NORMI}-IDA 1.. JARIN

N & J CONSTRUCTION & SUPPLY

1"22 Pac-esa, Ivrus, CavrrE

FINANCIAL STATEMENTS

For the year ending December 31,2014

NI & J CONSTRUCTION & SUPPLY122 Pag-asa, lmus, Cavite

STATEMENT OF MANAGEMENT R.ESPONSTBILIW FOR ANNUAL INCOME TAX RETURN

Thr: Management of N & J coNlsTR.ucTloN & SUPPLY is responsible for all information and

representations containe{ in the Annual lncome Tax Return for the year ended December 31,

?A14" Mianagement is likewise responsibie for all information and representations contained in

the financial statements accompanying the Annual Income Tax Return of Annual lnformation

Return covering the same reporting period. Furthermore the management is responsible for all

information and repr.esentations contained in all the other tax returns filed for the reportingperiod, including, but not limited, to the value added tax and/or percentage tax returns,

withholding tax returns, documentary stamp tax and any all other tax returns.

ln this regard, the Management affirms that the attached audited financial statements for the

year ended December 31, ZA14 and the accompanying Annual lncome Tax R'eturn are inaccordance with the books and records of N & J CONSTRUCTION & SUPPLY, complete and

correct in all material respects. Management likewise affirms that:

a) The Annr-lal lncome Tax Return has been prepared in accordance with tlre provisions of

ihe f{ationai lnternal Revenue Cocie, as amended, and the pertinent tax regulations and

other issuances ofthe Departrnent of Finance and the Bureau of lnternal Revenue;

Any disparity of figtrres in the submitted reports arising from the preparation of 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'sbooks and records in accordance with the requirements of Revenue Regulations No- 8-

2OO7 and other relevant isstlances;

-fhat N & J COnUSTRUCTTCN & SUPPLY has filed all applicable tax returns, reports and

staternents requirecl 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 thereporting period, except those contested in good faith-

INDA L. JARIN

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RCISALINDA U, BANTOCCertifrect Public Ac:countant Accreditation: Bureau of lntemal RevenueMember PICPA : Board of Accountanctt

Repod_of lmdependent Auditor

MS NORMINDA L JARINOwnerlGen" ManagerN & J CONSTRUCTION & SUPPLY122 Pag-asa, lmus, Cavite

I have audiied he accompanying fnancial statements of H & J GONSTRUCTIOITI & SUPPLY which comprise theshtement of financial position as of December 31,2014 and the related comprehensive income shtements, statement ofchanges in equity and statement of cash flows for the years then ended, and a summary of significant accounting policiesand other explanatory notes.

M a na g e m ent sResponsi&ilify to r *te F i n a n cialsdafemenfsManagement is responsible for the preparation of these financial statements in amrdance with Philippine FinancialReporiing Sbndards. The responsibility inoludes designing, implenrenting and rnainhining intemal conkol relevant to thepreparation and fair presenbtion of fnancial shtements that are ftee from material misstatement whether due to fraud orerror, selecting and applying appropriate accounting policies and making accounting estimates trat are reasonable in thecircumstances.

,{ odrfols Resp o n si bil ilyI;ty responsibility is to eryress an opinion on these financial statements based on my audit. I mnducted rny audit inaccordance with Philippine Standards on Auditing. Those standards require that I complywi$r ethical requirernents and planand perform the audit to obtain reasonable assurance whether the linancial shtements are free frorn material misshtement.An audit involves performing procedures to obtain audil evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditor's judgment, including the assessment of tfre risk of materialmisshtement of &e financial statements whetnr due to fraud or error, ln making those risk assessments, the auditorconsiders intemal control relevant to the entity's preparation and fair presenhtion of the fnancial staterxents in order todesign audit procedures that are appropriate in the circumshnces, but not for the purpose of epressing an opinion on theeffectiveness of the entity's internal conhol. An audit also includes erraluating the appropriateness of accounting policiesused and the reasonableness of ar;counting eetimates made by management as well as evaluating the overall presentationof the ftnancial statements. I believe that the audit evitlence I have obtained is sufficient and appropriate to provide a basisfor my audit opinion.

Opinianln my opinlon, the flnancial shtements referred to above present fairly, in all material respects, the financial position of N & JCONSRUCTIOH A SUPPLY as of December 31,2014 and its financial performance for the period then ended inaccordance wittr Phitippine Financial Reporting Standard.

