SRC 2019 SEC 20-IS-DEFINITIVE Information Statement

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

637-2917 Telephone Number

31 December 2018 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

% );tZ-JNOTICE OF REGULAR ANNUAL STOCKHOLDERS' MEETING

TO OUR STOCKHOLDERS:

NOTICE lS HEREBY GIVEN that the regular annual meeting of the stockhotders of SEAFRONT RESOURCES CORPORATION will be held at Rooms 527-528 Y|AS, Level 5, Podium 4, RCBC Plaza, Ayala Cor. Sen. Git J. Puyat Avenues, Makati City on Thursday, May 30, 2019 at 1:30 p.m. The order of business at said meeting will be as follows:

'1. Certification of Service

of Notice;

2. Determination of Quorum/Call to Order; 3. Approval of the Minutes of the last Stockholders' 4.

Meeting held on 17

May 2018;

Approval of Management Report and the 2018 Audited Financial Statements:

5.

6.

7.

8.

L

Confirmation and Ratification of all acts, contracts and investments made and entered into by Management and/or Board of Directors during the period 17 May 2018 to 30 May 201 9; Election of Nine (9) members of the Board of Directors (including lndependent Directors) for the year 2019-202Q; Appointment of External Auditors; Other Matters; and Adjournment

Please be advised that the record date of stockholders entitled to vote at said meeting shall be 15 March 2019. Registration for the meeting shall commence at 1:00 p.m. on Thursday, May 30, 2019 at the above venue.

,y',ttl -/t (b.(7

Samuel V. Torres

/ 4ftV. Corporate Seqetary O,/

SEAFRONT RESOURCES CORPORATION

RATIONALE AND BRIEF DISCUSSION OF THE AGENDA OF THE 2018 ANNUAL STOCKHOLDER’S MEETING. (THE “ANNUAL STOCKHOLDERS’MEETING”).

1. Call to Order The Chairman of the Board of Directors (or the Chairman of the meeting, as the case maybe) (the “Chairman”) will call the meeting to order.

2. Determination of Quorum/Report on Attendance The Corporate Secretary (or the Secretary of the meeting, as the case may be) (the “Secretary”) will certify the date when the written notice of the Annual Stockholders’ Meeting was sent to the stockholders as of the record date of March 15, 2019 and the date of publication of the notice in the newspapers of general circulation.

The Secretary will likewise certify the presence of a quorum. Under the By-Laws of the Corporation (the “Corporation’s By-Laws”), the holders of a majority of the issued and outstanding capital stock of the Corporation entitled to vote shall, if present in person or by proxy, constitute a quorum for the transaction of business.

Voting and Voting Procedure Only holders of the Company’s stock of record at the close of business on March 15, 2019 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 May 30, 2019. Stockholders of record are entitled to one vote per share. Voting may be done viva voce, by show of hands or by balloting.

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. 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).

Election of Directors shall be held at the Annual Stockholders’ Meeting on the date and place as herein stated. It shall be done by majority of stock represented in the meeting, or vote through remote communication or in absentia, and shall be conducted in the manner provided in Section 23 of the Revised Corporation Code of the Philippines, and with such formalities 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 whole number of Directors to be elected. d) Discretionary authority to cumulate vote is not solicited.

The external auditor of the Corporation will be requested to supervise the voting procedure.

Question and Answer The Chairman of the meeting will advise the stockholders of the holding of an open forum after the Management’s Report was delivered by the President of the Corporation.

3. Approval of the Minutes of the last Stockholders’ Meeting held on 17 May 2018.

The Minutes of the meeting held on May 17, 2018 are posted at the Seafront Resources Corporation website, www.seafrontresources.com.ph. Copies of which will also be distributed to the stockholders before the meeting.

4. Approval of Management Report and the 2018 Audited Financial Statements.

The Company’s audited financial statements as of December 31, 2018 is integrated and made part of the Company’s Information Statement. The Information Statement will be sent to the stockholders at least fifteen (15) business days prior to the ASM, and the same will be posted at the Company’s website at www.seafrontresources.com.ph.

A resolution approving the Management Report and the 2018 Audited Financial Statements shall be presented to the stockholders for approval.

The stockholders will be given the opportunity to ask questions or raise concerns.

5. Confirmation and Ratification of all acts, contracts and investments made and entered into by Management and Board of Directors during the period 17 May 2018 to 30 May 2019.

The resolutions approved by the Board in its regular and special meetings refer to acts done by the Board, Corporate Officers and Management in the ordinary course of business. The Company also regularly discloses material transactions approved by the Board. These disclosures are available for viewing and downloading at the Company’s website at www.seafrontresources.com.ph.

The stockholders will be requested to ratify all acts of the Board of Directors and Management since the last stockholders’ meeting in 2018.

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

At its meeting held on March 15, 2019, the Corporate Governance Committee, as the standing committee of the Board of Directors constituted for the purpose of reviewing and evaluating the qualifications of persons nominated to become members of the Board of Directors (including the independent directors) and pursuant to the provisions of the Corporate Governance Manual of the Company and rules of the Corporate Governance Committee, 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. The profiles of the nominees are provided in the Definitive Information Statement for the Annual Stockholders’ Meeting.

7. 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/BROC recommendation, the Board of Directors will recommend the reappointment of SGV as the Company’s external auditor for 2019.

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 2019 shall be presented to the stockholders for approval.

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

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

SECURITIES AND EXCHANGE COMMISSION SEC FORM 2O.IS Information Statement Pursuant to S€ction

I

of Securities Regulation Code

l.

Check the appropriate box:

_Preliminary

Information Statement

__LD€fi nitive Information 2. Name of Registnnt

Staiement

as specified in

i*

charter: SEAFRONT RESOURCES CORFORATION

3.

Province, country or otherjurisdiction of incorporation or organization: PASIG CITY. PHILIPPINES

4.

SEC Identification Number:

5. BIR Tax Identification

6.

Address ofprincipal

Code:

!@! $!Q!l!!f!

office: 7TH FLOOR JMT BUILDING. ADB AVENUE. ORTTGAS CENTER PASIG CITY I600" PHILTPPINES

7. Registrant's telephone number, including area code:

($!!).,!$!!!l

and place ofthe meeting ofsecurity holders: Mrv30.2019at l!30 p.m, at Rooms 527-528 Podium 4. RCBC Plaza. Avala Cor. Sen. Gil J. Puvat Avenues. Makati Citv.

8. Date, time

9. Approximat€ date on which the lnform&tion

Statement is first to be sent or given to security holders

ylAS. Ijvel

S.

!!4y]Q$!!Q!!

10. Securities registered pursuant to Section 4 and E ofthe RSA (information on number of shares and amount of debt is applicable only to corporate regisfants):

Title of Each Class

Common

ll.

Number of Shares of Common Stock Outstanding I

63,000,000 sha r€s

Are any or all ofregistrant's securities listed on the Philippine Stock Exchange? yes L/ No

2

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 Stockholders of Seafront Resources Corporation will be held at the Rooms 527-528 YIAS, Level 5, Podium 4, RCBC Plaza, Ayala Cor. Gil J. Puyat Avenues, Makati City, on Thursday, May 30, 2019, at 1:30 p.m.

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 May 2019 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 the Title X, Section 80 of the Revised Corporation Code of the Philippines governing the right which states that: Any stockholder of a corporation shall have the right to dissent and demand payment of the fair value of his shares in the following instances: a. In case an amendment to the articles of incorporation has the effect of changing or restricting the rights of any stockholder 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 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 Corporation.

As provided under Section 81 of the Revised Corporation Code, the dissenting stockholder who votes against a proposed corporate action may exercise the right of appraisal by making a written demand on the Corporation for the payment of the fair value of shares held within thirty (30) days from the date on which the vote was taken: Provided, That 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 corporation shall pay the stockholder, upon surrender of the certificate or certificates of stock representing the stockholder’s shares, the fair value thereof as of the day before the vote was taken, excluding any appreciation or depreciation in anticipation of such corporate action.

If, within sixty (60) days from the approval of the corporate action by the stockholders, the withdrawing stockholder and the corporation cannot agree on the fair value of the shares, it shall be determined and appraised by three (3) disinterested persons, one of whom shall be named by the stockholder, another 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 Corporation within thirty (30) days after such award is made: Provided, That no payment shall be made to any dissenting stockholder unless the corporation has unrestricted retained earnings in its books to cover such payment: Provided, further, That upon payment by the corporation of the agreed or awarded price, the stockholder shall forthwith transfer the shares to the Corporation.

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

3

B.

CONTROL AND COMPENSATION INFORMATION

Item 4 - Voting Securities and Principal Holders Thereof a) Number of Shares Outstanding as of 31 March 2019: 163,000,000 Number of Votes Entitled One (1) vote per share Foreign Equity Ownership as of 31 March 2019: The Company Foreign equity ownership, as follows: No. of Shares % Ownership Shares held by Filipino 162,201,834 common 99.51% Shares held by foreign nationals 798,166 common 0.49% Total 163,000,000 common 100%

b)

Only holders of the Company’s stock of record at the close of business on March 15, 2019 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 May 30, 2019. Stockholders of record are entitled to one vote per share. Voting may be done viva voce, by show of hands or by balloting.

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. 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 on the date and place as herein stated. It shall be done by majority of stock represented in the meeting, or vote through remote communication or in absentia, and shall be conducted in the manner provided in Section 23 of the Revised Corporation Code of the Philippines, and with such formalities 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 whole 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, 2019.

Title of Class

Name, Address of Record Owner

Common

PCD Nominee Corp.

MSE Building, Ayala Ave., Makati City

Stockholder

Common

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

Stockholder

Common

Common

Common

Alsons Cons. Res., Inc. 2286 Pasong Tamo Ext. Makati City CBC T/A-SCA#0010 CBC Building, Trust Dept.

Paseo de Roxas, Makati City CBC T/A-SCA#0011 CBC Building, Trust Dept.

P. de Roxas, Makati City

NOTE: 1.

2.

3.

4.

Relationship with Issuer

Stockholder

Stockholder

Name of Beneficial Owner

Various clients (Note 1) Pan Malayan Management and Investment Corporation (Note 2) Alsons Consolidated Resources, Inc.(Note 3)

China Banking Corp.

(Note 4) -do-

No. of shares held Citizenship

Percentage of Ownership

Filipino

66,830,210 *

40.92%

Filipino

30,469,858

18.69%

15,544,911

9.54%

Filipino

14,178,625

8.70%

Filipino

10,204,120

6.26%

Filipino

Stockholder

None of the holders of the Company’s common shares registered under the name of PCD Nominee owns more than 5% of the company’s common shares.

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

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

4

(2)

Security Ownership of Management as of March 31, 2019.

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

Common Common Common Common Common

Name of Beneficial Owner Name and Position Roberto Jose L. Castillo Chairman Milagros V. Reyes President and Director Perry Y. Uy Director/Treasurer Yvonne S. Yuchengco Director Nicasio I. Alcantara Independent Director Medel T. Nera Director

Amount and Nature of Beneficial Ownership

Citizenships

Percent of Class

1 “Direct”

Filipino

-

1 “Direct”

Filipino

-

1 “Direct”

Filipino

-

Filipino

-

Filipino

-

1 “Direct”

Filipino

-

1 “Direct”

Filipino

-

661 “Indirect”

Filipino

-

1,000 “Direct”

Filipino

-

-

Filipino

-

4,926 shares

Filipino

1 “Direct” 425 “Direct” 2,834 “Indirect”

Ernestine Carmen Jo D. Villareal-Fernando

Common Common Common Common Common Total

Independent Director Raul M. Leopando Director Victor V. Benavidez Director Samuel V. Torres Corporate Secretary Arlan P. Profeta Asst. Corporate Secretary

0 .40%

As of March 31, 2019, 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: Name Roberto Jose L. Castillo Milagros V. Reyes Perry Y. Uy Raul M. Leopando Yvonne S. Yuchengco Nicasio I. Alcantara Victor V. Benavidez Medel T. Nera Ernestine Carmen Jo D. Villareal-Fernando

Age 65 77 73 67 65 76 67 63 57

Position Chairman of the Board Director/President Director/Treasurer Director Director Independent Director Director Director Independent Director

Citizenship Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino

Period of Service 2018 to present 1999 to present 2007 to present 2017 to present 2000 to present 1995 to present 2017 to present 2011 to present 2012 to present

77 73 54 45

President Treasurer Corporate Secretary Asst. Corporate Secretary

Filipino Filipino Filipino Filipino

1999 to present 2007 to present 2006 to present 2008 to present

Executive Officers: Milagros V. Reyes Perry Y. Uy Atty. Samuel V. Torres Atty. Arlan P. Profeta

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.

5 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, 65, 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 EEI Corporation.

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, 77, 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, 73, 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, 65, 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 President/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 sits in 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

6 Mr. Medel T. Nera, 63, Filipino, Director Publicly-Listed Companies: Mr. Nera is the President and CEO of House of Investments, Inc. and Director of iPeople, Inc. and EEI Corporation.

Non-Listed: He is also a 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.; Director of HI-Eisai Pharmaceuticals, Inc., Investment Managers, Inc., Landev Corp., Malayan Colleges Laguna, Inc. Manila Memorial Cemetery Park, Inc., YGC Corporate Services, Inc. Independent Director of National Reinsurance Corp. of the Philippines; His past experiences include: Director, 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, 76, 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 Energy Corporation, 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, 57, Filipino, Independent Director Non-Listed: She is the Director of various corporation such as: Country Bankers Insurance Corporation, Country Bankers Life Insurance Corporation, Director and Treasurer of Jose E. Desiderio, Inc., Managing Director of Center for Asian Culinary Studies and Fernando Villareal Books, Legal Counsel, Committee on Art Auction, Ateneo Alumni Association, Partner, Fernando Panagsagan Bantilan Law Office.

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, 67, Filipino, Director Publicly-Listed Companies: He is a Director of Boulevard Holdings, Inc. Non-Listed: He is the Nominee of Alakor Securities Corporation, Formerly: General Manager of Alakor Securities, 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 University of Sto. Tomas, Master’s Degree in Economics from the University of Sto. Tomas, Professional Development Program from CRC. Mr. Raul M. Leopando, 67, Filipino, Director Publicly-Listed Companies: He is a director of PetroEnergy Resources Corporation 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 RCBC Capital 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.

7 Executive Officers: Ms. Milagros V. Reyes, 77, 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, 53, 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 Technology Center, 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, Sun Life Grepa Financial, Inc., Yuchengco Museum, YGC Corporate Services, Inc., Y Realty Corporation, 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, 45, 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 and Compliance Officer 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 2018-2019: 1.

2.

3.

4.

5.

Mr. Roberto Jose L. Castillo - Director Ms. Milagros V. Reyes - Director Mr. Perry Y. Uy - Director Ms. Yvonne S. Yuchengco - Director Mr. Medel T. Nera – Director

6.

7.

8.

9.

Mr. Nicasio I. Alcantara – Independent Director Atty. Ernestine Carmen Jo D. Villareal-Fernando – Independent Director Mr. Raul M. Leopando - Director Mr. Victor V. Benavidez – 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.

8 An Independent Director is a person who is independent of management and the controlling shareholder, and is free from any business or other relationship which 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 by the 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 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 any such officer or director been the subject of any court 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 is directed to the substance of the relationship, and not merely the legal form.

9 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:

Nature of transaction

Amount/ Volume

2018 Receivables/(Accounts payable)

Terms

Conditions

Noninterest bearing, payable when due (P =123,667) and demandable

Unsecured

- do -

- do -

Affiliate:

PERC

HEDC

Reimbursements Accounting Services (Note 10)

Nature of transaction

P =123,667

267,857 P =391,524

Amount/ Volume

21,652

2017 Receivables/( Accounts payable) (Note 9)

Terms

Conditions

Affiliate:

PERC

HEDC

Reimbursement s Accounting Services (Note 10)

=71,625 P

267,857 =339,482 P

Noninterest bearing, payable when due Unsecured, (P =71,625) and demandable no impairment –

- do -

- do -

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 as of December 31, 2018, 2017 and 2016.

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 short-term benefits for key management personnel were charged in profit or loss as of December 31, 2018, 2017 and 2016.

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 President Perry Y. Uy Treasurer Atty. Samuel V. Torres Corporate Secretary Atty. Arlan P. Profeta Asst. Corporate Secretary

10 Summary Compensation Table (All Directors as a group)

Particulars

All Directors as a group*

Year 2016 2017 2018 2019**

Salary -

Bonuses -

Other Annual Compensation 75,000 85,000 175,000 175,000

Total 75,000 85,000 175,000 175,000

*all executive officers of the company do not receive any compensation. ** 2018 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, 2018 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.

During the two (2) most recent fiscal years, the external auditor has not resigned, was not dismissed, or otherwise has ceased performing services for the Company.

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 by the Company for examination of the Company’s 2018 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 2018.

