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Foundation for  Rural  Electrification  for  Economic   Development,  Inc.   (A  Nonstock,  Not-­‐for-­‐Profit  Organization)   Financial  Statements   December  31,  2011  and  2010     and     Independent  Auditors’  Report         SyCip  Gorres  Velayo  &  Co.  


COVER SHEET

A 2 0 0 0 1 0 8 3 3 SEC Registration Number

F O U N D A T I O N I O N

F O R

F O R

R U R A L

E CO N O M I C

E L E C T R I F I C A T

D E V E L O P M E N T ,

I N C

.

(Foundation’s Full Name)

2 F

S T A T E

C O N D O M I N I U M

1 8 6

S A L C E D O

G E ,

M A K A T I

S T R E E T ,

I

B U I L D I N G ,

L E G A S P I

V I L L A

C I T Y

(Business Address: No. Street City/Town/Province)

Mr. Jaime I. Ayala

(632) 843-5609

(Contact Person)

(Foundation Telephone Number)

1 2

3 1

Month

Day

A A F S (Form Type)

(Fiscal Year)

0 3

2nd Mon

Month

Day

(Annual Meeting)

(Secondary License Type, If Applicable)

CFD

Not applicable

Dept. Requiring this Doc.

Amended Articles Number/Section Total Amount of Borrowings

10 Total No. of Board of Trustees

Nil

Nil

Domestic

Foreign

To be accomplished by SEC Personnel concerned

File Number

LCU

Document ID

Cashier

STAMPS Remarks: Please use BLACK ink for scanning purposes.


SyCip Gorres Velayo & Co. 6760 Ayala Avenue 1226 Makati City Philippines Phone: (632) 891 0307 Fax: (632) 819 0872 www.sgv.com.ph BOA/PRC Reg. No. 0001, January 25, 2010, valid until December 31, 2012 SEC Accreditation No. 0012-FR-2 (Group A), February 4, 2010, valid until February 3, 2013

INDEPENDENT AUDITORS’ REPORT

The Board of Trustees Foundation for Rural Electrification for Economic Development, Inc. 2F State Condominium I Building, 186 Salcedo Street, Legaspi Village, Makati City Report on the Financial Statements We have audited the accompanying financial statements of Foundation for Rural Electrification for Economic Development, Inc. (a nonstock, not-for-profit organization), which comprise the statement of financial position as at December 31, 2011, and the statement of activities, statement of changes in fund balances and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Philippine Financial Reporting Standards for Small and Medium-sized Entities, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

A member firm of Ernst & Young Global Limited


-2Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Foundation for Economic Development, Inc. as at December 31, 2011, and its financial activities and its cash flows for the year then ended in accordance with Philippine Financial Reporting Standards. Other Matter The financial statements of the Foundation as at and for the year ended December 31, 2010 were audited by other auditor whose report dated March 16, 2011, expressed an unmodified opinion on those statements. Report on the Supplementary Information Required Under Revenue Regulations 19-2011 and 15-2010 Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information required under Revenue Regulations 19-2011 and 152010 in Notes 9 and 10 to the financial statements, respectively, is presented for purposes of filing with the Bureau of Internal Revenue and is not a required part of the basic financial statements. Such information is the responsibility of the management of Foundation for Rural Electrification for Economic Development, Inc. The information has been subjected to the auditing procedures applied in our audit of the basic financial statements. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole. SYCIP GORRES VELAYO & CO.

Ladislao Z. Avila, Jr. Partner CPA Certificate No. 69099 SEC Accreditation No. 0111-AR-2 (Group A), February 4, 2010, valid until February 3, 2013 Tax Identification No. 109-247-891 BIR Accreditation No. 08-001998-43-2009, June 1, 2009, valid until May 31, 2012 PTR No. 3174866, January 2, 2012, Makati City ______________


INDEPENDENT AUDITORS’ REPORT

The Board of Trustees Foundation for Rural Electrification for Economic Development, Inc. Report on the Financial Statements We have audited the accompanying financial statements of Foundation for Rural Electrification for Economic Development, Inc. (a nonstock, not-for-profit organization), which comprise the statement of financial position as at December 31, 2011, and the statement of activities, statement of changes in fund balances and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Philippine Financial Reporting Standards for Small and Medium-sized Entities, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.


