NEW ABACHANAN AGRARIAN REFORM BENEFICIARIES COOPERATIVE AUDITED FINANCIAL STATEMENTS For the Year ended December 31, 2022 With independent auditor's report for the year ended December 31, 2022 Provided by: NCA Accounting ServicesSTATEMENT OF MANAGEMENT RESPONSIBILTY FOR FINANCIAL STATEMENTS The management of NEW ABACHANAN AGRARIAN REFORM BENEFECIARIES COOPERATIVE is responsible for the preparation and fair presentation of the financial statements including the schedules attached therein, for the years ended December 31, 2022, in accordance with the prescribed financial reporting framework indicated therein, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the company’s ability to continue as going concern, disclosing, asapplicable matters related to going concern and using. ‘the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. ‘The Board of Directors is responsible for overseeing the company's financial reporting process. The Board of Directors reviews and approves the financial statements including the schedules attached therein, and submits the same to the stockholders/members, NINA C. ACUZAR,CPA, the independent auditor appointed by the stockholders/members, has audited the financial statements of the company in accordance with Philippine Standards on Auditing, and in @ report to the stockholders, has expressed an opinion on the faimess of the presentation upon completion of such audit. Signature Signature Printed Name Signature peenlaeorh “o- PEReoHD Printed Name of the Treasurer BERNAR DIT 0. PeRoctD Signed this 31 day of __ MARCH 2023Nida Cervantes: Acuzat Contig Puc Aecountant Res. Purok 38, Esabo Strat, Tip Dist Tagharan Cty Offcs 72..A Clan Stret Tegoleran City, 6300 Sohal Prllppines We reper aas 4 00778768112 NGA ACCOUNTING SERVICES ‘STATEMENT OF INDEPENDENT AUDITOR'S REPRESENTATION ‘TO THE COOPERATIVE DEVELOPMENT AUTHORITY: In connection with my examination of the financial statements of NEW ABACHANAN AGRARIAN REFORM BENEFICIARIES COOPERATIVE covering the period ended December 31, 2022 that are herewith submitted to the Cooperative Development Authority, | hereby represent the following: 1, That said financial statements herewith attached are prepared and presented in conformity with the financial reporting standards applicable to cooperatives in the Philippines; 2. That in the conduct of my audit, | adhered to the Philippine Standards on Auditing (PSA) and the Standard Audit System for Cooperatives (SASC) as required by the Cooperative Development Authori 3, That | am qualified as provided for in Section 8 of the Code of Professional Ethics for Certified Public Accountants and Article 81 of R.A. No. 9520 (Philippine Cooperative Code of 2008); 4, That lam fully aware of my responsibility as an independent auditor for the audit report issued and attached to the financial statements and the sanctions to be bestowed on me for my misrepresentations that I may have willingly or unwillingly committed; 5. That | nor any member of my immediate family do not have any direct or indirect financial interest with the cooperative; 6. That | am not an employee nor an officer of a secondary cooperative or tertiary cooperative of which this cooperative is a member; 7. That | am not an employee of the Cooperative Development Authority nor have I engaged an employee of the CDA in the course of audit; 8. That I make representation in my individual capacity; 9. That lam a member of PICPA Bohol chapter. It is however, understood that my accountability is based on matter within the normal coverage of an audit conducted in accordance with Philippine Standards on Auditing and the ‘Standard Audit System for Cooperatives. R CPA Cert. #0113519 TIN 939-824-451-000 PTR No. 1107221, January 5, 2023, Tagbilaran City BIR AN 13-030930-002-2020 (until October 14, 2023) ‘CDA CEA No.: 0967 (until March 30, 2023) BOA Accrediatation No.: $329 (until January 16, 2024) March 6, 2023 Tagbilaran City, Boho!Nina Cervantes Acuzar Cartied Puc Accountant Fes: Purck 38, Esabo Steet, Tp Dstt Tagen City Offes 22 J Clann Stet, Tagbilaran Cy, 8300 Boba Philpines me = casey aeas x 00278760112 NCA ACCOUNTING SERVICES REPORT OF INDEPENDENT AUDITOR To accompanying financial statements for filing with the Bureau of Internal Revenue ‘THE BOARD OF DIRECTORS AND SHAREHOLDERS NEW ABACHANAN AGRARIAN REFORM BENEFICIARIES COOPERATIVE ‘Abachanan, Sierra Bullones, Bohol | have audited the accompanying financial statements of NEW ABACHANAN AGRARIAN REFORM BENEFICIARIES COOPERATIVE for the year ended December 31, 2022, on which rendered the attached report dated March 6, 2023. In