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 years cooling off period shall be observed in the re-engagement of same signing partner or individual audit Audit and Audit-Related Fees Year Audit Fees Tax Fees Other Fees 2018 349,272.00 2017 323,400.00 The above audit fees are for the audit of the Company’s annual financial statements or services normally provided in connection with statutory and regulatory filings or engagements for CY 2018 and 2017. There were no 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 Company passes upon and approves the Audit Committee/BROC’s recommendations. The Audit/BROC Committee, 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 Independent Director

11 Item 8 - Compensation Plan No action is to be taken with respect to any plan pursuant to which cash or non-cash compensation may be paid or distributed.

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 “A”. 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 2018 Annual Shareholders Meeting; The Minutes of 2018 Annual Shareholders Meeting reflects the following: 1.

Approval of Management Report and the 2017 Audited Financial Statements contained in the 2017 Information 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 19 May 2017 to 17 May 2018.

3.

Election of Nine (9) members of the Board of Directors for the year 2018-2019.

4.

Appointment of External Auditors.

b)

Approval of Management Report and the 2018 Audited Financial Statements;

c)

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 17 May 2018 to 30 May 2019; 1.

Constitution of various Committees and Appointment of Chairman and Members: (Organizational Meeting held 17 May 2019).

Such as: Corporate Governance Committee Chairperson Ernestine Carmen Jo D. Villareal-Fernando-Independent Director Members Nicasio I. Alcantara-Independent Director Medel T. Nera

12 Audit Committee/BROC Chairperson Members Corporate Information Officer/ Compliance Officer

Nicasio I. Alcantara - Independent Director Ernestine Carmen Jo D. Villareal-Fernando-Independent Director Medel T. Nera - Atty. Samuel V. Torres

Asst. Corporate Information Officer/ Asst. 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 2019-2020.

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 None.

Item 18 - Other Proposed Action None.

Item 19 - Voting Procedures a)

the vote required for approval or election

Section 4 of Article II of the By-Laws of the Corporation provides that 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.

With regard to the election of the members of the Board of Directors, the nominees receiving the highest number of vote shall be declared elected pursuant to Section 23 of the Revised Corporation Code of the Philippines. Likewise, for the election of External Auditors, the nominee receiving the highest number of votes will be declared the Corporation’s External Auditors. b) the method by which votes will be counted Except in cases where voting by ballot is applicable, voting and counting shall be viva voce. If by ballot, counting shall be supervised by the external auditors and transfer agents. If by viva voce, counting shall also be supervised by the external auditors and transfer agents.

l3

SICNATTJRE

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SEAT'RONT RESOUN,CES CORFORATION

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14 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, 2018 WITH THE CORRESPONDING STATEMENT OF MANAGEMENT RESPONSIBILITY. 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 accountant on any matter of accounting principles or practices, financial statement disclosures or auditing scope or procedure. During the two most recent fiscal years, the independent accountant has not resigned, was dismiss or otherwise ceased performing services for the Company. (Please see discussion on page 9 and 10 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, 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 implemented a quasi-reorganization plan whereby (a) its authorized capital stock was decreased from P800 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 FVPL are carried at fair value as follows:

Listed securities: Equity securities

2018

2017

P =44,850,901

P =62,845,291

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) Benguet Corporation Non-listed equity security: Hermosa Ecozone Development Corporation (HEDC) Investment in Government Securities

2018

2017

P =13,479,075 3,761,406 17,240,841

P =23,492,102 4,338,155 27,830,257

393,710,068 5,402,780 P =416,353,329

392,564,818 8,535,131 P =428,930,206

15 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 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 and 2017, the Company has outstanding subscriptions payable to HEDC which amounted P =12.35 million.

The subscriptions payable are due on demand (Note 8 of the AFS). Investment in HEDC is presented in the statement of financial position at fair value net of subscription payable.

The fair value of investment in HEDC is determined using the adjusted net asset 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 an accredited independent valuer as at December 31, 2018 and 2017. 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 money was spent for development activities for the last three fiscal years. The Company does 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, 2018 amounted to P13.362 million, bulk of which is from the dividend income from the investment in HEDC. Other than discussed, the Company has no principal product which contributes 10% or more to sales or revenues. 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 depreciation of the Peso. The regional economic crisis which started in 1997 negatively affected the Philippine economy resulting 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.

16 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 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 consisting of industrial estates, residential communities, a golf and country club 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 The Company’s accounts payable and accrued expenses are all settled on a monthly basis. Subscriptions payable are payable on demand and are non-interest bearinLiquidity 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 P =393.71 million and P =392.56 million, net of subscription payable, as of December 31, 2018 and 2017, respectively (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. Subscriptions payable are payable on demand and are non-interest bearing. lease 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.

17

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 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 as high grade since these are placed in financial institutions of high credit standing. Accordingly, ECLs relating to these debt instruments rounds to nil.

As of December 31, 2018 and 2017, the carrying values of the Company’s financial instruments represent maximum exposure as of reporting date.

The Company has a well-defined credit policy and established credit procedures. In addition, receivable balances are being monitored on a regular basis to ensure timely execution of necessary intervention efforts.

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, 2018 and 2017.

The table below demonstrates the debt-to-equity ratios of the Company as of December 31, 2018 and 2017:

Total liabilities: Accounts payable and accrued expenses Total equity: Capital stock Net unrealized gains on financial assets at FVOCI Retained earnings Debt-to-equity ratio

2018

2017

P =661,861

=710,754 P

P =163,000,000 263,345,540 12,224,078 P =438,569,618 0.0015:1

=163,000,000 P 273,067,937 19,081,093 =455,149,030 P 0.0016:1

There were no changes in the objectives, policies or processes for the years ended December 31, 2018 and 2017.

18 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)

1st Quarter

2nd Quarter

2018

2017

2018

P1.00

P1.00

P1.00

High

2.87

4.92

2.62

P1.00 3.14

Low

2.53

2.21

2.55

2.143M

31.49M

1.28M

ParValue

Volume

2017

3rd Quarter 2018

2017

4th Quarter 2018

1st Qtr

2017

2019

P1.00

P1.00

P1.00

P1.00

P1.00

2.83

3.00

2.60

3.34

2.79

2.55

2.55

2.61

2.20

2.52

2.25

8.12M

1.28M

6.67M

.194M

4.57M

.239M

The Company’s common equity is traded in the Philippine Stock Exchange (PSE).

2.

Holders As of March 31, 2019, the Company has 4,706 stockholders.

Hereunder is the list of the top 20 Stockholders as of 31 March 2019: STOCKHOLDERS

1. PCD Nominee Corporation (Filipino) 2. Pan Malayan Mgnt & Inv. Corp.(PMMIC) 3. Alsons Consolidated Resources, Inc. 4. China Banking Corporation T/A-SCA-#0010 5 China Banking Corporation T/A-SCA-#0011 6. House of Investments, Inc. 7. Yuchengco, Alfonso T. 8. Hydee Management & Resources Corporation 9. China Banking Corporation T/A-SCA-#0013 10. China Banking Corporation T/A-SCA-#0012 11 PCD Nominee Corporation (NF) 12. Ong, Clemente 13. Pacific Basin Sec. Co., Inc. 14. Floreindo, Antonio O. 15. Paz, Wenceslao R. de la 16. A.T. Yuchengco, Inc. 17. Pua Yok Bing 18. Reyes, Vicenta S. 19. Santiago, Violeta G. 20. Kensigton Management Corporation Sub-Total Others Grand Total 1.

2.

3.

4.

TITLE OF CLASS Common Common Common Common Common Common Common Common Common Common Common Common Common Common Common Common Common Common Common Common

SHARES 66,487,855 30,469,858 15,544,911 14,178,625 10,204,120 4,697,613 1,283,348 1,042,093 571,427 556,122 342,355 287,644 271,248 214,104 195,594 186,637 159,799 147,850 147,655 138,207 147,127,065 15,872,935 163,000,000

PERCENT OF CLASS 40.79% 18.69% 9.54% 8.70% 6.26% 2.88% 0.79% 0.64% 0.35% 0.34% 0.21% 0.18% 0.17% 0.13% 0.12% 0.11% 0.10% 0.09% 0.09% 0.08% 90.26% 9.74% 100%

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.

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.

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.

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

19 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 may be declared by the Board of Directors out of surplus profits derived from the Company’s operations. The same right exists with respect to a stock dividend, 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 2018 and 2017.

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 outstanding capital stock, as mandated by Section 3, Article XVlll of the Continuing Listing Requirements of the Listing and Disclosure Rules. As of March 31, 2019, 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:

Authorized - (P1.00 par value) Issued and outstanding

3.

Debt Securities - Not Applicable

4.

Stock Options - Not Applicable

No. of Shares 388,000,000 163,000,000

Amount P388,000,000.00 P163,000,000.00

20 PART III - 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, 2018 and 2017)

ASSETS Cash & cash equivalents Financial assets at fair value through profit or loss Receivables Other current assets Financial assets at fairvalue through other comprehensive income TOTAL ASSETS

31-Dec-18

31-Dec-17 (as restated)

P10,402,418

P8,651,880

20.23%

2.14%

44,850,901 12,537,600 988,670 416,353,329

62,845,291 261,858 900,200 428,930,206

-28.63% 4687.94% 9.83% -2.93%

9.25% 2.58% 0.20% 85.82%

485,132,918

501,589,435

-3.28%

100.00%

661,861 45,901,439 46,563,300

710,754 45,729,651 46,440,405

-6.88% 0.38% 0.26%

0.14% 9.46% 9.60%

438,569,618 P485,132,918

455,149,030 P501,589,435

-3.64% -3.28%

90.40% 100.00%

% Change % in Total Asset

LIABILITIES AND EQUITY Accounts payable and accrued expenses Deferred tax liability TOTAL LIABILITIES EQUITY TOTAL LIABILITIES AND EQUITY

Total assets amounted to P485.133 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 P0.989 million and P0.900 million as of December 31, 2018 and 2017, respectively. The 9.83% net increase in this account mainly represents additional input taxes recorded during the period.

21 A 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 (see Note 8 of the AFS).

Accounts payable and accrued expenses amounted to P0.662 million and P0.711 million as of December 31, 2018 and December 31, 2017, respectively. The 6.88% 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.

2. Results of Operations (For the years ended December 31, 2018, 2017 and 2016)

31-Dec-18 REVENUES Dividend income Interest income Other income-net Foreign exchange gain Net gains on fair value changes on financial assets at fair value through profit or loss TOTAL REVENUES COST AND EXPENSES General & administrative Net loss on fair value changes on financial assets at fair value through profit or loss TOTAL EXPENSES Income/(Loss) before income tax Provision for income tax NET INCOME (LOSS)

31-Dec-17

31-Dec-16

% Change % in Total 2018 vs. 2017 Revenue

12,885,767 117,951 352,337 5,573

294,713 96,516 352,337 -

353,401 124,711 352,337 -

4272.31% 22.21% 0.00% 100.00%

96.44% 0.88% 2.64% 0.04%

13,361,628

15,387,048 16,130,614

6,803,522 7,633,971

-100.00% -17.17%

0.00% 100.00%

2,217,206 17,994,390

1,451,900 -

1,326,412 -

52.71% 100.00%

16.59% 134.67%

20,211,596 (6,849,968) 7,047 (6,857,015)

1,451,900 14,678,714 7,047 14,671,667

1,326,412 6,307,559 7,047 6,300,512

1292.08% -146.67% 0.00% -146.74%

151.27% -51.27% 0.05% -51.32%

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.

22 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.

3. 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.

A Financial assets at fair value through other comprehensive income account as of December 31, 2017 amounted to P428.930 million as compared to P149.655 million in 2016. The bulk of the 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.

4. 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.

23 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.

5. Financial Conditions (As of December 31, 2016 and 2015) Total assets amounted to P209.974 million as of December 31, 2016 compared to P165.865 million as of December 31, 2015.

The Company’s cash and cash equivalents amounted to P11.725 million as of December 31, 2016 compared to P12.036 million as of December 31, 2015. The 2.58% net decrease was due to incurred expenses for the year.

Financial assets at fair value through profit or loss amounted to P47.454 million and P40.650 million as of December 31, 2016 and as of December 31, 2015, respectively. The 16.74% net increase is due to positive movement in the market values of investments in stocks traded at PSE particularly Araneta Properties Inc. (from 1.12/share to 2.35/share) and EEI Corporation (from P5.40/share to P6.12/share).

Receivables account as of December 31, 2016 amounted to P0.314 million compared to P0.315 million as of December 31, 2015.

The 0.43% net decline accounts for the collection of outstanding receivables.

Other current asset consists of prepayments, prepaid taxes and input tax carry-overs. This amounted to P0.826 million and P0.769 million as of December 31, 2016 and as of December 31, 2015, respectively. The 7.41% net increase in this account mainly represents additional input taxes recorded during the period.

Available-for-sale (AFS) financial assets account as of December 31, 2016 amounted to P149.655 million compared to P112.095 million as of December 31, 2015. The bulk of the 33.51% increase pertains to the restatement of the Hermosa shares to its fair value using the adjusted net asset value method. The Company recognized P34.30 million unrealized gain on fair value changes of the investment in Hermosa.

Accounts payable and accrued expenses amounted to P0.564 million and P0.315 million as of December 31, 2016 and December 31, 2015, respectively. The 78.65% net increase in this account is due to higher accrual of professional fees and other expenses.

Total Stockholders’ Equity as of December 31, 2016 amounted to P209.411 million or P1.285 book value per share compared to P165.550 million or P1.016 book value per share as of December 31, 2015.

6. Results of Operations (For the years ended December 31, 2016 and 2015) The Company posted a net income of P6.301 million or earnings per share of P0.0387 as of December 31, 2016 and net loss of P9.486 million or a loss per share of P0.0582 as of December 31, 2015.

Dividend income declined from P8.251 million as of December 31, 2015 to P0.353 million as of December 31, 2016 mainly due to HEDC’s declaration of cash dividend in 2015, none in 2016.

Interest income amounted to P0.125 million and P0.234 million as of December 31, 2016 and December 31, 2015, respectively. The decline is attributed to lower balance of the reinvested cash equivalents.

There was a positive turn-around in the changes in market values (fair value changes in on financial assets at fair value through profit or loss investments) from a P12.254 million unrealized loss on to P6.804 million unrealized gain. This is due to positive movement in the market values of investments in stocks traded at PSE particularly Araneta Properties Inc. (from 1.12/share to 2.35/share) and EEI Corporation (from P5.40/share to P6.12/share).

24 Other income as of December 31, 2016 and 2015 pertains to recurring service income for accounting services rendered by the Company to HEDC and rental income.

In December 31, 2015, the Company recognized impairment loss amounting P =4.6 million on investment in PERC’s share.

General and administrative expenses amounted to P1.326 million and P1.440 million as of December 31, 2016 and December 31, 2015, respectively. The 7.91% decrease is due to lower expenses during the period.

There was a minimal unrealized loss on forex in 2015 resulting from reinstatement of dollar investment of the Company.

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.

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, 2018 the 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 only possible 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 from the Company’s investments stated above, there are no other researches or development 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 Company in the 1st quarter 2019.. Aside from the subscription payable to HEDC, there are no known trends, demands, commitments, events or uncertainties that will have material impact on the Company’s liquidity.

Except from the cash call from HEDC, the Company has no commitment for the purchase of property, plant and equipment.

25 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, 2018 pertains to the dividends receivable (see Note 9 of the AFS) from Hermosa, which was received on January 2019.

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 P393.710 million and P392.575 million as of December 31, 2018 and 2017.

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 its cash requirements for a certain period and invests unrestricted funds to maximize interest earnings, i.e. money market 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 2018 Audited 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, 2018, there are no disagreements with Accountants on Accounting and Financial Disclosure.

26 PART IV – MANAGEMENT AND CERTAIN SECURITY HOLDERS Please refer to page 5 to page 6 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 its Manual on Code of Corporate Governance. The Company is adopting the Integrated Annual Corporate Governance 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 from the 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.

27 General Notes to Financial Statements 1.

Assets subject to Lien and Restrictions on Sales of Assets As of December 31, 2018, 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, 2018 Audited Financial Statements.

3.

Defaults - None

4.

The following are not applicable in the preparation of this report. a. b. c. d.

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

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

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

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 2018 AFS, Note 9

6.

Breakdown of Accounts payable and accrued expenses

Accounts payable and accrued expenses Professional fees Related party Services G&A

P

Others Total

316,700 123,666 98,630 102,002 20,863

P

640,998

7.

As of December 31, 2018, 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.