-2Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Foundation for Economic Development, Inc. as at December 31, 2011, and its financial activities and its cash flows for the year then ended in accordance with Philippine Financial Reporting Standards. Other Matter The financial statements of the Foundation as at and for the year ended December 31, 2010 were audited by other auditor whose report dated March 16, 2011, expressed an unmodified opinion on those statements. Report on the Supplementary Information Required Under Revenue Regulations 19-2011 and 15-2010 Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information required under Revenue Regulations 19-2011 and 152010 in Notes 9 and 10 to the financial statements, respectively, is presented for purposes of filing with the Bureau of Internal Revenue and is not a required part of the basic financial statements. Such information is the responsibility of the management of Foundation for Rural Electrification for Economic Development, Inc. The information has been subjected to the auditing procedures applied in our audit of the basic financial statements. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole. SYCIP GORRES VELAYO & CO.

Ladislao Z. Avila, Jr. Partner CPA Certificate No. 69099 SEC Accreditation No. 0111-AR-2 (Group A), February 4, 2010, valid until February 3, 2013 Tax Identification No. 109-247-891 BIR Accreditation No. 08-001998-43-2009, June 1, 2009, valid until May 31, 2012 PTR No. 3174866, January 2, 2012, Makati City ______________


SyCip Gorres Velayo & Co. 6760 Ayala Avenue 1226 Makati City Philippines Phone: (632) 891 0307 Fax: (632) 819 0872 www.sgv.com.ph BOA/PRC Reg. No. 0001, January 25, 2010, valid until December 31, 2012 SEC Accreditation No. 0012-FR-2 (Group A), February 4, 2010, valid until February 3, 2013

INDEPENDENT AUDITORS’ REPORT TO ACCOMPANY INCOME TAX RETURN

The Board of Trustees Foundation for Rural Electrification for Economic Development, Inc. 2F State Condominium I Building, 186 Salcedo Street, Legaspi Village, Makati City We have audited the financial statements of Foundation for Rural Electrification for Economic Development, Inc. (the Foundation) for the year ended December 31, 2011, on which we have rendered the attached report dated ____________. In compliance with Revenue Regulations V-20, we are stating that no partner of our Firm is related by consanguinity or affinity to the president, manager or principal stockholders of the Foundation. SYCIP GORRES VELAYO & CO.

Ladislao Z. Avila, Jr. Partner CPA Certificate No. 69099 SEC Accreditation No. 0111-AR-2 (Group A), February 4, 2010, valid until February 3, 2013 Tax Identification No. 109-247-891 BIR Accreditation No. 08-001998-43-2009, June 1, 2009, valid until May 31, 2012 PTR No. 3174866, January 2, 2012, Makati City ______________

A member firm of Ernst & Young Global Limited


FOUNDATION FOR RURAL ELECTRIFICATION FOR ECONOMIC DEVELOPMENT, INC. (A Nonstock, Not-for-Profit Organization)

STATEMENTS OF FINANCIAL POSITION

December 31 2011 2010 ASSETS Current Assets Cash (Note 4) Receivables (Note 5) Inventories (Note 8) Total Current Assets

P = 269,295 741,281 2,081,832 3,092,408

= P1,070,386 573,160 – 1,643,546

174,984

P =3,267,392

= P1,643,546

Liabilities Accounts and other payables (Note 7)

P = 508,624

= P103

Fund Balances (Note 8) Unrestricted Restricted Total Fund Balances

2,758,768 – 2,758,768

403,203 1,240,240 1,643,443

P =3,267,392

= P1,643,546

Noncurrent Assets Property and equipment - net (Notes 6 and 8) TOTAL ASSETS

LIABILITIES AND FUND BALANCES

TOTAL LIABILITIES AND FUND BALANCES See accompanying Notes to Financial Statements.


FOUNDATION FOR RURAL ELECTRIFICATION FOR ECONOMIC DEVELOPMENT, INC. (A Nonstock, Not-for-Profit Organization)

STATEMENTS OF ACTIVITIES

Years Ended December 31 2011 2010 REVENUES Donations received (Note 8) Interest income (Note 4) COSTS AND EXPENSES Professional fees Donations made Transportation and travel Meals Freight and handling Supplies Printing Advertising Communication Representation Depreciation (Note 6) Taxes and licenses Others OTHER EXPENSES Foreign exchange loss - net Others - net EXCESS OF REVENUES OVER EXPENSES (EXPENSES OVER REVENUES) See accompanying Notes to Financial Statements.

