3

INTERNATIONAL CARE MINISTRY OF THE PHILIPPINES, INCORPORATED

BACOLOD CITY

AUDITED FINANCIAL STATEMENTS

As of May 3 1,2006

BANTILAN, PEDROSA & CO.

Ccr).t@ed Public Accom.tmi3 Atik~rmys a - Law - t . SBuilding, Gala - Tacwn Streets, Racold Ct I iy

JERRY F. BANTILAN, CPA

Certified Public Accountant 'Attorney-at-law Rm. 9 JS Building, Lacson Street, Bacolod City Tel. Nos. 435-1 165 ' 434 -2878 FAX No. 435-1 165

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT The Board of Trustees INTERNATIONAL CARE MINISTRY OF THE PHILIPPINES, INCORPORATED Bacolod City Gentlemen: I have audited the accompanying balance sheet of INTERNATIONAL CARE MINISTRY OF THE PHILIPPINES, INCORPORATED as of May 31, 2006 and 2005 and the related statements of income and expenditures, cash flows and changes in fund balances for each of the years then ended. These financial statements are the responsibility of management. My responsibility is to express an opinion on these financial statements based on our audit. I conducted my audit in accordance with generally accepted auditing standards in the Philippines. These standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of INTERNATIONAL CARE MINISTRY OF THE PHILIPPINES, INCORPORATED as of May 31,2006 and 2005 and the results of its operation and its cash flows and changes in fund balances for each of the years then ended in conformity with generally accepted accounting principles in the Philippines. Bacolod City, September 6, 2006.

i,

PRC BOA Cert. Of Reg. No 0437 BIR Accreditation No. AN-001424-2002 CDA Cert. of Recognition No. 04-010 SEC Accreditation No. 0209-A BSP Accreditation - MB Res. 1485 11-18

STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS

'The management of INTERNATIONAL CARE MINISTRY OF 'THE PHILIPPINES, INCORPORATED is responsible for all information and representations contained in the financial statements for the year ended May
31, 2006 and 2005. The financial statements have been prepared in

conformity with generally accepted accounting principles and reflect amounts that are based on the best estimates and informed judgment of management with an appropriate consideration to materiality. In this regard, management maintains a system of accounting and reporting which provides for the necessary internal controls to ensure that transactions are properly authorized and recorded, assets are safeguarded against unauthorized use or disposition and liabilities are recognized. The Board of Directors review the financial statements before such statements are approved and submitted to the stockholders of the company. JERRY F. BANTILAN, CPA, the independent auditor appointed by the stockholders, have examined the financial statements of the company and have expressed his opinion to the report shown on the preceding page. Bacolod city,September 6, 2006.

Treasurer

Chairman, Board of Trustees

2006

2005

Cash on hand and in bank - Note 3 Accounts receivable - Note 4 Advances to officers and employees - Note 5 Loans receivable - Note 6 prepaid insurance

1,950,258.52 P 519,351.41 258,737.00 2,150,679.63 7,457.85 577,267.95 5,463,752.36

322,447.92 119,254.03 76,095.00 1,758,477.82 5,593.61 220,750.00 2,502,618.38

Total Current Assets Noncurrent AssetsDue to livelihood - Note 7 Property and Equipment, net Note 8 Deferred charges

I1
'1

16,818,214.20 487,759.70
P 25,917,342.06 P

14,860,215.80

TOTALASSETS

20,510,449.98

LIABILITIES AND FUND BALANCE Current LiabilitiesAccounts payable & other accrued expenses - Note 9 Pastor's fund Total Current Liabilities Fund BalanceGeneral Fund Property and equipment fund Total Fund Balance

