ONLINE MICRO SELLERS MARKETING COOPERATIVE Financial Statements As at and for the year ended December 31, 2020 and 2019= ( Online Micro Sellers 5! Marketing Cooperative Statement of Managements Responsibility for Financial Statements The management of Online Micro Sellers Marketing Cooperative is responsible for all information and representation contained in the financial statements for the year ended December 31, 2020. The financial statement have been prepared in conformity with Financial Reporting Standards applicable to Cooperatives in the Philippines and reflect amounts that are based on the best estimates and informed judgment of ‘management with an appropriate consideration to materiality. In this regard, management maintains a system of accounting and reporting which provides the necessary internal controls to ensure that transactions are properly authorized and recorded, assets are safeguarded against unauthorized use or disposition, and liabilities are recognized, The Board of Directors reviews the financial statements before such statements are approved and submitted to the members of the Cooperative. Alvin C. Mendoza, CPA, the independent auditor appointed by the Board of Directors, have examined the financial statements of the cooperative as of December 31, 2020 in accordance with the Philippine Standards on Auditing and the Standard Audit System for Cooperatives and had expressed his opinion on the fairness of the presentation upon completion of such examination, in his report to the members of the cooperative Marif Antongfte Quiogue Chafrman Vice Chairman General ManagerDIGUENO, MENDOZA & CO CPAS & MANAGEMENT CONSULTANTS, INDEPENDE) AUDITOR'S REPORT The Board of Directors ONLINE MICRO SELLERS MARKETING COOPERATIVE 1F Bonifacio Technology Center 3ist St cor. 2nd Ave, BGC, Taguig City We have audited the accompanying financial statements of ONLINE MICRO SELLERS MARKETING COOPERATIVE which comprise the balance sheets as of December 31, 2020 and 2019, and the statements of income, statements of changes in equity and statements of cash flows for the year then ended, and the summary of significant accounting policies and other explanatory notes. Management’s Responsibility on Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Philippine Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances, Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit, We conducted our audit in accordance with Philippine Standards on Auditing Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. ‘An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risks assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion., the financial statements present fairly, in all material respects, the financial positions of ONLINE MICRO SELLERS MARKETING COOPERATIVE as of December 31, 2020 and 2019, and of its financial performance, changes in equity, and its cash flows for the year then ended in accordance with Philippine Financial Reporting Standards applicable to Cooperative in the Philippines, taking into consideration Cooperative laws, rules, regulations and principles. Report on the Supplementary Information Required Under Revenue Regulations 15-2010 Our audit was conducted for the purpose of forming an opinion on the basic financial, statements taken as a whole. The supplementary information on taxes, duties and license fees in Note 18 to the financial statements is presented for purposes of filing with the Bureau of Internal Revenue and is not a required part of the basic financial statements. Such information is the responsibility of management. The information has been subjected to the auditing procedures applied in our audit of the basic financial statements, In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as whole. ALVIN C. MENDOZA Managing Partner — Digueiio, Mendoza & Co. CPA Certificate No. 88180 BOA Accreditation No.: 0811, valid until May 13, 2023 BIR Accreditation No. 05-005772-001-2019, October 14, 2019, valid until October 13, 2022 CDA Accreditation No.: 637, issued on Jan. 23, 2018, valid until Jan. 22, 2021 P.T.R. No. 8547050, January 11, 2021, Makati City January 15, 2021ONLINE MICRO SELLERS MARKETING COOPERATIVE ‘STATEMENT OF FINANCIAL CONDITION ‘As of December 31, 2020 and 2019 (amounts Phiopina Pores) ies as ae aeseTs CURRENT ASSETS Cashand Cosh Eaton a ‘Chon and te1s0000 12180000 ash in ork terstoateot —ee.0enana ta Paty Cos Fund 300000 1000000 Rev nd 2oooce 200000, Cann nOgorpay sssssso49 __ssongsrss aaa ae a5 See pecans Rectables Non Trae ; 00 Aavences oOo, Eplyes aed Morbare saomoe —sa7aenn ‘ier Cnt sets ropa Reta savesoe7?