STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR ANNUAL INCOME TAX RETURN: The Management of Avesco Marketing Corporation is responsible for all information and representations contained in the Annual Income Tax Return for the year ended June 30, 2014. Management is likewise responsible for all information and representations contained in the financial statements accompanying the Annual Income Tax Return covering the same period. Furthermore, the Management is responsible for all information and representations contained in alf 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, the Management affirms that the attached audited financial statements for the year ended June 30, 2014 and the accompanying Annual Income Tax Return are in accordance with the books and records of Avesco Marketing Corporation complete and correct in all material respects. Management likewise affirms that: (a) the Annual Income Tax Return has been prepared in accordance with the provisions of the National Internal Revenue Code, as amended, and pertinent tax regulations and other issuances of the Department of Finance and the Bureau of Internal Revenue; any disparity of figures in the submitted reports arising from 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 company’s books and records in accordance with the requirements of Revenue Regulations No. 8-2007 and other relevant issuances; (c) the Avesco Marketing Corporation 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. =o j EG President/Chairman “tr AXPAYER SERVICE (b)STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS “The management of Avesco Marketing Corporation is responsible for the preparation and fair presentation of the financial statements for the years ended June 30, 2014 and 2013, in accordance with the prescribed financial reporting framework indicated therein. This responsibility includes designing and implementing intemal controls 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. ‘The Board of Directors reviews and approves the financial statements and submits the same to the shareholders. Milagros D. Ocampo, the independent auditor appointed by the shareholders, has examined the financial statements of the company in accordance with Philippine Standards on Auditing, and in her report to the shareholders, has expressed her opinion on the fairness of presentation upon completion of such examination. TIMMY T. TANG President/Chairman < SIONG PING ‘Treasurer Signed this 25" day of September 2014MILAGROS D. OCAMPO Certified Public Accountant 11 Morato Street, San Francisco Del Monte, Quezon City SUPPLEMENTAL STATEMENT ‘To the Shareholders and the Board of Directors Avesco Marketing Corporation ‘Avesco Building, Aurora Boulevard ‘Comer Yale Street, Cubao, Quezon City T have examined the financial statements of Avesco Marketing Corporation for the year ‘ended June 30, 2014 on which I have rendered the attached report dated September 25, 2014. In compliance with SRC Rule 68, | am stating that the said Company has six (6) shareholders owning one hundred (100) or more shares each. CPA Ceft. No. 045422 Valid until June 08, 2015 BOA Cert. No. 2072 issued on October 22, 2012 Effective until December 31, 2015 BIR Accreditation No. AN 07-000569-1-2013 issued on January 2013 Effective until January 15, 2016 ‘TIN No. 184-977-620 PTR NO. 9243359 issued on January 23, 2014, Quezon CityMILAGROS D. OCAMPO Certified Public Accountant 41 Morate Street, San Francisco Del Monte, Quezon City To the Sharcholders and the Board of Directors ‘Avesco Marketing Corporation ‘Avesco Building, Aurore Boulevard Comer Yale Street, Cubao, Quezon City | have eudited the accompanying financial statements of Aveseo Marketing Corporation which consist of statements of financial position ae of June 20, 2014, the related statement of income, statement of changes in equily, land statement of cash flows for the year then ended and a summary of significant accounting policies and other ‘explanatory notes. ‘Management's Responsitility for the Financial Statements ‘Management is responsible for the preparation of these financial statements in accordance with Philippine Financial Reporting Standards. This responsibilty includes: designing, Implementing and maintaining intemal contro! relevant to the preparation and fair presentation of financial statements thal are free from material misstatement, whether due to fraud oF efror; Selecting and applying appropriate accounting poticies; and making accounting estimates that are reasonable in the circumstances. Auditors’ Responsibility My responsibilty is to express an opinion on these financial statements based on my audit. | conducted my austin accordance with Philippine Standards on Auuiting. Those standards requite that ! comply with ethical requirements ‘and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from ‘material misstatements, ‘An auxit involves performing procedures fo obiain audit evidence about the amounts and disclosures in the fnancial statements, The procedures selected depend on the audito’s judgment, including the assessment of the sks of material misstatement ofthe financial statements, whether due to fraud or error. In making those risks assessments, the audlor considers intemal control relevant to tho entiy’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not forthe purpose of expressing an opinion on the effectiveness of the enfty’s intemal conirol. An aust algo includes evaluating the ‘aporopriateness of accounting polices used and the reasonableness of accounting estimates made by management, ‘25 wel a evaluating the overal presentaton ofthe financial statements | befieve that the audit evidence | have obtained is suficient snd appropriate to provide a basis for my ausit opinion. Other Matter “The 2013 financial statements were audited by another auulor whose report rendered an unqualified opinion. These were presented for comperison purposes only ‘Opinion In my opinion, the financial statements present fairly, in all material respects, the financial posiion of Avesco Harkoting Corporation as of June 30, 2014, and their financial performance and their cash flows for the year then th Philippine Financial Reporting Standards. \Valid until June 08, 2015 BOA Cart. No. 2072 issued on October 22, 2012 Effective until December 31, 2015 BIR Acoreditation No. AN 07-000569-1-2013 issued on January 2013 Eflective unt January 15, 2016 TIN No. 184-977-620 PTR NO, 9243359 issued on January 23, 2014, Quezon City ‘September 25, 2014AVESCO MARKETING CORPORATION ‘STATEMENTS OF FINANCIAL POSITION 5 OF JUNE30, 2014 2013 ASSETS Current Assets Cash and cash equivalents (Note 4) > 380,373,179» 295,376,424 Accounts receivable - net (Note 5) 388,424,001 383,951,180 Stock investment (Note 6) 53,839,862 53,839,862 Taventory (Hote 7) 630,977,577 (633,003,771 Prepayments and other current assets (Note 8) 9,439,592 9,544,911 “Total Current Assets 1,463,054211_ 1,375,816, 148 Noncurrent Assets Property and equipment - net (Note 9) 78,481,907 64,245,448 Investment in real property (Note 10) 11,005,000 7,600,000 ‘Other noncurrent assets (Note 11) 12,505,600 12,505,600 Due from retated companies (Note 12) 148,981,378 136,070,104 Total Noneurrent Assets 250,973,885 215,401,152, Total Assets 1 1,714,028,096# 1,591,237,300 LIABILITIES AND EQUITY Current Liabilities Accounts payable (Note 13) 542,924,472 545,036,611 Income tax payable (Note 14) 1,669,504 2,578,002 VAT payable (Note 15) 3,405,466 2,608,512 ‘Accrual and other current liabilities (Note 16) 5,233,570 24,261,690 Total Current Liabilities 953,233,012 574,484,815. Noncurrent Liabilities Due to related companies (Note 12) 465,832,599 398,733,985 Advances from shareholders (Note 18) 298,458,066 255,173,659 ‘Total Noncurrent Liabilities 754,290,665 653,907,644 Shareholders’ Equity (Note 1) ‘Share capital 10,000,000 10,000,000 ‘Additional paid-in capital (Note 19) 287,807,219 287,807,219 Retained earnings (Note 20) 98,697,200 65,037,622 ‘Total Shareholders Equity 396,504,419) 362,844,841 ‘Total Liabilities and Equity ® 4,714,028,095 p1,591,237,300 