18,265.48 P 5,850.00 24,115.48 9,075,012.38 16,818,214.20 25,893,226.58

117,321.00 5,850.00 123,171.00 5,527,063.18 14,860,215.80 20,387,278.98

TOTAL LIABILITIES AND FUND BALANCE

25,917,342.06 P

20,510,449.98

See Notes to Financial Statements

m-

l ~ ~ ~ ~ N A T I O N A LMINISTRY OF THE PHILIPPINES INCORPORATED CARE

NO.4 San Juan Street, Bacolod City STATEMENT OF INCOME AND EXPENSES For the Fiscal Year Ended May 31,2006 (With comparative figures for 2005)
2006 2005 4,332,692.79 17,227,176.05 8,191.78 890,540.88 22,458,601.50

INCOMEDonation Grant Interest Income Other Income Total Income EXPENSESDirect Program Expenditures - Note 10 Feeding Medical Community Enrichment Program TB Full Adoption - CRS 1 Rallies1 Filmshowing Media IChild Evangelism Follow-up Touch Point Livelihood ICMPI - Mindanao ICMPI - Dumaguete ICMPI - Bohol ACE Smart School

8,067,645.90 P 26,245,741.87 16,057.91 1,844,151.58 36,173,597.26

4,734,330.22 4,581,497.93 116,329.90 1,263,817.27 246,002.70 456,613.10 1,010,097.24 2,147.393.09 4,362,101.09 1,731,590.99 2,106,270.89 228,935.47 406,283.04

2,708,321.57 2,889,880.54 60,761.05 867,346.99 166,216.30 320,346.39 919,127.36 941,159.69 4,103,369.07 1,121,786.59 1,779,418.99 146,719.40 104,039.50 16,128,493.44

Total Direct Expenditures General and Administrative ExpendituresStaff allowances Staff train~ng retreat and Repair and maintenance Transportation and travel

23,636,495.80

Taxes and licenses Communication

1,062,486.09 788,575.16 580,174.27 572,129.32 557,520.88 220,940.79 186,633.35 180,693.89 154,598.36 118,407.06 18,875.26 10,000.00 8,692 35 2,220,372 51

678,219.72 367,811.05 275,538.63 277,058.01 326,056.22 127,582 82 78,341 62 149,753.96 131,250.71 89,903.32 19,818.47 17,298.00 18,646.84 1,816,240.56

? a
4,373,519.93

MINISTRY OF THE PHILIPPINES INCORPORATED

STATEMENT OF CHANGES IN FUND BALANCE For the Fiscal Year Ended May 31,2006 (With Comparative Figures for 2005)

General Fund
Balance, June 1,2004 Prior period adjustment

Property & ~ ~ u i ~ mFundt en

5,786,690.78 P 15,003.30 5,801,694.08

12,628,996.77

Restated balance Add (Deduct): Excess of income over expenses Assets Acquisition Depreciation Expense Disposal of Motor Vehicle

12,628,996.77

1,956,588.13 (4,081,859.59) 1,816,240.56 34,400.00 5,527,063.18 471,471.40 5,998,534.58

4,081,859.59 (1,816,240.56) (34,400.00L 14,860,215.80 (389,924.26) 14,470,291.54

I
1

Balance, May 31,2005 Prior Period Adjustment

Restated balance Add (Deduct): Excess of income over expenses Assets Acquisition

5,424,400.46 (4,568,295.1 7)

4,568,295.17 2,220,372.51
16,818,214.20

FUND BALANCE,MAY 31,2006

9,075,012.38 P

See Notes to Financial Statements

INTERNATIONAL CARE MINISTRY OF THE PHILIPPINES INCORPORATED

NO. 4 Sari Juan Street, Bacolod City

STATEMENT OF CASH FLOWS For the Fiscal Year Ended May 31, 2006 (With Comparative Figures for 2005) 2006 Excess of income over expenses Adjustments to reconcile net income to net cash provided by operating activitiesDepreciation Bad debts Changes in operating assets and liabilities: Accounts Receivable Advances to officers and employees Loans receivable Prepaid insurance Prepaid rent Deferred charges Accounts payable & other accrued expenses Disposal of Motor Vehicle Prior period adjustment Net Cash Provided by Operating Activities Net Cash Used by Investing Activities Asset Acquisition Increase (Decrease) In Cash Balance Cashybn hand and in bank, June 1,2005 P 5,424,400.46 P 2005 1,956,588.13