P =6,182,590 745 6,183,335

= P– 3,250 3,250

1,764,356 1,266,359 811,469 298,114 264,521 248,022 100,187 78,960 55,538 29,205 28,186 20,000 35,506 5,000,423

– – – – – – – – – – – – 2,640 2,640

19,558 48,029 67,587

55,361 – 55,361

P =1,115,325

(P =54,751)


FOUNDATION FOR RURAL ELECTRIFICATION FOR ECONOMIC DEVELOPMENT, INC. (A Nonstock, Not-for-Profit Organization)

STATEMENTS OF CHANGES IN FUND BALANCES

Unrestricted

Years Ended December 31 2011 Restricted Total

Fund balance at beginning of year

P = 403,203

P =1,240,240

P =1,643,443

Excess of revenues over expenses (expenses over revenues)

1,115,325

1,115,325

Fund released from restrictions

1,240,240

Fund balance at end of year

P =2,758,768

See accompanying Notes to Financial Statements.

(1,240,240) P =–

2010 Total = P1,698,194

(54,751)

P =2,758,768

= P1,643,443


FOUNDATION FOR RURAL ELECTRIFICATION FOR ECONOMIC DEVELOPMENT, INC. (A Nonstock, Not-for-Profit Organization)

STATEMENTS OF CASH FLOWS

Years Ended December 31 2011 2010 CASH FLOWS FROM OPERATING ACTIVITIES Changes in net assets Adjustments for: Donations received in kind (Note 8) Depreciation (Note 6) Unrealized foreign exchange loss Interest income (Note 4) Changes in net assets before working capital changes Increase in: Receivables Accounts and other payables Net cash used in operations Interest received Net cash used in operating activities

P =1,115,325

(P =54,751)

(2,285,002) 28,186 19,558 (745) (1,122,678)

– – 55,361 (3,250) (2,640)

(168,121) 508,521 (782,278) 745 (781,533)

(619) 1 (3,258) 3,250 (8)

CASH FLOWS FROM INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

NET DECREASE IN CASH EFFECT OF EXCHANGE RATE CHANGES ON CASH

(781,533)

(8)

(19,558)

(55,361)

CASH AT BEGINNING OF YEAR

1,070,386

1,125,755

CASH AT END OF YEAR (Note 4)

P = 269,295

= P1,070,386

See accompanying Notes to Financial Statements.


FOUNDATION FOR RURAL ELECTRIFICATION FOR ECONOMIC DEVELOPMENT, INC. (A Nonstock, Not-for-Profit Organization)

NOTES TO FINANCIAL STATEMENTS

1. Organization and Tax Exemption The Foundation for Rural Electrification for Economic Development, Inc. (the Foundation) was registered with the Philippine Securities and Exchange Commission (SEC) on July 14, 2000, primarily to engage in initiating, sponsoring, assisting or financing programs for electrification of un-energized barangays in the country side. As a nonstock, not-for-profit organization intended for charitable purposes, the Foundation’s income is exempt from payment of income tax as set forth in Section 30(e) of the National Internal Revenue Code (NIRC) as amended by Executive Order (E.O.) 273. The Foundation’s registered office address is at 2F State Condominium I Building, 186 Salcedo Street, Legaspi Village, Makati City. The financial statements of the Foundation for the years ended December 31, 2011 and 2010 were approved and authorized for issue by the Foundation’s Board of Trustees (BOT) on ____________.

2. Basis of Preparation, Statement of Compliance and Summary of Significant Accounting Policies Basis of Preparation The financial statements of the Foundation have been prepared using the historical cost basis. The accompanying financial statements are presented in Philippine Peso (P =), which is the Foundation’s presentation and functional currency. All amounts are rounded off to the nearest peso, unless otherwise indicated. Statement of Compliance The accompanying financial statements have been prepared in compliance with PFRS for Small and Medium-sized Entities (SMEs). Transition to the PFRS for SMEs The financial statements for the year ended December 31, 2011 are the Company’s first financial statements prepared in accordance with PFRS for SMEs. The Company’s date of transition to PFRS for SMEs is January 1, 2010. For all periods up to and including December 31, 2009, the Company prepared its financial statements in accordance with generally accepted accounting principles applicable to non-publicly accountable entities (previous GAAP). The transition to PFRS for SMEs did not have any impact to the financial statements, except for disclosures, where applicable. Effect on the Statement of Cash Flows for 2010 There are no material differences in the statement of cash flows prepared under the PFRS for SMEs from that prepared under the previous GAAP.


Fund Accounting To ensure the observance of limitations and restrictions placed on the use of resources available to the Foundation, the accounts of the Foundation are maintained in accordance with the principles of fund accounting in which resources for various purposes are classified, for accounting and reporting purposes, into funds established according to their nature and purposes. Accordingly, all financial transactions have been recorded and reported by fund group, as follows: • •

“Unrestricted fund” represents the portion of expendable funds available for support of the Foundation’s operations. “Restricted fund” represents the amount set aside by the Foundation’s donors’ for special projects and other contingencies. It is reclassified as unrestricted fund when the conditions for the grant have been met.

