2013 financial report analysis

7/25/2019 2013 Financial Report Analysis

1/26

1

2013 Financial Report Analysis of

Loisse Danielle D. Vitug

4E3


2/26

2

Table of Contents

2013 Financial Report . 3

Copany !ac"groun# 12

Earnings an# Re$enue %ro&t' . 13

Cas' Flo& (ren# 14

De)t Loa# 1*

+otes to Financial ,tateent . 1-


3/26

3

UNIVERSALROBINACORPORATIONANDSUBSIDIARIESCONSOLIDATEDSTATEMENTSOFFINANCIALPOSITION

ASSETS

CurrentAssetsCashandcashequivalents(Note

7)Financialassetsatfairvalue

through

profitorloss(Notes8and9)Available-for-saleinvestments(Notes9

!"and!#)$eceivables(Notes!"and

%&)'nventories(Note!!)

iologicalassets(Note!&)

thercurrentassets(Note

!*)

+otalCurrentAssets

NoncurrentAssets

,ropertplantandequipment(Note!%)'ntangibleassets(Note!.)

iologicalassets(Note!&)'nvestmentina/ointventure(Note!7)'nvestmentproperties(Note!8)0eferredta1assets(Note%%)thernoncurrentassets(Note

!9)+otalNoncurrent

Assets

TOTALASSETS

LIABILITIESANDEQUITY

CurrentLiabilities

Accountspaableandother

accruedliabilities(Notes*!and%&)

Currentportionoflong-term

debt(Notes***%and

%!)

2hort-termdebt(Notes*"*%and%!)+rustreceiptsandacceptances

paable

(Notes!!and

*%)'ncometa1

paable

+otalCurrent3iabilities

!

"#

P$"%!##%#!&%

'&"

("#%)#%#

"

"%)!%!!!&%'%(")%'&*

"!%*&)%"%!'

"%!&"%!#'%

#+&%"!#%))"

##%()%'#&%'&

&

#!%"&!%(!!%!'*

"%)#%+)%))+

(%!'%"&"&'%#&(%!!!

+!%#%)'

''*%#""%")+

()(%&()%!'

##%"")%(&%*(

P$++%'((%*+)%

'#!

P$*%'"#%'"(%

**!

,

"%*('%(#!%+&

"

%#&(%#"+%"**

&)'%*#(%"##

"(%)"*%"*+%!!

#

Se-te.ber#!

*"!

*

(As

restated

seeNote

*)

4,&%#&8%%%

97

!"8!*#"**.&

#79787..*!

7#.!"%*9!&

97&9%%#!&*

!"&7""7.&8

#!#*7"*

%9.87.*97!

"

*79!8.%##

!*7%.*777.

#*89.!&9!

9.!%9"&%

.##9!&!*

!999!7#*.

#*&9*%.%7

%"#"7.9#

9

4,7""9&%*&

!&9

4,7&8.8#*!

*.

58&88&%.88

#

%#.#%."*!#

#*8!8#!%.

*" ".7 9*% %.

*"!

!(Asrestated

seeNote*)

4,#.88!&*7

!".&*"7!.97

&&!!&&!!**

7#!98*#8!&

97*#78#.&.9!!*.&!*9

.&!%&7!%8

%9#!77%."8

#

*.#*%**"7%

8

!#.%8&!!7.

#&9"&%.88

899..9##

.8!#9%"7!%%#%%8.%

%&%!98!."

*899"87%87

.

4,.8#"8."9

9."

4,7*7"8!8*77

8*"&7.%&78

&7#9.%*.%&

!##8!&.*8%

#"8.99778

*%"8%"7"&&

!


4/26

4

(For6ard)


5/26

NoncurrentLiabilities3ong-termdebt-netofcurrentportion

(Notes***%and%!)0eferredta1liabilities(Note%%)

Netpensionliabilit(Note%*)

+otalNoncurrent3iabilities

+otal3iabilities

E/uit0

quitattributabletoequitholdersoftheparent

,aid-upcapital(Note*%)

$etainedearnings(Note*%)thercomprehensiveincome

(Note*#)

quitreserve(Note*%)

+reasurshares(Note*%)

quitattributabletonon-controlling

interests

+otalquit

TOTALLIABILITIESANDEQUITY

!"#

P$,

#*"%#(%##(

+!(%(")%''"

**'%)("%&&'

"'%)"(%*#)%&&&

"*%!'+%+&'%'"

#)%))(%*&)%*!)

