SRC-DEFINTIVE 20-IS 2019 (SEC-FORM-20IS)

SEAFRONT RESOURCES CORPORATION

7th Floor, JMT Building, ADB Avenue Ortigas Center, Pasig City

8637-2917

Telephone Number

31 December 2019 Fiscal Year Ending

Notice of Regular Annual Stockholders’ Meeting

SEC Form 20-IS Information Statement Pursuant to Section 20 of the Securities Regulation Code Form Type

SEAFRONT RESOURCES CORPORATION

NOTICE OF REGULAR ANNUAL STOCKHOLDERS’ MEETING

TO OUR STOCKHOLDERS:

NOTICE IS HEREBY GIVEN that the Regular Annual Meeting of the Stockholders of Seafront Resources Corporation will be conducted virtually (or via online means of communication) on Monday, July 27, 2020 at 10:00 a.m., with the following agenda:

(1) Certification of Service of Notice;

(2) Determination of Quorum/Call to Order;

(3) Approval of Minutes of the last Regular Stockholders’ Meeting held on May 30, 2020;

(4) Approval of Management Report and the 2019 Audited Financial Statements contained in the 2019 Annual Report;

(5) Confirmation and Ratification of all acts, contracts and investments made and entered into by Management and/or the Board of Directors during the period May 30, 2019 to July 27, 2020;

(6) Election of nine (9) members of the Board of Directors, including two (2) Independent Directors for the year 2020-2021;

(7) Approval of the Amendments to the By-Laws Article I: Sections 1, 3, 4, 6 and 7; Article II: Sections 1, 2, 3, 4, 7, 8 and 9; Article III: Sections 3, 5, 6, 10 and 11; Article IV: Sections 1 and 6; Article V: Section 2; Article VIII: Section 1; and Article IX: Section 1;

(8) Appointment of External Auditors;

(9) Other Matters; and (10) Adjournment.

Stockholders as of Record Date June 10, 2020 will be entitled to notice of, and to vote at, the Annual Meeting.

To conform with the Government’s regulation on social distancing and prohibition on mass gatherings, the Company decided to hold the Regular Annual Meeting virtuallyor via online/remote communication, and allowthe stockholders to cast their votes by proxy, or by remote communication, or in absentia.

To participate in the Annual Meeting, stockholders must register from 9:00 a.m. of July 06, 2020 until 5:00 p.m. of July 17, 2020 through the following link: http://seafrontresources.com.ph/investor_relations and follow the steps provided therein. The procedures for participation via remote communication and in absentia may be found in the said link and in Annex “B” the Information Statement.

Stockholders who wish to appoint proxies may submit proxy forms until 5:00 p.m. of July 17, 2020 to the Office of Corporate Secretary at 7th Floor, JMT Building, ADB Ave., Ortigas Center, Pasig City or by email to asm@seafrontresources.com.ph. Validation of proxies will be held on July 17, 2020. A sample proxy form will be enclosed in the Information Statement for your convenience.

. ATTY. SAMUEL V. TORRES Corporate Secretary

AGENDA DETAILS AND RATIONALE

1. Call to Order.

The Chairman of the Board of Directors, Mr. Roberto Jose L. Castillo, will call the meeting to order.

2. Certification of Notice and Quorum.

The Corporate Secretary will certify that the written Notice for the meeting was duly sent to stockholders of record, including the date of publication and the newspaper where the notice was published. He will also certify that the quorum exists, and the Stockholders representing at least a majority of the outstanding capital stock, present in person or by proxy, shall constitute a quorum for the transaction of business.

Pursuant to Sections 23 and 57 of the Revised Corporation Code and SEC Memorandum Circular No. 6, Series of 2020, stockholders may participate and vote through remote communication or in absentia. Stockholders may register by submitting the requirements via email at asm@seafrontresources.com.ph and vote in absentia on the matters for resolution at the meeting. A stockholder who votes in absentia, as well as a stockholder participating by remote communication, shall be deemed present for the purpose of quorum.

Please refer to Annex “B” on the Procedures and Requirements for Voting and Participation in the 2020 Regular Annual Stockholders’ Meeting for complete information on remote participation or voting in absentia, as well as on how to join the livestream for the 2020 ASM.

3. Approval of the Minutes of the Annual Stockholders Meeting held on May 30, 2019.

The Minutes of the Meeting held on May 30, 2020 are available at the Company’s website: www.seafrontresources.com.ph

4. Approval ofManagement Report and the 2019 Audited Financial Statements contained in the 2019 Annual Report.

The Report summarizes the milestones and key achievements of Seafront Resources Corporation (SRC) and provides a clear picture of how SRC achieved its goals and strategic objectives for the year 2019. SRC’s audited financial statements, highlights of which are explained in the President and Chief Executive Officer’s Report and in the Information Statement. Copies of the 2019 Audited Financial Statements, previously approved by the Board of Directors, were also submitted to the Securities and Exchange Commission and the Bureau of Internal Revenue.

5. Confirmation and Ratification of all acts contracts and investments made and entered into by the Management and/or Board of Directors during the period May 30, 2019 to July 27, 2020.

The actions for approval are those taken bythe Board and/orits committees and the Management since the Annual Stockholders’ Meeting on May 30, 2019 until July 27, 2020, including the internal procedures for participation in meetings and voting through remote communication or in absentia. Agreements, projects, investments, treasury-related matters and other matters covered by disclosures to the Securities and Exchange Commission and the Philippine Stock Exchange will likewise be presented for approval. The acts of the officers were those taken to implement the resolutions of the Board or its committees or made in the general conduct of business.

6. Approval to the Amendment of By-Laws Article I: Sections 1, 3, 4, 6, and 7; Article II: Sections 1, 2, 3, 4, 7, 8 and 9; Article III: Sections 3, 5, 6, 10 and 11; Article IV: Section 6; Article V: Section 2; Article VIII: Section 1; and Article IX: Section 1. (Please see Annex “D” of the Information Statement for the Proposed Amendments to the By-Laws).

The Company’s By-Laws will be amended to reflect recent changes in Corporate Laws, foremost of which is the inclusion of the following provisions, among others:

a. Specifying the manner of transferring shares of stock by a stockholder;

b. Labeling shares of stock which are donated or reacquired by the Company as “Treasury Shares”;

c. Changing the schedule of the Annual Stockholders’ Meeting from “any day in May” to “any day in June”;

d. Specifying various matters relating to notice of Stockholders’ Meetings, and place and conduct of Stockholders’ Meetings;

e. Specifying the manner of appointing a proxy by a stockholder who is entitled to vote in Stockholders’ Meetings;

f. Specifying the manner of filling vacancies in the Board of Directors;

g. Specifying various matters relating to notice of Regular Board Meetings and Special Board Meetings, and the place and conduct thereof;

h. Defining further the restriction on “antagonistic-competitor” as a disqualification in the appointment in the Board of Directors;

i. Allowing the participation of stockholders in Stockholders’ Meetings through remote communication or other alternative modes of communication or in absentia;

j. Allowing an officer to concurrently hold two or more positions;

k. Requiring the Company’s Treasurer to be a Philippine resident;

l. Clarifying that dividends shall only be declared and paid out on the basis of the outstanding stock held by a stockholder from the unrestricted retained earnings;

m. Clarifying the Board of Directors’ power and authority in fixing, determining and using the unrestricted retained earnings, in determining the use and disposition of the working capital and in determining whether or not dividends shall be declared and paid; and

n. Delegating the power to amend, repeal, or alter the By-Laws to the Board of Directors.

7. Election of Nine (9) members of the Board of Directors (including Independent Directors) for the year 2019-2020.

At its meeting held on June 15, 2020, the Corporate Governance Committee, as the standing committee of the BoardofDirectorsconstitutedforthepurposeofreviewingandevaluatingthequalificationsofpersonsnominated to become members of the Board ofDirectors (includingthe independent directors) and pursuant to the provisions of the Revised Manual on Corporate Governance Manual of the Company, reviewed the candidates for director to ensure that they have all the qualifications and none of the disqualifications for nomination and election as members of the Board of Directors. The nine (9) nominees will be submitted for election to the Board of Directors by the stockholders at the Annual Stockholders’ Meeting. For this year, the candidates to the Board are the following:

a. As Regular Directors:

1) Mr. Roberto Jose L. Castillo

2) Mr. Medel T. Nera

3) Mr. Raul M. Leopando

4) Mr. Perry Y. Uy

5) Mr. Victor V. Benavidez

6) Ms. Milagros V. Reyes

7) Ms. Yvonne S. Yuchengco

b. As Independent Directors:

8) Atty. Ernestine Carmen Jo D. Villareal-Fernando

9) Mr. Nicasio I. Alcantara

Please refer to Item 5 – Directors and Executive Officers of the Information Statement for the profile of the nominees to the Board. Stockholders will be given the opportunity to elect the directors who will serve for the term 2020- 2021 by way of individual voting, by ballot and by proxy.

8. Appointment of the Company’s External Auditors.

The Company’s Board Audit Committee assessed and evaluated the performance for the previous year of the Company’s external auditor, SYCIP GORRES VELAYO & CO. (SGV). Based on the Board Audit Committee, the Board of Directors will recommend the reappointment of SGV as the Company’s external auditor for 2020.

SGV is one of the top auditing firms in the country and is fully accredited by the Securities and Exchange Commission (SEC). A resolution for the appointment of the Company’s external auditor for 2020 shall be presented to the stockholders for approval.

9. Other Matters

The Chairman of the meeting will inquire whether there are other relevant matters and concerns to be discussed.

10. Adjournment

Upon determination that there are no other relevant matters to be discussed, the meeting will be adjourned on motion duly made and seconded.

7. Registrant’s telephone number, including area code: (632) 8637-2917

8. Date, time and place of the meeting of security holders: July 27, 2020 at 10:00 a.m. virtually or via online/remote communication.

9. Approximate date on which the Information Statement is first to be sent or given to security holders: July 06, 2020.

10. Securities registered pursuant to Section 4 and 8 of the RSA (information on number of shares and amount of debt is applicable only to corporate registrants): Title of Each Class Number of Shares of Common Stock Outstanding Common 163,000,000 shares

11. Are any or all of registrant’s securities listed on the Philippine Stock Exchange? Yes______________No_____________

Information Required by Items of SEC Form 20-IS

A. GENERAL INFORMATION

Item 1 Date, time and place of meeting of security holders

The Regular Annual Meeting of the Stockholders of Seafront Resources Corporation will be held on Monday, July 27, 2020, at 10:00 a.m. virtually or via online/remote communication.

Mailing Address –7th Floor, JMT Building, ADB Avenue, Ortigas Center, Pasig City, Philippines.

Approximate date of which the Information Statement is to be first sent or given to security holders: 06 July 2020

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY

Item 2 Dissenters’ Right of Appraisal

There are no corporate matters or actions that will entitle dissenting stockholders to exercise their right of appraisal as provided in Section 80 of the Revised Corporation Code of the Philippines (RCC).

The Dissenter’s Right of Appraisal shall be available under the following instances:

a. In case of any amendment to the articles of incorporation has the effect of changing or restricting the rights of any stockholders or class of shares, or of authorizing preferences in any respect superior to those outstanding shares of any class, or extending or shortening the term of corporate existence;

b. In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially all of the corporate property and assets as provided in the Revised Corporation Code;

c. In case of merger or consolidation; and

d. In case of investment of corporate funds for any purpose other than the primary purpose of the Company.

In the event that a dissenting stockholder exercises his Right of Appraisal, he shall be entitled to demand payment of the fair value of his shares. The right of appraisal shall be exercised by making a written demand to the Company for the payment of the fair value of shares held, within thirty (30) days after the date on which the vote was taken. Failure to make the demand within such period shall be deemed a waiver of the Appraisal Right. If the proposed corporate action is implemented, the dissenting stockholder shall be paid the fair value his shares as of the day before the vote was taken, excluding any appreciation or depreciation, upon surrender of the certificate or certificates of stock representing the stockholder’s shares (Sec. 81, RCC).

If the dissenting/withdrawing stockholder and the Company cannot agree on the fair value of the shares within sixty (60) days from the approval of the corporate action, the same shall be determined and appraised by three (3) disinterested persons, the first shall be named by the dissenting/withdrawing stockholder, the second by the Corporation, and the third by the two (2) thus chosen. The findings of the majority of the appraisers shall be final, and their award shall be paid by the Company within 30 days after such award is made, but no payment shall be made unless the Company has unrestricted retained earnings in its books to cover such payment. Upon payment by the Company of the agreed or awarded price, the stockholder shall forthwith transfer the shares to the Company (Sec. 81, RCC)

Item 3 Interest of Certain Persons in Matters to be Acted Upon

No director, nominee for election as director, associate of the nominee or executive officer of the Company at any time since the beginning of the last fiscal year had any substantial interest, direct or indirect, by security holdings or otherwise, in any of the matters to be acted upon in the meeting, other than election to office.

No director has informed the Corporation in writing that he intends to oppose any action to be taken by the registrant at the meeting

B. CONTROL AND COMPENSATION INFORMATION

Item 4 Voting Securities and Principal Holders Thereof

a) Number of Shares Outstanding as of 31March2020:

163,000,000

Number of Votes Entitled One (1) vote per share

Foreign Equity Ownership as of 31 March 2020: The Company Foreign equity ownership, as follows: No. of Shares

held by Filipino

held by foreign nationals

b) Only holders of the Company’s stock of record at the close of business on June 10, 2020, acting in person or by proxy, on the day of the meeting are entitled to notice and to vote at the Annual Stockholders Meeting to be held on July 27, 2020. Stockholders of record are entitled to one vote per share. Voting may be done viva voce or by balloting or in absentia

c) Manner of Voting

Section 5.0 of Article II of the By-Laws of the Corporation provides that stockholder may vote at all meetings the number of shares registered in their respective names either in person or by proxy executed in writing, or through remote communication or in absentia as allowed by the Board of Directors. No proxy shall be recognized unless presented to the Secretary for inspection and registration at least ten (10) calendar days before the date of said meeting.

The stockholders have cumulative voting right with respect to the election of the Company’s Directors: (See also Item 19 page 12 Voting Procedures).

1. Election of Directors shall be held at the Annual Stockholders’ Meeting. It shall be done by majority (2/3 for the amendment of the By-Laws) of stock represented in the meeting, or vote through remote communication or in absentia, and shall be conductedinthemanner providedinSection23oftheRevised Corporation CodeofthePhilippines,andwith suchformalities and in such manner as the presiding officer at the meeting shall then and there determine and provide:

a) he/she may vote such number of shares for as many persons as there are Directors to be elected;

b) he/she may cumulate said share and give one candidate as many votes as the number of Directors to be elected multiplied by his/her shares;

c) he/she may distribute them on the same principle among as many candidates as he/she may see fit. In any of these instances, the total number of votes cast by the stockholders should not exceed the number of shares owned by him/her as shown in the books of the Corporation multiplied by the total number of Directors to be elected.

d) Discretionary authority to cumulate vote is not solicited.

d) Security Ownership of Certain Record and Beneficial Owners and Management

1. Security Ownership of Certain Record and Beneficial Owners:

The following table sets forth information with respect to a record or beneficial owner directly or indirectly owning more than 5% of the Company’s Capital Stock as of March 31, 2020.

Nominee Corp.

Building, Ayala Ave., Makati City

PMMIC 10th Floor, GPL Building, Buendia Ave., Makati City

Common Alsons Cons. Res., Inc. 2286 Pasong Tamo Ext. Makati City

Building, Trust Dept. Paseo de Roxas, Makati City

T/A-SCA#0011

Building, Trust Dept. P. de Roxas, Makati City

NOTE: 1. None of the holders of the Company’s common shares registered under the name of PCD Nominee ownsmore than 5% of the company’s common shares.

2. The corporate acts of PMMIC are carried out by its Board of Directors and Management.Ms. Helen Y. Dee is theChairperson of PMMIC.

3. The Corporate acts of Alsons Cons. Res., Inc. are carried out by its Board of Directors. Mr. Tomas I. Alcantara is the current president of the Company.

4. CBC T/A-SSC#0010 and T/A-SSC#0011 are Trust Accounts with China Banking Corporation as Trustee. The Corporate acts of CBC are carried out by its Board of Directors and Management. Mr.William C. Whang is the current CBC President and CEO * PCD total shares include Filipino and Non-Filipino.

2. Security Ownership of Management as of March 31, 2020.

The following are the number of shares owned of record by the Directors, the Chief Executive Officer and each of thekey officers of the Company and the percentage of shareholdings of each:

Title of Class

Common

Roberto Jose L. Castillo

Common Milagros V. Reyes

Common Perry Y. Uy

Common Yvonne S. Yuchengco

Common Nicasio I. Alcantara

Common Medel T. Nera

Common Ernestine Carmen Jo D. Villareal-Fernando

Common Raul M. Leopando

Common Victor V. Benavidez

Common Samuel V. Torres

Secretary

Common Arlan P. Profeta

Corporate Secretary

As of March 31, 2020, the Company’s directors and executive officers owned an aggregate of 4,926 shares equivalent to 0.40% of the Company’s outstanding shares. None of the members of the Company’s directors and management owns more than 2% of the outstanding capital stock of the Company.

Voting Trust Holders of 5% or more -The Company is not aware of any voting trust or similar arrangement among persons holding more than 5% of a class of shares.

Changes in Control - There had been no change in the control of the Company since the beginning of the last fiscal year. The Company has no existing voting trust or change in control agreements.

Item 5 -Directors and Executive Officers:

2018 to present

1999 to present

2007 to present Raul M. Leopando

2017 to present Yvonne S. Yuchengco

2000 to present Nicasio I. Alcantara

1995 to present Victor V. Benavidez

Medel T. Nera

2017 to present

2011 to present Ernestine Carmen Jo D. Villareal-Fernando

2012 to present Executive

Milagros V. Reyes

Y. Uy

1999 to present

2007 to present

2006 to present Atty. Arlan P. Profeta

2008 to present

The Directors of the Company are elected at the annual meeting of stockholders to hold office until the next annual meeting and until each respective successor shall have been elected and qualified. Each Board member serves for a term of one year or until his successor is duly elected and qualified.

The following are the incumbent directors of the Company and their business experience for the past five (5) years:

Board of Directors

Mr. Roberto Jose L. Castillo, 66, Filipino, Chairman (Non-Executive Director)

Publicly-Listed Companies: Mr. Castillo is the Chairman of the Board since 2018. He is also the President and Chief Executive Officer of Engineering Equipment, Inc.

Non Listed: Mr. Castillo also oversees EEI subsidiaries namely: Equipment Engineers, EEI Construction and Marine, Inc., EEI Power Corporation, Al Rushaid Petroleum Investment Company in Saudi Arabia, EEI Realty Corporation and Gulf Asia International Corporation. EEI is a member of the Yuchengco Group of Companies. He is also a Director of the following: PetroWind Energy, Inc., PetroGreen Energy Corporation, PetroSolar Corporation, Brightnote Assets Corporation, Hermosa Ecozone Development Corporation, Kubota-Kasui Philippines Corporation, SQ Resources, Inc., SN Resources, Inc., Somerset Hospitality Holdings Philippines, Inc., Ascott Hospitality Holdings Philippines, Inc. and Tong Hsing Electronics Philippines, Inc. He is also Chairman of the Advisory Board, Carmelray Industrial Corporation and Chairman CJC Corporation. Educational Background: Master’s degree in Business Administration, Wharton Graduate School of the University of Pennsylvania, Bachelor of Science in Commerce, University of Santo Tomas, Bachelor of Arts, University of Santo Tomas. Professional Qualification: Certified Public Accountant (CPA)

Ms. Milagros V. Reyes, 78, Filipino, Director/President

Publicly-Listed Companies: She is a Director and President of PetroEnergy Resources Corporation and a Director of iPeople, inc.

Non-Listed: She is presently the Chairman/President of PetroGreen Energy Corporation, Chairman of Maibarara Geothermal, Inc. and PetroSolar Corporation; Director/Treasurer of Hermosa Ecozone & Development Corporation. She was formerly a Director/Consultant of PNOC-EC and a Senior Vice President of Basic Petroleum and Minerals, Inc.

Educational Background: Bachelor of Science in Geology and Physical Sciences (Double Degree) from the University of the Philippines. She pursued various technical trainings from the National Iranian Oil Co., University of Illinois and Ajman Fields in U.A.E.

Mr. Perry Y. Uy, 74, Filipino,Director/Treasurer

Non-Listed: He is presently the President of Manila Memorial Park. He is a Director of La Funeraria Paz, Sucat. He is also an Ex-Com member of Manila Memorial Park and La Funeraria Paz, Sucat. He is formerly a member of the Board of Directors of various companies such as: RCBC Realty Corp., EEI Corporation, I People, Inc., Landev Corp., Hi-Esai, First Malayan Leasing, Subic Power Corporation, Malayan Colleges Laguna, Inc., Honda Cars, Inc. in Quezon City/Kalookan and Isuzu Manila. Educational Background: Bachelor of Science in Mechanical Engineering from De La Salle University, Master’s Degree in Business Administration at Wharton Graduate School of the University of Pennsylvania.

Ms. Yvonne S. Yuchengco, 66, Filipino, Director

Publicly-Listed Companies: She is a Director of House of Investments, Inc. Director/Treasurer of PetroEnergy Resources Corporation and Director of iPeople, inc.

Non-Listed: She is the Vice Chairperson/Director of Malayan Insurance Company, Inc., Mico Equities, Inc., Philippine Integrated Advertising Agency, Inc., Alto Pacific Corporation, RCBC Land, Inc. She also holds the position of Chairperson of First Nationwide Assurance Corporation, The Malayan Plaza Cond. Owners Association, Inc., RCBC Capital Corporation and XYZ Assets Corporation. Chairperson/President of Royal Commons, Inc., Y Tower II Office Cond Corp., Yuchengco Tower Office Condominium Corp. Director/Treasurer and CFO of Pan Malayan Mgmt.& Inv’t. Corp., Honda Cars Kalookan, Mona Lisa Development Corporation, Asst. Treasurer, Enrique T. Yuchengco, Inc.; Member, Board of Trustees AY Foundation, Inc, Mapua Institute of Technology, Inc., Phil-Asia Assistance Foundation, Inc., Yuchengco Museum, Inc. She is a member of Advisory Committee of Rizal Banking Corporation. She also sitsin the board of several companies such as: HyDee Management and Resource Corp., La Funeraria Paz, Inc.-Sucat, Luisita Industrial Park Corp., Malayan College Laguna, Inc., Malayan Colleges, Inc., Malayan High School of Science, Inc., Malayan Insurance (H.K.), Malayan International Insurance Corp., Manila Memorial Park, Inc., National Reinsurance Corporation of the Pilippines, Pan Malayan Express, Inc., Pan Malayan Realty Corporation, Asia-Pac Reinsurance Co., Ltd., AY Holdings, Inc., DS Realty, Inc., Pan Pacific Computer Center, Inc.,Shayamala Corporation and YGC Corporate Services, Inc.

Educational Background: Bachelor of Arts in Interdisciplinary Studies from the Ateneo De Manila University

Mr. Medel T. Nera, 64, Filipino, Director

Publicly-Listed Companies: Mr. Nera is the Director of iPeople, Inc.; EEI, Inc. and House of Investments, Inc.

Non-Listed: He is also a Director of Generika Group. His past experience include: President and CEO of House of Investments, Inc., Director and President of RCBC Realty Corp.; Chairman of the Board of Greyhounds Security & Investigation Agency Corporation, and Zamboanga Industrial Finance Corporation (ZIFC); Chairman and President of Honda Cars Kalookan, Inc.;DirectorofHI-Eisai Pharmaceuticals, Inc., Investment Managers, Inc., LandevCorp.,Malayan Colleges Laguna, Inc.Manila Memorial Cemetery Park, Inc., YGC Corporate Services, Inc., Chairman of Risk Oversight Committee and member of the Audit Committee of Rizal Commercial Banking Corp.; and Senior Partner at Sycip Gorres Velayo & Co.

Educational Background: Master in Business Administration from Stern School of Business, New York University, USA and Bachelor of Science in Commerce from Far Eastern University, Philippines, International Management Program from Manchester Business School, UK, Pacific Rim Program from University of Washington, USA.

Mr. Nicasio I. Alcantara, 77, Filipino, Independent Director

Publicly-Listed Companies: He is presently an Independent Director of The Philodrill Corporation and Phoenix Petroleum Philippines, Inc.

Non-Listed: Chairman of Conal Corporation and Vice-Chairman of Aviana Development Corporation. He is a member of the Board of Directors of various companies such as: Aces Technical Services, Inc., Acil Corporation, Alcor Transport Corporation, Alsing Power Holdings, Inc., Alsons Aquaculture Corporation, Alsons/AWS Information System, Inc. Alsons Corporation, Alsons Development & Investments Corp., Alsons Insurance Brokers Corp., Alsons Land Corporation, Alsons Power Holdings Corporation, Alsons Properties Corporation, Alsons Security Co., Inc., Aquasur Resources Corporation, BDO Private Banks, Inc., Buayan Cattle, Inc. Conal Holdings Corporation, Finfish Hatcheries, Inc., Indophil Resources NL, San Ramon Power, Inc., Sarangani Agricultural Co., Inc., Sarangani EnergyCorporation,Seawood Holdings Incorporated, Sunfoods Agri. Ventures, Inc., Site Group International, Ltd. Southern Philippines Power Corporation and Western Mindanao Power Corporation.

Educational Background: Bachelor of Science in Business Administration from the Ateneo de Manila University, Master’s in Business Administration from Sta. Clara University, California, USA

Atty. Ernestine Carmen Jo Villareal-Fernando, 58, Filipino, Independent Director

Non-Listed: She is the Director of various corporations such as: CountryBankers Insurance Corporation, CountryBankers Life Insurance Corporation, Jose E. Desiderio, Inc. and Fuego y Hielo, Inc., Founding Partner, Platon Martinez Flores San Pedro Leano Fernando Panagsagan do Panagsagan Bantilan Law Office, Independent Director of RCBC Securities, Inc., RCBC Forex Brokers Corporation and RP Land Development Corporation, Treasurer – Trustee of Philippine Bar Association.

Educational Background: Bachelor of Laws from the University of the Philippines, A.B. Economics-College Scholar, Dean’s Medal from the University of the Philippines, Certificate in Math and Computer Programming at Michigan State University, Computer Center.

Mr. Victor V. Benavidez, 68, Filipino, Director

Publicly-Listed Companies: He is a Director of Boulevard Holdings, Inc.

Non-Listed:HeistheNominee ofAlakorSecuritiesCorporation, Formerly: GeneralManagerofAlakorSecurities, Inc,Director, Mariwasa Siam Holdings, Anglo Philippines Holdings Corporation, VP and Director Mabuhay Holdings Corporation and Tagaytay Properties & Holdings Corporation, Columnist, The Daily Globe, Investment Research Consultant of James Capel, Manager/Corplan of Banco Filipino and Manager/Investment Research of Anselmo Trinidad & Co.

Educational Background: Bachelor of Science in Economics from the Universityof Sto. Tomas, Master’s Degree in Economics from the University of Sto. Tomas, Professional Development Program from CRC.

Mr. Raul M. Leopando, 69,Filipino, Director

Non-Listed: He is the Chairman of RCBC Securities, Inc., President and Director of Investment Houses Association of the Phils. (IHAP), Consultant of RCBC Capital Corporation, Director, Bankard, Inc. He is also formerly Chairman of the Board and Nominee of Philippine Stock Exchange, Inc and formerly President and CEO of RCBCCapital Corporation.

Educational Background: Bachelor of Arts in Economics from the University of the Philippines and Bachelor of Science in Commerce-Accounting from San Beda College.

