AILEEN OBRADOR PAULINO

18C Tower 1 Ayala Triangle

Ayala Avenue, Makati City

AUDITED FINANCIAL STATEMENTS

As of and For the Period ending December 31, 2018 and 2017/

CASTANEDA AND ASSOCIATES

Certified Public Accountants
61 Kanlaon Street, Mandaluyong City
Tel/Fax No. 5334962/ 7181945
BIR Tax Agent Reg. 07-003349-1-2013
Board of Accountancy Reg. 0492



CASTAÑEDA & ASSOCIATES
61 Kanlaon Street, Mandaluyong City
Tel/Fax No. 5334962/ 7181945
BIR Tax Agent Reg. 07-003349-1-2013
Certified Public Accountants Board of Accountancy Reg. 0492
CDA CEA No: 002-AF

REPORT OF INDEPENDENT AUDITORS

AILEEN OBRADOR PAULINO

18C Tower 1, Ayala Triangle
Ayala Avenue, Makati City

Opinion

We have audited the accompanying financial statements of AILEEN OBRADOR

PAULINO which comprise the statements of financial position as at December 31, 2018
and 2017, and the statement of comprehensive income, statement of changes in owner’s
equity & statements of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies and other explanatory
information.

In our opinion, the financial statements present fairly, in all material respects, the
financial position of AILEEN OBRADOR PAULINO as at December 31, 2018 and
2017, and its financial performance and its cash flows for the years then ended in
accordance with Philippine Financial Reporting Standards for Small Entities (PFRS for
SEs).

Basis of Opinion

We conducted our audits in accordance with the Philippine Standards on Auditing (PSA).
Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our report. We are
Independent of the Entity in accordance with the International Ethics Standards Board for
Accountants’ Code of Ethics for Professionals Accountants (PESBA Code) together with
the ethical requirements that are relevant to our audit of the financial statements in the
Philippines, the Code of Ethics for Professional Accountants in the Philippine (Philippine
Code of Ethics), and we have fulfilled our other ethical responsibilities in accordance
with these requirements and the PESBA Code. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management and Those Charged with Governance for the

Financial Statements

Management is responsible for the preparation and fair presentation of the financial
statements in accordance with PFRS for SE, 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 a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless

management either intends to liquidate the entity or to cease operations, or has no

realistic alternative but to do so.

Those charged with the governance are responsible for overseeing the Company’s
financial reporting process.

Auditor’s Responsibility for the Audit of the Financial Statements

Our objectives are 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 our opinion. Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit conducted in accordance with PSA will
always detect a material misstatement when it exists. Misstatements can arise from fraud
or error and are consider 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.

As part of an audit in accordance with PSA, we exercise professional judgment and

maintain professional skepticism throughout the audit. We also:

Identify and assesses the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit 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 Company’s internal control.

Evaluate the appropriateness of the accounting policies used and the reasonableness of
the accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of

accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in my auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Entity to cease to continue as
a going concern.

Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.

Report on Other Legal and Regulatory Requirements

Our audits were conducted for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary information in Note 14 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 supplementary information is
the responsibility of management and has been subjected to the auditing procedures
applied in our audits of the basic financial statements. In our opinion, the supplementary
information is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.

CASTANEDA AND ASSOCIATES, CPAs

By: Bernadette C. Rodriguez

Partner

CPA No. 104172

Tax Identification No. 209-550-301-000
PTR No. 3809527, Jan. 3, 2019, Mandaluyong City
Board of Accountancy Reg. No. 0492
valid until June 8, 2021
BIR Accreditation No. 07-000031-003-2019
valid until Jan. 23, 2022
CDA Accreditation No. 002-AF
valid until October 15, 2019

March 31, 2019

Mandaluyong City

AILEEN OBRADOR PAULINO

18C Tower 1, Ayala Triangle
Ayala Avenue, Makati City

STATEMENT OF MANAGEMENT’S RESPONSIBILITY

FOR ANNUAL INCOME TAX RETURN
I, AILEEN OBRAOR PAULINO, am responsible for all information and representation
contained in the Annual Income Tax Return for the calendar year ended December 31,
2018. I am likewise responsible for all information and representations contained in the
financial statements accompanying the Annual Income Tax Return covering the same
reporting period. Furthermore, I am responsible for all information and representations
contained in all the other tax returns filed for the reporting period, including, but not
limited, to the value added tax and/or percentage tax returns, withholding tax returns,
documentary stamp tax returns, and any and all other tax returns.
In this regard, I affirm that the attached audited financial statements for the year ended
December 31, 2018 and the accompanying Annual Income Tax Return
are in accordance with the books and records of AILEEN OBRADOR PAULINO
complete and correct in all material respect. I likewise affirm that:
a. the Annual Income Tax has been prepared in accordance with the provision of
the National Internal Revenue Code, as amended, and pertinent tax regulations
of other issuances of the Department of Finance and the Bureau of Internal
Revenue.
b. any disparity of figures in the submitted reports arising the preparation of
financial statements pursuant to financial accounting standards and the
preparation of the income tax return pursuant to tax accounting rules has been
reported as reconciling items and maintained in the client’s book and records
in accordance with the requirements of Revenue Regulations No. 8 – 2007
and other relevant issuances;
c. that I, AILEEN OBRADOR PAULINO, has filed all applicable tax returns,
reports and statements required to be filed under Philippine tax laws for the
reporting period, and all taxes and other impositions shown thereon to be due
and payable have been paid for the reporting period, except those contested in
good faith.

