
-
-
(3,391,440)
(3,391,440)

(4,598,759)
-
-
-
-
-
41,319
(5,000,000)
(2,027)
(4,960,708)
(4,960,708)
-
-
-

361,949

(4,598,759)
-
-
#VALUE!
JACK-MARGIE FARM, INC.
STATEMENTS OF INCOME
For the years ending December 31, 2019 and December 31, 2018
(Amounts in Philippine Peso)

Note/s 2019 2018

Revenue 10 8,281,541 9,250,154

Direct costs of service 11 (6,814,935) (6,990,946)
Employee benefit expense 13 (240,000) (240,000)
Gasoline and oil (125,165) (100,509)
Miscellaneous (78,156) (130,591)
Depreciation (22,906) (22,906)
Communication, light and power (52,052) (100,624)
Professional fees (10,000) (10,000)
Supplies expense (25,627) (62,263)
Taxes, licenses and permits 19 (60,211) (67,051)
Transportation and travel (90,687) (185,540)
Repairs and maintenance (200,165) (438,925)
Representation and entertainment (48,925) (43,255)

Operating profits 512,712 857,544

Other income 12 3,051 7,005
Interest expense

Profit before income tax 515,763 864,549

Income tax expense 14 (153,814) (257,263)

Profit for the year 361,949 607,286

See accompanying notes to financial statements #VALUE!
JACK-MARGIE FARM, INC.
STATEMENTS OF CHANGES IN EQUITY
For the years ending December 31, 2019 and December 31, 2018
(Amounts in Philippine Peso)

Share Retained Total

Capital Earnings Equity
(Note 9) (Note 2)

Balance at January 1, 2018 312,500 1,452,924 1,765,424

Profit for the year 2018 607,286 607,286
Dividend declared -
Issue of shares 2,687,500 2,687,500

Balance at December 31, 2018 3,000,000 2,060,210 5,060,210

Profit for the year 2019 361,949 361,949
Issue of shares -

Balance at December 31, 2019 3,000,000 2,422,159 5,422,159

See accompanying notes to financial statements
JACK-MARGIE FARM, INC.
STATEMENTS OF CASH FLOWS
As of December 31, 2019 and December 31, 2018
(Amounts in Philippine Peso)

Note/s 2019 2018

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax 515,763 864,549
Adjustments for:
Depreciation 6 3,848,106 3,791,023
Interest income 12 (3,051) (7,005)
Changes in working capital
Decrease (increase) in:
Trade and other receivables 4 258,034 (34,043)
Other current assets 5 94,379 (69,836)
Increase (decrease) in:
Trade and other payables 7 41,319 35,075
Advances payable 8 (5,000,000) (6,550,048)
Cash used in operations (245,450) (1,970,285)
Interest received 12 3,051 7,005
Income tax paid 14 (155,841) (249,088)

Net cash used in operating activities (398,240) (2,212,368)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment (456,666)

Net cash used in investing activities (456,666) -

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of shares - 2,687,500

Net cash generated from financing activities - 2,687,500

NET (DECREASE) INCREASE IN CASH 3 (854,906) 475,132
CASH AT JANUARY 1 3 1,455,685 980,553
CASH AT DECEMBER 31 3 600,779 1,455,685
See accompanying notes to financial statements
JACK-MARGIE FARM, INC.
NOTES TO FINANCIAL STATEMENTS
As of December 31, 2019 and December 31, 2018
(Amounts in Philippine Peso)

1. GENERAL INFORMATION

Jack - Margie Farm, Inc. ('the Company' for brevity) is engaged in agri-business and agricultural
development. It is incorporated and domiciled in the Philippines under SEC Registration No CS201323828.
The principal address is located at 64 Rizal St. Poblacion II Peñaranda, Nueva Ecija.

The financial statements were authorized for issue by the Board of Directors on May 20, 2020.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation

The financial statements as at and for the year ended December 31, 2019 are the first the company has
prepared in accordance with the PFRS (Philippine Financial Reporting Standards) for Small Entities
(the 'framework') as approved by the Securities and Exchange Commission (SEC) They have been
prepared on a historical cost basis, except for investment property that has been measured at fair
value. In preparing these financial statements, the company's opening statement of financial position
was prepared at at January 1, 2018, the company's transition date to PFRS for Small Entities. Note 18 to
the financial statements explains the adjustments made by the company in restating its previous
financial statements prepared in accordance with PFRS for SMEs, including the statement of financial
position at at January 1, 2018 and the financial statements as at and for the year ended December 31,
2018.