compliance with RR V-20, | am stating the following: 11, The taxes paid or accrued by the above taxpayer are shown in the schedule of taxes and licenses and other supporting schedules attached to the annual income tax return and audited financial statements, 2. That | am not related by consanguinity or affinity to any members of the Board of Directors and Officers of the Cooperative cadyar CPA Cert, #0113519 TIN 939-824-451-000 PTR No. 1107221, January 5, 2023, Tagbilaran City BIR AN 13-030930-002-2020 (until October 14, 2023) CDA CEA No.: 0967 (until March 30, 2023) “Ye BOA Accrediatation No.: 5329 (until January 16, 2024), March 6, 2023, Tagbilaran City, BoholNita Gerantes-Acuzar CCetied Pubic Accountant Res: Puro 38, Esabo Street, Tp Distt Tagtilaran Cay (fe: 22 JA Clan Steet, Tagbiaran Cty, 6200 Bohol Pilppines i © (038)412-4898 4 09278768112 NCA ACCOUNTING SERVICES Auditors’ Responsibilities for the Audit of the Financial Statements My responsibility is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with PSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. Report on Other Legal and Regulatory Requirements, My audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information for the year ended December 31, 2022 required by the Bureau of Internal Revenue as disclosed in the notes to financial statements is presented for purposes of additional analysis and is not a required part of the basic financial statements prepared in accordance with the Philippine Financial Reporting Standards. Such supplementary information is the responsibility of management. The supplementary information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in my opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole, INA C.. CPACert. #0113519 TIN 939-824-451-000 PTR No. 1107221, January 05, 2023, Tagbilaran City BIR AN 13-030930-002-2020 (until October’4, 2023) CDA CEA No.: 0967 (until March 30, 2023) BOA Accreditation No.:5329 (until January 16, 2024) March 6, 2023 Tagbilaran City, Boho!NEW ABACHANAN AGRARIAN REFORM BENEFICIRIES COOPERATIVE STATEMENT OF FINANCIAL CONDITION As of the year ended December 31, 2022 (with comparative figures for 2021) ASSETS 31-Dec22 -31-Dec-21 Current Assets Cash and cash equivalent 5 1,746,895 740,485 Loans and other receivables 6 1,232,585 1,447,511 Inventories Zz 285,902 352,460 3,265,382___2,540,456 Non current Assets Property and equipment, net 8 5,218,755 5,045,369 Other funds and deposits 2,033,876 «1,592,945, Deposit on ret. Containers 464 149 Investment in federation 35,500 30,500 7,288,594 6,668,963 TOTAL ASSETS 10,553,976 9,209,419 LIABILITIES AND EQUITY Current Liabilities ‘Accounts and other payables 9 908,505 857,595 s deposit 3,756,223 2,890,523 4,664,728 3,748,118 TOTAL LIABILITIES 4,664,728 3,748,118 Equity Share capital 5,096,570 4,591,809 Statutory funds 0 78, 369,492 889,248 5,461,301. TOTAL LIABILITIES AND EQUITY 10,553,976 9,209,419 esNEW ABACHANAN AGRARIAN REFORM BENEFICIRIES COOPERATIVE STATEMENT OF OPERATIONS. For the period ended December 31, 2022 (with comparative figures for 2021) INCOME 31-Dec-22 31-Dec-21 Income from Cosumers' Operations i 1,849,381.58 1,849,164 Interest income 432,529.00 437,850 Other income 2 243,580.59 206,494 2,525,491.17 2,493,508 Less: Financing costs 203,258.24 160,279 ‘Surplus before expenses 2,322,232.93, 2,333,229 Administrative and opearting expenses 13 1,743,239.30 1,682,148, Net Surplus for Allocation 378,993.63 651,080, ‘ALLOCATION General Reserve Fund 10% 57,899.36 65,108 Education and Trainig Fund-Local 5% 28,949.68 32,554 Education and Training Fund-Due to Apex 5% 28,949.68, 32,554 Optional Fund 7% 40,529.55, 45,576 Community Development Fund 3% 17,369.81 19,532 Interest on Share Capital/Patronage Refund 70% 405,295.54 455,756 Net Surplus as Allocated 578,993.63 651,080NEW ABACHANAN AGRARIAN REFORM BENEFICIRIES COOPERATIVE ‘STATEMENT OF CHANGES IN EQUITY As of the year ended December 31, 2022 (with comparative figures for 2021) ‘SHARE CAPITAL 31-Dec-22 31-Dec-21 Balance at beginning of year 4,591,809 2,550,534 Net increase (decrease) in capital 504,761____2,041,276 Balance at the end of the Year 5,096,570 4,591,810 GENERAL RESERVE FUND Balance at beginning of year 491,919 426,811 Allocation from net surplus 57,899 65,108 Adjustments during the year - Balance at the end of the year 349,818 491,919 CETF-LOCAL Balance at beginning of year 246,161 217,207 Allocation from net surplus 28,950 32,554 Adjustment during the year (217,562) (3,600) Balance at the end of the year 57,549 246,161, OPTIONAL FUND Balance at beginning of year 45,576 461,938 