Basis of Preparation

Estimated Retirement Benefits Cost The Company determines its obligation and the cost of retirement and other employee benefits based on the legal requirement as stated in Republic Act (R.A) 764 . !o significant assumption "as used by the Company that "ould generally affect the recogni#ed e$penses and recorded obligation in the future period. Annually% the Company assesses the sufficiency of the recorded retirement benefit liability. Any increase or decrease thereto is ad&usted through the Company's profit or loss. As of (ecember ) % *+ * and *+ % retirement benefit liability recogni#ed by the Company amounted to ,*%+)-%**6 and , %6.4%77/% respecti0ely (see !ote ).

Summary of Significant Accounting Policies

1mployee 2enefits 1mployee benefits are all forms of consideration gi0en by the Company in e$change for ser0ices rendered by employees% including directors and management. 1mployee benefits has four types as follo"s3 Short-term employee benefits. 4hort5term benefits gi0en by the Company to its employees include salaries and "ages% social security contributions% short5term compensated absences% bonuses% and non5monetary benefits. Post-employment benefits. 2enefits that are payable after the completion of employment. Other Long-term employee benefits. 2enefits that are not "holly due "ithin t"el0e months after the end of the period in "hich the employees render the related ser0ices. Termination Benefits. Termination benefits are payable "hen employment is terminated before the normal retirement date% or "hene0er an employee accepts 0oluntary redundancy in e$change for these benefits. The Company recogni#es termination benefits "hen it is demonstrably committed to either6 terminating the employment of current employees according to a detailed formal plan "ithout possibility of "ithdra"al6 or pro0iding termination benefits as a result of an offer made to encourage 0oluntary redundancy. 2enefits falling due more than * months after the end of the reporting date are discounted to present 0alue. The Company pays retirement benefits for its employees in accordance "ith the pro0isions of R.A. !o. 764 % "hich requires the Company to pay a minimum retirement benefit to employees "ho retire after reaching the mandatory retirement age of 6- years old or the optional age of si$ty (6+) years old "ith at least fi0e (-) years of ser0ice to the Company. The retirement benefit is equi0alent to one5half month of the latest basic pay for e0ery year of ser0ice.

1. Retirement Benefits
The Company pro0ides retirement benefit to its employees based on the pro0isions of the R.A. 764 7,hilippine Retirement 8a"9. :nder 4ection */ of ,;R4 for 4<1s% Retirement Benefit Cost% the cost of defined benefits% including those mandated by R.A. 764 % should be determined using an accrued benefit 0aluation method or pro&ected benefit 0aluation method. 2oth methods require an actuarial 0aluation "hich the Company did not underta=e as of (ecember ) % *+ . <anagement belie0es% ho"e0er% that the effect on the financial statements of the difference bet"een the retirement benefit cost determined by the Company and an accepted actuarial 0aluation method is not significant% therefore not engaging an independent actuary to perform the comprehensi0e actuarial 0aluation needed to calculate its defined benefit obligation. The Company commenced recogni#ing retirement benefits in *++6. >o"e0er% the Company ad&usted the estimated amount of pro0ision on retirement benefit from the time "hen there is a reduction in the number of employees. The Company is not able% "ithout undue costs or effort% to use the pro&ected unit credit method to measure its obligation and cost under defined benefit plans "ith its current employees% thereby ignoring the estimated future salary increases% future ser0ice of current employees% and possible in5ser0ice mortality of current employees bet"een the balance sheet date and the date employees are e$pected to begin recei0ing post5 employment benefits. >o"e0er% mortality after ser0ice "ill still need to be considered. The amount of retirement benefit e$pense is allocated as follo"s3
!ote Cost of ser0ices ?eneral and administrati0e e$penses 6 P P 2012 187,548 152, 00 !40,448 , , *+ --%))+ )%444 6/%774

As of (ecember ) % *+ * and *+ % retirement benefit liability recogni#ed in the statements of financial position amounted to ,*%+)-%**6 and , %6.4%77/% respecti0ely.