—1.90849070 Prepaid opeoee VT Nosearear i Hoth erence : 6400.00 [TOTAL CURRENT ASSETS Tama Ta — Tamers Non-cURRENT ASSETS inangte feet zioom00 21000000 ose Accurate Depeitn (4000000) Propry, Pant end Epon voeuthed! ite & proements tzoeoso18 — seazeenss oes Accurated Depacaten trstee7s67 Contr eaunt ae “eossosoe —teenastar evs Accurate Doren coves) “rataen rors, Foes 8 Ema 23.4000 (ous Acamulated Deacon - (cors2e Tela pay, Pant Eat TRS awTTE TOTAL NON-GURRENT ASSETS 85 fs eo 8.707870 TOTAL ASSETS jason7 27631 77257 148 uasimes current ussiumes foros Pataca 27 sa77san40 —cansass0 peru Pape Non re 21 rzarnssest “snoea raat ores on Sar Cnt Pao 1072s. . Patronage Refund Payable” 1,609,438.78 - | € herons pyle sherpa eps es51.00 : = vitotan TaxPaytie wxeres moras | C poset Expenses sosras ° ue to Members & Empl (e528) se0ae0) | 5 TOTAL LABIETIES eearisser? Tamara caury veneers EcumTY A Paid-up Share Capital-Preferred 28 2,100.00 70,953.56, IS Pai Se Cat: Common ze seoonnco stores | Depst er Share Genta Suoseroton 2s aoensoron 2.80000 “Total Paid-up Capital '2,448,561.00 2.313,831.96, S oer oral Rosre Fue 2.9 4asne0s23 - oop Eave Tran Fund be tonrszes Conmunty Deveoment zo 0.2080 : setae ae sos228 Tl Stuy Fad Sar east TOTAL MENGES EOUT? ea057218e 2a JoTALUABIITIES & MEMBER'S EGUTY ‘osanr rest Taras sets ‘See Aeconpaying Hotes Fran StatsONLINE MICRO SELLERS MARKETING COOPERATIVE STATEMENT OF OPERATION For the years ended December 31, 2020 and 2019 (Amounts in Philippine Pesos) Notes: 2020, 2019 REVENUE ITEMS Sales 2,10 22,993,859,133.53 19,814,266,519.87 Less: Sales Returns & Allowances 100,385,967.43____89,979,808.96, Net Sales 22,893,473,166.10 19,724,286,710.91 Less: Cost of Goods Sold 22,664,538,436,42 _13,588,167,285.76 TOTAL GROSS REVENUE FROM OPERATION 228,934,72968__196,119,425.15 ‘Add: Other Income 2,10 ‘Membership Fee 2,748,000.00 2,191,900.00 Incomelinterest from Investment/Deposits 190,594.84 100,195.28 Service Fee 4,17,700,00 668,496.80, Total Other Income 4,106,204.84 2,960,592.08 TOTAL GROSS REVENUES 7233,041,024.52 __139,080,017.23 LESS: EXPENSES Administrative Costs 214 ‘Advertising & Promotion Expense 92,689,586.46 68,756,152.82 Office Supplies Expense 72,189,994.59 -36,270,172.19 Salary & Wages 17,135,391.98 9,961,083.64 Bank Service Fee 8,920, 142.48, 4,208,431.97 Contractors Fees 679,027.04 1,865,391.52 Rental Expense 6,675,758.40 3,896,007.67 Professional, Consultancy & Legal Fees 5,198,470.80 9,385,488.82 Training & Seminars 3,291,339.57 4,187,098.47 Dues & Subscription 2,794,322.27 1,476,163.83, Depreciation 2,253,774.25 184,634.34 Representation 2,066,911.77 731,141.59 Insurance 1,552,972.63, 18,315.20 ‘Communication Expense 745,776.77 208,638.44 Honorarium Allowance 517,484.36 - Repairs & Maintenance 410,063.20 281,250.92 Power & Light 346,792.53, 78,000.00 Employee Benefits & Incentives Expenses 186,105.88 1,097,810.91 Postage and Courier Expense 60,842.80 25,290.64 ‘Transportation Expense 52,075.20 293,861.90 Tax Penalty Expense 120.00 125,967.55, Miscellaneous Expense 453,345.00 97,618.75 TOTAL EXPENSES: 224,099,697.98___142,911,398.17 NET SURPLUS (LOSS) 8,041,326.54 __(3,831,980.94) Allocation General Reserve Fund 2,9 4,470,66327 —_(3,588,534.50) Coop. Education & Training Fund 2,9 894,132.65 - ‘Community Development 2,9 268,239.80 : Optional Fund 2,9 625,892.86 : Interest on Share Capital 2 1,072,959.18 (72,853.93) Patronage Refund 2 1,809,438.78 (169,992.51) Total 8,941,326.54 __(3,831,380.94) ‘See Accompanying Notes fo Financial Statements.STATEMENT OF CHANGES IN EQUITY & STATUTORY FUNDS ‘As of December 31, 2020 and 2019 (Amounts in Phi Notes 2020 2018 EQuiTY Share Capital, Common Balance at beginning of year 51,078.40 51,078.40 ‘Add: Additional Capital Build-up 208,921.60 - Total "360,000.00 37,078.40 Less: Withdrawal in Capital - - Balance at end of year z 360,000.00 51,078.40, Share Capital, Preferred Balance at beginning of year 70,853.56 313,700.00 ‘Add: Additional Capital Build-up = = Total 70,853.56 313,700.00 Less: Reclass/excess of Net Loss over Reserve Fund (68,753.56) ___ (242,846.44) Balance at end of year 2 2,100.00 70,853.56 STATUTORY FUNDS Reserve Fund Balance at beginning of year - 3,588,534.50 ‘Add: Allocation from Net Surplus 9 4,470,663.27 - Total “4,470,663.27 __3,588,534.50 Less: Allocation from Net Loss (311,768.04) _ (3,588,534.50) Balance at end of year 2 4,158,895.23 = Cooperative Education and Training Fund Balance at beginning of year - 159,490.42 ‘Add: Allocation from Net Surplus 9 804,132.65 - Total 894,132.65 159,490.42 Less: Charges - (159,490.42) Balance at end of year z 894,132.65 = Community Development Fund Balance at beginning of year - 119,617.82 ‘Add: Allocation from Net Surplus 9 268,239.80 - Total 268,239.60 719,617.82 Less: Charges = (119,617.82) Balance at end of year z 268,238.80 = Optional Fund Balance at beginning of year - 119,617.82 ‘Add: Allocation from Net Surplus 9 625,892.86 - Total 625,892.86 19617 82 Less: Charges - (119,617.82) Balar id of year 625,892. ‘See Accompanying Notes fo Financial StatementsONLINE MICRO SELLERS MARKETING COOPERATIVE STATEMENT OF CASH FLOW As of December 31, 2020 and 2019 (Amounts in Philippine Pesos) Notes 72020, 2015 Cash flow from Operating Activities Cash provided by operation: Net Surplus (Loss) for allocation 8,941,326.54 —_(3,831,380.93) Depreciation 2,5 2,253,774.25 134,180.80 Changes in Assets and Liabilities Decrease (increase) in Loans and Receivable 2 15,405,287.89 (20,862,269.50) Other Current Assets 729,73272 — (2,197,665.58) Increase (decrease) in: ‘Accounts Payable Trade 2 (657,176,514.51) 677,000,455.54 ‘Accounts Payable Non-Trade 2 122,720,958.87 (13,187,423.25) Interest on Share Capital Payable 2 1,072,959.18 - Patronage Refund Payable 1,609,438.78 - Other Payable 3,849,066.00 - Withholding Tax Payable 2 (9,702,059.13) 26,307,095.95 Accrued Expenses 2 (39,757.84) (80,482.65) Due to Resigned Members 2 37,550.95 (45,803.80) Net cash from operating activities {510,298,236.30) —663,266,706.58 Cash flow from Investing Activities Decrease (increase) in Intangible Asset - (210,000.00) Property & Equipments 5 (8,435,664.84) _ (8,285,517.01) Net cash from investing activities (8,435,664.84) (8,495,517.01) Cash flow from Financing Activities Increase (decrease) in: Paid-up capital 240,168.04 308,921.60 Deposit for Share Capital Subscription (789,654.00) 1,882,978.40 Patronage Refund Payable (2,682,397.96) - Statutory Funds 2 (314,768.04)___(398,726.06) Net cash from financing activities Net increase/(decrease) in cash Cash balance, beginning _ Cash balance, end ‘See Accompanying Notes to Financial Statements. (3,543,651.96) _1,793,173.94 (622,277,553.10) 656,564,363.51 691,020,299.60_34,455,936.09 168,742,748.50__691,020,299.60‘ONLINE MICRO SELLERS MARKETING COOPERATIVE Notes to Financial Statements For the Year Ended December 31, 2020 (in Philippine Peso) NOTE 1: COOPERATIVE INFORMATION Cooperative (the “Cooperative”) was registered with the Cooperative Development Authority (CDA) on November 3, 2017 with Certificate Registration No, 9520- 1016000000039775. The primary purpose for which the Cooperative is organized is to engage to act as consolidator of members’ products and participate as the members’ collective “promoter”, “marketer”, “consignor”, or “seller” for the purpose of contracting and transacting with online shopping / selling platforms operating in the Philippines. In addition to the primary purpose provided for under Republic Act No. 9520, the Cooperative adopts objectives and goals aimed to improve the quality of life of its members. ‘The Cooperative's registered office, which is also its principal place of business, is located at 1* Floor Bonifacio Technology Center, 31" Street cor. 2" Avenue, Bonifacio Global City, ‘Taguig, Metro Manila. The Cooperative which transacts with both members and non-members, is not subject to income tax under Republic Act 9520 otherwise known as the “Philippine Cooperative Code of 2008” considering that its accumulated reserves and undivided net savings do not exceed Ten Million Pesos (10,000,000.00 Php) NOTE \UMMARY OF SIGNIFICANT ACCOUNTING POLICIES To facilitate the understanding of the financial statements, the more significant accounting policies and practices of the Cooperative are summarized as follows: 2.1 Basis of Preparation ‘The financial statements of the Cooperative have been prepared on a historical cost basis in accordance with the Philippine Financial Reporting Framework for Cooperatives. 