See accompanying Notes to Financial Statements.AVESCO MARKETING CORPORATION. ‘STATEMENTS OF INCOME FOR THE YEARS ENDED JUNE 30, 2014 2013 Revenve (Note 3) © 4,201,068,223 1,068,976,252 Cost of Sates (Note 22) (053,505,493) (743,390,603) Gross Profit 147,561,800 325,585,600 Cotner Income (Note 23) 821,739 10,256,275, Operating Expenses Note 24) (213,046,621) (206,314,864) Net Profit Before Tax AT 918 29,527,001 Income Tax Expense (Notes 3 and 14) (11,358,229) (6,801,571) Net Profit forthe Years * 30,379,609 72,725,400 See accompanying Notes to Financial StatementsAVESCO MARKETING CORPORATION STATEMENT OF CHANGES IN EQUITY FOR THE YEARS ENDED JUNE 30, 204 AND 2013 Shareholders Equity, Juy 1, 2012 (Notes 1, 9) ‘Alowarce for doubtful accounts adjustment (Note 20) Payment ofacitional tax assessment (Note 20) Net profit forthe year Shareholders Equity June 30, 2013 Payment of additional tax assessment (Note 20) Allowance for doubtful accounts adjusted (Note: Net profit forthe year Shareholders Equity, June 30, 2014 See accompanying Notes to Flneell Statements Common Aditional ——_—Retained ‘Stock __Pald-n Capital __Earmings TOTAL # 10,000,000» 287,807,219 63,520,825» 361,328,044 (18,599,498) (18,998,498) (2,209,135) @.209,135) RTs 2.75, 10,000,000» 287,807,219» 65,097,622» 302,848,841 20) 3.770.889 3,279,889 30,379,687 30,379,689 10,000,000 287,807,219 98,697,200» 396,504,419 | witha Un sn enna REN ru ER SERVE | candi = 2035 208 | pate , HOY 12 i RRL GYE BS CRISTINA f° DB GUAVESCO MARKETING CORPORATION STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 20, 2014 2013 Cash Flows from Operating Activities Cash receipts from customers (Note 3) © 4,200,672,255 947,550,988 Rent income (Note 17) 4,094,735 3,314,457 Repairs 0 28,969 loterest 796,758 540,007 Dividend 3,080,399 2,872,713 Gain onsale of shares stock (Note 6) 0 3,402,378 Other receipts 841 51752 1,208,693,994 957,807,264 ‘Cash payments for: Cost of inventory (Note 22) (53,591,378) (737,461,559) ‘Operating expenses (Note 24) (625,067,618) (295,834,761) Income tax expense (Notes 3 and 14 ) (12,265,727) (6,838,054) Net Cash Provided (Usod in) by Operating Activities 17,7652" _ (82,327,110) Cash Flows from Investing Activities ‘Adkition to property and equipment (ote 9} (21,836,263) (19,482,129) Disposition (addition to) of stock investment (Note 6) (6,405,000) 6,336,801, Net Cash Used in investing Activities (20,241,263) _(13,145,328) Coch Flows from Financing Aetivitios ‘Changes in related company accounts (Note 12) 54,187,340 (10,999,000) Increase in shareholders’ accounts Note 18) 483,184407 191,108,412 Net Cash Provided by Financing Activities 97,471,747 __ 180,409,442 Net Increase in Gash and Cash Equivalents 84,996,755, 84,636,974 Balance of Cash and Cash Equivalents Start of Years 295,376,024 210,739,450 Balance of Cash and Cash Equivatents End of Years 380,373,179» 295,376,424 ‘oe accompanying Notes to Financial Statements. [eg z RECE:VED | pmemni F 7 AVESCO MARKETING CORPORATION | dare | NOV T2-2914 | sps NOTES TO FINANCIAL STATEMENTS | ReEChivuD | Louis: DE GUZMAN JUNE 30, 2014 AND 2013 Note 1— Corporate Information ‘The company was incorporated on January 20, 1964 with an initial authorized capital stock of 200,000.00 divided into 2,000 common shares at a par value of P100.00 cach, which immediately thereafter, increased to P1,000,000.00 divided into 10,000 shares at the same par value. Currently, after another amendment to its charter on March 7, 1978, the company has now an authorized capital stock of P10,000,000.00 divided into 100,000 common shares at a par value ‘of P100.00 per share fully issued and outstanding. In compliance with SRC Rule 68, we are stating that the company has a total number of six (6) shareholders owning one hundred (100) o more shares each. ‘The principal purpose for which the corporation is organized, as amended, is cited below verbatim: To engage in or carry on any and all business as wholesaler or retailer, manufacturer, producer, trader, importer or exporter, indentor, and generally without