")(%(+*%!"1'%''+%'#"%*#*2

1+)!%#&+%!#(2

'!%))*%(%#&+

'!%&!'%'+

'!%!%!*%+(

P$++%'((%*+)%'

#!

Se-te.ber#!

*"!*

(Asrestated

seeNote*)

4,*99"#&&9*

.%"!%*"8*%

%7!"9.&89

%..*87%%%8

*%7%"79..98

!9"&..8&*&!

%*9.."%7"#7

&%#"#%7*8(&&&.&%!9%9)

(.7"%8."%#)

#.%*98#8"&%

%#.8"#"8

#.%.#&*8#.!

4,7""9&%*&!

&9

*"!!(Asrestated

seeNote*)

4,%""*##7!#

.*%7""#!9%

!#!"7"7!%

%%8"&**"&*

*.#.%&9*."%

!%#&&&&7%7"*9!*""!!!"%

&!8#.%9!8

(*#!#"*.!&%)

#".8""".*%8

!*.&"!!!!9

#!9#&"!7%&7

4,.8#"8."99

."

SeeaccompanyingNotestoConsolidatedFinancialStatements.


6/26

UNIVERSALROBINACORPORATIONANDSUBSIDIARIES

CONSOLIDATEDSTATEMENTSOFINCOME

YearsEn3e3Se-te.ber#!

*"!*(Asrestated

!"# seeNote*)

*"!!(Asrestated

seeNote*)

SALEOF4OODSANDSERVICES

(Notes.and%&)

COSTOFSALES(Notes*&and%&)

P$&!%**'%"'%+

(

')%))+%!!(%&'

4,7!*"!.777

79

&*7%"&%9#

4,.7!.7.%"#8!

&".#&*7%.&8

4ROSSPROFIT2ellinganddistributioncosts(Note*.)

eneralandadministrative e1penses

(Notes*7and%&)

OPERATIN4INCOME

:ar;etvaluationgain(loss)onfinancialassetsatfairvaluethroughprofitorloss(Notes.and8)

Financerevenue(Notes.8and%")Financecosts(Notes.*"**and%!)'mpairmentlosses

(Notes.!"!!!%and!.)

Netforeigne1changelosses

quitinnetincomeofa/ointventure(Note!7)

ain(loss)onsaleofinvestments(Notes8!#and%8)

therincome(e1penses)-net

INCOMEBEFOREINCOMETA5

PROVISIONFORINCOMETA5

(Note%%)

NETINCOME

NETINCOMEATTRIBUTABLETO6

quitholdersoftheparent(Note%#)

Non-controllinginterests

EARNIN4SPERS7ARE(Note%#)

asic


7/26

*SGVFS004

253*


8/26


CONSOLIDATEDSTATEMENTSOFCOMPRE7ENSIVEINCOME

Se-te.ber#!*"!*

(Asrestated

!"# seeNote*)

*"!!(Asrestated

seeNote*)

NETINCOME P$"!%"")%#*%+"! 4,8!8&"#8"99

4,&"*.%798%!

OT7ERCOMPRE7ENSIVEINCOME

1LOSS2

Itemstobereclassifiedtoprofitorloss

insubsequentperiods>

?nreali@edgain(loss)onavailable-for-

saleinvestments(Notes!#and*#)Cumulativetranslation

ad/ustments(Note*#)

Itemnottobereclassifiedtoprofitorloss

insubsequentperiods:

$emeasurementlossesondefinedbenefitplans(Notes*#and%*)

'ncometa1effect

OT7ERCOMPRE7ENSIVEINCOME

1LOSS2FORT7EYEAR

1+'!%'!(%)#&2

('&%"'%)"#

1"*%#'%!'2

1#*%&"+%&!)2

)"%*('%!(

1"+)%&)"%)+'2

1#+!%#%)*!2

%9%#.."*8

(!8!7&8.*!)

*!!7"7#"7

(*8*#!.)

8#7*#.#8

(!97.9"8#8)

!#"!.&&9

(#%79*.#!!)