2.1.1 Functional Currency Items included in the financial statements of the cooperative are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to the Cooperative. The financial statements are presented in Philippine Peso which is the Cooperative's functional and presentation currency, and all values are rounded to the nearest peso except when otherwise indicated. 2.2 Statement of Compliance ‘The financial statements were prepared in accordance with the Philippine Financial Reporting Framework for Cooperatives, which became effective for annual reporting periods beginning on or before January 1, 2016, and in adherence to the cooperative laws, issued policies, rules and regulations and cooperative principles and practices whenever applicable.2.3 Summary of Significant Accounting Policies Cash and Cash Equivalents Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and with original ‘maturities of three months or less and that are subject to an insignificant risk of change in value. Financial Assets Financial assets are recognized in the Cooperative's financial statements when the Cooperative becomes a party to the contractual provisions of the instrument. Transaction costs are included in the initial measurement of all financial assets. ‘The Cooperative derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Cooperative neither transfers, nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Cooperative recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. The Cooperative's financial assets include cash, trade and other receivables, financial assets at fair value through profit or loss and financial assets at cost. Trade and Other Receivables The Accounts Receivable pertains to the uncollected sales & creditable withholding tax to Clients & Suppliers of the Cooperative. allowance for doubtful accounts shall be set up to allow fair value of receivables. For calendar year 2019, Cooperative was not able to provide the allowance due to inadequate previous years’ records. However, appropriate doubtful accounts will be provided immediately after the retrieval of necessary accounting records. Equipment Equipment is measured initially at cost. Equipment, after initial recognition, is stated at cost less any accumulated depreciation and any accumulated impairment losses. ‘The initial cost of equipment comprises its purchase price and any cost directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management. Parts of some items of equipment may require replacement at regular interval. The Cooperative shall add to the carrying amount of an item of property and equipment the cost of replacing part of such an item when that cost is incurred if the replacement part is expected to provide incremental future benefits to the Cooperative. ‘The Cooperative depreciates its equipment on a straight-line method over its estimated Useful life as further discussed in Note 3. The Cooperative derecognizes an item of equipment upon disposal or when no future ‘economic benefits are expected from its use or disposal. The Cooperative recognizes the gain or loss on the derecognition of an item of equipment in profit or loss when the item is. derecognized. The Cooperative determines the gain or loss arising from derecognition of anitem of equipment as the difference between the net disposal proceeds, if any, and the carrying amount of the item. Impairment of Assets At each reporting date, equipment is reviewed to determine whether is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset (or group of related assets) is estimated and compared with carrying amount. if estimated recoverable amount is lower, the carrying amount is reduced to its estimated amount, and an impairment loss is recognized immediately in profit or loss. ‘Trade and Other Payables Economic obligations arising from purchase of goods and services and those incurred for the necessary operations of the business are classified under Trade and Other Payable. Trade and Other Payables are initially measured at invoice price and subsequently, at undiscounted amount of cash and other considerations expected to be paid. Equity Equity comprises of share capital and statutory funds. Share Capital -Common Share capital-common is determined by the par value of the common shares subscribed by the regular members less any subscription receivables, Share Capital-Preferred Share capital-preferred is determined by the par value of the preferred shares subscribed by the associate members less any subscription receivables. Deposit