AILEEN OBRADOR PAULINO

Date Signed: March 31, 2019

AILEEN OBRADOR PAULINO

18C Tower 1, Ayala Triangle
Ayala Avenue, Makati City

STATEMENT OF MANAGEMENT’S RESPONSIBILITY

FOR FINANCIAL STATEMENT

I, AILEEN OBRADOR PAULINO, am responsible for the preparation and fair

presentation of the financial statements including the schedules attached therein, for the
years ended December 31, 2018 and 2017 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 a going concern, disclosing, as applicable matters related
to going concern and using the going concern basis of accounting unless the management
either intends to liquidate the Entity or to cease operations, or has no realistic alternative
but to do so.

That I, AILEEN OBRADOR PAULINO, am responsible for overseeing the Company's

financial reporting process.

That I, AILEEN OBRADOR PAULINO, review and approve the financial statements
including the schedules attached therein, and submits the same to the shareholders or
members.

Castaneda and Associates CPAs, the independent auditor appointed by the AILEEN
OBRADOR PAULINO has audited the financial statements of the entity in accordance
with Philippine Standards on Auditing, and in its report to the shareholders or members,
has expressed its opinion on the fairness of presentation upon completion of such audit.

AILEEN OBRADOR PAULINO

Date Signed: March 31, 2019

AILEEN OBRADOR PAULINO

18C Tower 1, Ayala Triangle
Ayala Avenue, Makati City

STATEMENT OF FINANCIAL POSITION

(In Philippine Peso)

As at December 31
2018 2017

ASSETS

Current Assets
Cash and Cash Equivalents (Note 3.1, Note 4) 1,162,478 808,278
Trade and Other Receivables (Note 3.2, Note 5) 222,100 158,000
Total Current Assets 1,384,578 966,278

Non Current Assets

Property and Equipment (Note 3.3, Note 6) 201,246 214,787
Total Non Current Assets 201,246 214,787
TOTAL ASSETS 1,585,824 1,181,065

LIABILITIES AND OWNER’S EQUITY

Current Liabilities
Trade and Other Payables (Note 3.5, Note 7) 98,213 159,734
TOTAL LIABILITIES 98,213 159,734

Owner’s Equity
AOPaulino Capital, Beginning (Note 3.7, Note 8) 1,021,330 1,138,544
Add/(Less) : Net Income 1,166,281 82,786
Drawings (700,000) (200,000)
AOPAULINO CAPITAL, END 1,487,611 1,021,330
TOTAL LIABILITIES AND OWNER’S EQUITY 1,585,824 1,181,065
See Accompanying Notes to the Financial Statements

AILEEN OBRADOR PAULINO

18C Tower 1, Ayala Triangle
Ayala Avenue, Makati City

STATEMENT OF INCOME
(In Philippine Peso)

Year Ended December 31

2018 2017

REVENUES (Note 3.8)

Service Income 2,924,159 3,094,444
Total Revenues 2,924,159 3,094,444

COST OF SERVICE
Cost of Services (Note 3.9) 438,901 1,225,430
Total Cost of Service 438,901 1,225,430
GROSS PROFIT 2,485,258 1,869,014

EXPENSES
General and Administrative (Note 3.9)
Communication, Light and Water 92,899 74,239
Fuel and Oil 77,356 96,570
Insurance - 50,000
Repairs and Maintenance 165,306 300,011
Meetings and Conferences 217,979 395,961
Trainings and Seminars 172,385 313,063
Transportation and Travel 141,607 281,813
Total General and Administrative Expenses 867,531 1,511,656
Other Operating Expenses (Note 3.9)
Depreciation 13,541 13,541
Miscellaneous 142,479 257,598
Total Other Operating Expenses 156,020 271,139
Total Expenses 1,023,551 1,782,795
OPERATING INCOME (LOSS) 1,461,708 86,219
PROVISION FOR INCOME TAX (Note 3.10, Note 9) 295,427 3,433
NET INCOME (LOSS) 1,166,281 82,786
See accompanying Notes to the Financial Statements.

