SECURITIES AND EXCHANGE COMMISSION

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2 1/25/2018 [Amend-1]Quarterly Report CR SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-Q QUARTERLY REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SRC RULE 17(2)(b) THEREUNDER 1. For the quarterly period ended Aug 31, SEC Identification Number AS BIR Tax Identification No Exact name of issuer as specified in its charter Boulevard Holdings, Inc. 5. Province, country or other jurisdiction of incorporation or organization Makati City, Philippines 6. Industry Classification Code(SEC Use Only) 7. Address of principal office 1704 Peak Tower, 107 L.P. Leviste St., Salcedo Village, Makati City, Philippines Postal Code Issuer's telephone number, including area code (632) Former name or former address, and former fiscal year, if changed since last report Not applicable 10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA Title of Each Class Yes No Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding Numbmer of Common Stock Outstanding 12,000,000,000 Amount of Debt Outstanding 228,605, Are any or all of registrant's securities listed on a Stock Exchange? If yes, state the name of such stock exchange and the classes of securities listed therein: Philippine Stock Exchange Common Stocks 12. Indicate by check mark whether the registrant: 1/3

3 1/25/2018 [Amend-1]Quarterly Report (a) has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17 thereunder or Sections 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of the Corporation Code of the Philippines, during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports) Yes No (b) has been subject to such filing requirements for the past ninety (90) days Yes No The Exchange does not warrant and holds no responsibility for the veracity of the facts and representations contained in all corporate disclosures, including financial reports. All data contained herein are prepared and submitted by the disclosing party to the Exchange, and are disseminated solely for purposes of information. Any questions on the data contained herein should be addressed directly to the Corporate Information Officer of the disclosing party. Boulevard Holdings, Inc. BHI PSE Disclosure Form Quarterly Report References: SRC Rule 17 and Sections 17.2 and 17.8 of the Revised Disclosure Rules For the period ended Aug 31, 2017 Currency (indicate units, if applicable) PhP Balance Sheet Period Ended Fiscal Year Ended (Audited) Aug 31, 2017 May 31, 2017 Current Assets 92,940,961 87,791,830 Total Assets 2,136,935,514 2,115,460,208 Current Liabilities 220,174, ,504,390 Total Liabilities 228,605, ,935,215 Retained Earnings/(Deficit) -70,013,440-68,602,784 Stockholders' Equity 1,908,329,901 1,890,524,993 Stockholders' Equity - Parent 1,838,671,928 1,820,459,283 Book Value per Share Income Statement Current Year (3 Months) Previous Year (3 Months) Current Year-To-Date Previous Year-To-Date Gross Revenue 19,872,191 21,837,570 19,872,191 21,837,570 Gross Expense 21,169,365 21,285,814 21,169,365 21,285, /3

4 1/25/2018 [Amend-1]Quarterly Report Non-Operating Income 14,553 56,234 14,553 56,234 Non-Operating Expense Income/(Loss) Before Tax 15, ,182 15, ,182-1,298, ,808-1,298, ,808 Income Tax Expense 519, , , ,969 Net Income/(Loss) After Tax Net Income Attributable to Parent Equity Holder Earnings/(Loss) Per Share (Basic) Earnings/(Loss) Per Share (Diluted) -1,818, ,161-1,818, ,161-1,410, ,147-1,410, , Current Year (Trailing 12 months) Earnings/(Loss) Per Share (Basic) 0 0 Earnings/(Loss) Per Share (Diluted) 0 0 Previous Year (Trailing 12 months) Other Relevant Information The amendment was made to correct the following: 1) In the attached SEC Form 17-Q under Table of Contents, from Consolidated Statements of Income for the Three Months Period Ended August 31, 2017 and May 31, 2017 to Consolidated Statements of Income for the Three Months Period Ended August 31, 2017 and August 31, ) In the attached SEC Form 17-Q under Consolidated Statements of Cash Flows header, from August 31, 201 to August 31, ) Gross Revenue under Previous Year-To-Date, from 21,8,387,570 to 21,837,570 4) Net Income Attributable to Parent under Current Year (3 Months) and Current Year-To-Date, from 14,110,656 to -1,410,656 5) In the attached SEC Form 17-Q page 59 under Financial Soundness Indicators, typo-error on performance indicators under Year Ended May 31, 2017 and First Quarter Ended August 31, 2017, b. Solvency/Debt-to-Equity Ratio, c. Asset to equity ratio and under e. Profitability Ratios/ Return on total equity Filed on behalf by: Name Designation Mauro Badiola VP Finance/ Chief Corporate Information Officer & Alternate SEC Compliance Officer 3/3