Allocation from net surplus 40,530 45,576 Changes during the year (461,938) Balance at the end of the year 86,106 45,576 ‘COMMUNITY DEVELOPMENT FUND Balance at beginning of year 85,836 98,407 Allocation from net surplus 17,370 19,532 Adjustments during the year (4,000) (32,103) Balance at the end of the year 29,206 85,836 TOTAL EQUITY 5,889,208 5,461,301NEW ABACHANAN AGRARIAN REFORM BENEFICIRIES COOPERATIVE STATEMENTS OF CASH FLOWS As of the year ended December 31, 2022 (with comparative figures for 2021) ‘CASH FLOWS FROM OPEARTING ACTIVITIES 31-Dec-22 31-Dec-21 Net surplus 578,994 651,080 Adjustments for: Depreciation, amortization and other non cash expenses - - (Increase) or Decrease in non-cash operating assets 281,484 (194,984) Increase or (Decrease) in oper - Changes on funds and other operating adjustments 72,421 66,889 Net cash provided by opearting activities 932,899 522,985, CASH FLOW FROM INVESTING ACTIVITY Capital expenditures (173,386) (2,176,526) (Increase) decrease investment (5,000) (5,500) {Increse) decrease in other funds and deposit (341,246) (336,228) ‘Net cash provided by investing activity (619,631) (2,518,254) ‘CASH FLOW FROM FINANCING ACTIVITIES Increase (decrease) in deposits 865,700 1,053,526 Increase (decrease) in share capital 504,761 2,041,276 Net use of statutory funds (221,562) (497,641) Increase (decrease) in donated capital - Payment of interest and patronage refund (455,756) (1,635,150) Payment of due to apex = Net cash provided by financing activities 693,142, 962,011, NET INCREASE IN CASH 1,006,409 (1,033,258) CASH AT BEGINNING OF YEAR 740,485 1,773,743, ‘CASH AT END OF YEAR, 1,746,895 740,485NEW ABACHANAN AGRARIAN REFORM BENEFICIARIES COOPERATIVE Notes to Financial Statements December 31, 2022 1. The Cooperative NEW ABACHANAN AGRARIAN REFORM BENEFICIARIES COOPERATIVE (the Cooperative) was organized primarily for the purpose of offering products to the local folks of Abachanan, Sierra Bullones, Bohol and its neighboring barangays. {ts principal place of business is Abachanan, Sierra Bullones, Philippines. The accompanying financial statements of the Cooperative for the year ended December 31, 2022 were reviewed by and authorized for issuance by the Board of Directors on March 6, 2023. 2. Basis of Preparation and Statement of Compliance The financial statements have been prepared in conformity with the Philippine Financial Reporting Framework applicable to Cooperatives. ‘A complete set of financial statements of an entity reporting under PFRF for Cooperatives is similar to that provided for by full PFRS. It requires the following documents: 1, statement of financial conditions; 2, Astatement of operations; 3. A statement of changes in members’ equity; 4, Astatement of cash flows; 5. Notes including a summary of significant accounting policies. Comparative information in respect of the previous comparable period must be included; although an operating statement of financial position is not needed in the instances described by PAS 1 Presentation of Financial Statements. 3. Summary of Significant Accounting Policies ‘This is a set of financial staternents prepared by the Company in accordance with the PFRF for Cooperatives as adopted by Financial Reporting Standards Council (FRSC) from the pronouncements issued by the International Accounting Standards Board (IASB), ‘The principal accounting policies applied in the preparation of these financial statements are set out below, These policies have been consistently applied to all the years presented, unless otherwise stated, 3a. Basis of Preparation and Presentation of Financial Statement Statement of Compliance with Philippine Financial Reporting Standards for Small and Medium- sized Entities, ‘The financial statements of the Company have been prepared in accordance with Philippine Financial Reporting Standards.‘The financial statements have been prepared using the measurement bases specified by PFRS for each type of asset, liability, income and expense, These financial statements have been prepared on the historical cost basis. The measurement bases are more fully described in the accounting policies that follow. 