Executive Officers:

Ms. Milagros V. Reyes, 78, Filipino, Director/President

Publicly-Listed Companies: She is a Director and President of PetroEnergy Resources Corporation and a Director of iPeople, inc. Non-Listed: She is presently the Chairman/President of PetroGreen Energy Corporation, Chairman of Maibarara Geothermal, Inc. and PetroSolar Corporation; Director/Treasurer of Hermosa Ecozone & Development Corporation. She was formerly a Director/Consultant of PNOC-EC and a Senior Vice President of Basic Petroleum and Minerals, Inc. Educational Background: Bachelor of Science in Geology and Physical Sciences (Double Degree) from the University of the Philippines. She pursued various technical trainings from the National Iranian Oil Co., University of Illinois and Ajman Fields in U.A.E.

Atty. Samuel V. Torres, 55, Filipino, is the Gen. Counsel/Corporate Secretary of AY Foundation, Alto Pacific Company, Inc. (Formerly: The Pacific Fund, Inc.), Bankers Assurance Corp., FBIA Insurance Agency, Inc., Bluehounds Security & Invt. Agency, Enrique T. Yuchengco, Inc., First Nationwide Assurance Corp., GPL Holdings, Inc. GPL Cebu Tower Office Cond. Corp., GPL Holdings, Inc., Grepaland, Inc., Grepa Reality Holding Corporation, Hexagon Integrated Financial & Insurance Agency, Hi-Eisai Pharmaceutical, Inc., Honda Cars Kalookan, Inc, House of Investments, Inc.,Hexagon Integrated Fin. Ins. Agency, Inc., Hexagon Lounge, Inc., iPeople, Inc., Investment Managers, Inc.,Landev Corporation, La Funeraria Paz-Sucat, Inc., Malayan High School of Science, Inc., Malayan Insurance Co., Inc., Mico Equities, Inc., Malayan Colleges, Inc., Malayan Colleges Laguna, Inc., Malayan Securities Corporation, Mapua Information TechnologyCenter, Inc., MJ888 Corporation, Mona Lisa Development Corporation, Pan Malayan Management & Investment Corporation, Pan Malayan Realty Corporation, Pan Malayan Express, Inc., Pan Pacific Computer Center, Inc., People eServe Corporation, PetroEnergy Resources Corporation, Philippine Integrated Advertising Agency, Inc., Royal Commons, Inc.,RCBC Forex Corporation, RCBC Realty Corporation, RCBC Land, RCBC Securities, Inc., RCBC Bankard Services Corporation, RCBC Securities, Inc., RP Land Development Corporation,SunLifeGrepa Financial,Inc.,YuchengcoMuseum,YGCCorporateServices, Inc., YRealtyCorporation,Y Tower II Office Condominium Corp., Yuchengco Tower Office Condominium Corp. and Xamdu Motors, Inc.

Educational Background: Bachelor of Science in Business Economics from the University of the Philippines and Bachelor of Laws from Ateneo de Manila University.

Atty. Arlan P. Profeta, 46, Filipino, is presently the Corporate Secretary of Maibarara Geothermal, Inc., PetroGreen Energy Corporation, PetroWind Energy, Inc. and PetroSolar Corporation. He is also the Asst. Corporate Secretary of PetroEnergy Resources Corporation and formerly Tax Manager of Punongbayan and Araullo. Educational Background: Bachelor of Science in Accountancy from San Beda College. He is a Certified Public Accountant. He took his Bachelor of Laws degree from the Arellano University School of Law.

Nominees for Election as Members of the Board of Directors for the year 2020-2021:

1. Mr. Roberto Jose L. Castillo – Director 6. Mr. Nicasio I. Alcantara – Independent Director

2. Ms. Milagros V. Reyes - Director 7. Atty. Ernestine Carmen Jo D. Villareal-Fernando–IndependentDirector

3. Mr.Perry Y. Uy - Director 8. Mr. Raul M. Leopando - Director

4. Ms. Yvonne S. Yuchengco - Director 9. Mr. Victor V. Benavidez– Director

5. Mr. Medel T. Nera– Director

Nomination and Election of Independent Director:

The Corporate Governance Committee passed upon their qualifications and found no disqualifications, as provided for in the ByLaws and in accordance with SRC Rule 38 as amended and approved by the Board of Directors and Stockholders on May 17, 2008.

Atty. Arturo B. Maulion, a stockholder of record, formally nominated Mr. Nicasio I. Alcantara and Atty. Ernestine Carmen Jo D. Villareal-Fernando as Independent Directors. Atty. Maulion has no relations with the Nominees. (Please see attached Annex “A” for the Certification of Independent Directors).

The Corporate Governance Committee adheres to the criteria and guidelines governing the conduct of the nominations as set forth in the procedures under SRC Rule 38 on the Nomination and Election of Independent Directors, By-Laws, and the Company’s Manual of Corporate Governance.

The Company has adopted the SRC Rule 38 (Requirements on Nomination and Election of Independent Directors) and compliance therewith has been made. Only nominees whose names appear on the Final List of Candidates shall be eligible for election as Independent Director. No further nominations shall be entertained or allowed on the floor during the actual annual stockholders’ meeting.

An Independent Director is a person who is independent of management and the controlling shareholder, and is free from any business or other relationshipwhich could, or could reasonably be perceived to, materially interfere with his exercise of independent judgement in carrying out his responsibilities as a director.(Please see Annex “A” for the Certification of Independent Director).

The members of the Board of Directors and the Independent Directors are elected at the general meeting of stockholders, who shall hold office for the term of one (1) year or until their successors shall have been elected and qualified.

The Management Committee members and other Officers of the Company, unless removed bythe Board of Directors, shall serve as such until their successors are elected or appointed.

Significant Employees

Other than the aforementioned Directors and Executive Officers identified in the item on Directors and Executive Officers in this Information Statement, there are no other employees of the Company who may have significant influence in the Company’s major and/or strategic planning and decision-making.

The Corporation values its human resources. It expects each employee to do his share in achieving the Corporation’s set goals.

Family Relationship

There are no family relationships known to the Company.

Certain Relationships and Related Transactions (refer to Note 13 of the Audited Financial Statements)

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. Such relationship also exists between and/or among entities, which are under common control with the reporting enterprises and its key management personnel, directors, or its shareholders. In considering each related party relationship, attention is directed to the substance of the relationship, and not merely the legal form.

The Company in its regular conduct of business has entered into the following transactions with related parties consisting of reimbursement of expenses and management and accounting services agreements.

Involvement in Certain Legal Proceedings

For the past five (5) years, none of the Directors or Executive Officers was involved nor has any such officer or director has been involved in any legal cases under the Insolvency Law or the Philippine Revised Penal Code either as defendant or accused, nor has anysuch officer or director been the subject of anycourt order, judgment or decree barring, suspending or otherwise limiting him from engaging in the practice of any type of business including those connected with securities trading, investments, insurance or banking activities.

As of this report, the Company is not a party to any litigation or arbitration proceedings of material importance, which could be expected to have a material adverse effect on the Company or on the results of its operations. No litigation or claim of material importance is known to be pending or threated against the Company or any of its properties.

As of the record date, to the best of Company’s knowledge, there are no legal proceedings against the directors and executive officers of the company within the categories described in SRC Rule 12, Part 1V paragraph (A) (4).

Stocks Warrants or Options

NO warrants or options were granted to the Directors and Officers from 1999.

Related Party Transactions

Related party relationship exists when one party has the ability to control, directly, or indirectly through one or more intermediaries, the other party or exercise significant influence over the other party in making financial and operating decisions. Such relationship also exists between and/or among entities, which are under common control with the reporting enterprises and its key management personnel, directors, or its shareholders. In considering each related party relationship, attention isdirected to the substance of the relationship, and not merely the legal form.

The Company in its regular conduct of business has entered into the following transactions with related parties consisting of reimbursement of expenses and management and accounting services agreements.

The Company’s financial statements include the following amounts resulting from transactions with related parties:

2019

due and

*included as part of accounts payable and accrued expenses

2018

Affiliate:

Noninterest bearing, payable when due and demandable Unsecured, no impairment

The Company has no employee. PERC provides administrative support to the Company. Therefore, no compensation and shortterm benefits for key management personnel were charged in profit or loss for the years ended December 31, 2019, 2018 and 2017.

Terms and conditions of transactions with related parties

Outstanding balances at year-end are to be settled in cash. There have been no guarantees provided or received for any related party receivables or payables.

Aside from the above, there were no other related transactions or proposed transactions during the last two (2) years to which the registrant was or is to be a party.

The Company has no employee. PERC provides administrative support to the Company. Therefore, no compensation and shortterm benefits for key management personnel were charged in profit or loss as of December 31, 2019, 2018 and 2017.

Disagreements with the Company

No director has resigned or declined to stand for re-election for the Board of Directors since the date of the annual meeting of security holders due to any disagreement with the Corporation relative to the Corporation’s operations, policies and practices.

Item 6 -Compensation of Directors and Executive Officers

Summary Compensation Table (CEO and Top 4 Highest Paid Executive Officer) Name Designation Compensation * Milagros V. Reyes PresidentPerry Y. Uy TreasurerAtty. Samuel V. Torres Corporate SecretaryAtty. Arlan P. Profeta Asst. Corporate Secretary

Summary Compensation Table (All Directors as a group)

*all executive officers of the company do not receive any compensation. ** 2020 projected per diem during BOD meetings.

There is no employment contract between the registrant and the Chairman and all others Executive Officers.

There are no other arrangements pursuant to which any director of the company was compensated, or is to be compensated, directly or indirectly.

Item 7 -Independent Public Accountant

The external auditor of the Corporation is the auditing firm SyCip Gorres Velayo & Co. (SGV). The same accounting firm has been endorsed by the Audit Committee to the Board. The Board, in turn, approved the endorsement and will nominate the reappointment of the said auditing firm for the stockholders’ approval at the scheduled annual stockholders’ meeting. The said auditing firm has accepted the Company’s invitation to stand for re-election this year.

Audit services of SGV for the calendar year ended December 31, 2019 are the examination of the financial statements of the Company, review of income tax returns and other services related to filing of reports made with the Securities and Exchange Commission and Bureau of Internal Revenue.

The representatives of SGV have always been present at the shareholders’ meeting held during prior years and shall likewise be present during this year’s stockholders’ meeting to respond to appropriate questions or make statements with reference to matters for which their services were engaged.

Pursuant to SRC Rule 68 Paragraph 3 (b) (1V) (Re: Rotation of External Auditors), the Company has not engaged Ms. Ana Lea Bergado, partner of SGV & Co., for more than five (5) years. She was engage bythe Companyfor examination of the Company’s 2019 financial statements. The engagement of the partner is subject to the approval by the shareholders of the appointment of SGV & Co. as the external auditor for Calendar year 2019.

The Company is compliant with the Rotation requirement of its external auditor’s certifying partner as required under SRC Rule 68 (3)(b) (1V). A two (2) years cooling off period shall be observed in the re-engagement of same signing partner or individual audit

Disagreements with Accountants on Accounting and Financial Disclosures

As of December 31, 2019, there are no disagreements with Accountants on Accounting and Financial Disclosure.

Audit and audit- related fees

External audit fees amounted to P366,912.00 (inclusive of VAT) as of December 31, 2019 and P349,272.00 as of December 31, 2018. Said fees are for the audit and review of registrant’s annual financial statements and other services normally provided in connection with statutory and regulatory filings or engagements for CY 2019 and 2018. Aside from discussed, there were no other fees or other services.

It is the policy of the Company that all audit findings are presented to its Audit Committee which reviews and make recommendations to the Board on actions to be taken thereon. The Board of Directors of the Companypasses upon and approves the AuditCommittee/BROC’s recommendations. The Audit/Board RiskOversight Committee (BROC), the Board of Directors and the stockholders of Seafront Resources Corporation approved the engagement of SGV & Co as the Company’s external auditor. The members of the Audit Committee/BROC are as follows:

Nicasio I. Alcantara

- Chairman - Independent Director

Medel T. Nera - Member

Ernestine Carmen Jo Villareal-Fernando - Member - Independent Director

Item 8 - Compensation Plan

No actionistobe taken with respect toanyplan pursuanttowhich cashornon-cashcompensation maybe paidordistributed.

C. ISSUANCE AND EXCHANGE OF SECURITIES

Item 9 -Authorization or Issuance of Securities Otherwise than for Exchange

There is no matter or corporate action to be taken up in the meeting with respect to issuance of securities.

Item 10 - Modification or Exchange of Securities No Modification of Outstanding Securities

Item 11 - Financial and Other Information

The Audited Financial Statements of the Company is attached as Annex “E”. The Management’s Discussion & Analysis is incorporated in the attached Management Report.

Item 12 - Mergers, Consolidation, Acquisition and Similar Matters Not Applicable.

Item 13 - Acquisition or Disposition of Property Not Applicable.

Item 14 - Restatement of Accounts None.

D. OTHER MATTERS

Item 15 - Action with Respect to Reports

a) Approval of the Minutes of the 2019Annual Shareholders Meeting;

The Minutes of 2019Annual Shareholders Meeting reflects the following:

1. Approval of Management Report and the 2018Audited Financial Statements contained in the 2018Information Statement.

2. Confirmation and Ratification of all acts, contracts and investments made and entered into by Management and/or the Board of Directors during the period of 30 May 2019 to 27 July 2020.

3. Election of Nine (9) members of the Board of Directors for the year 2019-2020.

4. Appointment of External Auditors.

b) Approval of Management Report and the 2019Audited Financial Statements;

c) Confirmation and Ratification of all acts, contracts and investments made and entered into byManagement and/or the Board of Directors during the period of 30 May 2019 to 27 July 2020;

1. Constitution of various Committees and Appointment of Chairman and Members: (Organizational Meeting held May 30, 2019). Such as:

Corporate Governance Committee

Chairperson - Ernestine Carmen Jo D. Villareal-Fernando - Independent Director

Members - Nicasio I. Alcantara - Independent Director - Medel T. Nera

Audit Committee/BROC

Chairperson - Mr. Nicasio I. Alcantara – Independent Director Members - Ernestine Carmen Jo D. Villareal-Fernando - Independent Director - Mr. Medel T. Nera - Director

Corporate Information Officer/ -Atty. Samuel V. Torres

Asst. Corporate Information Officer/ Compliance Officer - Atty. Arlan P. Profeta

2. Ratification of acts and resolutions of Management and of the Board of Directors as referred to in the Notice of the Annual Meeting refers only to acts and resolutions done in the ordinary course of business and operation of the Company. Ratification is being sought in the interest of transparency and as a matter of customary practice or procedure undertaken at every Annual Meeting of Stockholders of the Company.

There are no other acts and resolutions of Management and of the Board of Directors that needs the approval of the stockholders.

d) Election of Nine (9) members of the Board of Directors (including Independent Directors) for the year 2020-2021.

Item 16 - Matters Not Required to be Submitted

a) Proof of the required notice of the meeting

b) Proof of the presence of a quorum

Item 17 -Amendment of Charter, By-Laws or Other Document

Amendment of By-Laws Article I: Sections 1, 3, 4, 6 and 7; Article II: Sections 1, 2, 3, 4, 7, 8 and 9; Article III: Sections 3, 5, 6, 10 and 11; Article IV: Sections 1 and 6; Article V: Section 2; Article VIII: Section 1; and Article IX: Section 1. (Please see Annex “D” for the Summary of the Proposed Amendments to the By-Laws)

The Company intends to amend its By-Laws to reflect recent changes in Corporate Laws, foremost of which is the inclusion of the following provisions, among others:

a. Specifying the manner of transferring shares of stock by a stockholder;

b. Labeling shares of stock which are donated or reacquired by the Company as “Treasury Shares”;

c. Changing the schedule of the Annual Stockholders’ Meeting from “any day in May” to “any day in June”;

d. Specifying various matters relating to notice of Stockholders’ Meetings, and place and conduct of Stockholders’ Meetings;

e. Specifying the manner of appointing a proxy by a stockholder who is entitled to vote in Stockholders’ Meetings;

f. Specifying the manner of filling vacancies in the Board of Directors;

g. Specifying various matters relating to notice of Regular Board Meetings and Special Board Meetings, and the place and conduct thereof;

h. Defining further the restriction on “antagonistic-competitor” as a disqualification in the appointment in the Board of Directors;

i. Allowing the participation of stockholders in Stockholders’ Meetings through remote communication or other alternative modes of communication or in absentia;

j. Allowing an officer to concurrently hold two or more positions;

k. Requiring the Company’s Treasurer to be a Philippine resident;

l. Clarifying that dividends shall only be declared and paid out on the basis of the outstanding stock held by a stockholder from the unrestricted retained earnings;

m. Clarifying the Board of Directors’ power and authority in fixing, determining and using the unrestricted retained earnings, in determining the use and disposition of the working capital and in determining whether or not dividends shall be declared and paid; and

n. Delegating the power to amend, repeal, or alter the By-Laws to the Board of Directors.

Adoption of a Resolution Allowing the Annual Stockholders’ Meeting Through Remote Communications or In Absentia

The Company’s Board of Directors, on its meeting held on May 25, 2020, resolved to allow the stockholders to participate and vote in the stockholders’ meeting through remote communication or other alternative modes of communication or vote in absentia, and for this purpose, such remote or in absentia participation shall be considered in the determination of quorum.

Item 18 - Other Proposed Action None.

Item 19- Voting Procedures

Considering that the Company will dispense with the physical attendance of its stockholders, the Board of Directors has adopted an internal procedure for the voting and participation in the 2020 Annual Stockholders’ Meeting, which covers both electronic voting in absentia and proxy voting. For the detailed steps and guidelines, please see attached Annex “B” Procedures and Requirements for Voting and Participation in the 2020 Annual Stockholders’ Meeting.

MANAGEMENT REPORT TO STOCKHOLDERS

PART I - BUSINESS AND GENERAL INFORMATION

INCORPORATED HEREIN ARE THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF SEAFRONT RESOURCES CORPORTION FOR THE YEAR ENDED DECEMBER 31, 2019 WITH THE CORRESPONDING STATEMENT OF MANAGEMENT RESPONSIBILITY and Unaudited 1st Quarterly Report 2020.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

For the last five (5) years, there have been no disagreements with the independent accountants on any matter of accounting principles or practices, financial statement disclosures or auditing scope or procedure. (Please see discussion on page 15 of the Information Statement Item 7 – Independent Public Accountant, Audit and Audit-Related Fees.

Description of Business

Item 1 - Business Development

Seafront Resources Corporation (the “Company”) was registered with the Securities and Exchange Commission (SEC) on April 16,1970asanoilexplorationandproductioncompany. OnOctober18,1996,theCompanyamendeditsArticlesofIncorporation which provides for the revision of its primary purpose from engaging in the business of oil exploration and production into a holding company and to include oil exploration and production business as one of its secondary purposes.

The Companyimplemented a quasi-reorganization plan whereby(a)its authorized capital stockwas decreasedfromP800 Million divided into 800 Million shares, to P388 Million divided into 388 Million shares, both at par value of P1; and (b) its issued and subscribed capital stock were decreased from P575 Million to P163 Million applied proportionately for all stockholders. The reduction surplus resulting from the quasi-reorganization was used to offset the Company’s deficit as of December 31, 1997. The quasi-reorganization plan was approved by the SEC on October 5, 1998.

The registered office address of the Company is 7th Floor, JMT Building, ADB Avenue, Ortigas Center, Pasig City.

The Company’s shares of stocks are listed and are currently traded at the Philippine Stock Exchange.

Business of Issuer

A. Investments in Financial Assets at Fair Value through Profit and Loss (FVTPL) (Note 8 of the AFS) The Company maintains a portfolio of investments in stocks traded in the Philippine Stock Exchange and investment in Government Securities. These financial assets at FVTPL are carried at fair value as follows:

2019

Listed securities: Equity securities P =45,288,418 P =44,850,901

B. Investment in Financial Assets at Fair value through other comprehensive income (FVOCI) (Note 8 of the AFS) Financial assets at FVOCI consist of quoted and unquoted shares of stock held for long-term investment purposes and are carried at fair value. The carrying values of these investments are as follows:

Listed equity securities: PetroEnergy Resources Corporation (PERC) P =15,789,774 P =13,479,075 Benguet Corporation 2,833,593 3,761,406 18,623,367 17,240,841

Non-listed equity security: Hermosa Ecozone Development Corporation (HEDC) 517,176,832 406,063,952 Subscriptions payable to HEDC - (12,353,884) 517,176,832 393,710,068 Investment

Investment in HEDC

On January31, 1997, the Company entered into a Project Shareholders’ Agreement with five other companies led by Investment and Capital Corporation of the Philippines and Penta Capital Investment Corporation to develop 500 to 600 hectares of raw land in Hermosa, Bataan into a new township consisting of industrial estates, residential communities, a golf and country club and a commercial center.

As of December 31, 2018, the Company has outstanding subscriptions payable to HEDC which amounted P =12.35 million. The subscriptions payable are due on demand. Investment in HEDC, is presented in the statement of financial position at fair value net of subscription payable. On January 26, 2019, the Company has paid up all the subscription payable to HEDC.

The fair value of investment in HEDC is determined using the adjusted net asset method wherein the assets of HEDC consisting mainlyof parcels ofland are adjustedfromcosttoitsfairvalue.The valuation oftheparcels of land wasperformed bya Securities and Exchange Commission - accredited independent valuer as at December 31, 2019 and 2018. This measurement falls under Level 3 in the fair value hierarchy.

Fair value measurement disclosures for the determination of fair value of unquoted equity securities are provided in Note 14 of the AFS.

Transaction with and/or dependence on related parties

Not applicable

Percentage of sale or revenue and net income contributed by foreign sales

Revenues which are mainly from the unrealized gains on market value changes of FVPL, interest income, dividend and rental income are denominated in Pesos. There are no revenues from foreign sales.

Total number of employees

The Company has no employees; PERC provides administrative, accounting and legal services to the Company. The Company does not anticipate any special undertaking that would warrant hiring some people for regular employment.

Competition

The Company itself has no competitor because it is a holding company. Its major investment, HEDC has competitors such as Clark Development Corporation, Subic Gateway Park and other nearby industrial zones.

Patent, trade, copyright, licenses and etc.

The Company has no existing patents, trademarks, copyrights, licenses, franchises, concessions or royalty agreements.

Research and development activities

No amount of moneywas spent for development activities for the last three fiscal years. The Companydoes not intend to acquire additional properties in the next twelve (12) months. However, the Company can sustain its need for operating expenses in the ordinary course of business.

Products

The Company has its investments in stocks (as discussed in the “Business of the Issuer”) as its principal product. Total revenue as of December 31, 2019 amounted to P34.646 million, bulk ofwhich isfrom the dividend income from the investment in HEDC. Otherthan discussed, the Companyhas no principal product which contributes10%ormore to sales orrevenues. No government approval is needed for its principal product.

Risk Factors

Political, Economic and Legal Risks in the Philippines

The Philippines has, from time to time, experienced military instability, mass demonstrations, and similar occurrences, which have led to political instability. The country has also experienced periods of slow growth, high inflation and significant depreciationofthePeso. Theregionaleconomiccrisiswhichstartedin1997negativelyaffectedthePhilippineeconomyresulting in the decline of the Peso, higher interest rate, increased unemployment, greater volatility and lower value of the stock market, lower credit rating of the country and the reduction of the country’s foreign currency reserves. There has also been growing concerns about the unrestrained judicial intervention in major infrastructure project of the government.

There is no assurance that the political environment in the Philippines will be stable and that current or future governments will adopt economic policies conducive to sustained economic growth.

The general political situation in and the state of the economy of the Philippines may influence the growth and profitability of the Company. Any future political or economic instability in these countries may have a negative effect on the financial results of the Company.

Equity Partnership Risk

The Company entered into a Project Shareholder’s Agreement with five (5) other companies led by Investment and Capital Corporation of the Philippines and Penta Capital Investment Corporation to develop 500-600 hectares of raw land in Hermosa, Bataan. Into a township consistingof industrial estates, residential communities, a golf and countryclub and a commercial center. This situation may involve special risks associated with the possibility that the equity partner (i) may have economic or business interests or goals that are inconsistent with those of the Company; (ii) take actions contrary to the interests of the Company; (iii) be unable or unwilling to fulfill its obligations under the Project Shareholder’s Agreement; or (iv) experience financial difficulties. These conflicts may adversely affect the Company’s operations. To date, the Company has not experienced any significant problems with respect to its equity partners.

Financial Risk Management Objectives and Policies (Note 14 of AFS)

The Company’s financial instruments comprise cash and cash equivalents, receivables, financial assets, accounts payable and accrued expenses and subscriptions payable. The main purpose of these financial instruments is to fund its own operations and capital expenditures. The BOD reviews and approves policies for managing these risks. Also, the Audit Committee of the BOD meets regularly and exercises oversight role in managing these risks.

Financial Risks

The main financial risks arising from the Company’s financial instruments are liquidity risk, market risk and credit risk.

a. Liquidity Risk

Liquidity risk is the risk that the Company is unable to meet its financial obligation when due. The Company has substantial investments in shares of stock which are not listed in the Philippine Stock Exchange and may not be readily convertible to liquid assets necessary to meet any potential additional liquidity requirements of the Company. Investments in unquoted equity securities classified as financial assets at FVOCI amounted to P517.18 million and P393.71 million, net of subscription payable, as of December 31, 2019 and 2018, respectively

The Company monitors its cash position and overall liquidity position in assessing its exposure to liquidity risk. The Company maintains a level of cash and cash equivalents deemed sufficient to finance operations and to mitigate the effects of fluctuation in cash flows.

The Company’s accounts payable and accrued expenses are all settled on a monthly basis.

Please refer to Note 14 of the AFS for the maturity profile of the Company’s financial assets and liabilities

b. Market Risk

Market risk is the risk of loss on future earnings, on fair values or on future cash flows that may result from changes in market prices. The value of a financial instrument may change as a result of changes in interest rates, foreign currency exchanges rates, commodity prices, equity prices and other market changes. The Company’s market risk emanates from its holdings in debt and equity securities.

The Company closely monitors the prices of its debt and equity securities as well as macroeconomic and entity-specific factors which could directly or indirectly affect the prices of these instruments. In case of an expected decline in its portfolio of equity securities, the Company readily disposes or trades the securities for replacement with more viable and less risky investments

Equity Price Risk

The Company closely monitors the prices of its debt and equity securities as well as macroeconomic and entity-specific factors which could directly or indirectly affect the prices of these instruments. In case of an expected decline in its portfolio of equity securities, the Company readily disposes or trades the securities for replacement with more viable and less risky investments.

Such investment securities are subject to price risk due to changes in market values of instruments arising either from factors specific to individual instruments or their issuers, or factors affecting all instruments traded in the market.

Interest Rate Risk

The Company’s exposure to market risk for changes in fixed interest rates relates primarily to the Company’s money market placements and debt securities.

There is no other impact on the Company’s equity other than those already affecting net income.

c. Credit Risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. With respect to credit risk arising from cash and cash equivalents, receivables, financial assets at FVTPL and financial assets at FVOCI, the Company’s exposure to credit risk is equal to the carrying amount of these instruments. The Company limits its credit risk on these assets by dealing only with reputable counterparties.

For cash and cash equivalents, the Company applies the low credit risk simplification where the Company measures the ECLs on a 12-month basis based on the probability of default and loss given default which are publicly available. The Companyalso evaluates the credit ratingof thebankand otherfinancial institutions to determinewhetherthe debt instrument has significantly increased in credit risk and to estimate ECLs.

The Company considers its cash and cash equivalents as high grade since these are placed in financial institutions of high credit standing. Accordingly, ECLs relating to these debt instruments rounds to nil.

The Company’s receivables are aged current as of December 31, 2019 and 2018. No receivables are considered creditimpaired.

As of December 31, 2019 and 2018, the carrying values of the Company’s financial instruments represent maximum exposure as of reporting date.

Please refer to Note 14 of the AFS for the maximum credit risk exposures on the financial instruments.

Capital Management (Note 15 of the AFS)

The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholders’ value.

The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares.

The Company monitors capital using a debt-to-equity ratio, which is total debt divided by total equity. The Company includes within total debt the following: accounts payable and accrued expenses and subscriptions payable. Total equity includes capital stock, net unrealized gains (losses) on financial assets at FVOCI and retained earnings (deficit).