5 COVER SHEET A S SEC Registration Number B O U L E V A R D H O L D I N G S, I N C. A N D S U B S I D I A R I E S (Company s Full Name) P E A K T O W E R, L. P. L E V I S T E O S T R E E T S A L C E D O V I L L A G E M A K A T I C I T Y T (Business Address: No. Street City/Town/Province) Mr. Mauro Badiola (632) (Contact Person) (Company Telephone Number) Q 1 0 Month Day (Form Type) Month Day (Fiscal Year) (Annual Meeting) Not Applicable (Secondary License Type, If Applicable) Dept. Requiring this Doc. Amended Articles Number/Section 394 Total Amount of Borrowings Total No. of Stockholders Domestic Foreign To be accomplished by SEC Personnel concerned File Number LCU Document ID Cashier S T A M P S Remarks: Please use BLACK ink for scanning purposes. 1

6 SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-Q QUARTERLY REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SRC RULE 17(2)(b) THEREUNDER 1. For the quarterly period ended August 31, SEC Identification No AS BIR Tax Identification No Exact name of issuer as specified in its charter BOULEVARD HOLDINGS, INC. 5. Province, Country or other jurisdiction of incorporation or organization: Makati City, Philippines 6. Industry Classification Code: ( ) (SEC Use only) Peak Tower, 107 L.P. Leviste St., Salcedo Village, Makati City Address of principal office Postal Code (632) Issuer s telephone number, including area code 9. Not applicable Former name, former address, and former fiscal year, if changed since last report 10. Securities registered pursuant to Section 8 & 12 of the SRC, or Sec 4 and 8 of the RSA a) Authorized Capital Stock Title of Each Class Common shares,.10 par value b) Issued and Outstanding Common shares,.10 par value Amount 12,000,000,000 shares P1,200,000,000 12,000,000,000 shares P1,200,000,000 c) Amount of Debt Outstanding P228,605, Are any or all of these securities listed on a Stock Exchange Yes ( / ) No ( ) If yes, state the name of such stock exchange and the classes of securities listed therein: Stock Exchange : Philippine Stock Exchange Securities : common shares 2

7 12. Check whether the issuer: a. (a) has filed all report to be filed by Section 17 of the SRC and SRC Rule 17 thereunder or section 11 of the Revised Securities Act (RSA) Rule 11(a)-1 thereunder, and Section 26 and 141 of the Corporation Code of the Philippines during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports): Yes ( / ) No ( ) a. (b) has been subject to such filing requirements for the past ninety (90) days Yes ( / ) No ( ) 3

8 TABLE OF CONTENTS PART 1 Item 1. - FINANCIAL INFORMATION Financial Statements Consolidated Statements of Financial Position as at August 31, 2017 and May 31, 2017 Consolidated Statements of Income for the Three Months Period Ended August 31, 2017 and August 31, 2016 Consolidated Statements of Comprehensive Income for the Three Months Ended August 31, 2017 and August 31, 2016 Consolidated Statements of Changes in Equity for the Three Months Period Ended August 31, 2017 and August 31, 2016 Consolidated Statements of Cash Flows for the Three Months Period Ended August 31, 2017 and August 31, 2016 Page No Notes to Consolidated Financial Statements 10 Item 2. PART II Management s Discussion and Analysis of Financial Condition and Results of Operations ( MD&A ) OTHER INFORMATION 52 Item 3. Three Months Period Ended August 31, 2017 Developments 54 Item 4. Other Notes to Three Months Period Ended August 31, 2017 Operations and Financials 55 Item 5. Financial Soundness Indicators 59 Signature 60 4