The company opted to adopt the framework on its mandatory effective date of January 1, 2019. The
financial statements were presented with comparative figures as at December 31, 2018 using also PFRS
for SEs.

2.2 Going Concern Assumption

The preparation of the accompanyingfinancial statements of the Company is based on the premise
that the Company operates on a going concern basis, which contemplate the realization of assets and
settlement of liabilities in the normal course of business. The management does not intend to
liquidate nor cease its operations.

2.3 Functional and Presentation Currency

The financial statements are presented in Philippine Pesos, the Company’s functional and
presentation currency, and all values are rounded to the nearest peso except when otherwise
indicated.

2.4 Financial Instruments

A financial instrument is any contract that gives rise to both a financial asset of one entity and a
financial liability or equity instrument of another entity. A financial instrument is recognized when
the entity becomes a party to its contractual provisions. The company classifies its financial
instruments into the following categories: (a) basic financial instruments and (b) complex financial
instruments.

The company's financial instruments consists of cash on hand and in banks, trade and other
receivables, borrowings, trade and other payables. The company does not have complex financial
instruments.

2.5 Basic Financial Instruments

Initial Measurement
On initial recognition, a debt financial instrument is measured at transaction price (including
transaction costs), unless the arrangement is in effect a financing transaction. In this case, it is
measured at present value of the future payment discounted using a market rate of interest for a
similar debt instrument.
 On initial recognition, a debt financial instrument is measured at transaction price (including
transaction costs), unless the arrangement is in effect a financing transaction. In this case, it is
measured at present value of the future payment discounted using a market rate of interest for a
similar debt instrument.

Subsequent Measurement
The company's financial instruments are subsequently measured at amortized cost using the effective
interest method.

Impairment of financial instruments measured at amortized cost

At each reporting date, the company assesses whether there is objective evidence of impairment on
any financial assets that are measured at amortized cost where there is objective evidence of
impairment, an impairment loss is recognized immediately in profit or loss.

The impairment loss is the difference between the assets carrying amount and the present value of
estimated cash flows discounted at the asset's original effective interest rate.

Derecognition of Financial Assets

Financial libilities are derecognized only when these are extinguished - that is when the obligation is
discharged, cancelled or has expired.

2.6 Cash
Cash includes cash on hand and in banks.

2.7 Trade Receivables and Other Receivables

Trade receivables are recognized initially at the transaction price. They are subsequently measured at
amortized cost using the effective interest method. A provision of impairment of trade receivables is
established when there is objective evidence that the company will not be able to collect all amounts
due according to the original terms of the receivables. Other receivables consist of advances to
officers, employees and other third parties which are subject for liquidation within 12 months.

2.8 Other Assets

Other asset include input taxes, prepayments, prior year’s excess credits, and other prepaid expenses.
Other assets that are expected to be realized within 12 months after reporting date are classified as
current assets. Otherwise, these are classified as non-current assets.

2.9 Property, Plant and Equipment

These are tangible assets that are held for use in production or supply of goods or services, for rental
to others, or for administrative purposes, and are expected to be used during more than one period.

Initial Recognition
The initial cost of property and equipment comprises its purchase price, including legal and brokerage
fees, import duties and non-refundable purchase taxes, after deducting trade discounts and rebates,
and any directly attributable costs of bringing the assets to their working condition and location for
their intended use.

Subsequent Expenditures
Expenditures incurred after the property and equipment have been put into operation, such as
repairs, maintenance and overhaul costs are normally charged to income in the period the costs are
incurred. In situations where it can be clearly demonstrated that the expenditures have resulted in an
increase in the future economic benefits expected to be obtained from the use of an item of property
and equipment beyond its originally assessed standard of performance, the expenditures are
capitalized as additional costs of property and equipment.

Subsequent Measurement
Property and equipment are carried at cost less accumulated depreciation and any accumulated
impairment losses.