The Company has no externally imposed capital requirements as of December 31, 2019 and 2018.

The table below demonstrates the debt-to-equity ratios of the Company as of December 31, 2019and 2018:

There were no changes in the objectives, policies or processes for the years ended December 31, 2019 and 2018.

Item 3 - Legal Proceedings

There are no pending legal proceedings to which the Company is party or which any of its property is the subject.

Item 4 - Submission of Matters to a Vote of Security Holders

There were no matters submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.

PART II – SECURITIES OF THE REGISTRANT

Item 5 – Market for Registrant’s Common Equity and Related Stockholders Matters

a) Market Price of and Dividends on Registrant’s Common Equity and Related Stockholder Matters

1. Market Information

Stock Market Price and Dividend on Registrant’s Common Equity (last 2 years).

The Company’s common equity is traded in the Philippine Stock Exchange

2. Holders

As of March 31, 2020, the Company has 4,706 stockholders.

Hereunder is the list of the top 20 Stockholders as of 31 March 2020:

1. PCD Nominee

2. Pan Malayan Mgnt & Inv.

5

6.

7. Yuchengco, Alfonso T.

8.

9. China

10. China Banking Corporation T/A-SCA-#0012

13. Pacific Basin Sec. Co., Inc.

14. Floreindo, Antonio O.

16. A.T. Yuchengco, Inc.

17. Pua Yok Bing

18. Reyes, Vicenta S.

Note:1. None of the holders of the Company’s common shares registered under the name of PCD owns more than 5% of the Company’s common shares.

2. The corporate acts of PMMIC are carried out by its Board of Directors and Management. Ms. Helen Y. Dee is the current Chairman of the Company.

3. The corporate acts of Alsons Consolidated Resources Inc. are carried out by its Board of Directors. Mr. Tomas I. Alcantara is the current President of the Company.

4. CBC T/A-SSC#0010 and T/A-SSC#0011 are Trust Accounts between China Banking Corporation as Trustee. The Corporate acts of CBC are carried out by its Board of Directors and Management. Mr. William C. Whang is the current CBC President and CO

3. Dividends

In accordance with the Corporation Code of the Philippines, the Company intends to declare dividends (either in cash or stock or both) in the future. Shareholders of the Company are entitled to receive a proportionate share in cash dividends that maybe declared by the Board of Directors out of surplus profits derived from the Company’s operations. The same right exists with respect to a stockdividend, the declaration of which is subject to the approval of stockholders representing at least two-thirds (2/3) of the outstanding shares entitled to vote. The amount of dividend will depend on the Company’s profits and its capital expenditure and investment requirements at the relevant time.

The Company did not declare any cash or stock dividends in the last two (2) fiscal years 2019 and 2018.

The last stock dividend (15%) was paid in 1997. Prior to 1997, the last cash/stock dividend paid was in 1990.

4. Recent sale of Unregistered Securities

There was no sale of unregistered securities for the past three years.

5. Minimum Public Ownership

The Company is compliant with the required Minimum Public Ownership of at least 10% of the total issued and outstandingcapitalstock, asmandatedbySection 3, Article XVlll of the ContinuingListingRequirements oftheListing and Disclosure Rules. As of March 31, 2020, the Company’s public float was 81.30%.

b) Description of Registrant`s Securities

1. Common Stock

The details of the Company’s capital stock are as follows:

6. Debt Securities - Not Applicable

7. Stock Options - Not Applicable

PART 111 - FINANCIAL INFORMATION

Item 6 - Management’s Discussion and Analysis or Plan of Operation

Management’s Discussion and Analysis of Financial Conditions and Results of Operations

1. Financial Condition (As of December 31, 2019and 2018)

LIABILITIES AND EQUITY

Total assets amounted to P630.211 million and P485.126 million as of December 31, 2019 and December 31, 2018, respectively. The net increase is mainly due to the increase in fair value re-measurement of the investment in HEDC shares based on current market valuation (of the land held for sale of HEDC) and income generated during the period.

The Company’s cash and cash equivalents amounted to P43.037 million and P10.402 million as of December 31, 2019 and 2018, respectively. The 313.72% net increase was due to proceeds from dividend income during the year, net of payment of subscriptions payable and other working capital requirements during the period.

Financial assets at fair value through profit or loss amounted to P45.288 million and P44.851 million as of December 31, 2019 and as of December 31, 2018, respectively. The minimal change of 0.98% is due to net market value movements in the market values of investments in stocks traded at PSE.

Receivables account as of December 31, 2019 amounted to P0.407 million as compared to December 31, 2018 of P12.538 million. The 96.76% decrease mainly pertains to collection of HEDCs dividend declaration on August 2018; payable on January 2019.

Other current assets consists of prepayments, prepaid taxes and input tax carry-overs. This amounted to P1.069 million and P0.982 million as of December 31, 2019 and 2018, respectively. The 8.85% net increase in this account mainly represents additional input taxes recorded during the period.

Financial Assets at fair value through other comprehensive income account as of December 31, 2019 amounted to P540.410 million as compared to December 31, 2018 of P416.353 million. The net increase pertains to the upward adjustment of the revaluation of the investment in HEDC (please refer to Note 8 of the 2019 AFS).

Accounts payable and accrued expenses amounted toP0.583 million and P0.655 million as of December 31, 2019 and December 31, 2018, respectively. The 11.03% net decrease in this account is due to lower accrual of professional fees and other expenses during the period.

The Company recognized deferred tax liability amounting to P62.568 million and P45.901 million. The increase is due to the additional set-up of Deferred tax liability associated with the increase in the revaluation of the investment in HEDC, more particularly, the related 15% capital gains tax should there be any sale of HEDC shares. HEDC shares are not traded in the PSE, and thus, any gain on sale of such shares would be subject to 15% capital gains tax.

Total Stockholders’ Equity as of P567.060 million or P3.48/share book value as compared to December 31, 2018 of P438.570 million or P2.69 book value per share.

2. Results

of Operations (For the years ended December 31, 2019, 2018and 2017)

gains onfair value changes

COST AND EXPENSES

The Company posted a net income of P32.42 million or P0.1989/share as of December 31, 2019 as compared to net loss of P6.857 million in December 31, 2018. The upturn in the bottom-line figure is mainly due to the positive movements of the market values of the investments in stocks traded in the PSE and higher dividend received from investment in HEDC.

The significant increase in dividend income from P12.886 million as of December 31, 2018 to P33.464 million in 2019 is mainly due to higher cash dividend declaration of HEDC’s during the period.

The changes in market values (of investment in stocks at FVPL) amounted to net gain of P0.437 million as of December 31, 2019 as compared to net loss of P17.994 million loss as of December 31, 2018, respectively. The upturn is mainly due to the positive movements of the market values of the investments in stocks traded in the PSE.

Interest income amounted to P0.416 million and P0.118 as of December 31, 2019 and December 31, 2018, respectively. The increase is attributed to higher interests from the RCBC trust account during the year.

Other income as of December 31, 2019 and 2018 pertains to recurring service income for accounting services rendered by the Company to HEDC and rental income.

General and administrative expenses amounted to P2.216 million and P2.217 million as of December 31, 2019 and December 31, 2018, respectively

Provision for income tax pertains to the Minimum Corporate Income Tax (MCIT) set-up. The Company set-up MCIT rather than the 30% regular tax because most of its income are from unrealized market changes of investments and passive income subject to final tax.

3. Financial Conditions (As of December 31, 2018 and 2017)

Total assets amounted to P485.126 million and P501.589 million as of December 31, 2018 and December 31, 2017, respectively. The decline is mainly due to the fair value re-measurement of the investment in HEDC shares based on current market valuation (of the land held for sale of HEDC).

The Company’s cash and cash equivalents amounted to P10.402 million and P8.652 million as of December 31, 2018 and 2017, respectively. The 20.23% net increase was due to maturity of investment in Government Security which were previously accounted under Investment in AFS.

Financial assets at fair value through profit or loss amounted to P44.851 million and P62.845 million as of December 31, 2018 and as of December 31, 2017, respectively. The 28.63% net decrease is due to downward movement in the market values of investments in stocks traded at PSE.

Receivables account as of December 31, 2018 amounted to P12.538 million compared to P0.262 million as of December 31, 2017. The P12.27 million increase pertains to HEDCs dividend declaration on August 2018; payable on January 2019.

Other current assets consists of prepayments, prepaid taxes and input tax carry-overs. This amounted to P0.982 million and P0.900 million as of December 31, 2018 and 2017, respectively. The 9.05% net increase in this account mainly represents additional input taxes recorded during the period.

Financial Assets at fair value through other comprehensive income account as of December 31, 2018 amounted to P416.353 million as compared to December 31, 2017 of P428.930 million. The net decrease pertains to the downward movement of the investment in stocks.

Accounts payable and accrued expenses amounted to P0.655 million and P0.711 million as of December 31, 2018 and December 31, 2017, respectively. The 7.87% net decrease in this account is due to lower accrual of professional fees and other expenses during the period.

The Company recognized deferred tax liability amounting to P45.901 million and P45.730 million relative to the 15% deferred tax on unrealized gains on untraded shares of stock classified as AFS financial assets.

Total Stockholders’ Equity as of December 31, 2018 amounted to P438.570 million or P2.69 book value per share as compared to December 31, 2017 of P455.149 million or P2.79 book value per share.

4. Results of Operations (For the years ended December 31, 2018 and 2017)

The Company posted a net loss of P6.857 million in December 31, 2018 as compared to net income of P14.672 million or P0.09 earnings per share as of December 31, 2017. The downturn in the bottom-line figure is mainly due to the negative movements of the market values of the investments in stocks traded in the PSE.

The significant increase in dividend income from P0.295 million in 2017 to P12.886 million in 2018 is mainly due to HEDC’s declaration of Dividends in August 2018, payable January 2019, none in 2017.

Interest income amounted to P0.118 million and P0.097 as of December 31, 2018 and December 31, 2017, respectively. The increase is attributed to higher interests from the RCBC trust account during the year.

Other income as of December 31, 2018 and 2017 pertains to recurring service income for accounting services rendered by the Company to HEDC and rental income.

The changes in market values (of investment in stocks at FVPL) amounted to net loss of P17.994 million loss and net gain of P15.387 million as of December 31, 2018 and 2017, respectively. The downturn is mainly due to the negative movements of the market values of the investments in stocks traded in the PSE.

General and administrative expenses amounted to P2.217 million and P1.452 million as of December 31, 2018 and December 31, 2017, respectively. The 52.71% increase is due to payment of the Company’s share in the Plug and Abandonement (P&A) of TARA South-1 Well that the Department of Energy required for funding. As a result, SRC paid its original corresponding share in the P&A amounting to $13,702.41 (P735,545).

Provision for income tax pertains to the Minimum Corporate Income Tax (MCIT) set-up. The Company set-up MCIT rather than the 30% regular tax because most of its income are from unrealized market changes of investments and passive income subject to final tax.

5. Financial Conditions (As of December 31, 2017 and 2016)

Total assets amounted to P603.559 million as of December 31, 2017 compared to P209.974 million as of December 31, 2016. The significant increase is mainly due to the fair value re-measurement of the investment in HEDC shares based on current market valuation (of the land held for sale of HEDC).

The Company’s cash and cash equivalents amounted to P8.652 million and P11.725 million as of December 31, 2017 and 2016, respectively. The 26.21% net decrease was due to incurred expenses for the year and additional investment in Government Securities.

Financial assets at fair value through profit or loss amounted to P62.845 million and P47.454 million as of December 31, 2017 and as of December 31, 2016, respectively. The 32.43% net increase is due to positive movement in the market values of investments in stocks traded at PSE.

Receivables account as of December 31, 2017 amounted to P0.262 million compared to P0.314 million as of December 31, 2016. The 16.58% net decline accounts for the collection of outstanding receivables.

Other current assets consists of prepayments, prepaid taxes and input tax carry-overs. This amounted to P0.900 million and P0.826 million as of December 31, 2017 and 2016, respectively. The 8.97% net increase in this account mainly represents additional input taxes recorded during the period.

AFinancial assets at fair value through other comprehensive income account as of December 31, 2017 amounted to P428.930 millionas compared to P149.655 million in 2016.The bulkofthe increase pertains to the fair value measurement of the HEDC shares. The Company recognized an additional P270.566 million unrealized gain on fair value changes of the investment in Hermosa.

Accounts payable and accrued expenses amounted to P0.711 and P0.564 million as of December 31, 2017 and December 31, 2016, respectively. The 26.10% net increase in this account is due to higher accrual of professional fees and other expenses.

The Company recognized deferred tax liability amounting to P61.03 million relative to the 15% deferred tax on unrealized gains on untraded shares of stock classified as AFS financial assets.

Total Stockholders’ Equity as of December 31, 2017 amounted to P455.149 million or P2.79 book value per share as compared to P209.411 million or P1.285 book value per share as of December 31, 2016.

6. Results of Operations (For the years ended December 31, 2017 and 2016)

The Company posted a net income of P14.672 million or P0.09 earnings per share as of December 31, 2017 as compared to P6.301 million or earnings per share of P0.0387 as of December 31, 2016.

Net gains in the changes in market values (fair value changes in on financial assets at fair value through profit or loss investments) amounted to P15.387 million and P6.804 million as of December 31, 2017 and 2016, respectively. The 126.16% net increase pertains to positive market value changes in the investments in stocks traded in the PSE.

Dividend income declined from P0.353 million in 2016 to P0.295 million in 2017. The 16.61% decline is mainly due to lower dividends declared from the investments in stocks during the period.

Interest income amounted to P0.097 million and P0.125 million as of December 31, 2017 and December 31, 2016, respectively. The decline is attributed to lower balance of the reinvested cash equivalents.

Other income as of December 31, 2017 and 2016 pertains to recurring service income for accounting services rendered by the Company to HEDC and rental income.

General and administrative expenses amounted to P1.452 million and P1.326 million as of December 31, 2017 and December 31, 2016, respectively. The 9.46% increase is due to higher expenses during the period.

Provision for income tax pertains to the Minimum Corporate Income Tax (MCIT) set-up. The Company set-up MCIT rather than the 30% regular tax because most of its income are from unrealized market changes of investments and passive income subject to final tax.

Except for items discussed above, there are no more changes in the financial statements that will reach the materiality threshold of 5%.

There are no known trends, demands, commitments, events or uncertainties that will have material impact on the Company’s liquidity.

There are no events that will trigger direct or contingent financial obligation that is material to the company, including default or acceleration of an obligation.

There are no material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the company with unconsolidated entities or other persons created during the period.

As of December 31, 2019, there are no material commitments for capital expenditures.

There are no known trends, events or uncertainties that has material impact on sales.

Aside from discussed above, there are no other significant elements of income or loss.

The causes of the material changes from period to period of the financial statements, using the horizontal and vertical analysis are discussed above. Aside from those discussed, there are no other items that reached the material threshold of 5%.

There are no seasonal aspects that has material effect in the financial statements

The Philippine economy is still affected by economic crisis, resulting in fluctuating foreign exchange rates and increase stock market uncertainties. Uncertainties remain as to whether the country will continue to be affected by regional trends in the coming months. The financial statements do not include any adjustments that might result from these uncertainties. Related effects will be reported in the financial statements, as they become known and estimable.

Key Performance Indicators

Please refer to the attached Financial Soundness Indicators

Plan of Operations

A. Investment in Financial Assets at FVOCI not traded in the market (Investment in HEDC)

As of December 31, 2019the Company holds 11.3% interest in its investment in Hermosa Development Corporation (HEDC).

The Management of HEDC is taking all efforts to sell portion of its saleable property, proceeds of which will be used to finance the development of the undeveloped portions of the property.

B. Investment in Financial Assets at FVPL and FVOCI traded in the market

The Company will continue to closely monitor the prices of its securities as well as those specific factors which could directly or indirectly affect the prices of these instruments. Because such investments are subject to price risk due to changes in market values, an expected decline in the portfolio will prompt the Company to dispose or trade the securities for replacement with more viable and less risky investments in the future.

With the Company’s current cash position, it can sustain its needs for its operating expenses. Its onlypossible material commitment is a cash call from HEDC, of which is not expected to call in the next twelve months. Thus, it does not intend to raise additional funds.

Aside fromthe Company’s investments stated above, there are no other researches ordevelopment plans, and purchase or sale of significant equipment that the Company expects perform.

Commitments

The only material commitment of the Company is the balance on its subscription to HEDC in the amount of P12.354 million. This was called and settled by the Companyin the 1st quarter 2019. Aside fromthe subscription payable to HEDC, therearenoknowntrends,demands,commitments,eventsoruncertaintiesthat will have materialimpactontheCompany’s liquidity.

Discussion of indicators of the Company’s level of performance

Receivable Management

The Company manages its receivables by monitoring on a regular basis to ensure timely execution of necessary intervention efforts.

Bulk of the receivables as of December 31, 2019 pertains to the dividends receivable and accrued interest receivable/.

Liquidity management

The Company has substantial investments in shares of stock which are not listed in the Philippine Stock Exchange and may not be readily convertible to liquid assets necessary to meet any potential additional liquidity requirements of the Company. Investment in unquoted securities included in financial assets at FVOCI amounted to P517.176 million and P393.710 million as of December 31, 2019 and 2018.

Management of liquidity requires a flow and stock perspective. Constraint such as political environment, taxation, foreign exchange, interest rates and other environmental factors can impose significant restrictions on firms in management of their financial liquidity.

Seafront has considered the above factors and paid special attention to its cash flow management. The Company identifies all itscashrequirements for a certainperiod and invests unrestricted funds to maximize interest earnings, i.e. moneymarket placements.

Rate of return of each stockholder

The company has no existing dividend policy. However, the Company intends to declare dividends in the future out of its unrestricted retained earnings accordance with the Corporation Code of the Philippines.

Cost-reduction effort

In order to minimize expenses, the Company has engaged the services of PetroEnergy Resources Corporation to handle its legal, administrative, accounting and treasury functions.

Item 7 - Financial Statements

The 2019Audited Financial Statements (AFS) and Supplementary Schedules of the Company are incorporated herein by reference.

Item 8 - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

As of December 31, 2019, there are no disagreements with Accountants on Accounting and Financial Disclosure.

PART IV – MANAGEMENT AND CERTAIN SECURITY HOLDERS

Please refer to page 9 to page 12 of the Information Statement for the discussion on the identity of each of Company’s directors and executive officers, their principal occupation or employment, the name of the principal business of any organization by which such directors and executive officers are employee.

PART V – CORPORATE GOVERNANCE

Compliance with Leading Practices on Corporate Governance

a. Evaluation System to Determine Compliance with Manual of Corporate Governance – The Company’s Board of Directors and management substantially adheres to and complies with the principles and best practices contained in itsManualonCodeofCorporateGovernance. The CompanyisadoptingtheIntegrated Annual CorporateGovernance Report, pursuant to the Code of Corporate Governance for Publicly-listed Companies (CG Code for PLCs), as an evaluation system for the company to measure or determine the level of compliance of the Board of Directors and top management with its Manual of Corporate Governance.

b. Measures Undertaken/to be undertaken to Comply with Leading Practices on Corporate Governance – Among the measures undertaken/to be undertaken to comply the Company’s Manual of Corporate Governance, are as follows:

1. The attendance of each Director in the scheduled meetings of the Board of Directors is monitored and recorded

2. The Company has Committee on Audit/Board Risk Oversight Committee (BROC) and Corporate Governance Committee under the CG Code for PLCs.

3. The financial reports and reports of operations are thoroughly reviewed by the external auditor before these are released to shareholders, the SEC and PSE.

c. Deviation fromthe Company’s Manual of Corporate Governance - There is no deviation from the Company’s Manual of Corporate Governance.

d. Plan to Improve Corporate Governance – The Company updated its Manual as mandated by SEC Memorandum Circular No. 19, series of 2016, based on the CG Code for PLCs and will, as far as they are practicable and relevant to the Company, adopt the recommendations therein. The Company will likewise accomplish and submit the Integrated Annual Corporate Governance Report.

1. Assets subject to Lien and Restrictions on Sales of Assets

As of December 31, 2019, there were no assets mortgaged, pledged or otherwise subject to lien.

2. Subsequent Events

There were no subsequent events that required adjustments on the December 31, 2019 Audited Financial Statements.

3. Defaults - None

4. The following are not applicable in the preparation of this report.

a. Adjustments made that lead to the revenue recognition but which adjustments cannot be properly supported.

b. Changes in estimates without proper disclosure which have the impact of improving results of operations.

c. Non-application or misapplication of accounting principles and standards, misstatements, omissions, etc.

d. Other cases involving accounting and auditing matters resulting to possible concealment of a fraud or the creation of a risk for the commission of fraud.

5. Schedule of Receivable account – please refer to the 2019AFS, Note 9

6. Breakdown of Accounts payable and accrued expenses

Accounts payable and accrued expenses

7. As of December 31, 2019, the Corporation has no receivables from any officer, directors, employees, related parties and principal stockholders.

8. The Company has no liability guaranteed by others.

9. There were no assets pledged against secured liabilities.

CERTIFICATION OF INDEPENDENT DIRECTOR

SEAFRONT RESOURCES CORPORATION

Procedures and Requirements for Voting and Participation in the 2020 Annual Stockholders’ Meeting

To conform with the Government’s regulations on social distancing and prohibition on mass gatherings and to protect the safety of its stockholders during the COVID-19 pandemic crisis, Seafront Resources Corporation (the “Company”) will dispense with the physical attendance of its stockholders for the 2020 Annual Stockholders’ Meeting (ASM). Instead, the Company will conduct the 2020 ASM scheduled on July 27, 2020 at 10:00 AM by remote communication and will conduct electronic voting in absentia.

Only stockholders of record as of June 10, 2020 are entitled to participate and vote in the 2020 ASM.

The Company has adopted the following procedures and requirements to enable its stockholders to participate and vote in the 2020 ASM:

I. ONLINE REGISTRATION STEPS AND REQUIREMENTS

A. Stockholders may register from 9:00 AM of July 6, 2020 until 5:00 PM of July 17, 2020 to signify his/her/its intention to participate in the 2020 ASM by remote communication. The registration steps and requirements are available through the following link: http://seafrontresources.com.ph/investor_relations

B. To register, stockholders shall submit thefollowing requirements to the Office of the Corporate Secretaryvia email at asm@seafrontresources.com.ph:

B.1. For Individual Stockholders:

(i) Scanned valid government issued identification card; (ii) Valid email address and active contact number;

B.2. For Stockholders with Joint Accounts:

(i) Authorization letter signed by all stockholders indicating the name of the person authorized to cast the votes;

(ii) Valid email address and active contact number of the authorized stockholder; (iii) Scanned copy of valid government-issued identification card of the authorized stockholder;

B.3. For Stockholders under PCD Participant/Brokers Account or holding ‘Scripless Shares’:

(i) Broker’s Certification on the stockholder’s number of shareholdings; (ii) Valid email address and active contact number of the stockholder; (iii) Scanned copy of valid government-issued identification card of stockholder; and

B.4. For Corporate Stockholders:

(i) Secretary’s Certificate attesting to the authority of the representative to vote the shares on behalf of the corporate stockholder;

(ii) Valid email address and active contact number of authorized representative; and (iii) Valid government-issued identification card of authorized representative.

C. The documents submitted will then be verified by the Office of the Corporate Secretary with the assistance of the Stock Transfer Agent. The validation process will be completed by the Company no later than three (3) business days from the stockholder’s receipt of an email from the Company acknowledging receipt of the stockholder’s registration documents. Once validated, the stockholder will receive an email that his/her/its account has been verified and shall be provided instructions for the stockholder’s access to the Company’s electronic voting and to access the ASM livestreaming link.

II. ELECTRONIC VOTING IN ABSENTIA

A. Duly registered stockholders have the option to vote for the matters contained in the agenda for the 2020 ASM through electronic voting in absentia. The deadline for registration is 5:00 PM of 17 July 2020. Beyond this date, stockholders may no longer avail of the option to electronically vote in absentia.

B. After verification, the Company shall send a ballot to the registered stockholder through his/her/its e-mail address which shall contain all the agenda items for approval as indicated in the Notice of Meeting and the registered stockholder may vote as follows:

(1) For items other than Election of Directors, the registered stockholder has the option to vote: In Favor of, Against, or Abstain. The vote is considered cast for all the registered stockholder’s shares.

(2) For the Election of Directors, the registered stockholder may vote for all nominees, not vote for any of the nominees, or vote for some nominees only, in such number of shares as preferred bythe stockholder, provided that the total number of votes cast shall not exceed the number of shares owned, multiplied by the number of directors to be elected. The total number of votes the stockholder is allowed to cast shall be based on the number of shares he/she or it owns.

(3) Once voting on the agenda items is finished, the stockholder can proceed to submit the accomplished ballot via email to asm@seafrontresources.com.ph

(4) After the ballot has been submitted, the stockholder may no longer change his/her vote. The stockholder will receive a confirmation email that his/her/its vote has been recorded.

C. Thereafter, the Office of the Corporate Secretary and the Transfer Agent, shall tabulate all valid and confirmed votes cast through electronic voting, together with the votes through proxies.

D. Registered stockholders shall have until 5:00 PM of 17 July 2020 to cast their votes in absentia. Stockholders will not be allowed to cast votes during the livestream of the 2020 ASM.

III. VOTING BY PROXY

A. ForindividualstockholdersholdingcertificatedsharesoftheCompany –Downloadtheproxyformthatisavailable at http://seafrontresources.com.ph/investor_relations

B. For stockholders holding ‘scripless’ shares, or shares held under a PCD Participant/Broker – Download the proxy form that is available at http://seafrontresources.com.ph/investor_relations. Stockholders are advised to coordinate with their brokers first for the execution of this type of proxy.

C. For corporate stockholders - Download the proxy form that is available at http://seafrontresources.com.ph/investor_relations. A copyof the dulysigned and notarized Secretary’s Certificate must be submitted together with the proxy form.

D. General Instructions on Voting by Proxy:

(1) Download and fill up the appropriate proxy form. Follow the instructions on how to cumulate or allocate votes in the election of directors.

(2) Send the scanned copy of the duly executed proxy form via email to corporate secretary via asm@seafrontresources.com.ph or submit the original proxy form to the Office of the Corporate Secretary at 7th Floor, JMT Building, ADB Avenue, Ortigas Center, Pasig City.

(3) Deadline for the submission of proxies is at 5:00 PM of 17 July 2020.

(4) Validation of proxies will be on 17 July 2020.

(5) If a stockholder avails of the option to cast his/her vote electronically in absentia and also issues proxy votes with differing instructions, the duly accomplished ballots sent through e-mail shall replace the proxy votes issued by the stockholder.

IV. PARTICIPATION BY REMOTE COMMUNICATION

A. Only duly registered stockholders will be included in determining the existence of a quorum.

B. Duly registered stockholders may send their questions and/or comments prior to the ASM through email at asm@seafrontresources.com.ph. The deadline for submitting questions shall be at 5:00 PM of 17 July 2020.

C. The proceedings during the 2020 ASM will be recorded. For any clarifications, please contact the Office of the Corporate Secretary via email at asm@seafrontresources.com.ph

SAMPLE

ONLY

PROXY SEAFRONT RESOURCES CORPORATION 2020 STOCKHOLDERS’ MEETING

I/WE hereby name and appoint, _____________________________, or in his absence, the Chairman of the meeting, as my/our proxy at the annual stockholders’ meeting of SEAFRONT RESOURCES CORPORATION. (“SRC”) to be held on 27 July 2020 and/or at any postponement or adjournment thereof, and/or any annual stockholders’ meeting of SRC, which appointment shall not exceed five (5) years from date hereof.

In particular, I hereby direct my said proxy to vote all my shares on the agenda items set forth below as I have expressly indicated by marking the same with an “X”.

Item No. Subject Action

I. Approval of Minutes of the Annual Meeting on May30, 2020

II. Approval of Management Report and the 2019 Audited Financial Statements contained in the 2019 Annual Report

III. Confirmation and Ratification of all acts, contracts and investment made and entered during the period May 30, 2019 to July 27, 2020.