9 BOULEVARD HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION EXHIBIT A August 31, 2017 May 31, 2017 Unaudited Audited ASSETS Current Assets Cash (Note 4) P=5,429,608 P=2,570,515 Trade and other receivables -net (Note 5) 4,175,872 4,868,478 Amounts owed by related parties (Note 17) 42,540,033 42,540,033 Inventories (Note 6) 794, ,493 Prepayments and other current assets net (Note 7) 40,000,568 36,939,311 Total Current Assets 92,940,961 87,791,830 Noncurrent Assets Investments properties - net (Note 8) 920,705, ,171,889 Property and equipment - net (Note 9) 442,535, ,742,231 Other noncurrent assets - net (Note 10) 680,754, ,754,258 Total Noncurrent Assets 2,043,994,553 2,027,668,378 TOTAL ASSETS P=2,136,935,514 P=2,115,460,208 LIABILITIES AND EQUITY Current Liabilities Trade and other payables (Note 11) P=200,243,381 P=196,572,983 Amounts owed to related parties (Note 17) 19,561,052 19,561,052 Customers' deposits 370, ,355 Total Current Liabilities 220,174, ,504,390 Noncurrent Liability Deferred tax liability 2,238,726 2,238,726 Retirement benefits liability (Note 12) 6,192,099 6,192,099 Total Noncurrent liabilities 8,430,825 8,430,825 Total Liabilities 228,605, ,935,215 Equity Attributable to Equity Holders of the Parent Capital stock - P0.10 par value (Note 21) Authorized - 12,000,000,000 common shares Issued and subscribed - 12,000,000,000 common shares 1,200,000,000 1,200,000,000 Additional paid-in capital (Note 21) 612,094, ,094,337 Cumulative translation adjustments 106,750, ,850,576 Remeasurement goss on retirement benefits liability ( Note 12) 3,863,291 3,863,291 Subscription receivables (Note 22) (14,022,899) (30,746,137) Deficit (70,013,440) (68,602,784) 1,838,671,928 1,820,459,283 Non-controlling interests 69,657,973 70,065,710 Total Equity 1,908,329,901 1,890,524,993 TOTAL LIABILITIES AND EQUITY P=2,136,935,514 P=2,115,460,208 See accompanying Notes to Consolidated Financial Statements. 5

10 BOULEVARD HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Three Months period Ended August 31, 2017 August 31, 2016 Unaudited Unaudited REVENUES (Notes 8, 13 and 19) Rooms P=13,516,286 P=14,898,898 Food and beverages 5,369,995 5,299,017 Others 985,910 1,639,655 19,872,191 21,837,570 COSTS AND EXPENSES Cost of sales and services (Note 13) 6,645,589 8,519,615 General, administrative and selling (Note 14) 14,523,776 12,766,199 21,169,365 21,285,814 OTHER INCOME (CHARGES) Foreign exchange gains-net 14,553 56,234 Interest income and others (15,851) (135,182) ` (1,298) (78,948) INCOME (LOSS) BEFORE INCOME TAX (1,298,472) 472,808 Provision for income tax 519, ,969 NET INCOME (LOSS) (P=1,818,393) (P=168,161) ATTRIBUTABLE TO Equity holders of the Parent (P=1,410,656) (P=512,147) Non-controlling interests (407,737) 343,986 (P=1,818,393) (P=168,161) LOSS PER SHARE (Note 17) Basic loss per share for the period attributable to equity holders of the Parent (P=0.0001) (P=0.0000) See accompanying Notes to Consolidated Financial Statements. 6

11 BOULEVARD HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME UNAUDITED Three Months period Ended August 31, 2017 August 31, 2016 NET INCOME (LOSS) (P=1,818,393) (P=168,161) Cumulative translation adjustments 2,900,063 (393,965) TOTAL COMPREHENSIVE INCOME P=1,081,670 (562,126) ATTRIBUTABLE TO Equity holders of the parent: P=1,489,407 (P=906,113) Non-controlling interest (407,737) 343,987 P=1,081,670 (P=562,126) See accompanying Notes to Consolidated Financial Statements 7

12 BOULEVARD HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY THREE MONTHS PERIOD ENDED AUGUST 31, 2017 and 2016 Attributable to Equity Holders of the Parent Additional Capital Paid In Cumulative Remeasurement loss on retirement Stock Capital Subscription Translation Retained benefits Controlling Total (Note 21) (Note 21) receivables Adjustments Earnings liability Total Interests Equity Balance as of May 31, ,200,000, ,094,337 (127,811,975) 103,952,189 (29,398,857) 2,220,677 1,761,056,371 85,394,631 1,846,451,002 Translation adjustment 393, , ,965 Net loss for the period (512,147) (512,147) (512,147) Subscription receivable 3,924,000 3,924,000 3,924,000 Non-controlling interests - (343,987) (343,987) Balance as of August 31, ,200,000, ,094,337 (123,887,975) 104,346,154 (29,911,004) 2,220,677 1,764,862,189 85,050,644 1,849,912,833 Non- Balance as of May 31, ,200,000, ,094,337 (30,746,137) 103,850,576 (68,602,784) 3,863,291 1,820,459,283 70,065,710 1,890,524,993 Translation adjustment 2,900,063 2,900,063 2,900,063 Net loss for the period (1,410,656) (1,410,656) (1,410,656) Subscription receivable 16,723,238 16,723,238 16,723,238 Non-controlling interests - (407,737) (407,737) Balance as of August 31, ,200,000, ,094,337 (14,022,899) 106,750,639 (70,013,440) 3,863,291 69,657,973 1,908,329,901 See accompanying Notes to Consolidated Financial Statements. 8

