3 els [o[3 3] |2|@ Sian wlalPlmelelaL.| [ale TO T III i [ I | Valse [ | I UNIT elslol[. | lalnirlelel [e]elolelalel [eluls]elofi nye]. 3] iuleltlal (vialelelals|.| [ole|r|s[e[a]s) [cle[mlrle|ay. Pals ie] [eli|t|v) |1/6)o|s i Ba i et a Tone erases) alalFls| at oy ay N/A ita eT N/A Tan ies ib on Sees ot ieeeelteeerel sas ecae ar aciaaaed amar = Plate une aki fr caning prgses@Q RAPPLER “STATEMENT OF MANAGEMENT'S RESPONSIBLITY ‘The management of APPLERINC response for allnformation ad representations contained Inthe nani statement forthe year(s) ended December 31, 2011 in aecordance wit the reserved nancial poring ramework indented thereln Ths espenibltyIncades designing and implementing interal controls relevant tothe preparation and fa presentation franca “aterents that are fee fom material mistaterent, wheter duet fraud or ero, selecting and ‘9p aparoplateaccourting polls, and malingoccountingextimates that re reasonable in ‘the cteumstances. ‘The Board of Directors or Trustees eviews and approves the financial statements and submat the sameto the sockholers or members. EYES TACANOONG & CO. the independent auditors and appointed bythe stockholders has ‘examined the financial statements of he company in acoreance with Piipine Standards on ‘Audking and has expressed tz opnion on the fares of presemtation upon competion of sch Siratre Yonetepect oaGsE ASS sae “feds "Name of Teasurer: UUBETH SOCORRO LFRONDOSO 20) An ga are car, 3a Vira roan, ie Ce, Pag iy 1608 Teaghne "0G 9080S Pokaes “0ST ars 981 Fos pa SeReyes TAcANDONG & Co, S-3s8=" FIRM PRINCIPLES. WISE SOLUTIONS. oes ~ INDEPENDENT AUDITOR'S REPORT The Stockholders and the Board of Directors Aappler, Inc. ‘Unit 2504, antel Global Busing 3 Jul Vargas, Ortigas Center Pasig ity 1605 Report on the Financial Statements We have audited the accompanying financial statements of Rapper, Ine, whch comprise the statement of financial postion as at Oecember31, 2012, and the statement of comprehensive income, statement of changes in equity and statement of cashflows forthe period July 25,2011 to December 31, 2011, and a summary of significant accounting policies and other explanatory information ‘Managements Responsibility forthe Financial Statements Management i responsible forthe preparation and far presentation ofthese financial statements in accordance with Philippine Financial Reporting Stendard for Small and Medium-sized Entities, and far such internal control as management determines is necessary to enable the preparation of financial statements that ace fee from material misstatement, whether due to feud ar eror. Astor's Responsibly (Our responsibilty isto express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Philippine Standards on Auditing, Those standards require ‘that we comply with ethical requirements and plan and perform the aveit to obtain reasonable assurance whether the finanelal statements ae free from material mistaterent. ‘Anauds involves performing procedures to obtain audit evidence about the amounts and disclosures {in the finan statements. The procedures selected depend on the auditor's judgment, incluging the assessment of the risks of material misstatement of the financial statements, whether due 10 fraud of eror. In making those risk assessments, che auditor considers internal eontrl relevant 10 the entity's preparation and fai presentation of the financial statements in order to design aut procedures thet are appropriate In the cxcumstanees, but not for the purpose of expressing an ‘pinion on the effectiveness ofthe entity’ internal contro. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made ‘by management, s well as evaluating the overall presentation ofthe financial statements ‘We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis {for our audit opinion,© woes yewpores.co : Opinion {nour opinion, the financial statements present fairy, in all material respects, the financial postion (of Rappler, ne. a5 at Oecember 31, 2013, and hs financial performance and its cach flaws forthe period July 25, 2011 to December 31, 2011 in conformity with Phiippine Financial Reporting Standard fr Small and Medium-sied Enis. ‘Report on the Supplementary Information Required Under Revenue Regulations No. 15-2010 of the Bureau of internal Revenue ‘Our auat was conducted forthe purpose of forming an opinion on the basi financial statements taken 35 a whole. The supplementary information on taxes and licenses in Note 13 tothe financial statements are presented for purposes of filing with the Bureau of Internal Revenue and is not 2 ‘aquired part of the base financial statements. Such information Is the responsibilty of the ‘management of Rapper, Inc. The nformation has been subjected tothe audtng procedures applied in our audit of the basie financial statements and, in our opinion, & fatly stated in all material respects in relation to the basic financial statements taken as whole [REYES TACANDONG & CO. Wace Sofa cnn PROTACI T.TACANDONG Pane Encetene 5025 Stren 5002 esecatatoae, se “Soop rem 2013 ‘november 3 1010 dt ont 203 rane hess m2. 20 saa. March 28,2012 Makati City, Metro ManiaRAPPLER, INC. ‘STATEMENT OF FINANCIAL POSITION ‘DECEMBER 33,2011 Asser, ‘current assets (Cash and cash equivalents (Note 5) 10,439,501 (Other current assets (Notes 6 and 22) 11057;300, “otal Gurrent Assets 71.516,601 Noncurrent Assets Property ané equipment -net (Note 7) 4.756,257 Intangibles (Note 8} 952,222 Deferred tax asset (Note 11) 2,794,948 Total Noncurrent Assets 8.103.477 TOTALASSETS 199620228, LUABIUITY AND EQUITY ‘current ability ‘Accrued and other liabilities [n 903,329 Equity Capital stock 403,125, Adional paid-in capital 24812500 efit (6,408,726 ‘TOTAL aawLiry AND EQUITY. 919,620,228© ° RAPPLER, INC. ‘STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD JULY 25, 2011 TO DECEMBER 31, 2011* CAPITAL STOCK - 2,00 par value Authorized - 3,000,000 shares Subscribed -937,500 shares 937,500 Less: Subscriotion receivable 534,375. 403,125, ADDITIONAL PAID-N CAPITAL 24,812,500 [RETAINED EARNINGS. Balance at beginning of period = Total comprehensive loss (6,498,726) Balance at end of period (6,498,726) 218,716,899 “re orconponying hts to France Sateen "The Company was eter wth he Saute and Entree Commision oy 25,2681 aes sila preoperangRAPPLER, INC. ‘STATEMENT OF CASH FLOWS FOR THE PERIOD JULY 25, 2011 TO DECENIBER 31, 2012° ‘CASH FLOWS FROM OPERATING ACTIVITES toss before income tax (9,293,674) ‘Adjustments or: Depreciation (Note 7) 283,482 Foreign exchange loss (Note §) 1035 Interest income (Note 5) 22818) ‘Tperatng oss before working capital changes 13.031,875) Increase in (Other current asets (Note 6) (4,087,300) Accrued and other Habits [Note 9) 903,329 Wetcash usedinoperations SSS ay Interest received 22,818, [Net cash used in operating actives SSS nr. ‘CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment (Note 7) (5,039,739) Additions to construction in progress inate 8) (552,222) ‘Net cash used ininvestog activites Bs 75,593,961) ‘CASH FLOW FROM A FINANGING ACTIVITY Issuance of shares 25,218,625 [EFFECT OF CHANGE IN EXCHANGE RATE IN CASH ‘AND CASH EQUIVALENTS, (1.035) (CASH AND CASH EQUIVALENTS AT END OF PERIOD. #1059501, Sec aeanpanping Nets a Fare Seane 1 The oman wa space wi the Secure we change Commision oh ay 25,202 anism preopertingRAPPLER, INC. NOTES TO FINANCIAL STATEMENTS 1. Corporate information apples, Inc. (the Company) was incorporated in the Philippines and registered with the Securities and Exchange Commission (SEC) on July 25, 2011. Its primary purpose is to design, velop, establish, marker, se, maintain, support, strbute, customize, re-sell and/or operate news, information, and socal network services including but not limited to contents, platforms, systems an/or ‘application via web, internet, mobile and other delvery formats, ‘communications, avertsing, corporate socal responsiblity, marketing, PR, events, ring affinity and other related services and packages provided will ot act as internet service provided. Ns registered office is at Unit 2501, Antel Global building, 24a Vargas, Onigns Center, Pasig City 1605. ‘The