COVER SHEET
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MILAGROS V. REYES
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SECURITIES AND EXCHANGE CO
c T D
SEC FORM I7-A
ANNUAL REPORT PURSUANT TO SECTION I7 OF THE SECURITIES RECULATION CODE AND SECTION OF THE CORPORATION CODE OF THE PHILIPPINES
L
For thc fiscalyear ended Dec€mber
2.
SEC ld€ntification Numbcr
4.
Exact name ofissuer as specified in irs chaner Scafronr Resou.ces Comorarion
5.
I'}'
I t.20 t7
40919 l.
Merro Manila. Philipoines (SEC Use Only) Province, Country or otherjurisdiction
BtR-1ax tdenlification No.000- I 94-465-000
6.[---___l of
Induslry Classifi cati(nr Cod€:
incorporation or organizarion
?.
8.
7th F. JMT Bldg.. ADB Avenu€. Odeas Center. pasie CaN Address of principal oflice
(632\ 637-2917 Issucy's telephone numbcr.
9.
i""
Not Aoplicable Formername, former address. and former fiscalyear, ifchanged since last repon.
10. Sccuriries regisrered
f
ll.
Postal Code
pursurnt
itle of Each Class
10
Sections 8 and I 2 of the
S
RC, or Sec. 4 and 8 of rhe RSA
Number ofShares ofCommon Slock Outsrandint and Amount ofDebl Outstanding
Ar€ any or all offtese securjties ljsled on a Slock Exchange.
Ycs
[x]
No
tl
Ify€s, state the name ofsuch stock exchange and thc classes of securities lisled therein: Philippine Stock Exchanee 12. Chcck whether the issuer: (a) has filed all reporrs required to be filed by Sectjon l? oflh€ SRC and SRC Rute I ?.t rhereunder or Scclion-l I ofthe RSA and RSA Rule I l(a)-t thereunder, and Sections 26 and l4l ofThe Corporation Code oflhe Philippioes during the preceding rwelve ( t2) monrhs (or for such shorter period that rhe regNtmnt was required to file such repons)i
Yes
[x]
Noll
(b) has been subject to such fiting requiremeots for the past ninery (90) days.
Yes
[x]
No
f
l
13. As of March 28, 20-t 8 prior ro th€ fil ing of SEC t7-A, the aggregate market value of the votinS stock held by non-affiliares of rhe Company is €quivalcnl ro Three Hundred-t.hirty Eight Mi ion Nine Hondred I w€nty tour I housand Two Hundred Eighry p€sos and 64lt00. (p3j8,924,280.9) or l3 t,877, t52 sharcs
.t
P2.57^hare.
DOCUMEN'TS INCORPORATED BY REFERENCE 2017 Audited Financial Statements (AFS)
o
TABLE OF CONTENTS Page No.
PART I _ BUSINESS AND GENERAL INFORMATION
l. 2. Item 3. Item 4. Item
Business Development Properties Legal Proceedings Submission ofManers to a Vote ofsecurity Holders
Item
PART II Item
5.
Item
6.
Item Item
7. 8.
-
OPERATIONAL AND FINANCIAL INFORMATION Market for Registrant's Common Equity and Related Stockholder's Matters Management's Discussion and Analysis or Plan of Operation Financial Statements
l0 t2 t'7
Changes and Disagreements with Accountants on
Accountingand FinancialDisclosure PART
5
9 9 9
t7
III - CONTROL AND COMPENSATION TNFORMATION
Item Item
9. I0. ll.
Directors and Executive Officers ofthe R€gistrant Executive Compensation Security Ownership ofCerlain Beneficial Owners and
l9 2l
12.
Management
22
Item
Certain Relationships and Related Transactions
Item
PART IV _ EXHIBITS AND SCHEDULES Item
13.
Exhibits and reports 2017 and20l6 Financial Statements with Management Responsibility Supplementary information and disclosures required on
a.
24
b. c. d. e. Item
14.
SRC Rule 68 and 68.I as amended General form for Financial Statements (CFFS) Repons on SEC Form l7-C(Current Reporr) Reports on SEC Form l7-Q (Quarterly Report)
General Notes to Financial Statements
SIGNATURES
24 25
PART I - BUSINESS AND GENERAL INFORMATION Description of Business Item
1
- Business DeveloDment
Seafront Resources Corporalion (the "Company") was registered with the Securities and Exchange Commission 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 rn 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.
(SEC) on
The Company's shares of stock wer€ listed on May
7, 1914 and, arc 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. Business of Issuer
A' Investments in Financial Ass€ts at Fair valu€ through Profit and Loss (FvpL) (Note 8 ofthe AFS) The Company maintains a portfolio of investments in stocks traded in the Philippine Stock Exchange and investmenl in Goyemment Securities. These financial assets at FVPL are carried at fair value as follows: 2011
2016
B. Investment in Available for Sale Securities (AFS) (Note 8 ofthe AFS) AFS financial assets consist ofquoted and unquoted shares ofstock held for long-term investment purposes and are carried at fair value. The carrying values ofthese investments are as follows 2017
2016
P23,492,102 4,338,155 27,830,257
Pt5,9E2,332 5,59t.957 21,514,289
494,s34,818
r2r,999238
8.535.131
6.08r.769 Pl49,655,296
Listed equity securities: PetroEnergy Resources Corporation (PERC) Benguet Corporation
Nonlisted equity security: Hermosa Ecozone Development Corporation
(HEDC)
lnvestment in Govemment
Securities
F530,900,206
Investment in HEDC On January 31, 1997, the Company entered into a Project Shareholders' Agreement with five other companies led by lnvestment and Capital Corporation of the Philippines and Penta Capital Inveslment Corporation to develop 500 to 600 hectares ofraw land in Hermosa, Bataan into a new township consisting ofindustrial estates, residential communities, a golfand country club and a commercial center.
As of December 31,2017 and 2016, the company has outstanding subscriptions payable to HEDC which
amounted P12.35 million. The subscriptions payable are due on demand (see Note l3). Investment in HEDC is presented in the statement offinancial position at fair value net ofsubscription payable.
The fair value of investment in HEDC is determined using the adjusted net asset method wherein the assets of HEDC consisting mainly ofparcels of land are adjusted from cost to its fair value. The valuation ofthe parcels
of
land was performed by
an accredited
independent
valuer as
December 31,2017 and 2016. This measurement falls under Level 3 in the fair value hierarchy. As a result
at
of
the valuation, the Company recognized unrealized gain on fair value changes of its investment in HEDC amounting to ?3'12.54 million and F34.30 million in 2017 and 2016, respectively, in other comprehensive income.
Products The Company has its investments in stocks (as discussed in the "Business ofthe lssuer") as its principal product. Total revenue as of December 31,2017 amounted to Pl6.130 million, bulk of which is from the unrealized gain on the fair value changes of investments in FVPL. Other than discussed, the Company has no principal product which contributes l07o or more to sales or revenues. No government approval is needed for its principal product.
Percentage ofsal€ or revenue and net income contributed by foreign sales There are no revenues llom foreign sales.
Distribution Method Not applicable Status of publicly -announced new product or service The Company has no new product or seruice.
Competition The Company itself has no compelitor because it is a holding company. lts major investment, HEDC has competitors such as Clark Development Corporation, Subic Gateway Park and other nearby industrial zones. Sources and Availability of Raw Materials and Names of Principal Suppliers The Company is not into manufacturing and has no need for raw materials for its business. Dependence on a single customer or few customers The Company is not dependent upon a single customer or a few customers.
Transaction with and/or dependence on relat€d parties Not applicable
Summary of principal terms and expiration dates of all patents, trademarks, copy rights, licenses, franchises, concessions and royalty agreements The Compariy has no existing patents, trademarks, copyrights, licenses, llanchises, concessions or royalty agre€ments,
Ne€d for Governm€nt approvals of Principal Products and effect of existing
or probable governmental
regulation No government approval is needed for its principal product. Research and dev€lopment activities No amount ofmoney 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 ofbusiness.
Total number of employees The Company has no employees; PERC provides administrative, accounting and legal services to the Company. The Company do€s not anticipate any special undertaking that would warrant hiring some people for regular employment.
Risk Factors Political. Economic and Leeal Risks in the Philipoines
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 ofthe stock market, lower credit rating ofthe country and the of the country's foreign currency reserves. There has also been growing concerns about the unrestrained.judicial intervention in major infrastructure project ofthe govemment.
reduction
There is no assumnce that the political environment in the Philippines will be stable and that cunent or future governments will adopt economic policies conducive to sustained economic growth. The general political situation in and the state of the economy of the Philippines may influence the groMh and
profitability of the Company. Any future political or economic instability in these countries may have negative effect on the financial results ofthe Company.
a
Equitv Partnership Risk The Company entered into a Project Shareholder's Agreement with five other companies led by Investment and Capital Corporation ofthe Philippines and Penta Capital lnvestment 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 ofthe Company; (ii) take actions contrary to the interests ofthe 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 Ri;k Manaeement Objectives and Policies (Note l4 ofAFS) The Company's financial instruments comprise cash and cash equivalents, short-term investments, receivables, financial assets at FVPL, AFS financial assets, accounts payable and accrued expenses and subscriptrons payable. The main purpose ofthese financial instruments is to fund its own operations and capital expenditures. Inherent in using these financial instruments are the following risks on liquidity, markel and credit. The BOD reviews and approves policies for managing these risks. Also, the Audit Committee ofthe 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. o. Liquidity Risk
Liquidity risk is the risk that the Company is unable to meet its financial obligation when due. The Company has substantial investments in shares of stock which are not listed in the Philippine Stock Exchange and may not be readily convertible to liquid assets necessary to meet any potential additional liquidity requirements ofthe
Company. Investments in unquoted equity securities included in AFS investments amounted to P494.53 mitlion and P122.0 million, net ofsubscription payable, as ofDecember 31,2017 and2016, respectively. The Company monitors its cash position and overall liquidity position in assessing its exposure to liquidity risk. The Company maintains a level of cash and cash equivalents deemed sufficient to finance operations and to mitigate the effects of fluctuation in cash flows. The Company's accounts payable and accrued expenses are all seftled on a monthly basis. Subscriptions payable are payable on demand and are non-interest bearing. Please refer
to the 2017 AFS, Note 14 for the maturity profile of the Company's Financial Assets
and
Liabilities. b. Market Risk
Market risk is the risk of loss on future eamings, on fair values or on future cash flows that may result from in market prices. The value ofa financial instrument may change as a result of changes in inter€st 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. changes
The Company closely monitors the prices of its debt and equify securities as well as macroeconomic and entityspecific factors which could directly or indirectly affect the prices ofthese instruments. ln case of an expected decline in its portfolio ofequity securities, the Company readily disposes or trades the securities for replacement with more viable and less risky investments.
Equitv Price Risk The Company closely monitors the prices of its debt and equity securities as well as macroeconomic and entityspecific factors which could directly or indirectly affect the prices ofthese instruments. In case ofan expected decline in its portfolio ofequity 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 adsing either
from factors specific to individual instruments or their issuers, or factors affecting all instruments traded in the market. Interest Rate Risk The Company's exposure to market risk for changes in fixed interest rates relates primarily to the Company's money market placements and debt securities. There is no other impact on the Company's equity other than those already affecting net income. c. Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. With respect to credit risk arising fiom cash and cash equivalents, receivables, financial assets at FVPL and AFS financial assets, the Company's exposure to credit risk is equal to the carrying amount of these instuments. The Company limits its credit risk on these assets by dealing only
with reputable counterparties.
As of December 31,2017 and 2016, the carrying values of the Company's financial instruments represent maximum exposure as of reporting date.
With respect to credit risk arising llom the other financial assets of the Company, which comprise of financial assets at FVPL, cash in bank, short-term investments and AFS financial assets, the Company's exposure to credit risk relates to default ofthe counter party. Please refer to Note
l4 ofthe AFS for the maximum credit risk on financial instruments.
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 ofnecessary intervention efforts.
Capital Manasement (Note 15 ofthe AFS) The primary objective ofthe Company's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to suppon 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 AFS financial assets and retained eamings (deficit). The Company has no externally imposed capital requirements as ofDecember Please refer to Note 14 for the table
3l,ZOl7 and2016.
ofthe debt-to-equity ratios ofthe Company
as
of December 3l,2Ol7 and
2016, respectively: There were no changes in the objectives, policies or processes for the years ended December 31,
20l'l
and2016.
Item 2 - Properties Aside from the investments in Financial Assets discussed above, the Company owns two parking lot spaces in Tektite Tower in Ortigas City. This property is accounted as investment property ofthe Company. In 2013, the Company fully depreciated the investment. Fair value of this investment is still estimated at P500.000 F600,000 per slol.
Item 3 - Lesal Proceedinqs There are no pending legal proceedings to which the company is party or which any
of its properfy is the
subject.
Item 4 - Submission of Matters to a Vote of Securitv Holders There were no matters submitted to a vote ofsecurity holders during the fourth quarter ofthe fiscal year covered by this report.
PART II . OPERATIONAL AND FINANCIAL INFORMATION Item 5 - Market for R€qistrant's Common Equity and Related Stockholder Matters
a)
Market Price ofand Divid€nds on Registrant's Common Equity and Related Stockholder Matters
.
I
Market Information
Stock Market Price and Dividend on Registrant's Common Equity (last 2 years)
lst Quarter 20t7 20t6 ParValue
P1.00
2nd Quarter 2017
2016
P1.00
P1.00
P1.00
P1.00
P
1.00
P1.00
P1.00
2.5
2.87
2.21
2.53
4.92
2.45
3.14
2.46
3
2.9
Low
2.21
2.05
2.55
2.13
2.61
2.t3
2.52
t2M
.587M
6.67M
t.l49M
4.57M
2.
31.49M
.538M
8.
2018
P1.00
High
Volurne
lstQ
4th Quarter 20t7 2016
3rd Ouarter 2017 2016
2.473M
2.15M
Holders As of December 31, 2017, the Company has 4,717 stockholders. Hereunder is the list
l.
of the
20 Stockholders (as of3 | December 201
PCD Nominee Comoration (Filipino)
Common
66.391.548 30,469,858 15,544,9 | I 14,178,625 10.204.120
40.73%
4.69'1.6t3 t.281.348
2.880/0
Common Common
1.042.093
0.640/o
t,42'7
0.35%
Common Common Common Common Common Common
556.122 28'7.644
0.34% 0.l8oh 0.t7%
2. Pan Malayan Mgnt & lnv. Com.(PMMIC) 3. Alsons Consolidated Resources. Inc. 4. China Banking Corporation T/A-SCA-#0010
Common Common Common
China Banking Comoration T/A-SCA-#001I
Common Common Common
5
6. House oflnvestments, lnc. 7. Yuchengco, Alfonso T. 8. Hydee Managemenl & Resources Corporation 9. China Banking Corporation T/A-SCA-#001 3 10. China
I
I
Banking Corporaiion T/A-SCA-#00 l2
Ong, Clemente 12. Pacific Basin Sec. Co., Inc. 13. PCD Nominee Comoration (NF) 14.
Floreindo, Antonio O.
15. Paz. Wenceslao R. de la
A.T. Yuchengco, Inc. 17. Pua Yok Bing 16.
Common Common Common Common
18. Reyes, Vicenta S. 19. Santiago, Violeta G. 20. Kensigton Managemenl Corporation
Common
Sub-Total
0thers Grand Total
|. 2. 3.
5'7
271.248 26s.491
9.54% 8.70% 6.26oto
0.79%
0.16%
214,t04 t95.594
0.l3o/o
186,631 159.199 147,850 141.655 138.207 146.9s3.894 16.046.106 163.000.000
0.11%
None ofthe holders of th€ Company's common shares regislercd under the name of PCD owns morc ihan 5% ofthe Company's common shares. The corporate acts of PMMIC are canied out by its Board olDir€clors and Managemcnl. Ms. Helen Y. Dee is lhe curr€nl Chairman ofthe Company. The corporate acts ofAlsons Consolidated Resources Inc. ar€ carried oul by its Board of Directors. Mr. Tomas l. Alcantara is lhe cunent President ofthe Comoanv.
l0
l8.690/o
0.120/0
0.t0% 0.09% 0.09oh
0,08% 90.160/0
9.84V"
100v,
4.
CBC T/A-SSC#oo|0 and T/A-SSC#001| are Trust Accounts between China Banking Corporarion a-s Trustee. Th€ Corporate acts ofCBC are carri€d out by its Board ofDirectors and M:rnagement. Mr. Ricardo R. Chua is the currenl CBC hesident and CEO.
As of December 3 l, 2016, the Company has a total of 163,000,000 shares issued and outstandins. Of the total ontstanding common capital stock, 162,284,'795 shares or 99.567o are owned by Filipino citizenf, while 715,205 shares or 0.4402 are owned by foreigners.
3.
Minimum Public Ownership The Company is compliant with the required Minimum Public Ownership ofat least l0o4 ofthe total issued and outstanding capital stock, as mandated by Section 3, Article XVIII of the Continuing Listing Requirements of the Listing and Disclosure Rules. As of December 31. 2017. the Company's public float was 80.91olo.
4.
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 ofthe Company are entitled to receive a proportionate share in cash dividends that may be declared by the Board of birectors 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 represinting at least two-thirds (2/3) ofthe outstanding shares entitled to vote. The amount of dividenj 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 2017 and 2016. The last stock dividend (15%) was paid in 1997. Prior to 1997, the last cash/stock dividend paid was
in 1990.
5. b)
Recent sale ofUnregistered Securities There was no sale ofunregistered securities for the past thee years.
Description of Registrant's Securities
1. Common Stock The details ofthe Company's capital stock
are as follows:
No. ofShares
Authorized (P 1.00 par value) Issued and outstanding
388,000,000 163.000.000
2.
Debt Securities - Not Applicable
3.
Stock Options - Not Applicable
4.
Securities Subject to Redemption call
5.
Weftants
6.
Market Information for Securities Other than Common Equity
-
-Not
Applicable
Not applicable
7. Other Securities -Not Applicable
n
-
Not Applicable
Amount 88,000,000.00 P163.000.000.00 P3
It€m 6 - Manasement's Discussion and Analvsis or plan of OD€ration Management's Discussion and Analysis of Financial Conditions and Results of Operations
l. Financiaf Condition (As of December 31,2011 and 2016) 3l -Dec-l7
3l-Dec-16
%o
Change
ozo
A sser
EfS Cash & cash equivalents
P8,65r,880
Pl t,725,238
Financial assets at fair value through profit or loss
62,445,291
a1 4a\ 1t1
32.43Vo
lo.4tvo
261,8s8
313,897
-16.580/0
O.MYo
900,200 530,900,206 603,559.435
826,t3s
8.97Yo
o.t50/o
149,655,296
254.7syo
209,974,2a7
ta7.44yo
54
563,640
AS
S
Receivables Other current assets
Available-for-sale
fi
nancial assets
TOTAL ASSETS
-26.21yo
1.43y.
47.96%0
100.00%
LIABILITIES AND EQUITY Accounts payable and accrued e)9ens es
7 1o,7
Deferred tax liability
TOTAL LIABILITIES EQUITY
TOTAL LL{BILITIES AND QU]TY Total
assets amounted
5,l5 t 6l,735,90s 6 t ,02
26.toyo
o.l2yo
100.00%
10.1tvo
563,640 t0853.07%
to.23yo
541,823,530
209,4tO,647
158.740/o
89.77o/o
P603,559,435
P209,974,287
187.44yo
100.00%
to P603.559 million as of December 31,201? compared to p2}g.g'.,4 million as of ofthe invesrmenr
December 31,2016. The significant increase is mainly due to the fair value re-measurement in HEDC shares based on current market valuation (ofthe land held for sale ofHEDC).
The Company's cash and cash equivalents amounted to P8.652 million and Pll.T25millionasofDecember3l, 2017 and2016' r€spectively. The 26.21o/o net decrease was due to incurred expenses for the year and additional investment in Government Securitics.