28

Undertakirg to Provide Annual Report UPON TIIE WRITTEN RDQUEST OF THE STOCKIIOLDERS, THE COMPAIYY UI\DERTAKES TO FURNISH SAID ST(rcKHOLDER WITII A COPY OF SEC FORM r7-A FREE OF CHARGE. ANy WRITTEN REQUEST FOR A COpy OF SEC FORM.ITA SHALL BE ADDRESSED TO THE FOLII)WINC:

Offce of tle Corporate Secretary SEAFRONT RESOURCES CORPORATION 76 Floor, JMT Building, ADB Avenue Ortigas Center, Pasig City

Pt[Tuant to the requiremsnts of the Securities Regulation code, the lssuer has duly caused this report to sign on its behalf by the undersigned hereunto duly authorized, this day ofApril 2019 in pasig City

_

SEAFRONT RESOLIRCES CORPORATTON Issuer

By:

kl /-

AMUEL V. TORR-ES Cotwrste seretary

q/

ANI{EX

..Art

CERTIFICATION OF INDEPENDENT DIREGTOR

CERNNCATION OF IIII'EPEIII}ENT DIREC'TOR

I, ERNDSII|ID CARMEN JO IIDSIITERIO VILI\RX,ALIERNAIIDO, Filipino, of age and a resident

legal

of 22 Bright Hil Street, New Manila, Rolling Hills SuMivision, Quezon City, after

having been duly swom in acmrdance with law do hereby declare that:

l. I an a nomin€e for Indep€od€ Directo of SEAFRONT RESOURCES and been Iad€pqdent Director since

2,

Mry

CORPORATION

10, 2012.

I am af6liated with the following companies or orgmizations:

COMPAI'Y'ORGATI'ZATION

P'()SITION/REI,.ATIONSHIP

Comtry Bankers Insrance Com-

Director

Country Banliers Life Insrrmce

Direclq

2005 to Dr€setrt 2005 lo pes€ot

Com Jose E. Desiderio. Inc. Platon lvlartimz Flores San pe&o t-€Eno Femsndo Pangssga! Badilan Lar*

RCBC Securities IncRCBC Forex Elrokers Com. RP Land Development Com Fgego y Hielo, Inc-

3.

!

gossess

Director

Directq

2005 to Dr€seNrt 1996 to Dres€ot

Partn€r hdependent Director

2012 2013 2012 2018 2018

IadeDendent Director

lnd@endent DirEctor

Director

Delq Lasbda Signa Alumni Assn

PERIOD OF SERVICE

Presideat- Trustee

to Dr€sent to oresent

to Dresent to Dr€sent to present

ail the qualifications and none of the disqualifications to serve as an Independent SEAFRONT RESo{tRcES coRpoRATIoN, as provided for in section 38 of

of

the Securities Regutation Code, its Implemetrting Rules and Regulatigus and other SEC lssuances.

not related to the following director/officer/substantial shareholder of SEA_FRONT !19 REsotlRcES

coRPoRATIoN its subsidiaries and affiliates, other the,, rhe relationship provided under &e Rule 38.2.3 ofthe Securities Regulation Code.

5.

To the best of nry knowledge, inr.estigation or proceeding.

I 7.

I

am not the subject of any pe'rrring criminal or adninistrative

am not in goverarnent service or am 8{Iiliated with a goveroment agency or GOCC.

I shall fartbirlly and diligently comply with my duties and responsibirities as Indeperdenr Director rmder the securities Regulation code and its Imprernentiag Rules and Regulations, Code of Corporate Governmce and other SEC issuances.

I

shall inform the corporale se'etary of SEAFRONT RESouRcES coRpoRATIoN of

any changes in the above-mentioned information within five (5) days from rts occurrence.

ER}TESTII{E CA SUBSCRIBEIT At\tD SWORN to before me rhis beforp me and exhibited her TIN I

No. 1lG. l.lo. t9 BookNo. 2z Poc

Page

Series of2019.

I

9{7

I

-285.

N JO DESIDERIO VtrJ.AREAI-FERNANDO APR 2 2 20l9zorq,

affiad pemonally appeared

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CERTIFICATION OF INDEPENDENT DIRECTORS I, Nicasio I. Alcantara, Filipino, of legal age and a resident of#1 Tamarind Road, Forbes Park, Makati city, after having been duly swom to in accordance with law do

hereby declare that:

1. I

am a nominee for independent direclor of Seafront Resources comoration May 15,2002.

and been lndependent Director since

2.

I am affiliated with the following companies or organizations: Name of Company

Aces Technical Services. Inc.

July

Alabel Sa Lipa Farms, Inc.

20ll

- Present

Director

November | 987 - Present

Director

April2012 - Present

Alcor Transport Corporation

February 1974 - Present

Alecal Corp.

Director

October 1989 - Present

Alsing Power Holdings, Inc.

Director

May

Alsons Aquaculture Corporation

Director

May 1988-Present

Director

May 1997 - Present

Alsons/ AWS Informuilol

!yrt..tln":

ACR Mining Corporation

20ll

- Present

September 21, 201 7 - Present

Alsons Corporation

Director

April

Alsons Development & Investments Corp.

Director

December 1962-Present

Alsons Land Corporation

Director

November

of I 994-Present

Alsons Power Holdings Corporation

Director

December

of20l

Alsons Propenies Corporation

Director

November of I 997-Present

Alsons Security Co., Inc.

Director

May of 2013-Present

1995-Present

I

-Present

of 2015- Present November of 2016 - Present December

June

Bulacnin Agri. Farms, Inc, Casa Sonoma Agri Frams, lnc.

Director I

Director Director

of 1987 - Present

April2012 - Present ]

April April2012 2012 - prese Present

Colina de Conrado Farms, Inc.

April2012 - Present

Conal Corporation

May

of

2006 - Present

Conal Holdings Corporation

May

of

201

Edicon Corporation

October of 1989 - Present

Enderun Colleges, Inc.

Director

May

Fial Corporation

of

October

Finfi sh Hatcheries.Inc.

Director

l-

Present

201 8 - Present

of

1989 - Present

May 1996-Present

Indophil Resources NL

December 201l-Present

Kennemer Foods International

Director

June 2013 - Present

Lima Agri Farms, Inc.

April of20l2 - Present

Niacor Corporation

October

of

1989 - Present

Phoenix Petroleum Philippines, Inc.

Director

Punta Properties. Inc-

Chairman President

Roscal Corporation

Director

October

Sagittarius Mines, Inc.

Director

August of 2015 - Present

March 15,2019-Present

&

May of 1997 - Present

of

1989 - Present

Samal Agricultural Dev't. Corporation

October

San Ramon Power, lnc.

luly of 2012 - Present

of

1989

- Present

Sarangani Agricultural Co., Inc. Sarangani Energy Corporation

Seafront Resources Corporation

Director

May of I995 - Present

Seawood Holdings Incorporated

Director

January

South Star Aviation Corporation

Director

December of | 990 - Present

Sunfoods Agri. Ventures, Inc.

Director

October

Site Group International, Ltd.

Director

October of 2010 - Present

Southern Philippines Power Corporation

Director

rMay

The Philodrill Corporation

Director

/December of

Trusto Corporation

Director

Westem Mindanao Power Corporation

I

Director-T.

of

of20l3 - Present ol20l2 - Present 201

I - Present

l99l

- present

October of 1989 - Presenr ,

May

of

201

| - present

I

all the qualifications and none of the disqualifications to serve as an Independent Director of Seafiont Resources Corporation, as provided for in Section 38 of the Securities Regulation Code and its Implementing Rules and

3.

possess

Regulations and SEC issuances.

I

A

am not related to the following director/officer/substantial shareholder of Seafront Resources Corporation its subsidiaries and affiliates. other than the relationship provided under the Rule 38.2.3 of the Securities Regulation Code.

5.

To the best

ofmy knowledge, I am not the subject of

any pending criminal or

administrative investigation or proceeding.

6.

I am not in govemment service or am affiliated with a govemment agency or GOCC.

7.

I shall faithfully and diligently comply with my duties and responsibilities as independent director under the Securities Regulation Code and its Implementing Rules and Regulations, Code of Corporate Governance and other SEC issuances.

I shall inform the Corporate Secretary of Seafront Resources Corporation of any changes in the above-mentioned information within five days from its

8.

occulTence.

Done. this

_

day of April 2019. at MakalCity.

Lrc€NICASIO I. ALCANTARA Affiant

204

this

r., -,..^ tqllqgjil,

APR 2 2 SUBSCzuBED AND SWORN to before me ar affiant personatly ap-peared before m;;l;xhibired to me hi, passp",1 No.' Par'i's7'A_i"'*ao" ia'rti,a" Manila.

aii--

Doc.

i;;F;

No. 4 A_;

No. 9t ; Book No. _;L_; Page

Series of 2019

Al;t

.

lili

r Ailii

' 'ru,,r itc ',.;. f

R,

U||{cot icc

531?01&1019i

)LlirCfor fasig, &n Juan ad i,alsro,

lloiili

ttniii 3i la;r,lber2019

/fJi1l6ldg, Ct(;s len;r,

tasio Ci,r

Rottlio. d33{1 PTR

lio, 517Cit/;

0t/l{t9r

pash

l8Pl,lo,06t0i6; 01iM19:

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Cirv

RSll'

CondjaNe tto. V{0I169; 0i,30/16

6 ncnjc.ldofkfM|fu9$6ctrlo'dimisBB.sidc6reprcn.dis omrLnulgclde.m'Es e Fffih.d fiDE, rFd4 fianen

Ebdb4ii!ffiind6'8[.goi

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dcp.d Miry ipd{'d

b\

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'

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$i,

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o* N, ,t, ph${rN tlt{lfNsi

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?tq SEAFRONT RESOURCES CORPORATION

I

COVER SHEET auDttEo F||{altcnt ararEl||rrYa

SE

o

N T

R E

s

U

c

c

T

I

'R|lc|r^!oFr|clieifuiifuA.4/ioMPDfu)

c

g

B 3

FA?n

fr dordqh@dll'I&rmddecq.i6

7th

Flon JMT Blitdi.g, ADB Av..o.,

Ortt! C..r.r

PsiE Cny

,INd8fudb'w||4d6@hbl|M4FdGb6s$dr&ehe/,upddb

fiflilIuilililil|ilililil[|fltl

scl/ INDEPf I\'DENT AUDITOR'S REPORT

ofDiEclos lnd Stocklolde6 Resourc* Co$ordrion S.a6onr 7rh Floor,JMTBujlding, ADB Avenuc Thc Boatd

R.pon or tb. Audil of lh.

Fi..!ci.l S&l.o..ir

Wc have oudncd $c finrncicl sbcm.nl5 of Safro.t R4ou*cs CoDodion (1h. Cohpey), rhich compriseth.shr.m.nGoifli.nci.lpdlitioneatDcc.nb.31,2013dd201?,ind e sk(enent of .omprehensive inoom., suleBenrs olchonges in cqujty a.d slalements olcdh nows lo! each oflhe rhrer roa^ in rhe psriod erd.d D.ccnber 31,2013, and nor.s ro rh.limcial nabn.its, includin!rsunnat)

olsignifi cam accounling policics.

pEe

fanly, in dl m .ti!l Esp.6, lhc fin.ncial In our opinion. rn sconp.nyiry fimcial shr.n.na posnion arth. compst a D6.6b.I 3l, 20 | 3 and 20 | 7, od is finscirl p.rfomue dd its lloss fo. ach ofrh. thrc. y.r^ in rh. p.riod .nd.d D.c.nb.r I l. 2013 iD iccodrico wirh Philippinc

{

Fi.ecili

6h

Reponirs Slotrd6d, (PFRst

\ ..onduded odraudit! in acco.dance unh Phi Eeponsibiliri.5 und.rrhos. sFndrids m funh of tla Ftnarctal 9atenedr *tion oI ou rtpo srhrh.Co&ofErhr.r lor Prca.s'oml A...unrba i dhicll Equim.Dc tnd F El.vd ro our audn of r hr!. tulfrll.d our orh.r .thic.l GpoNibiliri.s in lccod.n€ Ethics. wc bclieE lhlt dE ludil cvid.nc. h.v. obLin.d is sumci.d ind

'.

rppopirk

'd

po!id.

r

K.y audn maneB e. ihoc nar!.B rha! in o$ prcfc$ionlljudsmenr *eE ofno,l sisnincance rn our .udn of$.frnd.i.l i!l.n.nBofth.cutrmrp.riod. Thcat matu6 $eE.ddE$.d in rh. conrexr ofour .udirofrh. finrcirl s!r.n.nt!s, *hoL, dd in foming our opinion rh.Eo. ond s.do not p6id. a s.p.d.atinion onrh.s. matu6. For rh. nat.r b.lo*, ou. d*ndion ofhos ou rudit addBed rh. mae. n pdidcd in rhll conrcxl

rIIlll|lilt]tl

rhe rcspomibiiities dscribed in the,lrlir,rt,Reryo,tibillti.tforthe,4tlitaftht Stoten.nB *ctiol ol ov Epon. includin3 in Elrlon ro $is manq Acoodinely, ou.udit Finoncial perfomd.i of pmc.dDrcs d.sign.d to rcspond b ou of rhc ftkr of includ.d $. mislt.t.ndrof rh.Iinmcillst tcr.nb $cE ulBof ourrudnpd.duEs includinAthcprc.cduEs p.r]bm.d to ddB tie mrlLr bclos, prcvid. th. bdsG for our aldn opiniot on dE &mDpoying

W. have fulfilled

6.$n.

Y.lwtto,

oJ

wqud.d

nrtirl

.4tit t40ltl2s

onpany h6 o inv.shc in rhe unq uored .qu jty so. urity of Hem ost Ecozone Developmeir Corpolarion (HEDC)qhich h cei.d ar rh. esiimat d irir value ofPl9l.7l nillion a of D.c.nb.r 3 l, 2013 Epks.nrin3 3 | .I 5% of it roll 6!ats. This noitd is sigific.rr to our audir bs'u& .rimlri's rh. fan vrtue of.r uDquo&d .9uiry i.{rumc't is inherendy subj.crit. 6 ir inyolK rh. rpplic.lion of sigrificurjudgd.nr iD elcriry rh. v.lunion tchnique od in usirg vllurion inputs th0r .rc nol obEmble in rh. muk.t.

Th.

C

Th. Conpuyt dis.losuEs abour

it

unquored.quity inv.nmen. in UEDC arc included inNoe

N

$ th.

W. involvcd our intnrl sp..i.lkr in th. Evi.s ol lh. scop., b6cs, mc$odolo3r asunpiions u$d in rr!. vrlu.rion ed 6ults olrh. wort by rhc Componyl .xroal appais.. Th. asunDrions includ. conD.rrliv. eles pri€ of sukrito& pDpedid ..d c61 10 d.v.lop rfie pG.lr of ltnd of HIDC bt Ef.rcnc. b hnbricrl rd nr&.r drh on codp.tabl. pop.ni6. We rcvi.q.d rh. Compmti d hclosu rcs on de sens iriviq of thc fiir v alu. m.!rurcm..! b . h&8es in u nobscdable inpuls. W! rto coisidcrcd th. compdcncc, crpabiLilie! $dobjecriviq ofmanaEemenfr cxr.n.l.ppr{is* sho prcpdrcd

is rsp.nsibl. fo. thc odEr irfomdion. Th. orh.r infonation enpris.s rh. infomrioi includ.d in th. SEC Fon 20lS (D.linirile lnf.mltion Sbtm.nr), SEC fom I 7-A ud Annuol R.pon aor rh. v.r.nd.d Deobq 31.2017. bur does nor includothe finucialihrmcnb rd our audiror's rcpon rhercon. Tlre sEC Form 20.15 (Definni!.lnfom.rion Sbr.men0, SEC Fom l7.A and Annlll Rrpon ioi rh. y*ended Declmber rl,20l7 arc cxp.cred & be md. ovrilabt ro us ans$. dat olrhh

Me.g.ncnt

tin6ci.l n.|.D.nts dos fom of 6u@c. concllsion rhcFon. Our opinion on rhc

nol cov., th.

o$d infomolion md w. * ill rcr .xpr6s iny

wirh or .diB olrhc findcill M.m.nts. our Espo6ibilny i! to Erd lhc orhct infomlrion idenrified rbov. th.n n b.&nes rilabl. rnd, in doing sd, comidd qhdher the othcr idfomarion isoatiorly inconsisle wnh thc nnancillstllemenrs orourknowl.d3e oblaired ir rh. audiB. o!oteRke app€d! ro b. nate'ially di3$ ed

ln

c.n.*tion

1uilnilililill|jililt|[il|il[

Rapo$ibiliri€ ol M.!.g.ndr ..d Ttos Ch.r!.d wlrb Gd.tu.rc. lor

lL Fh.lcirl

St

..b.ra

is 6po$ibl. lor dE pEF@rion lnd fiit pEscnhrion oflnc finrncill luLDena iD wirh PFRSi $d for such inlenil &ntrcl G nM.g.mdt d.rcmji6 k nec$ary ro .nrble rh. ore@rion of linoncill *deneft thr e. fft. fab .a&nd Dkn!tmc'1. whcrhor du. ro fraud o.