13 BOULEVARD HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Period Ended August 31, 2017 August 31, 2016 CASH FLOWS FROM OPERATING ACTIVITIES Income (loss) before income tax (P=1,298,472) (P=512,147) Adjustment for: Depreciation (Note 8 and 9) 2,490,403 2,060,594 Interest income (15,851) (226) Operating income before working capital changes 1,176,080 1,548,221 Decrease (increase) in: Trade and other receivables 692,606 (2,598,601) Inventories 78,613 52,038 Prepayment and other current assets (1,295,263) (202,028) Increase (decrease) in: Trade and other payables 906,457 7,180,656 Amount owed to related parties 485,093 Net cash flows generated from operations 2,043,586 5,980,286 Interest received 15, Net cash flows from operating activities 2,059,437 5,980,512 CASH FLOWS FROM INVESTING ACTIVITIES Decrease (increase) in Acquisition of additional property and equipment (Note 9) (18,823,645) (5,500,000) Other non current assets (4,581,460) Net cash flows used in investing activities (18,823,645) (10,081,460) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from collection of subscription receivable (Note 21) 16,723,238 3,924,000 Net cash flows form (used in) financing activities 16,723,238 3,924,000 NET INCREASE IN CASH (40,970) (176,948) EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH 2,900,063 (393,965) CASH AT BEGINNING OF YEAR 2,570,515 2,146,601 CASH AT END OF YEAR P=5,429,608 P=1,575,688 See accompanying Notes to Consolidate Financial Statements 9

14 BOULEVARD HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Corporate Information, Status of Operations of Subsidiaries and Affiliates Corporate Information Boulevard Holdings, Inc. (the Parent Company) was incorporated with the Philippine Securities and Exchange Commission (SEC) on July 13, 1994 primarily to invest in, purchase, or otherwise acquire and own, hold, use, develop, sell, assign, among others, real and personal property of every kind and description. The Parent Company and its subsidiaries (collectively referred to as the Group ) has investments in operations involved in the development of leisure, hotel and tourist estates, as well as residential and office condominiums, operation and management of hotels and resorts, travel related and other allied businesses and services in the Philippines and abroad. The Parent Company s registered address is located at Unit 1704, 17th Floor, The Peak Tower, 107 L.P. Leviste Street, Salcedo Village, Makati City. Business Operations a. Friday s Holdings, Inc. (FHI) owns and operates a luxury resort situated in Boracay Island that offers fifty-two (52) rooms and facilities and amenities such as restaurants, function halls and other touristoriented activities. On February 14, 2014, a dispute arose between FHI and the heir of the lessor regarding the possession of the land where the resort is located. Stipulation of the lease contract states the transfer of ownership of the land upon consummation. The lease contract was consummated on February 14, However, as an act of dishonoring the contract, the heir of the lessor barricaded a portion of FHI s beach resort in defense that the contract was void at the very beginning. To counter this action, FHI filed a criminal case for usurpation of property as well as a civil case for forcible entry with a Temporary Restraining Order to remove the barricades built. On July 18, 2014, the Municipal Circuit Trial Court of Buruanga-Malay issued a Writ of Preliminary Injunction, ordering the lessor to vacate the premises. On September 29, 2014, the property under litigation has been successfully registered under the name of FHI with the Provincial Register of Deeds of Aklan. On December 3, 2014, FHI received the Court Order and Writ of Preliminary Injunction from the 5th Municipal Circuit Trial Court of Buruanga-Malay, Province of Aklan allowing FHI to take possession of the property at Boracay, Aklan. On March 2, 2015, FHI received the Court Order from the 5th Municipal Circuit Trial Court of Buruanga- Malay, Province of Aklan granting the request for police assistance in the implementation of the Writ of Preliminary Injunction dated November 26, Police assistance was primarily for the maintenance of peace and order and so as to endure safety of the Court personnel tasked for the implementation of the same. On March 13, 2015, the Court Order was implemented and FHI re-occupied the approximately 1,500 sq. m. prime beach front at Boracay. On April 24, 2015, the Court promulgated its decision upholding the superior right of FHI to the possession of the subject property and making permanent the injunction against the heir of the lessor and its representatives to any further intrusion thereon. The heir of the lessor then elevate the matter on ordinary appeal as provided for under the Rules of Court. 10