Property, plant and equipment are stated at historical cost less accumulated depreciation and any
accumulated impairment losses.
 Land is not depreciated. Depreciation on the other classes of property, plant and equipment is
charged so as to allocate cost of assets less their residual values over their estimated useful lives, using
the straightline method. The estimated useful lives of the company's depreciable assets are as follows:

Asset Useful life

Land N/A
Equipment 8 years
Poultry Building 8 years
Furnitures and fixtures 8 years

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.

2.10 Impairment of Assets other than Inventories

Assets such as property, plant and equipment, investment property, intangible assets and investments
in associates are assessed at each reporting date to determine whether there is any indication that the
assets are impaired. When an impairment indicator is identified, the carrying value of the asset is
tested for impairment. An impairment loss is recognized for the amount by which the asset's carrying
amount exceeds it recoverable amount. The recoverable amount is the higher of an assets fair value
less costs to sell and value in use. If the recoverable amount cannot be estimated for an individual
asset, the company estimates the recoverable amount of the cash-generating unit to which the asset
belongs. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows
that are independent of the cash flows from other assets within the company.

If an impairment indicator no longer exists or the recoverable amount has increased subsequently, the
company will determine the amount of impairment loss that can be reversed to the extent that the
reversal should not result in a carrying amount of the asset that is higher had no impairment loss was
recognized in the prior years.

Derecognition
Fully depreciated assets are retained in the accounts until they are no longer in use and no further
depreciation are credited or charged to current operations. When assets are retired or otherwise
disposed of, the cost and related accumulated depreciation and accumulated impairment loss, if any,
are removed from the accounts and any resulting gain or loss is credited or charged to current
operations.

2.11 Borrowings and Borrowing Costs

Borrowings are recognized initially at the transaction price (that is, the present value of cash payable
to the bank, including transaction costs). Borrowings are subsequently stated at amortized costs.
Interest expense is recognized on the basis of the effective interest method and is included in finance
costs.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting date.

All borrowing costs are expensed as incurred.

2.12 Trade and Other Payables

Trade and other payables are recognized initially at the transaction price and subsequently measured
at amortized cost using the effective interest method.

2.13 Advances Payable

Advances payable represent advances made by related parties used for funding support if operations.
These are usually non-interest bearing, unsecured, and payable on demand.
 Advances payable represent advances made by related parties used for funding support if operations.
These are usually non-interest bearing, unsecured, and payable on demand.

2.14 Provisions
Provisions are recognized when; the company has an obligation as a result of past event; it is probable
that a transfer of economic benefits will be required to settle the obligation; and the amount can be
reliably estimated. Provisions are not recognized for future operating losses.

When the effect of time value is material, provisions are measured at the present value of the amount
expected to be required to settle the obligation using a pre-tax rate(s) that reflect(s) current market
assessments of the time value of money and the risks specific to the obligation. Changes in the
provisions due to passage of time are recognized in profit or loss.

2.15 Retirement Benefits

The company is yet to establish a formal retirement plan for its employees. Thus, the company's
retirement benefit obligation is measured using the accrual approach based on the minimum
retirement benefits required under Republic Act (RA) No. 7641, otherwise known as The Philippine
Retirement Pay Law. Accrual approach is applied by calculating the expected liability as at reporting
date using the current salary of the entitled employees and the employees' years of service, without
consideration of future changes in salary rates and service periods.

As at reporting date no retirement benefit was accrued due to (1) the company is engaged in
agriculture related activities and (2) the company's past experience of employee turnover.

2.16 Equity

(a) Share Capital and Additional Paid-in Capital

Share capital is measured at par value for all shares issued. Any amount received by the company
in excess of par value of its shares is credited to additional paid-in capital. Incremental costs
directly attributable to the issuance of new shares are shown in equity as deduction from
proceeds, net of tax.

(b) Retained Earnings

Retained earnings consist of accumulated profits less any amounts distributed to the
shareholders.

(c ) Cash Dividend Distribution

Cash dividends to shareholders are recognized as a liability and deducted from equity when
approved by the company's Board of Directors.

(d) Appropriated Retained Earnings

Represent restricted earnings which cannot be declared as dividends due to legal, contractual or
voluntary purposes.