Mlnag.ndr

amrdse

In pr.p.ring $. financial sutemenb. mragemrnt is rcsponsible for as$inglhc Compey s $ility b oolri.ue 6rsoins.oiccn, disclcinE, a applhdbl., mad.is r.latd b goi4 conc.n dd using rhe goiig con*m bsh of..countiDg unls mml!.m.nt cidor i'tnds to liquidlrc ric Conpmy or ro cca. op.Brions, o' ha no rc.lbric ahcniiiv€ bur ro do $

e Kponsibl. for o!.6cinA rh. Conpdyt firncirl Audlort R6Dorribillria forr[. ud of rh. Fi'!'cirl Stt.m.nb Thosc cheged

vitn gov.d!n*

aponins

prr.$.

our obledivs are lo obein rcaso.able !$uene about wh.lherthe nnoncial sk!.n.ns s a wliolc are iee ion mlleial mi$r.rcm.d, *hethfl due rd fraud or .tror, and to issue d aldnofs r.pon rhat indud.souropinion. R.enable 6suFnc. is 0 high l.v.l of ssumc., bul is nor ! gudele. rha!.i

rud{condu\rdm&.ord.n..snhPSA.sillrlsr)tddlcrrnrreridlm"!cr.n. {h.nre\iJ. Misbtoens cd ris. from tlud o! cmr .3Ar.Cra, rh.y 4uld Eaonrblt b. exp€ b!\is orrhek finincial rbr.m.iL

,/-%l].i. .\ ".n

A3 D.d ot

s

audn in

!4ordlncc

; oMl j udsncnr and 6a'nla

i!

profesional skeptickm rhrouglo

ldenoi

and

as.$

rh! risls of

nf,fi!,1

anrof

rhef'ns.is nd.m.ds,sherherduerofmud

k sutncienr rd ipprcpri.r. ro prorid. i b6is for our opilion. Th.nskolnotd.t.dingasdri.l niss@m.nt GauhinS from nrud is higner firn for o& rsulring non .rcr a frlud my involv. coll6ion, fol8lry, inr..rion.l onisaons, misEpEs? dionsorrh.owrid.ofi mdconhl.

un!.nhdint of intmal conrbl rcl.v.nr to thc oudn in order to d.sig! ludir p'@duEs lnat @ lppopriltc ii rh. eircumsbc.s. bur nor for rhc purpose ofexpc$ingrn opinion on rhc Ohhin an

rfeciive'es

of thc

Conrany\ inEmal contbL

Evoluderhcapprcprialelc$ of occouniigpolicirs

.nimb rd

Elatd dkcldufts

made by

usod ard the

ns4.n.nr

reAonrblen*s oia(ounring

e

Con.lud. on th. lppbpriat..cs of smlgam.nfs ofrh. g.ing conc.m bsh ofaccounrins dd. b.scd on th. ludir cvid.nc. obrain d. vhdh.r i mrtcrinl trx@inry erGb clotcd lo crcDs or condnios dnr nay cst si9ificanr doubt dn rh. Conplnyt abili.y ro anrinu. a ! goins conc.m Ifs.concludcrh0r r m lrcnal uncerlainly cristsi w.E aqliEdbdw ancdion in ou audibr's rcp.n b L\. rclir.d dhclosuEs iD the fimcirl sbtemcnt or. ifsuch disdorucs aE imd.qu&, to modiry ouropinion Ourconclusions are bas.d on thc audn.videise obriin.d up rorh! ddr.ofou' auditorsrcpoft. Ho*cv.r, futuE event orcondiiiors may.ause rh. Comprny ro c.o* lo conrinue

f,ilIt]tiltl

tivaluatetheo!{ lprcs.trrarian.{rucrureand.o.nrorthetinan.iaIsrdrc'ncns,incLudingrhc di$losuEs. snd rhcthc rhd financill$otcncN rcprcsenr fte underlrin3 hnsadions and eretb manne' rhd achi.t.s fri. pEsenbtion

Ln

a

we connunicac Bnh rho* chsrged $nh sov.man.c rcgardine. snone orltr ntdc6. rhe planncd scoPc rnd riniigofthcaudi and siSnificanr iudir lindingt includinsdy risnificdnr dcficienci6 in inrem'l 0otrtolrhat \e idenriry duirrg oufaudn. chrged w ih Sovflnonce wirh a io.e'netrr thar *e havc co'nplied wnh ELevuir dhi.ilrcquLrenens rcsading iddcpciden.c. and locommunicrte sirh rhcm aLlrclriionships and other nitreE rhd m.y re$onoblr b. $oud,t ro b.d on our indcP€ndence. and !h*c applicablc, rclucd we

aLso provide those

\ith rhN chatgcd *i$ govsmuc., w d.r.nnin. rhose manc6 rhar From.h. 'nrnc6coflnu.ic.td q.rc ofnon sisnificrnc. in th. audn of$e fiMNialiarcm.nrsofrhccurenr period,nd d theEfor. rl$ kcy audn mane6 Wcdcscriberhe*fraresinoraudirorsrpofruil.shsottegularioi pr.. udes ptrblic dndd$trc.bouihc mr!.i or*hoi, in circmdy rarc.t{um$Ns, *e dete.mMe Er marershould nor bc comhun cdsd in our rcpod bc{mNe rhe advene con$q$.nce! ofdoing so would easonably be expedcd ro our*ei8h the public intrcnb.netiaofsrh comDnn'.,.on

d

R.pon or rbe SuDpl.Dcnt.rJ lrromrrion R.qulFd UnderR.verle n.guhriom No

lstolo

h. slpnlemcnury infom ion r.quiEd under R.wnue Regularions \o. I 5.20 | 0 fo. pu.pes of filing *irh fte Bureau oflm.mdlRcv.nue is pGenrcd byrlt mlnasemenr dfSslfionr Resources Co+onron in a scp.rare scheduh Rc!cnus Resulalions No l5-20l0rcquLresrheiniomuionrobepresen(edinlhc nores ro finsnciaL naMEns. Such Lifomnon iridrarcquned panofrhe bas. tiraNLalnateneds Th. infoma.ioi lsalsoior cq!ired by Secu ies R.guLarion CodeRul.6l, As Ahrnded(2011) Osr opitrion on rhe bdic financirlna.emens is nor altccrcd by fte pEvnr.rion ot$. irfonatiotr Li

'l

!

'l

hr engagcmed

SYCIP GORRES

prnn r or rh.

VEL

andir Esulrin-! in this mdcpendcni audirois tuDon n

na Lea C.

B.rsrdo.

YO & CO

ALc'+*J lccredihrion \o. 0660-AR.l (G{up A).

March 2,101r. vaLid utrriLMrrch 1.2010 T6i ldcnrifi .dion No. 102.032.6r0 lJlR Ac!iednatioi No 08-001993-61 2013.

FcbD14 l4,2013, vaLid unrilFebruary 13.l02l PTR No. 7ll2529, Jdnuary 1. 2019, Vakari Cirr SCC

ilt|[ililflilililtililtfitilt

SE^FRONT RESOURCES CORPORATION ST^TTMf,NTS OF FINANCIAL POSITION

2013

ASSf,TS

C6h dd c.sh.quiv.lcnls Oorca 6, Finrn.irl G!.k tt flt vrlu. rhrcugfi R6civ$1cs (Norcs 8, 9 a.d la) 94L625

Financi!la*ds

df.ir

value lhroug!

f,$.{l'i"1iii /itr

LIAAI LITI ES AIID EQTIITY Accduns payobh ard aoctued expenses (l,rores l3 and la)

D.r.n(d

6.

irbilkJ CNurc

:)

Capihl stek . F I pa v.lue (Noc I t) Althorized - 388,000.000 sh@s kslcd,nd oubdndinB- 161,000.000 shcs NerDnrcrlizd gains on frmncidaset ar aan v!h.ihdugh orher comprchcnsiv. iirne (Nores 3 and l5) Rehined.drinss (Norc ls)

263.345,5,10

413,560,613 r55 TOTAL LIABILITIES AND EQUITY

49,010

PC35,115,313 t50t,539,415

||ililll|mrmil5ilililil

SEAFRONT RESOURCES CORTORATION STATEMENTSOTCOMPREHENSIVEINCOME

(^s Esbr.d,

Nd sainr on rrn

d@ cias.s

a*

on finmcjd

ar

rair valu. rhrcush prcfir or lo$(Noc 3)

CI]^RCES ^ND .xF!6 Nc I I ) dd .dniii@tiv.

Nd l6s fr fln v!lu. chans6 on finEhl lss ran du. tircud @rtr or ros (]{oc 3) EXPENSIS

c!n6l

ar

coitf, r^x

FRovrsror{ FoRr

OTHER COMPREIJENSIVE INC

hed

1o

6.

actBltcd

b

p'ort d t

ll.<d) o fi nru. ,}'dgh a'rw onp'lh

Nd undli4d 3ri6

f

ii(oft. i.' ord (N*r ror {L cov

PREH

J md

r)

rlsrvE rNcoME

(Los.)

(fl6.5'0,!rD

F:!5,-.3,)3,

B.'i. .nd DirlBt errnidgr (Lr$) P.. Sr'irt

iluutilllilililt!fi|ltnflilt

SEAFRONT RESOURCES CORPORATION STATEMENTS OF CHANGES IN EQUITY

Net Unrealized Gains (Losses) on Financial Assets at Fair Value through

Other Comprehensive Capital Stock Income (Notes 8 (Note 15) and 15)

BALANCES AT DECEMBER Net income Other comprehensive income Total comprehensive income

BALANCES AT DECEMBER

31,2015

f165,549,598

6,300,512

6,300,512 37,560,537

37,560,537

31,2016

37,560,537 6,300,512 163,000,000 42,001,221 4,409426

43,861,049 209,410,647

14,671,667

reported

Total comprehensive income, as

Total

P163,000,000 P4,440,684 (P1,891,086)

Net income Other comprehensive income, as previously Fair value adiustment (Note 3) Other comprehensive income, as

Retained

Earnings (Deficit) (Note lS)

restated restated

14,671,667

317,741,216 (86,674,500)

317

231,066,716

231,066,716

231,066,716 14,671,667

245,738,383

,741,216 (86,674,500)

BALANCES AT DECEMBER 3I, 2017, AS RESTATED

BALANCES AT DECEMBER 31,2017, AS PREVIOUSLY REPORTED

*163,000,000 ?273,067,937

PI9,081,093

*455,149,030

*359,742,437

+19,081,093

P541,823,530

P163,000,000

Fair value adjustment CNote 3)

(86,674,500)

(86,674,500)

273,067,937

19,081,093 455,149,030 (6,857,015) (6,857,015)

(9,722,397)

(9,722,397) (16,579,412\

BALANCES AT DECEMBER 3I, 2017, AS RESTATED

163,000,000

Net loss Other comprehensive loss Total comprehensive loss

BALANCES AT DECEMBER See accompanying Notes to

31,2018

(9,722,397) (6,857,015) P163,000,000 P263,345,540 *12,224,078

f438,569,618

Financial Statements.

ilililil

til

il ]ilililililil ililt iltil ililt ilriltilil til iltl

SEAFRONT RESOURCES CORPORATION STATEMENTS OF CASH FLOWS

Years Ended December 3l 20t7 20r6

2018 CASH FLOWS FROM OPERATING ACTIVITIES Income (loss) before income tax Adjustments for: Net losses (gains) on fair value changes on financial assets at fair value through profit or loss (Note 8) Dividend income (Note 9) Interest income (Note 6) Operating loss before working capital changes Decrease (increase) in: Receivables Other current assets Increase (decrease) in accounts ble and accrued ex Cash used in operations Interest received Net cash used in

(P6,849,969)

17,994,390

(12,885,767) (117,951)

?14,678,714

F6,307,559

(15,397,049) (294,713) (96,516)

(6,803,522) (353,401)

(1,859,296) (1,099,563) (35,388) (88,425)

(r24.7rr\ (974,075) (24,437) (56,959)

99,859

24r.099 (8t4,372)

I I1.163

(74,065) t40.067 (933,702) 67.532

645,t54

275,877

384,713

55,938

(2,032,047)

I 19.201

CASH FLOWS FROM INVESTING ACTIVITIES Dividends received (Note 9) Proceeds from disposal (Acquisitions) ofi Financial assets at fair value through profit or loss (Note 8)

(4,522)

Financial assets at fair value through other complehensiye income (Note 8) Net cashplgvldqd by(used in) investing

activities

NET INCREASE (DECREASE) rN CASH AND CASH

EQUIVALENTS

cAsH AND CASH EQUIVALENTS AT BEGINNING OF

YEAR

CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 6) See accompanying Notes to

3,671,422

(2,478,543\ (2,207,188\

1,750,539

(3,073,359)

3,026,268

384.7r

(3 10,45 8)

8,65I,880 11,725,238 PI0,402,418

F8,651,880

3

12,035,696

Fl 1.725.239

Financial Statements,

r

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til

t] tlililt ilffi ilt ililt

iltil

iltil

illt

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SEAFRONT RESOURCES CORPORATION NOTES TO FINAIICIAL STATEMENTS

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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 I 8, I 996, 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 company financial statements were approved and authorized for issue by the Board of Directors (BOD) on April 10, 2019.

2. Basis of Preparation Basis of Preparation

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 (FVOCD, which have been measured at fair value. The Company's financial statements are presented in Philippine Peso (F), which is also the Company's functional and presentation currency.

The transactions and balances of the Companf line basis with the Company. The trust Company, using consistent accountin Standards (PFRSs).

Statement of Compliance The financial statements of the Company ha

are consolidated on a line by reporting year as the

ine Financial Reporting

ance with PFRSs.

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3.

Changes in Accounting Policies and Disclosures The Company adopted the following new accounting pronouncements starting January 1,2018. Except as specifically stated, the adoption of these new accounting pronouncements have no impact on the

Company's financial statements.

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Amendments to PFRS 2, Share-based Payment, Classification and Measurement of Share-based Payment Transactions

The amendments to PFRS 2 address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction; the classification of a share-based payment transaction with net settlement features for withholding tax obligations; and the accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash-settled to equity-settled. Entities are required to apply the

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-2amendments to: (1) share-based payment transactions that are unvested or vested but unexercised as of Janu ary 1,2018, (2) share-based payment transactions granted on or after January | ,201 8 and

to (3)

modifications

of

share-based payments that occurred

on or after January l, 2018. if it is possible to do

Retrospective application is permitted if elected for all three amendments and so without hindsight.

The Company has no share-based payment transaction with net settlement features for withholding tax obligations and had not made any modifications to the terms and conditions of its share-based payment transaction. Therefore, these amendments do not have any impact on the Company's

financial statements.

PFRS g, Financial Instruments, replaces PAS 39, Financial Instrument; Recognition and Measurement, for annual periods beginning on or after January 1,2018, bringing together all three aspects of the accounting for financial instruments: classification and measurement; impairment; and hedge accounting.

The Company has applied PFRS 9 retrospectively with the initial application date of January 1, 2018 and adjusting the comparative information for the period beginning January 1, 2017. The Company did not present its statement of financial position as of December 31, 2016 since the adoption of PFRS 9 affected only one type of financial asset included under one line item in the statement of financial position.

The impact of the adoption is described below:

(a) Classification and measurement Under PFRS 9, debt instruments are subsequently measured at FVTPL, amortized cost, or FVOCI. The classification is based on two criteria: the Company's business model for managing the assets; and whether the instruments' contractual cash flows represent 'solely payments of principal and interest' (SPPI) on the principal amount outstanding.

The assessment of the Company's business model was made as of the date of initial application, January 1,2018. The assessment of whether contractual cash flows on debt instruments are solely comprised of principal and interest was made based on the facts and circumstances as at the initial recognition of the assets.

Following are the impact of the classification and measurement requirements of PFRS 9 on the Company's financial assets: Cash and cash equivalents and receivables previously classified as loans and receivables as at December 31,2017 are held to collect contractual cash flows and give rise to cash flows representing solely payments of principal and interest. These are classified and measured as financial assets at amortized cost beginning January 1,2018. There was no change in the measurement of these financial assets.

Quoted debt instruments previously classified as AFS furancial assets are now classified and measured as debt instruments at fair value through OCI. The Group expects not only to hold the assets to collect contractual cash flows, but also to sell a significant amount on a relatively frequent basis. The Group's quoted debt instruments are regular government and corporate bonds that passed the SPPI test.

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-3Listed equity investments previously classified as AFS financial assets are now classified and measured as FVOCI. The Company elected to classiff inevocably its listed equity investments under this category as it intends to hold these investrnents for the foreseeable future. There were no impairment losses recognized in profit or loss for these investments in prior periods. There was no change in the measurement of these financial assets.

Equity investment in a non-listed company previously classified as AFS financial asset is now classified and measured as equity instrument designated at FVOCL The Company elected to classif, irrevocably its non-listed equity investment under this category as it intends to hold this investment for the foreseeable future. There were no impairment losses recognised in profit or loss for this investment in prior periods. The adoption of PFRS 9 resulted to a downward adjustment in the fair value of the financial asset by F86.67 million (seeNote8),netofdefenedincometaxofPl5.30millionasofDecember3l,20lT. Other comprehensive income in 2017 and net unrealized gains on financial assets at FVOCI also decreased by F86.67 million.

The Company has not designated any financial assets and financial liabilities as at FVTPL. There are no changes in classification and measurement for the Company's financial liabilities.