Financial assets at fair Yalue through profit or loss amounted to P62.845 million and p47.454 million as of December 3i,2017 and, as of December 31,2016, respectively. The 32.43% net increase is due to positive
movement in the market values ofinvestments in stocks traded at pSE.
Receivables account as of December 31,2017 amounted to P0.262 million compared to p0.314 million as December 3 l, 201 6. The 16.5 8% net dec rine accounts for the collection of outstanding receivabres.
of
olfr,gr cune111;9ts consisrs of prepayments, prepaid taxes and input tax carry-overs. r'his amounted to p0.900 mllfron and P0.uz6 mrllion as of December 31,2017 and 2016, respectively. 'fhe 8.97o/o net ingease in this account mainly represents additional input taxes recorded during the piriod.
AYailable-for-sale financial assets account as ofDecember 31,2017 amounted to p530.90 million as compared 254.7 5o/o increase pertains to the fair yalue measurement of the HEDC shares. The Company recognized an additional P372.536 million unrealized gain on fair value changes ofthe investment in Hermosa. please refer to Note g ofthe AFS.
to P149.655 million in 2016. The bulk of the
Accounts payable- and accrued expenses amounted to P0.71I and P0.564 million as of December 31,2017 and Dec^ember 3l-, 2016, respectively. The 26.10% net increase in this account is due to higher accrual of
professional fees and other expenses.
The Company recognized defened tax liability amounting to P61.03 million relative to the l5% defened tax on unrealized gains on untraded shares ofstock classified as AFS financial assers.
l2
Total Stockholders' Equity as of December 31, 2017 amounted to P541.83 million or p3.32 book value oer share as compared to P209.411 million or pl .285 book value per share as of December 3 l, 2016. The following liquidity and profitability ratios indicate acceptable levels of financial condition and performance ofthe ComDanv:
3l -Dec-l Curent Ratio Debt-Equiry Ratio Net Profit Margin
Asset to Equitv ratio Asset Tumover Eamings per Share
7
102.228:l
3l-Dec-l6
Formula
107.016:l Total Current
Assets/Total Current Liabilities Liabilities/Total Stockholden' Equity
0.1 14: l
0.003:1
90.96Vo
82.53o/. Incorne/Total Revenue L003: I Total Assets/ Total Equity
l.l l4:l O.02673:1
P0.0900
0.0364:l Reven ue/Total As s ets P0.0387 Net Incorne /lssued & Outstanding Shares
The decrease in cunent ratio and increase in debt-equity ratio is mainly due to the increase in current liabilities.
Net profit margin and EPS increased mainly due to positive market value movement of investments in FVPL traded in PSE.
The decrease in asset turnover is mainly due to the increase in assets during the period. Please refer to Financial Soundness Indicators for additional
Kpl's ofthe Company.
The only material commitment of the Company is the balance on its subscription to HEDC in the amount of PI2.354 million. The liquidity ofthe Company will be affected if HEDC deilares a call on said subscriplion. Possible source- of fund is through bank loan. Aside liom the subscription payable to HEDC, there are no
known trends, demands, commitments, events or uncertainties that will hive miterial impact on the Company's
Iiquidity.
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 cintinue tJbe affected by regional trends in the coming months. The financial statements do not includl any adjustments that might result flom these uncertainties. Relat€d effects will be reported in the financial staiements, as they become known and estimable.
l3
2, Resufts of Operations
(For the years ended December 31,201i-. 2016 and ZOIS\ %o
$ange
2016 vs. 2015
% in Total Revenue
REVUYT]ES
Net gains on fair value changes on financial assets at fair value through prot or loss
Dividend income Intercst incorne
COST AND D(PNSES C:pneral & administrative Net loss on fairvalue changes on fmancial assets at fair value through pml or loss
15J87,048 294,7l3
-
6,803.522
124,71r
I,451,900
1.3264t2
234,403 -22.610/.
r.83%
o.ffi/.
1.440,389
9.46%
9.00%
12,253,726
0.00/o
0.Uf/o
4,62t,8't2
0-uy/o
0.uy/o
523
0.ut/o
o.uf/o
Irpaimrnt
loss of avialable-for-sale financialassets Net reali4d forcxloss
TOTALD(PU\SES fncome/(toss) before income tax
95.38/0
8,250,779 -16.61yo
353,40t
96,516
l26.t6vo
1.451.900 t32m 14,67g,714
Provision for income tax
0.uy/o
OTHR, COMPR,UIE{S tVE INCOME
Goss) Net unrealized gain 1loss.; on ar ailablcfor-sale securities
Jl7 ,141216
37,5ffi.s37
(10,322,&2)
Trans lers to prolit and loss
-745-94Vo 100.Otrlo
TOTAL COMPREIIU{S IVE INCOME FOR TIIE YEAR
-657.88%
The Company posted a nel income of PI4.672 million or P0.09 eamings per share as of December 31, 2017 as compared to P6.301 million or earnings per share of p0.03 g7 as of December 3 I 201 6. ,
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 p0.80+ mittion as of December 31, 2oll'and ?016, respectively The 126.16% net increase pertains to positiye market value changes in the investments in stocks
haded in the PSE.
Dividend income declined from P0.353 million in 2016 to P0.295 million in 2017. The t6.6lolo decline mainly due to lower dividends declared from the investments in stocks during the period.
rs
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 ofthe reinvested cash equivalents.
other income as of December 3l,2ol7 nd 2016 pertains to recuning service income for accounting servrces rendered by the Company to HEDC and rental income. General and administrative expenses amounled to P|.452 million and P 1.326 million as of December and December 3l, 2016, respectively. The 9.46vo increase is due to higher expenses during the period.
t4
3
l,
2017
for income tax pertains to the Minimum corporate Income Tax (Mcrr) set-up. The company set-up rather than the 30% regular tax because mosi of its income are fiom unrealized market'cha'nges of rnvestments and passive income subject to final tax. Provision
MclT
Bulk of the net unrealized gain on available for sale securities pertains to the fair value measurement of the investment in HEDC shares (Note 8 ofthe AFS).
3, Financial Conditions (As ofDecember 31,2016 and 2015) Total assets amounted to P209.9'74 million as December 31, 2015.
of
December 31, 2016 compared
Il: 9-oiplll" cash and cash equivalents amounted P 12.036 million as of December 3
to p165.g65 million as of
to Pl | .725 million as of December 31, 2016 compared to
l, 2015. The 2.58% net
decrease was due to incuned expenses for the !ear.
Financial assets at fair value thJough profit or loss amounted to P47.454 million and p40.650 million as of December 3l' 2016 and as of December 31, 2015, respectively. The 16.740/0 net increase is due to positive movement in the market values of investments in stocks traded at PSE particularly Araneta properties Inc. ltiom 1.l2/sharc to 2.35/share) and EEI Corporation (fiom p5.4o/share to p6.12/sharc). Receivables account as of December 31, 2016 amounted to P0.314 million compared to p0.315 rnillion as December 31, 2015. The 0.439lo net decline accounts for the collection ofoutstanding receivables.
of
oth.er curent-asset consists of prepayments, prepaid taxes and input tax carry-overs. This amounted to p0.826 milfion and P0.769 million as of December 3 l, 2016 and as of December 31, i015, respectively. The 7 .4lb/o 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 io the restatement ofthe Hermosa shares to its fair-value using the adjusted net asset value method. The Company recognized P34.30 million unrealized gain on fair value clianges ofthe rnvestment in Hermosa. Accounts payable and accrued expenses amounted to P0.564 million and p0.315 million as of December 3 I, 2016 and D€cembet 31,2015, respectively. The'18.650/o net increase in this account is due to higher accrual of professional fees and other expenses.
Total Stockholders' Equity as of December 3 l, 20l6 amounted to p2og.4l I million or pl.285 book value per share compared to p 165.550 million or pl.0l6 book value per share as ofDecember 31,2015.
4.
Results ofOperations (For th€ years ended December 31,2015 and 2014)
The Company posted a net income ofP6.30l million or earnings per share ofp0.0387 as ofDecember 31, 2016 and net loss of P9.486 million or a loss per share of p0.05g2 as ofbecember 3 l, 2015.
Dividend income declined fiom P8.25 I million as of December 31, 2015 to p0.353 million as of December 2016 mainly due to HEDC'S declaration ofcash dividend in 2015, none in 2016.
3
l,
Interest income amounted to P0.125 million and P0.234 million as of December 3l,2016 and December 31, 2015, respectively. The decline is attributed to lower balance ofthe reinvested cash equivalents. There was a positive turn-around in the changes in market values (fair value value through profil or loss investments) flom a P12.254 million unrealized gain This is due to positive movement in the market values of investments Araneta Properties lnc. (from l.l2lshare to 2.3s/share) and EEI Cor?oration
changes in on financial assets at fair loss on to p6.g04 million unrealized
in stocks truded at pSE particutarly (from p5.4olshare to p6 .\2/sharet.
other income as of December 31, 20|6 and 2015 pertains to recurring service income for accounting servlces rendered by the Company to HEDC and rental income.
In December 31, 2015, the company recognized impairment loss amounting F4.6 million on investment PERC's share.
l5
rn
General and administrative expenses amounted to P1.326 million and P1.440 million as of December 31, 2016 and December 31, 2015, respectively. The 7.910lo decrease is due to lower expenses during the period. There was a minimal unrealized loss on forex in 2015 resulting fiom reinstatement of dollar investment ofthe 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 fiom unrealized market changes of investments and passive income subjecl to final tax. There was a tumaround in the other comprehensive income account llom P10.323 million unrealized loss as of December 31, 2015 to P37.56 million unrealized gain mainly due to the restatement ofthe Hermosa shares to its fair value using the adjusted net asset value method.
Except for items discussed above, there are no more changes in the financial statements that materiality threshold of 5%.
will
reach th€
Plan ofOperations
A.
lnvestm€nt in AFS not trad€d in the market (lnvestm€nt in HEDC)
As of December 31,2017 the Company holds ll.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 used to finance the development ofthe undeveloped ponions ofthe propeny.
B.
will
be
Inv€sament in Financial Assets at FVPL and AFS 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 instrumenls. Because such investments are subj€ct to price risk due to changes in market values, an expected d€cline in the porrfolio will prompt the Company to dispose or hade 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 operaling 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 ofsignificant equipment that the Company expects perform.
Liquidity management The Company has substantial investments in shares of stock which are not listed in the Philippine Stock Exchange anC may not be readily convertibte to liquid assets necessary to meet any potential additional Iiquidity requirements of the Company. lnvestment in unquoted securities included in AFS inyestments amounted to P494.535 miflion and P 121.999 million as of December 3 l, 20ti and 2016. Management of liquidity requires a flow and stock perspective. Constraint such as polilical environment, taxation, foreign exchange, interest rates and other environmental factors can impose sig;ificant restrictions on firms in management oftheir 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 cenain period and invests unrestricted funds to maximrze interest eamings, i.e. money market placements.
Commitments Except for a possible cash call
liom Hermosa Ecozone Project, the Company has no commitment for
purchase ofproperty, plant and equipmenl.
l6
the
Item 7 - Financial Stat€ments The 2017 Audited Financial Statements (AFS) of the Company are incorporaled herein by reference. The schedules listed in the accompanying index to Supplementary Schedules are filed as part ofthis Form l7-A. Item 8 - Chanqes in and Disagre€m€nts with Accountanls on Accounting and Financial Disclosure Informot ion on Independent Aud itor
The extemal auditor of the Corporation is the auditing firm Sycip Gorres velayo & co. (scv). The same accounting firm has been endorsed by the Audit committee to the Board. The Board, in tum, approved the endorsement and will nominate the reappointment ofthe 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 31,2017 are the examination of the financial stat€ments of the Company, review of income tax retums and other services related to filing of reports made with the Securities and Exchange Commission and Bureau of Intemal Revenue. Pursuanl to SRC Rule 68 Para$aph 3 (b) (lv) (Re: Rotation of Extemal Auditors), the company has not engaged Ms. Ana Lea Bergado, partner of SGV & Co., for more than five (5) years. She was engaged by the Company for examination ofthe Company's 2017 AFS. The company is compliant with the Rotation requirement of its extemal auditor,s certiSring partner as required under SRC Rule 68 (3)(b) (lV). A two year cooling offperiod shall be observed in the re-engagement ofsame signing partner or individual audiror. Disqgreements with Accountants on Accounting and Financi..i Disclosures
As of December 31, 2017, there are no disagreements with Accountants on Accounting and
Financial
Disclosure.
Audit and audit- relatedfees Extemal audit fees amounted to P323, 400 (inclusive of VAT) as of December 3 l, 2017. Said fees are for the audit and review ofregistrant's annual financial statements and other services rendered in connection with filine ofsaid financial statements with the govemment institution such as SEC and BIR. There were no fees paid or accrued for the last two yea$ relative planning and any other form oftax services.
to tax accounting, compliance,
advice,
The Audit Committee approved the above fees based on the services rendered and the amount paid ftom the previous year's audit.
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 Direclors of the Company passes upon and approves the Audit Committee's recommendations. The members ofthe Audit Committee are as
follows:
Nicasio [. Alcantara
Chairman (lndependent Director)
Medel T. Nera Reynaldo B. Vea
Member Member
l'7
PART III - CONTROL AND COMPENSATION INFORMATION Item 9 - Directors and Executive Offic€rs ofth€ Resistrant Helen Y. Dee Chairman ofthe Board Milagros V. Reyes President and Director Emestine Carmen Jo Villareal-Fernando lndependent Director Nicasio I. Alcanlara lndependent Director Raul M. Leopando Director Victor V. Benavidez _ Directot Yvonne S. Yuchensco Director Perry Y. Uy Treasurer and Director
-
Medel T. Nera
Director
Oflicers: Milagros V. Reyes Perry Y. Uy Samuel V. Torres
President Treasurer
Corporate Secretary Asst, Cor?orate Secretary
Arlan P. Profeta
a) Board of Directors seafront's Board of Directors is composed of nine (9) members elected by and from among the company's 'Board
stockholders. The Board is responsible for providing overall management and direction lo the 6ompany. meetings are held on a quarterly basis or as often as required to discuss the Company's operations, business strategy, policies and other corporate matters. A brief background ofeach member ofthe Company,s Board of Directors is provided below:
Directors: Name of Director
Age '13
Helen Y. Dee*
Position
Nationality
Tenure Director since 2002 and
Chairman ofthe Board
Filipino
20ll as Chairman ofthe Board to December 2017 1999 to present 2007 to present 2017 to Dresent 2000 to present
Milagros V. Reyes
76
Director/Presidenr
Perry Y. Uy Raul M. Leopando Yvonne S. Yuchengco
72 66
Director/Treasurer Director Director lndependent Director Director Director Independent Director
Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino
Age
Position
Nationality
Tenure
76
President Treasurer Corporate Secretary Asst. Corporate Secretary
Filipino Filipino Filipino Filipino
1999 to present
64 75
Nicasio I. Alcantara Victor V. Benavidez Medel T. Nera
66
Ernestine Carmen Jo D.
56
62
Villareal-Fernando effectivc January
1995 to Dresent
2017 to present 201 I to present 2012 to present
2018
Executive Ofticers: Name of officer Milagros V. Reyes Perry Y. Uv
'12
Atty. Samuel V. Torres Atty. Arlan P. Profeta
53
44
2007 to present 2006 to present 2008 to present
The members ofthe Board are elected at the Annual Stockholders' Meeting to hold office until the next Annual Stockholders' Meeting and until their respective successors have been appointed or elected and qualified.
Below is the list of the members of the Board and the corporate officers, and their business experience during
the past five (5) years:
Ms._Helen Y. Dee, 73, Filipino, is presently the Chairman
Banking corporation,
of House of Investments, Inc., Rizal Commercial RcBc Excom Forex Brckers corporation, Landev corporaiion, Mapua Information t8
Technology, Inc., Hi-Eisai Pharmaceuticals, Inc., Pan Malayan Realty Corporation, RCBC Savings Bank, Merchants Bank, La Funeraria Paz-Sucat, Malayan lnsurance Company, National R€insurance Corp of the Philippines, xamdu Motors, Inc., PetroEnergy Resources corporation, Manila Memorial park cem€Iery, lnc., Petrowind Energy, Inc. and Malayan High School of Science, Inc. She is the Chairman/President of Hydee Management & Resources, Inc.; Financial Brokers Insurance Agency, Inc., RCBC Leasing and Finance Cor?oration and Mijo Holdings, Inc.; She is also Chairman and CEO of Tameena Resources, Inc. She is the Presid€nt of Moira Management, Inc., YGC corporate Services, Inc. and GpL Holdings, tnc. she is the vice Chairman ofPan Malayan Management and Inyestmenl Corporation and West Spring Development Corporation and Vice President of A.T. Yuchengco, Inc. She is also a Member, Board of Trustees of Mapua Institute of Technology, Inc. a leading engineering school in the Philippines, Malayan Colleges Laguna, Inc and Philippine Business for Education, Inc. She also sits in the Board of the following companies, Phil. Long Distance Telephone company; south westem cement corp., Great Life Financial Assurance corp., MIco Equities, Honda Cars Philippines, Inc., Isuzu Philippines, Inc., EEI Corporation, A.y. Holdings, Inc. pan Malayan Express, Honda Cars Kalookan, Sun Life Grepa Financial, Inc., Philippine Integrated Advertising Agency, lnc., iPeople, Inc., Y Realty, Inc., Luis Miguel Foods.
Ms. Milagros V. R€yes, 76, Filipino, is presently the Chairman/President of Petrocreen Energy Corporation, Chairman of Maibarara Ceothermal, Inc. She is also the President of PetroEnergy Resources Corporation, an oil exploration and development company She is also a Director of lpeople, lnc., Director/Treasurer of Hermosa Ecozone & Development Corporation. She was formerly a Director/Consultant of PNOC-EC and a Senior Vice President ofBasic Petroleum and Minerals, Inc.
Mr. Perry Y. Uy, 12, Filipino, is presently the President of Manila Memorial Park. He is a Direclor 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 lsuzu Manila.
Mr. Raul M. Leopando' 66, Filipino, He is the Chairman of RCBC Securities, Inc.. President and Director of lnvestment Houses Association of the Phils. (IHAP), Consultant of RCBC Capital Corporation, Director, Bankard, Inc. He is also formerly Chairman ofthe Board and Nominee of PhiJippine Stock Exchange, Inc and formerly President and CEO ofRCBC Capital Corporation. Ms. Yvonne S. Yuchengco, 64, Filipino, 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, lnc., 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 Mgm't. & Inv't. corp., Director and rreasurer petroEncrgy Resources Corporation; Honda Cars Kalookan, Mona Lisa Development Corporation, Asst. Treasurer, Enrrquc T. Yuchengco, Inc.; Member, Board ofrrustees AY Foundation, Inc, Mapua Institute ofrechnology, Inc., philAsia Assistance Foundation, lnc., 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: House of Investment, lnc., [fYDee Management and Resource Corp., iPeople, inc., La Funeraria Paz, lnc.-Sucat, Luisita Industrial Park Corp., Malayan College Laguna, Inc., Malayan Colleges, Inc., Malayan High School of Science, Inc., Malayan Insurance (H.K.), Malayan Intemational Insurance Corp., Manila Memorial Park, Inc., National Reinsurance corporation of the Pilippines, Pan Malayan Express, lnc., pan Malayan Realty corporation, Asia-pac Reinsurance Co., Ltd., AY Holdings, lnc., DS Realty, Inc., pan pacific Computer Center, Inc.,shayamala Corporation and YGC Corporate Services, Inc.
Mr. Nicasio I. Alcantara' 75, Filipino, He is presently the Chairman of Conal Corporation and Vice-Chairman ofAviana Development Corporation. He is a memb€r ofthe Board of Directors ofvarious companies such as: Aces Technical Services, Inc., Acil Corporation. Alcor Transport Corporation. Alsing Power iloldings, Inc.. Alsons Aquaculture corporation, Alsons/AWS Information system, Inc. Alsoni corporation, AIsons Development
&
Investments Corp., Alsons Insurance Brokers Corp., Alsons Land Comoration. 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 Hatchenes, Inc., lndophil Resources NL, The Philodrill Corporation, San Ramon Power, lnc., Sarangani Agricultural Co., Inc., sarangani Energy corporation, Seawood Holdings lncorporated, Sunfoods Agri. ventures, Inc., site Group
l9
International, Ltd. Southem Philippines Power Corporation and westem Mindanao Power Conroration.