2,220,372.51 422,323.66 (822,421.04) (182,642.00) (392,201.81) (1,864.24) (356,517.95) (487,759.70) (99,055.52) 471,471.40 6,196,105.77

1,816,240.56

119,819.59 (3,902.26) (444,842.93) 0.1 1 (151,750.00) 110,193.84 34,400.00 15,003.30 3,451,750.34

(4,568,295.17) 1,627,810.60 322,447.92

(4,081,859.59) (630,109.25)
'

952,557.17

CASH ON HAND AND M

bkk, ~

A 31,2006 Y

1,950,258.52 P

3G:447.92
a .

.See Notes to Financial Statements

ERNATIONAL CARE MINISTRY OF THE PHILIPPINES INCORPORATED

4 Sari Juan Street, Bacolod City

ES TO FINANCIAL STATEMENTS

The International Care Ministry of the Philippines Incorporated was incorporated under the Corporation Law of the Philippines on July 5, 1993 for the purpose of making available Christian services for the glory of God in all aspects of community development, provide livelihood activities, leadership and comprehensive training for the less privileged. It is a Christian non-stock, non-profit and non-denominational corporation, organized strictly for charitable purpose. ~GNIFICANT ACCOUNTING POLICIES 'The principal accounting policies adopted in preparing the financial statements of International Care Ministry of ;the Phils., Inc. are as follows:
1

asis is of Financial Statements

4
l ~ h financial statements have been prepared in conformity with the accounting principles generally accepted in e Ithe Philippines.

doption of the Philippine Financial Reporting Standards (PFRS)/ lnternational Accounting (IAS)

PAS No. 1 - "Presentation of Financial Statements" which prescribes the basis for the presentation of general purpose financial statements in order to ensure comparability both with the enterprise's own financial statement f previous periods and with the financial statements of other enterprises. No. 7 - "Cash Flow Statements" which requires the provision of information about the historical changes in ash and cash equivalents of an enterprise by means of a cash flow statement, which classifies cash flows uring the period from operating, investing and financing activities.

AS No. 8 - "Accounting Policies, Changes in Accounting Estimates and Errors." which prescribe the criteria for electing and changing accounting policies, together with the accounting treatment and disclosure of changes in ccounting policies, changes in accounting estimates and corrections of errors.
AS No. 10 - "Events After the Balance Sheet Date", which requires the disclosure of the date of authorization issue of financial statements, and prescribes the policies and disclosures related to adjusting and non usting subsequent events. AS No. 16 - "Property, Plant and Equipment" which prescribes the accounting treatment for property, plant and No. 37 - "Provisions, Contingent Liabilities and Contingent Assets" which ensures that appropriate criteria nd measurement bases are applied to provisions, contingent liabilities, and contingent assets and that sufficient mation are disclosed in the notes to the financial statements to enable users to understand their nature,

evenue Recognition

ash and Cash Equivalents ents are carried in the balance sheet at face value. For purposes of the cash flow and cash equivalents consist of cash on hand and in bank.

property and Equipment

~ ~ ~ for land, which is stated at fair market value, property and equipment are reported at cost less e p t accumulated depreciation. Generally depreciation is computed using the straight-line method based on the following estimated useful lives of the assets: Building Improvements Furn. & FixtlEquipment otor Vehicles itchen Utensils 10 percent per annum 10 percent per annum 10 percent per annum 10 percent per annum 10 percent per annum

