MRB PROTECTORS & SECURITY SERVICES, INC. 416 G. Flores, Barangay Poblacion Pateros Metro Manila STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR ANNUAL INCOME TAX RETURN The Management of MRB PROTECTORS & SECURITY SERVICES, INC. is responsible for all information and representations contained in the Annual Income Tax Retum for the year ended December 31, 2022. Management is likewise responsible for all information and representations contained in the financial statements accompanying the Annual Income Tax Return covering the same reporting period. Furthermore, the Management is responsible for all information and representations contained in all the tax retums filed for the reporting Period, including, but not limited, to the value added tax and/or percentage tax returns, withholding tax retums, documentary stamp retums, and any and ail other tax returns. In this regard, the Management affirms that the attached audited financial statements for the year ended December 31, 2022 and the accompanying Annual income Tax Retum are in accordance with the books and records of MRB PROTECTORS & SECURITY SERVICES, INC. complete and correct in all material respects. Management likewise affirms that: {a} The Annual Income Tax Return has been prepared in accordance with the Provisions of the National intemal Revenue Code, as amended, and pertinent tax regulations and other issuances of the Department of finance and the Bureau of intemal Revenue: (b) Any disparity of figures in the submitted reports arising from the preparation of financial statements pursuant to financial accounting standards and the Preparation of the Income tax return pursuant to tax accounting rules has been reported as reconciling items and maintained in the company's books and records in accordance with the requirements of Revenue Regulations No. 8-2007 and other relevant issuances; (c]__ MRB PROTECTORS & SECURITY SERVICES, INC. has filed all applicable tax returns, reports and statements required to be filed under Philippine tax laws for the reporting period, and all taxes and other impositions shown thereon fo be due and payable have been paid for the reporting period, except those contested in good faith. MR. MARIO L. RANCE ‘Chairman of the Baard MR. MARIO L. RANCE Chief Executive Officer oe MS. EVANGELINE R. BERNARTE ___ a Chief Finance Officer G NOR Signed this 13" day of Marc! 2923 CEIVEDCPA Certificate No. 0051997 | BOA Registration No. 4756 379-A Dr. J. Fernandez Street, Brey. Highway Hills, Mandaluyong City @® SALVADOR T. FLORESCA, JR., CDA INDEPENDENT AUDITOR’S REPORT ‘The Board of Directors and Shareholders MRB PROTECTORS & SECURITY SERVICES INC. 416 G. Flores Street, Barangy Poblacion Pateros, Metro Manila Report on the Audited of the Financial Statements Opinion I have audited the financial statements of MRB PROTECTORS & SECURITY SERVICES INC. which comprise the Statement of Financial Position as at December 31, 2022 and the Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year then ended and Notes to the Financial Statements, including a summary of ‘significant accounting policies, In my opinion the accompanying financial statements present fairly, in all material respects, the financial position of MRB PROTECTORS & SECURITY SERVICES INC. as of December 31, 2022 and its financial performance and its cash flows for the year then ended in accordance with Philippine Financial Reporting Standards (PFRS). ‘The financial statements of the preceding year, which are included in the accompanying state- ments for comparative purposes, were audited by another auditor who expressed an unmodified opinion on those statements on March 23, 2022. Basis for Opinion I have conducted my audit in accordance with Philippine Standards on Auditing (PSAs). My responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Company in accordance with the ethical requirements that are relevant to my audit of the financial statements in the Philippines, the Code of Ethics for Professional Accountants in the Philippines, and 1 have fulfilled my other ethical responsibilities in accordance with these requirements. | believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Management is responsible for the preparation and fair presentation of the financial statements in accordance with PFRSs, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the Financial Statements, management is responsible for assessing the Company's ability to continue as a going concern basis of accounting unless management either intends to liquidate the Company or, “OF Hasino realistic alternative but to do so. My objectives are to obtain irance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with PSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are consideredCPA Centificate No. 0051997 | BOA Registration No. 4756 379-A Dr. 4. Fernandez Street, Brgy. Highway Hills, Mandaluyong City @® SALVADOR T. FLORESCA, JR., CDA material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with PSAs, I exercise professional judgment and