2.17 Revenue Recognition

Revenue is measured as the fair value of the consideration received or receivable, excluding discounts,
returns and value-added tax. The company recognizes revenue to the extent that it is probable that
future economic benefits will flow to the entity and that the amount of revenue can be reliably
measured. The following specific recognition criteria must be met before revenue is recognized:

(a) Rendering of Services - Contract Growing Fee

Sales of service are recognized as revenue when the company has delivered the service to the
customer and there is no unfulfilled obligation that could affect the customer's acceptance of the
service.

(b ) Interest Income
 Interest income is recognized using effective interest method, interest income is included in
'other income' account in the statement of income.

2.18 Cost and Expense Recognition

Costs and expenses are decreases in economic benefits during the accounting period in the form of
outflows or decrease of assets or incurrence of liabilities that result in decreases in equity, other than
those relating to distributions to equity participants. These costs, including all finance costs, are
recognized in the statements of income when incurred.
 Costs and expenses are recognized in the statements of income:

* on the basis of a direct association between the costs incurred and the earning of specific
items of income.
* on the basis of systematic and rational allocation procedures when economic benefits are
expected to arise over several accounting periods and the association can only be broadly or
indirectly determined; or
* immediately when expenditure produces no future economic benefits or when, and to the
extent that, future economic benefits do not qualify or cease to qualify, for recognition in the
statements of financial position as an asset.

2.19 Direct Costs of Service

All costs directly attributable in rendering the service are accounted on this account. Salaries of
employees connected in rendering the service, materials, depreciation of related property and
equipment are also charged in this account.

2.20 Income Tax Expense

The company uses the taxes payable method to account for income taxes. Under this method, the
company recognizes income tax expense and liability based on the taxable income for the year using
tax rates that have been enacted or substantially enacted at the reporting date.

2.21 Leases
When an item of property, plant and equipment is leased, payments made under the lease (net of any
incentives received from the lessor) are charged to profit or loss when incurred.

2.22 Events after the Reporting Date

Post-year events that provide additional information about the company's position at the reporting
date (adjusting events) are reflected in the financial statements. Post year-end events that are not
adjusting events are disclosed in the notes to the financial statements when material.

3. CASH
2019 2018
Cash on hand and in banks 600,779 1,455,685

600,779 1,455,685
Cash in banks earn interest at respective bank deposit rates.

4. TRADE AND OTHER RECEIVABLES

The account as of December 31 consist of:

2019 2018
Trade receivables (148,015) 141,610 424,644
Other receivables 25,000 -

166,610 424,644
Third party and other receivables are collectible in cash, unsecured and non-interest bearing. Other
receivables mainly comprise of advances to officers and employees and other non-trade receivables.

5. OTHER CURRENT ASSETS

2019 2018
Other current assets 200,626 295,005

200,626 295,005

6. PROPERTY AND EQUIPMENT

Presented on a separate sheet for a more detailed presentation.
7. TRADE AND OTHER PAYABLES

The account as of December 31 consists of:

2019 2018
Trade payables (40,774) 65,241 37,755
Accrued expenses 35,692 31,859
Non-trade payables 25,000 15,000

125,933 84,614

8. ADVANCES PAYABLE

The account as of December 31 consists of:

2019 2018
Advances payable 6,028,482 11,028,482

6,028,482 11,028,482

9. SHARE CAPITAL

The details of the account as at and for the years ended December 31 are as follows:

Number of shares Share Total

issued and fully paid Capital
At January 1, 2018 312,500 312,500 312,500
Share issue 2,687,500 2,687,500 5,375,000
At December 31, 2018 3,000,000 3,000,000 5,687,500
Share issue - -

At December 31, 2019 3,000,000 3,000,000 5,687,500

10. REVENUE

The details of the account for the years ended December 31, are as follows:
2019 2018
Rendering of services - contract growing fees 8,281,541 9,250,154

8,281,541 9,250,154

11. DIRECT COSTS OF SERVICE

These are cost directly related to rendering the company's services, to wit:
2019 2018
Materials and other direct costs 2,989,735 3,222,829
Depreciation 3,825,200 3,768,117

