a.

Statement of Financial Position

BRYAN SALES INDUSTRIES, INC.

STATEMENT OF FINANCIAL POSITION

December 31, 2018 and 2019

(In Philippine Peso) 

  December 31, 2019 December 31, 2018

ASSETS    

Current Assets    

Cash and cash equivalents (Note ___) 18,312,251 14,342,057

Receivables (Note ___) 28,246,099 24,826,685

Inventories 932,854 1,121,802

Total Current Assets 47,491,204 40,290,544

Noncurrent Assets    

Investment in non-marketable equity securities 71,265 71,265

Property plant and equipment - net (Note ___) 530,039 517,882

Other Asset 235,667 49,667

Total Noncurrent Assets 836,971 638,814

Total Assets 48,328,175 40,929,358

     

LIABILITIES AND SHAREHOLDER’S EQUITY

Current Liabilities    

Trade and Other Payables (Note ___) 273,725 340,764

Total Liabilities 273,725 340,764

Shareholder’s Equity    

Shareholder’s Equity 48,054,450 40,588,594

Total Shareholder’s Equity 48,054,450 40,588,594

Total Liabilities and Shareholder’s Equity 48,328,175 40,929,358

 See accompanying Notes to Financial Statements    

b. Statement of Income

BRYAN SALES INDUSTRIES, INC.

STATEMENT OF INCOME

For the Year Ended December 31, 2018 and 2019

(In Philippine Peso)

  December 31, 2019 December 31, 2018

REVENUE    

Sales Revenue 20,076,103 16,400,579

Cost of Sales (Note ___) 10,765,206 6,672,626

GROSS PROFIT 9,310,896 9,727,953

OPERATING EXPENSES 4,055,089 3,026,091

General and administrative expenses - net (Note 5,255,807 6,701,862

__)

NET INCOME (LOSS)    

 c.   Notes to Financial Statements

i.  General Information

Bryan Sales Industries Inc. was incorporated and registered with the Securities and Exchange
Commission on March 15, 2009. The registered address is at Araneta Street, Singcang, Bacolod City,
Negros Occidental. The Company’s principal activity is wholesale and retailing of consumer goods.

The financial statements of the company for the year ended December 31, 2019, were authorized for
issue in accordance with a resolution of the Board of Director on February 23, 2020.

         ii. Basis of preparation

The accompanying financial statements have been prepared on a going concern basis, which
contemplates the realization of assets and settlement of liabilities in the normal course of business.
They are presented under the historical cost basis.

Ability to Continue as a Going Concern

Coronavirus Disease 2019 (COVID-19) affects the global economy as businesses, except those
providing essential services, were obliged to cease their operations to comply with the social
distancing and safety protocols of different government agencies. This temporary intervention with
the normal operations of the Company indicates the existence of uncertainties which may cast
significant doubt as to the Company's ability to continue as a going concern. In the event that the
Company may be unable to realize its assets and discharge its liabilities in the normal course of
business, those charged with governance (BOD) and the shareholders’ plans to infuse additional
funds to support the resumption of the business should the need arise.

       iii. Significant accounting policies

Statement of Compliance with IFRS

The financial statements have been prepared in conformity with Philippine Financial Reporting
Standards.

Presentation Currency

The financial statements are presented in Philippine peso and rounded to the nearest peso, being
the company's functional and presentation currency.

Losses

In the case of impairment, any loss previously recognized in equity is transferred to the statement
of operations. Losses recognized in the statements of operations on equity investments are not
reversed through the statement of operations. Losses recognized in prior period statements of
operations resulting from the impairment of debt instruments are reversed through the statements
of operations. The estimated period between a loss occurring and its identification is determined
by management for each identified portfolio. In general, the periods used vary between three (3)
months and twelve (12) months; in exceptional cases, longer periods are warranted.

Offsetting
 Financial assets and financial liabilities are offset and the net amount reported in the statements of
financial condition if, and only if, there is a currently enforceable legal right to offset the
recognized amounts and there is an intention to settle on a net basis, or to realize the asset and
settle the liability simultaneously. This is not generally the case with master netting agreements,
and the related assets and liabilities are presented gross in the statements of financial condition

Impairment

The Company assesses at each statement of financial condition date whether there is an indication
that an asset may be impaired. If such impairment indication exists, or when an annual
impairment testing for an asset is required, the Company makes an estimate of the asset’s
recoverable amount. An asset’s recoverable amount is the higher of the asset’s value in use or its
net selling price. Where the carrying amount of an asset exceeds its recoverable amount, the asset
is considered impaired and is written down to its recoverable amount. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the
asset. An impairment loss is charged against operations in the year in which it arises, unless the
asset is carried at a revalued amount, in which case the impairment loss is charged to the
revaluation surplus of the said asset. A previously recognized impairment loss is reversed by a
credit to current operations (unless the asset is carried at a revalued amount in which case the
reversal of the impairment loss is credited to the revaluation surplus of the same asset) to the
extent that it does not restate the asset to a carrying amount in excess of what would have been
determined (net of any accumulated depreciation) had no impairment loss been recognized for the
asset in prior years.