AILEEN OBRADOR PAULINO

18C Tower 1, Ayala Triangle
Ayala Avenue, Makati City

STATEMENT OF CASH FLOW

(In Philippine Peso)

Year Ended December 31

2018 2017

CASH FLOW FROM OPERATING ACTIVITIES

Income (Loss) before Income Tax 1,461,708 86,219
Adjustment for:
Depreciation (Note 3.3, Note 6) 13,541 13,541
Operating Income before working capital changes 1,475,249 99,760
Decrease (Increase) in:
Trade and Other Receivables (Note 3.2, Note 5) (64,100) 100,000
Increase (Decrease) in:
Trade and Other Payables (Note 3.5, Note 7) (61,521) (85,267)
Net cash generated from operations 1,349,628 114,493
Income tax paid (Note 3.10, Note 9) (295,427) 3,433
Net cash flow from operating activities 1,054,200 111,060

CASH FLOW FROM INVESTING ACTIVITIES

Acquisition of Property and Equipment (Note 3.3, Note 6) - -
Net cash flow from investing activities - -

CASH FLOW FROM FINANCING ACTIVITIES

Owner’s Drawings (Note 3.7, Note 8) (700,000) (200,000)
Net cash flow from investing activities (700,000) (200,000)

EFFECTS OF EXCHANGE RATE CHANGES

- -
ON CASH AND CASH EQUIVALENTS
NET INCREASE (DECREASE) IN CASH
354,200 (88,940)
AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT
808,278 897,218
THE BEGINNING OF THE YEAR (Note 3.1, Note 4)
CASH AND CASH EQUIVALENTS AT
1,162,478 808,278
THE END OF THE YEAR (Note 3.1, Note 4)
See accompanying Notes to the Financial Statements

AILEEN OBRADOR PAULINO

18C Tower 1, Ayala Triangle
Ayala Avenue, Makati City

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

(In Philippine Peso)

Years Ended December 31

2018 2017

AOPAULINO, CAPITAL (Note 3.7, Note 8)

Balance as at January 1, 2017 1,138,544
Add/(Less): Net Income (Loss) for 2017 82,786
Owner’s Drawings in 2017 (200,000)
AOPaulino, Capital as at December 31, 2017 1,021,330 1,021,330
Add/(Less): Net Income (Loss) for 2018 1,166,281
Owner’s Drawings in 2018 (700,000)
AOPAULINO, CAPITAL
1,487,611
AS AT DECEMBER 31, 2018
See accompanying Notes to the Financial Statements

AILEEN OBRADOR PAULINO

18C Tower 1, Ayala Triangle
Ayala Avenue, Makati City

NOTES TO THE FINANCIAL STATEMENTS

As of and For the Year Ended December 31, 2018 and 2017

1. General Information

AILEEN OBRADOR PAULINO is registered with the Bureau of Internal Revenue

and Tax Identification Number 113-413-423-000 with registered office address
located at 18C Tower 1 Ayala Triangle Ayala Avenue Makati City.

AILEEN OBRADOR PAULINO with an accumulated equity amounting to One

Million Four Hundred Eighty Seven Thousand Six Hundred Eleven Philippine Pesos
(P1,487,611) as at December 31, 2018, is still willing to continue operation.

The accompanying financial statements have been prepared on a going concern

basis, which contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. The entity’s continuation as a going concern is
dependent on its ability to generate sufficient funds and ultimately to obtain
successful operation or to undertake decisive steps to preserve the value of the
company.

The financial statements of the entity have been approved and authorized for
issuance by owner on March 31, 2019. The owner is empowered to make revisions
even after the date of issue.

2. Basis of Preparation and Presentation of Financial Statements and Statement of

Compliance

Basis of Preparation

The financial statements of the entity have been prepared under the historical cost
basis and are presented in Philippine Peso, which is the entity’s functional and
presentation currency. All values represent absolute amounts except when otherwise
indicated.

Functional and Presentation Currency

Based in economy substance of underlying circumstances relevant to the entity, the

functional currency has been determined to be the Philippine Peso, which is the
currency the primary economic environment in which the entity operates and is the
currency that mainly influences the prices of the product and services and the cost of
providing such products and services.

The financial statements are presented in Philippine Peso. All amounts are rounded
to the nearest Peso, except when otherwise indicated.

 FLORANTE ESTABAYA MARTINEZ
Notes to the Financial Statements
Page 2

Statement of Compliance and early adoption of Philippine Financial Reporting

Standards for Small Entities (PFRS for SE)
The accompanying financial statements have been prepared in accordance with
Philippine Financial Reporting Standards for Small Entities (PFRS for SEs), as
approved by the Financial Reporting Standards Council, the Board of Accountancy,
and the Securities and Exchange Commission.