maintain professional skepticism throughout the audit. | also: + Identify 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 my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. ‘* Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. * Evaluate the appropriateness of the accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. * Conclude on the appropriateness of management's use of the going concem basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor's report to the related disclosures in the financial statements or if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. Report on the Suj Information Required U: ue tions 15. My audit was conducted for the purpose of forming an opinion on the basic financial statements taken as whole. The supplementary information on taxes, duties and license fees in Note to the financial statements is presented for the purposes of filing with the Bureau of Internal Revenue and is not a required part of the basic financial statements. In my opinion, the information is fairly stated in all matgyial respects in relation to the basic financial statements taken as whole. Issued on: January 30, 2023, Issued at: Mandaluyong City ‘Tax Identification No. 216-144-672 BOA Registration No. 4756 Valid until: October 31, 2024 BIR Accreditation No: 07-11 Issued on: June 26, 2020 March 14, 2023@® SALVADOR T. FLORESCA, JR., CDA CPA Centificate No. 0051997 | BOA Registration No. 4756 379-A Dr. J. Fernandez Street, Bray. Highway Hills, Mandaluyong City INDEPENDENT AUDITOR’S REPORT TO ACCOMPANY INCOME TAX RETURN ‘The Board of Directors and Shareholders MRB PROTECTORS & SECURITY SERVICES INC. 416 G. Flores Street, Barangy Poblacion Pateros, Metro Manila | have audited the financial statements of MRB PROTECTORS & SECURITY SERVICES INC. for the year ended December 31, 2022 on which I have rendered the attached report dated March i3, 2023. In compliance with Revenue Regulations V-20, | am stating the following: 1, The schedule of taxes paid and accrued by the above-company for the year ended December 31, 2022 is attached and stated in the Annual Income Tax Return. 2. 1am not related by consanguinity or affinity to the president & principal officers of the company. PTR No. 5146718 Issued on: January 30, 2023 Issued at: Mandaluyong City ‘Tax Identification No. 216-144-672 BOA Registration No. 4756 Valid until: October 31, 2024 BIR Accreditation No: 07-100148-001-2020 Issued on: June 26, 2020 Valid until: December 31, 2023 March 14, 2023MRB Protectors & Security Services, Inc. Statement of financial position (All amounts in peso unless otherwise stated) As at December 31 — Notes 2022 2024 Assets Current assets Cash 3 35,340 51,920 Non-current assets Property and equipment 4 42,248 Total Assets 35,340 94,164 Liabilities and shareholders’ equity Current liabilities ‘Trade and other payables a 5 1,109,450 1,009,450 Total liabilities 1,109,450 1,009,450 ‘Shareholders’ Equity ‘Share capital 6 1,000,000 1,000,000 Deficit a 7 (2,074,110) __(1,915,286) _Total shareholders’ equity (1,074,110) (915,286) Total liabilities and shareholders’ equity 35) 94,164 {See accompanying Notes 0 Financial Satemeris)MRB Protectors & Security Services, Inc. Statement of cash flows (All amounts in peso unless otherwise stated) Years ended December 31 2022 2021 os Notes Cash flows from operating activities Net loss (158,824) (161,973) Adjustments for non-cash items - Depreciation 4 42,244 46,084 - Trade and other payables 5 100,000 Net cash used in operating activities (16,580) (115,889) Net decrease in cash (16,580) (115,889) Cash at beginning of year 51,920 167,809 Cash at end of year 35,340 ,920 (See accompanying Notes to Financial Salomon)MRB Protectors & Security Services, Inc. Statement of income (All amounts in peso unless otherwise stated) Years ended December 31 2022 2021 Notes Revenue 8 Operating expenses oo (158,824) (161,973) Net loss (158,824) (161,973) (See accompanying Notes Yo Financial Statements)MRB Protectors & Security Services, Inc. Statement of changes in equity (All amounts in peso unless otherwise stated) Years ended December 31 . Notes 2022 2021 Share capital Authorized and issued 200,000 at 5 par value 6 __ 1,000,000 4,000,000 Net deficit 7 At beginning of year (1,915,286) (1,753,313) Net Loss (158,824) (161,973) ‘At end of year (2,074,110) (1,915,287) ‘Shareholders’ (1,074,110) (915,286) (See accompanying Notes to Financial Statements) Dae. ats ec aun a scree mLMRB Protectors & Security Services, Inc. Notes to financial statements (All amounts in peso unless otherwise stated) 1. General information MRB Protectors & Security Services, Inc. (‘the company’) was incorporated in the Philippines and registered with Securities and Exchange Commission under SEC registration number CS201625831. The company is primarily engaged in investigation and security activities. Its address is located at 416 G. Flores Street, Barangay Poblacion, Pateros Metro Manila. These financial statements were approved and authorized for issue by the Board of Directors on March 13, 2023. 