3b, Financial Instruments Date of Recognitian. The Company recognizes a financial asset or a financial liability when it becomes a party to the contractual provisions of the instrument. In case of a regular way purchase or sale of financial assets, recognition and derecognition, as applicable, is done using settlement date accounting. Initia! Recognition Financial assets and financial liabilities are recognized initially at fair value, which is the fair value of the consideration given (in case of an asset) or received (in case of a liability). The fair value of the consideration given or received is determined by reference to the transaction price or other market prices. If such market prices are not reliably determinable, the fair value of the consideration is estimated as the sum of all future cash payments or receipts, discounted using the prevailing market rate of interest for similar instruments with similar maturities. The initial measurement of financial instruments, except for those designated at fair value through profit and loss (FVPL), includes transactions cost. 3c. Financial Assets Financial Assets include cash and other financial instruments. Financial assets are classified into categories. Financial assets at fair value to profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. Financial assets are assigned to the different categories by management on initial recognition, depending on the purpose for which the investments are required. The designation of financial assets is re-evaluated at every reporting date at which date a choices of classification or accounting treatment is available, subject to ‘compliance with specific provisions of applicable accounting standards, 3d. Cash and Cash Equivalents Cash are stated at face value and includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less and are subject to an insignificant risk of changes in value and are free of any encumbrances. 3e. Inventories and supplies Inventories shall be measured at the lower of cost and net realizable value, Net realizable volue is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sa The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The cost is determined using first-n, first-out (FIFO). When inventories are sold, the carrying amount of inventories shall be recognized as an expense in the period in which the related revenue is recognizedThe amaunt of any write-down of inventories to net realizable value and all losses of inventories shall be recognized as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realizable value, shall be recognized as a reduction in the amount of inventories recognized as an expense in the period in which the reversal occurs. 43f, Financial Assets at FVPL The Company has'no financial assets at FVPL. Financial assets of this category include financial assets held for trading and financial assets designated upon initial recognition as at FVPL. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Gains or losses on investments held for trading are recognized in the interim statements of operation. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments. 39. Financial Liabilities Financial liabilities include trade and other payables, which are recognized when the Company becomes a party to contractual agreements of the instrument. These liabilities are recognized initially at transaction price and subsequently measured at amortized cost less settlement payments. 3h. Financial Liability at FVPL The Company has no designated financial liability at FVPL. Financial liabilities of this category are those resulting from trading activities or derivative transactions that are not accounted for ‘as accounting hedges. 43, Other Financial Liabilities This category pertains to financial liabilities that are not held for trading or not designated as at FVPL upon the inception of the liability. These include liabilities arising from operations or borrowings. The financial liabilities are recognized initially at transaction price and are subsequently carried at amortized cost, taking into account the impact of applying the effective interest rate method of amortization (or accretion) for any related premium, discount and any directly attributable transaction costs. 43). Impairment of Financial Assets The Company assesses at each reporting date whether a financial asset or group of financial assets is impaired, If there is objective evidence that an impairment loss on assets carried at amortized cost has been incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of the estimated future cash flows (excluding future expected losses that have not been impaired) discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced by setting up an allowance account. The amount of the loss shall be recognized in the statement of comprehensive income.The company first assesses whether evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively or financial assets that are not individually significant. If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in 2 group of financial assets with similar risk characteristics and that group of financial asset is collectively assessed for impairment. The determination of impairment losses for financial assets is inherently subjective because it requires material estimates, including the amount and timing of expected recoverable future ‘cash flows. The estimates may change significantly from time to time, depending on available information. 