The adoption of the above Framework, upon which the Entity has opted to early
adopt, did not have any significant effect on the Company’s financial statements.
These however, require additional disclosures on the Company’s financial
statements.

In preparing these financial statements, the Company’s opening statement of

financial position was prepared as at January 1, 2017, the Company’s transition date
to PFRS for Small Entities.

Note 13 to the financial statement explains the adjustments made by the Entity in
restating its previous financial statements prepared in accordance with PFRS for
SMEs including statement of financial positions as at January 1, 2017, and the
financial statements as at and for the year ended December 31, 2017.

The Entity opted to adopt the Framework earlier than its mandatory effective date of
January 1, 2019, as allowed by the Framework itself and the existing SEC rules and
regulations.

3. Summary of Significant Accounting Policies

The significant accounting policies that have been used in the preparation of the
financial statements are summarized below. The policies have been consistently
applied to all years presented, unless otherwise stated.

Financial Assets and Liabilities

Financial instruments within the scope of Section 6, “Basic Financial Instruments,”
are classified as either financial assets or financial liabilities. Financial assets and
liabilities are recognized initially at transaction price including transaction costs, and
subsequently at amortized costs using the effective interest method. Cash and debt
instruments that are classified as current assets or current liabilities are subsequently
measured at the undiscounted amount of the cash or other consideration expected to
be paid or received. Unless the arrangement constitutes, in effect a financing
transaction, the debt instruments are measured at the present value of the future
payments discounted using market rate of interest for a similar debt instrument. The
Entity determines the classification of its financial assets on initial recognition and,
where allowed and appropriate, re-evaluates this designation at each financial year-
end.

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

 FLORANTE ESTABAYA MARTINEZ
Notes to the Financial Statements
Page 3

provisions. The Entity classifies its financial instruments into the following
categories: (a) basic financial instruments; and (b) other financial instruments.

Derecognition of Financial Asset.

A financial asset (or, where applicable a part of a financial asset or part of a group of
similar financial assets) is derecognized when:

(i) the right to receive cash flows from the asset have expired

(ii) the entity retains the right to receive cash flows from the asset bus has
assumed an obligation to pay them in full without material delay to a third
party under a “pass-through” arrangement; or

(iii) the entity has transferred its rights to receive cash flows from the asset and has
(a) either transferred substantially all the risks and rewards of the asset, or (b)
has neither transferred nor retained substantially all the risks and rewards of
the asset, but has transferred control of the asset.

The asset is recognized to the extent of the company’s continuing involvement in the
asset. Continuing involvement that takes the form of a guarantee over the transferred
asset is measured at the lower of the original carrying amount of the asset and the
maximum amount of consideration that the entity could be required to repay.

Derecognition of Financial Liabilities

A financial liability is derecognized when the obligation under the liability is
discharged or cancelled or has expired. Where 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 and the recognition
of a new liability, and the difference in the respective carrying amounts is recognized
in the statement of income.

Impairment of Financial Assets

The entity assess at each reporting date whether there is objective evidence that a
financial asset or group of financial assets is impaired. A financial asset or a group of
financial assets is deemed to be impaired if, and only if, there is objective evidence
of impairment as a result of one or more events that has occurred after the initial
recognition of the asset (an incurred ‘loss event’) and that loss event (or events) has
an impact on the estimated future cash flows of the financial asset or the group of
financial assets that can be reliably estimated.

Evidence of impairment may include indications that the borrower or a group of

borrowers is experiencing significant financial difficulty, default or delinquency in
interest or principal payments, the probability that they will enter bankruptcy or other
financial reorganization and where observable data indicate that there is measurable
decrease in the estimated future cash flows, such as changes in arrears or economic
conditions that correlate with defaults.

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

 FLORANTE ESTABAYA MARTINEZ
Notes to the Financial Statements
Page 4

the asset’s carrying amount and the present value of estimated future cash flows
(excluding future expected credit losses that have not been incurred) discounted at
the financial asset’s original effective interest rate (ie.. the effective interest rate
computed at initial recognition). The carrying amount of the asset is reduced through
the use of an allowance account. The amount of the loss shall be recognized in the
statement of comprehensive income.

If, in a subsequent period, the amount of the impairment loss decreases and the
decrease can be related objectively to an event occurring after the impairment was
recognized, the previously recognized impairment loss is reversed, to the extent that
the carrying value of the asset does not exceed its amortized cost at the reversal date.
Any subsequent reversal of an impairment loss is recognized in the statement of
comprehensive income.

In relation to trade receivables, a provision for impairment is made when there is an

objective evidence (such as the probability of insolvency or significant financial
difficulties of the debtor) that the Entity will not able to collect all of the amounts
due under the original terms of the invoice. The carrying amount of the receivable is
reduced through use of an allowance account. Impaired receivables are derecognized
when they are assessed as uncollectible.