Mr. Victor V. Benavidez' 66, Filipino, He is the Nominee of Alakor Securities Corporation. Director of Boulevard Holdings, Inc. Formerly: Ceneral Manager of Alakor Securities, Inc, Direitor. Mariwasa Siam
Holdings, Anglo Philippines Holdings Corporation, VP and Director Mabuhay Holdings Corporation and
Tagaytay Properties & Holdings Corporation, Columnist, The Daily Globe, Invesiment Research Consultant James Capel, Manager/Corplan of Banco Filipino and Manager/lnvestment Research of Anselmo Trinidad Co.
of &
Mr. Medel T. Nera, 62, Filipino, is the President
and CEO of House of Investments, Inc. and president of RCBC Realtv Corporation. He serves as Director of House of Investments and its significant subsidiaries ano associates. He also serves as Director of Rizal Commercial Banking Corporation and National Reinsurance corporation ofthe Philippines. He was former senior partner ofSycip, Gonis, Velayo and co., cpAs where ne served as Financial Service Practice Head. He also serves as Director and Treasurer ofCRIBS Foundation, Inc.
Atty. Ernestine Carmen Jo Villareal-Fernando, 56, Filipino, is the Director of various corporation such as: Country Bankers Insurance Corporation, Country Bankers Life lnsurance Corporation, Director and Treasurer of Jose E. Desiderio, Inc., Cu€sst Evaluator of Center for Asian Culinary S-tudies and Cafd ysabel Group, Managing Director of Fernando Villareal Books, Legal Counsel, Committee on Art Auction, Ateneo Alumni Association, Senior Partner, Platon Maninez Flores San Pedro Leano Femando panagsagan Bantilan Law Office. Atty. Samuel V' Torres, 53, FiliPino, is the Gen. Counsel/Corporate Secretary of AY Foundation, Alto pacific lompany' Inc. (Formerly: The Pacific Fund, Inc.), Bankers Assurance corp., FBIA Insurance Agency, Inc., Blueiounds security & lnvt. Agency, Enrique T. yuchengco, Inc., First lriationwide Assurance borp, cpl Holdings, Inc. GPL Cebu Tower Office Cond. Corp., GpL Holdings, Inc., Grepaland, lnc., Grepa Reality Holding-Corporation, Hexagon lntegrated Financial & Insurance Ageniy, Hi-Eisai Fharmaceutical, Inc., Honda
cars Kalookan' Inc, House of Investments, Inc., Hexagon Integrated Fin. lns. Agency, Inc., Hexagon Lounge, Inc', iPeople, Inc., Investment Managers, Inc., Landev corporation, La Funeraria Faz-sucat, Inc., M-alayan High School of Science, lnc., Malayan Insurance co., Inc., Mico Equities, Inc., Malayan colleges, Inc., Malayin colleges Laguna, lnc., Malayan Securities corporation, Mapua lnformation Technology ceinrer, Inc., MJggg Corporation, Mona Lisa Development Corporation, Pan Maiayan Management & Inveiiment cor?oration, pan Malayan Realty corporation, Pan Malayan Express, Inc., pan pacific -computer cenler, Inc., people eServe corporation, PeroEnergy Resources corporation, phirippine Integrated Advertising Agency, Inc., Royar commons, Inc., RCBC Forex corporation, RCBC Realty corporation, RCBC Land, RC-BC Securities, Inc., RCBC Bankard Services Corporation, RCBC Securities, Inc., RP Land Development Corporation, Seafiont Resources corporation, Sun Life Grepa Financial, Inc., yuchengco Museum, yGb corporate services, Inc., y Realty corporation, Y Tower II oflice condominium corp., yuchengco Tower office condominium corp. and
Xamdu Motors, Inc.
Atty. Arlan
P. Profeta,44, Filipino, is the the AVP for Legal and Administration/Asst. Corporate Secretary of PERC. He is the Corporate Secretary of Maibarara Geothermal, lnc., Petrocreen Energy Corporation ano Petrosolar Corporation. He is AVP for Legal and Contracts/Corporate Secretary of Petrowind energy, lnc. and formerly Tax Manager of Punongbayan and Araullo.
Significant Employees Other than the aforementioned Directors and Executive Officers identified in the item on Directors and Ex€cutive. ofTicers in this report, 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
Corporation's set goals.
to do his share in achieving rne
There is no significant employee of the registrant that is expected to make significant contribution to the DUSrness.
The Dir€ctors of the Company are elected at the annual stockholders' meeting to hold office until the nexr succeeding annual meeting and until their respective successors have been elected and ouatified. 20
Officers are appointed or elected annually by the Board of Directors at its first meeting following the Annual Meeting of Stockholders, each to hold office until the next annual stockholders' meetins or until a successor shall have been elected, appointed or shall have qualified.
Family Relationship There are no family relationships known to the Company.
Involvement in Certain Legal Proceedings For the past five (5) years, none ofthe Directors or Executive Officers was involved nor has any such o{licer 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 ofany court order, judgment or decree barring, suspending or otherwise limiting him fiom engaging in the practice of any type of business including those connected with securities trading, investments, insurance or banking activities. C€rtain Relationships and Related Transactions Pfease refer to Note 13 of the 2017 Audited Financial Statements for the disclosure of the related party ransacnons.
Aside from the disclosure in the Audited Financial Statements, there were no other related transactions or proposed tansactions during the last two (2) years to which the registrant was or is to be a party. Item l0 - Exequtive Comnensation Compensation of Directors and Executive Officers Table (CEO and T Name Milagros V. Reyes
4 Hishest Paid Executive Officer
Compensation *
Designation President Treasurer Corporate Secretary Asst. Corporate Secretary
Perry Y. Uy Atty. Samuel V. Torres Atty. Arlan P. Profeta
Table (All Directors as a
Particulars
Year
Salary
Bonuses
0ther Annual Compensation
20 l5
All Directors as a group*
2017
70,000 75,000 85,000
2018**
95.000
20t6
Total 70,000 75.000 85.000 95.000
*all executive officers ofthe 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 othel anangements pursuant to which any director of the company was compensated, or is to be compensated, directly or indirectly.
2l
Item I I - Securitv Ownership ofCertain Record and Beneficial Owners and Manasem€nt (as of December 31. 20t7) a) Security Ownership
ofCertain Record and Beneficial Owners.
The following table sets fonh information with respect to a record or beneficial owner dir€clly or indireclly owning more than Capital Stock as of December 31. 2017.
Tille
of
Name, Address of Record O$,'|er
Class
Relationship with lssuer
Name ofBeneficial Own€r
No.
5olo
of
ofthe Company's
shares held
Petcentage
of
Citizenship
Ownershio PCD Nominee Corp.
MSE Building, Ayala
Common
Slockholder (Nore
Ave., Makati City
PMMIC Floor, CPL Building, Buendia Ave., Makali
Common
I orh
Pan Malayan and
l4anageme
Slockholder
Common
Common
CBC T/A-SCA#OOIO CBC Building, Trust
Filipino
66.657.039.
40.890/0
Filipino
30.469,858
t8.69%
Investmenl Coporalron (Note 2)
Cirv Alsons Cons. Res., Inc. 2286 Pasong Tamo Ext.
I)
Stockholder
Alsons Consolidated Resources. Inc.(Nole 3)
Filipino
5,544,91 |
9.54yo
China Banking Corp (Note 4)
Filipino
l4,t 7E,625
8.7V/o
Filipino
r0,204.120
626%
MakariCitv
Dept.
Srockholder
Paseo de Roxas,
MakatiCitv CBC T/A-SCA#OOI I CBC Building, Trust Dept. P. de Roxas,
Common
-do-
Slockholder
Maksli Citv Others Total
NOTE:
l
.
2 3. 4.
(2\
25.945,44'l
|
t63,000.000
100 00%
5.920/"
None of lhe holders of the Company s comtnon shares reSisrer€d under rhe naDe of PcD No'ninee owns mor€ than 5yo of tt|e companyis comrnon Thc coryorate acts ofPMMlC are caFi€d ort by ic Boatd ofDirccrore and Managenetrr Mls Hele Y D€€ is the Chainnan ofpMMtC Th€ CorPomie acls of Alsons Cons Res., Inc ar€ canjed our by irs Board of Direcrors Mr. Totnas A tcanlara is lhe cLrnent presrdenr of rhe Company cBc T/A-ssC,00l0 and T/A'SSC#001 I are T.un Accounrs will China BaDling Corporariotr as Trusree. Th€ Coaorate acrs ofcB6 ar€ cameo oul by irs Board otDircdors and Manasement. Mr. Rica'do R Chua is rhe cur.e CBC p..sident and CEO . PCD totrl shlres includ. Fitipino rnd Non-[itipino.
I
Security Ownership ofManagemenl as
of
December
31,20t7.
The following are the number ofshar€s owned ofrecord by th€ Direclors, th€ Chief Executive Ofncer and each ofthe kev oflicers and the percenlage ofshareholdinqs ofeach:
Title of Chss
Name of Benelicial Owner Name and Position
Common
Helen Y. Dee ** Charrman and Director January 1.2018.
Common
Milagros V. Reyes President and Director Peny Y. Uy
Common
-
restgned efleclivc
Direclor/Treasurer Yvonn€ S. Yuchengco
Common
Dircctor
Common
Nicasio L Alcantara Indep€ndent Direclor Med€l T. Nera
Common Common
Amount and Nature of Beneficial Ownershio
Citizerships
648,065 -lndirecf'
Filipino
l
"Direct"
Filipino
|
"Direct"
Filipino
l"Direct"
Filipino
425 "Direct" 2.834 "lndirect"
Filipino
Director
| "Direct"
Falipino
Emestine Camen Jo D. Villareal-Fernando Independenl Director
l "Direcl"
Filipino
ofthe
P€rcent of Class 0
A0%
Raul M. Leopando Common
Director
Cornmon
Victor V. Benavidez Director
Common
Samuel V. Torres Corporale Secretary
661 "lndirecf'
1,000'Direcf'
Filipino Filipino Filipino
Arlan P. Profeta Comrnon
Asst. Comorale Secrelary
Filipino
Total
652,990 shares
22
0 .40vo
i*
M.s. Helen Y. De rdign€d eff.ctive Jatruary 1,20t8.
As of December 31,201'7, the Company's directors and executive officers owned an aggregate of 652,990 shares equivalent to 0.40%0 of the Company's outstanding shares. None ofthe members ofthe Company's directors and management owns more than 29lo or more ofth€ outstanding capital stock ofthe Company.
Voting Trust Holders of
5%o
or more-The Company is not among
persons
aware of any voting trust or similar anangement holding more than 57o ofa class ofshares.
Changes in Control - There had been no change in the control ofthe Company since the beginning ofthe last fiscal year. The Company has no existing voting trust or change in control agreements.
Item l2 - Certain Relationships and Related Transactions There were no related transactions or proposed transactions during the last two (2) years to which the regrsrranr was or is to be a Dartv.
PART IV - EXHIBITS AND SCHEDULES Iteml3 - Exhibits and R€ports Exhibit I Exhibit
2
-
2017 and 2016 Audited Financial Statements
Supplementary Information and Disclosures required on SRC Rule 68 and 68.1 as amended
Organizational Strluct]ure (not applicab!e) Reports on SEC Form l7-C
l. 2'
May
23,2017
3. 4.
May June
23,2017 30,2017
February
23,2017 -
Notice ofAnnual Stockholders' Meeting
-
Results of Organizational Meeting ofBoard ofDirectors aft€r the Annual Stockholders' Meeting Mayl9, 2017 - Results ofAnnual Stockholders' Meetins 20 l7 - General Information Sheet 2017
Reports on SEC Form l7-Q (l'rQuarter, 2"d euarter, 3.d euarter)
Item 14- Gen€ral Notes to Financial Statements
l.
Assets subject to Lien and Restrictions on Sales ofAssets
As of December
3l,
2017, 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, 2016 Audited
Financial Statements.
3.
D€faults -None
4.
The following are not applicable in the preparation ofthis reporr.
a.
Adjustments made that lead
b.
adjustments cannot be properly supported. Changes in estimates without proper disclosure which have the impact of improving results of operations.
c. d.
Non-Application
or
to the revenue recognition but
misapplication
of
which
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.
The Company has no liabiliry guaranteed by others.
6.
There were no assets pledged against secured liabilities.
7.
Events after the date ofStatement ofFinancial position.
a.
Dividends There is no dividend proposal or declaration neither after the Statement of Financial Position date nor before the financial statements are authorized for issue.
b.
DiscontinuingOperations There were no significant events after the Stat€ment ofFinancial Position date but before the financial statements are authorized for issue that mav wanant susDension of the Corporation's operations.
24
c.
Earnings per share There are no significant events after the Statement ofFinancial Position date that will affect the computation of eamings per share.
SIGNATURES:
The President acts as the Principal Operating Officer and Principal Executive Offrcer; and the Treasurer as the Principal Financial Officer ofthe Company.
25
.
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VER SHEET for
AFTER TII€ BIR HAS OULY TTAIIPED NE€E'VEO.'?
FINANCIAL STATEMENTS Number
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cottPANY INFoRMATIoN
I
Thc dcsi$alcd Name ol
conhct
Person
Milagros V. Reyes
c-ontact Person
44IEf
bc an
I
Ofiictr ofthe Cotporation
EmailAddcss
mvreyes@petroenergy,com.ph
Itlobile Number
Telephone Number/s
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7th Floor, JMT Building, ADB Avenue, Ortigas Center' Pasig City
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designated. . occufience tlltr/rf{,l with infomation md conplete contact deblils of the new conhd -thjtty"ii(30) catendat days hon lh; AttAox"s ir"t be propetty and coruhtety filted-up. Faitwe to do so shet! cause the detay in updating tl:/,- cotpontion's reco.ds ulill,e Conmhslon and/ot |r)n+eceipt ol Notice i Oeticiencas, Fulher, rcn-rc.f,'ipl ol Ndice ol Defrciencies shall nol excuse the co?ontion lrcn liabilry lor iE deficfencies. .
.
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Sycip Gones Velayo & 6760 Ayala 1226 Makali
BOA/PRC Reg. No. 0001, December 14,2015, valid unlil Decomber 31,2014 SEC Accreditalion No. 0012-FR-4 (Group A), Novemb$ 10. 2015, valid until November 9, 2018
INDEPENDENT AT]DITOR'S REPORT
The Board of Directors and Stockholders Seafront Resources Corporation 7th Floor, JMT Building, ADB Avenue Ortigas Center, Pasig City
Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Seafront Resources Corporation (the Company), which comprise the statements offinancial position as at December 31,2017 and 2016, and the statements of comprehensive income, statements ofchanges in equity and statements ofcash flows for each ofthe three years in the period ended December 31,2017, and notes to the financial statements, including a summary of signifi cant accounting policies. In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position ofthe Company as at December 31, 2017 and 2016, and its financial performance and its cash flows for each ofthe three years in the period ended December 31, 2017 in accordance with Philippine Financial Reporting Standards (PFRSs). Basis for Opinion We conducted our audits in accordance witl Philippine Standards on Auditing (PSAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section ofour report. We are independent ofthe Company in accordance with the Code of Ethics for Professional Accountants in the Philippines (Code ofEthics) together with the ethical requirements that are relevant to our audit ofthe financial statements in the Philippines, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters Key audit matters are those mafters that, in our professional judgment, were ofmost significance in our audit ofthe financial statements ofthe current period. These matters were addressed in the context ofour audit ofthe financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description ofhow our audit addressed the matter is provided in tlat context. We have fulfilled the responsibilities described in the Auditor's Responsibilities for the Audit of the Finaneial Statemer8 section of our repof, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment ofthe risks of material misstatement ofthe financial statements. The including the procedures performed to address the matters opinion on the accompanying financial statements. R
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-aValudlion of unquoted svailable-for-sale fnancial asset The Company has an investrnent in tle unquoted equity securities of Hermosa Ecozone Development Corporation (FIEDC) classified as available-for-sale (AFS) financial asset and carried at the fair value as ofDecember 31, 2017 of ?494.5 million representing 81.94% of its total assets. This matter is significant to our audit because estimating the fair value ofan unquoted equity instrument is inherently subjective as it involves the use ofvaluation inputs that are not observable in the market. Management also applied significant judgment in selecting the valuation technique applied. The Company's disclosures about its unquoted equity investment in TIEDC are included in Note financial statements.
8
to the
Audit response We involved our intemal specialist in the review ofthe scope, bases, metJrodolory and results ofthe work by the Company's external appraiser. The assumptions include comparative sales price of substitute properties, and cost to develop the parcels of land of TIEDC by reference to historical and market data on comparable properties. We reviewed the Company's disclosures on the sensitivity of the fair value measurement to changes in unobservable inputs. We also assessed tle competence, capabilities and objectivity ofmanagement's extemal appraiser who prepared the valuation estimates.
Other Information Management is responsible for the otler information. The other information comprises tle information included in the SEC Form 20-IS (Definitive Information Statement), SEC Form l7-A and Annual Report for the year ended December 31, 2017, but does not include the financial statements and our auditor's report thereon. The SEC Form 20lS (Definitive Information Statement), SEC Form l7-A and Annual Report for the year ended December 3 1,2017 are expected to be made available to us after the date of this
auditor's report. Our opinion on the financial statements does not cover the other information and we form of assurance conclusion thereon.
will
not express any
In connection with our audits of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audits, or otherwise appears to be materially misstat€d. Responsibilities of Management and Those Charged with Governance for tbe Financial Statements Management is responsible for the preparation and fair presentation ofthe financial statements in accordance with PFRSs, and for such intemal control as management determines is necessary to enable the preparation offinancial statements that are free from material misstatement, whether due to fiaud or error.
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-3In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concem and using the going concem basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or enor, and to issue an auditor's report tlat includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit condusted in accordance with PSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasgnably be expected to influence the economic decisions ofusers taken on the basis of these financial statements.
As part ofan audit in accordance with PSAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
.
Identi& and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting fiom fraud is higher than for one resulting from error, as fiaud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of intemal control.
.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstarces, but not for the purpose of expressing an opinion on the effectiveness of the Company's intemal control.
.
Evaluate the appropriateness ofaccounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
.
Conclude on the appropriateness ofmanagement's use ofthe going concern basis of accounting and, based on the audit evidence obtained, whether a material unoertainty eists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concem. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, ifsuch disclosures are inadequate, to modifi our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Cornpany to cease to continue as a going concem.
.
Evaluate the overall presentation, structure and content ofthe financial statements, including the disclosures, and whether the financial statements represent t}te underlying transactions and events in a manner that achieves fair presentation.
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We communicate with those charged with govemance regarding, among other matters, the planned scope and timing ofthe audit and significant audit findings, including any significant deficiencies in internal control that we identifo during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were ofmost significance in the audit ofthe financial statements ofthe current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Supplementary Information Required Under Revenue Regulations No. l5-2010 The supplementary information required under Revenue Regulations No. l5-2010 for purposes of filing with the Bureau of Internal Revenue is presented by the management of Seafront Resources Corporation in a separate schedule. Revenue Regulations No. l5-2010 requires the information to be presented in the notes to financial statements. Such information is not a required part ofthe basic financial statements. The information is also not required by Securities Regulation Code Rule 68, As Amended (201l). Our opinion on the basic financial statements is not affected by the presentation ofthe information in a separate schedule. The engagement partner on the audit resulting in this independent auditor's report is Ana Lea C. Bergado.
SYCIP GORRES VELAYO & CO.
