FANE 0 SECURITIES AND EXCHANGE COMMISSION ‘SEC EDGA Greens Mendlvyongtty MetoMania Prigpnes Tol (2) 726-0030 30F ax 652)725.253Emak miu@sec go" ph Barcode Page The following document has been received: Rocelving OfficertEncoder : Reiner SJ. Antonio Roeslving Branch: SEC Head Office Receipt Date and Time - August 02, 2013 04:41:49 PM Received From Head Office Company Representative Doe Source Company Information SEC Registration No. CS201112835 ‘Company Name RAPPLER INC. Industry Classification Otner Monetary Intermediation ‘Company Type ‘Stock Corporation Document information Document iO "108022013004037 Document Type FINANCIAL STATEMENT-ANNUAL Document Code FS. Period Covered December $1, 2012 No.of Days Late 0 Department CEDICRMD RemarksaaprueR, ! amarks= Pease Back oan purposestikes REYES TACANDONG & Co, =2Esss” FIRM PRINCIPLES. WISE SOLUTIONS. Yoyonemaanms nase scat FF owns INDEPENDENT AUDITOR'S REPORT ‘The Stockholders andthe Board of Directors Rappler, nc Uni 2501, Ante! Global Busing 3 Julia Vargas, Ortigas Center Pasig ity 1605 Report on the Financial Statements We have audited the accompanying financial statements of Rappler, Inc, which comprise the statements of financial pesition as at December 31, 2012 and 2011, and the statements of income, statements of changes in equity and statements of cash flows fr the year ended December 31, 2012 and the period July 25, 201 to December 32, 2011 and a summary of significant accounting policies and other explanatory information. Management’ Responsibility fr the Financial Statements ‘Management i responsible fr the preparation and fle presentation of these financial statements in accordance with Philippine Financial Reporting Standard for Smalland Medium-sized Entities, and for ‘uch internal control as management determines is necessary to enable the preparation of financal statements that are fee from matedal misstatement, whether due to fraud or error. Auditor's Responsibility, ‘Our responsibility isto express an opinion on these financial statements based on our audits, We conducted our audlts 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 aust 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 auctor considers interna control celevant 0 the entty’ preparation and fair presentation of the financial statements in order to design autit procedures that are appropriate in the cieumstances, but not for the purpose of expressing an ‘pinion 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 bby management, as wel as evaluating the overall presentation ofthe financial statements. We believe thatthe audit evidence we hove obtained ssuffictent end appropriate to provide a basis for our audit opinionReyes Tacanponc & Co. Opinion ‘nour opinion, the financial statements present fly, i all material respects, the financial postion ‘of Rappler, Inc. as at December 31, 2012 and 2014, and its financial performance and is eath flout for the year ended December 31, 2012 and the period July 25, 2011 to December 31, 2011 In conformity wth Philippine Financial Reporting Standard for Small and Medium sized Entities, Report on the Supplementary information Required under Revenue Regulations Nos. 15-2010 and 19-2011 of the Bureau of Internal Revenue ‘Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken az. whole. The supplementary information on taxes and heenses and the schedule of taxable Income and deductible expenses in Note 16 tothe financial statements is presented for purposes of ‘lig with the Bureau of Internal Revenue ard is nota required part ofthe basic financial statements Such information isthe responsiblity of the management of Rapper, Inc. The information has been subjected to the auditing procedures applied in our audit ofthe basic Financial statements and, in our ‘opinion is fay state in al materia respects in relation tothe basi financial statements taken as 2 whole REYES TACANDONG & CO. FoTACH 1. TACAN Partner PA certs No 25006 SEC Acradraton No, 24 (Gee: alist September 8,213 108 Accrecitation No, 08-005 144-27010; Va until overber 5, 2013 "sue ana 2, 201, Mata Gy April 3, 2013, Makati City, Metro ManiaRAPPLER, INC.| December 31 Note “zoe 2 assets ‘current assets Cash and cash equivalents 5 P10.310,642 910,459,501 ‘Trade and other receivables 6 23,276,646 307,068 Other curent assets 7 2,609,357 750,231 Total Curent assets 36276445 13,516,801 Noncurrent Assets Property and equipment 8 9,957,908 4,756,257 Intangible assets 9 44067,089 352.222 Deferred tax asset 4 12968090 2,794,948, Other noneurrent assets 356,988 Total Noneurent Assets s50083 se 103a7 60126528 #19.520.228 aBILTY AND EQUITY Current Liabiity “Trade and other payables 10 94,829,039 ___#903,329 Noncurrent Labi Deposits for future stock subscription n 34737,07 - Total abies 39,566,406 303328 Equity Capital stock 2 1,125,000, 403,225 ‘Additonal paid-in capital 2 49,625,000 24,812,500 Deficit 30,189,918) (6,498,726) Total eau 20560,082 18,716,899 6026,529 _p19,520.228 ‘he Company was crpeatadon uly 2,201 ad started operations in May 2012 Baris ulSTATEMENTS OF INCOME FOR THE YEAR ENDED DECEMBER 33, 2012 AND FOR THE PERIOD JULY 25, 2011 TO DECEMBER 31, 2011° Note 2012 201 REVENUE Service income a 22,482,500 e Interest 5 46,39 22818 Others 303,050 = 22,872,093 2a EXPENSES Salaries, wages and other benefits 24385233 6,653,207 ‘Outside services 15,383,762 953,356 Advertsing 168,478 - Communications 3,420,005 357,587 Depreciation and