(!#*!99!&%)

(&8"!*&&.#)

(9"8*!8.%)

*7*#.&&9

(.%&7&%"#)

(.#%7""8.8)

TOTALCOMPRE7ENSIVE

INCOMEFORT7EYEAR

TOTALCOMPRE7ENSIVE

INCOMEATTRIBUTABLETO6

quitholdersoftheparentNon-controllinginterests

P$*%)')%"!'%&!

4,8!99".#.&8

P$*%+&(%*&!%*)

4,7778#&9#*.)%"(%&(&

#*"."&*%*P$*%)')%"!'%&!

4,8!99".#.&8

4,#%8*.789.%

4,#"!!.9"&

&7%7"988#".

4,#%8*.789

.%

SeeaccompanyingNotestoConsolidatedFinancialStatements.


9/26

*SGVFS004

253*


10/26


CONSOLIDATEDSTATEMENTS OFC7AN4ESINEQUITY

FORT7EYEARSENDEDSEPTEMBER#!%!"#%!"AND!""

Attributable toE/uit07ol3erso9t:eParent

Pai3;u-Ca-ital(Note*%) Retaine3Earnin

$P%)%+#&%*#

#

,

%)%+#&%*##

A33itional

Pai3;in

Ca-ital

$P"+%&*%!(+%#

"&

,

"+%&*%!(+%#"&

Total

Pai3;u-

Ca-ital

$P"*%!'+%+&'%

'"

,

"*%!'+%+&'%'"

Una--ro-riate3

Retaine3

Earnin


11/26


12/26

Attributable toE/uit07ol3erso9t:eParent

Pai3;u-Ca-ital(Note*%) Retaine3Earnin

A33itionalPai3;inCa-ital

TotalPai3;u-Ca-ital

Una--ro-riate3Retaine3Earnin


13/26


14/26


CONSOLIDATEDSTATEMENTSOFCAS7FLOS


CAS7FLOSFROMOPERATIN4ACTIVITIES

'ncome before income ta1Ad/ustments for>

0epreciation and amorti@ation of>,ropert plant and equipment (Note !%)'nvestment properties (Note !8)

'ntangible assets (Note !.):ar;et valuation loss (gain) on financial

assets at fair value through profit or loss(Note 8)

Finance revenue (Note %")Finance cost (Note %!)Net foreign e1change losses

3oss (gain) arising from changes in fair valueless estimated costs to sell of s6inestoc;s (Note !&)

'mpairment losses on>$eceivables (Note !")'nventories (Note !!)

,ropert plant and equipment (Note !%)'ntangibles (Notes !. and %8)

3oss (gain) on sale of>,ropert plant and equipmentNet assets of disposal group classified as

held for sale (Note %8)Available for sale investments (Note !#)Financial assets at fair value through profit

or loss (Note 8)quit in net income of a /oint venture

(Note !7)Amorti@ation of debt issuance costs:ar;et valuation gain on derivative

transactions (Note 8)perating income before 6or;ing capital

changes 0ecrease (increase) in>

$eceivables'nventoriesiological assetsther current assets

!"#

P$""%'(*%))"%(!

&

#%+")%*('%'&*

#%+')%)&)

1()#%#!!%*!2

1'*%+#*%+&!2

++%!##%#*'

"'+%*)(%

1+*%&*'%#)"2

!'%(+*&%+*(%&)*

1#&%&!'%*+)2

1+&!%+)*%*)2

1'(%(*#%(#*2

1"*%((%*#&2

*%'((%!)(

"#%)++%)+)%*

1"%)*%"&&%'(&21"%'+%'&"%))*2

1&%"*'%&((2

&+%!#&%*#"

*"!*(As restated

see Note *)

,49!8."%"%!%

%#!&%.988!

%.&779&5

(!#9!)(!**97*9*.8)

.9%*7%87"

.%#%9""#9

!&&*#.."

5

57.&!!7.

!9"**%#""

(*7.8!%*&)

5(&&!9**"9)

8&"99#*"

(%!!7*!"*)9%9..%.

(!***.&*%)

!!%%.!*#**.

(!"%##%.9%*(%##9.)

(!%!!7&"9*)!97*!##%.