3k. Evidence of Impairment Objective evidence that financial asset are impaired can include default or delinquency of accounts receivable. i. Impairment on Assets Carried at Cost It there is objective evidence of an impairment loss on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, or of a derivative asset that Is linked to and must be settled by delivery of such an unquoted equity instrument, the ‘amount of the loss is measured as the difference between the asset's carrying mount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. 3m. Reversal of Impairment Loss Hf, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed. Any subsequent reversal of an impairment loss is recognized in the statement of operations, to the extend that the carrying value of the asset does not exceed its amortized cost at the reversal date. 4n. Derecognition of Financial Liabilities ‘A financial liability is derecognized when the obligation under the liability is paid, or discharged ‘or cancelled or has expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability land the recognition of a new liability, and the difference in the respective carrying amounts is recognized in profit or loss. 0. Classification of Financial Instruments Between Debt and Equity Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest relating to a financial instruments or a component that is ‘a financial lability is reported as expenses. A financial instrument is classified as debt fit provides for a contractual obligation to: a. Deliver cash or another financial assets to another entity; orExchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the Foundation; or c. Satisfy the obligation other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of own equity shares. If the Company does not have an unconditional right to avoid delivering cash or another financial asset to settle its contractual obligation, the obligation meets the definition of a financial liability 3p. Property and Equipment ‘The initial cost of property and equipment consist of its cost (purchase price, including import duties, if any, taxes, and any directly attributable costs of bringing the assets to its working condition and location for its intended use). Expenditures incurred after the property and equipment have been ut into operation, such as repairs and maintenance and overhaul costs, are normally charged to expense in the period in which 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 cost of property and equipment. Depreciation is charged to operations and is computed on the straight-line method over the estimated useful ives of the assets. After initial recognition, the property and equipment is recognized at cost less accumulated depreciation and accumulated impairment losses, if any. ‘The useful lives and depreciation method are reviewed periodically to ensure that the period and method of depreciation are consistent with the expected pattern of economic benefits from item of property and equipment. The carrying values of property and equipment are reviewed when events or changes in circumstances indicate the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets are written down to the recoverable amount. The recoverable amount of property and equioment is the greater of net selling price and the value in use. Impairment loss, if any, is recognized in the statement of operations. When items of property and equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to current operations. The property and equipment items are depreciated on a straight line basis. The useful lives of these items are written below: Building 25 years Furniture and fixtures 5 to 10 years Store and office equipment 5 to 10 years. 3g, Impairment of Non-Financial Assets‘At each financial position date, the Company assesses whether there is any indication that its tangible assets may be impaired. When an indicator of impairment exists, the corporation makes formal estimates or recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Recoverable amount is the higher or net selling price or value in use. The net selling price is the amount obtainable from the sale of an asset in an arm’s length transaction, while value in use is the Present value if the estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets, or,it Is not possible, for the cash-generating unit to which the assets belong. Impairment losses, if any, are recognized in the statement of operations or recognized as @ reduction in the revaluation increment, if any, and any excess as a charge against current operations. 