In summary, upon the adoption of PFRS 9 with the initial application date of January 1,2018, the Company had the following required or elected reclassifications: PAS

39

measurement

assets category cash Loans and equivalents receivables

Financial

Original Carrying

under PAS 39 Amount

Cash and

Receivables

Loans and receivables

Debt

AFS financial assets

insuuments

New Carrying PFRS 9 measurement cateqory Financial assets at

P8,651,880

amortized cost

FVTPL

at

FVTPL

PFRS 9 F8,651,990

Financial assets at

261,858

amortized cost

261,859

Financial assets at FVOCI 8,535,131

Equity investments AFS financial assets Financial assets Financial assets at

Amount under

522,365,075 Financial 62,845,291 Financial

assets at FVOCI

8,535,131 420,395,075

FVTPL

62,845,291

assets at

The adoption of PFRS t has no impact on the Company's results of operations, operating, investing and financing cash flows.

(b) Impairment

t has fundamentally changed the Company's accounting for impairment losses for financial assets by replacing PAS 39's incurred loss approach with a forward-looking expected credit loss (ECL) approach. PFRS 9 requires the Company to recogniz,e an allowanse for ECLs for all debt instruments not held at FVTPL. The adoption of PFRS

For cash and cash equivalents, management evaluated that these financial assets have low credit risk. Hence, the Company measured ECL on these instruments on a 12-month basis applying the low credit risk simplification. The Company uses external credit ratings both to determine whether the cash and cash equivalents and restricted cash has significantly increased in credit risk and to estimate ECL.

The adoption of PFRS 9 did not have any significant impact on the Company's provision for impairment on its financial assets.

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-4Amendments to PFRS 4, Applying PFRS 9 Financial Instruments with PFRS 4 Insurance Contracts

The amendments address concerns arising from implementing PFRS 9, the new financial instruments standard before implementing the new insurance contracts standard. The amendments introduce two options for entities issuing insurance contracts: a temporary exemption from applying PFRS 9 and an overlay approach. The temporary exemption is first applied for reporting periods beginning on or after January 1, 2018. An entity may elect the overlay approach when it first applies PFRS 9 and apply that approach retrospectively to financial assets designated on transition to PFRS 9. The entity restates comparative information reflecting the overlay approach if, and only if, the entity restates comparative information when applying PFRS 9.

PFRS 15, Revenue from Contracts with Customers, supersedes PAS 18, Revenue, and related Interpretations and it applies, with limited exceptions, to all revenue arising from contracts with customers. PFRS l5 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

PFRS l5 requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a conftact and the costs directly related to fulfilling a contract. In addition, the standard requires relevant disclosures.

The Company adopted PFRS 15 using the full retrospective approach of adoption with January 1,2017 as the date of initial application.

The adoption of PFRS l5 did not have a material impact on the Company's financial statements since its revenues are derived primarily from its investments in financial assets, which is outside the scope of PFRS 15.

Amendments to PAS 2S,Investments in Associates and Joint Ventures, Measuring an Associate or Joint Venture at Fair Value (Part of Annual Improvements to PFRSs 2014 - 2016 Cycle)

The amendments clarifu that an entity that is a venture capital organization, or other qualifuing entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss. They also clarifo that if an entity that is not itself an investment entity has an interest in an associate or joint venture that is an investment entity, the entity ffi&y, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate's or joint venture's interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which (a) the investment entity associate or joint venture is initially recognized; (b) the associate or joint venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent. Retrospective application is required.

Amendments to PAS 40,Investment Property, Transfers of Investment Property

The amendments clarifr when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management's intentions for

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-5the use of a property does not provide evidence of a change in use. Retrospective application of the amendments is not required and is only permitted if this is possible without the use of hindsight.

Philippine Interpretation IFRIC-22, Foreign Curuency Transactions and Advance Consideration The interpretation clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognizes the nonmonetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the date of the transaction for each payment or receipt of advance consideration.

Retrospective application of this interpretation is not required.

Pronouncements issued but not yet effective are listed below. Unless otherwise indicated, the Company does not expect that the future adoption of the said pronouncements will have a significant impact on its financial statements. The Company intends to adopt the following pronouncements when they become effective.

Effective beginning on or after January I, 2019 r Amendments to PFRS 9, Prepayment Features with Negative Compensation Under PFRS 9, a debt instrument can be measured at arnortized cost or at fair value through other comprehensive income, provided that the contractual cash flows are 'solely payments of principal and interest on the principal amount outstanding' (the SPPI criterion) and the instrument is held within the appropriate business model for that classification. The amendments to PFRS 9 clariff that a financial asset passes the SPPI criterion regardless of the event or circumstance that causes the early termination of the contract and irrespective of which party pays or receives reasonable compensation for the early termination of the contract. The amendments should be applied retrospectively and are effective from January 1,2019, with earlier application permitted.

These amendments have no impact on the financial statements of the Company.

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PFRS 16, Leases

l6 sets out the principles for the recognition, measuremento presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under PAS 17, Leases. The standard includes two recognition exemptions for lessees leases of 'low-value' assets (e.9., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a PFRS

-

lessee will recognize a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset).

Lessees will be required to separately recognize the interest expense on the lease liability and the depreciation expense on the right-of-use asset.

Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.9., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognize the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset.

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.

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-6PFRS

l6 also requires

lessees and lessors to make more extensive disclosures than under PAS 17.

A

lessee can choose to apply the standard using either a full retrospective retrospective approach. The standard's transition provisions permit certain reliefs.

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or a

modified

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

The amendments to PAS 19 address the accounting when a plan amendment, curtailment or settlement occurs during a reporting period. The amendments speciff that when a plan amendment, curtailment or settlement occurs during the annual reporting period, an entity is required to: Determine current service cost for the remainder of the period after the plan amendment, curtailment or settlement, using the actuarial assumptions used to remeasure the net defined benefit liability (asset) reflecting the benefits offered under the plan and the plan assets after that event

Determine net interest for the remainder of the period after the plan amendment, curtailment or settlement using: the net defined benefit Iiability (asset) reflecting the benefits of;flered under the plan and the plan assets after that event; and the discount rate used to remeasure that net defined benefit liability (asset).

The amendments also clarifu that an entity first determines any past service cost, or a gain or loss on settlement, without considering the effect of the asset ceiling. This amount is recognized in profit or loss. An entity then determines the effect of the asset ceiling after the plan amendment, curtailment or settlement. Any change in that effect, excluding amounts included in the net interest, is recognized in other comprehensive income.

The amendments apply to plan amendments, curtailments, or settlements occurring on or after the beginning of the first annual reporting period that begins on or after January l, 2019, with early application permitted. These amendments have no impact on the financial statements of the Company.

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

clariff that an entity applies PFRS 9 to long-term interests in an associate orjoint venture to which the equity method is not applied but that, in substance, form part of the net investment in the associate or joint venture (long-term interests). This clarification is relevant The amendments

because it implies that the expected credit loss model in PFRS 9 applies to such long-term interests.

The amendments also clarified that, in applying PFRS 9,an entity does nottake accountof any losses of the associate or joint venture, or any impairment losses on the net investment, recognized as adjustments to the net investment in the associate or joint venture that arise from applying PAS 2S,Investments in Associates and Joint Ventures.

The amendments should be applied retrospectively and are effective from January 1,2019, with early application permitted. These amendments have no impact on the financial statements of the Company.

Philippine Interpretation IFzuC-23 , Uncertainty over Income Tax Treatments

The interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of PAS 72, Income Taxes, and does not apply to taxes or

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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: o Whether an entity considers uncertain tax treatments separately . The assumptions an entity makes about the examination of tax treatments by taxation authorities I How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates o How an entity considers changes in facts and circumstances

An entity must determine whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments. The approach that better predicts the resolution of the uncertainty should be followed.

The Company is currently assessing the impact of adopting the interpretation on its financial statements.

Annual Improvements to PFR^Ss 2015-2017 Cycle

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Amendments to PFRS 3, Business Combinations, and PFRS I l, Joint Arrangements, Previously Held Interest in a Joint Operation The amendments clarifu that, when an entity obtains control of a business that is a joint operation, it applies the requirements for a business combination achieved in stages, including remeasuring previously held interests in the assets and liabilities of the joint operation at fair value. In doing so, the acquirer remeasures its entire previously held interest in the joint operation.

A parfy that participates in, but does not have joint control of, a joint operation might obtain joint control of the joint operation in which the activity of the joint operation constitutes a business as defined in PFRS 3. The amendments clarifr that the previously held interests in that joint operation are not remeasured.

An entity applies those amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1,2019 and to transactions in which it obtains joint control on or after the beginning of the first annual reporting period beginning on or after January 1,2019, with early application permitted. These amendments are currently not applicable to the Company but may apply to future transactions.

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Amendments to PAS 12, Income Tax Consequences of Payments on Financial Instruments Classified as Equity The amendments clarifu that the income tax consequences of dividends are linked more directly to past transactions or events that generated distributable profits than to distributions to owners.

Therefore' an entity recognizes the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognized those past transactions or events.

An entity applies those amendments for annual reporting periods beginning on or

after January 1,2019, with early application is permitted. These amendments are not relevant to the

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8Company because dividends declared by the Company do not give rise to tax obligations under the current tax laws.

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Amendments to PAS 23, Borrowing Costs, Boruowing Costs Eligiblefor Capitalization The amendments clarifr that an entity treats as part of general borrowings any bonowing originally made to develop a qualiffing asset when substantially all of the activities necessary to prepare that asset for its intended use or sale are complete.

An entity applies those amendments to borrowing costs incurred on or after the beginning of the annual reporting period in which the entity first applies those amendments. An entity applies those amendments for annual reporting periods beginning on or after January 1,2019, with early application permitted.

These amendments have no impact on the financial statements of the Company.

Effective beginning on or after January I, 2020 o Amendments to PFRS 3, Definition of a Business

The amendments to PFRS 3 clariS the minimum requirements to be a business, remove the assessment of a market participant's ability to replace missing elements, ild n€urow the definition of outputs. The amendments also add guidance to assess whether an acquired process is substantive and add illustrative examples. An optional fair value concentration test is introduced which permits a simplified assessment of whether an acquired set of activities and assets is not a business.

An entity applies those amendments prospectively for annual reporting periods beginning on or after January 1,2020, with earlier application permitted.

These amendments

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will apply on future business combinations of the Company.

Amendments to PAS l, Presentation of Financial Statements, and PAS 8, Accounting Policies, Changes in Accounting Estimates and Eruors, Definition of Material The amendments refine the definition of material in PAS I and align the definitions used across PFRSs and other pronouncements. They are intended to improve the understanding of the existing requirements rather than to significantly impact an entity's materiality judgements.

An entity applies those amendments prospectively for annual reporting periods beginning on or after January 1,2020, with earlier application permitted.

Effective beginning on or after January o PFRS 17, Insurance Contracts

I, 202I

PFRS l7 is a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure. Once effective, PFRS l7 will replace PFRS 4, Insurance Contracfs. This new standard on insurance contracts applies to all types of insurance contracts (i,e., life, non-life, direct insurance and re-insurance), regardless of the type of entities that issue them, as well as to certain guarantees and financial instruments with discretionary participation features. A few scope exceptions will apply.

The overall objective of PFRS l7 is to provide an accounting model for insurance contracts that is more useful and consistent for insurers. In contrast to the requirements in PFRS 4, which are largely

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based on grandfathering previous local accounting policies, PFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects.

The core of PFRS l7 is the general model, supplemented by: A specific adaptation for contracts with direct participation features (the variable fee approach) A simplified approach (the premium allocation approach) mainly for short-duration contracts

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PFRS I 7 is effective for reporting periods beginning on or after January 1 ,2021, with comparative figures required. Early application is permitted.

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

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The amendments address the conflict between PFRS l0 and PAS 28 in dealing with the loss of control of a subsidiary that is sold or contributed to an associate orjoint venture. The amendments clarif, that a full gain or loss is recognized when a transfer to an associate orjoint venture involves a business as defined in PFRS 3. Any gain or loss resulting from the sale or contribution of assets that does not constitute a business, however, is recognized only to the extent of unrelated investors' interests in the associate or joint venture.

On January 13,2016, the Financial Reporting Standards Council deferred the original effective date of January 1,2016 of the said amendments until the International Accounting Standards Board

(IASB) completes its broader review of the research project on equity accountingthat may result in the simplification of accounting for such transactions and of other aspects of accounting for associates and

4.

joint ventures.

Summary of Significant Accounting Policies Cash and Cash Eryivalents 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 less and that are subject to an insignificant risk of changes in value.

Financial Instruments

Initial recognition and subsequent measurement A financial instrument is any contract that gives rise to a financial liability or equity instrument of another entity.

asset

of one entity and a financial

Financial assets - Initial recognition and measurement Financial assets are classified, at initial recognition, as subsequently measured at amortized cost; FVOCI; and FVTPL. The classification of financial assets at initial recognition depends on the financial asset's contractual cash flow sharacteristics 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 (SPPD' on the

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-10principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.

The Companyos 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.

Sub s e q uent m e as ur e m e nt

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

Financial assets at amortized cost (debt ins0uments) Financial assets at FVOCI with recycling of cumulative gains and losses (debt instruments) Financial assets designated at FVOCI with no recycling of cumulative gains and losses upon derecognition (equity instruments) 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:

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The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and 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 derecogn ized, modified or impaired.

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

Financial 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 amortised 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 financialposition at fair value with net changes in fair value recognised in the statement of profit or loss.

This category includes derivative instruments and listed equity investments which the Company had not irrevocably elected to classifu at fair value through OCI. Dividends on listed equity investments are also recognised as other income in the statement of profit or loss when the right of payment has been established.

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

Financial assets designated at FVOCI (equity instruments) Upon initial recognition, the Company can elect to classifu irrevocably its equity investments 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 recognised 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 government securities.

Impairment offinancial ass ets 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 exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance 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 external 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 contractual 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.

Sub

s

equent measurement

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

r r

Financial liabilities at FVTPL Loans and borrowings

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-t2Loans and botowings 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 amortiz.ation 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 comprehensive income.

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

Derecognition of Financial Assets and Financial Liabilities

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

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

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 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 asseto the asset is recognized to the extent of the Company's continuing involvement in the asset.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the 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 saine 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.

Offs etti ng of F inanc i al Ins trum ent s 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 oflset 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:

r

In the principal market for the asset or liability, or

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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 o I

Level I - Quoted (unadjusted) market prices in active markets for identical assets or liabilities Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable 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 recurring basis, the Company determines whether transfers have occurred between Levels in the hierarchy by re-assessing 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.

Operating Lease Company as a Lessor Leases where the Company does not transfer substantially all the risks and rewards of ownership of the assets are classified as operating leases. Lease payments received are recognized in profit or loss as income on a straight-line basis over the lease term.

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 transaction costs and the related tax effects is included in equity.

Retained Earnings

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 retained earnings of the Company are available for dividends only upon approval and declaration of the BOD. Earnings 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.

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t4Diluted 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 of all the dilutive potential ordinary shares into ordinary shares. There are no dilutive potential common shares that would require disclosure of diluted earnings per common share in the financial statements.

Revenue Recognition Revenue from contracts with customers is recognised 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 affangement since it is the primary obligor in all revenue ilrangements, 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 noncancellable leases is recognized in the on a straight-line basis over the lease terms or based on a certain percentage of the gross revenue of the tenants, as provided under the terms of the lease contract.

General and Adminisfative Expenses

Expenses are recorded when administering the business.

incurred. General and administrative

expenses constitute costs

of

Income Tax Curuent 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.

Defeted tax Deferred 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.

Defened 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 losses 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.

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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 ta< 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 defened tax asset to be recovered.

Defened 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 future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, 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 vinually certain that an inflow of economic benefits will arise, the asset and the related income are recognized in the financial statements.

Events After the Reporting 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

factorso including expectations

of future events that are believed to be reasonable

under the

circumstances.

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16Judgments In the process of applying the Company's accounting policies, management has made the following judgrnents, apart from those involving estimations, which has the most significant effect on the amounts recognized in the financial statements:

Recognition of deferred tax 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 recogn ized, based upon the likely timing and level of future taxable profits together with future tax p[nning strategies.

The Company did not recognize defened tax assets amounting to F3.96 million and F3.18 million as of December 3 | , 201 8 and 2017 , 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 concerning 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 offair 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 investments and make assumptions that are mainly based on market conditions existing at each reporting period. As of December 31,2018 and 2017,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 frorn changes in fair value of unquoted equity securities are fully disclosed in Note 8.

6.

Cash and Cash Equivalents

Cash in banks (Note 7) Cash

2018

20t7

P6,lg7,4lg

P5,379,556

uivalents fNote

3.273.324 F10,402,419

F8.651.990

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

F0.10 million and F0.12 million in 2018,2017 and20l6,respectively.