15 On September 24, 2015, the case has been raffled off to Branch 6 of the Regional Trial Court of Kalibo, Aklan, presided over by Judge Jemena Abella-Arbis. The parties have been directed to turn in their Memoranda of the legal and factual issues of the case. On February 3, 2016, FHI became a third party claimant when a Writ of Execution was issued by the Regional Trial Court of Quezon City and a Notice of Public Auction on March 7, 2016 on the 1,477 sq. m. real property of FHI in Boracay. FHI being a third party claimant, filed a motion to suspend the auction. On March 4, 2016, resolution was issued for the Third Party Claimant s Omnibus Motion to suspend the scheduled auction sale on March 7, On August 30, 2016, the Provincial Prosecution Office of Kalibo, Aklan issued a resolution charging Mila Yap-Sumndad and other parties with the crime of grave coercion. On September 5, 2016, a Writ of Preliminary Injunction from Regional Trial Court of Kalibo, Aklan was issued in favor FHI, directing defendant to pay the latter a reasonable compensation amounting to P=74.48 million for loss profit equal to daily rental rate of nineteen (19) rooms involved in the forcible entry for a period from February 15, 2014 up to March 14, 2015, or a total of three hundred ninety-two (392) days. Mila Yap-Sumndad interposed a Motion for Reconsideration. FHI filed a Motion for Execution before the Regional Trial Court of Kalibo, Aklan to execute the award of P=74.48 million. Also, in a related case, the complaint for falsification of public documents filed against Dalidig Sumndad, the two witnesses who signed on the Compromise Agreement, and Jose Marcel Panlilio, was recommended for dismissal on March 26, 2015 for insufficiency of evidence and approved by the City Prosecutor of Makati. b. FPGI started the construction of a luxurious native style boutique resort in the exclusive Boquete Island in Puerto Galera, Oriental Mindoro during 2012, aiming to replicate the success of the original Friday s Resort in Boracay. However, the construction was temporarily suspended in March 2014 by management s decision, but it eventually resumed in October In May 2017, FPGI's project consultant recommended the demolition and reconstruction of two (2) out of the eight (8) cluster villas and the generator- set room of the hotel resort in Puerto Galera as a result of a typhoon and for failing to meet the quality standards of FPGI. In addition, the management plans to renovate in the near future the staff house/laundry room and office/storage room that were also damaged by the typhoon. The aggregate cost of derecognized hotel resort properties amounted to P=10.43 million in As at August 31, 2017, construction in progress has an estimated percentage of completion of 75%. The hotel started its soft opening in December The management expects the construction will be completed by early c. COLI is engaged in the real estate business and currently owns 44% of FHI. COLI s only assets relate to its investment in FHI. COLI is yet to start its business operations. d. Askar has a previous lease agreement with Grand International Airways (GIA), an affiliate, involving two aircrafts the former owns. The agreement was for a period of thirty-six (36) months which ended on August 1, Askar did not renew its lease agreement with GIA on expiry date as the latter has indefinitely suspended its operations. e. Infocast has not yet started commercial operations and its business prospects are uncertain. 11

16 The Group incurred net losses of P=1.82 million and P=.17 million for the quarter ended August 31, 2017 and 2016 respectively, resulting to a total deficit of P=70.13 million P=68.60 million in August 31, 2017 and May 31, 2017, respectively. The stockholder has committed to complete the development of Friday s Boquete Beach Resort in Puerto Galera which is set to operate in December The Group is focused on investing in properties in other locations to be developed which will bring in the future the construction and developments of Friday s Resort. The Group s plan for future action is to improve its resorts operation through enhanced marketing and promotional activities. The consolidated financial statements are prepared on the basis that the Group will continue be a going concern and as such, the consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should the Group be unable to continue operating as a going concern. 2. Summary of Significant Accounting Policies and Financial Reporting Practices Basis of Preparation The consolidated financial statements have been prepared on the historical cost basis. The consolidated financial statements are presented in Philippine peso, which is the Parent Company s functional and presentation currency. All amounts are rounded to the nearest peso, except as otherwise indicated. Statement of Compliance The consolidated financial statements have been prepared in compliance with the Philippine Financial Reporting Standards (PFRSs). Basis of Consolidation The consolidated financial statements comprise the financial statements of the Parent Company and the following subsidiaries as at August 31, 2017, August 31, 2016 and May 31, 2017: Financial Percentage of Ownership Country of Reporting August 31, 2017 August 31, 2016 Subsidiary Incorporation Period Direct Indirect Direct Indirect FHI (a) Philippines June FPGI (a), (b) Philippines April COLI (a), (b) Philippines December 31* Askar Ltd. (c), (e) British Virgin Islands May Infocast (d), (e) Canada December 31* *For consolidation purposes, additional financial information of Infocast and COLI were prepared as of the same date as the financial statements of the Parent Company. (a) Majority of the subsidiary s BOD are also BOD of the Parent Company (b) Parent Company exercises power to govern the financial and operating policies by virtue of a shareholders agreement by the minority shareholders in favor of the Parent Company (c) No longer operating (d) Pre-operating stage (e) Foreign subsidiaries Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has: 12