IV. Approval of various Amendments to the By-Laws (see “Item 17” of the Information Statement.

V. Election of Directors for the year 2020-2021

1. Roberto Jose L. Castillo

2. Milagros V. Reyes

3. Nicasio I. Alcantara

4. Ernestine Carmen Jo D. Villareal-Fernando

5. Yvonne S. Yuchengco

6. Raul M. Leopando

7. Medel T. Nera

8. Perry Y. Uy

9. Victor V. Benavidez

VI. Appointment of External Auditors

I am accomplishing this Proxy Form this _____ day of June 2020.

For Against Abstain

PRINTED NAME OF STOCKHOLDER AUTHORIZED

THIS PROXY SHOULD BE SUBMITTED UNTIL 5:00 PM OF 17 JULY 2020, TO THE OFFICE OF THE CORPORATE SECRETARY AT 7th Floor, JMT Building, ADB Avenue, Ortigas Center, Pasig City OR BY EMAIL AT asm@seafrontresources.com.ph. THIS PROXY, WHEN PROPERLY EXECUTED, WILLBE VOTED IN THE MANNER AS DIRECTED HEREIN BY THE STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES AND FOR THE APPROVAL OF THE MATTERS STATED ABOVE AND FOR SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING IN THE MANNER DESCRIBED IN THE INFORMATION STATEMENT. A STOCKHOLDER GIVING A PROXY HAS THE POWER TO REVOKE IT AT ANY TIME BEFORE THE RIGHT GRANTED IS EXERCISED. A PROXY IS ALSO CONSIDERED REVOKED IF THE STOCKHOLDER ATTENDS THE MEETING IN PERSON AND EXPRESSED HIS INTENTION TO VOTE IN PERSON. THIS PROXY DOES NOT NEED TO BE NOTARIZED.

SEAFRONT RESOURCES CORPORATION

2020 STOCKHOLDERS’ MEETING

ELECTRONIC VOTING IN ABSENTIA

B. Dulyregistered stockholders have the option to vote for the matters contained in the agenda for the 2020 ASM through electronic voting in absentia. The deadline for registration is 5:00 PM of 17 July 2020. Beyond this date, stockholders may no longer avail of the option to electronically vote in absentia.

B. After verification, the Company shall send a ballot to the registered stockholder through his/her/its e-mail address which shall contain all the agenda items for approval as indicated in the Notice of Meeting and the registered stockholder may vote as follows:

(1) For items other than Election of Directors, the registered stockholder has the option to vote: In Favor of, Against, or Abstain. The vote is considered cast for all the registered stockholder’s shares.

(2) For the Election of Directors, the registered stockholder may vote for all nominees, not vote for any of the nominees, or vote for some nominees only, in such number of shares as preferred by the stockholder, provided that the total number of votes cast shall not exceed the number of shares owned, multiplied by the number of directors to be elected. The total number of votes the stockholder is allowed to cast shall be based on the number of shares he/she or it owns.

(3) Once voting on the agenda items is finished, the stockholder can proceed to submit the accomplished ballot via email to asm@seafrontresources.com.ph

(4) After the ballot has been submitted, the stockholder may no longer change his/her vote. The stockholder will receive a confirmation email that his/her/its vote has been recorded.

C. Thereafter, the Office of the Corporate Secretaryand the TransferAgent, shall tabulate all valid and confirmed votes cast through electronic voting, together with the votes through proxies.

D. Registered stockholders shall have until 5:00 PM of 17 July 2020 to cast their votes in absentia. Stockholders will not be allowed to cast votes during the livestream of the 2020 ASM.

Item No.

Subject Action

I. Approval of Minutes of the Annual Meeting on May 30, 2020

II. Approval of Management Report and the 2019 Audited Financial Statements contained in the 2019 Annual Report

III. Confirmation and Ratification of all acts, contracts and investment made and entered during the period May 30, 2019 to July 27, 2020.

IV. Approval of various Amendments to the By-Laws (see “Annex B” of the Information Statement.

V. Election of Directors for the year 2020-2021

1. Roberto Jose L. Castillo

2. Milagros V. Reyes

3. Nicasio I. Alcantara

4. Ernestine Carmen Jo D. Villareal-Fernando

5. Yvonne S. Yuchengco

6. Raul M. Leopando

7. Medel T. Nera

8. Perry Y. Uy

9. Victor V. Benavidez

VI. Appointment of External Auditors

For Against Abstain

SEAFRONT RESOURCES CORPORATION

Proposed Amendments to By-laws

Article and Section Nos. From To

Article I, Section 1

Section 1. Certificates of Stock. Each stockholder whose subscription has been fully paid shall be entitled to one or more certificates of stock showing the number of shares registered in his name. It shall be signed by the President and countersigned by the Secretary of the Company and sealed with its corporate seal.Thecertificatesofstockshallbeissuednconsecutiveorder and upon thestub of each certificateshall beentered thenumber of the certificate, date of issue, number of shares, name of stockholders, address and such other pertinent data that may be necessary. The stub shall be signed by the stockholder upon issuance to him of the corresponding certificate and shall be considered, for all purposes of thecorporation,asavalid receipt therefore from the stockholders. The necessary documentary stamps for each certificate of stock shall be borne by the stockholders, purchaser or transferee.

Article I, Section 3 Section 3. Transferof Stock. Certificates of stock maybesold, transferred or hypothecated by endorsement or separate deed, butthecorporation shallnotconsideranytransfereffectiveuntil the endorsed certificate is submitted for cancellation and a new one issued in the name of the transferee.

All certificates submitted for transfer to another name shall be marked “CANCELED” by the Secretary and attached to its corresponding stub whereon the following data shall be shown:

a. The date when the shares were transferred.

b. To whom transferred.

c. Number of shares transferred.

Number or numbers of the new certificate or certificates.

Section 1. Certificates of Stock. Each stockholder whose subscription has been fully paid shall be entitled to a certificate of stock showing the number of shares registered in his name. It shall be signed by the President and countersigned by the Secretary of the Company and sealed with its corporate seal. The certificates of stock shall be issued in consecutive order and upon the stub of each certificate shall be entered the number of the certificate, date of issue, number of shares, nameof stockholders, address and such other pertinent data that may be necessary. The stub shall besigned bythestockholder upon issuancetohim of the corresponding certificate and shall be considered, for all purposes of the corporation, as a valid receipt therefore from thestockholders.Thenecessarydocumentarystampsforeach share issued shall be borne by the stockholders, purchaser or subscriber

Section 3. Transferof Stock Subject to restrictions, terms and conditions contained in the Articles of Incorporation, shares may be transferred, sold, assigned or pledged by delivery of the certificates of stock duly indorsed by the stockholder, his attorney-in-fact or other legally authorized person. The transfer shall be valid and binding on the corporation only upon record thereof in the books of the corporation

All certificates submitted for transfer to another name shall be marked “CANCELLED” by the Secretary and attached to its corresponding stub whereon the following data shall be shown:

a. The date when the shares were transferred.

b. To whom transferred.

c. Number of shares transferred.

d. Number or numbers of the new certificate or certificates.

No share of stock against which the corporation holds unpaid claim shall be transferable in the books of the corporation

Article I, Section 4 Section 4. Lost, Stolen or Destroyed Certificates. Duplicate certificates of stock may be issued, in lieu of any certificate or certificates alleged to have been lost or destroyed only upon compliance with the requirements of the Corporation Code.

Article I, Section 6 Section 6. Inspection of the Stock Book or Register. The Stock Book or Register shall be available for inspection by any stockholder at a reasonable time during the office hours of the corporation.

Article I, Section 7 None

Article II, Section 1 Section 1. Annual Meetings. The annual meetings of the stockholders, for the purpose of electing directors and for the transaction of such business as may properly come before the meeting shall be held in the principal office of the Corporation

Section4.Lost,StolenorDestroyedCertificates.Duplicate certificates of stock may be issued, in lieu of any certificate or certificates alleged to have been lost or destroyed only upon compliance with the requirements of the Revised Corporation Code.

Section 6. Inspection of the Stock Book or Register. The Stock and Transfer Book or Register shall be available for inspection by any stockholder at a reasonable time during the office hours of the corporation.

Section 7. Treasury Shares. The treasury shares of the corporation shall consists of such issued, fully paid and outstanding stock of the corporation as may be donated to it, or otherwise reacquired by it either through purchase, redemption or other lawful means, and shall be held subject to disposal by the Board of Directors or the stockholders as the case may be. Such stock shall neither vote nor participate in dividends while held by the corporation

Section 1. Annual Meetings. The annual meetings of the stockholders, for the purpose of electing directors and for the transaction of such business as may properly come before the

or at any place designated by the Board of Directors in the city or municipality where the principal office of the Corporation is located on any day in May as may be fixed by the board of Directors.

Article II, Section 2 Section 2. Special Meetings. Special meetings of the stockholders may be called at the principal office of the Company at any time by resolution of the Board of Directors, or byorder of thePresident,and mustbecalled uponthewritten request of stockholders registered as the owners of one-third (1/3) of the total outstanding stock.

Article II, Section 3 Section 3. Notice of Meetings. Notices for regular or special meetings of the stockholders may be sent by the Secretary by personal delivery, or by mailing the notice at least fifteen (15) days prior to the date of the meetings to each stockholder of record at his last known post office address, or by publishing the notice in a newspaper of national circulation. The notice shall state the place, date, and hour of the meeting, and in case of a special meeting for the purpose for which the meetings is called. Notice of any meetings may be waived, expressly or impliedly by any stockholder, in person or by proxy, before or after the meetings.

meeting shall be held on any day in June as may be fixed by the board of Directors.

Section 2. Special Meetings. Special meetings of the stockholders may be called at any time by resolution of the Board of Directors, or by order of the President, or upon the written request of stockholders registered as the owners of one-third (1/3) of the total outstanding stock.

Section 3. Notice of Meetings. Notices for regular or special meetings of the stockholders may be sent by the Secretary by personal delivery, by mail, electronic mail, facsimile, or such other manner as may be allowed by the Securities and Exchange Commission (SEC), to each stockholder of record at his last known post office address, or by publishing the notice in a newspaper of general circulation, at least twenty (21)dayspriorto themeeting.Thenoticeshall state the place, date, hour of the meeting, and the purpose for which the meeting is called No failure or irregularity of notice of any regular meetings at which all the stockholders are present or represented without protest or challenge as to the legality or irregularity of said meeting, shall invalidate such meeting or any proceedings thereat Furthermore, notice of any meetings may be waived, expressly or impliedly by any stockholder, in person or by proxy, before or after the meetings.

Article II, Section 4

Section 4. Quorum. Unless otherwise prescribed by the Corporation Law, a quorum at any meeting of the stockholders shall consist of a majority of the subscribed capital stock of the Company represented in person or by proxy, and a majority of such quorum shall decide any question that may come before the meeting, save and except in those several matters in which the laws of the Philippines require the affirmative vote of a greater proportion.

Article II, Section 7 None

Article II, Section 8 None

Article II, Section 9 None

Section 4. Quorum. Unless otherwise prescribed by the Revised Corporation Code, a quorum at any meeting of the stockholders shall consist of a majority of the subscribed capital stock of the Company, whether represented in person or byproxy, or by remote communication or inabsentiaas may be allowed by law A majority of such quorum shall decide any question that may come before the meeting, save and except in those several matters in which the laws of the Philippines, require the affirmative vote of a greater proportion. If no quorum is constituted, the meeting shall be adjourned until the requisite amount of stock shall be present or represented

A stockholder who participates through remote communicationor in absentia shall be deemed presentfor the purpose of determining quorum.

Section 7. Place and Conduct of Meetings. Stockholders meetings, whether regular or special, shall be held in the principal office of the corporation, or in any city in Metro Manila, or at any place designated by the Board of Directors in the city of municipality where the principal office of the corporation is located, or through remote communication which shall include, but is not limited to, teleconferencing, videoconferencing, orotheralternatives modes of communication.

If a stockholder intends to participate in a meeting through remote communication, he/she shall notify in advance the Presiding Officer and/or the Secretary of the Companyof his/herintentionto do so.TheSecretaryshall note such fact in the Minutes of the Meeting

Section 8. Conduct of Meeting. At all meetings of the stockholders, the Chairman of the Board, or in his absence, the President, or in the absence of both the Chairman and the President, a person chosen by the majority in interest of the stockholders of the corporation presentin personorby proxyshall act asChairman of the meeting. The Secretary of the corporation shall act as secretary of all meetings of stockholders, or in his absence, any person appointed by the Chairman of the meeting

Section 9. Proxies. A stockholder entitled to vote at any meeting of stockholders may vote either in person or by proxy, or through remote communication which shall

Article III, Section 3 Section 3. Vacancy. If any vacancy shall occur among the Directors by death, resignation or otherwise, any meeting at which a quorum shall be present. In case of vacancy in the Board, the remaining Directors shall continue to act, but if at any time their number be reduced to less than a quorum, the Directors shall call a special meeting of the stockholders for the purpose of filling such vacancies.

include, but is not limited to, teleconferencing, videoconferencing, or other alternatives modes of communication. Unless otherwise provided in the proxy, such proxy shall be valid only for the meeting for which it is intended. Proxies must be filed with the Corporation's Secretary, Assistant Secretary or transfer agent at least ten (10) calendar days before the meeting. A stockholder may revoke the proxy either by written revocation duly presented to the Secretary, Assistant Secretary, or transfer agent of the corporation at least three days before the day of the meeting or by actual presence at the meeting. The Secretary or a special committee of inspectors composed of the Secretary, Assistant Secretary,and the transfer'sagent representatives should validate the proxies at least five days before the meeting. The decision of the Secretary or the special committee of inspectors on the validity of the proxies shall be final and binding until and unless set aside by a court of competent jurisdiction.

Section3 Vacancy.Anyvacancyorvacanciesoccurring in the Boardof Directorsbyreasonof death,resignation orfor any causeother than removal by thestockholders, may be filled by the vote of at least a majority of the remaining members of the Board, if still constituting a quorum; otherwise, the vacancy must be filled by the stockholders at a regular or at any special meeting of the stockholders called for the purpose. A Director so elected to fill the vacancy shall be electedonly for theunexpired termof his predecessor in office.

When the vacancy prevents the remaining directors from constituting a quorum and emergency action is required to prevent grave, substantial, and irreparable loss or damage to the Corporation, the vacancy may be temporarily filled from among the officers of the Corporation by unanimous vote of the remaining directors. The action by the designated director shall be limited to the emergency action necessary, and the term shall cease within a reasonable time from the termination of the emergency or upon election of the replacement director, whichever comes earlier. The Corporation must notify the Securities and Exchange Commission within three (3) days from the creation of the emergency board, stating therein the reason for its creation

Article III, Section 5 Section 5. Regular Meetings. The Board shall meet regularly once every quarter on such day, at such time and in such place at it may fix.

Article III, Section 6 Section 6. Special Meetings. Special Meetings of the Board of Directors shall consist of a majority of the entire membership of the Board. A majority of such quorum shall decide any question that may come before the meeting.

Section 5 Regular Meetings. The Board shall meet regularly once every quarter on such day, at such time, at the principal office of the corporation, or in any city in Metro Manila, or at such other place as a majority of the directors may designate from time to time, or through remote communication which shall include, but is not limited to, teleconferencing, videoconferencing, or other alternative modes of communication.

Directors may attend Board meetings through teleconference or videoconference or any electronic medium where attendees can participate, including the right to vote on matters for approval of the Board, during themeeting evenifnotphysically present.Boardmeetings through teleconferencing or videoconferencing should comply with the applicable rules and requirements of the Securities and Exchange Commission

Section 6 Special Meetings. Special Meetings of the Board of Directors shall be held in the principal office of the corporation, or in any city in Metro Manila, or at such other places as may be designated in the call, or through remote communication which shall include, but is not limited to, teleconferencing, videoconferencing, or other alternative modesof communication. Themeeting may be called by the President, or by request of a majority of Directors. Such special meetings may be held at any time and place without notice by the unanimous written

Article III, Section 10 Section 10. Disqualification. No person shall qualify or be eligible for nomination or election to the Board of Directors if the Board of Directors, by at least a majority vote of all its members, determines that such person is engaged in or is otherwise connected with any business which is antagonistic and / or inimical to that of the Corporation.

consent of all members of the Board who are present in the Philippines

Directors may attend and vote during Board meetings through teleconference or videoconference or any electronic medium where attendees can participate during the meeting even if not physically present. Board meetings through teleconferencing or videoconferencing shouldcomplywiththeapplicablerulesandrequirements of the Securities and Exchange Commission

Section 10. Disqualification. No person shall qualify or be eligible for nomination or election to the Board of Directors if such person is an antagonistic-competitor of the Corporation, or has interest/s whether directly or indirectly,which is/are disadvantageousor inimical to the Corporation, as may be determined by at least a majority of the Board of Directors, in the exercise of its judgment in good faith. Without limiting the generality of the foregoing, a person shall be deemed to be an antagonisticcompetitor:

i. If he is an employee, officer, manager or controlling person, director, or the owner (either of record or beneficially) of ten percent (10%) or more of any outstanding class of shares, of any corporation [other than one in which the Corporation owns at least thirty percent (30%) of the capital stock], or any entity engaged in a business that the Board of Directors, by at least a majority vote, determines to be competitive or antagonistic to that of the Corporation or any of its subsidiaries or affiliates; or

ii. If he is an employee, officer, manager or controlling person, director, or the owner (either of record or beneficially) of ten percent or more of any outstanding class of shares, of any corporation or entity engaged in any line of business of the Corporation or any of its subsidiaries or affiliates, when in the judgment of the Board of Directors, by at least majority vote, the laws against combinations and restraintof tradeshallbeviolatedbysuch person’s membership in the Board of Directors; or

iii. If the Board of Directors, in the exercise of its judgment in good faith, determines by at least a majority vote, that he is a nominee of any person set forth in (i) and (ii) above.

In determining whether or not a person is controlling person, beneficial owner, or the nominee of another, the Board of Directors may take into account such factors as business and family relationships.

Article III, Section 11 None

Section 11. Notices The notice of the regular or special meeting of the Board, specifying the date, time, place, object and purpose of the meeting shall be mailed by the Secretary to each of the member of the board at least two business days before any such meeting. The Secretary may send the notice by delivery, fax, electronic mail or short messaging system (SMS), or by other means of

Article IV, Section 1 Section 1. Officers. The officers of the Corporation shall consist of the Chairman of the Board, President, such VicePresidents as the Board of Directors may determine, General Manager, Treasurer, Secretary and such other officers, the offices of whom may be created by the Board of Directors as the necessities of the Directors. An officer may hold more than one office provided the duties thereof are not incompatible.

The Chairman of the Board, and President shall be members of the Board of Directors.

Article IV, Section 6 Section 6. Treasurer. The Treasurer shall have the custody of all money, securities and values of theCorporation which come into his possession, and shall keep regular books of accounts; shall deposit said money, securities and values of the Corporation in such banking institutions as may be designated from time to time by the Board of directors, subject to withdrawals there from only upon the checks or other written demands of the Corporation which shall be signed by at least twoofficerstobedesignatedbytheBoardofdirectors;andshall make such reports and perform such duties as are incident to this office or are properly required of him by the Board of directors.

Article V, Section 2 Section 2. Dividends. Dividends shall be declared only from the surplus profits and shall be payable at such time, in such manner and in such amounts as the Board of Directors shall determine. No dividend shall be shall be declared which will impair the capital of the company. Stock dividends shall be declared only in accordance with law.

writtenor printedcommunicationgenerally acceptedand used by the business community currently available or as may be made available through technical advances or innovations in the future.

The attendance of a director at a meeting shall constitute a waiver of notice of the meeting, except where the director attends a meeting for the specific purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened

Section 1. Officers. The officers of the Corporation shall consist of the Chairman of the Board, President, such VicePresidents as the Board of Directors may determine, General Manager, Treasurer, Secretary and such other officers, the offices of whom may be created by the Board of Directors as the necessities of the Directors. Any two or more positions may be held concurrently by the same person whenever deemed convenient or expedient, except that no one shall act as President and Treasurer or Secretary at the same time.

Section 6. Treasurer. The Treasurer, who must be a resident, shall have the custody of all money, securities and values of the Corporation which come into his possession, and shall keep regular books of accounts; shall deposit said money, securities and values of the Corporation in such banking institutions as may be designated from time to time by the Board of directors, subject to withdrawals there from only upon the checks or other written demands of the Corporation which shall be signed by at least two officers to be designated by the Board of directors; and shall make such reports and perform such duties as are incident to this office or are properly required of him by the Board of directors.

Section 2. Dividends. Dividends shall be declared and paid out only to all stockholders on the basis of outstanding stock held by them from the surplus profits unrestricted retained earnings and shall be payable at such time, in such manner, frequency and in such amounts as the Board of Directors shall determine, and in accordance with law. No dividend shall be shall be declared which will impair the capital of the company. Stock dividends shall be declared only in accordance with law.

The Board of Directors shall have power and authority to fix and determine, and from time to time vary, the amount to be reserved, over and above its capital stock paid in, as working capital, to meet contingencies, to providefortheequalizationsofdividendsand/orforother purposes, to direct and determine the use and disposition of working capital and of any amounts so reserved; to use and apply the surplus or any part thereof in acquiring the bonds orotherobligationsor sharesof thecapital stockof the corporation, to such extent, in such manner and upon such terms as the directors shall deem expedient (and shares of capital stock so purchased or acquired may be resold, and shall not be deemed to have been retired, unless such shares shall have been retired for the purpose of reducing the capital of the corporation in the manner provided by law); to determine whether any part of the net profits or surplus shall be declared and paid as dividends; and generally to fix and determine the use and disposition of any net profits or surplus.

Article VIII, Section 1 Section 1. The corporate seal of the Corporation, unless otherwise ordered by the Board of Directors, shall becircular in form and shall bear the words “SEAFRONT RESOURCES CORPORATION.” (formerly “SEAFRONT PETROLEUM AND MINERAL RESOURCES, INC.”)

Article IX, Section 1 Section1.TheseBy-Lawsmaybeamended,repealed oraltered, in whole or in part, by a majority vote of the entire subscribed capital stock of the company at any regular meeting of the

Section 1. The corporate seal of the Corporation, unless otherwise ordered by the Board of Directors, shall be circular informandshallbearthewords“SEAFRONTRESOURCES CORPORATION.” (formerly “SEAFRONT PETROLEUM ANDMINERALRESOURCES,INC.”). TheBoardhasfull authority to revise the corporate seal

Section 1. The power to amend, repeal or alter these Bylaws is delegated to the Board of Directors by the affirmative vote of the stockholders owning at least twothirds (2/3) of the outstanding capital stock of the

shareholders, or at any special meeting where such action has been announced in the cell and notice of such meeting.

Section 2. The Board of Directors may adopt additional rules in harmony with foregoing By-Laws and their amendments, but shall not alter, modify or repeal the foregoing By-Laws and their amendments.

Section 3. These By-Laws shall take effect immediately after the approval of the stockholders.

corporation. Nevertheless, the power delegated to the Board of Directors to amend or repeal the By-laws shall be considered revoked whenever stockholders owning or representing a majority of the outstanding capital stock shall so vote at a regular or special meeting.

AUDITED FINANCIAL STATEMENTS 2019 AND

UNAUDITED 1ST QUARTERLY REPORT 2020

May 25,2020

STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS

Securities and Exchange Commission

PICC, Roxas Boulevard, Pasay City

The management ofSeafront Resources Corporation is responsible for the preparation and fair presentation ofthe financial statements including the schedules attached therein, for the years ended December 3l , 2019 and 20 I 8, in accordance with the prescribed financial reporting framework indicated therein, and for such intemal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or eror.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going conoem, disclosing, as applicable matters related to going concern and using the going concem basis ofaccounting unless management either intends to liquidate the Company or to cease operations, or has not realistic alternative but to do so.

The Board of Directors is responsible for overseeing the Company's financial reporting process.

The Board ofDirectors reviews and approves the financial statements including the schedules attached therein, and submits the same to the stockholders or members.

SyCip Gorres Velayo & Co., the independent auditor appointed by the stockholders, ofthe company in accordance with Philippine Standards on Auditing, and in its report has audited the financial to the stockholders or

SUBSCzuBED AND SWoRN to me before this l{AY ? 5 ?l|?0 "t PAS!6 ffly Affiants exhibited to me their Tax Identification Numbers (TIN) indicated below each

NAMES

Roberto

Jose L. Castillo Jr.

Milagros

V. Reyes Perry Y. Uy

Doc. No. cbZ ' PageNo. {l ; BookNo. 3 ; Series of2020.

I 0l -563-055

ATTY.

Notary Publ for Pasig, San Juan and Pateros | 31 Decembet 2021 7F JMT Bldg. Ortigas Center, Pasig City Roll No. 63341

PTR No. 5242299', 01t1512020; Pasig City IBP No. 113855; 01/15/2020; RSM MCLE Compliance No. Vl-0018291; 02106119

AFTER Tt{E BIR HAS DTILY "' diluieo "REcEtvED''Al

COMPANY INFORMATION

COMPAIIY INFORMATION

The designated contact person !44!I be an Officer of the Corporation Teleohone

Name of Contact Person Milagros V. Reyes Email Address mvreyes@petroenergy.com.ph 637-2917

CONTAGT PERSOI{'s ADDRESS

d as antact person, such incident shall be repotled to tllr- Commission within thirly (30) calendar days from the occurrence thereof with infonnation and complete contact details of the new contact percon designated. 2 : ' All 6oxes nust be properly and completely ftlled-up. Failure to do so shal/ cause the delay in updating the corporation's records witft the Commission andlor non-receipt of Notice ;f D;ficiendes. Fufther, non+eceipt of Notice of Ddiciencies shall not excuse the corpwation fron liabilify tw its deficiencies' 7th Floor, JMT Buitding, ADB Avenue, Ortigas Center, Pasig City

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INDEPENDENT AUDITOR'S REPORT

The Board of Directors and Stockholders

Seafront Resources Corporation

7th Floor, JMT Building, ADB Avenue

Ortigas Center, Pasig City

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Seafront Resources Corporation (the Company), which comprise the statements of financial position as at December 31, 2019 and 2018, and the statements of comprehensive income, statements of changes in equity and statements of cash flows for each of the three years in the period ended December 31,2019, and notes to the financial statements, including a summary of significant accounting policies,

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2019 and 201 8, and its financial performance and its cash flows for each of the three years in the period ended December 31,2019 in accordance with Philippine Financial Reporting Standards (PFRSs).

Basis for Opinion

We conducted our audits in accordance with Philippine Standards on Auditing (PSAs). Our responsibilities under those standards are further described inthe Auditor's Responsibilitiesfor the Audit of the Financial Statemenls section of our report. We are independent of the Company in accordance with the Code of Ethics for Professional Accountants in the Philippines (Code of Ethics) together with the ethical requirements that are relevant to our audit of the financial statements in the Philippines, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For the matter below, our matter is provided in that context.

Bullding a better workinq world

We have fulfilled the responsibilities described inthe Auditor's Responsibilitiesfor the Audit of the Financial Statements section of our report, including in relation to this matter. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matter below, provide the basis for our audit opinion on the accompanying financial statements.

Valuation of unquoted equity securities

The Company has an investment in the unquoted equity security of Hermosa Ecozone Development Corporation (HEDC) classified as financial assets at fair value through other comprehensive income which is caried at the estimated fair value of P5 I 7. I 8 million as of Decemb er 3l , 2019 representing 82.06% of its total assets. This matter is significant to our audit because estimating the fair value of an unquoted equity instrument is inherently subjective as it involves the application of significant judgment in selecting the valuation technique and in using valuation inputs that are not observable in the market.

The Company's disclosures about its unquoted equity investment in HEDC are included in Note 8 to the financial statements.