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-17 -

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 3l follow: 2018

20r7

?4,268,251

?923,957 22,044,497

Assets Cash and cash equivalents (Note 6) Financial assets at FVTPL (Note 8) Financial assets at FVOCI - government securities (Note 8) Receivables CNote 9)

12,648,482 5,402r780 70,560

8,535,131

62,101 31,565,686

22,390,073

Liabilities Accounts payable and ascrued

Equity Principal

expenses

fund

(90,389) ?22,299,684

F3 1,502,958

P28,056,417

?28,056,417

(62,728',)

Accumulated trust fund income (loss) at

beginning of year Trust fund income (loss) for the Accumulated tnrst fund income (loss) at end of

year

year

(3,619,033) 7,065,574 3,446,541 P31,502,958

31446,541 (912031274\

(5,756,733) ?22,299,684

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 Company's financial assets are summarized by measurement categories as follows:

Cash and cash equivalents (Note 6)

Receivables (Note 9) Financial assets at FVTPL (Note 7) Financial assets at FVOCI (see Note 3)

2018 P10,402,418 12,537,600 44,850,901 416,353,329

*484,144,248

20t7 F8,651,880 261,858 62,845,291 428,930,206 F500,699,235

Financial Assets at FVTPL Details of financial assets at FVTPL consisting of listed equity securities follow:

20t7

2018

Fair value

Acquisition cost

F44,850,901

P62,945,291 49,100,916

48,100,916

The net loss on fair value changes on financial assets at FVTPL amounted to F17.99 million for the year ended December 31, 2018, while the net gain on fair value changes amounted to Fl5.39 million and F6.80 million for the years ended December 3 l, 2017 and 2016, respectively.

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- 18 The movements in financial assets at FVTPL for the years ended December 3l follow: 20t7 ?47,453,721

2018 Balance at beginning of year Fair value gain (loss) recognized during the year

?62,845,291 (17,994,390)

15,387,049 4.522

Additions Balance at end

of

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 atfair value. The carrying values of these investments are as follows:

20r7 (As restated, Note 3

Listed equity securities: PetroEnergy Resources Corporation (PERC) Benguet Corporation

*13,479,075 761.406

?23,492,102 4.33 8.1 55

27,830.257

Non-listed equity security (Note 3): Hermosa Ecozone Development Corporation (HEDC) Subscription payable to HEDC

406,063,952 12,353,894 393.71

404,919,702 12,353,994 392.564.818

Investments in government securities (Note

P416,353,329

P429,930.206

The movements in financial assets at FVOCI for the years ended December 3l follow: 2017 (As restated,

Balance at beginning of

year

p149,655,296

?428,930,206

Additions

2,479,543

Disposals Fair value gain (loss) recognized durine the vear Balance at end of vear

(3,026,269)

F416,353,329

276.796.367 P429,930.206

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

20t7 (As restated,

Balance at beginning of year Unrealized gain (loss) recognized in other

ive income CNote Balance at end

of

3

?273,067,937

?42,001,221

9.722

23r.066.716

*263

?273.067.937

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_19-

Investment in HEDC On January 3l , 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 and 2017 ,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 FIEDC is presented in the statement of financial position at fair value net of subscription payable.

The fair value of investment in FIEDC 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 an Securities and Exchange Commission accredited independent valuer as at December 3 1 , 201 8 and 201 7. 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

Dividends receivable Accrued interest receivable Rent receivable Receivable from HEDC

2018 ?121422,217

P18l,604

70,323 23,408

63,534 16,720

2017

2l F26l,g5g

Dividend income earned on

its

investments amounted

to F12.89 million, ?0.29 million

and

P0.35 million in 2018, 2017 and 2016, respectively, Dividend receivable from HEDC amounting million was subsequently collected in January 2019.

"12.23 10. Other Income 2018 Service income (Note Rental income

l3)

?267,857 480 7

20t7 ?267,957 84.480 P352.337

20r6 ?267,957 84.490 P352,337

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

Rental income pertains to rentals earned from the two (2) parking slots owned by the Company which

are classified as investment property. As of December 31, 2018 and 2017, the cost of tire fullv

depreciated parking slots amounted to ?207,598.

The fair value of the investment property ranges from F600,000 to F800,000 and F600,000 to F700,000 per slot as of December 31,2018 and 2017, respectively. This has been determined on the

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10-

basis of recent sales of similar properties in the same area as the investment properfy and taking into account the economic conditions prevailing at the time the valuation was made. There are no related costs for the operations of the investment property.

I

l.

General and Administrative Expenses

Professional fees and services

Stockholders' meeting expenses Stock listing maintenance fees Stock transfer expenses

Directors'fees

2018 F1,085,946 378,930

20t7

20t6

F318,750 302,149

264,116

265,660

253,539 175,000

259,513 85,000 37,722 10,704

F318,750 265,341 253,000 260,050 75,000 93,224

Taxes and licenses

32,7 49

Advertising IT services

10,212 6,516

Insurance expense

9,000

22,245

3,682

16l,g57 3,592

L7

6.853

13.409

Miscellaneous

17,393

12. Income Taxes

a.

The provision for income tax for the years ended December 31,2018, 2017 and20l6 represents MCIT.

b.

As of December 31,2018 and2017, 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.

2018 F3,939,030

NOLCO MCIT

20t7 ?3,162,213

2l,l4l

2l,l4l

The details of unexpired MCIT and NOLCO are as follows: 2018

Year incurred

MCIT

NOLCO

2018 2017

P7,047 7,047 7.047

P1,864,869 1,099,563

20t6

Pzl,l4l Year incurred

20r7 20r6 20r5

20t7 MCIT P7,047 7,047 7.047

December 31, 2021 December 31, 2020 December 31. 2019

97

F3.g3g

NOLCO P1,099,563

974,599 1.088,052

December 3 1, 2020 December 31, 2019 December 3 l. 2018

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-21

Rollforward of NOLCO follows: 20r8

20r7

*3,162,213 F3,205,994 1,864,969 1,099,563

Balances at beginning of year

Additions

Expirations

(1,088,052)

Balanses at end of vear

(1,143,244\

P3,939,030

P3.t62.2t3

2018

20t7

P2l,l4l

Pzl,lg4

Rollforward of MCIT follows:

Balances at beginning of year

c.

Additions

7,047

7,047

lons Balances at end

7

7.1 00

?2l.l4l

of

Pzt.t4l

As of December 31,2018 and 20l7,the Company recognized deferred tax liability amounting to F45.90 million and F45.73 million, respectively, which pertains to the setup of 15% defened 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:

20r8 Income tax at statutory tax rate of 30% Add (deduct) reconciling items: Movement in unrecognized DTA Interest income subjected to final tax

Dividend income Net loss (gains) on fair value changes on financial assets at FVTPL Provision for income tax

20r7

2016

P4,403,614

?1,992,269

564,935

336,916

299,269

(35,385) (3,865,730)

(88,414)

(F2,054,990)

(37,4t3)

(28,955)

4.676.714 ?7.047

(106,020)

2,041,05

?7.047

13. 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 entiiies, 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.

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-22 The Company's financial statements include the following amounts resulting from transactions with

related parties:

2018

Nature of transaction

PERC

Reimbursements Accounting services

HEDC

AmounU Volume

Receivables/ (Accounts

Conditions Noninterest bearing, payable when due and demandable

?123,667 267.857

P39r 20r7 Receivables/ (Accounts

Reimbursements Accounting services

?7t.625

(?71,625)

Noninterest bearing, payable when due

Unsecured,

and demandable

no impairment

267.8s7 F339.482

The Company has no employee. PERC provides administrative support to the Company. Therefore, no compensation and short-term bnefits for key management personnel were charged in profit or loss for the years ended December 31, 2018, 2017 and 2016.

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 parry receivables or payables.

14. Financial lnstruments Categories 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-term 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 of the fair value hierarchy.

1

category

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.

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_23

_

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 hierarchv.

Accounts payable and accrued expenses Carrying values approximate fair values due to their short-term nature.

Subscriptions payable Carrying values approximate fair values because this is due and demandable (see Note 8).

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 December20l8 and 2017 are shown below: Valuation

Significant

technioue unobservable in unquoted equity Adjusted net asset Price per square meter shares at FVOCI value method

201 8

2017 F400 - F4,000

?440 - F4,000

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/tenain, and development) affecting the subject properties as compared to the market listing of comparable properties ranges from -SYo to -10%. 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 ofthese 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 exircises oversight role in managing these risks.

Financial R,skr 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 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 potentiaLadditional Iiquidity requirements of the Company. Investments in unquoted equity securities classified as financial assets at FVOCI amounted to ?393.71 million and ?392.56 million, net of subscription payable, as of December 3 l, 201 8 and 201 7, respectively (see Note 8).

The Company monitors its cash position and overall liquidity position in assessing its exposure to Iiquidity 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. Subscriptions payable are payable on demand and are non-interest bearing.

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-24

-

The tables below summarize the maturity profile of the Company's financial assets and liabilities December 31,2078 and 2017 based on contractual undiscounted payments.

of

as

2018

Within

one

On demand Financial assets at FVTPL:

Equity securities Financial assets at amortized cost: Cash rnd cash equivalents Receivables: Receivable from HEDC

Rent receivrble Accrued interest receivable Dividends receivable Financial assets at FVOCI: Listed equity securities: PERC Benguet Corporation Nonlisted equity security:

*-

P44,950,901

10,402,419

10,402,419

21,652 23,409 70,323

23,409

21,652 70,323 12,422,217

12,422,217

13,479,075

3,761,406

HEDC*

406,063,952

Government securities

Accounts payable and accrued expenses Subscrintions oevable* *

F44,950,901

780

13,479,075 3,761,406

406,063,952 780

654,816

654,816

* Gross of subscription payable to HEDC anounting ** Presented as a deductionfromfinancial assets at FVOCIforfinancial statement presentation purposes.

2017

Within one Financial assets Financial assets at FVPL:

Equity securities Financial assets at amortized cost: Cash and cash equivalents Receivables: Rent receivable Accrued interest receivable

?62,945,291 8,65

P62,945,291

l,gg0

8,65

16,720 181,604

23,492,102 4,33 g,l 55

r8

r.604

404,919,702 8,535.13 I

44t.284.090

5r3.043.1t9

710,754

710,754

12.3 53.884

12.353.884 13.064.638 F499,978.481

13,064,639

Net financial assets

4,33 8,155

l

8.53 5.13

Financirl liabilities Subscri

23,492,102

404,919,702

77.425 Accounts payable and accrued expenses

16,720 63,534 I 91,604

63,534

Dividends receivable Financial assets at FVOCI: Listed equity securities: PERC Benguet Corporation Nonlisted equity security: HEDCT Investments in government securities

F58,512.787

l,gg0

FI8

r.604

F44l

090

* Gross of subscription payable to HEDC arnounting to pl2,353,88i. ** Presented as a deduction from financial assets at FVOCI for financial statement presentation purposes.

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-25 Market risk Market risk is the risk of loss on fufure 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, lquityirices 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 Comb-V readily disposes or trades the securities for replacement with more viable and less risky investments.

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

Effect on income before tax

Increase decrease) in market price 2018

+1,530h

20t7

-1,530h +6.9%

F685,521 (685,521)

4,277,905 (4,277,905)

-6s%

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 variable-s held constant, showing the impact on equity: Increase (decrease) in market 2018 2017

Effect on equi P292,934 Qg2,g34)

+L.70oA -l.70oh +SYo -5%

1,524,451

(r,524,451)

The percentage of increase and decrease in market price is based on the movement in the philippine Stock Exchange Index 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 fro1n .uriand cash equivalents, receivables, financial assets at FVTPL and financial assets at FVbCI, 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 government securities, the Company applies the low credit risk simplification where the Company measures the ECLs on a l2-month basis b*La 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 wheiher 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, ECLr tJtuting to these debt instruments rounds to nil.

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The Company's receivables are aged surrent as of December 31,2018 and2017. No receivables are cons idered credit-impaired.

As of December 31, 2018 and 2017, 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 December 3 1,2018 and 2017: 2018 Financial assets at FVPL: Equity securities Financial assets at amortized cost: Cash and cash equivalents Receivable from IIEDC Rent receivable Accrued interest receivable Dividend receivable Financial assets at FVOCI: Listed equity securities: PERC Benguet Corporation

20t7

F44,950,901

P62,945,291

10,4021419

8,651,990

21,652 23,408 70,323

16,720 63,534

12,422,217

l gl,604

13,479,075

23,492,102

3,761,406

Nonlisted equity security: IIEDC* Investments in ent securities

393,710,069 780 144.249

ptM.

* Net of subscription payable to HEDC anounting to

4,339,155 392,564,919 8.535.13

The following tables show financial instruments recogn ized at fair value as of December 2017, analyzed between those whose fair values are based on:

t.

2.

3.

1

F500,699.235

3I

, 201 g and

quoted prices in active markets for identical assets or liabilities (Level I ); those involving inputs other than quoted prices included in Level I that are observable for the asset or liability, either directly or indirectly (Level2); and

those with inputs for the asset (unobservable inputs) (Level 3).

or liability that are not based on

observable market data

2018

Level

I

Level2

Level3

Fair Value

Financial assets: Financial assets at FVPL:

Equity securities Financial assets at FVOCI: PERC Benguet Corporation

P44,950,901

44,850,901

13,479,075 3r761,406

13,479,075

HEDC* Investments in ernment securities

:

3r7611406

393,710,06;

393,710,069

780

402.790

P67.494.162

*461,204.230

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

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2017

Level

Level2

I

Level

Fair Value

3

Financial assets: Financial assets at FVPL:

Equity securities

?62,845,291

ts

F_

Financial assets at FVOCI: PERC

?62,845,291

BAVJA2

Benguet Corporation

23,492,102

4J39,155

4,33 8, 155

HEDC*

3g2,564,g1;

392,564,919

Investments in government securities

13l

r0.679 * Net of subscription payable to HEDC amounting plZ_lSS,*U, F99

35,131

8

F.

?392 564.818

?491 775.497

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 20lB and2017.

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 ruy udlust the diiidend 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 Lxpenses and subscriptions payable. Total equity includes capital stock, net uniealized gains (losses) on financial assets at FVOCI and retained earnings (deficit).

The Company has no externally imposed capital requirements as of December

3

l, 201 8 and 2017

The table below demonstrates the debt-to-equity ratios of the Company as of December 2017:

3l,20lg

2018

Total liabilities: Accounts payable and accrued ex Total equity: Capital stock Net unrealized gains on financial assets at FVOCI

.

and

20r7

P66r

?710,754

P163,000,000

P163,000,000 273,067,937

263,345,540

Retained earnin

l9,0g l,093 P4s5.149.030

0.0015:l

0.0016: I

There were no changes in the objectives, policies or processes for the years ended December 31, 2018 and 2017.

The Company has declarable dividends amounting to P15.47 million as of December 31, 2018.

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

Number of

of

Issue/

Date of SEC

holders as

offer price

approval

ofvear-end

Listing date - May 7, 1974 10,000,000,000 F0.01/share Add (deduct): 50% stock dividend 5,000,000,000 0.01/share 60% stock dividend 9,000,000,000 0.01/share l:2.400 stock rights offering 10,000,000,000 0.01/share l:2.125 stock rights offering 16,000,000,000 0.01/share l5% stock dividend 7,500,000,000 0.01/share Change in par value from F0.Ol/share to Fl.00/share (56,925,000,000)

November 5,1973

shares

Quasi-reorganization December 31, 2010

registered

November 27,I98l October 31, 1990 September 28,1992

February 8, 1994 January 20,1997

(412,000,000) l/share 163,000,000

August 14,1997 october 5, 1998 4,941

Add (deduct): Movement December 31, 201I Add (deduct): Movement

163,000,000

4,903

December 31,2012

163,000,000

4,747

163,000,000

4,819

163,000,000

4,796

163,000,000

4,758

163,000,000

4,759

r63 000.000

4.717

J

Add (deduct): Movement

7l

December 31. 2013

Add (deduct): Movement December 31,2014 Add (deduct): Movement December 31,2015 Add (deduct): Movement December 31,2016 Add (deduct): Movement December 31.2017

2 8

4l

Add (deduct): Movement December 31.2018

16. Basic and Diluted Earnings Per Share The computations of the Company's basic earnings per share are as follows: 2018

Net income (loss) Wei number of

g.rt.Dttrtrd

r"-tt

shares

2017

2016

(P6,857,015)

?14,671,667

I

163.000.000

F6,300,512 163.000.000

The Company has no potentially dilutive common stock in 2018, 2017 and 2016.

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I*'?;ili;;eo;B% '8fl:R?il'a,tl;lflllnt'nusust 24,zoz1 iiie'^ff,:T"H'avo&co 1226 MakatiCity ey.com/ph SEC Accreditation No. 0012-FR--s tOrup nl Philippines November 6, 2018, vatid untit November s,2021

INDEPENDENT AUDITOR'S REPORT

The Board of Directors and Stockholders Seafront Resources Corporation 7th floor, JMT Building, ADB Avenue Ortigas Center, Pasig City

We have audited the accompanying financial statements of Seafront Resources Corporation (the Company) as at and for the year ended December 31, 2018, on which we have rendered the attached

report dated

April 10,2019.