Reporf on flre Sapplemenhry fnformation Required uoderBlR Rerrenue Rryulafion ila 1*2OlOItly audit was conducted for the purpose of forming an opinion on the basic financial shtements taken as a whole. Thesupplementary infonnation on taxes, duties and license fees in Notes to fnancial shtements is presented for purposes offiling with Bureau of lntemal Revenue and is not required part of the basic finaneial statements. Such information is theresponsibiiity of the management. The information has been subjected to ttre auditing procedures apptied in my audit of thebasic financial statements. ln rny opinion, the Information is fairly stated in all material respects in relation to the basicfinancial statements taken as a wholo.

/qtu"q-R.CISAI-INDAU- BAFITOCCPA Cert. Of Reg. No" 53389TIN:123-176-213BIR Accreditation 09-003504401 -201 5BOA Accreditation No. 2613 until Dec. 2015PTR No.: 14AgA72

Ptace lssued: TMC, CaviteDate Issued: 01/0512015

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GIF Panganiban Bldg., 30I Trece-I-anza Road, Brgy. SanAgustin, Trece Martires City, CaviteTel./Fax No.: {A46) 419-21-58 " Cell. Number: 0939 9163115

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N & J CONSTR.UCTION & SUPPLY

#122 Pag-asa, lmus, Cavite

lncome Statementln Philippine Pesos

FOR THE YEAR ENDED DEC. 31

2014 2A13

REVENUE

COST CIF R.EVENUE

2,3,10 61,978,314.74 94,820,013.54

83,437,159.83a, 44a,a. I tAa 2eo lE.E a1

GROSS MARGIN

CPERATING EXPENSES. 12

8,639,'t59.52

4,611,970.29

11,382.853.71

5,273,483.65

NET INCO!'JIE

LESS: PROVISTONI FOR.INCOME TAX 2,3,14

4,O27,189.24

1,229,700.56

6,109,370.06

1,895,998.42

NET INCOME AFTER TAX 2,797,488.68 4"213,371^64

See acconrpanying nates to frnancial statentents

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ry q J corysTRUCrlON & SUPPLY#122 Pag-asa, lnrus, Cavite

Balance -Sheetln Fhilippine peso

ASSETS A S OF DECEMBER 31Notes 2014 2013

CURRENT ASSETS:Cash On Hand & ln BankAccount Receivablelnventories

2,3,42.3,52,3.6

8,464,485.802,233,983.74

451,125.AO

8,922,596:611,546,S18.1 1

140,937.50

P,ROPERry & EQUIPMENT 2,3.8 4.339.644 00 2,479.131.OO

LIABILITIES & CAPITAL

LIABILITIES:Current Liabiliiies:

lncome Tax psyagls 2,3,14 33,602.12 31,010,92Pavables

Total Liabrilities2,3.9 258,291.94 351,0s3.59

291,894.A5 382.064.51

CAPITAL: 2,3,17 15,226,364.49 12,728,875.81

rQlAL LtAEil..lTtES & CAPTTAL 15.51 13,110,C40.32

See accornpan

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N & J CONSTRUCTION & SUPPLYStatement of of Cash Fiowsln Phiiippine Peso

FOR. THE YEAR ENDED DEC 31

2014 2013CASH FLOWS FROM OPERA.TING ACTIVITIES

Excess of revenue over expenses before income taxAdustments to reconcile net excess of

revenue over gxpenses: '

Depreciationlnterest lncome

4,027,189.24

139,487.00

6,109,370.06

145,737.OO

Excess of revenue over expenses before working capitalDecrease (increase) in:

Current Assetslncrease (decrease) in:

Current liabilties (92,761.65)

4,166,676.24

(1,004,e16.03)

6,255,1CI7.06

1,725,961.24

(68,184.86)Nei Cash Generated from Operationslnterest t"eceivedlncome Tax paid/prepayrnents

3,068,998.56

(1,227,109.36)

7,912.883.44

(1,879,64s,29)(1,000,000.00)Personai Drawings (30O,0OO.O0)

CASH FLOWS FROM INVESTING ACTIVITIESADDITICT.IA[- INVESTMENTADDITIC}{S TO PROPERry & EQUIPMENT

1,541,889.20

(2,000,000.00)

5,033,238.15

5,033,238.153,889,358.46

_q4$!1_Lq4$ILEqUNALENT AT END OF YEAR 8,464,485.80 8,922,5s6.61

CASH FLO\l1S FROM FINANCING ACTIVITIESCASH AND CASH IhI BANKAT BEGINNING OF YEAR

(458,1 10.80)8,S22,596.61

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N & J GOhIST'RUCTION & SUPPLY

NOTES TO FINANCIAL STATEMENTSAS OF DECEMBER 31,2A14

1. COMPANY INFORMATION

N & J CCNSRUCTION & SUPPLY is a sole proprietorship engaged in construction businessactivities and trading registered with the Department of Trade and lndustry pursuant to theprovlsions of R.A. No. 3883 as amended by R.A. No. 4147 and R.A. No. 863 and in compliancewith applicable r"ulesanC regulations prescribed by the DTl.