0^^ /*^ c Ana Lea C.
rLrr-/l
Bergado ')
Partner
CPA Certificate No. 80470 SEC Accreditation No. 0660-AR-3 (Group A), March 2,2017,valid until March l, 2020 Tax Identification No. 102-082-670 BIR Accreditation No. 08-001 998-63-201 8, February 14,2018, valid until February 13,2021 PTR No. 6621232, January 9, 2018, Makati City
Aoril I l. 2018
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SEAF'RONT RESOURCES CORPORATION STATEMENTS OF FINANCIAL POSITION
Decemb€r
'_:j:'-"*,
3l 2016
2017
ASSETS
Current Assets Cash and cash equivalents (Notes 6,7, 8 and 14) Financial assets at fair value thrcugh profit or loss (Notes ?, 8 and 14) Receivables CNotes 7, E, 9 and 14) Other current asscts -l-otal Current Asscts
Noncurretrt Assets Available-for-sale financial assets (Notes 7,8 and l4) Inveslrnent property (Note l0) Total Noncurrent Assets
TOTALASSETS
P8,65t,880
F11,725,238
62,84529t 26l,E5E
900J00 72,659229
47,453,721 3 r 3,897 E26.135 60.3 t8.991
530,900,206
149,655,296
530900106
t49,655,296
-
p603.559.435
-
F209.914-287
LIABILITAS AND I]QUITY Current Liabilities Accounts payable and accrued expenses (Notes 13 and 14)
?110,754
P563,640
Non.urrent Liability Deferred tax liabilify (Note l2)
61.025.151
Total Liabilities
6r,735,905
563.540
r63,000,000
163,000,000
359,742,431
42,001,221
Equity Capital stock - Fl par value CNote l5) Authorized - 388,000,000 shares Issued and ourstanding - 163,000,000 shares Net unrealized gains on available-for-sale financial assets (Notes 8 and 15) Retained eamings (Note 15)
TotalEquiS/
TOTAL LIATILITIES AND EOUITY See
19,08t,093
4,409,426
541.823,530
209.410.647
F603.559.435
?209,97 4,287
ac.onpanyihg Not s to Finaacial Slateneits.
1 d AFfi ?0i3
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SEAFRONT RESOURCES CORPORATION STATEMENTS OF COMPREHENSIVE INCOME
Years Ended December 3l 20t5 2016 2017
REVENUES Net gains on fair value changes on financial value through profit or loss (Note 8) Dividend income (Note 9)
assets at
fair
Interest income (Note 6) Other income (Note I 0)
Frsi87,048
P-
P6,803,522
294,113 96,516 352337
8,250,779 234,403
353,401
16,130,6r4
124,711 352,337 7,633,971
8,837,519
1,451,900
t,326,412
1,440,389
EXPENSES AND CHARGES General and administrative expenses (Note I I ) Net losses on fair value changes on financial assets at fair value through profit or loss (Note 8) Impairment loss on available-for-sale financial assets (Note 8) Foreign exchange loss - net
12,253,726
4,62r,872 523
r,451,900
1,326,412
18,316,510
INCOME (LOSS) BEFOR-E INCOME TAX
14,678,714
6,307,559
(9,478,991)
PROVISION FOR INCOME TAX.Note 12)
7,047
NET INCOME
(LOSS)
7
,047
7,047
14,671,667 6,300,512
(9,486,038)
OTIIER COMPREHENSIVE INCOME (LOSS) Items to be reclassifed to proft or loss in subsequent periods
Net unrealized gains (losses) on available-forsale financial assets - net oftax (Note 8) and loss fNote 8 Transfer to
3t7,74t2r6 37,560,537
(10,322,642)
4.62t.872
3r7,741216 37,560,537
(5,'700,770)
TOTALCOMPREHENSMINCOME(LOSS) F332,412,8&t F43,861,049 (Fls,I86,808) Basic and Diluted Earnings (Loss) Per Share
(){"t"
t6)
See accompanyinE Notes to
P0.09001
F0
Financial Statements.
tNl[ilffiiln[ffi[ililtffi]il[l
SEAFRONT RESOURCES CORPORATION STATEMENTS OF CHANGES IN EQUITY
Net Unrealiz€d Gains (Loss) on Avrilsble
for-Sale Financial Ass€ts C8pital Slock (Note 15) (Notes 8 and 15)
Retaincd
Errnings @elicir) (Note 15)
Total
F163p00,000 Pr0,r4rJ54 f7,594,952 P180,736,406 BALANCES AT DECEMBER 3r,2014 (9,486,038) (9,486,038) Net loss (5,700,770) (5,700,770) Other comprehensive loss (5,700,770) (9,486,038) (15,186,808) Totat comprehensive loss 163,000,000 4,440,6E4 (r,89r,0t6) 165"549,s98 BALANCES AT DECEMBER 31,2015 6,300,512 6,300,512 Net income 37,560,537 37,560,537 Other comprchensive income 43,851,049 6,300,512 37,560,537 Total comprehensive income 163,000,000 42,001121 4,409,426 209110,647 BALANCES AT DECEMBER 31,2016 14,671,667 14,671'661 Net income 317,741,216 317,741,216 Other comprehensive income rrrcomc Total I Otill (,omplengrlsrv9 lncome BALANCES AT DECEMBER 31, See
2017
rJ.,rru,ooJ 332.4 rr,u/ r,vu/ 14.671.667 Jl 317.741.2t6 /,/tr,zru P163,000,000 ?359,142,431 ?19,081p93 Pt4Lq24!0
accompanying Notes to Finoncial Statements.
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SEAFRONT RESOURCES CORPORATION STATEMENTS OF CASH FLOWS
Years Ended December
2017
3l
2016
20t 5
CASH FLOWS FROM OPERATING ACTIVITIES Income (loss) before income tax Adjustments for: Net losses (gains) on fair value changes on hnancial assets at fat value tbrough profit or loss (Note 8) Dividend income (Note 9) Interest income (Note 6) Impairment loss on available-for-sale financial assets (Note 8) Operating loss before working capital changes Decrease (increase) in: Short-term investments Receivables Other current assets lncrease in accounts payable and accrued Cash generated from (used in) operations Interest received lncome taxes paid Net cash provided by (used in) operating
expenses
?t4,678,714
F6,307,s59
os,387,048) Q94,713)
(6,803,522)
CASH FLOWS FROM INYESTING ACTIVITIES Dividends received (Note 9) Payment of subscriptions payable (Notes 5 and 8)
12,253,726
(353,401)
(8,2s0,179)
(96,sr6)
(t24,71t)
Q34,403)
0,099,s63)
(974,07s)
99,859
(24,437) (s6,9s9)
4,62t,872 (r,088,575) t8,30'7 ,362
(74,06s)
140,067 (933,702) 67,532
activities
(F9,478,991)
(67,t42) (79,9r9)
241,099
52,519
(8r4,3'12)
t7 ,t24,245
a\)
| 19,201
(866,170) (695,171)
27s,877 384,7t3
6a<
17,576,900
8,501,361
(7,tt4,7s0)
Acquisitions of: Financial assets at fair value through profit or loss
(Note 8) Available-for-sale financial assets fNote 8)
(4,522) (2,478,543\
-
Net cash provided by (used in) investing activities
(2,207,188) 384,713
NET INCREASE (DECREASE) IN CASH AND CASH EQUTVALENTS
(3,073,358)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
11,725,238
CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 6)
P8,6sr,880
See accompanying Notes to
(310,45E)
(5,276,22t)
(tt;1s2,4r3) (t5,642,023)
t,934,877
12,035,696
10,100,819
Plr,725,238
712,035,696
Finahcial Statements.
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SEAFRONT RESOURCES CORPORATION NOTES TO FINANCIAL STATEMENTS
l.
Corporatelnformation Seafront Resources Corporation (the Company or SRC) was registered with the Securities and Exchange Commission (SEC) on April 16, 1970 as an oil exploration and production company. On October 18, 1996, the Company amended its Afticles of lncorporation which provides for the revision of its primary purpose from engaging in the business ofoil 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 ofstock were listed on May 7,19'74 and *e curently traded atthe 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 11, 2018.
2.
Basis ofPreparation Basis ofPreparation
The accompanying financial statements ofthe Company have been prepared under the historical cost basis, except for the financial assets at fair value through profit or loss (FVPL) and available-for-sale (AFS) financial asses, 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 Company's trust funds (see Note 7) are consolidated on a line by line basis with the Cornpany. The trust fund reports are prepared for the same reporting year as the Company, using consistent accounting policies in accordance with Philippine Financial Reporting Standards (PFRSS). Statement of ComDliance The financial statements ofthe Company have been prepared in accordance with PFRSs.
3.
Changes in Accounting Policies and Disclosures The accounting policies adopted are consistent with those ofthe previous financial year, except that the Company has adopted the new accounting pronouncements starting January 1,2017. Adoption ofthese
pronouncements did not have any significant impact performance unless otherwise indicated.
o
on the Company's financial position or
Amendments to PFRS 12, Disclosure of Interests in Other Entities, Clarffication of the Scope the Standard (Part of Annual Improvements to PFRSI 2014 - 2016 Cycle)
of
clarif that the disclosure requirements in PFRS 12, other than those relating to summarized financial information, apply to an entity's interest in a subsidiary, ajoint venture or an associate (or a portion of ie interest in ajoint venture or an associate) that is classified (or included in a disposal group that is classified) as held for sale. The amendments
||]tHil]|tilil|nI[||$$ilil
-zAdoption ofthese amendments did not have any impact on the Company's financial statements.
.
Amendments to PAS 7, Statement of Cash Flows, Disclosure Initiative
The amendments require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Company has no changes in their liabilities arising fiom financing activities. As allowed under the transition provisions ofthe standard, the Company did not present comparative information for the year ended December 31, 2016.
o
Amendments to P AS 12, Incotne Tmes, Recognition of Defeted Tax Assets
for
Unrealized Losses
The amendments clariry that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions upon the reversal ofthe deductible temporary difference related to unrealized losses. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount. The Company applied the amendments retrospectively. However, their application has no effect on the Company's financial position and performance as the Company has no deductible temporary differences or assets that are in the scope ofthe amendments. Standards Issued but Not Yet Effective The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company's financial statements are listed below. Unless otherwise indicated, the Company does not expect that the frrture adoption of the said pronouncements to have a significant impact on its financial statements. The Corrpany intends to adopt these standards when tbey become effective'
Efective beginning on or afier January I , 201 8 o Amendments to PFRS 2, Share-based Payment, Classification and Measurement of Share-based Pawent Transactions The amendments to PFRS 2 address three main areas: the effects of vesting conditions on the measurement ofa cash-settled share-based payment transaction; tlte classification of a share-based payment transaction witl net settlement features for withholding tax obligations; and the accounting where a modification to the terms and conditions ofa share-based payment transaction changes its classification from cash settled to equity settled. On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application is permitted if elected for all three amendments and if other criteria are met. Early application of the amendments is permitted. The Company has assessed that the adoption ofthese amendments
will not have any impact
on the
201 8 financial statements.
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PFRS 9, Financial Insiuments
PFRS 9 reflects all phases of the financial instruments project and replaces PAS 39, Financial Instruments: Recognition and Measuremenl, and all previous versions of PFRS 9. The standard introduces new requirements for classification and measurement, impairmen! and hedge accounting. Retrospective application is required but providing comparative information is not compulsory. For hedge accounting, tlle requirements are generally applied prospectively, with some limited exceptions.
The adoption of PFRS 9 will have an effect on the classification and measurement of the Cornpany's financial assets, including the impairment methodology for financial assets. The Company is cunently assessing the impact of adopting PFRS 9 and plans to adopt the new standard on the mandatory effective date and will not restate compaxative information.
Amendments With PFRS 4
to
PFRS 4, Insurance Contacts, Applying PFRS 9, Financial Instruments,
The amendments address concems 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 dre overlay approach if, and only ii the entig restates comparative information when applying PFRS 9. The amendments are not applicable to the Company since none ofthe entities within the Company have activities that are predominantly connected with insurance or issue insurance contracts. PFRS I 5, Revezze from Contracts with Cuslomers PFRS l5 establishes a new five-step model that will apply to revenue arising from contracts with customers. Under PFRS 15, revenue is 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 eustomer. The principles in PFRS 15 provide a more structured approach to measuring and recognizing revenue.
The new revenue standard is applicable to all entities and will supersede all current revenue recognition requirements under PFRSs. Either a full retrospective application or a modified retospective application is required for annual periods beginning on or after January l, 2018. The Company is currently assessing the impact of PFRS I 5 and plans to adopt the new standard on the reouired effective date.
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Amendments to PAS 28, Measuring an Associate or Joint Ventwe at Improvements to PFRSr 2014 - 2016 Cycle)
Fair
Value (Pafi of Annual
The amendments clarifu that an entity that is a venture capital organization, or other qualifuing entity, may elect, at initial recognition on an investnent-by-investnent basis, to measure its investments in associates and joint ventures at fair value through profit or loss. They also clarily that if an entity that is not itselfan investrnent entity has an interest in an associate orjoint venture that is an inveshnent entity, the entity may, when applying the equity metlod, 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 orjoint venture, at the later ofthe date on which (a) the investment entity associate or joint venture is initially recognized; (b) the associate or joint venture becomes an investnent entity; and (c) the investment entity associate orjoint venture first becomes a parent.
The amendments should be applied retrospectively, with earlier application permitted. The Company has assessed that the adoption ofthese amendments 201E financial statements.
will not have any impact
on the
Amendments to P AS 40, Investment Property, Transfers of Investmenl Prcperty
The amendments clarif when an entity should nansfer 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 ofthe change in use. A mere change in management's intentions for the use of a property does not provide evidence of a change in use. The amendments should be applied prospectively to changes in use that occur on or after the beginning ofthe annual reporting period in which the entity first applies the amendments. Retrospective application is only permitted if this is possible without the use ofhindsight. Since the Company's current practice is in line with the clarifications issued, the Company does not expect any effect on its financial statements upon adoption ofthese amendments.
Philippine Interpretati on IFRIC-Z2, Foreign Currency Transactions and Advance Consideration The interpretation clarifies that, in determining tlre spot exchange rate to use on initial recognition ofthe related asset, expense or income (or part of it) on the derecognition ofa non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognizrs 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 a date of the transactions for each payment or receipt of advance consideration Entities may apply the amendments on a fully retrospective basis. Altematively, an entity may apply the interpretation prospectively to all assets, expenses and income in its scope that are initially recognized on or after the beginning of the reporting period in which the entity first applies the interpr€tation or the beginning ofa prior reporting period presented as comparative information in the financial statements ofthe reporting period in which the entity first applies the interpretation. The Company has assessed that the adoption 201 E financial statements.
ofthis interpretation will not have any impact
on the
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Efective beginning on or afier January I, 2019 o Amendments to PFRS 9, Prepayment Features with Negative Compensation The amendments to PFRS 9 allow debt instruments with negative compensation prepayment features to be measured at amortized cost or fair value through other comprehensive income. An entity shall apply these amendments for annual reporting periods beginning on or after January l, 2019. Earlier application is permitted.
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PFRS 16, Leases PFRS 16 sets out tlre principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to tle accounting for finance leases under PAS 17, Leases. The standard includes hvo recognition exemptions for lessees leases of 'low-value' assets (e.g., personal computers) and short{erm leases (i.e., leases with a lease term of l2 months or less). At the commencement date of a lease, a 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-us€ asset.
-
Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., 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 pa)rments). 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 classifo all leases using the same classification principle as in PAS I 7 and distinguish between two types of leases: operating and finance leases. PFRS
l6 also requires
lessees and lessors to make more extensive disclosures than under PAS 17.
Early application is permitted, but not before an entity applies PFRS 15. A lessee can choose to apply the standard using either a full retrospective or a modified retrospective approach. The standard's transition provisions permit certain reliefs. The Company is currently assessing the impact of adopting pFRS 16.
.
Amendments to PAS 28, Long-term Interests in Associates and Joint Ventures
The amendments to PAS 28 clarif, that entities should account for long-term interests in an associate orjoint venture to which the equity method is not applied using pFRS 9. An entity shall apply these amendments for annual reporting periods beginning on or after January I 2019. iarlier , application is permitted.
.
Philippine Interpretation IFRIC-23, [.Incertqinty over Income Tm Treatments
The interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application ofPAS l2 and does not apply to taxes or levies outside the scope of PAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatrnents.
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-6The interpretation specifically addresses the following: Whether an entity considers uncertain tax treatrnents separately
. ' . .
The assumptions an entity makes about the examination of tax heatrnents by taxation authorities How an entity determines taxable proflt (tax loss), tax bases, unused tax losses, unused tax credits and tax rates 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 morb other uncertain tax treatments. The approach that better predicts the resolution of the uncertainty should be followed. The Company is currently assessing the impact ofadopting this interpretation.
Defened efectivity ' Amendments to PFRS l0 and PAS 28, Sale or Contibution ofAssets between an Investor and its Associate or
Joint Venture
The amendments address the conflict between PFRS 10 and PAS 28 in dealing with the loss of conhol ofa subsidiary that is sold or contributed to an associate orjoint venture. The amendments clari! that a full gain or loss is recognized when a transfer to an associate orjoint venture involves a business as defined in PFRS 3, Bruizess Combinations. Any gain or loss risulting from the sale or contribution of assets that does not constitute a business, h-owever, is recogniied only to the extent ofunrelated investors' interests in the associate orjoint venture. On January 13,2016, the Financial Reporting Standards Council defened the orisinal effectrve l, 2016 ofthe said amendments until the Intemational Accounting Stindards Board (IASB) completes its broader review of the research project on equity accountiig that may result in the simplification of accounting for such transactions and of bther aspects o1 accouning fo, date ofJanuary
associates
4.
ald ioint ventures.
Summary of Significant Accounting policies Cash and Cash Eouivalents
Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investnents that are_ readily convertible to known amounts of cash with original maturities oftnrie (3) months or less and that are subject to an insignificant risk of changes in va'iue.
Financial Assets and Financial Liabilities Date ofrecognition The Company recognizes a financial assel or a financial liability in the statement of financial position when it becomes a pa4y to the contractual provisions ofthe instrument. Purchases orsales offinancial assets that require delivery of assets within the time frame established by regulation or convention rn the marketplace are recognized on the settlement date.
Initial recognition ofJinancial instruments All financial assots and financial liabilities
are recognized
initially at fair value. Transaction costs are
included in the initial measurement of all financial assets and fin.ancial liabilities, except for financial assets and financial liabilities measured at fair value through profit or loss (FVpLj.
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- tFinancial assets are classified into the following categories: finaacial assets at FVPL, loans and receivables, held-to-maturity (HTM) financial assets, or available-for-sale (AFS) financial assets. Financial liabilities are classified as either financial liabilities at FVPL or other financial liabilities. The classification depends on the purpose for which the financial assets were acquired or financial liabilities
were incuned and whether they are quoted in an active market. Management determines the classification of its financial assets and financial liabilities at initial recognition and, where allowed and appropriate, re-evaluates such designation at every reporting date. Financial instruments are classified as liabilities or equity in accordance with the substance of tlre conhactual arrangement. Financial assets and fnarcial liabilities are offset when there is a legally enforceable right to offset and intention to settle either on a net basis or to realize tle asset and settle the liability simultaneously. The Company's financial assets include financial assets at FVPL, loans and receivable and AFS financial assets and the fnancial liabilities include other financial liabilities. As of December 31, 2017 and 20l6,the Compaay has no HTM investments and financial liabilities at FVPL. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the company provides money, goods o. services directly to a debtor witl no intention oftrading the receivables. Loans and receivaLiis are recognized initially at fair value, which normally p€rtains to the billable amount. After initial measu..."nilo-, and receivables are carried at amortized cost in the statement of financial position. Amortizaiion is determined using the effective interest rate (EIR) rnethod, less allowance foi probable losses, ifany.
Amortized.cost is calculated by taking into account any discount or premium on acquisition and fees that are an integral part of the EIR. The amortization, if any, is included in the interesi income in profit or loss. Gains and losses are recognized in profit or loss when loans and receivables are derecognized or impaired, as well as through the amortization process. The company's loans and receivabres include cash and cash equivalents and receivables.