17 Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee); Exposure, or rights, to variable returns from its involvement with the investee; and The ability to use its power over the investee to affect its returns. Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Parent Company has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: The contractual arrangement(s) with the other vote holders of the investee; Rights arising from other contractual arrangements; and The Group s voting rights and potential voting rights. The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary. Profit or loss and each component of OCI are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it derecognizes the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognized in profit or loss. Any investment retained is recognized at fair value. Non-Controlling interests Non-controlling interests represent interests in a subsidiary that is not owned, directly or indirectly, by the Parent Company. Profit or loss and each component of OCI (loss) are attributed to the equity holders of the Parent Company and to the non-controlling interests. Total comprehensive income (loss) is attributed to the equity holders of the Parent Company and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance. Non-controlling interest represent the portion of profit or loss and the net assets not held by the Group. Transactions with non-controlling interests are accounted for as equity transaction. Changes in Accounting Policies and Disclosures The accounting policies adopted are consistent with those of the previous financial year except for the adoption of the following amendments to previously issued PFRS, Philippine Accounting Standards (PASs), Philippine Interpretations based on International Financial Reporting Interpretations Committee (IFRIC), which were effective beginning June 1, Adoption of these amendments to PFRS, PAS and Philippine Interpretations did not have any significant impact on the Group s financial position or performance unless otherwise indicated. 13

18 Amendments to PFRS 10, PFRS 12 and PAS 28, Investment Entities: Applying the Consolidation Exception Amendments to PFRS 11, Accounting for Acquisitions of Interests in Joint Operations PFRS 14, Regulatory Deferral Accounts Amendments to PAS 1, Disclosure Initiative Amendments to PAS 16 and PAS 38, Clarification of Acceptable Methods of Depreciation and Amortization Amendments to PAS 16 and PAS 41, Agriculture: Bearer Plants Amendments to PAS 27, Equity Method in Separate Financial Statements Annual Improvements to PFRSs Cycle Amendment to PFRS 5, Changes in Methods of Disposal Amendment to PFRS 7, Servicing Contracts Amendment to PFRS 7, Applicability of the Amendments to PFRS 7 to Condensed Interim Financial Statements Amendment to PAS 19, Discount Rate: Regional Market Issue Amendment to PAS 34, Disclosure of Information Elsewhere in the Interim Financial Report Future Changes in Accounting Policies Except as otherwise indicated, the Group does not expect the adoption of these new and amended standards and Philippine Interpretations to have significant impact on its financial statements. The relevant disclosures will be included in the notes to the financial statements when these become effective. Effective beginning on or after January 1, 2017 Amendment to PFRS 12, Clarification of the Scope of the Standard (Part of Annual Improvements to PFRSs Cycle) The amendments clarify that the disclosure requirements in PFRS 12, other than those relating to summarized financial information, apply to an entity s interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal group that is classified) as held for sale. The amendments do not have any impact on the Group s financial position and results of operation. Amendments to PAS 7, Statement of Cash Flows, Disclosure Initiative The amendments to PAS 7 require an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). On initial application of the amendments, entities are not required to provide comparative information for preceding periods. Early application of the amendments is permitted. The amendments do not have any impact on the Group s financial position and results of operation. Amendments to PAS 12, Income Taxes, Recognition of Deferred Tax Assets for Unrealized Losses The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount. Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognized in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief 14