accompanying financial statements were authored for isue by the Board of Orectrs on March 29, 202, ‘Bass of Preparation and Statement of Compliance ‘The Financial statements of the Company have been prepared on a historical cost basis The financial statements are presented in Phiippine peso (P), which is the Company's functional currency. All amounts are rounded to the nearest Philippine peso unit except when otherwise indleated. ‘The financial statements have been prepared in compliance with Philppine Financial Reporting Standards (RS) for SME. 3. Summary of Significant Accounting and Reporting Policies Cath and Cash couivlent Cash includes cash on hand and in banks. Cash equivalents are short-term, highly lauid investments that are readily convertible to known amounts of cash with orginal maturities of three months or ess from dates of placement and which are subject to an insignificant risk of changes in val. Property and Eavioment Property and equipment is stated at historical cost less accumulated depreciation and amortization and any accumulated impairment losses. Historical cost includes expenditure thet 's directly arvibutabe to bringing the property and equipment to the location and condition ‘necessary fort to be capable f operating inthe manner intended by management Depreciation is computed on te straight-line method based on the estimated useful feof three Ghyears.os 19si1 When assets are sold or retired, their cast, accumulated depreciation and accurmulated Impairment losses are eliminated from the accounts and any resulting gain or lost is included in the statement of comprehensive income of such period ‘The useful fe an deprecation method are reviewed periodically to ensure thatthe periods and ‘method of depreciation and amortization are consistent with the expected pattern af economic benefits of property and equipment ranges Intangibles are composed of website costs. Website costs are capitalized on the basis of the costs incurred to acquite and bring to use the website. These costs are amortized over the estimated useful He of three (3) yea, Impairment of Assets Assets that are subject to depreciation and amortization are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carving value ofthe assets tested for impairment. ‘An impairment lss is recognized for the amount by which the assets carrying amount exceeds its recoverable amount. The recoverable amount Is the higher ofan asset's fair valueless costs 1 sell and value in use. For the purposes of assessing impairment, assets are grouped at the ‘lowest levels for which there are separately identifiable cash flows, Nonfinancial aseats accessed {or impairment are reviewed for possible reversal ofthe impairment at each reporting date Interest income Interest income is recognized as the interest accrues usually en a time proportion basis taking into account the effective yield on the asset or effective interest rate (EIR). Expenses Expenses are recognized in the statement of comprehensive loss upon receipt of goods, tization of services or at the date they ae incurred. Income Taxes Income tax expense includes current and deterred tax. Current Tox Current tax assets and lilies or the current and prior periods are measured at the amount expected tobe recovered trom or paid tothe taxation authorities, The tax rate and tax laws use to compute the amount are those that are enacted or substantively enacted bythe reporting date, Deferred Tax. Deferred taxis recognized on differences between the carrying amounts of assets and liabilities in the financial statements and their corresponding tax bases, Ceferred tax Uiblites are recognized forall temporary diflerences that afe expected to increase taxable profit In the future. Deferred tax asets are recognized fr all temporary differences that are expected to reduce taxable profit inthe future, ané any unused tax losses or unused tax credits, Deferred tax assets are measured atthe highest amount that, on the basis of curent o estimated future taxable profits more likey than not to be recovered,