Financial assets at FVPL Financial assets at FVPL include financial assets held for trading purposes, derivative instuments, or those.designated by management upon initial recognition as at FtpL, subject to any of the following criteria: the de-signation eliminates or significantly reduces the inconsistent teatrnent that would otherwise arise from measuring tle assets or riabilities or recognizing gains or losses on them on a different oasls: or
the,assets are part of a group of financial assets which are managed and their performance are evaluated on a fair value basis, in accordarce with a documented risk management or investment
stratery; or the financial instrument contains an embedded derivative, unless the embedded derivative does not significantly modifo the cash flows or it is clear, with iittle or no analysis, that it would not be
separately recorded.
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-8Financial assets at FVPL are recorded in the statement of financial position at fair value. Changes in fair value are reflected in the profit or loss. Interest eamed or incurred is recorded as interest income or expense, respectively. Dividend income is recognized according to the terms of the contract, or when the right ofthe payment has been established. The Company's financial assets at FVPL include investnents in listed equity securities held for hading and investments in govemment securities classified under financial assets at FVPL. AFS financial assets at fair value through other comprehznsive income (FVOCD A-FS financial assets at FVOCI are those which are designated as such and are purchased and held indefinitely, and may be sold in response to liquidity requirements or changes in market conditions. AFS financial assets include investments in equity securities classified under the available-for-sale
financial assets.
After initial measwement AFS financial assets are measured at fair value. The unrealized sains and losses arising from the fair valuation ofAFS financial assets are excluded from reported eariings and are reported in the statement of financial position and in other comprehensive income presented separately in equity. When the security is disposed of, the cumulative gain or loss previously recognized in the statement of changes in equity is recognized in profit or loss. Where the Company holds more than one investment in the same security, these are deemed to be disposed ofon a first-in-first-out basis. The losses arising
from impairment of such investments are recognized in profit or loss.
The Company's AFS financial assets include quoted and unquoted shares ofstock. Other fnanc ial I iab
ilities
All financial liabilities
are initially recognized at the fair value of the consideration received less directly athibutable transaction costs. After initial recognition, other financial liabilities are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit and loss when the liabilities are derecognized or impaired, as well as through the amJrtization
process.
other financial liabilities are presented as current when these are expected to be settled within 12 months from the reporting date or the company does not have any unconditional right to defer settlement within l2 months from reporting date. otherwise, these are classified as noncurrent. The Company's other financial liabilities include accounts payable and accrued expenses (excluding
statutory liabilities).
Determinati on offair v alue 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 participans at the measurement date. The fair value measurlment is based on the presumption that the transaction to sell the asset or transfer the liability takes place eithel
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In the principal market for the asset or liabilitv. or In the absence ofa principal market, in the rnort
"du-t"g"ous
market for the asset or liability
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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 rninimizing the use ofunobservable inputs.
All
assets and liabilities for which fair value is measured or disclosed in the financial statements axe 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:
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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
.
Level 3
value measurement is directly or indirectly observable
-
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 tansfers 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 ofeach reporting period, Imoairment of Financial Assets The Company assesses at each reporting date whether a financial asset or group of financial assets is impaired. A financial asset or a group offinancial assets is deemed to be impaired if, and only i( there is objective evidence of impairment as a result of one or more events t}tat has occuned after the initial recognition of the asset (an incurred 'loss event') and that loss event (or events) has an impact on tle estimated future cash flows ofthe financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the borrower or a group of borrowers is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicate that there is measurable decrease in the estimated future cash flows, such as changes in arears or economic conditions that conelate with defaults.
Financial assets carried at amortized cost The carrying amount of the asset is reduced through the use of an allowance for impairment loss account. The amount of the loss shall be recognized in profit and loss. If, in a subsequent period, the amount of the impairment loss decreases, and the decrease can be related objectivily to an event occurring after the impairment was recognized, the previously recognized impairment lois is reversed. Any subsequent reversal of an impairment loss is recognized in profit and loss, to the extent tlat the carrying value ofthe asset does not exceed what would have been the amortizpd cost at the reversal date had there been no impairment recognized. AFS financial assets
In the case ofequity investments classified as AFS financial assets, objective evidence would include a significant or prolonged decline in the fair value of the investments below ir cost. Where there n evidence of impairment, tle cumulative loss, measured as the difference between the acquisition cost and the current fair value, less any impairment loss on the AFS furancial asset previousli recognized in profit or loss, is removed from other comprehensive income and recognized in piofit oi loss. Impairment losses on equifr investments are not reversed through the statemint of income. Increases in fair value after impairment are recognized directly in other comprehensive income
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-10Derecognition of Financial Assets and Liabilities asset (or where applicable, a part ofa group offinancial assets) is derecognized when:
A financial
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the rights to receive cash flows from the assets have expired; the Company retains the right 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,, arrang€ment; or the Company has transferred substantially all the risks and rewards of the asset, or has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control ofthe asset.
Where the Company has transferred the rights to receive cash flows from an asset or has entered into a pass-through arrangement and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control ofthe asset, the asset is recognized to the extent ofthe 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 carqring amount of the, asset and the maximum amount ofconsideration tlat the Company could be required to repay.
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or has expired. Investment ProDertv Invesfnent property includes parking slots that are held to be leased out under one or more operatlns Ieases. These properties are initially measured at cost, which comprises is purchase price and an! directly attributable expenditure. Directly attributable expenditure capitalized as part oftire investment properties' cost includes professional fee for legal services, property transfer taxes and other transaction costs less accumulated depreciation.
Investment property is derecognized when either it has been disposed of or when tle investrnent property is permanently withdrawn from use and no future economic benefit is expected from its disposal Any gains or losses on the retirement or disposal of an investment property aie recognized in profit or loss in the year of retirement or disposal. Transfers are made from investment property when, and only when, there is a change in use, evidenced by commencement of owner-occupation or commencement of development with a view to sell.
Operating Lease Company as a Lessor Leases where the Company does not transfer substantially alt the risks and rewards ofownership assets are classified as operating leases. Lease payments received are recognized in profit
income on a straight-line basis over the lease term.
ofthe or loss as
Capital Stock
Capital stock is measured at par value for all shares issued. Incremental costs incurred directly attributable to the issuance ofnew shares are shown in equity as a deduction from proceeds, net of tax. When the Company purchases its own capital stock (heasury sharos), the consideration paid, including any attributable incremental costs, is deducted from equity until the shares are cancelled, reissued or disposed Where such shares are subsequently sold or ieissued, any consideration received, net of any directly athibutable incremental transaction costs and the related tax effects is included in equrtv.
of
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Retained Eamings Retained eamings represent accumulated earnings of the Company less dividends declared and with consideration of any changes in accounting policies and other adjustrnents applied retroactively. The retained eamings ofthe Company are available for dividends only upon approval and declaration oftlre
BOD. Earnines Per Share (EPS) Basic earnings per share are computed on the basis of the weighted average number of shares outstanding during the year after giving retroactive effect for any stock dividends declared in the current year.
Diluted earnings per share, ifapplicable, is computed on tle basis ofthe weighted average number of shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion ofall the dilutive potential ordinary shares into ordinary shares. There are no dilutive potential cornmon shares that would require disclosure of diluted eamings per comrnon share in the financial statements. Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the income can be reliably measured regardless of whether the payment is being made. Revenue is measured at the fair value ofthe consideration received or receivable, taking into iccount contractually defined terms of payment and excluding taxes or duties. The Company has concluded that it is acting as principal in all of its revenue arrangements. The specific recognition criteria described below must also be met before revenue is recognized.
Dividend income Dividend income is recognized when the Company's right to receive the payment is established, which is generally when the BOD approves tJre dividend declaration. fnterest income Inter€st income is recognized as the interest accrues taking into account the effective yield on the asset. Seryice income Income from services is recognized when the services have been rendered. Rental income Rental income under noncancellable leases is recognized in the on a straight-line basis over tle lease terms or based on a certain percentage ofthe gross revenue ofthe tenants, as provided under the terms of the lease contract General and Administrative Exosnses
Expenses are recorded when administering the business.
incurred. General and administrative
expenses constitute costs
of
Income Tax Current tax Current tax assets and liabilities_for the current and prior periods are measured at tle amount expected to be recovered fiom or paid to the taxation authorities. The tax rates and tax laws used to co.put" tha amount are those that are enacted or substantially enacted by the reporting date.
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Defened 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. Deferred tax liabilities are recognized for all taxable temporary differences. Defened tax assets are recognized for all deductible temporary differences, carryforward of unused tax credits fiom 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 profrt will be available against which the deductible temporary differences, and the carry4orward of unused tax credits from excess MCIT and unexpired NOLCO can be utilized. The carrying amount of defened tax assets is reviewed at each reporting date ard reduced to the extent that it is no longer probable that sufticient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reportins date and are recognized to the extent that it has become probable that future taxable profit *itl utlo* th" deferred tax asset to be recovered.
Defened tax assets and liabilities are measured at t}re 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 ofa past event, it is probable that an outflow ofresources embodying economic benefis will Le 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 ratj that reflects current market assessments of tle time value ofmoney and, where appropriate, the risks specific to the liability. where discounting is used, tle increase in the provision due to the passage of time rs recognized as an interest expense. Provisions are reviewed at each reporting date and adjuited to reflect tle current best estimate.
Contingent liabilities are not recognized in the financial statements. They are disclosed unless the possibility ofan outflow of resources embodying economic benefits is remlte. Contingent assets are not recognized in the financial statements but are disclosed when an inflow of econoiic benefits is probable. Contingent assets are assessed continually to ensure that developments are appropriately reflected in the financial statements. If it has become virtually certain that an inflow of economic benefits will arise, the asset and the related income are recognizid in the financial statem€nts. Events After the Reportine Date Post year-end events up to the date of auditors' report tlat 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.
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5.
Signilicant 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 judgnrents, estimates and assumptions used in the financial statements are based upon management's evaluation ofrelevant facts and circumstances as ofthe date oftle Company's financial statements. Actual results could differ from such estimates. Judgnrents and estimates are contractually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the c
lrcumstances
,
Judgments In the process of applying the Company's accounting policies, management has made the following judgnents, 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 ofdeferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with future tax planning strategles.
The Company did not recognize defened tax assets amounting to P0.97 million and P0.98 mjllion as of December 3l,2017 and 2016, respectively (see Note l2). Management believes that it may not be probable that sufficient taxable income realized prior to their expiration.
will
be available against which the income tax benefits can be
l
Estimates and Assumotions
*t".pti""t
nt" kty the future and other key souroes of estimation uncertainty at the position date, that have a significant risk ofcausing a material adjustment to the statements offlnancial "".*rning carrying amounts ofassets and liabilities within the next financial year are discussed below. Estimation offair value of unquoted equity securities classified as AFS 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 ofDecember 31, 20l7 and 2016, the Company valued the unquoted equity securities classified as available-for-sale securities using the adjusted net asset method which is a combination ofthe market and income approaches. It involves directly measuring the fair value of the assets and liabilities ofthe investee company. Assets ofthe investee company consist mainly ofparcels of land for sale which is adjusted to its fair value. The fair value adjustments arising fiom changes rn fair value ofunquoted equity securities are fully disclosed in Note 8.
6.
Cosh and Cash Equivalents 2017
2016
F5.378.556
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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 ofthe Company and eam interest at the prevailing short-term placement rates.
Interest income eamed on cash in banks and cash equivalents amounted F0.12 million and P0.23million in2017,2016 and 2015, respectively.
7.
to
P0.10 million,
fnvestment 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:
Assets Cash and cash equivalents Financial assets at fair value through profit and loss
2017
2016
P923,957 22,044,497
P3,4t4,66r t4,997,486
8,$s,r3l
6,081,769
62,10l
25,958 24,5t9,874
Available for sale financial assets - sovemment securities Loans and
receivables
31.s65.686
Equity incipal fund Accumulated trust fund loss at beginning of year Trust fun4 income for the year Accumulated trust fund income at end of
(3,6r9,033) 7
(6,080,s16) 2.461.484
.065.57 4
619.032 P24.437.385
The assets, liabilities and performance ofthe fund are consolidated in the applicable accounts of Company for financial statement presentation purposes.
8.
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Financial Assets The Company's financial assets are summarized by measurement categories as follows: 2017 Cash and cash equivalents (Note 6) Receivables (Note 9) Financial assets at FVPL
AFS financial
assets
2016
F8,6sr,880
?rt,725,238
261,858
62,84s291
530,900,206
313,897 47,4s3,721 149,655,296
?209.148.152
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- l) Financial Assets at FVPL Details of financial.assets at FVPL consisting of listed equity securities follow: 2016
2017
Fair value Acquisition cost
P47,453,721 48,096,391
"62,845,29r 48,100,916
The net gain on fair value changes on financial assets at FVPL amounted to F15.39 million and P6.80 million for the years ended December 31,2017 nd2016, respectively, while the net loss on fair value chaages amounted to P12.25 million for the year ended December 31, 2015. The movements in financial assets at FVPL for the years ended December
3l follow: 2016
2017
*47,453,721
Balance at beginning ofyear
Additions
Failvalue gains recognized during the Balance at end
year
of
F40,650,199
4,522
15,387,048
6.803,522
AFS Financial Assets
AFS financial assets consist of quoted and unquoted shares of stock held for long-term investment purposes and are carried at fair value. The carrying values oftlese investments are as follows; Listed equity securities: PetroEnerry Resources Corporation (PERC)
2017
2016
p23,492,r02
?t5,982,332 5.591.957
Hermosa Ecozone Development Corporation
(rmDC)
506,888,702 Ie to HEDC
The movements in AFS financial assets for
t34,353,122
L
1<1
tle years ended December 3l follow:
Balance at
Additions
2017
2016
*149,655296
Plt2,094,759
2,478,543
Fair value
37.560.s37 P149.655
Movements in the net unrealized gains on AFS financial assets are as folJows:
Balance at beginning of year Unrealized gain recognized in other comprehensive Income
2011
20t6
*42,001,221
?4,440,684 37.560.53?
ililililffitffiiltililililtiltffit
_16-
Investment in HEDC
On January 31, 1997, the Company entered into a Project Shareholders' Agreement with five other companies led by lnvestment and Capital Corporation ofthe 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 ofDecember 3 1,2017 and20l6,the Company has outstanding subscriptions payable to IIEDC which amounted PI2.35 million. The subscriptions payable are due on demand (see Note 13). The investment in IIEDC is presented in the statement offinancial position at fair value net ofsubscription payable.
The fair value of investment in HEDC is determined using the adjusted net asset method wherein the assets of FIEDC consisting mainly ofparcels 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 31,2017 and 2016. This measurement falls under Level 3 in the fair value hierarchy. As a result ofthe valuation, the Company recognized unrealized gain on fair value changes of its investment in IIEDC amounting to P372.54 million and F34.30 million in 2017 and 2016, respectively, in other comprehensive income. Fair value measurement disclosures for the determination of fair value ofunquoted equity securities ar€ orovided in Note i4.
9.
Receivables
Dividends receivable Accrued interest receivable Rent receivable Advance to suppliers Receivable from EEDC (Note 13)
20t6
2017 P181,604 63,534
?162,768 34,550
r6,720
16,720
74,859 25.000
Dividend income earned on its investments amounted F8.25 million in2017,2016 and 2015, respectively.
to p0.29 million, F0.35 million
and
10. Other Income
Service income (Note 13) Rental income fNote I
20t7
20t6
2015
?267,857
?267,857
P267,857
84.480
Service income pertains to accounting services rendered by the company to FIEDC (see Note l3).
ilffi ilil uxffi ilililil
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Rental income pertains to rentals eamed from the two (2) parking slots owned by the Company which are classified as investment property (see Note l7). As of December 31,2017 and 2016, the carrying value of investment property follows: Cost
P207,598
Accumulated depreciation
(207,s98)
The t'air value ofthe investrnent property amounted to F600,000 to F700,000 and F500,000 per slot as ofDecember31,2017 utd2016, respectively. This has been determined on tlle basis of recent sales of similar properties in the same area as the investrnent property and taking into account the economlc conditions prevailing at the time the valuation was made. There are no related costs for the operations of tle investment property,
I
l.
General and Administrative Erpenses 2016 F318,750
20r7 Professional fees
F318,750
Stockholders' meeting expenses Stock listing maintenance fees
265,341 253,000
302,,149
265,660 259,513 t61,957
Stock transfer expenses IT services
Directors' fees Taxes and licenses
Advertising Ilsurance expense Miscellaneous
260,050
)) )a\
2015 P322,163 414,618 253,000 256,964 43,681
85,000 31,722 10,704
75,000 93,224 8,000
70,000 48,104
3,392
t7,393
7,362 t3,397 FI,440,389
13,409
6,853
P1,451,900 P1,326,412
I 1,100
12. Income Taxes The provision for income tax for the years ended December 31,2017 ,2016 and 2015 represents MCIT.
As of December 31,2017 and 2016, the Company did not recogrize 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 aeainst which the deferred tax assets caa be utilized prior to their expiration.
NOLCO MCIT
20t7 P3,t62213
P3,205,894
2t,t4l
zt,t94
2016
The details of unexpired MCIT and NOLCO are as follows: 2017
Year incurred 20t7 2016 2015
NOLCO Expirv Date ?7,047 7,047 7,047
P2t,t4l
P1,099,563 December31,2020 974,598 December31,2019 1,088,052 December31,2018 P3,1622r3
|il[|tililtffimil|frmilililililt
-
18 -
2016
NOLCO
MCIT
Year incurred
20t6
?7,047
Pq?4 501
2015
7,047
1,088,052
7,100
20r4
?21,194
r,r43,244
Exoirv Date December 31, 2019 December 31, 2018 December 31, 2017
P3,205,894
Rollforward of NOLCO follows: 2016 ?3,729,208 974,598
2017 Balances at beginning of year
Additions Expirations Balances at end
P3,205,894 1,099,563
(r,r43,244')
ofyear
(1,497,9t2')
*3,162,213
F3,205,E94
Rollforward of MCIT follows:
Balances at beginning ofyear
Additions Expirations Balances at end
2017
2016
|2r,r94
F20,839
7,047
7,04'7
(7,100)
ofyear
(6,692)
Pzl,l4l
Pzr,t94
As of December 31, 2017, the Company F61.03 million which pertains to the setup
recognized defened tax liability amounting to of l5% defened tax on unrealized gains on untraded shares
ofstock classified as AFS financial assets. The reconciliation of the income tax computed at the statutory tax rate to the provision for income tax as shown in the statements ofcomorehensive income
follows: 2016
2017
Provision for income tax at statutory tax rate 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 FVPL Nondeductible expenses Provision for income tax
?4,403,614 336,916
(28,9st (88,414)
(4,616,114\ P7,047
2015
P1,892,268
e2,843,697)
299,269
333,619
(37,413)
(106,020)
(70,321) (2,47s,234)
(2,04t,0s7)
3,676,1t8
P7
,047
1,386,562 P7,047
Republic Act No.10963 or the Tax Reform for Acceleration and Inclusion Act (TRAIN) was signed into law on December 19,2017 and took effect January 1, 2018, making the new tax law enacted as of the repoting date. The provisions of Section 39(B), wherein, a final tax at t}re rate of I 5% is hereby imposed upon the net capital gains realized during the taxable year from the sale, barter, exchange or other disposition ofshares ofstock in a domestic corporation, except shares sold, or disposed ofthrough the stock exchange have an impact on the financial statement balances as of December 31,2017 .
lililil
fl
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-19Other than the provision mentioned above, the management assessed that the TI(AIN
will
not have any
significant impact on the financial statement balances as ofDecember 31,2017.
13. Related Party Transactions Related party relationship exists when one party has the ability to oontol, 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 tle reporting enterprises and its key management personnel, directors, or its shareholders. In considering each related party relationship, attention is directed to the substance ofthe relationship, and not merely the legal form.
The Company in its regular conduct ofbusiness has entered into the following transactions with related parties consisting of reimbursement ofexpenses and management and accounting services agre€ments.