2. Summary of significant accounting policies Basis of Preparation The financial statements have been prepared using the historical cost basis. The audited financial statements are presented in Philippine Peso (Php), which is the company's functional and Presentation currency. All amounts are rounded-off to the nearest Php unless otherwise indicated, Statement of Compliance This is the first set of financial statements prepared by MRB Protectors & Security Services, Inc. in accordance with the Philippine Financial Reporting Standards (PFRS) for Small Entities. This financial reporting framework was adopted by Securities and Exchange Commission (SEC) in 2018 as response to feedback on the complexity of PFRS for Small and Medium Sized Entities (SMEs) application. Based on SEC Memorandum Circular §-2018, small entities are those that meet all the following criteria: (1) Total Assets of between Php 3 million to Php 100 milion or total liabilities of between Php 3 million to Php 100 million. If the entity is a parent company, the said amounts shall be based on the consolidated figures; (2) Are not required to file financial statements under Part Il of SRC Rule 68; (3) Are not in the process of fling their financial statements for the purpose of issuing any class of instruments in a public market, and; (4) Are not holders of secondary licenses issued by regulatory agencies. ‘Some of key simplifications provided by PFRS for SE which are also adopted by the company as Part of its accounting policies are the following: * There is no concept of "finance lease”. All lease receipts (payments) are recognized as income (expense) as earned (incurred). + There is no accounting for onerous contracts. * For defined benefit plans, an entity is required to use the accrual approach in calculating benefit obligations in accordance with Republic Act (RA) 7641, The Philippine Retirement Pay Law, or company policy (if superior than RA 7641). Accrual approach is applied by calculating the expected liability as of reporting date using the current salary of the entitled employees and the employees’ years of service, without consideration of future changes in salary rates and service periods. + Entities are given a policy choice of not recognizing deferred taxes in the financial statements. * Prior period adjustments are just captured in the opening balance of the current year, but with appropriate disclosures == — © There is no requirems provide disclosures about ren estimates and judgment, including information $n BEET, ie =DFollowing the adoption of the above, the updated principal accounting policies applied in the preparation of these financial statements are set out below. Cash Cash which is stated at face value includes cash on hand, petty cash fund and demand deposits. Bank overdrafts, if any, are normally considered financing activities similar to borrowings. However, if they are repayable on demand and form an integral part of an entity's cash management, bank overdrafts are a component of cash. Property, plant and equipment Property, plant and equipment are tangible assets that are held for use in the production or supply ‘of goods or services, for rental to others, or for administrative purposes; and are expected to be used during more than one period. Items such as spare parts, stand-by equipment and servicing ‘equipment are property, plant and equipment if the company expects to use them during more than ‘one period or if they can be used only in connection with an item of property, plant and equipment. Otherwise, such items are classified as inventories. Land and buildings are separable assets, and the company shall account for them separately, even when they are acquired together. Property, plant and equipment are initially measured at cost. The cost of an item of property, plant ‘and equipment comprises all of the following: a) its purchase price, including legal and brokerage fees, import duties and non-refundable purchase taxes, after deducting trade discounts and rebates; and b) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. These can include the costs of site preparation, initial delivery and handling, installation and assembly, and testing of functionality. If payment is deferred beyond normal credit terms, the cost is the present value of all future payments. The following costs are not costs of an item of property, plant and equipment, and an entity shall recognize them as an expense when they are incurred: a) costs of opening a new facility; b) costs of introducing a new product or service (including costs of advertising and promotional activities); c) costs of conducting business in a new location or with a new class of customer (including costs of staff training); and d) administration and other general overhead costs. The income and related expenses of incidental operations during construction or development of an item of property, plant and equipment are recognized in profit or loss if those operations are not necessary to bring the