In compliance with Securities Regulation Code Rule 68, As Amended (201l), we are stating that the above Company has four thousand three hundred fifty (4,350) stockholders owning one huridred (100) or more shares.

SYCIP GORRES VELAYO & CO.

/)/All t4^ C t^r=/L J

(/,r^

Ana Lea C. Bergado Partner

CPA Certificate No. 80470 SEC Accreditation No. 0660-AR-3 (Group A), March 2,2017,valid until March 1,2020 Tax Identification No. I 02-082-670 BIR Accreditation No. 08-001 998-63-201 8, February 14,2018, valid until February 13,Z02l PTR No. 7332 529, January 3,2019, Makati City

April I 0, 201 9

I

A member firm of Ernst & Young Global Limited

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Buildinq a better

workin{ world

Co. Avenue MakatiCity

SyCip Gorres Velayo & 6760 Ayala 1226 Philippines

Tel: (632) 891 0307 Fax: (632) 819 0A7Z ey.comiph

BOA/PRC Reg. No.0001, October 4,2018, valid until August 24,2021 SEC Accreditation No. 0012-FR-5 (Group A), November 6, 2018, vatid until November S. Z0Z1

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, 2018 and 20ll aid for each of the three years in the period ended December3l,2018, included inthis Form l7-Aand have issued ourreporttheieon dated April 10,2019. 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 Securities Regulation Code Rule No. 68, As Amended (2011) 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.

SYCIP GORRES VELAYO & CO.

f)/n[r- C'Kq=/l (/,^ e

Ana Lea C.

Bergado

Partner

CPA Certificate No. 80470 SEC Accreditation No. 0660-AR-3 (Group A), March 2,2017, valid until March 1,2020 Tax Identification No. I 02-082-670 BIR Accreditation No. 08-001 998-63-201 8, February 14,2018, valid until February 13,2021 PTR No. 7332 529, January 3,2019, Makati City

April

10, 2019

|

A member firm of Ernst & Young Global Limitod

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SEAFRONT RESOURCES CORPORATION

INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES SEC FORM I7-A

FINANCIAL STATEMENTS Statement of Management's Responsibility for Financial Statements

Report of Independent Auditors' Report Statements of Financial Position as at December 31,

20lg

and 2017

Statements of comprehensive Income for the years ended December 3 l, 2018, 2017 and 2016 Statements of Changes in Equity for the years ended December 3 l, 2078,2017 and 2016 Statements of Cash Flows for the years ended December 3 l, 2018, 2017 and 2016

Notes to Financial Statements

SUPPLEMENTARY SCHEDULES Report of Independent Auditors' on Supplementary Schedules Schedules Required under SRC Rule 68-E Financial Assets Amounts Receivable from Directors, Officers, Employees, Related Parties, ond principal Stockholders (Other than Related Panies) Amounts Receivable from Related Parties which are Eliminated during the Consolidation of Financial

A. B.

C.

Statements

D. Intangible Assets - Other Assets E. Long-term Debt F. Indebtedness to Related Parties G. Guarantees of Securities of Other Issuers H. Capital Stock Additional Components Schedule of Financial Soundness Indicators Reconciliation of Retained Earnings Available for Dividend Declaration Schedule of all the effective standards and interpretations under PFRS as of December

Map of Relationship of the Companies within the Group

3I

. 20lg

SEAFRONT RESOURCES CORPORATION SUPPLEMENTARY INFoRMATIoN AND DrscLosuRES RULE 68 AS AMENDED

Rneurnpn oN sRc

DECEMBER 31,2018 Philippine Securities and Exchange Commission (SEC) issued the amended Securities Regulation Code Rule SRC Rule 68 which consolidates the two separate rules and labeled in the amendment as ,,part I', and "Patt 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 SRC Rule 68, as Amended (Z0ll) that are relevant to the Company. This information is presented for purposes of filing with the SbC and is not required pa:t of the basic financial statements.

Schedule A. Financial Assets Below is the detailed schedule of the Company's financial assets as of December 31, 2018: Number

of Amount Shown

Shares or

Name of Issuing Entity and Association Each Issue

of

Principal Amount of

in the Statement of

Bonds and Notes

5,000

F23,950

F-

13,000

260,000 6,499,243

15,207

Financial assets at FVPL Equity Securities: 2GO Group Inc.

ABS.CBN Araneta Prop.

Ayala Corp.-A Ayala Land, Inc. Holcim Phil. Inc. Bankard Inc. Belle Corp.

Belle Corp.

Cyber Bay Corp.

3,756,799

EEI Corporation Empire East Land Holdings, Inc. BDO-Unibank Inc. House of Investments, Inc. Interport Res.-IRC Properties Inc.

372,500 28,200 332 2,494,000

Petron Corp.

PLDT Company

PLDT Series X RCBC South China Resources Inc. Arthaland Corp.

Waterfront Phil. Inc. Resources

Income Received and

Financial Position

Accrued

l,l lg

1,006,200

7,737

l2g,193

54,1 I 5

17,229

5,204,636 gg,g2g

49,100

73,650

150,000

346,500 57,750 30,400

25,000 90,000

281,250 457,974 56,250 7,000 56,430

700

152,250 30,000 3,613,952

5,37:

13,677

43,426 14,481,720

59,400

1,990 100,000

19,000

2,961,375

125,000 50

7,236

398

161,460 8,910

1,220

74,000 146,160 21,000 12.648.482

t,rr1

-2

-

Number

of

Shares or Amount Shown

Principal

Amount of Name of Issuing Entity and Association Each Issue

Available-for-sale Debt equities

secu

of

Bonds and Notes

in the Statement of Financial Position

Income Received and

Accrued

rities

Philippine Government Quoted: Benguet Corporation Resources

2,507,604 ration

3,85 1.164

3,761,406 t3.479.075

Hermosa Ecozone Development 393.710.068

t2.231 031

?416,353,329

P12,423 589

The fair value for financial instruments traded in active markets at the reporting date is based on their quoted market price without any deduction for transaction costs. For securities in *ttich current bid and asking prices are not available, the price of the most recent transaction provides evidence of the current fair valui 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 3 I , 201 8.

.A ivabl lncl Stockholders (Other than Related Parties) The Company has no outstanding receivables from its directorso officers, employees, related parties and

principal stockholders as of December 31, 2018.

Not applicable.

Schedule D. Intangible Asset The company has no intangible assets as of December 31, 2018.

Schedule E. Long-term Debt The Company has no outstanding long-term debt as of December 31, 2018.

.Ind

Term Re es The Company has no long-term indebtedness to related parties as of December 31, 2018.

Schedule G. Guarantees of Securities of Other Issuers The Company does not have guarantees of securities of other issuers as of December

3I

. 201 8.

-3Schedule H. Cap_ital Stock Number

of

shares issued and

Number

Title of issue Common Shares

of

outstanding as shown under related

shares

balance sheet

authorized 388,000,000

163,000,000

Number

of

Shares

reserved for

options, warrants,

conversion and other

Number

of

shares

held by related

Directors, officers and

30,469,958

4,926

lon

SEAFRONT RESOURCES CORPORATION SCHEDULE OF FINANCIAL SOUNDNESS INDICATORS AS OF DECEMBER 31,2018 AND 20t7 Financial S oundnes s Indicators Below are the financial ratios that are relevant to the Company for the years ended December 31, 20l g and 20t7:

2018

Financial ratios Current ratio

Current assets Current liabilities

105.03:1

20t7 102.23:l

Debt to assets

Total debt Total assets

0.0960:1

0,0926:l

Total assets Total equity

1.1062:1

1.1020:l

Net income Weighted average no. of shares

N/A

0.0900:l

Closing price

N/A

N/A

Net income Total revenue

N/A

N/A

Asset-to-equity

Earnings per

ratio

share

Price earnings

ratio

Earnings per share

Return on

revenue

Long-term debt to equity

ratio

Long-term debt Equity

N/A

N/A

EBITDA to total interest

paid

EBITDA* Total interest paid

N/A

N/A

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

SEAFRONT RESOURCES CORPORATION

RECoNcILIATIoNoFRETAINEDEARNINGSAVAILABLEFoRDIVIm DECLARATION DECEMBER 31,2019

Unadjusted retained earnings, beginning Unreal ized fair vgluq s4i ustnents (marked-to-market

Ad.iusted retained earni Net income (loss) during the period closed to retained earnings

Add: Non-actual/unrealized income net of tax Less: Non-actual/unrealized income net of tax Fair value adj ustments (mark-to-market) Impairment loss on availaUe-for-sale financiar assets Net income a

incurred during the

Less: Dividend declarations durine the year

Total retained gql4l4gs available for dividends

F19,091,093 14,7 44,37 5

(6,857,0I5)

17,gg43{{

SEAFRONT RESOURCES CORPORAf ION SCTIf,DULE OFALL THE EFFECTIVE STAN'DAR.DS AND ImERPRETATIONS UNDER PrRSs AS OF DECEMBER 3l.20lE

Bclow G rhe list of all ctfccrive PFRS, Philippinc accounrin8 Sta'd..ds (PAs) a'd I'rerpr.r.rionsoflnbna(ionalFlndci.lReponinglnr.rprcalionsCommjn.c(IFRIC)asof

Fnnl'm! adoprioi orPhilipphc

DGdo!@

oflnrtt!

R.v.nG fiom

in

Fiir.hl

R.ponilB

olhe' Entrrn3

Conh* unhcs'dn*!

^(obriiePoli.i.i,

ftoF4r Plur sd

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Equiph<d

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chiiS.s ii ErNin3 lr.onmisio'ns, R.nor oi md

v.nb.s Sh!( '.

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co-op.nrrv. Enliri.srid srmird

siising 6om D(omm

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co{5

SEAFRONT RESOURCES CORPORATION MAP OF RELATIONSHIPS OF THE COMPANIES WITHIN THE GROUP

Group Structure All existing stockholders as of December 31, 2018 neither constitute control nor significant influence over the Company. Also, the Company's investments neither constitute contol nor significant influence.

Republic of the Philippines) )S.S.

CERTIFICATION I, the undersigned,

MILAGROS

V.

REYES, PRESIDENT

OF

SEAFRONT RESOURCES CORPORATION, with office address at 7th Floor JMT Building, ADB Avenue, Pasig City, after having been sworn and in accordance with law hereby states that the information contained in the hard copy of the General Form for Financial Statements for the year ended December 3l ,2018 and the one contained in the compact disc are one and the same.

IN WITNESS WHEREOF, I hereto affixed my signature this 2019 at Pasig City.

of

-day

,ffi"" AFFIANt

z

APR 1 1 z0Uors at pasig day of SUBSCRIBED AND SWORN to before me thts City, affrant exhibited to me her Tax Identification Number (TIN) 100-732-775.

'I18 No.--?-; Page No. eootNo. F' Doc.

Series

of 2019

;

R LIilICOLIOC

ATJT, L llo l{oatry

58 {201&201ei

Pasig, SanJuan and Pateros 31 December?019

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ControlNo.: Form Type:

GFFS

(rev2M0)

GENERAL FORIIJI FOR FINANCIAL STATEMENTS NAME OF CORPOMTION:

SEAFRONT RESOURCES CORPORATION

CURRENT ADDRESS:

7th FloorJMT

TEL.

NO.:

ADB Avenue, FA)( NO.:

COMPANYTYPE:

lf these

,

637-2917

are based

HOLDING

PSIC:

on consolidated financial statements, please so indicate in the caption.

Table 1. Statements of Financial Position

FINANCIAL DATA A"

(Ai + A.2+A"3 +A"4+A.5+A.6 + A.7 + A.8 +49 +A.i(l) 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 equlqlelts (A.1.1.1 + A.1,1,2 + A.1.1.3)

ASSETS

A.1.1.1 On hand 4.1.1,2 ln domestic banks/entities A,1.1,3

2018

2017

( in P'000 )

( in P'000 )

2016 (in P'000 )

485,126

501,589

209,974

68J73

72,659

60,319

10.402

8.652

11,725

10,402

8,652

11,725

In foreign banks/entities

A,1.2 Trade and Other Receivables (A.1.2,1 + A.1.2.21 A,1,2.1 Duefromdomesticentities (A.1.2.1.1 +A.1 .2.1.2+A.1,2,1,3+A.1

.2.1.41

12,538

262

314

12,539

262

314

12.538

262

314

7C

63

35

182

163

4.1.2.1,1 Due from customers (trade) 4,1.2.1.2 Due from related parties 4.1 .2.1 .3 Others, specify (A.1 .2.1.3.

1 +fi . 1 .2,1,3.2) 4,1.2.1.3.1 Receivables from a consortium operator

4.1.2.1 .3.2 Accrued interest

4,1,2.1,3.3 Loans receivable 4.1.2.1.3.4 Dividends receivable

12,423

4,1.2.1.3.5 Advances to Suppliers 4.1.2.1.3.6 Receivable from HEDC

7a 2E

4.1.2.1,3.7 Others

45

17

17

44,851

62,845

47,454

44,951

62,845

47,454

44,851

62,8451

47.454

Aj.2,1.4 Allowance for doubtful accounts (negative entry) 4.1.2.2 Due from foreign entities, specify (

4.1 .3.2,1 + A.1 .3.2.2 + A. 1 .3.2.3 + A. 1 .3.2.4)

A,1.2.2.1

4.1,2.2.2 4.1.2.2.3 Allowance for doubtful accounts (neqative entrv) A.1.3 lnventories (A,1.3.1 + fi.1.3.2 + A.1.3.3 + A.1.3.4 + {.1.3.5 + A.1.3.6) A,1.3.1 Raw materials and supplies 4.1,3.2 Goods in process (including unfinished goods, growing crops, unfinished seeds) A.1.3.3 Finished goods A.1.3.4 Merchandise/Goods in transit A.1.4 Financial Assets other than Cash/Receivables/Equity investments (A.1.4.1 + A,1,4.2 +

4143+A144+A145+A146) 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)

4.1.4.1.1 National Govemment 4.1.4.1.2 Public Financial lnstitutions A.1.4.1.3 Public Non-Financial lnstitutions A.1.4,2 Held to Maturity Investments - issued by domestic entities (4.1.4.2.1 + A,1.4.2.2 + A.1.4.2.3 + A.1.4,2.4 + A.1.4.2.5)

ilolE: Thi9gg|cdfmbapdjcd,€bcompanj66'lo4gdinA0dd|fE'Fish€'y,FoDsry'inin0'ando6ryi.!'i,anUbctuing,E|odjty,G6andwatsl,cd|sttJcli'b8d|T' TEmpodafon'sb?geandcmmUn.atjois,Hot€|s8tdR6tauran|s'Roa|E3|€b'commUni|y,s@idandP€.5onalseices,otHlbnnsofpodUciiI'andgenora|bcho

4d*'digbo0gcompdosMdonolhawindGtly.6p€cifcsp€cia|Foi'Ls's@a|finssha||beus€dbynjbfdy-hoH.ompdi€.sandhoc€€l|g{6dil|non+'lkd dd aclMli€6 ardlary b fnancld hbmodialbn, {hM BquiE s&o|ldary lhdtso film SEC.

granting,

0odFslicolpo|dlio|F'6fDcewhid|aniEo4orabdund€rPhi|i4ino|a,so.brfchosibubs|dladesofbEioncorpo6tiorjsthslaBli;6.F€dbdob|Ailhhf| inbElo.&1iv|lyi5wlthlnhof[|pp|ng6'o|0Foherhand,bGhncoponlbnsaclhcet!6[aEimmora|6dab.od,iiclUdingbranchsofFhi|i!dn6ccporat|orlso0€ra|i.

Financial|mUt]doNaeco0orat|onsFincipa||yolu.g€dinfnancialin|onn€dialbn'faci|ilalillgfnajcia|int€nl1€dialio, tie pDdlElbn of ma*el goods ard mn-fnancial s€ryhss.

pdmadly sEaged in

Page

1

Control No.: FormType:

GFFS (rev 2006)

GENERAL FORM FOR FINANCIAL STATEMENTS NAME OF

CORPOMTION:

CURRENT ADDRESS: TEL.

NO.:

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

637-2917

COMPANY TYPE

:

FAX NO.: HOLDING

PSIC:

lf these are based on consolidated financial statements, please so indicate in the caption.

Table 1. Statements of Financial Position 2016

Table 1. Statements of Financial Position

(in P'000 )

1.4.3 Loans and Receivables - issued bv domestic

4.1,4.3.1 A.1.4.3,2

National Government

A.1,4.4.1 4.1.4.4.2 A.1,4.4.3

National Government

Public Financial financial assets - issued bv domestic entities: Public Financial lnstitutions Public

A.1.4.5 Financial Assets issued bv foreion entities: (A.1 .4.5.1rA.1 .4.

4.1.4.5.1 FinancialAssets at fair

1.5

material items) (A.1.5.1 + A.1.5.2 +A,1.5.

CIher Cunent Assets

A.1.5.1 Creditable Inout VAT

.2.1+4.2.2 +A.2.3 +A.2.4 +A.2.5 +

2.5.1 + A.2.5,2 + A.2.5.3 + A.2.5.4 + A.2.