for Share Capital Subscription This Account refers to amount paid by the members for the capital subscription equivalent to the value less than one share and additional in excess of authorized share capital pending approval of the amendments to increase Authorized Share Capital. This may also include the amount of share capital paid but not yet covered by subscription contract. Statutory Funds Statutory funds are mandatory funds established/set up in accordance with Article 86 of R.A. 9520. These are follows: General Reserve Funds. This account refers to the amount set aside annually for the stability of the Cooperative and to meet net losses in its operation to at least 10% of net surplu: provided that, in the first five years of operation after registration, this amount shall not be less than fifty percent 50% of the net surplus. Education and Training Fund. This account refers to the amount retained by the Cooperative, not exceeding 4% of the Cooperative’s net surplus, for training, development and similar other cooperative activities geared towards the growth of the cooperative movement.‘Community Development Fund. This account refers to fund set aside to be used for projects or activities that will benefit the community where the cooperative operates. This fund shall not exceed 3% of the net surplus of the Cooperative. Optional Fund. This account refers to fund set aside from net surplus not exceeding 39% thereof. It shall be used of the following purposes: land and building, acquisition of equipment, members’ benefit, or other purposes. Revenue and Expense Recognition Revenue is recognized to the extent that is probable that the economic benefits will flow to the Cooperative and the amount of revenue can be measured, Provisions and Contingencies Initial recognition ‘The Cooperative recognizes a provision when the Cooperative has an obligation at the reporting date as a result of a past event; itis probable that the cooperative will be required to transfer economic benefits in settlement; and the amount of the obligation can be estimated reliably. ‘The Cooperative measures provisions at the best estimate of the amount required to settle the obligation at the reporting date. The best estimate is the amount the Cooperative would rationally pay to settle the obligation at the end of the reporting period or to transfer it toa third party at that time. ‘The Cooperative does not recognize a contingent asset. Only a disclosure of a contingent asset is required when an inflow of economic benefit is probable. ‘The Cooperative does not recognize a contingent liability as liability. Disclosure of a contingent liability is required unless the possibility of an outflow of resources is remote. ‘Subsequent measurement ‘The Cooperative shall charge against a provision only those expenditures for which the provision was originally recognized and review provisions at each reporting date and adjust them to reflect the current best estimate of the amount that would be required to settle the obligation at that reporting date. Any adjustments to the amounts previously recognized shall be recognized in profit or loss unless the prevision was originally recognized as part of the cost of an asset. When a provision is measured at the present value of the amount expected be required to settle the obligation, the unwinding of the discount shall be recognized as finance sot in profit or loss in the period. Events After End of the Reporting Period The Cooperative only adjust the amounts recognized in the financial statements, including related disclosures, to reflect adjusting events after the end of the reporting period but before the financial statements are authorized for issue. Related Party Disclosures Related party relationships exist when one party can control, directly or indirectly, through ‘one or more intermediaries, the other party or exercise significant influence over the other arty in making financial and operating decisions. This includes: (1) individual owning, directly or indirectly through or more intermediaries, control or are controlled by, or under common control with, the Cooperative; (2) associates; and (3) individuals owning directly or 4indirectly, an interest in the voting power of the Cooperative that gives them significant influence over the Cooperative and close members of the family of any such individuals. The key management