Audit response

We involved our internal specialist in the review of the scope, bases, methodology assumptions used in the valuation and results of the work by the Company's external appraiser. The assumptions include comparative sales price of substitute properties and cost to develop the parcels of land of HEDC by reference to historical and market data on comparable properties. We reviewed the Company's disclosures on the sensitivity of the fair value measurement to changes in unobservable inputs. We also considered the competence, capabilities and objectivity of management's external appraiser who prepared the valuation estimates.

Other Information

Management is responsible for the other information. The other information comprises the information included in the SEC Form 20-IS (Definitive Information Statement), SEC Form l7-A and Annual Report for the year ended December 3L,2019, but does not include the financial statements and our auditor's report thereon. The SEC Form 20-IS (Definitive Information Statement), SEC Form l7-A and Annual Report for the year ended December 3l , 2019 are expected to be made available to us after the date of this auditor's report.

Our opinion on the financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audits of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audits, or otherwise appears to be materially misstated.

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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 PFRSs, 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 eror.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concem, disclosing, as applicable, matters related to going concem and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic altemative but to do so.

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

Auditor's Responsibilities 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 PSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or eror and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with PSAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

o Identiff and assess the risks of material misstatement of the financial statements, whether due to fraud or elror, 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.

o Obtain an understanding of intemal 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 intemal conffol.

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

o 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 siguificant doubt on the Company's ability to continue as a going concem. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modiff 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 Company to cease to continue as a going concem.

Building a better workinq srorld

o 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 identiff during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on the Supplementary Information Required Under Revenue Regulations No. 15-2010

The supplementary information required under Revenue Regulations No. I 5-201 0 for purposes of filing with the Bureau of Internal Revenue is presented by the management of Seafront Resources Corporation in a separate schedule. Revenue Regulations No. l5-2010 requires the information to be presented in the notes to financial statements. Such information is not a required part of the basic financial statements. The information is also not required by the Revised Securities Regulation Code Rule 68. Our opinion on the basic financial statements is not affected by the presentation of the information in a separate schedule.

The engagement partner on the audit resulting in this independent auditor's report is Ana LeaC. Bergado.

SYCIP GORRES VELAYO & CO.

ArA_o a,*^,/

Ana Lea C. Bergado

Partner

CPA Certificate No. 80470

SEC Accreditation No.0660-AR-4 (Group A), October 22,2019, valid until October 21,2022

Tax Identification No. 102-082-670

BIR Accreditation No. 08-00 I 998-63-20 I 8. February 14,2018, valid until February 13,2021

PTR No. 8125214, January 7,2020, Makati City

May 25,2020

SEAFRONT RESOURCES CORPORATION

Current Assets

Cash and cash equivalents (Notes 6,7 ,8 and 14)

Receivables (Notes 8, 9 and 14)

Financial assets at fair value through profit or loss (FVTPL) (Notes 8 and 14)

LIABILITIES AI\D EQUITY

Current Liabilities

Accounts payable and accrued expenses (Notes l3 and 14)

(Note 12)

Capital stock - Pl par value (Note 15)

Authorized - 388,000,000 shares Issued and outstanding - 163,000,000 shares 163,000,000 163,000,000 Net unrealized gains on financial assets at FVOCI (Notes 8 and 15) 359,414,236 263,345,540 Retained earnings (Note 15) 44'645'751 12,224'q7q total gquiw 567,059,9ffi 485@$ft

TOTAL LIABILITIES AND EOUITY P630,2I0,953 P485,125,873 See accompanying Notes to Financial Statements.

SEAFRONT RESOURCES CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

REVENUES

Dividend income (Note 9)

Net gain on fair value changes on financial assets at FVTPL (Note 8)

Interest income (Note 6)

Foreign exchange gain - net

Other income fNote l0)

EXPENSES AND CHARGES

General and administrative expenses (Note 11)

Foreign exchange loss - net Net loss on fair value chanses on financial assets at FVTPL (Note 8)

COMPREHENSIVE INCOME (LOSS)

SEAFRONT RESOURCES CORPORATION

STATEMBNTS OF CHANGES IN EQUITY Net Unrealized Gains (Losses) on Financial Assets at Retained Capital Stock FVOCI Earnings (Note tS) (Notes 8 and 15) (Note 15)

32,421,673 128,490,369 BALANCES AT DECEMM

See accompanying Notes to Financial Statements.

SEAFRONT RESOURCES CORPORATION

STATEMENTS OF CASH FLOWS

CASH FLOWS FROM OPERATING ACTI\TTIES

Income (loss) before income tax

Adjustments for:

Net loss (gain) on fair value changes on financial assets at FVTPL (Note 8)

Dividend income (Note 9)

(Note 6) (415,615) (117,951) (96'516)

Operating loss before working capital changes

Decrease (increase) in:

CASH FLOWS FROM IIWESTING ACTIVITIES

Dividends received (Note 9)

Proceeds from disposal (Acquisitions) of: Financial assets at FVOCI (Note 8) Financial assets at FVTPL (Note 8) 45,668,186 645,154 275,877 1,032,630 3,026,268 (2,478,543) Pavment of subscription payable (Note 8) (12,353'8M) (4,522) 3,67r,422 (2,207,188)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUTVALENTS AT BEGINNING OF YEAR 32,634,851 1,750,538 10,402,418 8,651,880 (3,073,358) 11,725,238

CASH AND CASH EQUIVALENTS AT END OF YEAR(Note 6

See accompanying Notes to Financial Statements.

SEAFRONT RESOURCES CORPORATION

NOTES TO FINANCIAL STATEMENTS

1. Corporatelnformation

Seafront Resources Corporation (the Company or SRC) was registered with the Securities and Exchange Commission (SEC) on April 16, 1970 as an oil exploration and production company. On October 18, 1996, the Company amended its Articles of Incorporation which provides for the revision of its primary purpose from engaging in the business of oil exploration and production into a holding company and to include oil exploration and production business as one of its secondary purposes. The Company's shares of stock were listed on May 7,1974 and are currently traded at the Philippine Stock Exchange.

The registered office address of the Company is 7th Floor, JMT Building, ADB Avenue, Ortigas Center, Pasig City.

The accompanying financial statements were approved and authorized for issue by the Board of Directors (BOD) on May 25,2020.

2. Basis of Preparation

Basis ofPreparation

The accompanying financial statements of the Company have been prepared under the historical cost basis, except for the financial assets at fair value through profit or loss (FVTPL) and financial assets at fair value through other comprehensive income (FVOCI), which have been measured at fair value. The Company's financial statements are presented in Philippine Peso (F), which is also the Company' s fu nctional and presentation currency.

The Company has invesftnent in trust funds. The transactions and balances of the Company's trust funds (see Note 7) are consolidated on a line by line basis with the Company. The trust fund reports are prepared for the same reporting year as the Company, using consistent accounting policies in accordance with Philippine Financial Reporting Standards (PFRSs).

Statement of

Compliance

The financial statements of the Company have been prepared in accordance with PFRSs. The term PFRSs, in general, include all applicable PFRSs, Philippine Accounting Standards (PASs) and Interpretations issued by the Standing Interpretations Committee, the Philippine Interpretations Committee (PIC) and the International Financial Reporting Interpretations Committee (IFRIC), which have been approved by the Philippine Financial Reporting Standards Council (FRSC) and adopted by the Philippine SEC.

3. Changes in Accounting Policies and Disclosures

The Company adopted the following new accounting pronouncements starting January L, 2019. Except as specifically stated, the adoption of these new accounting pronouncements did not have any impact on the Company's financial statements.

PFRS 16, Leases

PFRS 16 supersedes PAS 17, Leases, Philippine Interpretation IFRIC 4, Determining whether an Arrangement contains a Lease, Philippine Interpretation Standard Interpretations Committee ("SIC") -15, Operating Leases-Incentives and Philippine Interpretation SIC-27, Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentafion and disclosure of leases and requires lessees to recognize most leases on the balance sheet.

Lessor accounting under PFRS 16 is substantially unchanged from today's accounting under PAS 17. Lessors will continue to classiff all leases using the same classification principle as in PAS l7 and distinguish between two types of leases: operating and finance leases.

Philippine Interpretation TFRIC-23, Uncertainty over Income Tax Treatments

Philippine Interpretation IFRIC 23 addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of PAS 12,Income Taxes, and does not apply to taxes or levies outside the scope of PAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments.

The interpretation specifically addresses the following:

. Whether an entity considers uncertain tax treatrnents separately

. The assumptions an entity makes about the examination of tax treatrnents by taxation authorities

. How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates

. How an entity considers changes in facts and circumstances

The entity is required to determine whether to consider each uncertain tax treatrnent separately or together with one or more other uncertain tax treatments and use the approach that better predicts the resolution of the uncertainty. The entity shall assume that the taxation authority will examine amounts that it has a right to examine and have full knowledge of all related information when making those examinations. If an entity concludes that it is not probable that the taxation authority will accept an uncertain tax ffeatment, it shall reflect the effect of the uncertainty for each uncertain tax treatment using the method the entity expects to better predict the resolution of the uncertainty.

Upon adoption of the Interpretation, the Company assessed that it has no material uncertain tax treatrnents, accordingly, the Interpretation did not have an impact on the Company's financial statements.

The Company also adopted the following new accounting pronouncements starting January 1,2019. The adoption of these pronouncements did not have any significant impact on the Company's financial position or performance.

o Amendments to PFRS 9, Prepayment Features with Negative Compensation

o Amendments to PAS 19, Employee Benefits, Plan Amendment, Curtailment or Settlement

o Amendments to PAS 28, Long-term Interests in Associates and Joint Ventures

o Annual Improvements to PFRSs 2015-2017 Cycle Amendments to PFRS 3, Business Combinations, and PFRS I l, Joint Arrangements, Previously Held Interest in a Joint Operation

. Amendments to PAS 12, Income Tax Consequences of Payments on Financial Instruments

Classified as Equity

. Amendments to PAS 23, Borrowing Costs, Borrowing Costs Eligiblefor Capitalization

Standards Issued but not yet Effective Pronouncements issued but not yet effective are listed below. The Company is currently assessing the impact of the following standards and plans to adopt the new standards when these become effective.

Effective beginning on or after January 1, 2020

o Amendments to PFRS 3, Definition of a Business

o Amendments to PAS 1, Presentation of Financial Statemenfs, and PAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, Definition of Material

Effective beginning on or after January 1, 202I

o PFRS lT,Insurance Contracts

Deferred effectivity

o Amendments to PFRS 10, Consolidated Financial Statements, and PAS 28, Sale or Contribution of Assets between an Investor and its Associqte or Joint Venture

The Company continues to assess the impact of the above new and amended accounting standards and interpretations effective subsequent to 20L9 on the Company's financial statements in the period of initial application. Additional disclosures required by these new pronouncements will be included in the financial statements when these are adopted.

4. Summary of Significant Accounting Policies

Cash and Cash Equivalents

Cash includes cash on hand and in banks. Cash equivalents are short-term, higttly liquid investments that are readily convertible to known amounts of cash with original maturities of three (3) months or less and that are subject to an insignificant risk ofchanges in value.

Financial Instruments

Initial recognition and subs equent measurement

A financial instrument is any conffact that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets - Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortized cost; FVOCL and FVTPL.

The classification of financial assets at initial recognition depends on the financial asset's contractual cash flow characteristics and the Company's business model for managing them. The Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.

In order for a financial asset to be classified and measured at amortized cost or fair value through OCI, it needs to give rise to cash flow that are 'solely payments of principal and interest (SPPI)' on the principal amount outstanding. This assessment is refened to as the SPPI test and is performed at an instrument level.

The Company's business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

o Financial assets at amortized cost (debt instruments)

o Financial assets at FVOCI with recycling of cumulative gains and losses (debt instruments)

o Financial assets designated at FVOCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)

o Financial assets at FVTPL

Financial assets at amortized cost (debt instruments)

The Company measures financial assets at amortized cost if both of the following conditions are met:

o The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and

o The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired.

The Company's financial assets at amortized cost includes cash and cash equivalents and receivables.

Financiql assets at FWPL

Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at fair value through OCI, as described above, debt instruments may be designated as at FVTPL on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch.

Financial assets at FVTPL are carried in the statement of financial position at fair value with net changes in fair value recognized in profit or loss.

This category includes derivative instruments and quoted equity investrnents which the Company had not irrevocably elected to classiff at fair value through OCI. Dividends on quoted equlty investnents are also recognized as other income in profit or loss when the right of payment has been established.

The Company's financial assets at FVTPL consists of investments in quoted equity securities held for trading.

Financial qssets designated at FVOQ @quity instruments)

Upon initial recognition, the Company can elect to classi$ irrevocably its equity invesfinents as equity instruments designated at FVOCI when they meet the definition of equity under PAS 32 and are not held for trading. The classification is determined on an instrument-by-instrument basis.

Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognized as other income in profit or loss when the right of payment has been established, except when the Company benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at FVOCI are not subject to impairment assessment.

The Company's financial assets at FVOCI include quoted and unquoted equity securities and quoted govemment securities.

Impairment offinancial lssets

The Company recognizes an allowance for ECLs for all debt instruments not held at FVTPL. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next l2-months (a l2-month ECL). For those credit exposgres for which there has been a significant increase in credit risk since initial recognition, a loss allbwance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

The Company may consider a financial asset to be in default when internal or extemal information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the confractual cash flows.

Financial liabilities - Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables. net of directly attributable transaction costs'

Subs equent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at FVTPL

o Loans and bonowings

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of compreher, sive income.

The Company's loans and borrowings include accounts payable and accrued expenses, excluding statutory liabilities.

D

er eco gnition offinancial qs s ets and financial

Financial assets

liabilities

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

o the rights to receive cash flows from the asset have expired;

o the Company retains the rights to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a "pass-through" arrangement; or

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

When the Company has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor 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 transfened asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

Financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged, 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 profit or loss.

Offsetting of Financial Instruments

Financial assets and financial liabitities are set off and the net amount is reported in the statement of financial position 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.

Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

o In the principal market for the asset or liability, or

o In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

o Level I - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

o Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

o Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognized in the financial statements on a recturing basis, the Company determines whether transfers have occurred between Levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

Capital Stock

Capital stock is measured at par value for all shares issued. Incremental costs incurred directly attributable to the issuance of new shares are shown in equity as a deduction from proceeds, net of tax. When the Company purchases its own capital stock (treasury shares), the consideration paid, including any attributable incremental costs, is deducted from equity until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental ffansaction costs and the related tax effects is included in equity.

Retained Eamines

Retained earnings represent accumulated earnings of the Company less dividends declared and with consideration ofany changes in accounting policies and other adjusfrnents applied retroactively. The retained earnings of the Company are available for dividends only upon approval and declaration of the BOD.

Eamines Per Share (EPS)

Basic earnings per share are computed on the basis of the weighted average number of shares outstanding during the year after giving retroactive effect for any stock dividends declared in the current year.

Diluted earnings per share, if applicable, is computed on the basis of the weighted average number of shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion ofall the dilutive potential ordinary shares into ordinary shares. There are no dilutive potential common shares that would require disclosure of diluted eamings per common share in the financial statements.

Revenue Recoqnition

Revenue from contracts with customers is recognized when control of the services is transfened to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The Company has concluded that it is the principal in its revenue arrangement since it is the primary obligor in all revenue arrangements, has pricing latitude and is also exposed to credit risk.

Dividend income

Dividend income is recognized when the Company's right to receive the payment is established, which is generally when the BOD approves the dividend declaration.

Interest income

Interest income is recognized as the interest accrues taking into account the effective yield on the asset.

Service income

The Company recognizes revenue from services over time, using an input method to measure progress towards complete satisfaction of the service, because the customer simultaneously receives and consumes the benefits provided by the Company.

Rental income

Rental income under non-cancellable leases is recognized in the on a straight-line basis over the lease terms, as provided under the terms of the lease contract.

General and Administrative Expenses

Expenses are recorded when incurred. General and administrative expenses constitute costs of administering the business.

Income Tax

Current tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted by the reporting date.

Deferred tax

Defened tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences. Defened tax assets are recognized for all deductible temporary differences, carryforward of unused tax credits from excess minimum corporate income tax (MCIT) over regular corporate income tax and unused net operating loss carryover (NOLCO), to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carryforward of unused tax credits from excess MCIT and unexpired NOLCO can be utilized.

The carrying amount of defened tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized defened tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantially enacted at the reporting date.

Provisions and Contingencies

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Company expects a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. If the effect of the time value of money is material, provisions are determined by discounting the expected funrre cash flows at a pretax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is use4 the increase in the provision due to the passage of time is recognized as an interest expense. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

Contingent liabilities are not recognized in the financial statements. They are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are not recognized in the financial statements but are disclosed when an inflow of economic benefits is probable. Contingent assets are assessed continually to ensure that developments are appropriately reflected in the financial statements. If it has become virnrally certain that an inflow of economic benefits will arise, the asset and the related income are recognized in the financial statements.

Events After the Reoorting Date

Post year-end events up to the date of auditors' report that provide additional information about the Company's situation at the reporting date (adjusting events) are reflected in the financial statements, if any. Post year-end events that are not adjusting events are disclosed in the notes when material.

5. Significant Accounting Judgments, Estimates and Assumptions

The preparation of the accompanying financial statements requires management to make judgments, estimates and assumptions that affect amounts reported in the financial statements and related notes' The judgments, estimates and assumptions used in the financial statements are based upon management's evaluation of relevant facts and circumstances as of the date of the Company's financial statements. Actual results could differ from such estimates.

Judgments and estimates are contractually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Judsments

In the process of applying the Company's accounting policies, management has made the following judgments, apart from those involving estimations, which has the most significant effect on the amounts recognized in the financial statements:

Recognition ofdeferred tqx assets

The Company's deferred tax assets pertain to the carryforward benefits of NOLCO and excess MCIT over RCIT. Judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

The Company did not recognize defened tax assets amounting to P4.87 million and P3.96 million as of December 31,2019 and 2018, respectively (see Note l2). Management believes that it may not be probable that sufficient taxable income will be available against which the income tax benefits can be realized prior to their expiration.

Estimates and Assumptions

The key assumptions conceming the future and other key sources of estimation uncertainty at the statements of financial position date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Estimation offoir value of unquoted equity securities classified as financial assets at FVOCI

The Company uses its judgment to select the most appropriate valuation methodology to value its unquoted equity investnents and make assumptions that are mainly based on market conditions existing at each reporting period. As of December 31, 2019 and 2018, the Company valued the unquoted equity securities classified as financial assets at FVOCI using the adjusted net asset method which is a combination of the market and income approaches. It involves directly measuring the fair value of the assets and liabilities of the investee company. Assets of the investee company consist mainly of parcels of land for sale which is adjusted to its fair value. The fair value adjustments arising from changes in fair value of unquoted equity securities are fully disclosed in Note 8.

6. Cash and Cash Equivalents

Cash in banks earn interest at the prevailing bank deposit rates. Cash equivalents are short-term investments that are made for varying periods of up to three months depending on the immediate cash requirements of the Company and earn interest at the prevailing short-term placement rates.

Interest income earned on cash in banks and cash equivalents amounted to F0.42 million, F0.12 million andP0.l0 million rn2019,2018 and 20IT,respectively.

7. Investment in Trust Funds

The Company established trust funds (the Trust) which are being administered by a local bank under two trust agreements. The details of the trust funds based on the financial statements issued by the trustee bank as of December 31 follow:

Cash and cash equivalents (Note 6)

Financial assets at FVTPL (Note 8)

Financial assets at FVOCI - govemment securities (Note 8)

tnrst

(loss)

The assets, liabilities and performance of the fund are consolidated in the applicable accounts of the Company for financial statement presentation purposes.

8. Financial Assets

The

and cash equivalents (Note 6)

(Note 9)

assets at FVTPL (Note 7) *43,037,269 406,512 45,288,418 PrO,402,4t8 12,537,600 44,850,901 Financial assets at FVOCI (Note 3

4r6.3s3.329 *629,142,410 P484,144,248

The net gain on fair value changes on financial assets at FVTPL amounted to P0.44 million and FI5.39 million for the years ended December 31,2019 and2017, respectively, while the net loss on fair value changes on financial assets at FVTPL amounted to P17.99 million for the year ended December 31. 2018.

The movements in financial assets at FVTPL for the years ended December 3l follow:

gain (l gatance at end ofyear

Financial Assets at FVOCI

Financial assets at FVOCI consist of quoted and unquoted shares of stock held for long-term investment purposes and are carried at fair value. The carrying values of these investments are as follows:

The movements in financial assets at FVOCI for the years ended December 3l follow:

Movements in the net unrealized gains on financial assets at FVOCI in equity are as follows:

Investment in HEDC

On January 31, 1997, the Company entered into a Project Shareholders' Agreement with five other companies led by Investment and Capital Corporation of the Philippines (ICCP) and Penta Capital Investment Corporation (PCIC) to develop 500 to 600 hectares of raw land in Hermosa, Bataan into a new township consisting of industrial estates, residential communities, a golf and country club and a commercial center.

As of December 31, 2018, the Company has outstanding subscriptions payable to HEDC which amounted to P12.35 million. The subscriptions payable are due on demand (see Note l4). The investment in HEDC is presented in the statement of financial position at fair value net of subscription payable. On January 25,2019, the Company has paid up all the subscription payable to HEDC.

The fair value of investment in HEDC is determined using the adjusted net asset value method wherein the assets of HEDC consisting mainly of parcels of land are adjusted from cost to its fair value. The valuation of the parcels of land was performed by a Securities and Exchange Commission-accredited independent valuer as at December 31,2019 and 2018. This measurement falls under Level 3 in the fair value hierarchy.

Fair value measurement disclosures for the determination of fair value of unquoted equity securities are provided in Note 14.

9. Receivables

Dividend income earned on its investments amounted to ?33.46 million, P12.89 million and P0.29 million in 2019, 2018 and 2017, respectively. Dividend receivable from HEDC amounting ?12.23 million in 2018 was collected in Januarv 2019.

10. Other Income

(Note 13)

Service income pertains to accounting services rendered by the Company to HEDC (see Note l3).

Rental income pertains to rentals eamed from the two (2) parking slots owned by the Company which are classified as investment property. As of December 31, 2019 and 2018, the cost of the fully depreciated parking slots amounted to F207,598.

The fair value of the investment property ranges from P800,000 to P1,000,000 and P600,00 to P 800,000 per slot as of December 31,2019 and 2018, respectively. This has been determined on the basis of recent sales of similar properties in the same area as the investment property and taking into account the economic conditions prevailing at the time the valuation was made. There are no related costs for the operation of the investment properfy.

I l. General and Administrative Expenses

Miscellaneous consist of penalties paid, oflice supplies, bank charges, notarial fees, among others.

12. Income Taxes

a. The provision forincome tax forthe years ended December 31,2019,2018 and20l7 represents MCIT.

b. As of December 3I, 2019 and 2018, the Company did not recognize defened tax assets on the carryforward benefits of the following NOLCO and excess MCIT over RCIT as management assessed that there will be no future available taxable income against which the defened tax assets can be utilized prior to their expiration.

Rollforward of NOLCO follows:

at beginning of year

Rollforward of MCIT follows:

at beginning of year

As of December 31,2019 and 2018, the Company recognized defened tax liability amounting to P62.57 million and F45.90 million, respectively, which pertains to the setup of 15% deferred tax on unrealized gains on unquoted shares of stock classified as financial assets at FVOCI.

The reconciliation of the income tax computed at the statutory tax rate to the provision for income tax as shown in the statements of comprehensive income follows:

Income tax at statutory tax rate of 30%

Add (deduct) reconciling items: Dividend income Movement in unrecognized DTA Interest income subjected to final tax

Net loss (gain) on fair value changes on financial assets at FVTPL *9,728,474 (P2,054,990) P4,403,614 (10,039,135) (3,865,730) (88,414) 573,178 564,835 336,916 (124,684) (35,385) (28,955) (131,255) 5,398,317 (4,616,114) Provision for income tax F6,578

13. Related ParW Transactions

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. Such relationship also exists between and/or among entities, which are under common control with the reporting enterprises and its key management personnel, directors, or its shareholders. In considering each related party relationship, attention is directed to the substance of the relationship, and not merely the legal form.

The Company in its regular conduct of business has entered into the following transactions with related parties consisting of reimbursement of expenses and management and accounting services agreements.

The Company's financial statements include the following amounts resulting from transactions with related parties:

Receivables/ AmounU (Accounts Nature of transaction Volume pavable) Terms Conditions

Afliliate:

* included as part of accounts payable and accrued expenses

2018

Receivables/ AmounV (Accounts Nature of transaction Volume pavable) Terms Conditions

Affiliate:

Noninterest bearing; PERC Reimbursements *123,667 (*123,667)* due and demandable Unsecured Accounting services Unsecured, no

(Note l0)

- do - impairment *39t.524

* included as part ofaccounts payable and accrued expenses

The Company has no employee. PERC provides administrative support to the Company. Therefore, no compensation and short-term benefits for key management personnel were charged in profit or loss for the years ended December 31,2019,2018 and20l7

Terms and conditions of transactions with relqted parties

Outstanding balances at year-end are to be settled in cash. There have been no guarantees provided or received for any related party receivables or payables.

14. Financial Instruments

Catesories and Fair Values of Financial Instruments

The methods and assumptions used by the Company in estimating the fair values of the financial instruments are:

Cash and cash equivalents and receivables

Due to the short-tenn nature of the instruments, carrying amounts approximate fair values as of the reporting date.

Government securities

Fair values are generally based on quoted market prices at reporting date. This is under Level I category of the fair value hierarchy.

Equity securities

For quoted equity securities, fair values are based on published quoted prices. This is under Level I category of the fair value hierarchy.

For unquoted equity securities, fair values are determined using the adjusted net asset value method which involves directly measuring the fair value of the assets and liabilities of the investee company. This measurement falls under Level 3 in the fair value hierarchy.

Accounts payable and accrued expenses

Carrying values approximate fair values due to their short-term nature.

Description of significant unobservable inputs to valuation:

The significant unobservable inputs used in the fair value measurement categorized within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 3l December 2019 and 2018 are shown below:

Valuation Significant technique

Unquoted equity Adjusted net asset Price per square meter F450 - F5,650 F440 - P4,000 shares at FVOCI value method

The appraised value of the land was determined using the market approach which is a valuation technique that uses prices and other relevant information generated by market transactions involving identical or comparable assets. Net adjustment factors arising from external and internal factors (i.e. location, sizelshape/terrain, and development) affecting the subject properties as compared to the market listing of comparable properties ranges from -5Yo to -10%o. Significant favorable (unfavorable) adjustments to the aforementioned factors based on the professional judgment of the independent appraisers would increase (decrease) the fair value of land, in return the fair value of the unquoted financial asset.

Financial Risk Management Objectives and Policies

The Company's financial instruments comprise cash and cash equivalents, receivables, financial assets, accounts payable and accrued expenses and subscriptions payable. The main purpose of these financial instruments is to fund its own operations and capital expenditures. The BOD reviews and approves policies for managing these risks. Also, the Audit Committee of the BOD meets regularly and exercises oversight role in managing these risks.

Financial Risks

The main financial risks arising from the Company's financial instruments are liquidity risk, market risk and credit risk.

Liquidity risk

Liquidity risk is the risk that the Company is unable to meet its financial obligation when due. The Company has substantial invesbnents in shares of stock which are not listed in the Philippine Stock Exchange and may not be readily convertible to liquid assets necessary to meet any potential additional liquidity requirements of the Company. Investments in unquoted equity securities classified as financial assets at FVOCI amounted to P517.18 million and P393.71 million" net of subscription payable, as of Decemb er 3l , 2019 and 201 8, respectively (see Note 8).

The Company monitors its cash position and overall liquidity position in assessing its exposure to liquidity risk. The Company maintains a level of cash and cash equivalents deemed sufficient to finance operations and to mitigate the effects of fluctuation in cash flows.

The Company's accounts payable and accrued expenses are all settled on a monthly basis.

The tables below summarize the maturity profile of the Company's ftnancial assets and liabilities as of December 3l , 2019 and 201 8 based on contractual undiscounted payments.