item to its intended location and operating condition. The company measures property, plant and equipment after initial recognition at cost less any accumulated depreciation and any accumulated impairment losses. The company allocates the depreciable amount of an asset on a systematic basis over its useful life. The depreciable amount is. cost minus accumulated depreciation and accumulated impairment losses, and minus residual value. The residual value of an asset is the estimated amount that an entity would currently obtain from disposal of an asset, after deducting the estimated costs of disposal, if the asset was already of the age and in the condition expected at the end of its useful life. The depreciation charge for each period which is computed on the straight line method based on the estimated useful lfe of the asset shall be recognized in profit or loss. ‘Subsequent expenditures relating to an item of property, plant and equipment that have already been recognized are added to the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard or performance of the existing assets that will flow to the corporation. All other subsequent expenditures are recognized as expenses in the period in which those are incurred, Estimated future dismantiement costs of items of property, plant and equipment arising from legal or constructive obligations are recognized as part of property and equipment and are measured at present value at the time when the obligation was incurred.Gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognized in income. ‘When assets are retired or otherwise disposed of their costs and related accumulated depreciation are eliminated from the account and any gains or losses resulting from their disposal in the statement of income of such period. The useful lives and depreciation method are reviewed periodically to ensure that the periods and methods of depreciation are consistent with the expected pattern of economic benefits from its property, plant and equipment. Derecognition (retirement and disposals) of an asset should be removed from the balance sheet on disposal or when it is withdrawn from use and no future economic benefits are expected from its disposal. The gain or loss on disposal is the difference between the proceeds and the carrying amount and should be recognized in the income statement. Trade and other payables Trade and other payables refer to accounts payable to consignor, customer's deposit, accrued expenses, and dues to government. Accounts payable and other liabilities are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. These items are measured initially at transaction cost and subsequently measured at undiscounted amount of cash or other considerations expected to be paid. Taxes payable pertain to liabilities due to government arising from withholding taxes from the compensation of employees and taxes withheld on purchase of goods and services from suppliers and value-added taxes (i.e. output less input tax). Similar with trade and other payables, these are measured initially at transaction cost. ‘Share Capital Share capital represents ordinary shares and is determined using the nominal par value of shares that have been issued and fully paid. Ordinary shares are classified as equity and are measured at the fair value of the cash or other resources received or receivable, net of the direct costs or issuing the equity instruments. If payment is deferred and the time value is material, the initial measurement is on a present value basis. Retained earings Retained eamings include all current and prior periods result as disclosed in the statement of income, Rendering of services ‘When the outcome of a transaction involving the rendering of services can be estimated reliably, the ‘company shall recognize revenue associated with the transaction by reference to the stage of ‘completion of the transaction at the end of the reporting period (sometimes referred to as the percentage of completion method). The outcome of a transaction can be estimated reliably when all the following conditions are satisfied: a) the amount of revenue can be measured reliably; b) itis probable that the economic benefits associated with the transaction will flow to the company; c) the stage of completion of the transaction at the end of the reporting period can be measured reliably; and d) the costs incurred for the transaction and the costs to complete the transaction can be measured reliably. ‘When services are performed by an indeterminate number of acts over a specified period of time, an entity recognizes revenue on a straight-line basis over the specified period unless there is ‘evidence that some other method better represents the stage of completion. When a specific act is much more significant than any other act, the company postpones recognition of revenue until the significant act is executed.Cost of services Cost of services is recognized in profit or loss in the period the services are provided. The account includes salaries and benefits, depreciation, utilities, and other expenses directly attributed to the services provided. Operating Expenses Cost and administrative expenses are recognized in the statement of income upon utilization of the service or in the date they are incurred. Income Tax The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date. Management periodically evaluates positions taken in tax retums with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities, Deferred income tax is recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits by the Company. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date. The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profi. Events after the Reporting Date Post year-end events that provide additional information about the Company's position at the reporting date (adjusting events) are reflected in the financial statements. Post year-end events that are not adjusting events are disclosed in the notes to the financial statements when material. 3. Cash ‘The account represents the cash in reputable bank. 4, Property and equipment ‘The account is simplified by showing below lapsing schedule: January1__ Movement _ December 31 Cost Firearms 168,000 168,000 Office equipment ____62,420 62,420 230,420 230,420 ‘Accumulated Depreciation Firearms 137,200 30,800 168,000 Office equipment 50,976 11,444 62,420 188,176 42,244 230,420 Book Value Firearms 30,800 (30,800) Office equipment — 11,444 (11,444) Net 42,244 (42,244)5. Trade and other payables The account as at December 31 consists of: - 2022 2021 Trade payable 7,100,000 7,000,000 Rent payable 9,000 9,000 Withholding tax expanded : 450 450 Total 1,109,450 7,009,450 6. Share capital The total authorized number of ordinary shares is 200,000 shares with a par value of PS per share as at December 31, 2022. All issued shares are fully paid and have equal rights to vote at general meetings and entitled to receive dividends when declared. There were no changes in the authorized number of ordinary shares and its value since the date of incorporation. 7. Deficit The account as at December 31 consists of: = : : 2022 2021 Beginning of Year (1,915,286) (1,753,313) Net loss a : (158,824) (161,973) Net (2,074,110) (1,915,286) 8. Sales This account represents the revenue in rendering security services. No revenue recognized during the year. 9. Operating expenses Please see below the composition of the account as at December 31 = er ) 2024 Rent expense 108,000 108,000 Depreciation 42,244 46,084 Taxes and licenses 8,156 7,889 Office Supplies Transportation and travel Total 161,973, 10. Supplementary Information Required by Bureau of Internal Revenue (BIR) This information is presented for purposes of filing with the BIR and is not a required part of the basic financial statements. Revenue Regulations (RR) No. 15-2010 On December 10, 2010, RR No. 15-2010 became effective and amended certain provisions of RR No. 21-2002 prescribing the manner of compliance with any documentary and/or procedural requirements in connection with the preparation and submission of financial statements and income tax returns. Section 2 of RR No. 21-2002 was further amended to include in the Notes to FinancialStatements information on taxes, duties and license fees paid or accrued during the year in addition to what is mandated by the PFRS for SEs. The additional information required by RR No. 15-2010 is presented below. Withholding tax Total remittances for the years 2022 and 2021 are summarized as follows: 2022 2021 Expanded _ 5,400 5,400 Taxes and licenses Total payments for the years 2022 and 2021 are summarized as follows: 2022 2021 Business Permit 7,656 7,389 BIR Registration Fee - - 500 500 Total 8,156 7,889 ‘Tax assessment and cases AAs of the date of issuance of the Audit Report, there was no pending LOA issued by the BIR. Revenue Regulation No. 19-2011 RR No, 19-2011 prescribes the new BIR forms that should be used for income tax filing covering and starting with the calendar year 2011 and modifies Revenue Memorandum Circular No. 57-2011 In the Guidelines and Instructions Section of the new BIR Form 1702 (version November 2011), a required attachment to the income tax returns is an Account Information Form and/or Financial ‘Statements that include in the Notes to Financial Statements schedules of sales/receiptsifees, cost of sales/services, non-operating and taxable other income, itemized deductions (if the taxpayer did not avail of the Optional Standard Deduction or OSD), taxes and licenses and other information prescribed to be disclosed in the Notes to the Financial statements. The additional information required by RR No. 19-2011 is presented below. Sales and Cost of Sales The Company's sales and cost of sales subject to the regular corporate income tax rate of 20% is the same as shown in Note 8 to the financial statements. Itemized Deductions The Company's itemized deductions which are subject to the regular corporate income tax rate of 20% are the same as shown in Note 9 to the financial statements.