Offsetting of Financial Instruments

Financial assets and liabilities are offset and the net amount is reported in the
statement of financial position if, and only if, there is a currently enforceable legal
right to offset the recognized amounts and there is an intention to settle on a net
basis, or to realize the asset and settle the liability simultaneously. This is not
generally the case with the master netting agreements, and the related assets and
liabilities are presented gross in the statement of financial position.

3.1 Cash and Cash Equivalents

Cash is stated at face value. Cash also includes cash in banks and petty cash
funds, which are being utilized to fund expenses on a day-to-day transaction
of the entity and cash in banks, which consist of the current and savings
accounts. Cash equivalents, if any, are short-term, highly liquid debt
instruments that are readily convertible to known amounts of cash with
original maturities of three months or less and that are subject to an
insignificant risk of change in value.

3.2 Trade and Other Receivables

Trade and other receivables, which are based on normal credit terms and do
not bear interest, are stated at their transaction costs as reduced by any
appropriate allowances for doubtful accounts, and subsequently at amortized
costs using the effective interest method. Any allowance for impairment loss
and allowance for doubtful accounts are the estimated amount of probable
losses arising from non-collection based on past collection experience and
management’s review of the current status of the long outstanding receivables.
Any doubtful account expense is to be recognized in the statement of income.
As of reporting date, management estimates that the receivables are fully
collectible.

 FLORANTE ESTABAYA MARTINEZ
Notes to the Financial Statements
Page 5

3.3 Properties and Equipment
Property and equipment are initially stated at cost, and subsequently measured
at cost less accumulated depreciation and amortization and impairment in
value, if any.

The initial cost of property and equipment consists of its purchase price,
including any directly attributable costs in bringing the asset to its working
condition and location for its intended use. Expenditures incurred after the
item has been put into operation, such as repairs, maintenance and overhaul
costs, are normally recognized as expense in the period the costs are incurred.
In situations where it can be clearly demonstrated that the expenditures have
improved the condition of the asset beyond the originally assessed standard of
performance, the expenditures are capitalized as an additional cost of property
and equipment.

When assets are sold or retired, their costs and accumulated depreciation,
amortization and impairment losses, if any, are eliminated from the accounts
and any gain or loss resulting from their disposal is included in the statement
of income of such period.

Depreciation and amortization of an item of property and equipment begins

when it becomes available for use, i.e., when it is in the location and condition
necessary for it to be capable of operating in the manner intended by
management. Depreciation is charged so as to allocate the cost of assets less
their residual value over the estimated useful lives of the assets using the
straight-line method as follows:

Furniture and Fixture 10 Years

Equipment 15 Years

The foregoing estimated useful lives and depreciation method are reviewed
from time to time to ensure that these are consistent with the expected
economic benefits of the property and equipment.

The useful life of each of the property and equipment is estimated based on
the period over which the asset is expected to be available for use. Such
estimation is based on a collective assessment of industry practice and
experience with similar assets.

The assets' residual values, useful lives and depreciation and amortization
method are reviewed, and adjusted if appropriate, at each financial year-end.

If there is any indication that there has been a significant change in

depreciation rate, useful lives or residual values of an asset, the depreciation
and amortization of that asset is revised prospectively to reflect the new
expectations.

An item of property and equipment is derecognized upon disposal or when no

future economic benefits are expected from its use or disposal. When assets
are retired or otherwise disposed of, the cost and the related accumulated

 FLORANTE ESTABAYA MARTINEZ
Notes to the Financial Statements
Page 6

depreciation are removed from the accounts and any resulting gain or loss is
credited or charged to current operations. Gain or loss arising on the disposal
or retirement of an asset is determined as the difference between the sales
proceeds and the carrying amount of the asset.

Land, if any, is carried at cost and is not depreciated.

3.4 Asset Impairment

At each reporting date, property and equipment and other noncurrent assets
are reviewed to determine whether there is any indication that these assets
have suffered impairment loss. If there is an indication of possible
impairment, the recoverable amount of any affected assets (or group of related
assets) is estimated and compared with the carrying amount. If estimated
recoverable amount is lower, the carrying amount is reduced to its estimated
recoverable amount, and an impairment loss is recognized immediately in the
statement of comprehensive income.

If an impairment loss subsequently reverses, the carrying amount of the asset

(or group of related assets) is increased to the revised estimate of its
recoverable amount, but not in excess of the amount that would have been
determined had no impairment loss been recognized for the asset (or group of
related asset) in prior years. A reversal of impairment loss is recognized in the
statement of comprehensive income.