43r. Revenue Recognition Revenue is recognized to the extend that is probable that the economic benefits will flow to the ‘entity and the revenue can be reliably measured. Revenue is recognized at the point of sale. Revenue items earned by the Company includes interest income from loans, filing fees, membership fees from members and other related items. 3s. Costs and expenses Costs and expenses are decreases in economic benefits during the accounting period in the form of outflows or decrease of assets or incurrence of liabilities that result in decrease in equity other than those relating to distribution of equity participants. Expenses are generally recognized when the services are used or the expenses arise are used 3t. Contingencies Contingent liabilities are not recognized in the financial statements. These are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. A contingent asset is not recognized in the financial statements but disclosed when an inflow of economic benefits is probable. 3u. Events After the Reporting Date Post year-end events that provide additional information about the Company's financial position at the reporting date (adjusting events) are reflected in the financial statements, Post year-end events that are not adjusting events are disclosed in the notes to financial statements. 3v. Employee Benefits Short term benefits The company recognizes a liability net of the amount already paid and an expense for service rendered by employees during the accounting period. Short term benefits given by the company to its employees include compensation, social security contribution, short term compensated absences, bonuses and other non-monetary benefits Long-term benefit ‘The company has no constructive obligation to pay retirement costs to its employees since it is exempt from labor laws of the Philippines. Article 287 or Presidential decree No. 442 sates thatservice establishments or operations not employing more than ten (10) employees or workers are exempt from paying retirement benefits to its employees. Pension Obligations The entity has no formal defined benefit plan or defined contribution plan E defined contribution plan is a pension plan under which the entity pays fixed contributions into a separate entity and has ‘no legal or constructive obligations to pay further contribution if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods, A defined benefit plan.is a pension plan that is not defined contribution pian. Typically defined benefits plans define an amount of pension benefit that an employee will receive in retirement, usually dependent on one or more factors such as age, years of service and compensation ‘The liability recognized in the financial statements in respect of defined benefit pension plans is the present value of the defined benefit obligation at the reporting date minus the fair value of plan assets, The defined benefit obligation is measured using the projected unit credit method. The present value of defined benefit obligation is determined by discounting the estimated future payments by reference to market yields at the reporting date on high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of related pension liability. Past service costs are recognized immediately in profit or loss. For defined contribution plans, the association pays contributions to publicly or privately administered pension insurance plans on @ mandatory or contractual basis. The contributions are recognized as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognized as an asset. The entity has not recognized long-term retirement benefit obligation as of December 31, 2021 and 2020. 