personnel of the Cooperative are also considered to be related parties. NOTE 3: SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS ‘The Cooperative requires the Management to make estimates assumptions that affect the amount reported in the Cooperative’s financial statements are based on Management's evaluation of relevant facts and circumstances as of the date of the Cooperative’s financial statements. Actual results could differ from such estimates and assumptions. Estimates and assumptions The following are the key estimates and assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Useful Lives if Equipment The Cooperative estimates the useful lives of equipment based on the period over which the assets are expected to be available for use. The estimated useful lives of property and ‘equipment are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of assets. The carrying amounts of property and equipment are analyzed in Note 6. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Office Equipment 2 years Computers and software 2years Leasehold Improvement 5 years Based on management's assessment as of December 31, 2020, there is no change in the estimated useful lives of the property and equipment. Actual results however may vary due to changes in factors mentioned above. Impairment of Equipment ‘The Cooperative’s policy on estimating the impairment of equipment is discussed in detail in Note 2. Although management believes that the assumptions used in the estimation of fair values reflected in the financial statements are appropriate and reasonable, significant changes in these assumptions may materially affect the assessment of recoverable values and any resulting impairment loss could have a material adverse effect on the results of operations. There are no impairment losses for the Cooperative’s equipment and other non-financial assets as of December 31, 2020 and 2019 based on management's evaluation. NOTE 4: CASH AND CASH EQUIVALENTS This is consisting of: 2020 2019“Cash on hand Pp 121,500.00 P 121,500.00 Petty Cash Fund 35,000.00 10,000.00 Revolving Fund 30,000.00 20,000.00 Dragon Pay 6,655,930.49 3,829,997.49 Cash in Bank - BGC BDO 5,349,465.80 2,954,424.69 Cash in Bank - BGC UNION Trade 147,327,558.33, 678,043,407.31 Cash in Bank - BGC UNION: Non-Trade 9,081,875.17 5,000,000.00 Cash in Bank - BGC PS Bank — 141,416.71 1,040,970.13, Total Cash and Cash Equivalent _ P_ 168,742,746.50___P__691,020,299.62 A reasonable petty cash fund is maintained to cover small payments not covered by checks, such as transportation, small amount of office supplies, and other various purchases approved by management. NOTE S: TRADE AND OTHER RECEIVABLES Accounts Receivables are receivables pertaining to outstanding billings to customers. Advances to officers and members pertain to amounts disbursed to the members to facilitate conduct of official business projects and activities. These are subject to liquidation. NOTE 6: EQUIPMENT. This account consists of the following: (Disposal)/ Revaluation/ _ 2019 __Additions __Reclassification _—2020 Cost Leasehold P 6,922,660.65 6,373,389.61 - P 13,296,050.16 Improvement Computer Equipment 1,688,451.47 1,939,913.55 : 3,628,365.02 Furniture & Fixtures 23,490.00 - (23,490.00) - - 8,634,602.02 _8,313,303.16 (23,490.00) __16,924,415.18 Less accumulated depreciation Leasehold P - 1,519,475.67 - P 1,519,475.67 Improvement Computer Equipment 137,313.67 452,520.16 - 589,833.83 “Furniture & Fixtures 4,073.25 : (4,073) - 141,386.92 1,971,995.83 (4,073) 2,109309.50 Property & equipment, net 8,493,215.10 14,815,105.68 ‘There is no equipment to which the Cooperative has restricted title that is pledge as security for liabilities. Likewise, the Cooperative has no contractual commitment for the acquisition of any other equipment. NOTE 7: TRADE AND OTHER PAYABLESThis account consists of: te tot Accounts Payable Trade 22,75,803.46 _668,995,539.53 Accounts Payable Non-Trade 122,720,958.87 _30,956,778.44 Interest on Share Capital Payable 1,072,959.18, ; Patronage Refund Payable 1,609,438.78, ; Accounts payable on share capitaldeposit 3,164,851.00 : Accrued Expenses - 29,757.84 Withholding Tax Payable 15,275,798.33—24977,857.46 Due to Members & Employees (6,252.85) (45,803.80) ‘Accounts payable pertains primarily to liabilities to trade suppliers for purchased services and capital assets. These are non-interest bearing and are