3.5 Trade and Other Payables

Trade and other payables are liabilities to pay for goods or services that have
been received or supplied and have been invoiced or formally agreed with the
supplier. Trade payables are non-interest bearing and are stated initially at
their transaction costs. Subsequently, it is recognized at amortized costs using
the effective interest method.

Accruals are liabilities to pay for goods or services that have been received or
supplied but have not paid, invoiced or formally agreed with the supplier,
including amounts due to employees, if any. It is necessary to estimate the
amount or timing of accruals, however, the uncertainty is generally much less
than provisions.

3.6 Income Tax Payable

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

The tax payable for the year is either based on the graduated income tax table
issued by the Bureau of Internal Revenue. Taxable profit or loss differs from
net profit or loss as reported in the statements of income, because it excludes
items of income or expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible.

 FLORANTE ESTABAYA MARTINEZ
Notes to the Financial Statements
Page 7

3.7 Owner’s Capital

Owner's Equity represents the cumulative amount of capital infused on the
business. Owner's Equity is increased by net income and additional
investment of the owner and decreased by net loss and withdrawal of the
owner.

3.8 Receipts Recognition

Revenue is recognized to the extent that is probable that the economic benefits
will flow to the entity and the amount of revenue can be reliably measured.
However, when an uncertainty arises about the collectibility of an amount
already included in the revenue, the uncollectible amount or the amount in
respect of which recovery has ceased to be probable is recognized as an
expense, rather than as an adjustment of the amount of revenue originally
recognized.

Service Income
Revenues from rendering services are recognized, when services are
completed and billed.

3.9 Cost of Service and Expense Recognition

Expenses are decreases in economic benefits in the form of decreases in assets
or incurrence of liabilities that result in decreases in equity, other than those
relating to distributions to equity participants. Expenses are generally
recognized when the services are received or when the expenses are incurred.

Cost of Services
Costs of sales are recognized in profit or loss in the period the goods are sold.
Direct Costs are recognized in profit or loss in the period the services are
provided. Direct costs include salaries and benefits, depreciation, utilities, and
other expenses directly attributed to the products/ services provided.

General and Administrative Expenses

Administrative expenses include professional fees, taxes and licenses,
communication, transportation, office supplies and other costs that cannot be
associated directly to the products/ services provided.

Other Operating Expenses

Other Operating expenses include miscellaneous expense and bank charges.

3.10 Income Taxes

The income tax expense for the year is either Regular Corporate Income Tax
(RCIT) or Minimum Corporate Income Tax (MCIT) whichever is higher.
Taxable profit differs from net income as reported in the statements of income
because it excludes items of income or expense that are taxable or deductible
in other years and a further excludes items that are never taxable or
deductible. The reconciliation of the company’s liability for current tax is
calculated using 30% tax rate.

 FLORANTE ESTABAYA MARTINEZ
Notes to the Financial Statements
Page 8

3.11 Provisions
Provisions are recognized when: a) the entity has an obligation as a result of a
past event; b) it is probable that a transfer of economic benefit will be required
to settle the obligation; and c) 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 that reflect current market assessments of the time value
of money and the risk specific to the obligation. Changes in the provisions due
to passage of time are recognized in the statement of income.
3.12 Subsequent Events
Events after the reporting period occur between the end of the reporting period
and the date when the financial statements are authorized for issue. It includes
all events up to the date when the financial statements are authorized for issue,
even if those events occur after the public announcement of profit or loss of
other selected information.
Any adjusting events after the reporting period are adjusted in its financial
statements including related disclosures, to reflect adjusting events after the
end of the reporting period. Non Adjusting Events, if any, after the end are
recognized in its financial statements to reflect non-adjusting events after the
end of the reporting period.
The Entity adjusts the amounts recognized in its financial statements,
including related disclosures, to reflect adjusting events after the end of the
reporting period. Hence, the Entity shall not adjust the amounts recognized in
its financial statements to reflect non- adjusting events after the reporting
period.
3.13 Related Party Disclosure
Related party relationship exists when one party has the ability to control,
directly or indirectly through one or more intermediaries, the other party or
exercise significant influence over the other party in making financial and
operating decisions.
This includes: (1) Individual owning, directly or indirectly, one or more
intermediaries, control, or are controlled by, or under common control with,
the entity; (2) associates; and (3) individual owning, directly or indirectly, an
interest in the voting power of the entity that gives them significant influence
over the entity and close members of the family of any such individual.

4. Cash and Cash Equivalents

As at December 31
--------------------------------
Particulars 2018 2017
------------------------------------------------ --------------- ---------------
Cash in Bank 1,162,478 808,278
------------------------------------------------ --------------- ----------------
Total Cash and Cash Equivalents 1,162,478 808,278
============================ ========= =========

 FLORANTE ESTABAYA MARTINEZ
Notes to the Financial Statements
Page 9

The carrying amount of cash and cash equivalents approximates their fair value.
Cash in bank is maintained at a local bank, which are non-interest bearing.