3w. Related Party Transactions Related party relationship exists when one party has the ability to control, directly or indirectly ‘through one or more intermediaries, the other party exercise significant influence over the other party in making financial and operating decisions. This includes (1) individuals owning, directly or rectly through more intermediaries, control, or are controlled by , under common control with ‘the company; (2) associates, and (3) individuals owning directly or indirectly an interest in the voting. power of the Company that gives them significant influence over the company and close members of ‘the family of such individual. The entity does not have any other related party transactions concerning relationship with other companies, key management personnel and other related parties, 3x. Statutory funds. These are mandatory funds established /set up in accordance with Cooperative Code of the Philippines. They are as follows: General Reserve Fund Amounts set aside annually for the stability of the Cooperative and to meet net losses in its operations. It is equivalent to 10% of the net surplus. A corresponding fund should be set up either in the form of time deposit with local banks or government securities. Only the amount in excess of the paid up share capital may be used for the expansion and authorized investment of the Cooperative as provided inits by-laws.Education and Training Fund ‘An amount retained by the Cooperative out of the mandatory allocation as stipulated in the Cooperative's by-laws. Currently, the Cooperative withheld 10% for Education and Training Fund. Community Development Fund This is computed at 3% of the Cooperative’s net surplus. This is used for projects or activities that will benefit the community where the cooperative operates. Optional Fund This is computed at 7% of the Cooperative’s net surplus. This is used for any of the following purposes: land and building, acquisition of equipment, members’ benefit, social undertaking, or other purposes. 4, Management's Use of Judgments and Estimates The preparation of the Company's financial statements in compliance with PFRS requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. The estimates and assumptions used in the accompanying financial statements are based upon management's evaluation of relevant facts and circumstances as at date of financial statements. The effects of any changes in estimates are recognized when determinable. 4a. Estimating Allowance for Doubtful Accounts Allowance for doubtful accounts is maintained at a level considered adequate to provide for potentially uncollectible receivables. The level of allowance is based on the aging of receivables, past collection experience and the Portfolio at Risk (PAR). The allowance is established by charges to income in the farm of allowance for doubtful accounts. 4p, Estimating Useful Lives of Property and equipment Useful lives of property and equipment are estimated based on the period over which these assets ‘are expected to be available for use. The estimated lives of the property and equipment may differ from previous estimates due to wear and tear. ‘4c. Estimating Impairment of Property and Equipment ‘The Company assesses at each reporting period whether there is an indication that property and equipment may be impaired. Determining the value in use of property and equipment, which require the determination of future cash flows expected to be generated from the continued use and ultimate disposition of such assets, requires the corporation to make estimates and assumptions that can materially affect the financial statements. Future events could cause the corporation to ‘conclude that property and equipment are impaired. Any resulting impairment loss could have @ material adverse impact on the corporation's financial position and financial performance. ‘The recognition of the estimated future cash flows involves significant judgments and estimates. While the Company believes that the assumptions are appropriate and reasonable, significant changes in the assumptions may materially affect the assessment of recoverable values and may lead to future impairment charges.5. Cash and cash equivalents This consists of: 2022 2021 Cash on hand 387,904 367,748 Cash in bank 1,358,990 372,738 $e SABO 1 ____B7aae Total <5 1,746,895 740,486 6. Loans and other receivables This consists of: 2022 Livelihood loan receivable 1,940 Loans receivable-MSO 893,606, Total 895,546, ‘Trade and other receivable Accounts receivable-trade 337,039 337,039 Total loans and other receivables 1,232,585 Less: Allowance for probable losses on loan Net Realizable Value 1,232,585, 7. Inventories This consists of: 202 202 Consumers 177,386 189,931 Philkraft 25,916 82,600 Palay 82,600 79,929 Total 285,902 352,460 2021 2,980 1,121,002 1,123,942 323,568 323,568 1,447,510 1,447,5108. Property and equipment, net This consists of: Z 2022 2021 Depreciable assets Building 5,082,569 4,953,333, Furniture and fixtures 111,254 103,254 Store and office equipment 299,951 263,801 TOTAL 5,493,774 5,320,388 Less: Accumulated depreciation