limitations as to class of products, consumer ot otherwise, merchandise or properties such as but not limited to electrical and poleline materials, meters, lighting fixtures and systems and controls, controlling equipment and accessories, home appliances, audio and video systems, equipment and accessories, paging systems, electrical, electronic wires, cables and devices, control and data cables, structured wiring ‘and control systems and devices, security systems and controls, telephone systems, terminals and accessories both wired and wireless, cel-site products, testing and measuring instruments, radio ‘communication systems, equipment and accessories, electronic parts and components, process control systems, equipment and accessories, industrial products, motors, control centers, automation and’ security alarm access and control systems, security and protection alarm, surveillance and waming systems, air conditioning systems, software and hardware development, integration, installation, repair, assemble and/or otherwise deal in any materials, articles, properties, whether real or personal, or things within or outside of the Philippines, and geverally to perform any and all acts connected with the businesses and lines above defined or arising or incidental thereto. The registered office address of the company is Avesco Building, Aurora Boulevard comer Yale Street, Cubao, Quezon City. “The accompanying statements of financial position as of June 30, 2014 and 2013 and the related statements of income, changes in equity and cash flows for the years then ended were reviewed and approved by the Board of Directors on September 25, 2014. Note 2 — Basis of Financial Statement Preparation ur financial statements have been prepared in conformity with accounting principles generally accepted in the Philippines as set forth in the Philippine Financial Reporting Standards.Our financial statements are presented in Philippine currency and all values are rounded off to whole peso when otherwise indicated. Note 3— Summary of Significant Accounting Policies > Revenue Recognition — The sales or revenues are recognized when there is evidence that the delivery of the product or services has occurred and that the presence of collectability is reasonably assured. The account is recorded VAT excluded. Cost Recognition — Cost and expenses are recognized upon utilization of the assets or services at the date it occurred. Invoices from suppliers of goods and services are recorded VAT excluded. Cash and Cash Equivalents - The account includes cash on hand and in banks. Cash equivalents are short-term, risk-free investments that are readily convertible to cash in three months or less. Receivables - The account is stated at face value less allowance for doubtful accounts. Allowance for Doubtful Accounts - The allowance is estimated at 25% of accounts outstanding and dormant for more than 120 days. The estimate is based on collection experience and other factors, which the management believes, affect the collectability of the account. Inventories ~The account is stated at cost or net realizable value whichever is ower. Net realizable value is the replacement cost of the assets. Property and Equipment - The property and equipment are stated at cost, plus expenses incurred to bring the assets into operation, Replacement cost and major repairs prolonging the lives of the assets are capitalized. Depreciation is on a straight-line basis over their estimated useful lives. Value Added Tax — The company is subject to 12% Expanded Value Added Tax (E- VAT) on its gross receipts. The E-VAT is an indirect tax which may be shifted or passed ‘on the buyer, transferee or lessee of the goods, properties or services. Under the VAT system, the E-VAT or output tax on the sale of goods, properties or services is offset against the 12% E-VAT or input tax on the purchase of goods, properties or services. If the input tax exceeds the output tax, the excess shall be carried over the succeeding months. Income Tax ~ The company belongs to the