Post Year-end Events

Post year-end events that provide additional information about the Company's position at the
statement of position date (adjusting events) are reflected in the financial statements. Post year-
end events that are not adjusting events are disclosed in the notes when material.

1 Cash and Cash Equivalent

Cash includes cash on hand and in banks. Cash in banks earns interest at the respective bank
deposit rates.

2 Financial Assets

DEFINITION. Financial assets include cash, loans and receivables, and investment in non-
marketable equity. The company recognizes financial assets in the statement of financial position
when it becomes a party to the contractual Purchases or sales of financial assets that require
delivery of assets within the time frame established by regulation or convention in the
marketplace are recognized on the settlement date.

CLASSIFICATION. The Company classifies its financial assets into the following categories:
loans and receivables, and financial assets at cost. Financial assets are assigned to different
categories by management on initial recognition, depending on the purpose for which the
investments were acquired. The designation of financial assets is re-evaluated at every reporting
date at which date a choice of classification or accounting treatment is available, subject to
compliance with specific provisions of applicable accounting standards.
 RECOGNITION. All financial assets are recognized on their trade date. All financial assets that
are not classified as fair value through profit or loss are initially recognized at fair value, plus
transaction costs. Regular way purchases and sales of financial assets are recognized on the trade
date - the date on which the Company commits to purchase or sell the asset. The designation of
financial assets is re-evaluated at every reporting date at which date, a choice of classification or
accounting treatment is available, subject to compliance with specific provisions of applicable
accounting standards.

DERECOGNITION. Derecognition of financial assets occurs when the rights to receive cash
flows from the financial instruments expire or are transferred and substantially all of the risks and
rewards of ownership have been transferred.

IMPAIRMENT. The Company assesses at each statement of financial position date whether
there is objective evidence that a financial asset or a group of financial assets may be impaired. A
financial asset or a group of financial assets is impaired and impairment losses are incurred if, and
only if, there is objective evidence of impairment as a result of one or more events that occurred
after the initial recognition of the asset (a "loss event") and that loss event has an impact on the
estimated future cash flows of the financial assets or 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, or where observable data indicate that there is a measurable decrease in the
estimated future cash flows, such as changes in arrears or economic conditions that correlate with
defaults.

A. Loans and Receivable

DEFINITION. Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in the active market. They arise when the Company
provides money, goods, or services directly to a debtor with no intention of trading the
receivables.

MEASUREMENT. Loans and receivables are subsequently measured at amortized cost using
the effective interest method, less impairment losses. Any change in their value is recognized in
profit or loss. It is included in the current assets if maturity is within 12 months from the
statements of financial condition date. An impairment loss is provided when there is objective
evidence that the Company will not be able to collect all amounts due to it in accordance with the
original terms of the receivables. The amount of the impairment loss is determined as the
difference between the assets' carrying amount and the present value of the estimated cash flows.

IMPAIRMENT. If there is objective evidence that an impairment loss on loans and receivables
carried at amortized cost has been incurred, the amount of the loss is measured as the difference
between the asset’s carrying amount and the present value of the estimated future cash flows
(excluding future credit losses that have not been incurred) discounted at the financial asset’s
original effective interest rate. The carrying amount of the asset is reduced through use of an
allowance account. The amount of loss is charged to current operations. If a receivable has a
variable interest rate, the discount rate for measuring any impairment loss is the current effective
interest rate determined under the contract. The criteria that the Company uses to determine that
there is objective evidence of an impairment loss include:

1.  Delinquency in contractual payments of principal or interest;                                       

 2.  Cash flow difficulties experienced by borrower;         
3.  Breach of loan covenants or conditions;         
4.  Deterioration of the borrower’s competitive position; and                                      
5.  Deterioration in the value of the collateral.

When loans and receivable are uncollectible, these are written-off against the related allowance
for receivable impairment. Such loans are written-off after all the necessary procedures have been
completed and the amount of the loss has been determined. Subsequent recoveries of amounts
previously written- off decrease the amount of the provision for receivable impairment in the
statements of members’ equity. If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an event occurring after the impairment
was recognized (such as an improvement in the debtor’s credit rating), the previously recognized
impairment loss is reversed by adjusting the allowance account. Any subsequent reversal of an
impairment loss is recognized in the statements of members’ equity, to the extent that the
carrying value of the asset does not exceed its amortized cost at the reversal date.

The carrying values of cash, loans and receivables, and trade and other payables and approximate
their fair values due to the short-term maturity of these instruments. Those financial assets and
liabilities that have a fixed maturity are measured at amortized cost using the effective interest
rate method. Those that do not have a fixed maturity are measured at cost. All financial assets are
subject to review for impairment.

 B. Financial Asset at Cost

DEFINITION. These include non-derivative financial assets that are either designated to this
category or do not qualify for inclusion in any of the other categories of financial assets. Financial
assets at cost are shown as investments in non-marketable equity securities in the statement of
financial condition.