Building 150,000 150,000 Furniture and fixtures 39,244 39,208 Store and office equipment 85,775 85,775 275,019 275,019 NET BOOK VALUE 5,218,755 __ 5,045,369 9. Accounts and other Payables This consists of; 202 2021 1SC/Patronage refund payable 524,651 502,700 Due to APEX 383,845 354,895 eer a SO CO OE, 10. Statutory funds This consists of: 2022 2021 General reserve fund 549,818 491,20 Education and training fund 57,549 246,161 Optional fund 86,106 45,575 Community development fund 99,206 85,836 TOTALu 12, Income from Consumers’ operations ‘This is computed as follows: 2022 NET SALES 93,800,142 Less: Cost of goods sold Beginninginventory 352,460 ‘Add: Net Purchases 7,458,984 Freight and handling 53,762 Other Direct Charges 71,456 Total goods available forsa 7,936,662 Less: Inventory end 285902___7,650,760 Gross Profit on Sales 1,849,382 Other Income This consists of: 2022 2021 Interest on bank deposits 15,206 12,227 Membership Fee 3,400 7,700 Service Fee 44,103 48,746 Fines, penalties & surcharges 70,925 76,123 Total 133,634" 144,796 GCASH and other income 7,537 179 Passbook 1,150 3,075, ‘Snacks and Sprayer 21,040 16,108 ‘Transfer Fee 1,800 5,064 Photocopy 36,844 27,084 Closure Charge ‘900 390 Termination Fee 33,214 4,264 Gain on Insurance 7,461 5,534 Total 109,947 61,698 Total Other Income 243,581 206,494 total Otherincome ___243,581 206,404 2021 339,589 9,869,289 110,788 10,319,665 352,460 11,816,369 9,967,205 1,849,16413. Administrative and Operating Expenses This consists of: 2022 202 Salaries and Wages 1159914 1,129,185 Perdiems- BODs 89,000 91,500 Travel and transportation 59,640 59,223 Taxes and Licenses 7,651 4,585, General Assembly Expense 30,605 Employees Benefits 146,662 187,731 Professional Fees 7,500 8,500 Power, Light and Water 35,108 34,572 Insurance 41,823 26,231 $85/Philhealth/HOMF 90,495 78,961 Notarial Fee 100 700 Representation Expense 4178 4,268 Communication Expense 6,996 7,084 Anniversary Expense 1,003 Linen and Uniforms 9,600 Rent Expense - 3,200 Miscellaneous 4,642 Retirement Benefits 9,100 7,000 Commission Expense 3,646 2,897 Due to other regulatory agencies 3,491 24,395 Gas, Oil & Lubricants 34,585 7,A75 Donations and Solicitation 2,143 Total 1,743,239 1,682,148 14. Supplementary information on taxes and licenses Tax Exemption ‘The Cooperative is duly registered with the Bureau of Internal Revenue. In accordance with the cooperative code of the Philippines, cooperatives are exempted from payment of all national, city, provincial, municipal, or barangay taxes of whatever name and nature, including exemption from custom duties, advances sales of compensating taxes on importation of machinery, equipment and spare parts which are not available locally as certified by the Department of Trade and Industry. Cooperatives shall enjoy tax exemptions from government taxes or fees imposed under internal revenue laws provided, the cooperative does not transact business with non-members or the general public. Cooperatives, if transacting business with non-members or the general public, may be exempt from taxes if their accumulated reserves and undivided net savings does not exceed Php10 million or up to 10 years from date of registration if their accumulated reserves already exceed Php 10 million.‘As a CDA registered Cooperative transacting business with members only and whose accumulated reserves and undivided net savings did not exceed Php10 million. Under R.A. 19520, the cooperative is exempt from paying the following taxes, (per RDA-RR13 Ruling No. 22-03 dated February 11, 2003 and BIR Ruling No. 009-96 dated February 28, 1996, and Sec. 1109 (u) of NIRC), to wi 1 2 3 7 Income Tax on income from operations ‘Value-added tax (VAT) under Section 109 pars. (1), (s), (t), and (u) of the Tax Cede of 1997 whenever applicable; 3% Percentage tax under section 116 of the Tax Code of 1997; Donor’s tax on donations to duly accredited charitable, research and educational institutions and reinvestment to socio-economic projects within the area of operations of the cooperative; Excise tax under Title VI of the Tax Code of 1997 Documentary Stamp tax imposed under Title Vil of the Tax Code of 1997, provided, however, that the other party to the taxable documents/transactions \who is nat exempt shall be the one directly liable for the tax; and Annual Registration fee of P500 under Section 236 (8) of the Tax Code of 1997. However, the taxes and licenses account paid by the cooperative as reflected above in the ‘amount of P7,651.00 consists of local licenses as required by the local government unit and ‘other regulatory agencies.