general type of corporations subject to 30% ‘on its net taxable income. The computation of the tax considers the applicability of the ‘Net Operating Loss Carryover (NOLCO) and the benefit of the excess of the Minimum Corporate Income Tax (MCI) over the normal income tax. The amount stated is presented net of creditable income tax withheld by the customers. ‘Minimum Corporate Income Tax (MCIT) ~ The company is subject to a minimum corporate income tax of 2% on its gross income as of the end of the taxable year, when this MCIT is greater than the normal corporate income tax. Any excess of this tax over the normal income tax shall be carried forward and credited against the normal income tax for the three immediately succeeding taxable years. Because of these restrictions in its application, the tax is classified as Noncurrent.> Asset Impairment — All assets classified as Noncurrent Assets - such as the property and equipment and long-term investments - are periodically reviewed and assessed if their carrying amount exceeds their recoverable value. Whenever this condition occurs, the loss is recognized and charged to either the income statement or retained camings. Note 4— Cash and Cash Equivalents ‘The account is summarized below: 2014 2013 Cash on hand 2278569 —P —2,461,015.00 Petty cash and revolving funds 912,250 852,250.00 Cash in banks 37,182,360, 292,063,159. 380,373,179 _P 295,376,424 Note 5— Accounts Receivable ‘The account is presented net of allowance for doubtful accounts. The allowance is estimated, based on collection experience of the company, at 25% of accounts remaining uncollected and dormant for 120 days or more. 2014 2013 Balance of accounts at fave value 424,562,163 423,369,230 Less allowance for doubtful accounts (36,138,162) 69,418,050) 388,424,001 _P __ 383,951,180, Note 6 ~ Stock Investment ‘The account refers to available-for-sale investment in shares of stock carried in the books at cost. ‘The schedule of the investment follows: Shares 2014 Shares 2019 Banco de Oro 60,000 «(2,980,361 160,000 2,980,351 Belle Corporation 1,200,033, 6,786,877 1,300,033, 6,786,877 ‘SM Development Corporation 169,766 1,228,340 189,768 1,228,340 ‘Asia United Bank 150,000 3,801,000 0,000 3,801,000 Meralco A 284,427 39,043,204 284,427 39,043,204 > $3,839,962 53,839,902, Note 7 —Inventory‘The account is stated at cost or net realizable value whichever is lower. The reported amount is net of impairment determined during the valuation of the items and is considered in the inventory list at the end of the year. Note 8 - Prepayment and Other Current Assets ‘The account is summarized as follows: 2014 2013, Accounts receivable -other 2,024,497 1,960,497 ‘Miscellaneous advances 7,260,535, : Security deposits 154,560 154,560 ‘Due from employees 7,529,854 9,439,592 _P 9,644,911 . | Note 9~ Property and Equipment “The property and equipment account is summarized below: 2014 aoa Cost Deprociation Net Not Buildings and improvements »«47 131,008 «P| «40,968,171 a te4esa © (16,902,984 ‘Transportation equipment 39,111,337 26,492,048 12,678,489, 10,156,900, Furniture and equipment 53,025,361 30,748,196 2.279.165 16.498 842 Leaschold improvements 51,363,628 32,888,909, 19,474,719 1712648 Command center 393,606 o 3,903,006 3,393,805, > 194.025251_p 131,034,124 62,991,107 48,754,643 Lend 15,480,800 16,490,800 8 75481907 _P_64205,008 ‘The assets are depreciated on a straight-line method based on their estimated useful lives. Except for the original cost of the building which is depreciated for 50 years and the computer equipment for 5 years, the rest of the assets, including the major improvements done on the building, are depreciated at a uniform rate of 10% annually. ‘The company’s land and building used as its main store and office located at Aurora Boulevard, Cubao, Quezon City, are described below by eValue Phils. Inc., the independent appraisers ‘commissioned by the company in 2011 for the purpose: Land — located at Aurora Boulevard comer Yale Street, Cubao, Quezon City, consisting of two {ots containing