The registered address of N & J CONSTRUCTION & SUPPLY is 122 Pag-asa, lmus, Cavite

2. BASIS OF FREPARATION

The consolidated financiai statements of N & J CONSTRUCTION & SUPPLY have been, prepared in conrplialtce with accounting principles generally accepted in the Philippines as set

forth in the Philippine Financial Reporting Standards (PFRS) for Small and Medium-SizedEntiiies (IFPS for SMEs)

3. SUMMARY OF SIGNIFICANT ACCOUN]-'ING POLICIES

The principal accounting policies applied in the preparation of these financial statements are setout below. These policies have been consistently applied to all the years presented, unlessotherwise stated.

Eash and Cjsh Equival$

Cash includes cash on hand and in banks" Cash equivalents'are short term, highly liquidinvestments that are readily convertible to known amounts of cash with original maturities of 90days ol^ less from dates of acquisition and that are subject to insignificant risk of change in value.

rc-SS_a nd_oth.e r R_e tE!{AElg!

Trade receivables are recognized and carried at original invoice amounts less allcwance for anydoubtful accounts.

Other receivalrles are stated at face value less allowance for any doubtful accounts.

lf there is objective evicJence that an impairment loss on recelvable has been incurred, theamount of loss is rneasured as the difference between the asset's carrying amount and thepresent value of estimated cash flows discounted at the financial asset's original effective rate.For short term receivables, related cash flows are not discounted if the effect of diseounting isirnmaterial"

An estimate for doubtful accounts is made when collection of the full amount is no longerprobable.

InvefiqreE

lnventories and supplies are valued at the lower cost or net realizable value. Costs incurred in

bringing each product to its present location and conditions are accounted for as follows:

Materials and supplies - purchase cosl on a moving-average method-

Propertv. Plant and Equipment

Property, plant and equipment, except land, are stated at cost less accumulated depreciation andarnortization and any ir.npairment in value. Land is stated at eost less any impairment in value.

The initial cost of property, plant and equiprnent consist of its purchase price, including importduties, taxes and any directly attributable costs in bringing the assets to its working condition andlocation for its intended use. Cost also included any related asset retirement obligation andinterest incurred durirrg the construction period on funds borrowed to finance the construction ofthe projects. Expenditures incorrect after the item has been put into operation, such as repairs,maintenance and overhaul costs are nonnally recognized as expense in the periocl the costs areincurred. ln situations where it can be clearly demonstrated that the expenditures have improvedthe condition of the asset beyond the originally assessed standard of performance, theexpenditures are capitalized as an additional cost of property, plant and equipment.

Depreciation and amortization are computed using the straight line method over the fotlowingestimated useful lives of the assets:

The r"emaining useful lives and depreciation and amortization method are reviewed periodically toensure that the period and method of depneciaticn and amortization are consisteni with theexpected pattern of economic benefits from the items of property, plant and equiprnent. Fullydepreciated assets are retained in the accounts until they are no longer in use and no furtherdepreciation are credited or charged to curent operations.

Upon retirement or disposal of the assets, the cost and related accumulated depreciation areeliminated from the accounts and any gain or loss is included in the results of operations'

Asset lmpaiunenl

The carrying value of property, plant and equipment and other longJived asset are reviewed forirnpairment when everrts or changes in circurnstances indicate that the carrying value my not berecoverable. If any such indication exists, and if the carrying value exceeds the estimatedrecoverable arnount, the assets or cash generating units are written down to their recoverableamoulnts. The recoverable amount of property, plant and equipment is the greater of net sellingprice or value in use. The net selling price is the amount obtainable from the sale of an asset in

an arm's-length transaction less cost to sell. ln assessing value in use, the estimated future cashflows are discounted to their present value using a pre-tax discount rate that reflects cunentmarket assessrnents of the time value of rnoney and the risks specific to the asset. For an assetthat does not generate largely independent cash flows, the recoverable amount is determine forthe cash-generating unit to which the asset belongs. lmpairment losses of continuing operationsare recognizecl in the statements of income in those expense categories consistent with thefunction of the impaired asset.