2019

Financial

Financial assets at FVTPL:

Financial

Accrued

Market risk

Market risk is the risk of loss on future eamings, on fair values or on future cash flows that may result from changes in market prices. The value of a financial instrument may change as a result of changes in interest rates, foreign crurency exchanges rates, commodity prices, equity prices and other market changes. The Company's market risk emanates from its holdings in debt and equity securities.

The Company closely monitors the prices of its debt and equity securities as well as macroeconomic and entity-specific factors which could directly or indirectly affect the prices of these instruments. [n case of an expected decline in its portfolio of equity securities, the Company readily disposes or trades the securities for replacement with more viable and less risky investments.

The analysis below is performed for reasonably possible change in the market price of quoted shares classified as financial assets at FVTPL, with all other variables held constant, showing the impact on income before tax:

Increase (decrease) in market price

Effect on income before tax

The table below demonstrates the sensitivity to a reasonably possible change in the market price of quoted shares classified as financial assets at FVOCI, with all other variables held constant, showing the impact on equity:

The percentage of increase and decrease in market price is based on the movement in the Philippine Stock Exchange lndex from beginning to end of the year.

Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. With respect to credit risk arising from cash and cash equivalents, receivables, financial assets at FVTPL and financial assets at FVOCI, the Company's exposure to credit risk is equal to the carrying amount of these instruments. The Company limits its credit risk on these assets by dealing only with reputable counterparties.

For cash and cash equivalents and quoted govemment securities, the Company applies the low credit risk simplification where the Company measures the ECLs on a l2-month basis based on the probability of default and loss given default which are publicly available. The Company also evaluates the credit rating of the bank and other financial institutions to determine whether the debt instrument has significantly increased in credit risk and to estimate ECLs.

The Company considers its cash and cash equivalents and quoted government securities as high grade since these are placed in financial institutions of high credit standing. Accordingly, ECLs relating to these debt instruments rounds to nil.

The Company's receivables are aged current as of December 31, 2019 and 2018. No receivables are considered credit-impaired.

As of December 31, 2019 and 2018, the carrying values of the Company's financial instruments represent maximum exposure as of reporting date.

The table below shows the comparative summary of maximum credit risk exposures on financial instruments as of Decemb er 3l 2019 and 20 I 8:

Financial assets at FVTPL:

Equity securities

Financial assets at amortized cost:

Cash and cash equivalents

Receivable from HEDC

Rent receivable

Accrued interest receivable

Dividend receivable

Financial assets at FVOCI:

Quoted equity securities: PERC

Benguet Corporation

Unquoted equity security: HEDC* P45,288,418 43,037,269 37,946 26,663 124,089 217,814 15,789,774 2,833,592 s17,176,832 P44,850,901 10,402,418 21,652 23,408 70,323 12,422,217 13,479,075 3,761,406 393,710,068 5,402,780 Investments in government securities 4'610'013 *629,142,410 F484,144,248

* Net of subscription payable to HEDC amounting to P12,353,884 in 2018.

The following tables show financial instruments recognized at fair value as of December 31,20t9 and 2018, analyzedbetween those whose fair values are based on:

l. quoted prices in active markets for identical assets or liabilities (Level 1);

2. those involving inputs other than quoted prices included in Level I that are observable for the asset or liability, either directly or indirectly (Level 2); and

3. those with inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).

Financial assets:

Financial assets at FVTPL:

Financial assets at FVOCI:

in P45,288,418 15,789,774 2,833,592 P5t7,176,$; f45,288,418 15,789,774 2,833,592 517,176,832 government securities 4,610,013 - - 4'610'013 t68,52L,797

Financial assets: Financial assets at FWPL:

securities Financial assets at FVOCI:

* Net of subscriptionpayable to HEDC amounting P|2,353,884.

There were no transfers between Level I and Level 2 fair value measurements and no transfers into and out of Level 3 fair value measurements in 2019 and 2018.

15. Capital Management

The primary objective of the Company's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholders' value.

The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares.

The Company monitors capital using a debt-to-equity ratio, which is total debt divided by total equity. The Company includes within total debt the following: accounts payable and accrued expenses and subscriptions payable. Total equity includes capital stoclq net unrealized gains (losses) on financial assets at FVOO and retained earnings (deficit).

The Company has no extemally imposed capital requirements as of December 31, 2019 and 2018.

The table below demonstrates the debt-to-equity ratios of the Company as of December 31, 2019 and 2018:

There were no changes in the objectives, policies or processes for the years ended December 31,2019 and 2018.

The Company has declarable dividends amounting to P47 .46 million as of Decemb er 31, 2019

The Company's track record of capital stock is as follows:

November 27,l98l

October 31, 1990

September 28,1992

February 8,1994

January 20,1997

August 14,1997

October 5. 1998

16. Basic and Diluted Earnings Per Share

The computations of the Company's basic earnings per share are as follows:

17. Events After the Reporting Period

In the light of the Govemment's decision to declare Code Red Sub-level 2 resulting in national and localized community quarantine effective March 15, 2020, the Company has instituted specific guidelines to mitigate the risks brought by COVID-I9 and to ensure business continuity.

SRC, being an investment holding company, is exposed to market risk or loss on future earnings due to volatility in financial instruments due to uncertainties in the capital market. The Company's market risk emanates from its holdings in debt and equity securities. To address this, the Company closely monitors the prices of its debt and equity securities as well as the macroeconomic and entityspecific factors which could directly or indirectly affect the prices of these instruments.

There are also the risks associated with operations of HEDC, a joint-venture project of SRC and five other companies led by ICCP and PCIC. HEDC is a master planned township consisting of industrial estates, residential communities, and commercial center. COVID-l9 may affect the manpower and operating schedules of the locators in the ecozone, which may lead to negative financial impact in their businesses. To mitigate this risk, SRC, together with its partners will work closely with HEDC administration to ensure that the locators have their respective business continuity plans in place.

The Company assures its shareholders that while it fully supports the Government's actions to combat COVID-I9, it will also ensure that the Company's business operations will remain unhampered.

The Company considers the measure taken by the government as a non-adjusting subsequent event, which does not impact its financial position and performance as of and for the year ended December 31,2019. However, it could have a material impact on its 2020 financial results and even periods thereafter. Considering the evolving nature of this outbreak, the Company cannot determine at this time the impact to its financial position, performance and cash flows. The Company will continue to monitor the situation.

Buitding a b3tt€r

Accreditation No' 0012-FR-5 (Group A)' workind world

November 6, 2018, valid until November 5, 2021

INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY SCHEDULES

The Board of Directors and Stockholders

Seafront Resources Corporation 7th Floor, JMT Building, ADB Avenue Ortigas Center, Pasig City

We have audited in accordance with Philippine Standards on Auditing, the financial statements of Seafront Resources Corporation as at December 31, 2019 and 2018 and for each of the three years in the period ended December 31,2019, included in this Form l7-A and have issued our report thereon dated May 25,2020. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed in the Index to Financial Statements and Supplementary Schedules are the responsibility of the Company's management. These schedules are presented for purposes of complying with the Revised Securities Regulation Code Rule 68 and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly state, in all material respects, the information required to be set forth therein in relation to the basic financial statements taken as a whole.

SYCP GORRES VELAYO & CO.

A* Lo ,4*Jl

Ana Lea C. Bergado --5-l

-

Parfirer

CPA Certificate No. 80470

SEC Accreditation No.0660-AR-4 (Group A), October 22,2019, validuntil October 21,2022

Tax Identification No. I 02-082-670

BIR Accreditation No. 08-001 998-63-20 I 8, February 14,2018, valid until February 13,2021

PTR No. 8125214, January 7,2020, Makati City

May 25,2020

Buiginga belter l?ij6ri:l:g'"*

sEc Accreditation No' 0012-FR-5 (Group A)' worftr*g a,orx, Philippines

November 6, 2018, valid until November 5, 2021

INDEPENDENT AUDITORS' REPORT ON COMPONENTS OF FINANCIAL SOUNDNESS INDICATORS

The Board of Directors and Stockholders

Seafront Resources Corporation 7th Floor, JMT Building, ADB Avenue Ortigas Center, Pasig City

We have audited in accordance with Philippine Standards on Auditing, the financial statements of Seafront Resources Corporation (the Company) as at December 3l , 2019 and 201 8 and for each of the three years in the period ended December 31,2019, and have issued our report thereon dated May 25,2020. Ov audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The Supplementary Schedule on Financial Soundness lndicators, including their definitions, formulas, calculation, and their appropriateness or usefulness to the intended users, are the responsibility of the Company's management. These financial soundness indicators are not me:Nures of operating performance defined by Philippine Financial Reporting Standards (PFRSs) and may not be comparable to similarly titled measures presented by other companies. This schedule is presented for the purpose of complying with the Revised Securities Regulation Code Rule 68 issued by the Securities and Exchange Commission, and is not a required part of the basic financial statements prepared in accordance with PFRSs. The components of these financial soundness indicators have been traced to the Company's financial statements as at Decemb er 31, 2019 and 201 8 and for each of the three years in the period ended December 31,2019 andno material exceptions were noted.

SYCP GORRES VELAYO & CO.

Ana Lea C. Bergado Partner

CPA Certificate No. 80470

SEC Accreditation No. 0660-AR-4 (Group A), October 22, 2019, valid until October 2t, 2022

Tax Identification No. 102-082-670

BIR Accreditation No. 08-001 998- 63-2018, February 14,z0l8,valid until February 13,2021

PTR No. 8125214, January 7,2020, Makati City

May 25,2020

SEAFRONT RESOURCES CORPORATION

SUPPLEMENTARY INFORMATION

AIID DISCLOSURES

REQUIRED ON REVISED SRC RULE NO. 68

DECEMBER 31,2019

Philippine Securities and Exchange Commission (SEC) issued the Revised Securities Regulation Code Rule No. 68 (Revised SRC Rule No. 68) which consolidates the two separate rules and labeled in the amendment as "Part I" and "Part II", respectively. It also prescribed the additional information and schedule requirements for issuers of securities to the public.

Below are the additional information and schedules required by Revised SRC Rule No. 68, that are relevant to the Company. This information is presented for purposes of filing with the SEC and is not required part of the basic financial statements.

Schedule A. Financial Assets

Below is the detailed schedule of the Company's financial assets as of December 3I,2019:

Number of Amount Shown Shares or in the Principal Statement of Income

Name of Issuing Entity and Association Amount of Financial Received and of Each Issue Bonds andNotes Position Accrued

Financial assets at FVTPL

Equity Securities:

PetroEnergy Resources Corporation

House of Investments, Inc.

Ayala Land, Inc.

Araneta Properties, Inc.

EEI Corporation

Others 3,613,852 2,484,000 128,193 3,756,799 372,500 PL4,816,793 12,916,800 5,832,782 5,522,478 3,650,500 2,549,065 P161,460 64,983 74,500 39 4 P45,288,418 P340,784

Name of lssuing Entity and Association of Each Issue

Financial assets at FVTOCI Debt equities

Quoted:

Number of Shares or Amount Shown Principal in the Amount of Statement of Bonds and Financial Notes Position Income Received and Accrued

Government P4,610,013 P_

Unquoted:

33,123,000

ed on their quoted market price without any deduction for transaction costs. For securities in which current bid and asking prices are not available, the price of the most recent transaction provides evidence of the current fair value as long as there has not been a significant change in economic circumstances since the time of the transaction.

For unquoted financial securities, the most recent sales transaction was used as the basis for determining the fair value as of December 31,2019.

Schedule B. Amounts Receivable from Directors. Offrcers. Employees. Related Parties and Princioal Stockholders (Other than Related Parties)

The Company has no outstanding receivables from its directors, officers, employees, related parties and principal stockholders as of December 31,2019.

Schedule C. Amounts Receivable fromlPayable to Related Parties which are Eliminated durine the Consolidation of Financial Statements Not applicable.

Schedule D. Lone-term Debt

The Company has no outstanding long-term debt as of December 31,2019.

Schedule E. lndebtedness to Related Parties (Lone Term Loans from Related Companies)

The Company has no long-term indebtedness to related parties as of Decemb er 3I , 2019

Schedule F. Guarantees of Securities of Other Issuers

The Company does not have guarantees of securities of other issuers as of Decemb er 3l , 2019

Schedule G. Capital Stock

Number of Number of shares issued Shares and reserved for outstanding options, as shown warrants, Number of Number of under related conversion shares held Directors, shares balance sheet and other by related ofFtcers and Title of issue authorized caption rights parties emplovees Others

\32,525,216

SEAFRONT RESOURCES CORPORATION

SCHEDULE OF FINAI\CIAL SOUNDNESS INDICATORS

AS OF'DECEMBER 31. 2019 AND 2018

Financial Soundness Indicators

Below are the financial ratios that are relevant to the Company for the years ended December 31,2019 and 2018: Financial ratios

Current ratio Debt to assets

Asset-to-equity ratio

Eamings per share

Price eamings ratio

Return

Long-term debt to equity ratio

EBITDA to total interest paid

Total interest paid *Earnings before interest, taxes, depreciation and amortization (EBITDA)

RECONCILIATION OF RETAINED EARNINGS AVAILABLE FOR DIVIDEND DECLARATION

DECEMBER3I,2019

Net income (loss) during the period closed to retained earnings

Add: Non-actuaUunrealized income net of tax Less: Non-actuaVunrealized income net of tax

32,421,673 (437,51;) Less: Dividend declarations during the year

SEAFRONT RESOURCES CORPORATION

MAP OF RELATIONSHIPS OF THE COMPANIES WITHIN THE GROUP

Group Structure

All existing stockholders as of December 31, 2019 neither constitute control nor significant influence over the Company. Also, the Company's investments neither constitute control nor significant influence.

SEAFRONT RESOURCES CORPORATION

INDEX TO F'INANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES

SEC FORM 17.A

FINANCIAL STATEMENTS

Statement of Management's Responsibility for Financial Statements

Report of Independent Auditors' Report

Statements of Financial Position as at December 3 I 201 9 and 20 I 8

Statements of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017

Statements of Changes in Equity for the years ended December 3l , 2019, 2018 and 2017

Statements of Cash Flows for the years ended December 3 l, 2019, 2018 and 2017

Notes to Financial Statements

SUPPLEMENTARY SCHEDULES

Report of Independent Auditors' on Supplementary Schedules

Schedules Required under SRC Rule 68-E

A. Financial Assets

B. Amounts Receivable from Directors, Officers, Employees, Related Parties, and Principal Stockholders (Other than Related Parties)

C. Amounts Receivable from Related Parties which are Eliminated during the Consolidation of Financial Statements

D. Long-term Debt

E. Indebtedness to Related Parties

F. Guarantees of Securities of Other Issuers

G. Capital Stock

Additional Components

Schedule of Financial Soundness Indicators

Reconciliation of Retained Earnings Available for Dividend Declaration

Map of Relationship of the Companies within the Group

FullName)

RegistrationNumber

(BusinessAddress:No.StreetCity/Town/Province)

(ContactPerson) 1st QuarterReport (CompanyTelephone Number) 12 31 17-Q 07 27

Day

Day (FiscalYear) (AnnualMeeting)

(SecondaryLicenseType,IfApplicable)

Dept.RequiringthisDoc. AmendedArticlesNumber/Section TotalAmountofBorrowings TotalNo.ofStockholders Domestic Foreign

SECFORM17-Q

QUARTERLYREPORTPURSUANTTOSECTION11 OFTHESECURITIESSREGULATIONCODE(SRC) ANDSRCRULE17(a)-1(b)(2)THEREUNDER

1. March31,2020 Forthequarterlyperiodended

2. SECIdentificationNumber 40979

4. SeafrontResourcesCorporation

Exactnameofregistrantasspecifiedinitscharter

5. Manila,Philippines

3. BIRTaxIdentificationNo.000-194-465-000

6. (SECUseOnly) Province,countryorotherjurisdiction

IndustryClassificationCode: ofincorporation

7. 7th Floor,JMTCondominium,ADBAvenue,OrtigasCenter,PasigCity 1605 Addressofprincipaloffice PostalCode

8. (632)8637-29-17

Registrant’stelephonenumber,includingareacode

9. Notapplicable

Formername,formeraddressandformerfiscalyear,ifchangedsincelastreport

10. SecuritiesregisteredpursuanttoSections8and12oftheCode,orSections4and8oftheRSA

TitleofEachClass NumberofSharesofCommonStock Outstanding

Common(parvalueofP1.00/share)

AmountofDebtOutstanding

163,000,000

₱62,997,111

11. AreanyorallofthesecuritieslistedonthePhilippineStockExchange?

AllissuedandoutstandingcommonsharesarelistedinthePhilippineStockExchange

12. Indicatebycheckmarkwhethertheregistrant:

(a) hasfiledallreportsrequiredtobefiledbySection11oftheSecuritiesRegulationCode(SRC) andSRCRule11(a)-1thereunderandSections26and141oftheCorporationCodeofthePhilippines,during thepreceding12months(orforsuchshorterperiodtheregistrantwasrequiredtofilesuchreports)

Yes []

(b) hasbeensubjecttosuchfilingrequirementsforthepast90days

Yes[]

1. StatementsofFinancialPosition

AsofMarch31,2020,March31,2019andDecember31,2019

2. StatementsofIncome

Forthe1st quarterendedMarch31,2020andMarch31,2019

3. StatementofChangesinEquity

AsofMarch31,2020,March31,2019andDecember31,2019

4. StatementofCashflows

AsofMarch31,2020,March31,2019andDecember31,2019

5. NotestoFinancialStatements 8-27

Item2.ManagementDiscussionandAnalysisofFinancialConditionandResultsof Operations

1.FinancialCondition–March31,2020andMarch31,2019

2.ResultsofOperations–ForthequarterendedMarch31,2020 andMarch31,2019

3.FinancialCondition–March31,2019andDecember31,2018

4.KeyPerformanceIndicator

5.DiscussionofIndicatorsoftheCompany’sLevelofPerformance

SEAFRONTRESOURCESCORPORATION

STATEMENTSOFFINANCIALPOSITION

ASSETS

CurrentAssets

LIABILITIESANDEQUITY

(Unaudited)

(Unaudited)

(Audited)

See accompanying Notes

SEAFRONTRESOURCESCORPORATION

STATEMENTSOFCOMPREHENSIVEINCOME

REVENUES

OTHERCOMPREHENSIVEINCOME(LOSS)

(Unaudited)

(Unaudited)

See accompanying Notes to Financial Statements.

SEAFRONTRESOURCESCORPORATION STATEMENTSOFCHANGESINEQUITY

See accompanying Notes to Financial Statements.

Forthe1st QuarterEndedMarch31,2020(Unaudited)

Forthe1st QuarterEndedMarch31,2019(Unaudited)

FortheYearEndedDecember31,2019(Audited)

SEAFRONTRESOURCESCORPORATION

STATEMENTSOFCASH FLOWS

CASHFLOWSFROMOPERATINGACTIVITIES

Income(loss)beforeincometax

31-Mar-20 (Unaudited) 31-Mar-19 (Unaudited) 31-Dec-19 (Audited)

(236,317) (55,485) (415,615)

Operatinglossbeforeworkingcapitalchanges (287,008) (325,616) (1,888,665)

Decrease(increase)in:

18,973 (26,087) (19,549)

(30,998) (59,377) (86,918)

Increaseinaccountspayableandaccruedexpenses (155,553) (517,311) (78,799) Cashgeneratedfrom(usedin)operations (454,586) (876,217) (2,073,931)

CASHFLOWSFROMINVESTINGACTIVITIES

CASHANDCASHEQUIVALENTSAT

See accompanying Notes to Financial Statements.

SEAFRONTRESOURCESCORPORATION

NOTESTOFINANCIALSTATEMENTS

1. CorporateInformation

Seafront Resources Corporation (the Company or SRC) was registered with the Securities and Exchange Commission (SEC) on April 16, 1970 as an oil exploration and production company. On October 18, 1996,theCompanyamendeditsArticlesofIncorporationwhichprovidesfortherevision of its primary purpose from engagingin the business of oil exploration and production into a holding companyandtoincludeoilexplorationandproductionbusinessasoneofitssecondarypurposes.The Company’ssharesofstockwerelistedonMay7,1974andarecurrentlytradedatthePhilippineStock Exchange.

The registered office address of the Company is 7th Floor, JMT Building, ADB Avenue, OrtigasCenter,PasigCity.

TheaccompanyingcompanyfinancialstatementswereapprovedandauthorizedforissuebytheBoard ofDirectors(BOD)onMay25,2020.

2. BasisofPreparation

BasisofPreparation

The accompanying financial statements of the Company have been prepared under the historical cost basis,exceptforthefinancialassetsatfairvaluethroughprofitorloss(FVTPL)andfinancialassetsat fairvaluethroughothercomprehensiveincome(FVOCI),whichhavebeenmeasuredatfairvalue. The Company’s financial statements are presented in Philippine Peso (P=), which is also the Company’s functionalcurrencyandpresentationcurrency.

The Company has investment in trust funds. The transactions and balances of the Company’s trust funds(seeNote7)areconsolidatedonalinebylinebasiswiththeCompany.Thetrustfundreportsare prepared for the same reporting year as the Company, using consistent accounting policies in accordancewithPhilippineFinancialReportingStandards(PFRSs).

StatementofCompliance

ThefinancialstatementsoftheCompanyhavebeenpreparedinaccordancewithPFRSs.

3. ChangesinAccountingPoliciesandDisclosures

Theaccountingpoliciesadoptedinthepreparationoftheinterimfinancialstatementsareconsistentwith thosefollowedinthepreparationoftheCompany’sannualfinancialstatementsfortheyearended December31,2019,exceptfortheadoptionofthefollowingamendmentsandimprovementstoexisting standardsandinterpretations,whichwereeffectivebeginningJanuary1,2020.

• AmendmentstoPFRS3, Definition of a Business

• AmendmentstoPAS1, Presentation of Financial Statements,andPAS8, Accounting Policies, Changes in Accounting Estimates and Errors, Definition of Material

AdoptionofthesepronouncementsdidnothaveanysignificantimpactontheCompany’sfinancial positionorperformanceunlessotherwiseindicated.

StandardsIssuedbutnotyetEffective

Pronouncements issued but not yet effective are listed below. The Company is currently assessing the impactofthefollowingstandardsandplanstoadoptthenewstandardswhenthesebecomeeffective.

Effective beginning on or after January 1, 2021

 PFRS17, Insurance Contracts

Deferred effectivity

 Amendments to PFRS 10, Consolidated Financial Statements, and PAS 28, Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

TheCompanycontinuestoassesstheimpactoftheabovenewandamendedaccountingstandardsand interpretations for the year 2020. Additional disclosures required by these new pronouncements will beincludedinthefinancialstatementswhentheseareadopted.

4. SummaryofSignificantAccountingPolicies

CashandCashEquivalents

Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with original maturities of three (3) months or lessandthataresubject toaninsignificantriskofchangesinvalue.

FinancialInstruments

Initial recognition and subsequent measurement

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liabilityor equityinstrumentofanotherentity.

Financial assets - Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortized cost; FVOCI;andFVTPL.

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing them. The Company initiallymeasuresafinancialassetatitsfairvalueplus,inthecaseofafinancialassetnotatfairvalue throughprofitorloss,transactioncosts.

InorderforafinancialassettobeclassifiedandmeasuredatamortizedcostorfairvaluethroughOCI, it needs to give rise to cash flow that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrumentlevel.

The Company’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flowswill result fromcollectingcontractualcashflows,sellingthefinancialassets,orboth.

Subsequent measurement

Forpurposesofsubsequent measurement,financialassetsareclassifiedinfourcategories:

 Financialassetsatamortizedcost(debtinstruments)

 FinancialassetsatFVOCIwithrecyclingofcumulativegainsandlosses(debtinstruments)

 Financial assets designated at FVOCI with no recycling of cumulative gains and losses upon derecognition(equityinstruments)

 FinancialassetsatFVTPL

Financial assets at amortized cost (debt instruments)

TheCompanymeasuresfinancialassetsatamortizedcostifbothofthefollowingconditionsaremet:

 The financial asset is held within a business model with the objective to hold financial assets in ordertocollectcontractualcashflows;and

 Thecontractualtermsofthefinancialassetgiveriseonspecifieddatestocashflowsthataresolely paymentsofprincipalandinterestontheprincipalamountoutstanding.

Financialassetsatamortizedcostaresubsequentlymeasuredusingtheeffectiveinterest(EIR)method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized,modifiedorimpaired.

TheCompany’sfinancialassetsatamortizedcostincludescashand cashequivalentsandreceivables.

Financial assets at FVTPL

Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to bemeasured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effectivehedginginstruments.Financialassetswithcashflowsthatarenotsolelypaymentsofprincipal andinterestareclassifiedandmeasuredatfairvaluethroughprofitorloss,irrespectiveofthebusiness model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at fair value through OCI, as described above, debt instruments may be designated as at FVTPL on initial recognitionifdoingsoeliminates,orsignificantlyreduces,anaccountingmismatch.

FinancialassetsatFVTPLarecarriedinthestatementoffinancialpositionatfairvaluewithnetchanges infairvaluerecognizedinthestatementofprofitorloss.

This category includes derivative instruments and listed equity investments which the Company had notirrevocablyelectedtoclassifyatfairvaluethroughOCI.Dividendsonlistedequityinvestmentsare also recognized asother income in the statement of profit or loss when the right of payment has been established.

The Company’s financial assets at FVTPL consists of investments in listed equity securities held for trading.

Financial assets designated at FVOCI (equity instruments)

Uponinitialrecognition,theCompanycanelecttoclassifyirrevocablyitsequityinvestmentsasequity instruments designated at FVOCI when they meet the definition of equity under PAS 32 and are not heldfortrading. Theclassificationisdeterminedonaninstrument-by-instrumentbasis.

Gainsandlossesonthesefinancialassetsareneverrecycledtoprofitorloss.Dividendsarerecognized as other income in profit or loss when the right of payment has been established, except when the

Company benefitsfromsuchproceedsasarecoveryof partofthecostof thefinancialasset,inwhich case, such gains are recorded in OCI. Equity instruments designated at FVOCI are not subject to impairmentassessment.

The Company’s financial assets at FVOCI include quoted and unquoted equity securities and quoted governmentsecurities.

Impairment of financial assets

The Company recognizes an allowance for ECLs for all debt instruments not held at FVTPL. ECLs arebasedonthedifferencebetweenthecontractualcashflowsdueinaccordancewiththecontractand all thecash flowsthattheCompanyexpectsto receive,discounted atan approximationoftheoriginal effectiveinterestrate. Theexpectedcashflowswillincludecashflowsfromthesaleofcollateralheld orothercredit enhancementsthatareintegraltothecontractualterms.

ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposuresfor which therehasbeen a significant increasein credit risk since initial recognition, aloss allowanceisrequiredforcreditlossesexpectedovertheremaininglifeoftheexposure,irrespectiveof thetimingofthedefault(alifetimeECL).

The Company may consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before takingintoaccountanycreditenhancementsheldbytheCompany.Afinancialassetiswrittenoffwhen thereisnoreasonableexpectationofrecoveringthecontractualcashflows.

Financial liabilities - Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings andpayables,netofdirectlyattributabletransactioncosts.

Subsequent measurement

Themeasurementoffinancialliabilitiesdependsontheirclassification,asdescribedbelow:  FinancialliabilitiesatFVTPL

Loansandborrowings

Loans and borrowings

Afterinitialrecognition,interest-bearingloansandborrowingsaresubsequentlymeasuredatamortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognizedaswellasthroughtheEIRamortizationprocess.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statementofcomprehensiveincome.

The Company’s loans and borrowings include accounts payable and accrued expenses, excluding statutoryliabilities.

Derecognition of financial assets and financial liabilities

Financial assets

Afinancialasset(or whereapplicable,apart of afinancialassetor partof agroupof similarfinancial assets)isderecognizedwhen:

 therightstoreceivecashflowsfromtheassethaveexpired;

 theCompanyretainstherightstoreceivecashflowsfromtheasset,buthasassumedanobligation topaytheminfullwithoutmaterial delaytoathirdpartyundera“pass-through”arrangement; or

 the Company has transferred its right to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retainedsubstantiallyalltherisksandrewardsoftheasset,buthastransferredcontroloftheasset.