*"!!(As restated

see Note *)

,4&.#8%#*8"#

%*."87***.%.&7787

!.!##&&

!!&7%!&9!*(!!9%*7!!8&)!""!9"!%%.

%..88!7*

!*8%!"!..

&.*&8!%#""&"."

!"".&*97!#7&!#7.&

(!7&."...)

!77789%9.(.9%9"9.%)

%.9..97

(*.9.%%)!*%77%%!

(#!!&%%")!"*899.9##"

(98!"7%.&*)(!8#%%"*..*)

(*"%"&!9#7)!7#"9*%!.

(For6ard)


15/26

253*


16/26


'ncrease (decrease) in>Accounts paable and other accrued liabilities

+rust receipts and acceptances paable

Net cash generated from operations'nterest received'nterest paid

'ncome ta1es paid

Net cash provided b operating activities

CAS7FLOSFROMINVESTIN4ACTIVITIES

Acquisitions of>,ropert plant and equipment (Note !%)

Financial assets at fair value through profitor loss

Non controlling interest (Note *%),roceeds from the sale of>

Financial assets at fair value through profitor loss (Note 8)

Available-for-sale investments (Note !#),ropert plant and equipment

Net assets of disposal group classified asheld for sale (Note %8)

0ecrease (increase) in>ther noncurrent assetsNet pension asset (liabilit)

0ividends received (Note !7)Net cash provided b (used in) investing activities

CAS7FLOSFROMFINANCIN4ACTIVITIES

$epaments of>2hort-term debt3ong-term debt (Note **)

,roceeds from availment of short term debt,roceeds from the sale of treasur shares net of

transaction costs (Note *%)

Cash dividends paid (Note *%),urchase of treasur shares (Note *%)

Net cash used in financing activitiesNETINCREASEINCAS7AND

CAS7EQUIVALENTS

CAS7ANDCAS7EQUIVALENTSATBE4INNIN4OFYEAR

CAS7ANDCAS7EQUIVALENTSATENDOFYEAR

!"#

$P%"*'%+*%

*

1"%"+'%""&%!2

"%##&%**"%++

)(*%!(!%!!!

1&)%!'#%**'2

1"%"&%"#+%**)2

""%+"&%&(!%+#(

1'%'('%)'+%+*2

"!%)"#%&&%(&*(%)")%+&"%!!!

&(%&"&%&

1(&%*#%#&&2

1+%(*'%&(+2

*%***%**"*%*('%!'%)&

1&%'&+%#*)%)(2

1#%!!!%!!!%!!!2

"%*('%(#!%+&"

1'%#'%+!(%+#*2

1"(%&)+%')"%#2

+%+&)%()'%"&(

'%#('%#%#*)

$P"%!##%#!&%'&"

*"!*(As restated

see Note *)

99**"7%!8*!889#798"

!%&!#%%*##"!**7&8""%"

(8!#9%#**9)

(8989#"!%9)

!%"*8"%8!"*

(&!*9!9!99#)

(!97.898#..)(7*"""""""")

*7#"%9"%9.!"88!.%9"87#!

5

(7*7*M)

(&*%89.**)

*#99999%(!".#7!#*"#!)

(&7#9.%*.%&)(78#87.*7.8)8&88&%.88#

7%##7.8"""(%9!.8&%.7*)

5

(!&8!9##!9!)

7989&!87"

#.88!&*7

,4&%#&8%%%97

*"!!(As restated

see Note *)

.8.%#897!!#%978&&9#9&.*7.8"."!!.& *""!

(!""!87!"&.)

(7"8&97%"%)

9"!7#998&&

(#&&9#&!8.!)

(*%#*9&8#.8)5

.7*7"!#9"7!.!&8%7*.7&."...