5. Trade and Other Receivables

As at December 31
--------------------------------
Particulars 2018 2017
------------------------------------------------ --------------- ---------------
Trade Receivables 222,100 158,000
Less: Allowance for Doubtful Accounts - -
------------------------------------------------ --------------- ----------------
Total Trade and Other Receivables, Net 222,100 158,000
============================ ========= =========

Trade receivables are customer accounts, which are non-interest bearing and are
generally collectible within 30 to 60 days term.

No allowance for doubtful accounts has been provided during the calendar year since
the account is most probable to be collected. No allowance for impairment loss has
been provided during the calendar year ending December 31, 2018 and 2017.

The amount of receivables approximates their fair value.

6. Property and Equipment

As at December 31
---------------------------------
Particulars Furniture Equipment 2018 2017
----------------------------------- ------------- -------------- -------------- --------------
Cost:
Beginning Balance 100,000 131,869 231,869 231,869
Additional Procurement - - - -
Disposal of Assets - - - -
----------------------------------- ------------ -------------- -------------- --------------
Ending Balance 100,000 131,869 231,869 231,869
----------------------------------- ------------ -------------- -------------- --------------
Accumulated
Depreciation:
Beginning Balance 10,000 7,082 17,082 3,541
Depreciation 10,000 3,541 13,541 13,541
Disposal of Assets - - - -
----------------------------------- ------------ -------------- -------------- --------------
Ending Balance 20,000 10,623 30,523 17,082
----------------------------------- ------------ -------------- -------------- --------------
Carrying Value 80,000 121,246 201,246 214,787
===================== ======= ======== ======== ========

The entity conducts yearly assessment of its fixed assets recoverable amounts and
determined that none of its fixed assets have indication for impairment. As at
December 31, 2018 and 2017, the carrying amount of the fixed assets approximates
the recoverable value.

 FLORANTE ESTABAYA MARTINEZ
Notes to the Financial Statements
Page 10

No items in property and equipment account were pledged as securities for
liabilities.

All items in the Property and Equipment are depreciated using the straight line
method of depreciation. Useful lives are the assets are discussed in Note 3.3:
Property and Equipment.

7. Trade and Other Payables

As at December 31
--------------------------------
Particulars 2018 2017
------------------------------------------------ --------------- ---------------
Accounts Payables 70,278 95,478
Accrued Payables 24,924 60,824
Income Tax Payables 3,011 3,433
------------------------------------------------ ---------------- ----------------
Total Trade and Other Payables 98,213 159,735
============================ ========= =========

8. Owner’s Equity

As at December 31
--------------------------------
Particulars 2018 2017
-------------------------------------------------------------------------- --------------- ---------------
AOPaulino Capital:
Balance as of January 1, 2017 1,138,544
Add / (Less): Net Income (Loss) after Income Tax In 2017 82,786
Owner’s Drawings in 2017 (200,000)
-------------------------------------------------------------------------- --------------- ---------------
AOPaulino Capital as at December 31, 2017 1,021,330 1,021,330
-------------------------------------------------------------------------- --------------- ---------------
Add / (Less): Net Income (Loss) after Income Tax In 2018 1,166,281
Owner’s Drawings in 2018 (700,000)
-------------------------------------------------------------------------- --------------- ---------------
AOPaulino Capital as at December 31, 2018 1,487,611
=========================================== ========= =========

9. Income Tax

As at December 31
--------------------------------
Particulars 2018 2017
------------------------------------------------ --------------- ---------------
Revenues 2,924,159 3,094,444
Less: Operating Expenses 1,462,451 3,008,225
------------------------------------------------ --------------- ---------------
Operating Income (Loss) 1,461,708 86,219
Less: Income subject to final tax - -
------------------------------------------------ --------------- ---------------

 FLORANTE ESTABAYA MARTINEZ
Notes to the Financial Statements
Page 11

As at December 31
--------------------------------
Particulars 2018 2017
------------------------------------------------ --------------- ---------------
Taxable Income 1,461,708 86,219
Less: Personal Exemption - 50,000
------------------------------------------------ --------------- ---------------
Net Taxable Income 1,461,708 36,219
Less: Threshold 400,000 30,000
------------------------------------------------ --------------- ---------------
Excess 1,061,708 6,219
Rate on Excess 25% 15%
------------------------------------------------ --------------- ---------------
Tax on Excess 265,427 933
Tax on Threshhold 30,000 2,500
------------------------------------------------ --------------- ---------------
Provision for Income Tax 295,427 3,433
Less: Creditable Withholding Taxes 292,416 -
Income Tax Payments - -
------------------------------------------------ ---------------- ----------------
Income Tax Payable / (Prepaid Taxes) 3,011 3,433
============================ ========= =========

10. Events after Balance Sheet Date

There were no events after balance sheet date that would require a disclosure or
adjustment on the financial statements of the entity.