3 Property and Equipment - net

MEASUREMENT. Property and equipment is stated at cost less accumulated depreciation and
any impairment in value. The initial cost of property and equipment consists of its purchase price,
including taxes and any directly attributable cost of bringing the asset to its working condition
and location for its intended use. Expenditures incurred after the fixed assets have been put into
operation, such as repairs and maintenance and overhaul costs, are normally charged to income in
the period the costs are incurred. In situations where it can be clearly demonstrated that the
expenditures have resulted in an increase in the future economic benefits expected to be obtained
from the use of an item of property and equipment beyond its originally assessed standard of
performance, the expenditures are capitalized as an additional cost of property and equipment.
 
DEPRECIATION. Depreciation is computed using the straight-line method over the  following 
estimated  useful  lives  of  the  properties:  Building  15  years; Equipment 3-5 years; Furniture
and fixtures 5 years; Improvements 5 years. The residual values and estimated useful lives of
property and equipment are reviewed, and adjusted if appropriate, at each statements of financial
condition date.
 
 DERECOGNITION. An item of property and equipment is derecognized upon disposal or when
no future economic benefits are expected to arise from the continued use of the asset. When
property and equipment are retired or otherwise disposed of, the cost of the related accumulated
depreciation and accumulated provision for impairment losses, if any, are removed from the
accounts and any resulting gain or loss is credited or charged against current operations.
 
IMPAIRMENT. The carrying values of the property and equipment are reviewed for impairment
when events or changes in circumstances indicate the carrying value may not be recoverable. If
any such indication exists and where the carrying values exceed the estimated recoverable
amount, an impairment loss is recognized in the statements of operations (see accounting policy
on Impairment of Non-Financial Assets). An asset’s carrying amount is written down
immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated
recoverable amount.
 
4 Other Assets
Other Asset account pertains to the cost of software license application used in the
Company's activity. 

5 Trade and Other Payables

DEFINITION. Financial liabilities include trade and other payables. Financial liabilities are
recognized when the Company becomes a party to the contractual agreements of the instrument.
Trade payables represent unpaid accounts with suppliers. No interest is charged on the trade
payables for payment made after the required settlement date. The Company has financial risk
management policies in place to ensure that all payables are paid within the credit timeframe. The
fair values of trade and other payables have not been disclosed as, due to their short-term
duration, management considers the carrying amounts recognized in the statements of financial
position to be a reasonable approximation of their fair values.

Contingent Liabilities

Contingent liabilities are not recognized in the financial statements. They are disclosed in
the financial statements unless the possibility of an outflow of resources embodying economic
benefits is remote. Contingent assets are not recognized but are disclosed in the financial
statements when an inflow of economic benefits is probable.

6 Revenue

MEASUREMENT. Revenue is recognized to the extent that it is probable that economic

benefits will flow to the Company and the income can be reliably measured. The following
specific recognition criteria must also be met before income is recognized:

1. Sale of goods are recognized upon the receipt of goods by the customers.

2. Revenue is measured by reference to the fair value of consideration received

or receivable by the Company for goods supplied and services provided,
excluding trade discounts, if there is any.
 3. Related costs and expenses are recognized as incurred. These are recognized
in the statements of operations upon utilization of the service or at the date of
their origin. Finance costs, if any, are reported on an accrual basis.
4. Provisions are recognized when an obligation (legal or constructive) is
incurred as a result of a past event and where 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.
5. If the effect of the time value of money is material, provisions are
determined by discounting the expected future cash flows at a pre-tax rate
that reflects current market assessment 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
finance costs, if any

       iv. Significant accounting judgment and estimates

The preparation of the Company’s financial statements in conformity with the Financial
Reporting Framework in the Philippines requires management to make estimates and assumptions
that affects the amounts reported in the Company’s financial statements and accompanying notes.
The estimates and assumptions used in the Company's financial statements are based on
management’s evaluation of relevant facts and circumstances as of the date of the Company's
financial statements. Actual results could differ from such estimates. Estimates and judgments are
continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.

Accounting Estimates 

Revisions to accounting estimates are recognized in the period in which the estimate is revised if
the revision affects only that period or in the period of the revision and future periods if the
revision affects both current and future periods.

Useful Life

The Company estimated the useful lives of its property and equipment based on the period over
which the assets are expected to be available for use. The Company reviews annually the
estimated useful lives of property and equipment based on expected asset utilization as anchored
on business plans and strategies. It is possible that future results of operation could be materially
affected by changes in these estimates brought about by changes in the factors mentioned. A
reduction in the estimated useful lives of property and equipment would increase the recorded
depreciation and decrease non- current assets.

Revenue Recognition

The Company’s revenue recognition policies require the use of estimates and assumptions that
may affect the reported amounts of revenues and receivables. Differences between the amounts
initially recognized and actual settlements are taken up in the accounts upon reconciliation.
However, there is no assurance that such use of estimates may not result to material adjustments
in future periods.

 Impairment
 The Company performs a regular review of the age and status of these accounts, designed to
identify accounts with objective evidence of impairment. The Company assesses impairment on
assets whenever events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. The factors that the Company considers important which could trigger an
impairment review include the following:

1. Significant underperformance relative to expected historical

or projected future operating results;

2. Significant changes in the manner of use of the acquired

assets or the strategy for overall business; and

3. Significant negative industry or economic trends. 

               v.  Schedules

             vi. Board approval for financial statements