An assessment is made at each reporting date as to whether there is any indication thatpreviously recognized impairrnent losses rnay no longer exist or nray have decreased. If suchindication exists, the recoverable arnount is estimated. A previously recognized impainnent lossis reversed only if there has been a change in the estimates used to detenmine the asset'srecoverable amount since the last impairrnent loss was recognized. lf that is the case, thecarrying amount of the asset is increased to its recoverable amount. That increased amountGannot exceed the carrying arnount that would have been determined, net of depreciation, hadno irnpairment loss been recognized for the asset in prior years. Such reversal is recognized in

profit and loss. After such revercal, the depreciation chatge is adjusted in future periods toallocate the asset's revised carrying amount, less any residualvalue, on a systematic basis over

Assets Estimated Useful LifeMachineries and Equipment Ten (10) vearsTransoort Eouioment Ten (1 0) vearsFumiture and Fixtures Ten (1O) vearsOffice Ten (10) years

its rernaining useful life.

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Bonowinq Costs

Borrowing costs are generally expensed as incurred" Borrowing costs are capitalized if they aredirectly attributable to the aequisition or construction of a qualifying asset, Capitalization ofborrowing costs commences when the activities to prepare the asset are in progress andexpenditures and borrowing costs are being incuned. Borrowing costs are capitalized until theassets are substantially ready for their intended use. lf the carrying amount of the assetsexceeds its recoverable amount, an irnpairment loss is recorded.

Revenue Recoonition

Revenue is recognize'd to the extent that it is probable that the economic benefits will flow to theGroup and the revenue can be reliably measured. The following specific recognition criteria mustalso be me before revenue is recognized:

Revenue, expenses and assets are necognized at amounts of invoice, excluding valueadded taxes since the input tax is recoverable from the taxation authority; in this caseinput tax is not recognized as part of the cost of acquisition of assets nor as part of theexpenses item as epplicable.

Sales revenue is subject to value added tax.

lnssme-Iaxes

Current tax: The tax rate and tax laws used to compute the amount are those that are enactedor substantially enacted at balance sheet date.

Events Afrer Balance Sheet Date

Fost-year end events that provide additional information about the Company's position atbalance sheet date (adjusting events) are reflected in the consotidated financial Satements.Post-year end events that are not adjusting events are disclosed in the notes to the financialstatements when material.

Manaqement's Use of Estimates and Judgements

The preparation of the Cornpany's financial statements in conformity with PFRS for SMEsrequires management to make estimates and assumptions that affect the amounts reported inthe Company's financial statements are based upon management's evaluation of relevant factsand circumstances as of the date of the Cornpany's financial statements. Actual results coulddiffer from such estirnates, judgements and estimates are continually evaluated and are basedon historical experience and other factors, including expectations of future events that are.Felieved to be reasonable under the circumstances.

The estinnates on useful lives of the company's property, plant and equiprnent is based on theperiods over which assets are expected to be available for use. The estimated useful lives ofproperty, plant and equipment are reviewed at least annually and are updated if expectationsdiffer from previoLrs estimates due to physical wear and tear, technical or commercialobsolescence and legal or other limits on the use of our assets. ln addition, estimation of theuseful lives of property, plant an equipment is based on collective assessment of industrypractice, intemal technical evaluation and experience with similar assets. lt is possible, however,that future results of operation could be materially affected by changes in the estirnates broughtabout by change ln the factors mentioned above. The amounts and timing of recorded expensesfor any period would be affected by changes in these factors and circumstances" Our revenuerecognized policies require us to use estinrates and assumptions that may affect the reportedarnnunt of our revenue and receivables.

