ROXAS HOLDINGS, INC._____________________________________________________ (Company’s Full Name) 6/F CG Building, 101 Aguirre St., Legaspi Village, Makati City _____________________________________________________ (Company’s Address) (632) 810-8901 __________________________________ (Telephone Number) 30 June ______________________ (Fiscal Year Ending) (Month & day) _____________________ (Annual Meeting) SEC Form 17 – A ___________________________________ (Form Type) ________________________________________________ Amendment Designation (if applicable) June 30, 2010 ____________________________________ Period Ended Date ______________________________________________ (Secondary License Type, If any) ___________________ Cashier _________________ LCU ____________________ Central Receiving Unit _________________ DTU 15-A S.E.C. Reg. No. _________________ File Number _________________ Document I.D. SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-A ANNUAL REPORT PURSUANT TO SECTION 17 OF THE REVISED SECURITIES REGULATION CODE AND SECTION 141 OF CORPORATION CODE OF THE PHILIPPINES 1. For the fiscal year ended : 30 June 2010 2. SEC Identification Number : 15-A. 3. BIR Tax Identification No. : 000-290-538. 4. Exact name of issuer as specified in its charter : ROXAS HOLDINGS, INC. 5. Province/Country of Incorporation/Organization : Philippines. 6. Industry Classification Code : __________________ 7. Cacho-Gonzales Building, 101 Aguirre St., Legaspi Village, Makati City Address of principal office Postal Code 1200 8. (632) 810-8901 to 06 Registrant’s telephone number, including area code 9. CENTRAL AZUCARERA DON PEDRO Former name, former address and former fiscal year, if changed since last report 10. Securities registered pursuant to Sections 4 and 8 of the RSA Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding 1,500,000,000 909,552,236 None registered Authorized Capital Stock (Common Shares) No. of shares of common stock outstanding Amount of debt outstanding as of 30 June 2010 11. Are any or all of these securities listed on the Philippine Stock Exchange? Yes [x] No [ ] 12. Check whether the issuer: (a) has filed all reports required to be filed by Section 17 of the Securities Regulation Code (SRC) and Rule 17 (a)-1 thereunder and Sections 26 and 141 of The Corporation Code of the Philippines during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); Yes [x] No [ ] (b) has been subject to such filing requirements for the past 90 days. Yes [ ] No [x] 13. State the aggregate market value of the voting stock held by non-affiliates of the issuer. The aggregate market value shall be computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of specified date within 60 days prior to the date of filing. If a determination as to whether a particular person or entity is an affiliate cannot be made without involving unreasonable effort and expense, the aggregate market value of the common stock held by non-affiliates may be calculated on the basis of assumptions reasonable under the circumstances, provided the assumptions are set forth in this Form. Assuming that the number of shares held by non-affiliates as of 30 September 2010 is 214,121,263 and assuming further that the closing market bid price on said date is P2.92 then the aggregate value of voting shares held by non-affiliates as of the above date is P625,234,088.00. 14. Documents incorporated by reference. (Briefly describe them and identify the part where they are incorporated by reference). (a) Incorporated by reference in Part III on Financial Information is the annual report to security holders as of the fiscal year ended 30 June 2010. PART I - BUSINESS 1. Business Development Since 2007, the company has positioned itself in a new direction in light of the changes that have been happening in the sugar industry as well as in the global economy. It thus laid the groundwork for transformation from a commodity producer to a sugarcane-based solutions provider in preparation for the reduction of sugar tariffs to near zero levels in 2015 under the ASEAN Free Trade Agreement. To this end, the company implemented strategies to raise its revenue-generating capacity and enhance its cost-competitiveness through an integrated business model which will enable it to produce and sell raw sugar, refined sugar and bioethanol. Recently, the company embarked on a massive expansion of its milling and refinery operations in CADPI and CACI, which will