Revenue Recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Foundation and the amount of revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized: Grants and Donations Grants and donations are recognized when the right to receive such has been established. Donated services received are recognized when they create or enhance nonfinancial assets. Interest Income Interest income from bank deposits are recognized as it accrues using the effective interest rate method. Cash Cash includes cash on hand and in banks. Receivables Receivables are recognized and carried at original amount less allowance for any uncollectible amounts. At the end of each reporting period, the carrying amounts of receivables are reviewed to determine whether there is any objective evidence that the amounts are not recoverable. If so, an impairment loss is recognized immediately in the statement of activities. Inventories Inventories are valued at lower of cost and net realizable value (NRV). Cost is determined using the specific identification method. NRV is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. An allowance for inventory obsolescence is provided for slow-moving, defective or damaged goods based on analyses and physical inspection. Property and Equipment Property and equipment which pertain to office and project equipment are carried at cost less accumulated depreciation and any impairment in value. Depreciation is calculated on a straightline basis over the estimated useful lives of the assets, which is two (2) years. The initial cost of property and equipment comprises its purchase price and other directly attributable costs of bringing the asset to its working condition and location for its intended use. The estimated useful lives and the depreciation method are reviewed periodically to ensure that the periods and method of depreciation are consistent with the expected pattern of economic benefits from items of property and equipment.


When property and equipment are retired or otherwise disposed of, their cost, accumulated depreciation and any allowance for impairment in value are eliminated from the accounts and any gain or loss resulting from their disposal is included in the statement of activities. Fully depreciated assets are retained as property and equipment until these are no longer in use. Impairment of Property and Equipment At each reporting date, property and equipment are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset (or group of related assets) is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognized immediately in the statement of activities. If an impairment loss subsequently reverses, the carrying amount of the asset (or group of related assets) is increased to the revised estimate of its recoverable amount (selling price less costs to complete and sell, in the case of inventories), but not in excess of the amount that would have been determined had no impairment loss been recognized for the asset (group of related assets) in prior years. A reversal of an impairment loss is recognized immediately in the statement of activities. Accounts and other payables Accounts and other payables are obligations on the basis of normal credit terms and do not bear interest. Expense Recognition Expenses are recognized as incurred following the accrual basis of accounting. Foreign Currency Transactions Transactions in foreign currencies are recorded using the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are restated using the closing exchange rate at the reporting date. Foreign exchange differences between rate at transaction date and rate at settlement date or reporting date are recognized in the statement of activities. Provisions Provisions are recognized when the Foundation has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as an interest expense. Where the Foundation expects some or all of a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of activities, net of any reimbursement. Contingencies Contingent liabilities are not recognized in the financial statements. These are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are not recognized in the financial statements but disclosed when an inflow of economic benefits is probable.


Events after the Financial Reporting Date Post year-end events that provide additional information about the Foundation’s position at the statement of financial position date (adjusting events) are reflected in the financial statements. Post year-end events that are not adjusting events are disclosed in the notes to financial statements when material.

3. Significant Accounting Estimates and Judgments The preparation of the accompanying financial statements in conformity with PFRS for SMEs requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The estimates and assumptions used in the accompanying financial statements are based upon management’s evaluation of relevant facts and circumstances as of the date of the financial statements. Actual results could differ from such estimates. Judgments In the process of applying the Foundation’s accounting policies, management has made the following judgments, apart from those involving estimations, which have the most significant effect on the amounts recognized in the financial statements: Determining functional currency The functional currency of the Foundation has been determined to be the Philippine peso. The Philippine peso is the currency of the primary economic environment in which the Foundation operates. Estimates The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: Estimating allowance for impairment losses on receivables Management reviews the age and status of receivables and identifies accounts that are to be provided with allowance on a continuous basis. The Foundation maintains allowance for impairment losses at a level considered adequate to provide for potential uncollectible accounts. As of December 31, 2011 and 2010, the Foundation has no allowance for impairment losses on receivables. The carrying amount of receivables amounted to = P741,281 and = P573,160 as of December 31, 2011 and 2010, respectively (see Note 5). Estimating allowance for inventory losses The Foundation maintains allowance for inventory losses at a level considered adequate to reflect the excess of cost of inventories over their NRV. NRV of inventories are assessed regularly based on the prevailing selling prices of inventories less the estimated cost necessary to sell. Increase in the NRV will increase the carrying amount of inventories but only to the extent of their original acquisition costs. As of December 31, 2011 and 2010, the Foundation did not provide allowance for inventory losses. The carrying amount of inventories amounted to = P2,081,832 and nil as of December 31, 2011 and 2010, respectively. Estimating useful lives of property and equipment The Foundation estimates the useful lives of its property and equipment based on the period over which these assets are expected to be available for use. The estimated useful lives of property and equipment are reviewed at least annually and are updated if expectations differ from previous