an ageregate area of 1,884 square meters. Building —a four-storey structure standing on the lot above contai of 4,539 square meters. ng an estimated floor area ‘The results of the appraisal, together with book value of the assets, follow: Sound Value __Market Value _Book ValueLand P_— ‘101,736,000 P_—‘101,736,000 P_—‘15,490,800 Building 52,168,000 43,726,000 9,916,031 P__ 153,904,000 145,462,000 _P_ 25,406,831 Note 10— Investment in Real Property ‘The account is summarized below and presented at cost: ‘Aros insqm 2ote 2013 Lotin Sherwood Hits Subdivision, Trece Martinez, Cavite ors «2600.00 © 2,600,000 Lotin Yaie Street, Cubeo, Quezon City 283 8,405,000 ° 11,005,000. _e_ 2,600,000 Note 11 — Other Noncurrent Assets ‘The account is summarized as follows: 2014 2013 Advances to officers “P__12,500,000 12,500,000 PLDI deposit 5,600 5,600 > __12:505,600, _ 12,505,600 Note 12— Related Company Accounts ‘The account refers to the net balance of transactions with related companies. These transactions ‘are normal in the business under the terms comparable to unrelated companies. The account, however, is classified as noncurrent because of the absence of definite term of payments. Note 13 - Accounts Payable ‘The account consists of amounts due to the suppliers of merchandise and services which are estimated to be due within the year. Note 14—Income Tax Payable ‘The account refers to the balance of the income tax duc after deducting the creditable income tax withheld by the customers and the quarterly payments during the year, Please refer to Note 3 above on the subject. Note 15— VAT Payable The account refers to the balance of the VAT output during the year net of inputs from purchases of merchandise and services and monthly remittances made during the year. Please refer to Note 3 above on the subject.Note 16 — Accruals and Other Current Liabilities ‘The account is summarized below: EB 2013 Withholding taxes ° 1,156,188 Due to SSS, et. 1,632,441 2,906,586 Union does 28,503 41898 ‘Acerued taxes 1,081,731 343,133 Acerued rent 595,404 511,200 Accounts payable - others 282,993 19,302,685 Total & 5.233.570 _ 24,261,690 Note 17 — Lease Contracts ‘The company as lessee: ‘The company is leasing the premises consisting of land and building focated in 653-655 Rizal ‘Avenue, Manila from Dulalia, Inc. at P71,000.00 a month. The site is being used by the Manila Branch of the company as a store and warehouse. The lease is supposed to expire on June 30, 2009 but has been renewed on a year-to-year basis up to the present. ‘The company is also leasing an office space containing an area of 61 square meters in Machay Building in #30 Gorordo Avenue, Cebu City to attend to the business in the area. The lease is supposed to be up to August 31, 2009 only, but subject to renewal as agreed by both parties. ‘The company as lessor: ‘The company is leasing a 24 x 27 square feet office space in its building located at Oxford Street comer Aurora boulevard, Quezon City to Kipcol International Corporation. Together with the use of the facilities of a warehouse in Pasig City, the rent is P50,000 a month. Note 18 — Advances from Shareholders ‘The advances are financial accommodation extended to the company without interest, Note 19 ~ Additional Paid-In Capital ‘The account refers to the following: 1. Availment of the company of Commission of Revenue Memorandum Order No. 28-95 issued by the Bureau of Internal Revenue on September 1, 1995 resulting in additional inventory adjustment P 277,907,219 2. Avaitment of the company on March 5, 2008 of tie provision of R.A. No. 9480 resulting in the decrease of accounts payable. 