!"79*"#&%

(8!!#899*)

7&.&9"88

*#9999*9(&%!8&&9%*%)

(&!!!8&9&%#)(7#"!%8&)

&7#7!"#7%8

5(%9!7"#%.7%)

(%**!!#!%&)

(%.!!%!%989)

87.*.%

##&9*b#

,4#.88!&**


17/26


18/26

COMPANY BACKGROUND

ni$ersal Ro)ina Corporation /RC is one of t'e largest )ran#e# foo# pro#uct

copanies in t'e 'ilippines &it' t'e #istinction of )eing calle# t'e countrys first

'ilippine ultinational5 an# 'as a gro&ing presence in ot'er Asian ar"ets. 6t &as

foun#e# in 1784 &'en 9r. :o'n %o"ong&ei :r. esta)lis'e# ni$ersal Corn ro#ucts

6nc. a cornstarc' anufacturing plant in asig. ('e copany is in$ol$e# in a &i#e

range of foo#;relate# )usinesses inclu#ing t'e anufacture an# #istri)ution of )ran#e#

consuer foo#s pro#uction of 'ogs an# #ay;ol# c'ic"s anufacture of anial an# fis'

fee#s glucose an# $eterinary copoun#s flour illing an# sugar illing an# refining.

('e copany is a #oinant player &it' lea#ing ar"et s'ares in sa$ory snac"s

can#ies an# c'ocolates an# is a significant player in )iscuits &it' lea#ing positions in

coo"ies an# pret


19/26

I. Earnings and Reen!e Gro"t#

RC generate# a consoli#ate# sale of goo#s an# ser$ices of = >0.778 )illion for t'e

fiscal year en#e# ,epte)er 30 2013 13.>? sales gro&t' o$er 2012. ('is gi$es t'e

copany 'ig'er gross re$enue t'an last year feasi)ly t'roug' eans of o)taining ra&

aterials an# goo#s at lo&er costs lea#ing to an increase# profit argin. ('is

increase# profit argin can allo& ore #iscounts an# increase spen#ing in areas of

in$estent for t'e copany.

('e operating argin of RC is 'ig'er )y .01- points in 2013. ('is iplies t'at t'ere is

a 'ig'er percentage of sales t'at &as left o$er after all e@penses &ere pai# )y t'e)usiness. ('e copany &as a)le to co$ert sales into net incoe ore effecti$ely t'an

in 2012. 6n$estors &ant to a"e sure profits are 'ig' enoug' to #istri)ute #i$i#en#s

&'ile cre#itors &ant to a"e sure t'e copany 'as enoug' profits to pay )ac" its loans.

('e operating profit argin is significant as it &oul# in#icate &'et'er t'e e@penses are

too 'ig' an# t'e copany nee#s to )u#get an# cut e@penses in RCs case users

ust feel confi#ent since t'e copany 'as )een consistently generating ore re$enues

&'ile "eeping e@penses constant.

6t is also crucial for a copany to coen#a)ly aintain a goo# perforance of itsassets &'ile ta"ing into consi#eration long;ter financing t'is is easure# )y t'e

profita)ility ratio return on capital eploye# /RBCE. 6n sipler ters it s'o&s 'o&

uc' in profit eac' peso of capital eploye# generates. 6t ta"es into account t'e

longe$ity of a copany. RCs RBCE 'as increase# in 2013 &it' 0.22 points as

copare# to 2012s 0.1> points. ('is in#icates t'at for e$ery peso in$este# in capital

eploye# t'e copany a#e 22 centa$os of profit. ('is ratio is )ase# on a calculation

)et&een operating profit an# capital eploye#. B)$iously a 'ig'er ratio &oul# )e ore

fa$ora)le for RC to entice ore in$estors to engage in t'e copany.

A easure of t'e net incoe pro#uce# )y total assets is calle# t'e return on assets

ratio /RBA. RCs RBA 'as increase# )y 0.038 points &it' 0.187 in 2013 an# 0.124 in

2012. ('is con$eys t'ere 'as )een a ore efficient anageent of assets to pro#uce

profits in 2013 t'an 2012. ('is ratio 'elps )ot' anageent an# in$estors to loo" 'o&

copetent t'e copany can con$ert its asset in$estents into profit. A positi$e RBA

ratio usually in#icates an up&ar# profit tren# as &ell.


20/26

('e earnings per s'are of RC in 2013 is 4.* 'ig'er )y .7 in 2012 &it' a $alue of only

3.-. ('is easure is also calle# net incoe per s'are it is a ar"et prospect ratiot'at

easures t'e aount of net incoe earne# per s'are of stoc" outstan#ing. 6t is t'e

aount of oney eac' s'are of stoc" &oul# o)tain if t'e profit &as e$enly #istri)ute# to

t'e outstan#ing s'ares at t'e en# of t'e year. 6t is profoun#ly influence# on 'o& anys'ares are outstan#ing. ('e 'ig'er t'is easure is t'e greater t'e stoc" price of a

copany ay )ecoe.