11. Approval of the Financial Statement

The owner, AILEEN OBRADOR PAULINO, approved the financial statements

including all the notes and disclosures on March 31, 2019.

12. Related Party Transactions

The owner, AILEEN OBRADOR PAULINO, has no transactions to its related

parties as at December 31, 2018 and 2017.

13. Transition to PFRS for Small Entities

Explanation of transition to the PFRS for Small Entities

Under the previous accounting framework (PFRS for SMEs), the Entity’s retirement
benefit obligations were calculated on the basis of the projected unit credit method.
Under PFRS for Small Entities, the Entity is now required to use the accrual
approach to calculate for the retirement benefit obligations.

The following reconciliations show the effect of the transition from previous
accounting framework (PFRS for SMEs) to the PFRS for Small Entities on the

 FLORANTE ESTABAYA MARTINEZ
Notes to the Financial Statements
Page 12

Entity’s equity as at January 1, 2017 and December 31, 2017, and the Entity’s
profit/(loss) for the year ended December 31, 2017.

As at December 31
--------------------------------
Particulars 2018 2017
-------------------------------------------------------------------------- --------------- ---------------
Equity:
-------------------------------------------------------------------------- --------------- ---------------
Equity under previous framework 1,487,611 1,021,330
Restatement - -
-------------------------------------------------------------------------- --------------- ---------------
Equity under PFRS for Small Entities 1,487,611 1,021,330
=========================================== ========= =========

Profit / (Loss) for the year ended December 31, 2017:

-------------------------------------------------------------------------- --------------- ---------------
Profit / (Loss) for the year ended December 31, 2017 under 295,427
previous framework
Restatement -
-------------------------------------------------------------------------- --------------- ---------------
Profit / (Loss) for the year ended December 321, 2017 under 295,427
PFRS for Small Entities
=========================================== ========= =========

14. Taxes, Duties and License Fees

Revenue Regulations (RR) No. 21-2002 prescribing additional procedural and/or

documentary requirements in connection with the preparation and submission of
financial statements accompanying income tax returns was amended under RR 15-
2010. The amendment that became effective on December 28, 2010 requires
inclusion in the notes to the financial statements information on taxes, duties and
license fees paid or accrued during the year in addition to what is required under the
Philippine Financial Reporting Standards and such other standards and/or
conventions.

Below is the additional information required by RR 15-2010. This information is

presented for purpose of filing with the Bureau of Internal Revenue and is not
required part of the basic financial statements.

14.1 The landed cost of imports and the amount of custom duties and tariff fees
paid or accrued thereon: No importation as of calendar year ending
December 31, 2018.

14.2 The amount of excise tax/es, classified per major product category, i.e.
tobacco products, alcohol products, automobiles, minerals, oil & petroleum,
etc. paid on : No excise taxes paid as of calendar year ending December 31,
2018.

 FLORANTE ESTABAYA MARTINEZ
Notes to the Financial Statements
Page 13

14.3 DST On Loan Instruments, shares of stock and other transactions subject
thereto; No Documentary Stamp Taxes on Loan Instruments, shares of
stock and other transactions paid as of calendar year ending December 31,
2018.

14.4 The amount of withholding taxes categorized into:

a. Tax on compensation and benefits (BIR Form 1601-C)
There are no withholding taxes on compensation and benefits paid as
of calendar year ending December 31, 2018.

b. Creditable withholding taxes at source (1601-E)

There are no Expanded withholding taxes paid by the entity for thee
calendar year ending December 31, 2018.

c. Creditable withholding taxes (BIR Form 2307)

There are no Creditable withholding taxes claimed/used as of calendar
year ending December 31, 2018.

d. Final withholding taxes

There are no final withholding taxes paid as of calendar year ending
December 31, 2018.

14.5 Periods covered and amount/s of deficiency tax assessments, whether

protested or not; The entity does not have any deficiency tax assessments as
of calendar year ending December 31, 2018.

14.6 Tax cases and amounts involved, under preliminary investigation, litigation
and/or prosecution in courts or bodies outside the BIR. The entity does not
have any tax cases, whether under preliminary investigation, litigation
and/or prosecution in courts or bodies outside the BIR as of calendar year
ending December 31, 2018.

14.7 All other taxes, local and national, including real estate taxes, licenses and
permit fees lodged under taxes & licenses account both under the cost of sales
and operating expenses accounts; There are no other taxes paid as of
calendar year ending December 31, 2018.