The Company's financial statements include the following amounts resulting from transactions with related oarties: 2017
Accountt
of trrnsrction Nrturc
Amounu Volume
PiYrbl.
rrd
rccrucd
axpGnsGs
Terms
Conditions
AIfilirte:
PERC
Nor|interest berring, pryrble when duc i71,625 end demandrblc Unsecured
Reimbursemcnts ?71,625 Accounting
HEDC
Services
fNote
l0)
267.851
1339,482
-
- do
-
- do
-
*1t,625
20t6
of Amount transaction Volumc Naturc
Re{eivables (Note
9)
Terms
Conditions
Affiliatc: Nonintcrcst bcadng,
PERC
Reimburscmcnts ?11.327
F
payable when
due
Unsecured,
ard dcmandablc no impairmcnt
Accounting Services
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 3 l, 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.
ilffiil|ilflruilffiilHt[iltiltx
-20 -
14. Financial Instruments Catesories and Fair Values of Financial Instruments The methods and assumptions used by the Company in estimating the fair values of the financial instruments are: Cash and cash equivalents and receivables
Due to the short-term nature of the instruments, carrying amounts approximate fair values as of the reporting date. Governmenl securities Fair values are generally based on quoted market prices at reporting date. This is under Level I category
ofthe fair value hierarchy. Equity securities
For quoted equity securities, fair values are based on published quoted prices. This is Level I category ofthe fair value hierarchy.
under
For unquoted equity securities, fair values are determined using the adjusted net asset method which involves directly measuring the fair value of the assets and liabilities of the investee company. This measurement falls under Level 3 in the fair value hierarchy. Accotmts 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).
Descriotion of sisnificant unobservable inouts to valuation: The significant unobservable inputs used in the fair value measurement categorized within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 3l December 2017 and 2016 rre shown below:
AFS
financial
assets
in
Valuation Significant technique unobservable inputs Adjusted net asset Price per square meter F500 -
2017
Range
F4,000
2016 F500 - F600
metJrod
unquoted
eouitv shares
The appraised value of the land was determined using the market approach which is a valuation technique that uses prices and other relevant information generated by market transactions involving identical or comparable assets. Net adjustment factors arising from external and internal factors (i.e. location, sizelshape/terrain, and development) affecting the subject properties as compared to the market listing ofcomparable properties ranges from -5% 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 retum t]le fair value ofthe AFS financial asset.
The increase in price per square meter in 2017 is athibutable to ongoing project developments in the property and the recent sale to a third party in the property itself that would represent the highest and best use ofthe property.
rffi|il|illflilililtiltiltilililtilililil||]
-
zt
-
Financial Risk Manaeement Objectives and Policies The Company's financial instruments comprise cash and cash equivalents, receivables, financial assets at FVPL, AFS frnancial 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 exercises oversight role in managing tlese risks.
Financial Risks The main financial risks arising from the Company's financial instruments are liquidity risk, market risk and credit risk.
Liquidity risk Liquidity risk is the risk that the Company is unable to meet its financial obligation when due. The Company has substantial 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 included in AFS invesfnents amounted to F494.5 million and F122.0 million, net of subscription payable, as of December 31, 2017 and 2016, 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 ofcash and cash equivalents deemed sufficient to finance operations and to mitigate the effeots of fluctuation in cash flows. The Company's accounts payable and accrued expenses are all settled on payable are payable on demand and are non-interest bearing.
a
monthly basis. Subscriptions
The tables below summarize the maturity profile of the Company's financial assets and liabilities as ofDecember 31, 2017 and 2016 based on contractual undiscounted payments. 2017
one yerr
Within On
dem.nd
More thrn one
yerr
&!!l
FinN|lcirl rssets assets at FVPL: Equity securities
Finrncirl
*62,84s29r
?62,E45291
8,65t"880
8,651,E80
t6,720 63534
16,120 63,534
Loens and receivrble,t:
Crsh rnd crsh equiv!lcnts Receivsblcs: Rcnt receivrble Accrucd intcrest rcceivrble Dividendi receivrble
HEDC* lnvqrtmcnts in governm€nt
181,604
181,604
AFS tinrncial rssrts: Listed equity securitie,!: PERC Bcnguet Corporation Nonlisted equity security:
sccurities
11511,425
23,492,102
23,492,102
4J38,15s
4J38,r55
s06,tEt,7o2
506,888,702
E,535,f31
8,535,131
181,604 s43,254,090 6!l,q!,119
Firrncirl lirbilities Accounts pryrble ard rccrucd
expenses pryablet"
Subscriptions
t*
710'?54 12J53,884 13,064,638 1t7
710,751
f2p53'8t4 13,064,638
Pl8
of subscription pdyable to HEDC omouhtihg to P I 2 ,3 5 3,884. Presetted at q dedLctionfrom AFS for financi\l staletuent ptesenlation purposes.
l|ffirilflilru|il[ililfirfrr]
2016
Within one On
Finrncirl
HEDC* Invcstments in govcmment
one year
Total
?47,453;721
?47,453,721
I t;725,238
I t,725,238
25,000
25,000
t6;720
t6,720
34,550
34,550
t62;768
-
payable*r
162,'168
expenses 563,640 12,353,884
t5,982,332
15,982,332
{
-
securities
Accounts payablo and accrued Subscriptions
*
More than
yeu
assets
Financial assets at FVPLi Equity securities Loans and receivables: Cash and cash equivalents Receivables: Receivable from HEDC Rcnt receivablc Accrued interest rcccivable Dividends receivablc AFS financial assets: Listcd oquity securities: PERC Bcnguct Corporation Nonlisted cquity securityl
r
demand
591 q57
-
134,353,122
-
-
<
aol o<?
134,353,122 6,081,769
6,081,'769
563,640 12,353,884
Gross ofsubscription payable to HEDC anounting to P12,353,884. * Presented at a deduction fton AFS for lnancial slatement presenlation purposes.
Market risk Market risk is the risk of loss on future earnings, on fair values or on future cash flows that may result frorn 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 macroeconomlc and entity-specific factors which could directly or indirectly affect the prices of these instruments. In case of an expected decline in its portrolio of equity securities, the Company readily disposes or trades the securities for replacement with more viable and less risky invesknents. The analysis below is performed for reasonably possible change in the market price of quoted shares classified as financial assets at FVPL, with all other variables held oonstant, showing the impact on income before tax:
Increase (decrease) in market price 2017
2016
Effect on income before tax +6,8Vo ?4,277,905 (4,277,905\ -6.EVo +2Yo
F869,645
-2Yo
(869,64s)
tffi[|ilul[!|ffiilil|Nffiilililil|t!fi
The table below demonstrates the sensitivity to a reasonably possible change in the market price of quoted shares classified as AFS financial assets, with all other variables held constan! showing the impact on equity:
Increase (decrease) in market price 2017 2016
Effect on equitv *1,524,451
+5o/o -So/o +tyo
-r%
(1,524,'451) P241,197
(20r,197)
The percentage of increase and decrease in market price is based on the movement in the Philippine Stock Exchange Lrdex from beginning to end ofthe 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 fiom cash and cash equivalents, receivables, financial assets at FVPL and AFS financial assets, tle 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. As of December 31,2017 nd 2016, 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 | , 2017 and 2016: 2016
2017
Financial assets at FVPL:
Equity securities
*62,845,291
P47,453,721
Loans and receivables Cash and cash equivalents
Receivable from FIEDC Rent receivable Accrued interest receivable Dividend receivable
t1,725,238
8,651,880
25,000
t6,720 34,550
16,720 63,534 181,604
t62,768
23,492,102
15,9E2,332
4"338,155 494,534,818 8,535,131
5,591,95'l r21,999,238
AFS financial assets: Listed equity sesurities: PERC Benguet Corporation
Nonlisted equity security: FIEDC+ Investments in government securities
F602,659,23s
t
ililfl
6,081,769 P209,073,293
ililililtffi lilxrilililililt ililil [t
at
The tables below show the credit quality by class of asset based on the Company's internal evaluation as of December 31.2017 and2016. 2017
Loans and receivrbles; Cash in bank Shorl-t€rm it|vestmcnts Receivrbles: Rent receivable Accrued interest receivable Dividend receivable
Neither prst due ror impaired Iligh grade Standard crNdc
and impaired
Total
?-
P_
F5J78,5s6 3,273324
P5J7E,556
PNst du€
3,273324 t6,720 63,534 1E1,604
16,120 63,s34 l Et,604
62,845,291
62,84s29r
23,492,t02
23,492,r02
Financid
assets at FVPL; Equity securitics
AFS financirl assets: PERC Benguct Corporstion
4J38,r5s
4J3E,t55
EEDC*
494,534,S1;
494,534,tr8
Invcstments in government
securities
8.535.131
*10E,124,411 '
E,535,131
P-
P494,534,818
P602.659135
Net ofsubscription payable to HEDC amounting P12,353,884.
2016 Neither past due nor impaired
Hieh Cash in bank Short-term investments Receivables: Receivable from HEDC Rent receivable
Accrued interast receivable Dividend receivable Financial assets at FVPL: Equity securities
srade
Standard
srade
F-
P6,013,893 5,7
tt,345 25,000
t6,720 34,550 162,?68
47,4s3,721
Past due
and
imoaired
F-
Total F5,013,893 5,?11,345 25,000 16,720 34,550
t62,768 47,453,721
AFS financial assets: PERC Benguet Corporation
t5,982,332
{ {or
HEDC* Investrnents in govemment
securities
t< oet 21t
-
o57
121,999,238
-
<
<ol o<?
t21,999,238
6,081,769
6,081.769
FE?,0?4,05s Ftrr, * Nel ofsubscription payable to HEDC amounting P 12,j53,884.
The Company uses the following criteria to rate credit quality:
Class High Grade
Standard Grade
Description
Financial assets that are deposited inlor hansacted with reputable banks and other counterparties which have low probability of insolvency. Financial assets ofcompanies that have the apparent ability to satisfo its obligations in full.
|[fl]tiltuxNfi
ilililtililtffi ilntililill
-25 -
Fair Value of Financial Instruments The following tables show financial instruments recognized at fair value as of December 31,2017 and 2016, analyz.ed between those whose fair values are based on:
l.
Quoted prices in active markets for identical assets or liabilities (Level l); Those involving inputs other than quoted prices included in Level I that are observable for the asset or liability, either directly or indirectly (Level 2); and Those with inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
2. 3.
2017
Level
Financial assets: Financial assets at FVPL: Equity securities AFS financial assets:
1
Level2
Level
PERC 23,492,102 Corporation 4,33E,155
Fair Value
P-
F
?62,845,291
3
?62,E45,291
Benguet
-
HEDC* Investments in government
494534,E18
securities8,535,l3l--8,535,131 P99,2,10,679 P- P494,534,E18
* Net ofsubscription payable to HEDC amounting
Level I Financial assets: Financial assets at FVPL: Equity securities AFS financial assets: PERC Benguet Corporation
P 12,3
'
?593,745,497
53,884,
20r6 Level2
Level
Fair Value
3
F-
?47,453,721
ts,982,332
-
5,591,957
12r,999,238
HEDC* Invesgnents in govemment securities
23,492,t02 4338,155 494,534,818
6,081,769
Ptslogltg
?-
P47,453,721
t5,982,332 < <ol o{7 121,999,238
6,08t,769
P12t999fi
Nel ofstbscription payable to HEDC amounting P12,35j,884.
There were no transfers between Level I and Level 2 fair value measurements and no transfers into and out oflevel 3 fair value measurements in 2017 and 2016.
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 ofchanges in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares.
ffimilHHffiililil|fllffi|
-26
_
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 AFS
financial assets and retained eamings (deficit). The Company has no extemally imposed capital requirements as ofDecember 31,2017 and2016. The lable below demonstrates the debt-to-equity ratios of the Company as of December 31,2017 md
2016: 2016
2017
Total liabilities: Total equity:
Pt63,000,000
Capital stock
Net unrealized gains on AFS financial assets Retained eaminss
359,742,437
F163,000,000 42,001,221 4,409,426 P209,410,647
19,081,093
Ps41,823,530 Debt-to-eouitv ratio
0.0013:
I
0.0027:l
There were no changes in the objectives, policies or processes for the years ended December 31, 2017 and 2016. The Company has declarable dividends amounted F4.34 million as ofDecember 31,2017.
The Company's track record of capital stock is as follows: Number of sharcs
Listing dale - May 7, 1974 Add (deduct): 50% stock dividend 60% stock dividend l:2.400 stock rights offering l:2.125 stock rights offe ng l5% stock dividend Change in par value fiom F0.01/share !o
r€gistered
Issu€/ olTer price
ofSEC approval
Date
10,000,000,000 F0.0l/sharc November 5,
hold€rs as
ofyear-end
1973
5,000,000,000 9,000,000,000 10,000,000,000 16,000,000,000 7,500,000,000
0.01/share November 27, l9El
0.0l/share
larlluary20,1997
F1.00/share (56,925,000,000)
(412,000,000) l/share
August 14, 1997 October 5, 1998
Quasi-reorganization
Number of
0.0l/share
October 31, 1990 September 28, 1992 0.0l/share February 8, 1994
0.0l/share
4,941
December 31, 2010 Add (deduct); Movement
163,000,000
December 3l, 2011 Add (deduct):
163,000,000
December 31. 2012 Add (deduct): Movement
163,000,000
4,747
December3l,2013 Add (deduot); Movement December 31,2014
163,000,000
4,818
Movement
Add (deduct):
Movemont
4,903 (156) 71
-
Q2)
-
4,786 (28)
163,000,000
December3l,20l5
163,000,000
Add (deduct): Movement Decembcr 31, 2016 Add (deduct): Movement
163,000,000
December3l,2017
-
163,000,000
4,7 58 4,7 58
-
-
-
(41)
4,7t7
riltil|ltrffisillffl[NiltutI
-27 -
16. Basic and Diluted Earnings Per Share The computations ofthe Company's basic earnings per share are as follows:
(loss)
rfrare
2016
2017
Net income Weighted average number B asic/Diluted eamings (loss) pe.
?14,671,667 ?6,300,512
ofshares 163,000,000 163,000,000 PO.Og00l
2015 (P9,486,038) 163,000,000
P0
The Company has no potentially dilutive common stock in 2017,2016 and2015.
I
7. Lease Commitments Company as lessor The Company has entered into cancellable lease agreements as a lessor with terms ofone (l) year. The leases contain renewal options and a clause enabling annual upward revision ofthe rental charges based on prevailing market conditions. The related rent income derived from this transaction included urrder
"Other income" amounted to F84,480 in 2017 and 2016 (see Note receivable as of December 31,2017 and 2016 amounte.d to P33,E98.
l0).
Future minimum lease
till[tilil|||milffi[ffi1ililil1]
arft JLt Building
, U a better
co Avenue City phrtrpprnes
syc,p Gorfes Velayo & 6760 Ayala 1226 MakaU
0307 ey corn/ph Telr (632) 891
BoA/PRc Reg. No oool
Fax
December 14.2015. valid untrl December31.2O18 SEC Accredrtation No 0012-fR 4 (Group A), November tO. 2015. vatid until Novomber 9. 2018
(632)8190872
II{DEPENDENT 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 3 |,2017 , on which we have rendered the attached report dated April I I, 2018.
In compliance with Securities Regulation Code Rule 68, As Amended (201 l), we are stating that the above Company has two thousand one hundred forty one (2,l4l ) stocklolders owning one hundred (100) or more shares.
SYCIP GORRES VELAYO & CO.
0-,^/.^
cqJ
Ana Lea C. Bergado Partner
CPA Certificate No. 80470 SEC Accreditation No. 0660-AR-3 (Group A), March 2,2017,valid until March l, 2020 Tax Identification No. 102-082-670 BIR Accreditation No. 08-001998-63-201 8, February 14,2018, valid until February 13,2021 PTR No. 6621232, January 9, 2018, Makati City
April I l, 2018
illtililtillil]uililillilllllllilillllilllllllllillillll A m€6b€r
rim ot Emsi & Youne Glob.lLimirod
sGv
Sycrp Go,res VelayoE 6760 Ayala Avenue 1226 MakaliCity
Buildino a better
Co
PhrliDDines
workind world
Te1
{632)891
Faxr (632) 819
eycom/ph
o3o7 0872
AOA/PRC Reg No 0001, December 14. 2015, valid until Decomber 31, 2018 SEC Accreditation No 0012'FR-4 (Group A), November 10 2015, vald Llnlil November 9,2018
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, 2017 and2016 and for each ofthe three years in the period ended December 3 l, 201 7, included in this Form l7-A and have issued our report thereon dated April 11, 2018. 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 ofthe Company's management. These schedules are presented for purposes of complying with the Securities Regulation code Rule No. 68, As Amended (201 l) and are not part ofthe basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit ofthe 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.
kt#;S;^'f#rL Partner
CPA Certificate No. 80470 SEC Accreditation No. 0660-,4R-3 (Group A), March 2,2017, valid until March 1,2020 Tax Identification No. 102-082-670 BIR Accreditation No. 08-001998-63-2018, February 14,2018, valid until February 13,2021 PTR No. 6621232, January 9, 2018, Makati City
Aoril I l. 2018
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SEAFRONT RESOURCES CORPORATION INDEX TO FINA}{CIAL STATEMENTS AND SI]PPLEMENTARY SCHEDT]LES SEC FORM T7.A
FINANCIAL STATEMENTS Statement of Management's Responsibility for Financial Statements Report of Independent Auditors' Report Statements ofFinancial Position as at December 31,2017 and 2016 Statements ofComprehensive Income for the years ended December 3 l, 2017,2016 and 2015 Statements ofChanges in Equity for the years ended December 31, 2017,2016 and 2015 Statements ofCash Flows for the years ended December 31, 2017,2016 and 2015 Notes to Financial Statements
STIPPLEMENTARY SCHEDULES Report of Independent Auditors' on Supplementary Schedules Schedules Required under SRC Rule 68-E
A. B.
Financial Assets Amounts Receivable from Directors, Offrcers, Employees, Related Parties, and Principal Stockholders
C.
(Other than Related Parties) Amounts Receivable from Related Parties which are Eliminated dwing the Consolidation of Financial
D. E. F. G.
H.
Statements
Intangible Assets - Other Assets Long-term Debt Indebtedness to Related Parties Guarantees of Securities of Other Issuers Capital Stock
Additional Components Schedule of Financial Soundness Indicators Reconciliation of Retained Eamings Available for Dividend Declaration Schedule
ofall the effective standards and interpretations under PFRS
Map of Relationship of the Companies within the Group
as
ofDecember 31, 2017
SEAFRONT RESOURCES CORPORATION SUPPLEMENTARY INFORMATION AND DISCLOSURES REQUIRED ON SRC RULE 68 AS AMENDED DECEMBER 3T.2017
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 '?art I" and *Part II", respectively. It also prescribed the additional information and schedule requirements for rssuers ofsecurities to the public. Below are the additional information and schedules requhed by SRC Rule 68, as Amended (201l) that are relevant to the Company. This information is presented for purposes of filing with the SEC and is not required part ofthe basic financial statements. Schedule A. Financial Assets Below is the detailed schedule ofthe Company's financial assets as ofDecember 31,2017: Number Shares
of
or
Amount Shown in the
Principal
Name oflssuing Entity and Association of Each Issue
of Bonds and Notes Amount
Statement
of
Financial
Income Received and
Position
Accrued
Financial assets at FVPL Farritrr Qaarrririac.
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. EEI Corporation Empire East Land Holdings, lnc. BDO-Unibank Inc. House of Investments, Inc. lnterport Res.-lRC Properties lnc. Petron Corp. PLDT Company
PLDT Series X
5,000 13,000
3,756,788 I,1 18
t28,193 t7,229 49,100 150,000 25,000 80,000
South China Resources Inc. Arthaland Corp. Waterfront Phil. Inc. Resources
|,134,770 5,717,408 185,729 96,727
s82,000 9?,000 36,400
3't2,500
4,470,000
?'8,200
18,330 54,447 18,282,240
))z 2,484,000 125,000 59,400 50 700 1,980
RCBC
P23,850 449,800 8,565,477
r00,000 152,250 30,000
3.613.852
92,500 544,698
P_ t7 ,293 10,956
58,436 16,884 14,250
2,371
398 161,460
{
q40
1,400
74,000 7,000
2,400
sq'l
1,091
93,000
t't!