significantly boost their production capacity and enhance product quality. At the same time, the expansion brings energy efficiency components with the capability of energy export to the grid. The company likewise ventured into the bioefuels business to take part in the buoyant prospects for the industry given the enactment of the Bioefuels Law of 2006. ROXOL, which construction of ethanol plant was completed in June 2010, will produce 100,000 liters of ethanol per day. The plant, which uses molasses as feedstock, started commissioning in July 2010 and is expected to go on full commercial operation by October 2010. ROXOL’S plant is designed to produce not only fuel ethanol but also potable alcohol. Moreover, the plant has the flexibility to produce extra neutral alcohol and anhydrous industrial alcohol. ROXOL employs a wastewater and methane gas recovery project that will avoid air and water pollution and mitigate the impact of climate change. This earned a carbon finance deal with the World Bank, in which, part of the revenue from the purchase of the emission reductions will be used to finance ROXOL’s community development projects in Negros Occidental. Likewise, in order to help planters produce high-yielding canes, RHI activated CADP Farm Services, Inc., which provides modern farming technology and services as well as nursery facilities to CADPI and CACI planters. Business Units and Operations The company’s wholly-owned sugar manufacturing subsidiaries are Central Azucarera Don Pedro, Inc. (CADPI) and Central Azucarera de la Carlota, Inc. (CACI). It likewise has a 45% equity investment in Hawaiian Philippine Company (HPCo.). Strategically situated in Luzon and the Visayas, the group is the biggest raw sugar producer, and the second biggest in refined sugar production, taking up 17% of total national production. Roxol Bioenergy Corporation (ROXOL) is also a wholly-owned subsidiary that was organized to engage in the bioethanol business while CFSI was activated to improve the supply and quality of canes in Batangas and Negros Occidental. The company’s other subsidiaries are CADP Consultancy Services, Inc., CADP Insurance Agency, Inc., Najalin Agri-Ventures, Inc., Jade Orient Management Services, Inc., Roxas Power Corporation and CADP Port Services, Inc. Principal Products and Services Presently, the Group produces raw and refined sugar in different grades. Its premium refined sugar is accredited and preferred by big industrial customers. The Group also produces super granulated sugar (SGS) a high quality refined sugar of finer granules required by manufacturers of powdered juice drinks, infant milk formula, and pharmaceuticals. The Group also provides toll or refining services to raw sugar owners at its Nasugbu plant. Tolling or refining involves a process whereby raw sugar is converted or processed to refined sugar. As a major supplier of sugar, the Group works in partnership with its customers by providing not only sugar products but also total sugar-based solutions. As such, the Group delivers refined sugar by bulk and by “megabags” (one ton quantity per bag vs. the standard 50 Kg). These types of delivery/packing make its delivery system compatible to the receiving systems of most of its customers. 2. Business a. Description of the company. Roxas Holdings, Inc. (RHI) was established in Nasugbu, Batangas in 1927 as a sugar milling company and was then known as Central Azucarera Don Pedro. Faced with rising global competition, it embarked on an expansion and modernization program in 1994 to become an integrated sugar manufacturing company with a state-of-the-art refinery. In 1995, it acquired a majority ownership in Central Azucarera de La Carlota, a sugar manufacturing company based in La Carlota City, Negros Occidental. Thereafter, it likewise acquired a 45% equity investment in Hawaiian Philippine Company (HPCo), another sugar milling company based in Silay City, Negros Occidental. The company’s group is the largest producer of raw sugar and the second largest refiner in the country, taking up 17% percent of total national production in crop year 2009-2010. The complementary locations of its sugar mills enable the group to serve its customers in strategic parts of the country. In 2008, the company undertook a corporate reorganization. The reorganization eliminated the extra holding company and consolidated all sugar-related businesses under one listed company. This reduced redundancies