19 must disclose that fact. Early application of the amendments is permitted. The amendments do not have any impact on the Group s financial position and results of operation. Effective beginning on or after January 1, 2018 Amendments to PFRS 2, Share-based Payment, Classification and Measurement of Share-based Payment Transactions The amendments to PFRS 2 address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction; the classification of a share-based payment transaction with net settlement features for withholding tax obligations; and the accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash settled to equity settled. On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application is permitted if elected for all three amendments and if other criteria are met. Early application of the amendments is permitted. The amendments do not have any impact on the Group s financial position and results of operation. Amendments to PFRS 4, Insurance Contracts, Applying PFRS 9, Financial Instruments, with PFRS 4 The amendments address concerns arising from implementing PFRS 9, the new financial instruments standard before implementing the forthcoming insurance contracts standard. They allow entities to choose between the overlay approach and the deferral approach to deal with the transitional challenges. The overlay approach gives all entities that issue insurance contracts the option to recognize in other comprehensive income, rather than profit or loss, the volatility that could arise when PFRS 9 is applied before the new insurance contracts standard is issued. On the other hand, the deferral approach gives entities whose activities are predominantly connected with insurance an optional temporary exemption from applying PFRS 9 until the earlier of application of the forthcoming insurance contracts standard or January 1, The overlay approach and the deferral approach will only be available to an entity if it has not previously applied PFRS 9. The amendments do not have any impact on the Group s financial position and results of operation. PFRS 15, Revenue from Contracts with Customers PFRS 15 establishes a new five-step model that will apply to revenue arising from contracts with customers. Under PFRS 15, revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The principles in PFRS 15 provide a more structured approach to measuring and recognizing revenue. The new revenue standard is applicable to all entities and will supersede all current revenue recognition requirements under PFRSs. Either a full or modified retrospective application is required for annual periods beginning on or after January 1, The Group is currently assessing the impact of adopting this standard. PFRS 9, Financial Instruments PFRS 9 reflects all phases of the financial instruments project and replaces PAS 39, Financial Instruments: Recognition and Measurement, and all previous versions of PFRS 9. The standard introduces new requirements for classification and measurement, impairment, and hedge accounting. PFRS 9 is effective for annual periods beginning on or after January 1, 2018, with early application permitted. 15

20 Retrospective application is required, but providing comparative information is not compulsory. For hedge accounting, the requirements are generally applied prospectively, with some limited exceptions. The adoption of PFRS 9 will have an effect on the classification and measurement of the Group s financial assets and impairment methodology for financial assets, but will have no impact on the classification and measurement of the Group s financial liabilities. The Group is currently assessing the impact of adopting this standard. Amendments to PAS 28, Measuring an Associate or Joint Venture at Fair Value (Part of Annual Improvements to PFRSs Cycle) The amendments clarify that an entity that is a venture capital organization, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss. They also clarify that if an entity that is not itself an investment entity has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate s or joint venture s interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which (a) the investment entity associate or joint venture is initially recognized; (b) the associate or joint venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent. The amendments should be applied retrospectively, with earlier application permitted. The amendments do not have any impact on the Group s financial position and results of operation. Amendments to PAS 40, Investment Property, Transfers of Investment Property The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management s intentions for the use of a property does not provide evidence of a change in use. The amendments should be applied prospectively to changes in use that occur on or after the beginning of the annual reporting period in which the entity first applies the amendments. Retrospective application is only permitted if this is possible without the use of hindsight. The amendments do not have any impact on the Group s financial position and results of operation. Philippine Interpretation IFRIC-22, Foreign Currency Transactions and Advance Consideration The interpretation clarifies that in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or nonmonetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognizes the nonmonetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine a date of the transactions for each payment or receipt of advance consideration. The interpretation may be applied on a fully retrospective basis. Entities may apply the interpretation prospectively to all assets, expenses and income in its scope that are initially recognized on or after the beginning of the reporting period in which the entity first applies the interpretation or the beginning of a prior reporting period presented as comparative information in the financial statements of the reporting period in which the entity first applies the interpretation. The amendments do not have any impact on the Group s financial position and results of operation. Effective beginning on or after January 1, 2019 PFRS 16, Leases Under the new standard, lessees will no longer classify their leases as either operating or finance leases in accordance with PAS 17, Leases. Rather, lessees will apply the single-asset model. Under this model, lessees will recognize the assets and related liabilities for most leases on their balance sheets, and 16