I Oq
137
,025
28,800 497
Number Shares
Name oflssuing Entity and Association Each Issue
of
of or Amount Shown
Principal Bonds and
in the
Amountof Statementof
Notes
Financial
Income
Received and
Position
Accrued
Available-for-sale securities Debt equities
Philippine Gbvernment Quoted: Benguet
Corporation
PetroEnergyResourcesCorporation Unquoted: Hermosa Ecozone Development
Corporation
F8,535,131
2,507,604 3,851,164 6,358,768
6,358,768
F-
4,338,155
23,492,102 27,830,257
494,534,8t8
F530,900,206
F:
The fair value for financial instruments traded in aotive markets at the reporting date is based on their quoted market price without any deduction for hansaction costs. For securities in which cunent bid and asking prices are not available, the price ofthe most recent transaction provides evidence ofthe current fair value as long as there has not been a significant change in economic circumstances since the time of the ransacuon.
For unquoted financial securities, the most recent sales transaction was used as the basis for determining the fair value as of December 3 1 , 20 1 7 . Schedule B. Amounts Receivable from Directors. Officers. Emoloyees. Relate.d Parties and Princioal Stockholders (Other than Related Parties) The Company has no outstanding receivables from its directors, officers, employees, related padies and principal stockholders as of December 3 1, 201 7. Schedule C. Amounts Receivable from/Pavable Consolidation of Financial Statements
to Related Parties which are Eliminated durins
Not applicable. Schedule D. Intangible Asset The Company has no intangible assets as of December 31,2017, Schedule E. Lone-term Debt The Company has no outstanding long-term debt as ofDecember 31, 2017. Schedule F. Indebtedness to Related Parties (Long Term Loans from Related Companies) The Company has no long-term indebtedness to related parties as of December 31, 2017. Schedule G. Guarantees of Securities of Other Issuers The Company does not have guarantees of securities of other issuers as of December 31, 2017.
the
-J-
Schedule H. Capital Stock Number sharcs
and
of
issued
outstanding
of sharcs
Numbcr
Titlc
ofissue
Common
as
Number
of
Sharcs rcsorvod for
options,
shown warants,
Number
of
held Directors, rclated officers and parties cmployecs 30,469,858 652,990
under related conversion sharcs by balance shoet and
authorized caDtion
Shares 388,000,000 163,000,000
other rights -
Others 131,87'1,152
SEAFRONT RESOURCES CORPORATION SCHEDULE OF FINANCIAL SOUNDNESS INDICATORS AS OF DECEMBER 31,2017 AND 2016 F inanci al S otmdne s s Indic ators
Below are tlre financial ratios that are relevant to the Company for tlre years ended December 31,2017 and 2016: Financial ratios
2017
Curent
Current ratio
assets
20t6 .02:l
102.23':1
107
0.1023:1
0.0027:1
1.1139:1
1.0027:l
0.0900:1
0.0387:l
Current liabiliti€s Debt to assets
Total debt Total assets
Asset-to-equity ratio
Total assets Total equity
Earnings per share
Net income Weighted average no. of shares
Price eamings ratio
Closing price Eamings per share
N/A
N/A
Relrm
Net income
N/A
N/A
N/A
N/A
N/A
N/A
on revenue
Total revenue Long-term debt to equity
ratio
Long-term debt
Equity
EBITDA to total interest
oaid
EBITDAT Total interest paid
tEarnings before interest, taxes, depreciation and amortization (EBITDA)
SEAFRONT RESOURCES CORPORATION RECONCILIATION OF RETAINED EARNINGS AVAILABLE FOR DIVIDEND DECLARATION DECEMBER 3I,2OI7
Unadjusted retained earnings, beginning Unrealized fair value adiustrnents (marked-to-market) Adiusted retained earninss. besinnins
P4.409.426
Net income (loss) during the period closed to retained eamings
14,671,667
Add: Non-actuaVunrealized income net oftax Less: Non-actuaVunrealized income net oftax Fair value adjustments (mark-to-market) Impairment loss on available-for-sale financial assets Net income actually incurred during the
year
642,673
5'052'099
(15,3S7,048)
(715J81)
Less: Dividend declarations during the year
Total retained earninss available for
dividends
P4J35'71E
SEAFRONT RESOURCES CORPORATION SCHEDULE OF ALL THE EFFECTIVE STANDARDS AND INTERPRETATIONS UNDER PFRSs AS OF DECEMBER 31. 2017 Below is the list of all effective PFRS, Philippine Accounting Standards (PAS) and Philippine Interpretations oflnternational Financial Reporting Interpretations Committee (IFRIC) as of December 31. 2017:
Fram€work for the Preparation and Presentatiotr of Financial Statements ConceDtual Framework Phase A: Obiectives and oualitative characteristics PFRSS Practice Statem€nt Management Comm€ntary
Philippine Financial Reporting Standards PFRS
I
(Revised)
First-time Adoptjon of Philippine Financial Reporting Standards
Amendments to PFRS I and PAS 27: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate Amendments to PFRS time AdoDters
l: Additional
ExemDtions for First-
Amendment to PFRS l: Limited Exemption from ComDaralive PFRS 7 Disclosures for Fint-time AdoDters Amendments to PFRS l: Severe Hlperinflation and Removal of Fixed Date for First-time AdoDters Amendments to PFRS PFRS 2
l:
Govemment Loans
Share-based Payment
Amendments to PFRS 2: Vesting Conditions ard Cancellations Amendments to PFRS 2: Group Cash-settled Share-based Payment Transactions
ImDrovement to PFRS 2: Definition ofvestine Condition Amendments to PFRS 2: Classiflrcation and Measurement Share-based Palment Transactions PFRS 3 (Revised)
Business Combinations
Amendment to PFRS 3: Accounting for Contingent Consideration in a Business Combination Amendment to PFRS 3: Scope Exceptions for Joint ArTangements
PFRS 4
Insurance Confacts
Amendments to PAS 39 and PFRS 4: Financial Guarantee Contracts PFRS 4
Amendment to PFRS 4: Applying PFRS 9, Financial
(cont.)
Insfuments, with PFRS 4
of
PFRS 5
Noncurrent Assets Held for Sale and Discontinued Operations
Amendment to PFRS 5: Changes in Methods ofDisposal
PFRS 6
Exploration for and Evaluation of Mineral Resources
PFRS 7
Financial Instuments: Disclosures Amendments to PAS 39 and PFRS 7: Reclassification Financial Assets
of
Amendments to PAS 39 and PFRS 7: Reclassificarion Financial Assets - Eflective Date and Transition
of
Amendments to PFRS 7: Improving Discloswes about Financial Instruments
Amendments to PFRS 7: Disclosures - Transfers ofFinancial Assets Amendments to PFRS 7: Disclosures - Offsettins Financial Assets and Financial Liabilities Amendments to PFRS 7: Mandatory Effective Date ofpFRS 9 and Transition Disclosures PFRS 7: Financial Insftuments: Disclosures - Servicins
lontracts q.mendment to PFRS 7: Applicability of the Amendments to )FRS 7 to Condensed Interim Financial Statement
PFRS 8
Operating Segments Amendments to PFRS 8:Aggregation of Operating Segments and Reconciliation ofthe Total ofthe ReDortable Se8ments'Assets to the Entity's Assets
PFRS 9
Financial Instruments Amendments to PFRS 9; Mandatory Effective Date ofpFRS 9 and Transition Disclosures
PFRS IO
Consolidated Financial Statements Amendments to PFRS l0: Investment Entities Amendments to PFRS l0: Sale or Contribution ofAssets between an Investor and its Associate or Joint Venture Amendments to PFRS l0: Applying the Consolidation Exception
PFRS IT
Joint Arrangements Amendments to PFRS I l: Accounting for Acquisitions Interests in Joint Operations
of
-3 -
PFRS 12
Disclosure of Interests in Other Entities Amendments to PFRS 12: lnvestnent Entities Amendments to PFRS 12: Investment Entities: Applying the Consolidation Exception Amendments to PFRSI2: Clarification ofScooe ofthe Standard
PFRS 13
Fair Value Measuement Amendment to PFRS 13: Portfolio Excertion
PFRS 14
Regulatory Deferral Accounts
PFRS 15
Revenue from Contracts with Customsrs
PFRS 16
Leases
Philippire Accounting Standards PAS
I
(Revised)
Presentation of Financial Statements
Amendment to PAS
l: Capital Disclosures
Amendrnents to PAS 32 and PAS t: Punable Financial Instruments and Obligations Arising on Liquidation Amendments to PAS I : Presentation of Items of Other Comprehensive Income or OCI Amendments to PAS
l:
Discloswe Initiative
PAS 2
Inventories
PAS 7
Statement of Cash Flows
Amendments to PAS 7: Disclosue Initiative PAS 8
Accounting Policies, Changes in Accounting Estimates and Errors
PAS TO
Events after the Reporting Date
PAS
II
PAS 12
Construction Contracts Income Taxes Amendment to PAS l2 - Deferred Tax: Recovery Underlying Assets
of
Amendments to PAS 12: Recognition of Deferred Tax Assets for Uniealized Losses PAS 16
Property, Plant and Equipment
Amendments to PAS l6: Clarification ofAcceotable Methods of Depreciation and Amonization Amendments to PAS 16, Property, Plant and Equipment Bearer Plant PAS 16
(cont.)
Amendment to PAS l6: Revaluation Method - proDortionate Restatement of Accumulated Depreciation and Amortization
PAS 17
Leases
PAS 18
Revenue
PAS T9
Employee Benefits
(Revised)
Amendments to PAS l9: Defined Benefit Plans - EmDlovee Contributions Amendment to PAS 19: Regional Market Issue Regarding Discount Rate
PAS 20
Accormting for Government Grants and Disclosure Govemment Assistance
2I
The Effects ofChanges in Foreign Exchange Rates
PAS
of
Amendment: Net Investment in a Foreign Operation PAS 23 (Revised)
Bonowing Costs
PAS 24
Related Party Disclosures
@evised)
Amendment to PAS 24: Key Management Personnel
PAS 26
Accounting and Reporting by Retirement Benefit plans
PAS 27
Separate Financial Statements
(Am€nded)
Amendments to PAS 27: lnvestment Entities Amendments to PAS 27: Equity Method in Separate Financial Statements
PAS 28
(Amended)
Invesunents in Associates and Joint Ventures
Amendments to PAS 28: Sale or Contribution ofAssets between an Investor aDd its Associate or Joint Venture Amendments to PAS 28: Investment Entities: Applying the Consolidation Exceotion Amendments to PAS 28: Long-term Inierests in Associates and Joint Ventures
PAS 29
Financial Reporting in Hyperinflationary Economies
PAS 32
Financial Instuments: Disclosure and presentation Amendments to PAS 32 and PAS l: Puttable Financial Instruments and Obligations Arising on Liquidation Amendment to PAS 32: Classification of Rishts Issues Amendments to PAS 32: Offsetting Financial Assets and Financial Liabilities
PAS 33
Eamings per Share
PAS 34
Interim Financial Reponing
-5-
PAS 36
Impairment ofAss€ts Amendments lo PAS 36: Impairment of Assets Recoverable Amount Disclosures for Non-Financial Assets
PAS 37
Provisions, Contingent Liabilities and Contingent Assets
PAS 38
Intangjble Assets Amendments to PAS 38: Clarification ofAcceptable Methods of Depreciation and Amortization Amendment to PAS 38: Proportionate Restatement Accululated Depreciation and Amortization
I
nas sr
of
Financial Instruments: Recognition and Measurement Amendments to PAS 39: Transition and Initial Recognition ofFinancial Assets and Financial Liabilities Amendments to PAS 39: Cash Flow Hedge Accounting
of
Forecast Infagroup Transactions
Amendments to PAS 39: The Fair Value Ootion
Amendnents to PAS 39 and PFRS 4: Financial Guarantee Contracts
Amendments to PAS 39 and PFRS 7: Reclassification Financial Assets
of
Amendments to PAS 39 and PFRS 7: Reclassification Financial Assets - Effective Date and Transition
of
Amendments to Philippine Interpretation IFRIC 9 and PAS 39: Embedded Derivatives Am€ndment to PAS 39: Eligible Hedged Items Amendments to PAS 39: Financial Instruments: Recognition and Measurement - Novation ofDerivatives and Continuation of Hedge Accounting PAS 40
Investment Property Amendments to PAS 40: Transfer oflnvesfinent ProDerties
PAS 4I
Agriculture Amendments
to
PAS
4l:
Bearer Plants
Philippine Int erpretations
IFRIC
1
Changes in Existing Decommissioning, Restoration and
Similar Liabilities
IFRJC
2
Members' Share in Co-operative Entities and Sinilar Instruments
IFRIC
4
Delermining ,yhether an Aftangement Contqins
IFRIC
5
Rights to Interests arising from Decomrnissioning, Restoration and Environmental Rehabilitation Funds
a Lease
-6-
IFRIC
6
Liabilities arisingfrom Participating in a Specific Market Waste Electrical and Electonic Equipment
IFRIC
7
Applying the Restatement Approach under PAS 29 Financial Reporting in HyperinJl ationary Eco nom ies
ITRIC
8
Scope of PFRS 2
IFRIC
9
Reassessment of Embedded Derivatives
Amendments to Philippine Interpretation IFRIC 9 and PAS 39; Embedded Derivatives
IFRIC IO
Interim Finqncial Reporting and Impairment
IFRIC
11
PFRS 2 - Group and Treasury Share Transactions
IFRIC
12
Service Concession Arran sem€nts
IFRIC
13
Customer Loyalty Programmes
IFRJC T4
Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction The
Amendments to Philippine Interpretations IFRIC- 14, Prepaynents of a Minimum Funding Requirement
IFRIC
15
Agreements for the Consfuction ofReal Estate
IFRIC I6
Hedges of a Net Investnent in a For€ign Operation
IFRIC
17
Distributions ofNon-cash Assets to Owners
IFRIC
18
Transfers ofAssets from Customers
IFRIC
19
Extinguishing Financial Liabilities with Equify Instruments
IFRIC 20
Stripping Costs in the Production Phase ofa Surface Mine
IFRIC 2I
Levies
IFRIC
Foreign Crmency Transactions and Advance Consideration
22
IFRIC 23
Uncertainty over lncome Tax Treatments
sIc-7
Introduction of the Euro
slc-10
Govemment Assistance - No Specific Relation to Operating
Activities
sIc-12
Consolidation - Special Purpose Entities Amendment to SIC - l2; Scope of SIC 12
slc-13
Jointly Controlled Entities - Non-Monetary Conffibutions by Ventues
sIc-15
Operating Leases - Incentives
slc-2r
Income Taxes . Recovery ofRevalued Non-Depreciable Assets
src-25
Income Taxes - Changes in the Tax Status ofan Entity or its Shareholders
1
Evaluating the Substance ofTransactions Involving the Legal Form ofa Lease
Revenue - Barter Transactions lnvolving Advertising Services
Intangjble Assets - Web Site Costs
Standards tagged as "Not applicable" have been adopted by the Company but have no significant covered transactions for the year ended December 3 l, 2017. Standards tagged as "Not adopted" are standards issued but not yet effective as ofDecember3l,20l7. The Company will adopt the Standards and Interpretations when these become effective.
SEAFRONT RESOURCES CORPORATION MAP OF RELATIONSHIPS OF THE COMPANIES WITHIN THE GROUP
Group Structure
All existing stockholders
as ofDecember 31, 2017 neither constitute control nor significant influence over the Company. AIso, the Company's investments neither constitute control nor significant influence.
,T .F;.:..?'! z$l.EE:F='ei*-"
Republic of the PhlltppttreE)
PASESNY
)s.s.
:
CERTIFICATION I,
@
thc undersigncd, MILAGROS V. REYES, PRESIDENT
APR
:;ifififi-l{;;
Of
SEAFRONT
RESOURCF^S CORPIORATION, with office addEss al 7t Floor JMT Buildin& ADB Avenug Pasig City, afrer heving b€€n swom and in aocordance with law hereby stafcs that th€ information contained in the hard copy of thc Gcneral Form for Finsncial Statements for the y€sr ended December 31, 2017 and the one contained in the compact disc ar€ one and the same.
IN WTNESS WHEREOF, I hereto affixcd my signature this
day
of
2018 at Pasig City,
fu{fu",, AihrAN? lt sUBscRIBED AND swoRN to before me a"uof APR l120le 2915., Pasig City, affi8nt cxhibit€d to me her Tax ldentif,".rbn NumGiErNJ-tOOllZ-ZZS.
this
Doc.No. 9
PageNo. ., Book No. Scries
of20l8 -!_;
:
' ATTY.
MARK R. LIMCOLIOC or.i..nl Io.
58 {201&2i19} Publi. lor th. cili.s ol P.dg' and in t||. $lrhip.litY ol Pcerc3
o;;;e.i;;.
l|.
Pr,e crtt Rorrx' $n,l1 crv
i358?86, Olrl(11!. Paslg
Form
GENEML FORM
NO.:
GFFS
k
v 2006)
FOR FINANCIAL STATEiIENTS
CORPORITIOII CURREUTAODRESST NAME OF
TEL,
Typ.
SEAFNONT RESOURCES CORPOMTION
7lh FloorJilT Buildlng, A08 Ave.ue, Onlgr! C6nter, P.s F&\ No.l
637-2S17
CoMPANYTYPE:
HoLDING
PSICI
It thaso are baso.l on.onsolidated tnancial statenents, please so in.licat ln tho caption.
Table
l. Slatement! ol Financial Position 2017
FINANCIAL OATA
q.
ASSETS (A"1+ 4.2 +
A3 r A4+ A5
+ AG
(in P000
+t'7 + A8 + Ag { A10l
A.1 Curent Aseb (A.1.1+A.1.2 +A.13 +A 14 +A i 5) A.1.1 Cashand cas\ equivdle.rs (A.1.1 A.1.1.2' A..l J)
-'
n foreian
209,914
165.865
72.659
6031S
53.770
65i
1.t2!
12 036
11.72!
12.0J€
8
banltentles
.2 Trade and other Re€eivables lA.1 .2 1
A.1
2015 (lnP'000)
603.55!
A.11.1 On hand A 11.2 n dorieslic banks/entiles
A.11.3
2016 ( in P'000 )
"
A.1 2 2)
A.12.1 Duefrcfi domesficenlilies 1A.1.2.1.1 + A 1 21 2 + A1 2 4.1 21 1 Dle tfom cuslomers {trade) 4.1.212 oue fron elaled oadies A 1.213 Olhers specit {A 121 31+A.12.13.2)
A121.31 Receivables iom
1 3 +
A.1.2.1.4\
262 262
314
311
314
31:
262
314
315
63
3!