amortization 8 3,100,099, 293,482 Rent 5 11552,703 136,800, ‘Travel and transportation 1238714 258236, Workshops, training and development 1236.79 139,886 tities 662,008 7387 Office supplies 353,082 95,394 Representation and entertainment 226311 153,480, Taxes and licenses 98452 92,354 Others 13813, 316.092, 1085 BEFORE INCOME TAX 33aa3sa 9,293,674 DEFERRED TAX BENEFIT 4 20,173,202) (2,793,948 NET Loss 23,691,192 96,498,726 Texoczonpanjog Raat Poon Stern ine Compares ineorerted ot 25, 21 antares operations in My 2012RAPPLER, IN ‘STATEMENTS OF CHANGES IN EQUITY ‘FOR THE YEAR ENDED DECEMBER 31, 2012 [AND FOR THE PERIOD JULY 25, 2011 TO DECEMBER 31, 2011* 2o12 2011 Note Shares Amount Shares Amount ‘CaPiTaL sTOOK Authorized -P1 par value 3,000,000 3,900,000 3,000,000 3,000,000 Issued 2 Balance at beginning of period 03.125 8403,125 = e Adsitiona issuance Teag75___7a4g75 403,125 403.125, Balance at end of period $125,000 4,125,000 403,125 403,125 Subscribed 2 Balance at beginning of period 534375534375 534375 534,375, Collection af subscription roceWvable (634,375) (534,375) = = Subscription receivable = = 1534375) (534375) Balance at end of period = = = ADDITIONAL PAIDAIN CAPITAL 12 Balance at beginning of period 24,812,500, - ‘Additonal suance 24,812,500, 24,812,500, 49,625,000 eric Balance at beginning of period (6.498,726) ~ Net loss (23,681,192) (6,498,726) Balance at end oF period (6.498.726) 920,560,082 918,716,399, “Se ccomporpng Maver Feancelsurenenis ‘tne Company as corporate om ay 25,2011 98 tte aeratone in Nay 2012RAPPLER, INC. STATEMENTS OF CASH FLOWS. FOR THE YEAR ENDED DECEMBER 31, 2012 /AND FOR THE PERIOD JULY 25, 2011 TO DECEMBER 31, 2011* Note 212. 2011 ‘CASH FLOWS FROM OPERATING ACTIVITIES Loss before income tax (933,864,334) (99,293,674) ‘Adjustments for: Depreciation and amortization 8 3,100,089 283,482 Unrealized foreign exchange loss 767 11035 Interest income 5 (46,139) (22,838) ‘Dperating oss before working capital changes (30,809,607) (9,031,975) Increase in: Trade and other receivables (22,969,577) = other current assets (1,938,926) (1,057,300) Other noncurrent assets (056,988), = Increase in- “Trade and other payables 3,925,710 903,329 Weteash used in operations (2,149,388) (9,185,940) Interest received 46,138 ‘Net cash used in operating actives 152,103,249) ‘CASH FLOWS FROM INVESTING ACTIVITIES ‘Acquisition of property and equipment 8 (7,596,662) (5,039,739), ‘Acquistion of intangible assets 5 (79,212) (552,222) Proceeds from disposal of property and equipment__8 49,269 5 ‘Net cash used in investing activities (316.625) (5591961) ‘CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of common shares 2 25534375 25,215,625 Deposits for future stock subscription i 38,737,407, = Net cash provided by fnancing activities 60,271,782 25,215,625 NET EFFECT OF EXCHANGE RATE CHANGES IN CASH AND CASH EQUIVALENTS, (767 2,035 [NET INCREASE (DECREASE) IN CASH AND CASH. EQUIVALENTS. (149,859) 10,459,501 ‘CASH AND CASH EQUIVALENTS AT BEGINNING (OF PERIOD 10,459,501 ‘CASH AND CASH EQUIVALENTS AT END OF PERIOD. 10,310,642 _¥10,459,501 “ee conning Note to Prone Satement ‘Te Company wancrporated on July 28, 2014 ad sate operations May 2012RAPPLER, INC. NOTES TO FINANCIAL STATEMENTS 1. Corporate information applet, ine. (the Company) was incorporated in the Philippines and registered with the Securities and Exchange Commission (SEC) on july 25, 2012. ts primary purpose is to develop ‘and sell news, information, and socal network services through various delivery formats. The ‘scope of its services includes communications, adversng, corporate socal responsibilty, public ‘efations, events, brand affity and other related services and packages. ‘The Company’ registered address is Unit 2501, Antel Global builing, 3 Jule Vargas, Ortigas Conter, Pasig Cy 1605, ‘The financial statements of the Company were approved and authorized for issue by the Board ‘of Directors (80D) on April 3, 2013. 2, Basis of Preparation and Statement of Compliance Basis of Preparation ‘The financial statements of the Company have been prepared on ahistorical cost basis and are presented in Philiopne Peso, which isthe Companys funcional and presentation currency. All values are in absolute amounts unless otherwise indicated. Statement of Compliance “he finan statements of the Company have been prepared in compliance with Philippine Fino Reporting Standard for smal and Megha ied Cnt (PFS for SMS) ‘3 Summary of Significant Accounting and Reporting Poidies ash ond Cash Equivalents Cash and cash equivalents are stated at face amount Cash in banks earn interest earn intrest at the respective bank deposit rates, Cosh includes cash on hand and in banks. Cash equivalents are short-term, highiy liquid investments thot are readily convertible to known amounts of eash with orginal maturities of three months or es from dates of placement and which are subject to an insignificant risk of changes in vale cosivable Receivables are financial assets with fixed or determinable payments that are not quoted in an aetive market. Receivables are recognize intially at the transaction rice. Subsequent to initia ‘recognition, receivables are measured at amortized cost using the effective interest method, less ‘any impairment losses. Provsion for impairment i established when there is objective evidence ‘hat the Company wil not be able to collect all amounts due according tothe orginal terms of ‘the receivables