Page 5 - ANNUAL REPORT COMPLETE FS

We launched the pick-up, take out and food delivery service last year which aims to provide members
an alternative to dining out. We also welcomed non-members and guests who want to savor the club’s
staple dishes and delicacies.

Moreover, the food and beverage department, together with the management, conceptualized and
developed new and more appetizing menu to give variety and choices to our members’ insatiable palate.
Despite the sharp increase in cost of our food items in the fourth quarter, we did not adjust our selling
prices. However, we will review and adjust food prices to cope with rising inflation.

Banquet functions have been the largest revenue generator of the club. Unfortunately, the management
was unable to accept bookings from March to November 2020 because of the lockdown measures and
restrictions mandated by the government. In spite of that, we managed our cash flow prudently and
implemented cost-saving measures.The management also implemented a flexible and reduced load
work arrangements to maximize manpower, lower labor costs, and avoid laying off people.

Recurring expenses were closely monitored and significantly went down in this time of pandemic. However,
we had significant non recurring expenses in the forms of financial assistance to our employees, and our
extended families (salon and barber shop, trainers, ball boys) as well as PCR testing to employees and
expenses related to ensuring safety in our club.

The combination of the loss of banquet functions, lower revenue due to less patronage by the members
because of the pandemic and the non recurring expenses led us to incur a loss in 2020. While the
vaccine rollouts have been delayed, we hope banquet functions and patronage will increase during the
second half of 2021 to allow us to at least break even.

In closing, we wish to thank you, our members, who have continued to support the club, visit and use
the facilities. The crisis may not be over but, with your unwavering support, we can overcome all travails
in these trying times.

EDUARDO V. FRANCISCO

2

Makati (Sports) Club, Inc.