1
(S of

1 ther Assets
4SH ON HAND AND IN BANK

1,950,258.52

the center are composed of the following -

Detty cash fund Zasoline Revolving Fund cash in bank - Bacolod SIA #54601003-2 Automatic Transfer :ash in bank - Bacolod CIA #5005540 a s h in bank - Bacolod Dollar Account SIA #54600218-1 Eash in bank - Bacolod Livelihood SIA X5460059597 ,ash in bank - Bacolod Dry Goods Account #002265520 ;ash in bank - PClB #01514-8 2 s h in bank - lCMPl#217328 'ash in bank - Special needs SIA #010040 ash in bank - Marbel SIA # 281106202 ash in bank - Scholarship Account SIA #217328 ash in bank - Dumaguete Dollar Account # 11005476 ash in bank - Dumaguete CIA # 110509436 ash in bank - Dumaguete ATA # 110584432Automatic Transfer ash in bank - Dumaguete Livelihood Account # 110584807

he dollar accounts for Bacolod SIA #54600218-1 & for Dumaguete account # 11005476 were translated to hilippine currency using P52.64 closing rate. Any difference thereof is treated as an adjustment to income tatement as foreign currency gain or loss. The computation is as follows:

rash in bank - Bacolod Dollar Account SIA #54600218-1

eg. Balance (1348.84 @ P56) et interest income alance ending (1367.85 @ P52.64) oreign currency loss

76,063.12 498.16 76,561.28 72,003.62 4,557.66

lash in bank Dumaguete Dollar Account t 11005476 leg. Balance (574.36 @ P56) terest income, net of tax (4.06 @ P52) rota1 alance ending (578.42 @ P52.64) reign currency loss P 32,164.16

30,448.03

TS RECEIVABLE

519,351.41

rhis accounts consist of outstanding loan balances of as of cut-off date of the following

anasirlg, Jacqueline ardinas, Christine

narch Insurance yo, Helen Grace

Siscar, Shellane Sistual, Febe ~apuz, Annie TapuZ, Brenda Tapuz, Jocel Tapuz, Jove rapuz, Juan Tresfuentes, Ercile JY, Wen Willy villamor, Eunice dillamor, Juliet dillamor, Jurimae Jillamor, Rene Jillanueva, Alice

VANCES TO OFFICERS AND EMPLOYEES

258,737.00

knliquadated advances were charged to the account of the following persons: lozo, Gilde anasing, Jacqueline esaiia, Joan ucayani, Susan agatam, Dolores olicios, Juanito apuz, Brenda emplado, Samuel
P

-0TAL ANS RECEIVABLE

258,737.00
P
2,150,679.63

butstanding loan receivables are due to the following persons:

Yo, Helen Grace

amiento, Rogen Paul

Siscar, Shellane Tabuno, Joanna Marie TapUZ, Annie TapuZ, John Paul ~ a p u zJonny II , Tapuz, Jove uy, Wen Norie Villarnor, Eunice Villamor, Jurimae

otal Scholarship loan

dana, Emmanuel

emplado, Rochelle

Total Outright loan

kLoan

.Boat Ownershi

'he following accounts were written off in the statement of accounts of ICMPI as per approved resolution "bmitted during the special meeting of the Board of Directors of the said corporation held at # 4 San Juan itreet, Bacolod City on September 6, 2006:

,. Scholarship Loans,suela, Mark auela, Mespah ,uhilio, Carlito ,usente, John Kerry 'illamor, Eumir Total
I. Outright Loan-

davera, Joel Iesuyo, Marcus istrao, Selvestre ieollegue, Tim ebitaryo, Fred 'apang, Tim Total

:. Malversed Fundslaisy Lyn Laburada lario Banzon Total

OTAL ACCOUNTS WRITTEN OFF
P

188,823.64 405,727.30 3,147,615.80

'ESTMENTS LIVELIHOOD PROJECT

his account represents as the investment of the center to Touching Lives Foundation Inc.