6.1 + 4.2.6.2 + A.2.6.3 + A.2.6,4

1 +A.3.2 +A.3.3

1.1 +A.3.2.1 +A.3.3.1 +4.3.3.4

1.1 +A.6.1.2 +4.6.1.3 +4.6.1.

1 + 4.6.2.2 + A.6.2,3 +A,6,2.

A.8 Assets induded in

Classified as Held for Sale

Page2

Control No.:

Control No.:

FormType:

FormType:

GFFS (rev 2006)

GENERAL FORM FOR FINANCIAL STATEMENTS NAME OF

CORPOMTION:

SEAFRONT RESOURCES CORPORATTON

CURRENT ADDRESS: TEL.

NO.: $7.n17

COMPANYTYPE: HOLDING lf these are based on consolidated financial sfafements, please so indicate in the caption.

Table 1. Statements of Financial Position Table 1. Statements of Financial Position

2018

2017

2016

( in P'000 )

(in P'000 )

(in P'000 )

A.9 Lono-term receivables (net of cunent portion) (A.9.1

+ A.9.2 + A.9.3) A.9.1. From dQmestrc enlittes, specify (A.9.'1.1 + A.9.1.2 + A.9.1.3 + A.9.1.4)

4.V.1.1

4.9.1.2 A.9.1.3 A,9,1.4

4.9.2 ffqln foreign entities, spedfu (A.9.2.1 + A.9.2.2 + A.9.2.3 + A.9.2.4) A.9.2.1 A.9.2.2 A.9.2.3 A.

B.

A.V.J AilOwan@ l0r 00u0rut ac@unts, net 0t current Dortion (neoative entrv) 1 U Utner Assets (4. 1 U. I + A. 1 U.2 + 4.1 0.3 + A. 1 0.4+A. 1 0.5) 4.10.'1 Defened charges - net of amortization A.10.2 Defened Income Tax

A. I 0,3 Advance/Miscellaneous deposits A.10,4 Others, soecifo (A.10.4.1 +A.10.4.2 +A.10.4.3 +A.10.4.4) 4.10.5 4lou/ance l0rwnte{owl0ldelerred charges/bad accounts (neqative entrv) LIABILITIES (B.1 + 8.2 + 8.3 + 8.4 + 8.5) 8.1 Cunent Liabilities (8,1.1 + B.1.2 + 8.1.3 + 8.1.4 + B.1.5 + 8.1.6 + 8.1.7)

B.1.1 Trade and Other Payables to Domestic Entities 8.1.1.1 Loans/Notes Pavables 8.1.1.2 Trade Payables 8.1.1.3 Payables to Related Parties, specifo (8.1.1.3 .1 +8.1.1.3.2 + 8.1.1.3.3)

45.556

46.440

563

655

71(

56:

655

71C

563

8.1.1.3.1

8.1.1.3.2 8.1.1.3.3

B.1.1.4 CIhers, specify (8.1.1.4.1 +8.1,1,4.2 + 8.1.1.4.3)

8.1

655

7lC

56:

8.1.1.4.1 Accruals

501

611

46€

8.1.1.4.2 Wthholdino tax oavable 8.1,1.4.3 Defened credits 8.1.1.4.4 Accounts oavable

1

13

141

86

8C

45 901

ls73[

8.1.1.4.5 Due from broker ,2 Trade and Other Payables to Foreign Entities (specifo) (8.1 .2.1+8.1 .2.218.1.2.3+8.1 .2.41 8.1.2.1 Derivative liabilitv

8j.2.2 8.1.2.3 B.1.3 ProMsions

8.1.4 Financial Liabilities (excludinq Trade and Other Payables and Provisions) 8.1.5 Liabilities for Cunent Tax 8.1.6 Defened Tax Liabilities 8.1.7 Others, specify (lf material, state separately; indicate if the item is payable to public/private or 8,1.7.1 8.1.7.2 B.1.7.3 B.1.7.4

Dividends dedared and not oaid at balance sheet date Acceptances Payable Liabilities under Trust Receiots

I

Portion of Lonq-term Debt Due within one vear

8.1.7.5 Defened Inmme 8.1.7.6 Anv other cunent liabilitv in excess of 5% of Total Cunent Liabiilities, soecifu: 8.1.7.6.1

8j.7.6.2

Page 3

Control No.:

FormType:

GFFS

(rev 2006)

GENERAL FORI' FOR FINANCIAL STATEMENTS

NAiIE OF CORPORATION: SEAFRONT RESOURCES CORPORATTON

ADDRESS: NO.: $T.nfl

CURRENT

TEL.

COMPANY TYPE

lf these

:

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

FN( NO.:

HOLDING

are based on consolidated financialsfafemenfg please

PSIC:

so indicate in the caption.

Table 1. Statements of Financial Position

Table 1. Statements of Financial Position

2018

2017

2016

( in P'000 )

( in P'000 )

( in P'000 )

B.2 Long{erm Debt- Non+unent Interest-bearinq Liabilities 8.2.1 +8.2.2 + 8.2.3 +8.2.4 + B.2.S) B,2.1 Domestic Public Financial Institutions 8.2.2 Domestic Public Non-Financial Institutions 8.2.3 Domestic Private Financial Instihrtions 8.2.4 Domestic Private Non-Financial Ins$tutions 8.2.5 Foreiqn Financial Instihrtions

8.3 Indebtedness

to Affliates and Related Parties (Non-Cunent)

B.4 Liabilities Included in frre Disposal Groups Classified as Held for Sale 8.5 Oher Liabilities (8.5.1 + 8.5.2) B.5.1 Defened Income Tax 8.5.2 Ohens. soecifo (8.5.2.1 +8.5.2.2 + 8.5.2.3 + 8.5.2.4) 8.5.2.1 Subscdption oavable 8.5.2.2 8.5.2.3 8.5.2.4

C.

EQUITY (G.3 + C.4 + G.5 + G.6 + C.7 + G.8 + C.9+C.101 C.l Auhorized Capital Stock (no. of shares. Dar value and total value: show details) C.1.1 Common shares 388,000,000 shares, Pl parvalue

C.1.2 Prefened Shares C.1.3 Ohen C.2 Subscribed Capital Stock (no. of shares, par value and total value) (C.2.1 + C.2.2 + C.2.3) C.2.1 Common shares C.2.2 Prefened Shares C.2.3 Ohers C.3 Paid-up Capital Stock (C.3.1 + C.3.2) C.3.1 Common shares C.3.2 Prefened Shares C,4 Additional Paid-in Capital / Capital in excess of par value / Paid-in Surolus C.5 Minority Interest C.6 Ohers, specifu (C.6.1 + C.6.2 + C.6.3 + C.6.4 + C.6.5) C.6.1 Net unrealized qains on available-for-sale financial asseF c.6.2 c.6.3 c.6.4 c.6.5

438,570

455.143

209,411

388,000

388.000

388.000

388.000

388.000

388.000

163.000

163.000

163.00C

r63.000

163.000

r63.000

263.346

273.068

42.001

263.34€

273.06t

42.001

12.224

19.081

4.409

12,2241

19,081

4.409

C.7 Aooralsal SumludRevaluation lncrement in Prooertv/Revaluation Sumlus

C.8 Retained Eamings (C.8.1 +C.8.2) C.8.1 Appropriated

).

C.8.2 Unappropdated C.9 Head / Home ffice Account (for Foreiqn Branches only) C.10 Cost of Stocks Held in Treasury (nesative entry) TOTAL LIABILITTES AND EQU|W (B + C)

485,1261

Page 4

501,589

Control No.: Form

Type:

GFFS (rev 2006)

GENERAL FORM FOR FINANC]AL STATEMENTS NAME OF CORPORATION: SEAFRONT RESOURCES CORPORATION

ADDRESS: TEL. NO.: 637-2917 CURRENT

COMPANY TYPE

lf

:

7th Floor JMT Building, ADB Avenue, Ortigas Center, Pasig Cig FAX NO.:

HOLDING

PSIC:

these are based on consolidated financial stafemenfs, please so indicate in the caption.

Table 2. Statements of Income 2018

FINANCIAL DATA

A. REVENUE

2017

(in

( in P'000 )

INCOME (A.1 + A.2 + A.3)

2016

(in

P'000 )

P'000

)

13.361

16.131

7,634

13.361

16.131

7.6U

118

97

125

12.886

295

353

15.387

6,804

352

352

352

352

A.1 Net Sales ' or Revenue / Receipts from Operations (manufacturinq, mininq.utilities. trade.

A.2 Share in the Profit or Loss of Associates and Joint Ventures accounted for usino the A.3 Other Revenue (A.3.1 + A.3.2+ A.3.3 + A.3.4 + A.3.5) A.3.1 Rental Income ftom Land and Buildinos Receipts from Sale of Merchandise (hadinq) (from Secondarv Activitu) Sale of Real Estate or other Property and Equipment Royalties, Franchise Fees, Copyrights (books, films, records, etc.)

Others, specifr (A.3.5.1 + A.3.5.2 + A.3.5.3 + 4.3.5.4 + A.3.5.5 +

A.3.2 A,3.3 A.3.4 A.3.5

A.3.5.1 Net qains on fair value chanqes on financial assets at FVPL A.4 Other Income (non-operating) (A.4.1 + A.4.2 + A.4.3 + A.4.4) A.4.1 Interest Income A.4.2 Dividend Income A.4.3 Net qain on FV chanqes on financial asset at FVPL A.4.4 Gain / (Loss) from sellinq of Assets, specifo A.4.3.1 Gain from sale of financial assets A.4.4 Gain / (Loss)on Foreign Exchanqe (A,4.4.1 + A.4.4.2 + A.4.4.3 + A.4.4.4) 4.4.4.1 Net foreiqn curencv exchanoe oain 4.4.4.2 Miscellaneous A.4.4.3

B.

COST OF GOODS SoLD (8.1 + 8.2 + 8.3)

8.1 Cost of Goods Manufactured (8.1.1 + 8.1.2 + 8.1,3 + 8,1.4 + B.1.5) B.1.1 Direct Material Used

c.

8.1.2 Direct Labor 8.1.3 Other Manufacturinq Cost / Overhead 8.3 Finished Goods, End (neqative entrv) cosT oF sALEs (c.1 + c.2 + 9.31

C.l

D.

Purchases

C.2 Merchandise Inventorv. Beqinninq C.3 Merchandise Inventory, End (negative entry) COST OF SERV|CES. SPECIFY (D.1 + 0.2 + 0.3 + D.4 + D.5 + 0.6) D.1

D.2

0.3 D.4 D.5

Page 5

357 5

352

Control No; Form

Type:

GFFS (rev 2006)

GENERAL FORM FOR FINANCIAL STATEMENTS NAME OF CORPORATION: SEAFRONT RESOURCES CORPORATION CURRENT

TEL.

ADDRESSz

NO.:

637-2917

COMPANY TYPE

lf these are

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

:

FAX NO.:

HOLDING

PSIC:

based on consolidated financial statemenfs, please

so indicate in the caption.

Table 2. Statements of Income

FINANCIAL DATA E.

2018

2017

( in P'000 )

( in P'000 )

2016

(in

P'000 )

OTHER DIRECT COSTS, SPECIFY (E.1 + E.2 + E.3 + E.4 + E.5 + E.6) E.1

E.2 E.3 E.4 E.5 E.6

F. G.

GROSS PROFIT N. B.C. D. E) OPERATING EXPENSES (G.1 + G.2 + G.3 + G.4} G.1 Sellinq or Marketinq Expenses

13.361

G.2 Administrative Expenses

16.131

7.634

20.211

1.452

1.326

2.217

1.452

1,326

G.3 General Expenses G.4 Other Expenses, specify (G.4.1 + G.4.2 + G.4.3 + G.4.4 + G.4.5 + G.4.6) G.4.1 Net loss on fair value chanqes on financial assets at FVPL

17.994 17.994

G.4.2 Unrealized foreiqn curTency exchanqe loss G.4.3 Realized foreiqn currencv exchanoe loss G.4.4 Unrealized markedto market loss from currencv forward G,4.5 lmpairment loss on available-for-sale financial assets G.4.6

H.

I.

J. K. L.

FINANCE COSTS NET INCOME (LOSS} BEFORE TAX ( F . G . H} INCOME TA,\ EXPENSE (neqative entrv|

-6,850

14.679

7

7

7

INCOME AFTER TAX

.6,857

14,672

6.301

Amount of (i) Post Tax Profit or Loss of Discontinued Operations: and fii) 1.1

L,2

M. Profit or Loss Attributable to Minority lnterest N. Profit or Loss Attributable to Equity Holders of the Parent

Page 6

6,308

Control No.: FormType: GENERAL FORM FOR FINANCIAL STATEITIENTS NAME OF CORPORATION: SEAFRONT RESOURCES CORPORATION CURRENT TEL.

ADDRESS:

NO.:

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

$7-n17

COMPANY TYPE

:

FAX NO.:

HOLDING

PSIG:

lf ffiese are 0ased on consolidated financial statements, please so indicafe in the caption.

Table 3. Statements of Cash Florvs Table 1. Statements of Financial Position

Net Income (Lossl Before Tax and Extraordinarv ltems

to Reconclle Net Income to Net Cash

Net unrealized loss (oains) on financial assets at FVPL Net unrealized loss (gains) on sale financial assets al Gain on sale of financial assets/ Dividend income loss on available-for-sale financial assets

Income and Other Taxes

Net Cash Provlded bv Used in) Ooeratinq Activities (sum of above

Proceeds from sale of financial assets at FVPL Proceeds from sale ofAFS financial assets

B. Net Cash Provlded by (Used in) Investlns Activltles (sum of

INCREASE IN CASH AND CASH EQUIVALENTS (A + B +

PageT

GFFS (rev

20M)

al

Control No.:

Formlype: CFFS(rerrfff) GEiIERAL FORiI FOR FINANCIAL STATEMENTS

NAilE OF

CORPOMTION:

SEAFRONT RESOURCES CORPORATIOII

CURRENT

ADDRESS;

Center, Pasig City

NO.:

TEL.

COTIPANYTYPE: ll these

FAXNO.:

637-2917

are based

HOLDING

on consolidated financial statements, please so indicate in the caption.

Table 4. Statements of Changes in Equity

Table

'1.

Statements of Finarrcial

(Amount in P'000)

Pr

ilel unaoalzeo FITIANCIAL DATA

).

Bdance. lJanli H.l

Conec'lion of Enor

CapitelSlock

Additonal Pridin Caoihl

Revaludion

Tnnrlrton

lncromont

Dlfferencer

Grins on AFS Financirl Asset!

t.u1

183.000

Retdned Eernlnos .1.891

TOTAL 155.551

lsl

H.2 Chanoes in Acco

r. Restrted Brlance Sumlur

37.56'l

37.56

J.1 Sumlus lDelicill on 37.561

J.2 Sumlus Oefici0 on J.3 Cunencv Translation J.4 O{her Sumlus {soecitvl J.tl-l J.4.2 J.4.3 J.1.4 J.4.5 R.

I.

llet lncome [oss) for ihe Period DMdends (neoative entrvl Aoomoriafon for lsoecifv)

5.301

6.301

4.40!

209.411

M1 M.2 M.3 M.4 M.5 lJ. lssurnce of Caoital Sltock

N.l Cormon Sbck N.2 Prefened Shck N.3 Others

/. BahncE l-Jan-l7

f2.001

103.00(

H.1 mbnofEnor(s) H.2 CMnoes in Accounlino ,Y.

I

Re3trtod Erlanog

Sumlur

231.06?

J.1 Sumlus lDeficit) on J.2 Sumlus (Deficit) on J.3 Cunencv Translation J.4 Other Sumlus {soecifvl

231.067

231.061

J.4.1

J.1.2 J.4.3 J.1.1 J.4.5

/. llet t.

Incoms lLoslforthe Period Dividends (neoative entrvl Anomorlation lor lsoecifvl

11.6f2

t{67

19.081

455.t{!

M.1 M_2

M.3 M.1 M.5

lssurnce of Caolhl S:lock N.l Commn Sbck N.2 Prehmd Sbck N.3 i.

Otprs

Bel.ncr.

1-Jan 18

273.06t

r63.00(

H.l Coreclion

of Enor {sl H ? Channae in Ancornlinn

). Restrted Balance .9.722

Sumlus

I

Surolus

-9.721

lDaficitlon

J.2 Sumlus (Deficit! on J.3 Curencv Translalion J-tl Other Sumlus {soecifol

-Y.I lt

J.4.1 J.4.2 J.d 3 J.4.4 J,4.5 .6.E57

. llet

lncomc ftorrl forthe Period 3. Divldendr (neoative entr) {. Aoomorhffon for lsoecilvl

.6,E5;

M.1

|1.2 M.3 M.1 M.5

lsrurnco of Groltrl $ocl N-l Cormon Stock N.2 Prefened Sbck N.3 Odters

f.

Brhnce.

l-Jm-le

263.3{t

r63.000

Page 8

12221

f3t.5rl