When the Company has transferred its rights to receive cash flows from an asset and has neither transferrednorretainedsubstantiallyalltherisksandrewardsoftheassetnortransferredcontrolofthe asset, the asset is recognized to the extent of the Company’s continuing involvement in the asset. Continuinginvolvementthattakestheformofaguaranteeoverthetransferredassetismeasuredatthe lower of the original carrying amount of the asset and the maximum amount of consideration that the Companycouldberequiredtorepay.

Financial liabilities

Afinancialliabilityisderecognizedwhen theobligationundertheliabilityisdischarged, cancelledor hasexpired.

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 modificationistreatedasaderecognitionoftheoriginalliabilityandtherecognitionofanewliability, andthedifferenceintherespectivecarryingamountsisrecognizedinprofitorloss.

Offsetting of Financial Instruments

Financial assets and financial liabilities are set off and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and thereisanintentiontosettleonanetbasis,ortorealizetheassetandsettletheliabilitysimultaneously.

FairValueMeasurement

Fairvalueisthepricethat wouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderly transactionbetweenmarketparticipantsatthemeasurementdate. Thefairvaluemeasurementisbased onthepresumptionthatthetransactiontoselltheassetortransfertheliabilitytakesplaceeither:

 Intheprincipalmarketfortheassetorliability,or

 Intheabsenceofaprincipalmarket,inthemostadvantageousmarketfortheassetorliability.

Theprincipalorthemostadvantageousmarket must beaccessibletobytheCompany. Thefair value of an asset or a liability is measured using the assumptions that market participants would use when pricingtheassetorliability,assumingthatmarketparticipantsactintheireconomicbestinterest.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs andminimizingtheuseofunobservableinputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorizedwithinthefairvaluehierarchy,describedasfollows,basedonthelowestlevelinputthatis significanttothefairvaluemeasurementasawhole:





Level1-Quoted(unadjusted)marketpricesinactivemarketsforidenticalassetsorliabilities

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair valuemeasurementisdirectlyorindirectlyobservable

 Level 3 - Valuation techniques for which the lowest level input that is significant to the fair valuemeasurementisunobservable

For assets and liabilities that are recognized in the financial statements on a recurring basis, the CompanydetermineswhethertransfershaveoccurredbetweenLevelsinthehierarchybyre-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole)attheendofeachreportingperiod.

CapitalStock

Capital stock is measured at par value for all shares issued. Incremental costs incurred directly attributabletotheissuanceofnewsharesareshowninequityasadeductionfromproceeds,netoftax. WhentheCompanypurchasesitsowncapitalstock(treasuryshares),theconsiderationpaid,including any attributable incremental costs, is deducted from equity until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of anydirectlyattributableincrementaltransactioncostsandtherelatedtaxeffectsisincludedinequity.

RetainedEarnings

Retained earnings represent accumulated earnings of the Company less dividends declared and with consideration of any changes in accounting policies and other adjustments applied retroactively. The retainedearningsoftheCompanyareavailablefordividendsonlyuponapprovalanddeclarationofthe BOD.

EarningsPerShare(EPS)

Basic earnings per share are computed on the basis of the weighted average number of shares outstandingduringtheyearaftergivingretroactiveeffectforanystockdividendsdeclaredinthecurrent year.

Diluted earningspershare, if applicable, iscomputed onthebasis of theweighted averagenumber of sharesoutstandingduringtheyearplustheweightedaveragenumberofordinarysharesthatwouldbe issuedontheconversionofallthedilutivepotentialordinarysharesintoordinaryshares.Thereareno dilutive potential common sharesthat would requiredisclosureof diluted earningsper common share inthefinancialstatements.

RevenueRecognition

Revenuefromcontractswithcustomersisrecognizedwhencontroloftheservicesistransferredtothe customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The Company has concluded that it is the principal in its revenue arrangementsinceitistheprimaryobligorinallrevenuearrangements,haspricinglatitudeandisalso exposedtocreditrisk.

Dividend income

DividendincomeisrecognizedwhentheCompany’srighttoreceivethepaymentisestablished,which isgenerallywhentheBODapprovesthedividenddeclaration.

Interest income

Interestincomeisrecognizedastheinterestaccruestakingintoaccounttheeffectiveyieldontheasset.

Service income

TheCompanyrecognizesrevenuefromservicesovertime,usinganinputmethodtomeasureprogress towards complete satisfaction of the service, because the customer simultaneously receives and consumesthebenefitsprovidedbytheCompany.

Rental income

Rental incomeunder non-cancellableleasesis recognized in theon astraight-linebasis overthelease terms,asprovidedunderthetermsoftheleasecontract.

GeneralandAdministrativeExpenses

Expenses are recorded when incurred. General and administrative expenses constitute costs of administeringthebusiness.

IncomeTax

Current tax

Currenttaxassetsandliabilitiesforthecurrentandpriorperiodsaremeasuredattheamountexpected toberecoveredfromorpaidtothetaxationauthorities. Thetaxratesandtaxlawsusedtocomputethe amountarethosethatareenactedorsubstantiallyenactedbythereportingdate.

Deferred tax

Deferred tax is provided on all temporary differences at the reporting date between the tax bases of assetsandliabilitiesandtheircarryingamountsforfinancialreportingpurposes.

Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences, carryforward of unused tax credits from excess minimum corporate income tax (MCIT) over regular corporate income tax and unused net operating lossescarryover (NOLCO), totheextentthatitisprobablethattaxableprofit willbeavailableagainst which the deductible temporary differences, and the carryforward of unused tax credits from excess MCITandunexpiredNOLCOcanbeutilized.

Thecarryingamountofdeferredtaxassetsisreviewedateachreportingdateandreducedtotheextent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferredtaxassettobeutilized. Unrecognizeddeferredtaxassetsarereassessedateachreportingdate and are recognized to the extent that it has become probable that future taxable profit will allow the deferredtaxassettoberecovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enactedorsubstantiallyenactedatthereportingdate.

ProvisionsandContingencies

ProvisionsarerecognizedwhentheCompanyhasapresentobligation(legalorconstructive)asaresult ofapastevent,itisprobablethatanoutflowofresourcesembodyingeconomicbenefitswillberequired tosettletheobligationandareliableestimatecanbemadeoftheamountoftheobligation. Wherethe Companyexpectsaprovisiontobereimbursed,thereimbursementisrecognizedasaseparateassetbut

onlywhenthereimbursement is virtuallycertain. If theeffect ofthe time value of moneyis material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects currentmarketassessmentsofthetimevalueofmoneyand,whereappropriate,therisksspecifictothe liability. Where discounting is used, the increase in the provision due to the passage of time is recognizedasaninterestexpense. Provisionsarereviewedateachreportingdateandadjustedtoreflect thecurrentbestestimate.

Contingent liabilities are not recognized in the financial statements. They are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are not recognized in the financial statements but are disclosed when an inflow of economic benefits is probable. Contingent assets are assessed continually to ensure that developments are appropriately reflected in the financial statements. If it has become virtually certain that an inflow of economic benefitswillarise,theassetandtherelatedincomearerecognizedinthefinancialstatements.

EventsAftertheReportingDate

Post year-end events up to the date of auditors’ report that provide additional information about the Company’ssituationatthereportingdate(adjustingevents)arereflectedinthefinancialstatements,if any. Postyear-endeventsthat arenotadjustingeventsaredisclosedinthenoteswhenmaterial.

5. SignificantAccountingJudgments,EstimatesandAssumptions

The preparation of the accompanying financial statements requires management to make judgments, estimates and assumptions that affect amounts reported in the financial statements and related notes. The judgments, estimates and assumptions used in the financial statements are based upon management’sevaluationofrelevantfactsandcircumstancesasofthedateoftheCompany’sfinancial statements. Actualresultscoulddifferfromsuchestimates.

Judgments and estimates are contractually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Judgments

In the process of applying the Company’s accounting policies, management has made the following judgments,apartfromthoseinvolvingestimations,whichhasthemostsignificanteffectontheamounts recognizedinthefinancialstatements:

Recognition of deferred tax assets

TheCompany’s deferredtax assets pertain to the carryforward benefits of NOLCOand excess MCIT overRCIT.Judgmentisrequiredtodeterminetheamountofdeferredtaxassetsthatcanberecognized, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

The Company did not recognize deferred tax assets amounting to P =4.87 million as of December 31, 2019 and March 31, 2020. Management believes that it may not be probable that sufficient taxable incomewillbeavailableagainstwhichtheincometaxbenefitscanberealizedpriortotheirexpiration.

EstimatesandAssumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the statementsoffinancialpositiondate,thathaveasignificantriskofcausingamaterialadjustmenttothe carryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow.

Estimation of fair value of unquoted equity securities classified as financial assets at FVOCI

The Company uses its judgment to select the most appropriate valuation methodology to value its unquotedequityinvestmentsandmakeassumptionsthataremainlybasedonmarketconditionsexisting at each reporting period. As of March 31, 2020 and December 31, 2019, the Company valued the unquoted equity securities classifiedasfinancial assets at FVOCI using the adjusted net asset method which is a combination of the market and income approaches. It involves directly measuring the fair value of the assets and liabilities of the investee company. Assets of the investee company consist mainlyofparcelsoflandforsalewhichisadjustedtoitsfairvalue. Thefairvalueadjustmentsarising fromchangesinfairvalueofunquotedequitysecuritiesarefullydisclosedinNote8.

6. CashandCashEquivalents

31-Mar-20 (Unaudited) 31-Dec-19 (Audited)

Cashinbanksearninterestattheprevailingbankdepositrates. Cashequivalentsareshort-term investmentsthataremadeforvaryingperiodsofuptothreemonthsdependingontheimmediatecash requirementsoftheCompanyandearninterest attheprevailingshort-termplacementrates.

InterestincomeearnedoncashinbanksandcashequivalentsamountedtoP=0.24million,P=0.06million, P =0.42millionforthe1st quarter2020and2019,asofDecember31,2019,respectively.

7. InvestmentinTrustFunds

The Company established trust funds (the Trust) which are being administered by a local bank under two trust agreements. The details of the trust funds based on the financial statements issued by the trusteebankfollows:

31-Mar-20 (Unaudited)

31-Dec-19 (Audited)

Assets

Cashandcashequivalents P =8,001,017 P =5,561,000

FinancialassetsatFVTPL 2,073,680 14,816,793

FinancialassetsatFVOCI-governmentsecurities 9,034,630 4,610,013

Loansandreceivables 28,571 70,440 19,137,898 25,058,246

Liabilities

Accountspayableandaccruedexpenses (42,664) (177,027) P=19,095,234 P =24,881,219

-1731-Mar-20 (Unaudited) 31-Dec-19 (Audited)

Equity Principalfund P =28,056,417 P =28,056,417

Accumulatedtrustfundincome(loss)atbeginningof year (3,175,198) (5,756,733)

Trustfundincome(loss)for theyear (5,785,985) 2,851,535

Accumulatedtrustfundincome(loss)atendofyear (8,961,183) (3,175,198) P=19,095,234 P =24,881,219

The assets, liabilities and performance of the fund are consolidated in the applicable accounts of the Companyforfinancialstatementpresentationpurposes.

8. FinancialAssets

TheCompany’sfinancialassetsaresummarizedbymeasurementcategoriesasfollows:

31-Mar-20 (Unaudited) 31-Dec-19 (Audited)

FinancialAssetsatFVPL

DetailsoffinancialassetsatFVTPLconsistingoflistedequitysecuritiesfollow:

31-Mar-20 (Unaudited) 31-Dec-19 (Audited)

value P=29,757,961 P =45,288,418

The net gain (loss) on fair value changes on financial assets at FVTPL amounted to (P=15.53) million, P =7.02millionandP=0.44millionforthe1st quarter2020and2019andfortheyearendedDecember31, 2019,respectively.

Themovementsinfinancialassets atFVTPLfor the1st quarterendedMarch31,2020andyearended December31,2019follow:

31-Mar-20 (Unaudited) 31-Dec-19 (Audited)

Balanceatbeginningofyear P=45,288,418 P =44,850,901

Fairvaluegain(loss)recognizedduringtheyear (15,530,457) 437,517

Balanceatendofyear P=29,757,961 P =45,288,418

FinancialAssetsatFVOCI

FinancialassetsatFVOCIconsistofquotedandunquotedsharesofstockheldforlong-terminvestment purposesandarecarriedatfairvalue. Thecarryingvaluesoftheseinvestmentsareasfollows:

31-Mar-20 (Unaudited) 31-Dec-19 (Audited)

Listedequitysecurities:

PetroEnergyResourcesCorporation(PERC) P=9,627,911 P =15,789,774 BenguetCorporation 2,632,984 2,833,592 12,260,895 18,623,366

Non-listedequitysecurity: HermosaEcozone DevelopmentCorporation (HEDC) 517,176,832 517,176,832 Investmentsingovernmentsecurities 2,075,016 4,610,013 P=531,512,743 P =540,410,211

Themovementsin financialassets at FVOCIforthe1st quarterendedMarch31,2020and yearended December31,2019follow:

31-Mar-20 (Unaudited) 31-Dec-19 (Audited)

Balanceatbeginningofyear P=540,410,211 P =416,353,329

Fairvaluegains(loss)recognizedduringtheperiod (6,392,922) 112,735,628 Paymentofsubscriptionpayable − 12,353,884 Movementofgovernmentsecurities (2,504,546) (1,032,630) Balanceatendofyear P=531,512,743 P =540,410,212

MovementsinthenetunrealizedgainsonfinancialassetsatFVOCIareasfollows:

31-Mar-20 (Unaudited)

31-Dec-19 (Audited)

Balanceatbeginningofyear P=359,424,346 P =263,345,540

Unrealizedgain(loss)recognizedinother comprehensiveincome

Investment in HEDC

On January 31, 1997, the Company entered into a Project Shareholders’ Agreement with five other companies led by Investment and Capital Corporation of the Philippines (ICCP) and Penta Capital Investment Corporation(PCIC) to develop 500to600hectaresof rawland inHermosa, Bataan intoa new township consisting of industrial estates, residential communities, a golf and country club and a commercialcenter.

Thefair valueof investment inHEDCisdeterminedusingtheadjustednetasset valuemethod wherein the assets of HEDC consisting mainly of parcels of land are adjusted from cost to its fair value. The valuation of the parcels of land was performed by a Securities and Exchange Commission accredited independentvaluerasatDecember31,2019and2018. ThismeasurementfallsunderLevel3inthefair valuehierarchy.

Fairvaluemeasurementdisclosuresforthedeterminationoffairvalueofunquotedequitysecuritiesare providedinNote14.

9. Receivables

31-Mar-20 (Unaudited) 31-Dec-19 (Audited)

Dividendincomeearnedonitsinvestmentsamountedtonilforthe1st quarterof2019and2018,andP = 33.46millionfortheyearended2019.

10. OtherIncome

31-Mar-20 (Unaudited)

31-Dec-19 (Audited)

31-Dec-18 (Audited)

ServiceincomepertainstoaccountingservicesrenderedbytheCompanytoHEDC.

Rental incomepertainsto rentalsearnedfromthetwo(2)parkingslotsownedbytheCompanywhich are classified as investment property. As of March 31, 2020 and December 31, 2019, the cost of the fullydepreciatedparkingslotsamountedtoP =207,598.

ThefairvalueoftheinvestmentpropertyamountedtoP=800,000toP=1,000,000perslotasofMarch31, 2020 and December 31, 2019, respectively. This has been determined on the basis of recent sales of similar properties in the same area as the investment property and taking into account the economic conditionsprevailingatthetimethevaluationwasmade. Therearenorelatedcostsfortheoperations oftheinvestmentproperty.

11. RelatedPartyTransactions

Relatedpartyrelationshipexistswhenonepartyhastheabilitytocontrol,directly,orindirectlythrough one or more intermediaries, the other party or exercise significant influence over the other party in makingfinancialandoperatingdecisions. Suchrelationshipalsoexistsbetweenand/oramongentities, which are under common control with the reporting enterprises and its key management personnel, directors,oritsshareholders. Inconsideringeachrelatedpartyrelationship,attentionisdirectedtothe substanceoftherelationship,andnotmerelythelegalform.

TheCompanyinitsregularconductofbusinesshasenteredintothefollowingtransactionswithrelated partiesconsistingofreimbursementofexpensesandmanagementandaccountingservicesagreements.

The Company’s financial statements include the following amounts resulting from transactions with relatedparties:

Natureof transaction

Affiliate:

Natureof transaction

Affiliate:

2031-Mar-20 (Unaudited)

Receivables/ (Accounts payable) Terms Conditions

Noninterest bearing,payable whendueand demandable Unsecured

18,973 -do- -doP=104,585 31-Dec-19 (Audited)

Receivables/ (Accounts payable) Terms Conditions

Noninterest bearing, payablewhendue anddemandable Unsecured, no impairment

37,946 -do- -doP =368,663

TheCompanyhasnoemployee.PERCprovidesadministrativesupporttotheCompany.Therefore, nocompensationandshort-termbenefitsforkeymanagementpersonnel werechargedinprofitor lossforthequarterendedMarch31,2020and2019andyearendedDecember31,2019.

Terms and conditions of transactions with related parties

Outstandingbalancesatyear-end aretobesettledincash. Therehavebeennoguaranteesprovidedor receivedforanyrelatedpartyreceivablesorpayables.

12. FinancialInstruments

CategoriesandFairValuesofFinancialInstruments

The methods and assumptions used by the Company in estimating the fair values of the financial instrumentsare:

Cash and cash equivalents and receivables

Due to the short-term nature of the instruments, carrying amounts approximate fair values as of the reportingdate.

Government securities

Fairvaluesaregenerallybasedonquotedmarketpricesatreportingdate. ThisisunderLevel1category ofthefairvaluehierarchy.

-21-

Equity securities

For quoted equity securities, fair values are based on published quoted prices. This is under Level1categoryofthefairvaluehierarchy.

For unquoted equity securities, fair values are determined using the adjusted net asset value method which involves directly measuring the fair value of the assets and liabilities of the investee company. ThismeasurementfallsunderLevel3inthefairvaluehierarchy.

Accounts payable and accrued expenses

Carryingvaluesapproximatefairvaluesduetotheirshort-termnature.

Descriptionofsignificantunobservableinputstovaluation:

Thesignificant unobservableinputsused in the fair value measurement categorized within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at March 31, 2020 and December31,2019areshownbelow:

Valuation technique Significant unobservableinputs

Range

Unquotedequity sharesat FVOCI

Adjustednet asset method Pricepersquaremeter P =450-P =5,650

The appraised value of the land was determined using the market approach which is a valuation technique that uses prices and other relevant information generated by market transactions involving identical or comparable assets. Net adjustment factors arising from external and internal factors (i.e. location, size/shape/terrain, and development) affecting the subject properties as compared to the marketlistingofcomparablepropertiesrangesfrom-5% to -10%.Significantfavorable(unfavorable) adjustments to the aforementioned factors based on the professional judgment of the independent appraisers would increase (decrease) the fair value of land, in return the fair value of the unquoted financialasset.

FinancialRiskManagementObjectivesandPolicies

TheCompany’sfinancialinstrumentscomprisecashandcashequivalents,receivables,financialassets, accountspayableandaccruedexpensesandsubscriptionspayable. Themainpurposeofthesefinancial instruments is to fund its own operations and capital expenditures. The BOD reviews and approves policiesformanagingtheserisks. Also,theAuditCommitteeoftheBODmeetsregularlyandexercises oversightroleinmanagingtheserisks.

Financial Risks

The main financial risks arising from the Company’s financial instruments are liquidity risk, market riskandcreditrisk.

Liquidity risk

Liquidity risk is the risk that the Company is unable to meet its financial obligation when due. The Company has substantial investments in shares of stock which are not listed in the Philippine Stock Exchangeandmaynotbereadilyconvertibletoliquidassetsnecessarytomeetanypotentialadditional liquidity requirements of the Company. Investments in unquoted equity securities classified as financialassetsatFVOCIamountedtoP=517.18millionasofMarch31,2020andDecember31,2019.

The Company monitors its cash position and overall liquidity position in assessing its exposure to liquidityrisk. TheCompanymaintainsalevelofcashandcashequivalentsdeemedsufficienttofinance operationsandtomitigatetheeffectsoffluctuationincashflows.

TheCompany’saccountspayableandaccruedexpensesareallsettledonamonthlybasis.

ThetablesbelowsummarizethematurityprofileoftheCompany’sfinancialassetsandliabilitiesas ofMarch31,2020andDecember31,2019basedoncontractualundiscountedpayments.

31-Mar-20 (Unaudited)

31-Dec-19 (Audited) Ondemand

Market risk

Marketriskistheriskoflossonfutureearnings,onfairvaluesoronfuturecashflowsthatmayresult fromchangesin marketprices. The valueof afinancial instrumentmaychangeasaresult ofchanges in interest rates, foreign currency exchanges rates, commodity prices, equity prices and other market changes. TheCompany’smarketriskemanatesfromitsholdingsindebtandequitysecurities.

The Company closely monitors the prices of its debt and equity securities as well as macroeconomic and entity-specificfactorswhichcould directlyor indirectly affect thepricesof these instruments. In caseof an expected declineinitsportfolio of equitysecurities,theCompanyreadilydisposesortrades thesecuritiesforreplacementwithmoreviableandlessriskyinvestments.

Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. With respect to credit risk arising from cash and cash equivalents, receivables, financial assets at FVTPL and financial assets at FVOCI, the Company’s exposure to credit risk is equal to the carrying amount of these instruments. The Company limits its creditriskontheseassetsbydealingonlywithreputablecounterparties.

For cash and cash equivalents and quoted government securities, the Company applies the low credit risksimplificationwheretheCompanymeasurestheECLsona12-monthbasisbasedontheprobability of default and loss given default which are publicly available. The Companyalso evaluates the credit rating of the bank and other financial institutions to determine whether the debt instrument has significantlyincreasedincredit riskandtoestimateECLs.

TheCompanyconsidersitscashand cash equivalentsand quotedgovernmentsecuritiesashighgrade since these are placed in financial institutions of high credit standing. Accordingly, ECLs relating to thesedebtinstrumentsroundstonil.

The Company’s receivables are aged current as of March 31, 2020 and December 31, 2019. No receivablesareconsideredcredit-impaired.

As of March 31, 2020 and December 31, 2019, the carrying values of the Company’s financial instrumentsrepresent maximumexposureasofreportingdate.

The table below shows the comparative summary of maximum credit risk exposures on financial instrumentsasofMarch31,2020andDecember31,2019: 31-Mar-20 (Unaudited)

(Audited)

FinancialassetsatFVTPL:

Financialassetsatamortizedcost:

Financial

atFVOCI:

The following tables show financial instruments recognized at fair value as of March 31, 2020 and December31,2019,analyzedbetweenthosewhosefairvaluesarebasedon:

1. Quotedpricesinactivemarketsforidenticalassetsorliabilities(Level1);

2. ThoseinvolvinginputsotherthanquotedpricesincludedinLevel1thatareobservablefortheasset orliability,eitherdirectlyorindirectly(Level2);and

3. Those with inputs for the asset or liability that are not based on observable market data (unobservableinputs)(Level3).

31-Mar-20 (Unaudited)

TherewerenotransfersbetweenLevel1andLevel2fairvaluemeasurementsandnotransfersinto andoutofLevel 3fairvaluemeasurementsinMarch31,2020andDecember31,2019.

13. CapitalManagement

The primary objective of the Company’s capital management is to ensure that it maintains a strong creditratingandhealthycapitalratiosinordertosupportitsbusinessandmaximizeshareholders’value.

TheCompanymanagesitscapitalstructureandmakesadjustmentstoit,inlightofchangesineconomic conditions. Tomaintainoradjustthecapitalstructure,theCompanymayadjustthedividendpayment toshareholdersorissuenewshares.

TheCompanymonitorscapitalusingadebt-to-equityratio,whichistotaldebtdividedbytotalequity. The Company includes within total debt the following: accounts payable and accrued expenses and subscriptions payable. Total equity includes capital stock, net unrealized gains (losses) on financial assetsat FVOCIandretainedearnings(deficit).

The Company has no externally imposed capital requirements as of March 31, 2020 December 31, 2019.

The table below demonstrates the debt-to-equity ratios of the Company as of March 31, 2020 and December31,2019:

31-Mar-20 (Unaudited)

31-Dec-19 (Audited)

Therewere no changesin theobjectives, policies or processesfor the 1st quarter2020 and yearended December31,2019.

TheCompanyhasdeclarabledividendsamountedP =47.4millionasofMarch31,2020.

TheCompany’strackrecordofcapitalstockisasfollows:

Numberof

DateofSEC approval

Listingdate-May7,1974 10,000,000,000P=0.01/shareNovember5,1973

Add(deduct):

50%stockdividend 5,000,000,0000.01/shareNovember27,1981

60%stockdividend 9,000,000,0000.01/shareOctober31,1990

1:2.400stockrightsoffering 10,000,000,0000.01/shareSeptember28,1992

1:2.125stockrightsoffering 16,000,000,0000.01/shareFebruary8,1994 15%stockdividend 7,500,000,0000.01/shareJanuary20,1997

Changeinparvaluefrom P =0.01/sharetoP=1.00/share(56,925,000,000) August14,1997

Quasi-reorganization (412,000,000) 1/shareOctober5,1998

Numberof holdersas ofyear-end

14. BasicandDilutedEarningsPerShare

ThecomputationsoftheCompany’sbasicearningspershareareasfollows:

The Company has no potentially dilutive common stock as of March 31, 2020, March 31, 2019, and December31,2019.

15. Others

a) The Interim Financial Report as of March 31, 2020 is in compliance with generally accepted accountingprinciples(alleffectivestandardsandinterpretationsunderPFRS).

b) The same policies and methods of computation were followed in the preparation of the interim financialreportcomparedtotheDecember31,2019AuditedFinancialStatements.

c) Therearenounusualitemoritemsthataffectedtheassets,liabilities,equityand cash flowsofthe March31,2020FinancialStatements.

d) Thereare no material events happened subsequent to the end of March 31, 2020 that might affect theresultofsaidfinancialstatements.

e) Earnings per share is presented in the face of the unaudited statements of income for the period endedMarch31,2020andMarch31,2019.

f) No significant events happened during the quarter that will affect the March 31, 2020 Unaudited FinancialStatements.

g) There are no seasonal aspects that had a material effect on the financial condition or results of operationoftheCompany.

h) There is no foreseeable event that will trigger direct or contingent financial obligation that is materialtotheCompany,includinganydefaultofacceleratedobligation.

i) There are no material off-balance sheet transactions, arrangements, obligations and other relationshipoftheCompanywithotherentitiesorpersonsthatwerecreatedduringtheperiod.

j) Therearenochangesinestimatesofamountsreportedinpriorperiodsofthecurrentfinancialyear orchangesinestimatesofamountsreportedinpriorfinancialyearsthatcouldhavematerialeffect inthecurrentperiod.

k) Therearenoissuances,repurchases,repayments,repaymentsofdebtandequitysecurities.

l) We are not required to disclose segment information in our financial statements because we only haveonesourceofrevenue.

m) Therearenochangesinthecompositionoftheissuerduringtheinterimperiod,includingbusiness combinations, acquisition or disposalof subsidiariesandlongterm investments, restructuringand discountingoperationsduringtheperiod.

ITEM2. MANAGEMENTDISCUSSIONANDANALYSISOFFINANCIALCONDITIONAND

1.FinancialCondition(AsofMarch31,2020andMarch31,2019)

LIABILITIESANDEQUITY

TotalassetsamountedtoP608.081millionandP493.373millionasofMarch31,2020andMarch31,2019, respectively.