estimates due to physical wear and tear and technical or commercial obsolescence on the use of these assets. It is possible that future results of operations could be materially affected by changes in estimates brought about by changes in factors mentioned above. As of December 31, 2011 and 2010, the carrying amount of property and equipment amounted to = P174,984 and nil, respectively (see Note 6). Estimating impairment of property and equipment The Foundation assesses impairment on property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The factors that the Foundation considers important which could trigger an impairment review include the following: • • •

Significant underperformance relative to expected historical or projected future operating results; Significant changes in the manner of use of the acquired assets or the strategy for overall business; and Significant negative industry or economic trends.

An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is computed using the asset’s value in use. The value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets or, if it is not possible, for the cash-generating unit to which the asset belongs. In determining the present value of estimated future cash flows expected to be generated from the continued use of the assets, the Foundation is required to make estimates and assumptions that can materially affect the financial statements. No impairment loss was recognized in 2011 and 2010. The carrying amount of property and equipment amounted to = P174,984 and nil as of December 31, 2011 and 2010, respectively (see Note 6).

4. Cash This account consists of: Cash on hand Cash in banks

2011 P =5,258 264,037 P = 269,295

2010 = P– 1,070,386 = P1,070,386

Cash in banks earn interests at the respective bank deposit rates. Interest earned on cash in banks amounted to = P745 and = P3,250 in 2011 and 2010, respectively.


5. Receivables This account consists of the following: Receivable from Philippine Business for Social Progress (PBSP) Advances to employees

2011

2010

P = 573,160 168,121 P = 741,281

= P573,160 – = P573,160

6. Property and Equipment - net

Cost Balance at January 1, 2011 Additions Disposal Balance at December 31, 2011 Accumulated depreciation Balance at January 1, 2011 Depreciation during the year Disposal Balance at December 31, 2011 Net book value

Office Equipment

Project Equipment

Total

= P– 61,950 – 61,950

= P– 141,220 – 141,220

= P– 203,170 – 203,170

– 19,360 – 19,360 = P42,590

– 8,826 – 8,826 = P132,394

– 28,186 – 28,186 = P174,984

The Foundation had no property and equipment as of December 31, 2010.

7. Accounts and Other Payables This account consists of: Accounts payable Expanded withholding tax payable

2011 P = 391,086 117,538 P = 508,624

2010 = P103 – = P103

Accounts payable are noninterest-bearing and are generally on 30 - 60 days’ terms.

8. Note to Statements of Cash Flows In 2011, the Foundation received inventories and property and equipment thru donations amounting to = P3.16 million and = P0.20 million, respectively.


9. Supplementary Tax Information under Revenue Regulations 19-2011 On December 9, 2011, the BIR issued RR No. 19-2011 prescribing the new income tax forms to be used effective calendar year 2011. In the case of corporations using BIR Form 1702, the taxpayer is now required to include as part of its notes to the audited financial statements, which will be attached to the income tax return, schedules and information on taxable income and deductions taken. The schedule and information of taxable income and deductions taken for 2011 are as follows: a. Donations and interest income exempt from income tax amounted to = P6,183,335. b. Itemized Deductions Professional fees Inventories Transportation and travel Meals Freight and handling Supplies Printing Advertising Communication Representation Depreciation Others

Exempt = P1,764,356 1,266,359 811,469 298,114 264,521 248,022 100,187 78,960 55,538 29,205 28,186 83,535 = P5,028,452

10. Supplementary Tax Information under Revenue Regulations 15-2010 The Foundation reported and/or paid the following types of taxes as of and for the year ended December 31, 2011: Withholding Taxes The Foundation’s expanded withholding taxes amounted to = P117,538. Status of Tax Assessment and Court Cases There were no deficiency tax assessments issued by the BIR to the Company during the calendar year ended December 31, 2011. There were also no pending tax cases nor litigation and/or prosecution in courts or bodies outside the BIR in 2011.

2010-2011 Statements & Auditors' Report  

Foundation for Rural Electrification for Economic Development, Inc. (FREED) Financial Statements December 31, 2011 and 2010 and Independent...

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