OPERTY AND EQUIPMENT

16,818,214.20

OUNTS PAYABLE & OTHER ACCRUED EXPENSES

Savings Payable SSS Loans Payable philhealth Payable

18,265.48

IRECT PROGRAM EXPENDITURES

A. FEEDING Rice Gasoline & Transportation Miscellaneous Feeding Forms Staff allowances

23,636,495.80

Total
B. MEDICAL Medicines Local Special Case Doctor ILab fees Transportation 1 Gasoline Emergency Office Supplies I Miscellaneous I Provincial Pastor's Meeting Staff & volunteers allowance

Total

C. COMMUNITY ENRICHMENT PROGRAM PHE Seminars & Trainings PHE Modules

Total
1. TB FULL ADOPTION ( CRS 1 1 Medicine Local ( TB ) Power 1Electricity Food Milk IFormula Treatment Transportation X-ray, Lab., etc. Emergency ( hospitalization ) Repairs and maintenance Beddings & Personal Needs Staff allowance Sundries 1Miscellaneous

Total

E. RALLIES IFILMSHOWING
Film Showing Negros Oriental Film Showing - Mindanao Film Showing Negros Occidental Pastor's Monthly Meeting Additional VCD Tapes, etc. Contingencies Staff & volunteers allowances Total

F. MEDlAlCHlLD EVANGELISM
CE Certification & Appreciation CE Training CE Outreach & Fellowship CE Monthly Meeting & Fellowship CE Satelite In Charge Teachers Fellowship Teachers Manual Translation Staff Transportation Monitoring ( Nat'l Incharge 1 Staff ) Staff Allowances

G. FOLLOW UP Transportation Instructors seminar Certificate Lamination Follow up Awareness Postages & Communications Counselor Seminar Certified Pastors Christmas Fellowship Instructor Certification Seminar Instructor Fellowship Follow-up Materials Support Satelite Pastors Support ( Negros Or., Escalante ) Pastor's Wives & Women's Fellowship Ptrs. Monthly Meeting ( Fdg, FUP, Mdl. ) Staff & Volunteers Allowances Total

H. TOUCH POINT
Bawlod & Outside fellowship Dumaguete & Outside Fellowship Miscellaneous Resource ( Materials, Xerox, etc ) Grand Touch Point Celebrate Jesus Foreign Crusade Mindanao Touch Point Staff Transportstion Staff & volunteers Allowances

I. LIVELIHOOD Staff Allowance Contingencies Livelihood Motor Vehicle Maintenance Micro Loan ( Prostitute Ministry ) Card Making Fish Pond I Farm Project Gasoline 1Transportation Monitoring Kavir Poultry Orchard Pig Raising ( DSB ) CIP Pig Fattening Progreso & Bacong Hollow Blocks Factory Rice Production Seminars & Training Vegetable Production Jewelry Making Biogas Water Purification

Total
J. ICMPI MINDANAO Gasoline Electricity Water Rep. & Maint. - Motor Vehicle, Bldgs., etc. House rental Telephone Transportation of Mindanao Staff 1Gasoline Office supplies & Stationaries Food Staff allowance

Total
K. DUMAGUETE Transportation for Dumaguete Staff I Gasoline Telephone & Telefax Water Satelite Telephone E-Mail & Postages House Rental Repairs & Maintenance Orphanage Personal Needs Food ( Staff 1Orphanage ) Electricity Office supplies Miscellaneous Staff & volunteers allowance

Total

Transportation for Dumaguete Staff I Gasoline Telephone, Telefax, E-mail, Postage Water House rental Food Electricity Office supplies Staff & volunteers allowances Total

. ACE SMART SCHOOL

Educational Materials ( Paces, Supplies, etc. ) Educational Trip Electricity Gasoline & Transportation Repairs & Maintenance Teachers Training B'laan Smart School Lake Sebu Smart School Lub.Smart School T'boli Smart School Others ( Uniforms, etc. ) Faculty.;Staff & volunteers allowances Monitoring X-mas Party Total SCHOLARSHIP EXPENSES Tuition Fees & School Needs