TheCompany’scash andcash equivalentsamounted toP45.344millionasofMarch31,2020 andP8.469 million as of March 31, 2019. The 435.44% net increase was due to cash dividend received from HEDC netofpaymentforworkingcapitalrequirementsduringtheperiod.

FinancialassetsatfairvaluethroughprofitorlossamountedtoP29.758millionandP51.870millionasof March 31, 2020 and as of March 31, 2019, respectively. The 42.63% decrease is mainly due to negative movement of marketvaluesofinvestmentsinstockstradedatPSE.

Receivables account as of March 31, 2020 amounted to P0.367 million compared to P0.279 million as of March31,2019.Thebulkofthe31.34%increaseinthisaccountisduetointerestfromthemoneymarket placement.

Other current assets consist of prepayments, prepaid taxes and input tax carry-overs. This amounted to P1.100millionandP1.041millionasofMarch31,2020andMarch31,2019,respectively.The5.62%net increasemainlyrepresentsadditionalinputtaxesrecordedduringtheperiod.

FinancialassetsatFVOCIasofMarch31,2020amountedtoP531.513millionandP431.714millionasof March31,2019. Thebulkofthe23.12%netincreaseisduetotherevaluationoftheinvestmentinHEDC inDecember2019,netof downwardmovementoftheinvestmentinstockstradedatthePSE.

Accounts payable and accrued expenses amounted to P0.429 million and P0.139 million as of March 31, 2020andMarch31,2019,respectively.The208.48%increaseaccountsfortheaccrualofprofessionalfees andothergeneralandadministrativeexpenses.

TotalStockholders’EquityasofasofMarch31,2020amountedtoP545.084millionorP3.344bookvalue pershareandP447.333millionorP2.744bookvaluepershareasofMarch31,2019.

2.ResultsofOperations(FortheQuarterendedMarch31,2020andMarch31,2019)

TheCompanypostedanetlossofP15.583millionasofMarch31,2020comparedtonetincomeofP6.748 millionorP0.041earningspershareasofMarch31,2019.

TheCompany’snetgain/(loss) onfairvaluechangesonfinancialassetsatFVTPLamountedto(P15.530) million and P7.019 million as of March 31, 2020 and March 31, 2019, respectively. The downturn in this account pertains to the decline of market price of theinvestment in PetroEnergy Resources Corporation’s share from P4.10/share to P2.50/share, House of Investments’ share from P5.20/share to P3.70/share and otherinvestments.

InterestincomeamountedtoP0.236millionandP0.055millionasofMarch31,2020andMarch31,2019, respectively.Thereisa325.91%increaseduetotheinterestsearnedinthemoneymarketplacement.

Other income amounted to P0.085 million and P0.074 million as of March 31, 2020 and March 31, 2019 respectively.The15.01%increaseismainlydueto3monthrentalincomein2020ascomparedto1month rentalin2019.

GeneralandadministrativeexpensesamountedtoP0.372millionandP0.400millionasofMarch31,2020 andMarch31,2019,respectively.The6.88%decreaseaccountsforloweradministrativeexpensesincurred duringtheperiod.

-30-

Provision for income tax as of March 31, 2020 and 2019 pertains to the MinimumCorporate Income Tax (MCIT)set-up.TheCompanyset-upMCITratherthanthe30%regulartaxbecausemostofitsincomeare fromunrealizedmarketchangesofinvestmentsandpassiveincomesubjecttofinaltax.

3.FinancialConditions(AsofMarch31,2020andDecember31,2019)

ASSETS

LIABILITIESANDEQUITY

Total assets amounted to P608.081 million as of March 31, 2020 compared to P630.211 million as of December31,2019.

TheCompany’scashandcashequivalentsamountedtoP45.344millionasofMarch31,2020comparedto P43.037 million as of December 31, 2019. The 5.36% increase pertains to the maturity of investment in government security recorded in financial assets at FVOCI net of payment of general and administrative expensesduringtheperiod.

FinancialassetsatFVTPLaccountasofMarch31,2020amountedtoP29.758millioncomparedtoP45.288 millionasof December31,2019. The34.29%decreasepertainsto negativemovementsof market values ofinvestmentsinstockstradedatPSE.

Receivables account as of March 31, 2020 amounted to P0.367 million compared to P0.407 million as of December31,2019.The9.79%decreaseisduetothereceiptofservicefeefromHEDC.

Other current assets as of March 31, 2020 amounted to P1.100 million compared to P1.069 million as of December 31, 2019. The increase is due to additional input taxes and other assets recorded during the period.

Bulkofthe1.65%decreaseinfinancialassetatFVOCIpertainstothedownwardmovementofinvestment instocks.

Accounts payable and accrued expenses amounted to P0.429 million and P0.583 million as of March 31, 2020 and December 31, 2019, respectively. The 26.41% net decrease accounts for payment of accrued expensesuchasprofessionalfeesandothergeneralandadministrativeexpenses.

TotalStockholders’ EquityasofMarch 31,2020amounted toP545.084millionorP3.344 bookvalueper sharecomparedtoP567.060millionorP3.479bookvalueasofDecember31,2019.

Exceptforitemsdiscussedabove,therearenomorechangesinthefinancialstatementsthatwillreachthe materialitythresholdof5%.

KEYPERFORMANCEINDICATORS(KPI):

The following liquidity and profitability ratios indicate acceptable levels of financial condition and performanceofthecompany:

There is a decrease in the Company’s current ratio asof March 31, 2020 as compared to March 31, 2019 mainlyduetotheincreaseincurrentassetsandcurrentliabilities.

Thereis a slight change in the Company’sdebt-equityratio as of March 31, 2020 compared to March 31, 2019isduetomovementsinliabilitiesandequityduringtheperiod.

Asset turnover for the 1st quarter 2020 is lower compared to the 1st quarter 2019 due to negative market valuemovementsoftheinvestmentsinstock.

Please refer to Financial Soundness Indicators for additional KPIs

DiscussionofindicatorsoftheCompany’slevelofperformance

ReceivableManagement

TheCompany’sreceivablesreportedintheStatementsof FinancialPositionincludethefollowing:

1. CashDividendsfromvariousstockinvestments.

2. AccruedInterestReceivablefromtheCompany’sshort terminvestmentsasof March31,2020of whichtheCompanywillreceiveuponmaturity.

Furthermore, the Company manages its receivables by monitoring on a regular basis to ensure timely executionofnecessaryinterventionsefforts.

LiquidityManagement

The Company has substantial investments in shares of stock which are not listed in the Philippine Stock Exchange and may not be readily convertible to liquid assets necessary to meet any potential additional liquidity requirements of the Company. Investment in unquoted securities included in financial assets at FVOCIamountedtoP517millionasofMarch31,2020andDecember31,2019.

Management of liquidity requiresa flow andstock perspective. Constraint such aspolitical environment, taxation,foreignexchange,interestratesandotherenvironmentalfactorscanimposesignificantrestrictions onfirmsinmanagementoftheirfinancialliquidity.

Seafront has considered the above factors and paid special attention to its cash flow management. The Companyidentifiesallitscashrequirementsforacertainperiodandinvestsunrestrictedfundstomaximize interest earnings,i.e.moneymarketplacements.

RateofReturnofEachStockholder

TheCompanyhasnoexistingdividend policy. However, theCompanyintendstodeclaredividendsinthe futureoutofitsunrestrictedretainedearningsinaccordancewiththeCorporationCodeofthePhilippines.

CostReductionEffort

In order to minimize expenses, the Company has engaged the services of PetroEnergy Resources Corporationtohandleitslegal,administrative,accountingandtreasuryfunctions.

Financialdisclosuresinviewofthecurrentfinancialcondition

The Company is still on wait-and-see attitude with respect to investing in other businesses. It has no intentionofincreasingitscapitalstock. Thecurrentmarketdoesnotwarrantanaggressivestancetowards investments. The Company is generating its funds from interest earnings on money market placements.

Thereareno knowntrends,demands,commitments,eventsor uncertaintiesthat willhave material impact ontheCompany’sliquidity.

ThePhilippineeconomyisstillaffectedbyeconomiccrisis,resultinginfluctuatingforeignexchangerates andincreasestockmarketuncertainties.Uncertaintiesremainastowhetherthecountrywillcontinuetobe affectedbyregionaltrendsinthecomingmonths. Thefinancialstatementsdonotincludeanyadjustments that might result from these uncertainties. Related effects will be reported in the financial statements, as theybecomeknownandestimable.

Assess the financial risks exposures of the Company particularly on currency, interest credit, and market and liquidity risks. If any change thereof would materially affect the financial condition and results of operation of the Company, provide a discussion in the report on quantitative impact or such risks and includeadescriptionofenhancementinthecompany’sriskmanagementpoliciestoaddressthesame.

TheCompany’sprincipal financialinstrumentsinclude cashand cash equivalents, tradingandinvestment securities (financial assets at FVTPL) and receivables. Themain purpose of these financial instruments is tofundtheCompany’sworkingcapitalrequirements.

FinancialRiskManagementObjectivesandPolicies

PleaserefertoNote12

PlanofOperations

A. InvestmentinFinancialassetsatFVOCInottradedinthemarket(InvestmentinHEDC)

As of March 31, 2020 the Company holds 11.33% interest in its investment in Hermosa Development Corporation(HEDC).

The Management of HEDC is taking all efforts to sell portion of its saleable property, proceeds of which willbeusedtofinancethedevelopmentoftheundevelopedportionsoftheproperty.

B. InvestmentinFinancialAssetsatFVTPLandFVOCItradedinthemarket

The Company will continue to closely monitorthe prices of its securities as well asthose specific factors which could directly or indirectly affect the prices of these instruments. Because such investments are subject to price risk due tochanges in market values, an expected decline in the portfolio will prompt the Company to disposeortradethe securitiesfor replacement with moreviableand lessriskyinvestmentsin thefuture.

WiththeCompany’scurrentcashposition,itcansustainitsneedsforoperatingexpenses.Theonlypossible materialcommitmentisacashcallfromHEDC,ofwhichisnotexpectedtocallinthenexttwelvemonths. Thus,itdoesnotintendtoraiseadditionalfunds.

Aside from the Company’s investments stated above, there are no other researches or development plans, andpurchaseorsaleof significantequipmentthattheCompanyexpectsperform.

PARTII-OtherInformation

The Company has no other information that need to be disclosed other than disclosures made under SEC Form17-C(ifany).

SEAFRONTRESOURCESCORPORATION

SUPPLEMENTARYINFORMATIONANDDISCLOSURESREQUIREDONSRC RULE68ASAMENDED MARCH31,2020

Philippine Securities and Exchange Commission (SEC) issued the amended Securities Regulation Code RuleSRCRule68whichconsolidatesthetwoseparaterulesandlabeledintheamendmentas“PartI”and “PartII”,respectively. Italsoprescribed theadditional information andschedulerequirementsfor issuers ofsecuritiestothepublic.

BelowaretheadditionalinformationandschedulesrequiredbySRCRule68,asAmended(2011)thatare relevant to the Company. This information is presented for purposes of filing with the SEC and is not requiredpartofthebasicfinancialstatements.

ScheduleA.FinancialAssets

BelowisthedetailedscheduleoftheCompany’sfinancialassetsasofMarch31,2020:

NameofIssuingEntityandAssociationof EachIssue

Numberof Sharesor Principal Amountof BondsandNotes AmountShown

Numberof Sharesor

NameofIssuingEntityandAssociationof EachIssue

assetsatFVOCI Debtequities

Quoted:

Unquoted:

Thefairvalueforfinancialinstrumentstradedinactivemarketsatthereportingdateisbasedontheirquoted market price without any deduction for transaction costs. For securities in which current bid and asking pricesarenotavailable,thepriceofthemostrecenttransactionprovidesevidenceofthecurrentfairvalue as long as there has not been a significant change in economic circumstances since the time of the transaction.

For unquoted financial securities, the most recent sales transaction was used as the basis for determining thefairvalueasofMarch31,2020andDecember31,2019.

Schedule B. Amounts Receivable from Directors, Officers, Employees, Related Parties and Principal Stockholders(OtherthanRelatedParties)

The Company has no outstanding receivables from its directors, officers, employees, related parties and principalstockholdersasof March31,2020andDecember31,2019.

Schedule C. Amounts Receivable from/Payable to Related Parties which are Eliminated during the ConsolidationofFinancialStatements Notapplicable.

ScheduleD.IntangibleAsset

TheCompanyhasnointangibleassetsasofMarch31,2020andDecember31,2019.

ScheduleE.Long-termDebt

TheCompanyhasnooutstandinglong-termdebtasofMarch31,2020andDecember31,2019.

ScheduleF.IndebtednesstoRelatedParties(LongTermLoansfromRelatedCompanies)

The Company has no long-term indebtedness to related parties as of March 31, 2020 and December 31, 2019.

ScheduleG.Guaranteesof SecuritiesofOtherIssuers

TheCompany doesnot haveguaranteesofsecuritiesof otherissuersasof March 31, 2020 andDecember 31,2019.

ScheduleH.CapitalStock

Titleofissue

Numberof shares authorized

Numberof sharesissued and outstanding asshown underrelated balancesheet caption Numberof Shares reservedfor options, warrants, conversion andother rights Numberof sharesheld byrelated parties Directors, officersand employees Others

SEAFRONTRESOURCESCORPORATION

SCHEDULEOFFINANCIALSOUNDNESSINDICATORS

Financial Soundness Indicators

Below are the financial ratios that are relevant to the Company for the 1st quarter ended March 31, 2020, March31,2019andfortheyearendedDecember31,2019:

*Earnings before interest, taxes, depreciation and amortization (EBITDA)

SEAFRONTRESOURCESCORPORATION

RECONCILIATIONOFRETAINED EARNINGSAVAILABLEFORDIVIDEND DECLARATION

MARCH31,2020

Unadjustedretainedearnings,beginning P =44,645,751

Prioryear adjustments: Unrealizedfairvalueadjustments(marked-to-market) 2,812,498

Adjustedretainedearnings,beginning 47,458,249

Netincome(loss)duringtheperiodclosed toretainedearnings (15,582,847)

Add:Non-actual/unrealizedincomenetoftax –

Less:Non-actual/unrealizedincomenetoftax –Fair valueadjustments(mark-to-market) (15,530,457)

Impairmentlossonavailable-for-salefinancialassets –

Netincomeactuallyincurredduringtheyear (52,390)

Less:Dividenddeclarationsduringtheyear –

Totalretainedearningsavailablefordividends P =47,405,859

SEAFRONTRESOURCESCORPORATION

MAPOFRELATIONSHIPS OFTHECOMPANIESWITHINTHEGROUP

Group Structure

AllexistingstockholdersasofMarch31,2020neitherconstitutecontrolnorsignificantinfluenceover theCompany. Also,theCompany’sinvestmentsneitherconstitutecontrolnorsignificantinfluence.

SIGNATTIRES

Pursuant to the requirements of the Securities Regulation Code, the registrant has duly caused this report to be signed on behalf of the undersigned thereunto duly authorized.

Registrant

SEAFRONT RESOTIRCES CORPORATION

Signature and Title :

Signature and Title : Perrl'Y

V. Reyrts - President

GENERAL FORM FOR FINANCIAL STATEMENTS

NAME OF CORPORATION:SEAFRONT RESOURCES CORPORATION

CURRENT ADDRESS: 637-2917

7th Floor JMT Building, ADB Avenue, Ortigas Center, Pasig City TEL. NO.:

COMPANY TYPE : HOLDING

If these are based on consolidated financial statements, please so indicate in the caption.

Table1.StatementsofFinancialPosition

FINA NC IAL DATA

ASSETS (A.1 + A.2 + A.3 + A.4 + A.5 + A.6 + A.7 + A.8 + A.9 + A.10) A.1

Current Assets (A.1.1 + A.1.2 + A.1.3 + A.1.4 + A.1.5)

A.1.1

Cash and cash equivalents (A.1.1.1 + A.1.1.2 + A.1.1.3) On hand

A.1.1.1

A.1.1.2 In domestic banks/entities

A.1.1.3 In foreign banks/entities

A.1.2Trade and Other Receivables (A.1.2.1 + A.1.2.2)

A.1.2.1.1

A.1.2.1 Due from domestic entities (A.1.2.1.1 + A.1.2.1.2 + A.1.2.1.3 + A.1.2.1.4) Due from customers (trade) Due from related parties

Receivables from a consortium operator Accrued interest Loans receivable Others, specify (A.1.2.1.3.1+A.1.2.1.3.2)

Dividends receivable

Advances to Suppliers Receivable from HEDC

A.1.2.2 Due from foreign entities, specify (A.1.3.2.1 + A.1.3.2.2 + A.1.3.2.3 + A.1.3.2.4)

A.1.2.2.1

A.1.2.2.2

A.1.2.2.3

Allowance for doubtful accounts (negative entry) Others Allowance for doubtful accounts (negative entry)

A.1.3Inventories (A.1.3.1 + A.1.3.2 + A.1.3.3 + A.1.3.4 + A.1.3.5 + A.1.3.6)

A.1.3.1 Raw materials and supplies

A.1.3.2Goods in process (including unfinished goods, growing crops, unfinished

A.1.3.3 Finished goods

A.1.3.4 Merchandise/Goods in transit

A.1.4 National Government Public Financial Institutions

A.1.4.1 Financial Assets at Fair Value through Profit or Loss - issued by domestic entities (A.1.4.1.1 + A.1.4.1.2 + A.1.4.1.3 + A.1.4.1.4 + A.1.4.1.5)

Financial Assets other than Cash/Receivables/Equity investments (A.1.4.1 + A.1.4.2 + A.1.4.3 + A.1.4.4+A.1.4.5+A.1.4.6) Public Non-Financial Institutions

A.1.4.2

NOTE: Held to Maturity Investments - issued by domestic entities (A.1.4.2.1 + A.1.4.2.2 + A.1.4.2.3 + A.1.4.2.4 + A.1.4.2.5)

40712,538 40712,538

21812,423

ThisgeneralformisapplicabletocompaniesengagedinAgriculture,Fishery,Forestry,Mining,andQuarrying,Manufacturing,Electricity,GasandWater,Construction,WholesaleandRetailTrade, Transportation,StorageandCommunications,HotelsandRestaurants,RealEstate,Community,SocialandPersonalServices,otherformsofproduction,andgeneralbusinessoperations.Thisformisalso applicabletoothercompaniesthatdonothaveindustry-specificSpecialForms.Specialformsshallbeusedbypublicly-heldcompaniesandthoseengagedinnon-bankfinancialintermediationactivities,credit granting, and activities auxiliary to financial intermediation, which require secondary license from SEC.

DomesticcorporationsarethosewhichareincorporatedunderPhilippinelawsorbranches/subsidiariesofforeigncorporationsthatarelicensedtodobusinessinthePhilippineswherethecenterofeconomic interest or activity is within the Philippines. On the other hand, foreign corporations are those that are incorporated abroad, including branches of Philippine corporations operating abroad.

FinancialInstitutionsarecorporationsprincipallyengagedinfinancialintermediation,facilitatingfinancialintermediation,orauxiliaryfinancialservices.Non-Financialinstitutionsrefertocorporationsthatare primarily engaged in the production of market goods and non-financial services.

GENERAL FORM FOR FINANCIAL STATEMENTS

NAME OF CORPORATION: SEAFRONT RESOURCES CORPORATION

7th Floor JMT Building, ADB Avenue, Ortigas Center, Pasig City TEL. NO.:

CURRENT ADDRESS: 637-2917

COMPANY TYPE :

A.1.5

If these are based on consolidated financial statements, please so indicate in the caption. Loans and Receivables - issued by domestic entities: National Government A.3.2

A.2.1 Land

Table 1. Statements of Financial Position

Investments accounted for using the equity method (A.3.1 + A.3.2 + A.3.3 ) Prepaid taxes A.3.1Equity in domestic subsidiaries/affiliates Equity in foreign branches/subsidiaries/affiliates Table 1. Statements of Financial Position

Non-Financial Institutions Financial Assets at fair value through profit or loss National Government Building and improvements including leasehold improvement Prepaid expenses Other current asset

Financial Assets at Fair Value Thruogh other Comprhensive Income (FVOCI)

Public Financial Institutions

Public Non-Financial Institutions

Private Financial Institutions

and equipment (on hand and in transit) A.3.3 Public Financial Institutions

Held-to-maturity investments HOLDING

Private Non-Financial Institutions

Financial Assets issued by foreign entities: (A.1.4.5.1+A.1.4.5.2+A.1.4.5.3+A.1.4.5.4)

A.1.4.6 Allowance for decline in market value (negative entry)

Supplies Inventory

A.2.4 Transportation/motor vehicles,

GENERAL FORM FOR FINANCIAL STATEMENTS NAME OF CORPORATION:SEAFRONT RESOURCES CORPORATION

CURRENT ADDRESS: 637-2917

7th Floor JMT Building, ADB Avenue, Ortigas Center, Pasig City

COMPANY TYPE : HOLDING

If these are based on consolidated financial statements, please so indicate in the caption.

Table 1. Statements of Financial Position

Table 1. Statements of Financial Position

Long-term receivables (net of current portion) (A.9.1 + A.9.2 + A.9.3)

A.9.1.

A.9.1.1

A.9.1.2

A.9.1.3

From foreign entities, specify (A.9.2.1 + A.9.2.2 + A.9.2.3 + A.9.2.4)

Allowance for doubtful accounts, net of current portion (negative entry)

A.10.1 A.10

Other Assets (A.10.1 + A.10.2 + A.10.3 + A.10.4+A.10.5)

Deferred charges - net of amortization

A.10.2

TEL. NO.: A.10.5

Deferred Income Tax

A.10.3Advance/Miscellaneous deposits

A.10.4Others, specify (A.10.4.1 + A.10.4.2 + A.10.4.3 + A.10.4.4)

Allowance for write-down of deferred charges/bad accounts (negative entry)

B. LIABILITIES (B.1 + B.2 + B.3 + B.4 + B.5)63,15146,556

B.1

B.1.1

Trade and Other Payables to Domestic Entities Payables to Related Parties, specify (B.1.1.3.1 + B.1.1.3.2 + B.1.1.3.3)

B.1.1.1 Loans/Notes Payables

B.1.1.2 Trade Payables

B.1.1.3

B.1.1.3.1

B.1.3Provisions Deferred credits

B.1.2.1

B.1.2.2

B.1.2.3

B.1.4 Withholding tax payable

Others, specify (B.1.1.4.1 + B.1.1.4.2 + B.1.1.4.3) Derivative liability

B.1.2 Accruals Financial Liabilities (excluding Trade and Other Payables and Provisions)

B.1.7

Trade and Other Payables to Foreign Entities (specify) (B.1.2.1+B.1.2.2+B.1.2.3+B.1.2.4)

B.1.7.1

B.1.7.2

B.1.7.3 Liabilities

B.1.7.4

B.1.7.5 Deferred Income

B.1.7.6

B.1.7.6.1 B.1.7.6.2 Liabilities for Current Tax

Any other current liability in excess of 5% of Total Current Liabiilities, specify: Others, specify (If material, state separately;

GENERAL FORM FOR FINANCIAL STATEMENTS

NAME OF CORPORATION: SEAFRONT RESOURCES

CURRENT ADDRESS: 7th Floor JMT Building, ADB Avenue, Ortigas Center, Pasig City

TEL. NO.: 637-2917

If these are based on consolidated financial statements, please so indicate in the caption.

Table 1. Statements of Financial Position

Table 1. Statements of Financial Position

AuthorizedCapitalStock(no.ofshares,parvalueandtotalvalue;showdetails)

388,000388,000 388,000388,000 SubscribedCapitalStock (no.ofshares,parvalueandtotalvalue)(C.2.1+C.2.2+C.2.3)

GENERAL FORM FOR FINANCIAL STATEMENTS

NAME OF CORPORATION:SEAFRONT RESOURCES CORPORATION

7th Floor JMT Building, ADB Avenue, Ortigas Center, Pasig City TEL. NO.:

CURRENT ADDRESS: 637-2917

COMPANY TYPE : HOLDING

If these are based on consolidated financial statements, please so indicate in the caption.

Table 2. Statements of Income

REVENUE/INCOME(A.1+A.2+A.3)

A.1NetSalesorRevenue/ReceiptsfromOperations (manufacturing,mining,utilities,trade,

ShareintheProfitorLossofAssociatesandJointVenturesaccountedforusingthe

34,64613,36116,131

OtherRevenue(A.3.1+A.3.2+A.3.3+A.3.4+A.3.5)

A.3.1

A.3.2

A.3.4 A.3

ReceiptsfromSaleofMerchandise(trading)(fromSecondaryActivity) RentalIncomefromLandandBuildings

A.3.3SaleofRealEstateorotherPropertyandEquipment Royalties,FranchiseFees,Copyrights(books,films,records,etc.)

A.3.5

Others,specify(A.3.5.1+A.3.5.2+A.3.5.3+A.3.5.4+A.3.5.5+ A.3.5.6+A.3.5.7)

Netgainsonfairvaluechangesonfinancial assetsatFVPL

OtherIncome(non-operating)(A.4.1+A.4.2+A.4.3+A.4.4) A.4

A.4.1 InterestIncome

A.4.2 DividendIncome

A.4.3

A.4.4

NetgainonFVchangesonfinancialassetatFVPTL

Gain/(Loss)fromsellingofAssets,specify

A.4.4 Gain/(Loss)onForeignExchange(A.4.4.1+A.4.4.2+A.4.4.3+A.4.4.4)

C.3 MerchandiseInventory,End(negativeentry)

COSTOFSERVICES,SPECIFY(D.1+D.2+D.3+D.4+D.5+D.6)

34,64613,36116,131 41611897 33,46412,886295 43715,387

GENERAL FORM FOR FINANCIAL STATEMENTS

7th Floor JMT Building, ADB Avenue, Ortigas Center, Pasig City TEL. NO.:

CURRENT ADDRESS: 637-2917

COMPANY TYPE : HOLDING

Table 2. Statements of Income

GENERAL FORM FOR FINANCIAL STATEMENTS

NAME OF CORPORATION:

SEAFRONT RESOURCES CORPORATION

CURRENT ADDRESS: 637-2917 7th Floor JMT Building, ADB Avenue, Ortigas Center, Pasig City TEL. NO.:

:

If these are based on consolidated financial statements, please so indicate in the caption.

Table 3. Statements of Cash Flows

Table 1. Statements of Financial Position

unrealized foreign currency exchange loss (gain)

Gain on sale of financial assets/ Dividend income Interest income

unrealized loss (gains) on sale financial assets at FVTPL Impairment loss on available-for-sale financial assets

Write-down of Property, Plant, and Equipment

Interest received

Income taxes paid

A. Net Cash Provided by (Used in) Operating Activities (sum of above rows)

CASH FLOWS FROM INVESTING ACTIVITIES

Dividends received

Proceeds from sale of financial assets at FVPL

Acquisitions of AFS financial assets

Acquisitions of financial assetsat FVPL

Decrease in AFS Payment of subscriptions payable

B. Net Cash Provided by (Used in) Investing Activities (sum of above rows)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from: Cash and Cash Equivalents Beginning of year End of year NET INCREASE IN CASH AND CASH EQUIVALENTS (A + B + C)

Payments of:

C. Net Cash Provided by (Used in) Financing Activities (sum of above rows)

V.1Correction of Error (s)

V.2Changes in Accounting Policy

Surplus

X.1Surplus (Deficit) on

X.2Surplus (Deficit) on

X.3Currency Translation

X.4Other Surplus (specify)

Net Income (Loss) for the Period Dividends (negative entry)

Appropriation for (specify) A.1 A.2

A.5

Issuance of Capital Stock B.1Common Stock

C.1Correction of Error (s)

C.2Changes in Accounting Policy

Surplus

E.1Surplus (Deficit) on E.2Surplus (Deficit) on E.3Currency Translation

E.4Other Surplus (specify)

Net Income (Loss) for the Period Dividends (negative entry)

Appropriation for (specify)

H.1

H.2

H.3 H.4 H.5 Issuance of Capital Stock I.1Common Stock

01-Jan-19