B$erall RCs net incoe aounte# to = 10.11- )illion an# = >.1>8 )illion in

2013 an# 2012 respecti$ely. ('is resulte# to a = 1.732 )illion increase. ('e ain

contri)utor to t'is increase &as t'e 'eig'tene# operating incoe. ('is gro&t' is

reflecti$e of RCs #ri$e to&ar#s largely )ranc'ing out into t'e retail ar"et an# an

attri)ution to econoic upsurge &'ic' le# to a positi$e rippling effect on its custoers.

II. Cas# $lo" Trends

RC ust al&ays ensure t'at it ta"es in ore cas' t'an &'at it sen#s out. A copany

cannot sur$i$e e$en if it 'as a rapi# gro&t' on sales an# profit it also 'as to 'a$e a

proper an# efficient cas' anageent.

('e aount of oney a copany sen#s in fro regular operational acti$ities suc' asanufacturing an# selling goo#s in t'e case of RC is calle# t'e cas' flo& fro

operating acti$ities. ('is #oes not consi#er long;ter capital or in$estent costs. ('ere

'as )een a #ecrease of = 1.407 )illion in 2013 copare# to 2012 in RCs cas' flo&

fro operating acti$ities. ('is eans t'at t'e copany 'as )een ore successful in

financing its s'ort;ter capital in 2012 t'an t'e latter year.

Alost all cas' flo& easures are s&aye# profoun#ly )y t'e state of a copanys cas'

fro operational acti$ities &'ic' t'en is 'ea$ily influence# )y net incoe.

=ig'er re$enues an# lo&er o$er'ea# are siultaneous #ri$ers of cas' flo& frooperating acti$ities. Copanies can control its cas' flo& fro operations t'roug'

lengt'ening t'e tie t'ey consue in paying )ills t'us preser$ing cas' an#

accelerating t'e receipt of cas'.

A positi$e cas' flo& fro in$esting acti$ities in 2013 for RC is e$i#ent aounting to

= 7.748 )illion. ('is in$ol$es in$esting transactions t'at generate cas' outflo&s suc'
http://www.myaccountingcourse.com/financial-ratios/market-prospect-ratioshttp://www.investinganswers.com/financial-dictionary/financial-statement-analysis/net-income-808http://www.investinganswers.com/financial-dictionary/businesses-corporations/revenue-5108http://www.investinganswers.com/financial-dictionary/businesses-corporations/overhead-799http://www.investinganswers.com/financial-dictionary/financial-statement-analysis/net-income-808http://www.investinganswers.com/financial-dictionary/businesses-corporations/revenue-5108http://www.investinganswers.com/financial-dictionary/businesses-corporations/overhead-799http://www.myaccountingcourse.com/financial-ratios/market-prospect-ratios


21/26

as capital e@pen#itures for plant property an# euipent. ,ale of assets )usinesses

an# in$estent securities are resulte# to cas' inflo&s. 6n$estent on capital

e@pen#itures is #eee# to )e t'e ost iportant in financing acti$ities since it is a

priary necessity for t'e proper aintenance of RCs p'ysical assets to support

efficient operations an# copetiti$eness. ('e copanys net capital e@pen#iture is =30.1>0 )illion in 2013. Bf t'is aount t'e capital e@pen#iture &as e@pense# /not

capitali


22/26

III. Debt %oad

RC 'as a #e)t ratio of .24 in 2013. ('is is relati$ely lo& copare# to ot'er copanies.