generally payable under special arrangement with said suppliers. ‘Accounts Payable Non-Trade is the fund from LAZADA Company intended for the settlement of sales transactions that OMSMC members will generate from last payment cut-off up to end of December 2020. Accrued expense include accrual for rental payment and contractual employees. Accounts payable on share capital deposit pertains to the collected share capital from micro- sellers who have still pending membership requirements to OMSMC. NOTE 8: MEMBERS EQUITY 2020 2019 Common Share Capital Authorized 360,000.00 360,000.00 ‘Share Capital ~ 3,600 Shares @ 100Php per value Issued Share Capital — Common 360,000.00 51,078.40 Subscribed Share Capital - Common 360,000.00 Less: Subscription Receivable - Common 308,921.60 Total Paid-up Share Capital - Common 360,000.00 51,078.40 Preferred Share Capital Authorized 120,000.00 120,000.00 ‘Share Capital ~ 1,200 Shares @ 100Php per value Issued Share Capital ~ Preferred 2,100.00 70,853.56 Subscribed Share Capital - Preferred 4,500.00 120,000.00 Less: Subscription Receivable — Preferred 2,400.00 Total Paid-up Share Capital - Preferred 2,100.00 Deposit on Share Capital Subscription 2,086,461.00 2,191,900.00 ‘Significant change in Deposit on Share Capital Subscription due to non-compliance from last year pending membership requirements.NOTE 9: ALLOCATION AND DISTRIBUTION OF NET SURPLUS Under the Cooperative Code of the Philippines (R.A No.9520) and pursuant to Article IX of, the amended By-Laws of the Cooperative, at the end of each calendar year, the Cooperative shall allocate and distribute a portion of its net surplus to the following statutory funds: General Reserve Funds, Education and Training Fund, Community Development Fund and Optional Fund. The remaining net surplus shall be made available to members in the form of interest on share capital not exceed the normal rate of return on investments prescribed by law, and patronage refund. For 2020, the Cooperative allocates 3% of the net surplus for the year to Community fund, 110% to Education and training fund, 7% to optional fund and 50% to the General reserve funds. NOTE 1 _ 2020 2019 Sales 22,993,859,133.53_13,814,266,519.87 Less: Sales Returns & Allowances 100,385,967.43 89,979,808.96_ Net Sales 22,893,473,166.1013,724,286,710.91 Less: Cost of Goods Sold 22,664,538,436.42__13,588,167,285.76 TOTAL GROSS REVENUE FROM OPERATION 228,934,729.68 136,119,425.15 Other Income Membership Fee 2,748,000.00 2,191,900.00 Income/Interest from Investment/Deposits 190,594.84 100,195.28 Service Fee 1,167,700.00 668,496.80 Total Other Income 4,106,294.84 2,960,592.08 TOTAL GROSS REVENUES NOTE 11: GENERAL AND ADMINISTRATIVE EXPENSE ‘This account consists ee toed ‘Advertising & Promotion Expense 92,689,586.46 68,756,152.82 Office Supplies Expense 72,189,994.59 36,270,172.19 Salary & Wages 17,135,391.98 _9,961,063.64 Bank Service Fee 8,920,142.48 — 4,208,431.97 Contractors Fees 6,679,027.04 —_1,665,391.52 Rental Expense 6,675,758.40 _=3,896,007.67 Professional, Consultancy & Legal Fees 5,138,470.80 9,385,488.82 Training & Seminars 3,291,339.57 4,187,098.47 Dues & Subscription 2,734,322.27 1,476,163.83, Depreciation 2,253,774.25 154,634.34 Representation 2,066,911.77 731,141.59 Insurance 41,552,372.63 18,315.20‘Communication Expense 745,776.77 204,638.44 Honorarium Allowance 517,484.36 Repairs & Maintenance 410,063.20 281,250.92 Power & Light 346,792.53 75,000.00 Employee Benefits & Incentives Expenses 186,105.88 ——1,097,810.91 Postage and Courier Expense 60,842.80 25,290.64 ‘Transportation Expense 52,075.20 293,861.90 ‘Tax Penalty Expense 120.00 125,867.55 Miscellaneous Expense 453,345.00 97,615.75 224,099,697. 142,911,398.17 NOTE 12: SUPPLEMENTARY INFORMATION REQUIRED BY THE BIR REVENUE REGULATIONS (RR) NO. 15-2010 In compliance with the requirements set forth by RR 15-2010, hereunder are the information on taxes, duties and licenses feed paid or accrued during taxable year. 1. VAT. ‘The Cooperative is not subject to VAT. VAT on the purchase of the Cooperative is recognized as part of expenses. 2. Importation ‘The Cooperative did not have any importation in 2019 & 2020 3. Excise Tax ‘The Cooperative is exempted from excise tax. 4, Documentary stamp tax (DST) ‘The Cooperative is exempted from DST 5. Other taxes and licenses CDA certificate of exemption Business permits Community tax certificate Barangay cleance