23
182
I6: 7l
194
25
75
'17
1T
a consorlium ooeretor
A1.2.1.3.2 Accrued interest
41.2.r.3.3 Loans rcceivable A.1 2.1 3.4
0ivide.ds re.elvable
A.12,1.3,5 Advances to Suooters A.1.2.1.36 Re.eivrble from HEDC .d1.2.13.7 Olhe6 A.1.2.1.4 Allowance for doubltjl accounts ine{arive enlry) A.1 .2.2 oue lrom forcign
enttes, sp€cily
(A 1.3 2.1 +A.1.3 2 2
+A
1
3.2 3
+A
1.3 2.41
A.t 2.21
412.22 4.1 .2-2.3 Allowance for doLrbful accounls (neqalive entry)
A I 3 l"venlon€s(A.1.3.1 *A.1.3.2
+ A.1.3
4.131
Raw marena s andsuDotes
A.1 3 2
Gaoos
A
1
p'ocesg
ti^(l-d
3 , A LJ.a +A.1
nq
!r
(1s_ed
3.5
goods
+A r.3.61
q'oh.g c'ops u li- srcd
seeos,
qoods
J3 Fhshed
4.1 .3.4 Merchandiselcoods ln
lEnsii
ban Cash/ReceivablsgEquily inveshenrs iA.1 .4 1 + A.1 .4.2 + A 1 43 +A 1 I'lr.{ I a5+A 1 lA\ A.1 4 1 FinancialAsselsalFaif Vauelhrough ProfitorLoss,issuedbydoneslic enlities (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)
A.1 .4 Financial Assets otner
62,815
47,454
40,650
62 045
47 454
40650
47.454
10 6s(
lJ llllalbGl
Govemmenl Pubic Financiai nslitulions A I 4.1 Pubiic Non.Frnan.iallnsxhnr.ns A,1.4.2 Held lo Malwily Inveslmenls - issued bv dorneslic enliles 141.4.2.1 + 41.4.22 + A 1 4.23 + A1 42 4 + A142 5\ A 1.4
12
3
NOTE:
lhkoee6l.omhdp!1]6b1e|oMpai]osmc.9gdinfIicunuGFi9heryF@,}M'dn!'aidouarngMaiul&|0inq'E]6'i.ily'Gsaidwa|d,cds|f|ioiWlo]6'eaidF6lal]T .I6Bpd1alin.sIoa9€adcomnuic!ljo6.NoldsadR6laUthR€|Es|ale,cdnmun''sde|.idftEoM|s€niEolhg1binso|p!nUdixa|dqgmb!'6s@efa|ionsIhi5lfn6a apdi@bl6 ro orhs
gGiling
Mp.ii6
and acrMljg
au"ary
ha do ror hr iidusry{peitc spe.id Fms speja tms sh3rr ro fnrnda nlemodaron *hich@ques&o^c.ryl.eMtlnsEc
be us€d by
gdaty ieh .onodis aid
[cd 6r4.d n enjad i^4id
ntmedialih 4ri"1bs .isdil
ntecld4l'i|yisvfnlhgPh'hpnesonlheollrelhaidlo€ign.o4.6|oi3a€bNhataBicolp.6|enabDa
Fi@iarlislilu|ixsd@0dat@pli@loa[y.n94ed]n'naEialinlernEdald'Iadil.|ii9in4i6|nhedlalioloIfn|a'yfmfia|sfigNoiFnddaliB|j|u|ssDbdlia|aE p.naily
6ngaged
ii lt€
prod@lion ol
mal€l
S@ds and
mi fiamar sefris
Page
1
tW.:
Fon
GFFS
kev 2006)
GENEMT FORI/I FOR FINAI{CIAL STATEMEiITS
ilAilE oF CoRPORATION: SEAFRoNT RESoURCES CORPoMTIoN CURRENT ADDRESST 7th FloorJ|UT Bulldiru, ADB Av.nu.,onigas C6nr€r, Pssig City TEL.
NO.r
637"2917
CoMPANY TY-FEl--fr
FAXNo.|
6l6il1c
PS|C:
lf these arc based on consoldated lin.nciat .taternents, plqtsa so indicete in ke caption.
L Slat.m€ntG ol Fli:ncial Polltiotr
Tabl€ Table A
i
l. Stalsments otFinancial Position
-
2017
2016
20i5
{in P'000 }
{inP'000)
(lnP'000)
R*eivabl$ - ssued by dN6lic endliell 4.1.4.3.1 NadmlGovmment
4 3 Loans 6nd
4113
2
Public Fnancial
lislitulids
A.1.,1.3.3 PublicNon.Financiallnst;lutons
A'44
Alailabl4'hreleharcalasseE .ssuedbvdomesicdrd4
A1441
t30.90(
Nalidnacov6mmanl Publr Financ'al hsllulons
600,
A.1442 Al 443 PublicNm.Fliei.iarrnsrtuli.ns 4.1.,1.4.4 PriEie Fii an.lar rnsriturims A.i 445 Prit.aleNon,Financial lnsbturiors llllEilaicial Assel5 issled by tdeion ddtes: iA.1 4 5,I +A. L4.5.2+A I 4 A L4 5 F nancisl Assels ar tat !a ue lhroloh oroir or oss A
l4
149.654
l 2
522.361
6041
T06.04t
5 3+A 1.4.5.4)
Held.ro-maturtv nvesr,nents A.1.4,6 Allwaice fddeclnein mrkel value lndauve entry) 5
A15 oterC-uenrals.rs
lsra e seo:.arFi
ra|q er.F-sttA.1.5 r -A
r 5.2
-A
r5
L
90c
87t
63!
602
56i
2t
21
13t
2t A.2 Prcperiy, danr, aid
eqlipMr {42.1 + A.22
+ L2.3 r A.2 4 + A.2.5 +
A26 +A.2
7+A.281
A.2.2 Euildino and inomMnls idudiid le,s.n.ld imbmv.n.il A 2.3 Maciid4 dd eouiomslim haid and n riais rl A.2 4 TEfspo.laljd/motor vehicles, autonolive e{uloment a0tos and ltucks aid d6 v6ry BouiDmenr A.2 5 Ohets' sDocilvlA 2.5 I +A2 5 2 +A2 5 3 +A 2 5 4 +A 2 5 sl A.2 5 1 Proo€1tr q auioment used lor educahon oumos€s A 2.5 2 Consruclioi in 0rdarc6s A 26 AllEisal'u666, soecirv lA2I I . A.2.6.2.A.2.6 42.7 A@mulaled o€rrccialion {n4aliv€ entry) 4.2.8 lnoannenl L6s orRevdel(il oss ieoa[ve eittul
3
-4264r
4,3 Investhenh s.couiled lor usino Ue eolitv mebod lA 3.1 rA.3 2 A.3.1 Equ lv in donestic subs diaies/alliliares A 3.2 Eouitv in lo{sion branches/subsidiaderaf ars A.3.3 Ohets, tD.dfrlA31 1+A.3.2.1 +A3.3.1.A3 341
43.3.1 A.3.32
A.6
niano ble Assels iA 6 1 + A 6 2)
4.6.1 Mdd
ll6!ts,3!eO
(A6.1.1 + A 6 1.2 + A.6.1 3
+
AO 1.4)
A.6.1.3
4.6.2
0$e6 soeirvlA62 1 +A62 2-A6 2.1-A624) A621
A7
A$els Classifed a!
A 8 Assets ii duded
He
d lof Sale
ii oisoo!]l Grolpr llassiied a
Held lor S.ro
*A3
fonfwe:
eFFS(ev20{f,)
GEII€RAL TORX FOR FINANCIAL SIATEMENTS
tlA
CoRPORATIoN:
E OF
SEAFROIiIT REsoURcEs CoRPORAT|oN
CURREITADoRESS: 7lhFloo.J IEL.NO.T
Av.nu., onisas c.nr.r, Prltg CiV
T Eulldlng, ADB
637.2917
FAXNO,I
I
COiIPA YTYPE HolDl G ll these aft based on cdsolid.ted nnanclet statenents, pte.se so indicate ln the captton, Tahle L Silt h.nt! otFln.ncli! Potltlon Iable
@i€!€
Lom.t6n
^a
491 r@
(ol
1. St
ordrl@rlionl
srct
a92 Fom br.4i dfi6,6Deqt
AloMe
A 9.J
A10 olh6. A l0
I
6|
doubrtul
{A
aenE
( In P000
l
{
In P000 )
I2 i .A 9 22.A92t.a9211
dnerr rd6n
ner dl
h.ni r
8,t
4 +B
t
pn,^,
5J
3 M€ieAliwllaneous de0os Is 01 olhs, sBito aA.l0l I .l.104.2.A 104l.Al0t4l A l0 5 Allowie fdr wle dow ol dehf,ed charo6rbad ,6ib rn.d:riv.
l
20t5
2016
h P1001
+ r.9 2.A I3l lA91 l-A912.Ag t ll -Aq I L'
101 ra 10.2 iA 103-a 10.4rA.10 06r6@d cha&B - iel otaho&atlon
{8.1 + Bl + 33 + A.a + B 1 Curent Lieuftres lB l 1 a 3 | 2' 8 1 3 + a
(
{A9 |
r'Gs6rs (A
a. ul8[rflEs
?!1l
tenenb of Fira.cial Po.irion
dono.r'c d'tti€s
PStC:
|
5
$hr 6t.11!
B t 6 r 3 1 7t
Ll.1 IGdeandohsPzyable!loDomeshEnrres B', ',3 0a/ad6s b R€labi Pan6 sedtui8
311
i 131 -B I
I
:t
t.F I i 1 1,
31131
!ll,!? 811.3.3
0d*
81.11
s0e1{8 r r 1r +3r | 12,31r
.L1 t ? ldlDllordins
tlr
131
rax oayabre
3
L!2 -'a&
6rd
6.1 .2.1
olie
Pr'yab€s lo Fo€,on
lntre, GNN)
rB r
21€ 122€ l2 3,4I
24r
DedEtw liatiltv
8122 8.123
8'
4
r03dd L'br.16lercudno
rEoe
3.1 5 Llrltll es tu Cuneot Tax B I 6 Deiened Id Liabi lles B
"
"f
d
o$er P",$es aio F,o/\on.i
0rje6, speo1 (lr mds al errs \"oere,r, no@re r tre icr .s orrao 3.1.ZI Dilidelds dedared ed mrpad al b6t$ce 5rr4ldale A173
Lialililis
BlT6Aiyolhercuneflliab 8.1./.6.2
tobt{joiraE or
uds TBI R@iors
B.I / 4 Podion ol Lmoiem oeu qre {Ur,n orc
31761
6! p ro
ty in
exe$ ol5%
ttar ot Totr
CucitLabjirles s@dtv
0251
3t:
FotnTWa:
GFFS
lnv
2A46)
GEI'IERAL FOR|I FOR FI|i|]qNCIAL SlATEllEr{TS
NA
E OFCORPORATIoN:
CURRE TE!.
T
ADDRESS:
tlo.:
SEAFRONT RESoIjRCES CORPORAT'ON 7th Floor JtrrT Bultdtng, ADB Avonu.,
odga! C.nr.., prtg
Crty
037.291?
C0 PAIiIYTYPE:
SOLD|NG
It thesa arc based on c@solihted linancial
st
tn
n,5, please
so
intli6t.
Table
Trbl.
1.
SLbn.nb
6f Fln.ncial
'1.
in th. c.pton,
SLtsmenl. ol Flnancial Position
m1l
P6ilion
32 Lono.bm oebl.No@nslJ-hrlsl-b€adno Ltrbitlje {321 . B2 2 -B 2l +E E2l Doms& Arbi. Fined, lisrtuidis I 2.2 oonslc Plb ic Non.Fiaa.jat .s!tutons B 2 3 oohslc Piv6le Finan.ial ri silumns
(ir 2.a
-B?
P'000 )
2016
2015
{iiP000)
{ In P000 )
5r
E?l 0om6li(
Pfrale Non Fndn@l Insljtruons 8,2.5 Fd. oi Fiian.iallnslitibois B 3 hde6hdia$ b Affl6l6 dd RelaEd Patu6 lNon Curen 8.4 Uabjlit$ l.ctuded n he D6!.rd Gr@r6 Clasn.d as Held br 35 Oha. LbaAtB la5.1 r 3.5 2) 8.5 2
ohds.
sjto
8.5.2.1
lB5 2 I +8.5.2.2+85 2 3
iBs2
Sa
e
dr
Subsblihoavable
8.5.22 8.5 2.3
s.52.1
rc.t+ c,1+ c.5+c.6+c.7 r c.8. c a.C,10t C,' rJhoized Caplld Sroc. .o.ois'rdr6 oar,!L€!.drdb latue 5nsoerais, I Connonshare5 333.000.000lharc!.F1 Drrvrrue
EqUITY
C 1,2
c2
165.55{
383 00(
388 00(
333.00
388.001
388,000
Prefere! Sha6
subsb€{C4b Stftr C.2.3
209,411
308001
(no
oIs'ae!
e6rvatu. ano lor. vatuettC.2
+C2.2.C2l\
O'lgs
CJ Pard.utC lalSbdlc.3.l +C
l2)
00(
t63.0q
T63 00C
163,00{
153.00{
16!,000
163
C{ addtua.loailiCaD4rl,CaDb q€xc6$otolr!ar./Paidinsur|-E C.0 01,\eE. so4it lC 6.1*C6.2 *C.0 3 +c64 +c 6sr c 6 1 Nst um4llzoa oaim o^ avai ab elorsal6 fna.dat c 6.2
'Jsgt12
alsG
42401 42.001
4441
c63 c.0.4
c65 C.7 AoDrcsal SlDti/Rdabddol rEmdr n Pr@ers/Fdduaim SrDtus C e RobiEd E niaos (C3.1 +C 8.2) C.E.l Aop@r@bd
).
C.9 Nead / 8@e Of@ A@unt lior Fde{n &ancn6 C | 0 CGI ol Slo{ts Held in TEasry TOIAL lrABlLItlES ANp EQUTTY {B + C)
ohl
r9081
{!!!!h!.i|ry)
6ot559T
.!
891
contlol No.:
Fom
Type:
(rcv 2006)
GFFS
GENERAL FOR[l FOR FINANCIAL STATEI'/|ENTS NAME OF CORPoRATION: SEAFRoNT RESOURCES CORPOMT|oN
CURRENTADDRESST TEL.
NO.:
7th FtoorJMT Buitdlng, ADBAvenue, Orflgas Center, paslg City
637-2917
COMPANYTYPE
I
FAX No.r
HotDlNG
PStC:
lf these are besod on consolidaled financjal stetemenls, please so indlcate in the caDllon. Table 2. Stet€mgnts of lncomo 2017
FINANCIAL OATA
q.
2016
( in P'000 )
REVE UE/lNComE {A.l +A.2+A,3) A 1 Nel Sales or RevenJe / Receipts fron OperaLons (ranufactLr ng nl|lrnq ut I des uade A.2 Shale in he Pmft or Loss olAsrooates and. o|nt Vantu€s accoJnteo bl us nq tne A.3 o$er R6!€nue (A.3.1 rA.3.2 i A.3.3 + A.3.4 + A.3.5)
( in P'000
20't5
(in
)
P'000 )
16.131
7,634
8,838
16,131
7.6U
8.838
97 295
125 353
15387
6,804
352
352
A.3.1 Renlallncome lrom Land and Bu drnos A.3.2 Receipls from Sale ol l,lerchandise llradino) lionr Secondary Activjrvl 4,3 3 Sale ofRealEslaie orother Prooeirv and Eou Dment A.3 4 Rovah€s. Franchise F6€6. Copyriqn6 (boo(6
A.3.5 Olhefs,specifo {A.3 5.1 + A 3 5 2 + A 3
lhs
.eco'ds ek
4.3.51 Nelgainsoniairvaluechanqesonfrnanciat A.4
I
5 3 + A 3 5 4 + A 3 5.5 +
assehatFVPL
lncome (non-operaiina) (A.4.I + A.4.2 + A.4.3 + A 4.4) A.4,1 Inlerest lncome
o$er
4.4.2 D vldend Incorne A4 3 Nelgarn on FV changes on linancta asselaiFVPL
234 8.251
A 4.4 Gain / (Loss) ft.om s6tlng of Assets, specrty A 4.3.1 Gain fiom sale of financial assets A.4.4 Gain/(Lo3r)onForeionExchanqe{A.44.1 }A.4.42+A.4.4.3+A.44.4)
A.4.4.1 Netfoleiqn clrrency exchanae oain A4 4.2 Miscellaneols
B.
44.4 3 COST OF G0O0S SOLD{8.1+8.2+ B.3l 9.1 Codolcoods ManulactuEd (B I | + S I 2 + 8.1.3 + B.1.1 Direct llalerial Used
352
I
1 4 +
B.l 5)
8.1.2 Di|ecl Lebor
c.
B.13 other ManLiactu nq Con/ overh€ad 8.3 Finhhed Goods, End ineoativs €nrryl cosT oF sALEs {c.t + c.2+c.3t
C.l
Purchases
C.2 Merchandrse nt€nlory, Eeainnino C.3 Merchandise Inventory, End (!!qdiveentry) qgsT oF sERVlCEs, sPEclFY (01+ 0.2 + 0.3 + D.4 + 0.5 + D.Er
D.l 0.2 D.3 D.4
0.5
Page 5
352 352
Contrcl No,:
FomType:
GFFS
tev
2006)
GENERAL FORM FOR FINANCIAL STATEMENTS
C0RP0MTION: CURRENTADDRESS: NAI'rE OF
TEL.
NO.:
COMPANY
ll
SEAFRONT RESOURCES C0RpORATtON
7th FtoorJMT Bu ding, ADB Avenue, Ortigas Center, pastg City
637.2917
TYPE:
FAX N0.l
HoLDING
these are basecl on consolidateal financial
PSICi
stetenenb, please so indicate in the caDtion. Table 2. Statements of lncome 2017
FINANCIAL OATA E.
(jn
2016
2015
(in
( in P'000 )
P'000 )
P'000 )
oTHER DTRECT COSTS, SPECjFY {E.1 + E.2 + E.3 + E.4 + E.5 + E.6t
E3 E.4 E.5
8,6
F. G,
GROSS PROFITIA. B, C. D. E) OPERATING EXPENSES {G,1 + G.2 + G,3 + G,4I G 1 Selhnq orl\,larketrnq Erpenses G 2 Adminlslralive ErDeises
16,131
7.634
8,838
1.451
1,326
18.31?
1.452
1326
G.3 GeneralErpenses G.4 Other Expenses, specily {c 41 + c4 2 + c.4.3 } c 4.4 + c.4.5 + G.4.61 G.4.1 Nel loss on fairvalue chanoes on financialassets al FVPL G.4.2 Unrealized loreiqn cufiencv exchanae loss G.4 3 Realiz€d loreiqn cunencv erchanoeloss
16.876
12.254
G4.4 ljnrealzed rla*edlo maftet loss ffom cufiency rorwaro G.4.5 lmpa nerr loss on ,varlab ejorsale ,irarc at asse6
4 622
G.4.6
H.
t.
FINANCE COSTS NET |NCoME {LoSS) BEFORE TAX { F - G . H)
J.
lNCol'rETAx EXPENSE (neqativeentry)
K. L.
INCOMEAFIERTAX Amount ol (i)Post.Tax Profil or Loss of Discontinued olerations: and tiil
14,673 7
t1 L.2
M. Proflt or
N.
Loss Attributable to Minority Inter$t Profil or Loss Attributableto Equitv HoldeB otthe Parent
Page 6
14.612
6,3081
-9.479
7l
7 .9.486
6,301
GFFS
GEIIERAL FORI FOR FII{AXCIAL STATETiEIIIS
AilE 0FCORPORATON: SEAFROI{TRESOURCES CURRENT
TEL.
A0DRESS:
[0.i
7rn
CORPORATToN
Floo'Jri[ Buitdin!, ADa Arenu.,0dtg!sC€nter, prsiq Cig
637.2317
COiIPANYTYPE: HOlDllC
t
these
.E b.sd
6
PSICI
consolld.rNd f,n.nciat
st.En.nh
ph.se so indie.h in th.
Tabh L SGtements olFlnrnchl Posirion f ROM OPENATNG ACINITIES
Nelsca
zed
of
o$ loan$
fnatrial
6ale 0l inanclal
on
fnancarreE
*eE/
els
Didend ,@ne
ar FVPL
HANDCASH EOUIVAIENIS iAT B+C
capti,.
ltov 2006)
6FFS(td 2u4l GEI{€MI. IORI FOR NIIXC|AI SIATEflEITS
lrr,rE or coRpoMno
CoMFATiY TYPE
tunn m b8rd
: Dr
:
HoLoLNG
cortoltdl.d lhr^ctrl Eht n.nts, pt.r'. to lrdt.tl. h th, .1pn
n.