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ALAH VALLEY ACADEMY OF SURALA COTABATO, INC.Allah Valley Drive, National Highway, Surallah, South Cotabato

NOTES TO THE FINANCIAL STATEMENTSApril 30, 2013

ORGANIZATION

The ALAH VALLEY ACADEMY OF SURALA COTABATO, INC., is a domestic non-stock, non-profitcorporation engaged in the secondary education. Starting June 2012, as approved by the Departmentof Education the school shall offer pre-school education.

The registered business office is at Allah Valley Drive, National Highway, Surallah, SouthCotabato.

Among the specific purposes of the corporation include:1. To establish and maintain a complete academic or general secondary school with vocational

education as well as elementary and college education;2. To help carry out faithfully the educational objectives in the constitution of the Philippines; and3. To hold and to acquire real properties as the necessities of the corporation may require.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe more significant accounting policies and practices of the corporation are summarized below

to facilitate the understanding of the data presented in the financial statements.

The corporation prepares its financial statements on accrual basis of accounting. Accordingly,

income are recognized when earned and expenses are recognized when incurred.

Property, Plant and Equipment are recorded at cost less accumulated depreciation. Thecost of an asset comprises its purchase price and directly attributable costs of bringing theasset to working condition for its intended use. Major improvements are capitalized;expenditures for repairs and maintenance are charged to expense as incurred.

Depreciation is computed on straight-line basis over the estimated useful lives of theassets. The useful life and depreciation method are reviewed periodically to ensure that theperiod and method of depreciation are consistent with the expected pattern of economicbenefits from the items of property, plant and equipment.

1 Cash and Cash Equivalents

Cash and Cash Equivalents are cash on hand, demand deposits and short-term highlyliquid investments readily convertible to known amounts of cash and which are subject toinsignificant risk of changes in value.

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April 30, 2013 December 31, 2011

Cash In Bank 710,673.06 1,073,056.63Petty Cash Fund 5,000.00 5,000.00Total 716,673.06 1,078,056.03

2 Accounts Receivable

Trade & Other Receivable are recognized and carried at original invoice amounts lessallowance for any uncollectible amounts. An estimate for doubtful accounts is made whencollection of the full amount is no longer probable. Bad debts are written off when identified.

April 30, 2013 December 31, 2011

Current 103,161.00 226,248.82Past Due 483,508.00 489,188.00Others 441.50 11,585.00Total 587,110.50 727,021.82

3 Plant, Property and Equipment

Property, Plant and Equipment are recorded at cost less accumulated depreciation. Thecost of an asset comprises its purchase price and directly attributable costs of bringing the asset

to working condition for its intended use. Major improvements are capitalized; expendituresfor repairs and maintenance are charged to expense as incurred.

Depreciation is computed on straight-line basis over the estimated useful lives of theassets. The useful life and depreciation method are reviewed periodically to ensure that theperiod and method of depreciation are consistent with the expected pattern of economicbenefits from the items of property, plant and equipment.

Life YearsLand -Water System 10 yearsPower Generator 10 years

Building Improvements 30 yearsBuilding 30 yearsLaboratory Equipments 15 yearsDrum Corps Equipment 15 yearsFurniture and Fixtures 15 years

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Sports Equipment 15 yearsTools and Utensils 10 yearsOther F, F and E 10 yearsLibrary Books 10 yearsGymnasium 50 years

A lapsing schedule of depreciation is attached.

Total Property and Equipment 23,094,214.95Less Accumulated Depreciation 4,347,892.13

Property and Equipment (Net) 18,746,322.82

4 Non-current LiabilitiesThis consist of the proceeds of long-term debt from ICTUS and SRMPC which bearsinterest of 3% monthly.

April 30, 2013 December 31, 2011Long-term Liability 3,423,500.42 -

5 Income from School FeesThis consists of fees covering, matriculation, registration fees, dental and medical fees,library, laboratory, tuition and athletic fees.

April 30, 2013 December 31, 2011Income from School Fees 6,212,685.82 3,385,842.25

6 Uncategorized IncomeUncategorized Income covers income from yearbook and insurance.

April 30, 2013 December 31, 2011Uncategorized Income 406,135.00 525,365.00

7 Other IncomeOther income are income from risograph machines, copier, rentals and incomegenerated from drum corps and cheerdance.

April 30, 2013 December 31, 2011

Other Income 35,516.26 13,999.70