6t is a easure of a firs total lia)ilities as a percentage of its total assets. ,iply put it

s'o&s t'e a)ility of t'e copany to pay off its lia)ilities &it' its assets. 6t in#icates t'atRC 'as efficient anageent of its lia)ilities since it 'as lo& le$els of lia)ilities

copare# &it' assets resulting to lo& ris"s for len#ers. RCs #e)t ratio 'as gone

#o&n fro 0.34 to 0.24 in 2013 an# t'is iplies a ore fir )usiness &it' t'e potential

of longe$ity )ecause a copany &it' lo&er ratio also 'as lo&er o$erall #e)t. =a$ing

= **.848 )illion total assets an# = 18.-18 total lia)ilities it eans t'at t'e

copany 'as t&ice as any assets as lia)ilities. Essentially only its cre#itors o&n 'alf

of t'e copanys assets an# t'e s'are'ol#ers o&n t'e reain#er of t'e assets. ('e

#e)t ratio is a $ital sol$ency ratio )ecause cre#itors an# len#er are $ery concerne# &it'

repayent. ('is 'elps in$estors analy


23/26

NOTE& TO $INANCIA% &TATEMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of PreparationThe accompanying consolidated fnancial statements o the Grop ha!e "eenprepared on a historical cost "asis# e$cept or fnancial assets at air !ale throghproft or loss %FV&'(# a!aila"le)or)sale %FS( in!estments and deri!ati!e fnancialinstrments that ha!e "een measred at air !ale# and "iological assets andagricltral prodce that ha!e "een measred at air !ale less estimated costs tosell+ The consolidated fnancial statements o the Grop are presented in &hilippine&eso+ The nctional and presentation crrency o the &arent ,ompany and its&hilippine s"sidiaries %as -ell as certain oreign s"sidiaries( is the &hilippine &eso+

Statement of Compliance

The consolidated fnancial statements o the Grop ha!e "een prepared incompliance -ith the &hilippine Financial .eporting Standards %&F.S(+

Reen!e Reco"nition.e!ene is recogni/ed to the e$tent that it is pro"a"le that the economic "enefts-ill 0o- to the Grop and the re!ene can "e relia"ly measred+ .e!ene ismeasred at the air !ale o the consideration recei!ed# e$clding disconts#re"ates and other sales ta$es or dties+ The ollo-ing specifc recognition criteriamst also "e met "eore re!ene is recogni/ed

Sale of "oo#s

.e!ene rom sale o goods is recogni/ed pon deli!ery# -hen the signifcant rissand re-ards o o-nership o the goods ha!e passed to the "yer and the amont ore!ene can "e measred relia"ly+ .e!ene is measred at the air !ale o theconsideration recei!ed or recei!a"le# net o any trade disconts# prompt paymentdisconts and !olme re"ates+

Ren#erin" of serices.e!ene deri!ed rom tolling acti!ities# -here"y ra- sgar rom traders andplanters is con!erted into refned sgar# is recogni/ed as re!ene -hen the relatedser!ices ha!e "een rendered+

$ii#en# income

i!idend income is recogni/ed -hen the shareholders right to recei!e the paymentis esta"lished+

Rent income.ent income arising on in!estment properties is acconted or on a straight)line"asis o!er the lease term on ongoing leases+

Interest income


24/26

5nterest income is recogni/ed as it accres sing the e6ecti!e interest rate %75.(method nder -hich interest income is recogni/ed at the rate that e$actly discontsestimated tre cash receipts throgh the e$pected lie o the fnancial instrmentto the net carrying amont o the fnancial asset+

Cas% an# Cas% E&!ialents

,ash incldes cash on hand and in "ans+ ,ash e8i!alents are short)term# highlyli8id in!estments that are readily con!erti"le to no-n amonts o cash -ithoriginal matrities o three months or less rom dates o placement# and that ares"9ect to insignifcant ris o changes in !ale+

Reco"nition of Financial Instr!ments

$ate of reco"nitionThe Grop recogni/es a fnancial asset or a fnancial lia"ility in the consolidatedstatement o fnancial position -hen the Grop "ecomes a party to the contractalpro!isions o the instrment+ &rchases or sales o fnancial assets that re8iredeli!ery o assets -ithin the time rame esta"lished "y reglation or con!ention in

the maretplace are recogni/ed on the settlement date+ eri!ati!es are recogni/edon a trade date "asis+

Initial reco"nition of 'nancial instr!mentsFinancial instrments are recogni/ed initially at air !ale+ 7$cept or fnancialinstrments !aled at FV&'# the initial measrement o fnancial assets incldestransaction costs+ The Grop classifes its fnancial assets into the ollo-ingcategories fnancial assets at FV&'# FS in!estments and loans and recei!a"les+