6,814,935 6,990,946

12. OTHER INCOME

The details of the account for the years ended December 31, are as follows:
2019 2018
Interest income 3,051 7,005
Miscellaneous - -

3,051 7,005
13. EMPLOYEE BENEFIT EXPENSE

The details of the account for the years ended December 31, are as follows:
2019 2018
Salaries and wages 240,000 240,000
Retirement benefit expense - -

240,000 240,000

14. INCOME TAX EXPENSE / INCOME TAX PAYABLE

Income tax is the higher between regular corporate income tax (RCIT) and MCIT:

Regular income tax is computed as follow:

2019 2018
Profit before income tax 515,763 864,549
Less: non-taxable income 3,051 7,005
Taxable income 512,712 857,544
Multiply by income tax rate 30% 30%
Current tax on profits for the year 153,814 257,263
Adjustment in respect of prior years -

Income tax expense 153,814 257,263

MCIT or Minimum Corporate Income Tax is computed as follow:

2019 2018
Service fees 8,281,541 9,250,154
Cost of services 6,814,935 6,990,946
Gross profit 1,466,606 2,259,208
Multiply by: MCIT rate 2% 2%

Income tax under MCIT 29,332 45,184

The income tax expense is RCIT and income tax payable is computed as follows:
2019 2018
Income tax expense 153,814 257,263
Less: Income tax withheld 105,054 179,039
Quarterly tax payments 22,425 49,862

Income tax payable 26,335 28,362

15. LEASES

The Company as Lessee

As of December 31, 2019, the company did not enter into any lease agreement.

16. CONTINGENCIES

As of December 31, 2019, the company has no contingent liabilities.

17. RELATED PARTY TRANSACTIONS

The following transactions were carried out with related parties:

Nature of Transaction Terms and Conditions 2019 2018

(a) Key management * Determined based on 240,000 240,000
compensation contract of employment
(b) Advances payable * To be settled with 6,028,482 11,028,482
shares or in cash

6,268,482 11,268,482

18. TRANSITION TO PFRS FOR SMALL ENTITIES

The company has no transaction that requires reconciliation of previous year's equity and/or profit under
PFRS for SMEs to conform with the standards of PFRS for SEs.

19. TAXES AND LICENCES (SUPPLEMENTARY INFORMATION REQUIRED BY THE BIR)

Business Tax
The Company is not subject to Value Added Tax nor Percentage Tax since its main purpose is related to
agriculture and/or farming.

Withholding Tax 2019 2018

Withholding tax - compensation - -

- -

Other Taxes and Licenses

These are as follows:
a. Local 2019 2018
Mayor's permit 20,519 22,519
Community Tax Certificate 2,000 2,000
Fire department fee 560 718
Real property taxes 34,632 34,526
Barangay clearance 2,000 2,000

Total 59,711 61,763

b. National
BIR annual registration 500 500

Total 500 500

- #VALUE!
#VALUE!
JACK-MARGIE FARM, INC.
NOTES TO THE FINANCIAL STATEMENTS
For the years ending December 31, 2019 and December 31, 2018

6. PROPERTY AND EQUIPMENT

The movement within each class of property and equipment are as follows:

Land Equipment Poultry Furniture Total

Building & Fixtures
Acquisition Cost:
At January 1, 2018 730,400 4,752,000 25,392,932 183,250 31,058,582
Additions - - - - -
Disposals - - - - -
December 31, 2018 730,400 4,752,000 25,392,932 183,250 31,058,582
Additions - 456,666 - - 456,666
Disposals - - - - -
December 31, 2019 730,400 5,208,666 25,392,932 183,250 31,515,248

Accumulated Depreciation:
At January 1, 2018 - 2,072,000 11,077,601 91,624 13,241,225
Depreciation - 594,000 3,174,117 22,906 3,791,023
Disposals - - - - -
December 31, 2018 - 2,666,000 14,251,718 114,530 17,032,248
Depreciation - 651,083 3,174,117 22,906 3,848,106
Disposals - - - - -
December 31, 2019 - 3,317,083 17,425,835 137,436 20,880,354

Carrying Amount:

December 31, 2018 730,400 2,086,000 11,141,214 68,720 14,026,334

December 31, 2019 730,400 1,891,583 7,967,097 45,814 10,634,894