21 subsequently, will depreciate the lease assets and recognize interest on the lease liabilities in their profit or loss. Leases with a term of 12 months or less or for which the underlying asset is of low value are exempted from these requirements. The accounting by lessors is substantially unchanged as the new standard carries forward the principles of lessor accounting under PAS 17. Lessors, however, will be required to disclose more information in their financial statements, particularly on the risk exposure to residual value. Entities may early adopt PFRS 16 but only if they have also adopted PFRS 15. When adopting PFRS 16, an entity is permitted to use either a full retrospective or a modified retrospective approach, with options to use certain transition reliefs. The Group is currently assessing the impact of adopting this standard. Deferred effectivity Amendments to PFRS 10 and PAS 28, Sale or Contribution of Assets between an Investor and its Associate or Joint Venture The amendments address the conflict between PFRS 10 and PAS 28 in dealing with the loss of control of a subsidiary that is sold or contributed to an associate or joint venture. The amendments clarify that a full gain or loss is recognized when a transfer to an associate or joint venture involves a business as defined in PFRS 3, Business Combinations. Any gain or loss resulting from the sale or contribution of assets that does not constitute a business, however, is recognized only to the extent of unrelated investors interests in the associate or joint venture. On January 13, 2016, the Financial Reporting Standards Council postponed the original effective date of January 1, 2016 of the said amendments until the International Accounting Standards Board has completed its broader review of the research project on equity accounting that may result in the simplification of accounting for such transactions and of other aspects of accounting for associates and joint ventures. Summary of Significant Accounting and Financial Reporting Policies Presentation of Consolidated Financial Statements The Group has elected to present all items of recognized income and expense in two statements: a statement displaying components of profit or loss, and a second statement beginning with profit or loss and displaying components of other comprehensive income. Business Combination and Goodwill Acquisition method Business combinations are accounted for using the acquisition method. The cost of acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any con-controlling interest in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interest in the acquiree at fair value or at the proportionate share of the acquiree s identifiable net assets. Acquisition-related costs incurred are expensed and included in general and administrative expenses. When the Group acquires a business, it assesses the financial assets and financial liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. If the business combination is achieved in stages, any previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognized in profit or loss. Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of 17

22 PAS 39, Financial Instruments: Recognition and Measurement, is measured at fair value with changes in fair value recognized either profit or loss or as a change to OCI. If the contingent consideration is not within the scope of PAS 39, it is measured in accordance with the appropriate PFRSs. Contingent consideration that is classified as equity is not re-measured and subsequent settlement is accounted for within equity. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for NCI, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the re-assessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in profit or loss. After initial recognition, goodwill, is measured at cost less accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group s cash-generating units (CGUs) that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill has been allocated to a CGU and part of the operation within that unit is disposed of, the goodwill associated with the operations disposed of is included in the carrying amount of the operation when determining the gain or losses on disposal of the operation. Goodwill disposed in these circumstances is measured based on the relative value of the disposed operation and the portion of the CGU retained. Cash Cash in the consolidated statement of financial position comprise of cash on hand and cash in banks, which earn interest at their respective bank deposit rates. Financial Instruments Date of recognition The Group recognizes a financial asset or a financial liability in the Group consolidated statement of financial position when it becomes a party to the contractual provisions of the instrument. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognized on the trade date. Financial assets Initial recognition and measurement Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, AFS financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Group commits to purchase or sell the asset. As at August 31, 2017 and May 31, 2017, the Group s receivables. financial assets consist mainly of loans and Subsequent Measurement Loans and receivables This category is the most relevant to the Group. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such 18

23 financial assets are subsequently measured at amortized cost using the EIR method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the statement of profit or loss. The losses arising from impairment are recognized in the statement of profit or loss in finance costs for loans and in cost of sales or other operating expenses for receivables. The category generally applies to trade and other receivables, and amounts owed by related parties (see Note 19). Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group s consolidated statement of financial position) when: The rights to receive cash flows from the asset have expired, or The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a passthrough arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass- through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of its continuing involvement. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. Offsetting of Financial Instruments Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position if there is a currently enforceable legal right to set off the recognized amounts and there is intention to settle on a net basis, or to realize the asset and settle the liability simultaneously. The Group assesses that it has a currently enforceable right of offset if the right is not contingent on a future event, and is legally enforceable in the normal course of business, event of default, and event of insolvency or bankruptcy of the Group and all of the counterparties. Impairment of Financial Assets The Group assesses, at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is impaired. An impairment exists if one or more events that has occurred since the initial recognition of the asset (an incurred loss event ), has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. Financial assets carried at amortized cost 19