The Grop classifes its fnancial lia"ilities into fnancial lia"ilities at FV&' and otherfnancial lia"ilities+ The classifcation depends on the prpose or -hich thein!estments -ere ac8ired and -hether they are 8oted in an acti!e maret+:anagement determines the classifcation o its in!estments at initial recognition

and# -here allo-ed and appropriate# re)e!alates sch designation at e!erystatement o fnancial position date+

$etermination of fair al!eThe air !ale or fnancial instrments traded in acti!e marets at the statement ofnancial position date is "ased on their 8oted maret price or dealer price8otations %"id price or long positions and as price or short positions(# -ithotany dedction or transaction costs+ ;hen crrent "id and as prices are nota!aila"le# the price o the most recent transaction pro!ides e!idence o the crrentair !ale as long as there has not "een a signifcant change in economiccircmstances since the time o the transaction+

Financial assets fnancial asset %or# -here applica"le a part o a fnancial asset or part o a gropo fnancial assets( is derecogni/ed -hen

*The rights to recei!e cash 0o-s rom the asset ha!e e$pired arrangement< or


25/26

*The Grop has transerred its rights to recei!e cash 0o-s rom the asset andeither %a( has transerred s"stantially all the riss and re-ards o o-nershipand retained control o the asset# or %"( has neither transerred nor retainedthe ris and re-ards o the asset "t has transerred the control o the asset+

Financial lia(ilities fnancial lia"ility is derecogni/ed -hen the o"ligation nder the lia"ility isdischarged or cancelled or has e$pired+ ;here an e$isting fnancial lia"ility isreplaced "y another rom the same lender on s"stantially di6erent terms# or theterms o an e$isting lia"ility are s"stantially modifed# sch an e$change ormodifcation is treated as a derecognition o the original lia"ility and the recognitiono a ne- lia"ility# and the di6erence in the respecti!e carrying amonts isrecogni/ed in the consolidated statement o income+Finis%e# "oo#s) *or+,in,process) ra* materials) containers an# pac+a"in"materials,ost is determined sing the -eighted a!erage method+ Finished goods and -or)in)process inclde direct materials and la"or# and a proportion o manactring

o!erhead costs "ased on actal goods processed and prodced# "t e$clding"orro-ing costs+

Materials in,transit,ost is determined sing the specifc identifcation "asis+

Spare parts an# s!pplies,ost is determined sing the -eighted a!erage method+

Propert-) Plant an# E&!ipment&roperty# plant and e8ipment# e$cept land# are carried at cost less accmlateddepreciation and amorti/ation and impairment losses# i any+ The cost o an item o

property# plant and e8ipment comprises its prchase price and any costattri"ta"le in "ringing the asset to its intended location and -oring condition+

Intan"i(le Assets5ntangi"le assets ac8ired separately are measred on initial recognition at cost+Follo-ing initial recognition# intangi"le assets are measred at cost less anyaccmlated amorti/ation and impairment losses# i any+

Contin"encies,ontingent lia"ilities are not recogni/ed in the consolidated fnancial statements "t

disclosed nless the possi"ility o an ot0o- o resorces em"odying economic"enefts is remote+,ontingent assets are not recogni/ed in the consolidated fnancial statements "tdisclosed -hen an in0o- o economic "enefts is pro"a"le+

E.penses


26/26

7$penses are decreases in economic "enefts dring the acconting period in theorm o ot0o-s or decrease o assets or incrrence o lia"ilities that reslt indecreases in e8ity# other than those relating to distri"tions to e8ity participants+7$penses are recogni/ed -hen incrred+

Forei"n C!rrenc- Translation/Transactions

The nctional and presentation crrency o the &arent ,ompany and its &hilippines"sidiaries %as -ell as certain consolidated oreign s"sidiaries( is the &hilippine&eso+

Common Stoc+,ommon stocs are classifed as e8ity and are recorded at par+ &roceeds in e$cesso par !ale are recorded as ?dditional paid)in capital in the consolidatedstatement o fnancial position+ 5ncremental costs directly attri"ta"le to the isse one- shares or options are sho-n in e8ity as a dedction# net o ta$# rom theproceeds+

2013 financial report analysis

Documents