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4. Cash and Cash Equivalents2014 2413

Cash on HandPetty Cash Funds/Revolving fundsCash in bank

65,000.0070,000.00

8,329,485.80

72,350.O450,000.00

8,800,246.61Totai 8,464,485.80 8.922.596.61

5. Trade and other receivables2014 2013

Account ReceivableRetention Receivables

515,890.001,673,093.74

395,737.001 ,1 16,1 81 ,1 '1

35,000.00Advances tc, employees 45,000.00Toial 2,233,983.74 1,546,918.1'1

6" lclventories2014 2413

Unused suppliesCcnstruction materialsConstruction in process

131,250.003'19,875.00

140,937.50

Total 451 125.00 140,937.50

7. Frepaid expenseslOther Assets2A14 2013

lnput tax unusedPrepaid insurance

21,375.007,645.00

14,255.8s7,1A1.25

Totai Prepaid expenses 29,020.00 21,357.10

8. Property and eguipmentCosts 12t3112013 Addittions (disposal) 12t31t2014LandHouse and improvementsTranspcrt Equipmentfulachineries and EquipmentFurniture and FixturesOffice Equipment

1,410,00CI.001,000,000.00

248,22A OO

1,121,650.0043,750.0049,S50.00

2,000,000.001,410,000.CIO

3,000,000.00248,224.O4

1,121,650.0043,750.A449,950.00

Total 3,873,570.00 2,000,000.00 5.873.570.00

Accunruiated depn 12t31t2013 Depn-2014 12t31t2014LandHouse and improvernentsTransport EquipmentMech!rreries and EquiprnentFurniture and FixturesCffice Equipment

120,000.00173,754.O4

1,009,485 0041,250.0049,950.00

24,822.OO112,165.OO

2,500.00

120,000.00198,576.00

1 ,121 ,650.O043,750.004S,950.00

Totai 1,394,439.00 139.487.OO 1,533,926.00

NET BOOK VALUE Cost Total Accum depn NBV-12131 12017LandHouse and improrrementsTransport EquiprnentMachineries and EquipmentFurniture and FixluresOffice Equipinent

1 ,'1 21 ,650.OO 1 ,121 ,650.O043,75O.O0 43;75O"OO49,950.00 49,950.00

1,410,000.003,000,000.00

248,224.OO120,000.00198,576.00

1,410,000"002,880,000.00

49,644.00

Toial 5,873,570.00 1,533,926.00 4,339,644.00

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SSS, PHIC & HDMF PayableAccrued Expenses

8,910.007,550.00

8,910.001S,701.00

Tctai Payables 258,251.94 351,053.59

10. Revenue

Construction lncorne-Govt Contracts 57,631,530.80 9'1,267,069.59Trading-Govt contracts 4,346,783.94 3,552,943.95Total Revenue 61,978,314.74 94,820,413.54

11. Cost of Revenue2014 2013

Direct LaborDirect MaterialsDepreciation exp-machineries and equiptOverhead expenses

17,289,459.2433,878,181 .53

112,'165.002,O59,349.44

31,128,060.6C48,226,483.23

112,165.003,970,851.00

Total cost of revenue 53,339,155.22 83,437,1 59.83

12. Operating expenses2414 2013

Charitable donationChristrnas expensesComrnunications, liglrt and waterDepreciationFuei and oillnsurarrce and bondsI\iliscellaneous expenseOffice supplies & orintingPhotccopying expensesR.epairs and maintenanceRepresentation and entertainmentSalaries ancl allowancesSSS, PHIC and HDMF ContributionTaxes and llcensesTransportation and travel I ing

30,000.00210,000.00222,849.98

27,322.OA1,041,858.001,328,O82.50

209,835.00116,702.4075,703.13

191,356.0031,890.00

816,693.2846,150.00

1 18,028.00

25,000.00250,000.00262,176.45

33,572.001,344,332.901,562,450.00

279,780.OO155,603.2189,062.50

201,775.0466,084.34

742,448.4457,634.7262,875.00

145,500.00 140,689.'10Totai Operating Expenses 4,611.970.29 5,273,483.65

't3. Taxes and licenses

Bureau of lnternal RevenueAnnr.ral Registration Fee 500.00

Local taxesBusiness Permit and Licenses and other feesBrgy PermitFire

114,735.041,500.001,293.00

Total local taxes 117,528.OO

Total Taxes and Licenses paid -2A14 118,028.00

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{4. Provision for lncome tax/income tax payableNet lncomeExemptions:

Personal

4,027,189.24

so,o00.oo

,r', ,'tddition'l - zs,ooo'op zs,oqo.oLl.lettaxableincome G.zeTax due 1,229,7AA.56Tax Cre9its LB|M307) 1,196,098.44

_ lncomeTaxPayable re

2414 2013N. .iarin, CapitalNet lncome

12,728,875,81 9,515,504.174,213,371.642.797.488.68

Total Capital 15,526,364.49 -:-:13,728,875.81Less: 1.000.0oo.00

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