9,900,000 Total P.287,807.219Note 20 — Adjustments on Retained Earnings The adjustments are summarized as follows: 2014 2013, Allowance for doubtful accounts adjusted © 3,270,889 18,999,498 Additional tax assessment - 2,200,135 F3279.839 Pp _21,208,633 ‘The adjustment on allowance for doubtful accounts was made by the management to conform to the policy on doubtful accounts as discussed on Note 3 above. Note 21 - Employees’ Benefits “The company is presently in the process of setting up a retirement fund for permanent employees ‘to be administered by a bank’s trust department. Until the setting up of the fund is materialized, the company is meeting its obligation to its employees under the combination of the existing, Collective Bargaining Agreement and applicable provisions of the labor laws. Note 22— Cost of Sales The cost of goods sold is computed as follows: 2014 2013, Purchases 851,479,239 850,987,508 Reginning inventory 633,003,771 525,406,906 Ending inventory (630,977,577) (633,003,771) Total P__ 853,505,433, 743,390,643, ‘Note 23 — Other Income ‘The account is summarized as follows: 2014 2013 Rent 4,094,735 3,314,457 Interest 796,758 540,007 Repairs : 28,969 Dividend 3,080,399 2,872,713 Gain on sale of shares of stock - 3,442,378 Miscellaneous 49,847 57,152 P8021,739_ Pp 10,256,276 Note 24- Operating Expenses ‘The operating expenses are summarized below: 2014 2013Advertising Pe 16,443,482 7,961,177 Representation 33,737,661 33,016,524 Freight and detivery 5,184,696 6,092,632 Sales commission 6,975,661 6,419,580 Depreciation 17,599,804 43,309,211 Sorviee fees 13,847,172 12,721,246 Commitment fees 6,561,038 - Salaries 118,533,946 112,419,730 Employees’ benefits 12,208,266 14,519,604 SSS, Medicare, ete. 10,676,752 7,088,693 Insurance 1,446,426 1,476,698 Light and water 8,519,506 8,306,095 Supplies 2,379,038 1,466,721 Professional fees 793,744 300,500 Rent 2,525,336 1,091,200 Repairs and maintenance 5510372 8,985,292 Security ser 3,870,354 4,523,481 Separation pay 2,672,615 4,676,282 Subscription 602,578 630,322 ‘Taxes and licenses 72195689 7,102,841 ‘Transportation and travel 11,949,465 14,923,921 Telephone 4,438,889 432,145 Contribution 2,832,179 1,376,000 Bonus 1 officers, 10,434,480 5,802,978 Miscellaneous 16,823,452 30,687,050 P 313,846,621 306,314,884 Note 25 — Reclamation Project ‘The Sangguniang Pantungsod of the City of Paranaque in its resolution on March 14, 2013 authorized the mayor of the city, Honorable Mayor Florencio M. Bernabe, Jr., to accept the proposal of the company to reclaim and develop, in a joint venture with the city, certain portion of Manila Bay subject to the approval of concemed governinent agencies. Note 26 ~ Restriction on Retained Earnings ‘The Board of Directors in a special meeting held on June 5, 2014, took into account the proposed ten-storey building to be constructed on the company’s lot located in Yale Street in Cubao, Quezon City. A proposal to restrict declaration of dividend until the completion of the building, which is estimated to cost 75,000,000, more or less, is unanimously adopted. Note 27 ~ Restatement of Last Year’s Figures ‘Certain figures in 2013 financial statements were restated to conform to this year’s presentation. ‘Note 28 — National and Local Taxes Incurred In compliance with Revenue Regulation No. 15-2010, the national and local taxes incurred during the year, together with information related therewith, are listed below:Value Added Tax 1 Vatable sales P 1,164,544,041 11 Zero-rated sales - 40,576,928 VAT output tax declared P (139,745,285) 2 VAT Input Tax Beginning balance 0 i. Purchaso of goods for resale/manufacture 96,608,067 Goods other than for resale or manufacture ili, Capital goods subject to amortization iv. Capital goods not subject to amortization ¥. Services lodged under cost of goods sold vi, Services lodged under other accounts 12,798,343 Claims for tax credit/refund and other 3 adjustments 26,937,534 4, Balance of Input (Output) Tax at End of Year Pr 401341) Landed cost of imports 690,539,892 Customs duties and tariff paid thereon 2,909,388 Documentary stamp tax incurred 75,000 All other taxes lodged under ~ ‘Taxes and Licenses - Manufacturing Administrative 7,204,649 Withholding Taxes: ‘Compensation and benefits 13,752,503 Creditable withholding taxes 3,201,897 Final withholding taxes Deficiency Tax Assessments ‘Tax Cases Under preliminary investigation, litigation and/or prosecution in courts or bodies outside the BIR