and improved overall efficiency. With this, the company purchased all the operating subsidiaries of CADP Group Corporation (CADPGC). The shell company of CADPGC, in turn, was sold to its parent company, Roxas and Company, Inc. (RCI). As earlier mentioned, the company also entered into the bioethanol business through a subsidiary, Roxol Bioenergy Corporation (ROXOL). It also activated another wholly-owned subsidiary, CADP Farm Services, Inc. (CFSI), to improve the supply and quality of canes both in Batangas and Negros Occidental. i) Principal products, markets, relative contribution to sales and revenues of Central Azucarera Don Pedro, Inc. and Central Azucarera de la Carlota, Inc. CADPI a. b. c. d. Raw sugar Refined sugar Molasses Tolling 3% 84% 6% 7% CACI a. Raw sugar b. Refined sugar c. Molasses 90% 5% 5% ii) Distribution methods. CADPI and CACI distribute their sugar to local or domestic markets. Distribution is through direct selling to various traders and industrial users. They are not dependent on one or few major customers and/or related parties in the distribution of their products. iii) Competition. CADPI and CACI supply sugar to entities engaged in pharmaceutical, food and beverage businesses, among others. Both are top raw sugar producers in the industry and have the most modern sugar equipment/facilities in the country. Entities engaged in the same line of business are Batangas Sugar Central in Batangas and Victorias Milling Co., Binalbagan-Isabela Sugar Company and Hawaiian-Philippine Company in Negros. CADPI and CACI do not have records indicative of the relative sizes and financial and market strengths of the said companies. iv) Sources and availability of raw materials and names of principal suppliers of CADPI and CACI. CADPI secures its sugar cane principally from planters in Batangas. Its principal suppliers of other materials are: Allied Specialty Chemicals, DM Trading & Industrial Services, Inc., Fabcon Philippines, Inc., Guanzon Lime Development Corp., Philbless, Inc., Pilipinas Shell Petroleum Corp., Jimgem Mineral Resources, Goldhill Industrial Corp., Ingasco, Inc., Artemis Salt Corp., Arvin International Marketing, Falcon Yarn Mfg., GCH International Mercantile, Inc., Philko Peroxide, Prosperity Manufacturing Corp., Regan Industrial Sales, Remington Industrial Sales, Sanvil Industrial Supply, Severo Sy Ling, and Uptown Industrial Sales. CACI secures its sugar cane from various planters/traders in Negros Occidental. Its affiliates, Najalin Agri Ventures, Inc. and Jade Orient Management Systems, Inc. supply about 5% of the sugar cane requirements of the company. Its major suppliers of materials are: Bearing Center & Machinery, DM Trading & Industrial Sales, Agro Industrial & Mill Supplies Corp., Leeleng Commercial, Inc., Uptown Industrial Sales, Regan Industrial Sales, Inc., Edison Electric Integrated, Inc., GY Industrial Sales, Guan Yiac Hardware, Le Price, United Digital Remington Industrial Sales, Portalloy Industrial Supply, Newel Industrial Sales, Kentool Hardware, Associated Products, MB Marketing, LLT Generation, L-Trading, and Severo Syling. v) Transactions with and/or dependence on related parties. CADPI and CACI are not dependent on few customers or related parties in the distribution or sale of their products. They supply various industrial users and traders. Demand from these customers are evenly distributed. vi) Patents, Trademarks and Copyrights. The company or CADPI and CACI do not have existing patents, trademarks, copyrights, licenses, franchises, concessions and royalty agreements. vii) Need for government approvals of principal products. The sugar businesses of CADPI and CACI are principally regulated by the policies and the rules and regulations of the Sugar Regulatory Administration (SRA) while the business of ROXOL will be principally regulated by the Department of Energy (DOE). viii) Effect of existing or probable governmental regulations on the business of CADPI and CACI. The sugar industry in the Philippines is governed by certain policies and rules and regulations issued by the government through the SRA. They are: 1. The U. S. Quota System The main goal of the US sugar policy is to support and stabilize the incomes of its own sugar farmers who grow cane and beet sugar. One major policy instrument employed to achieve this end is the import quota. From 1934 until the early 1980’s, quota limitation governed Philippine sugar consumption. In 1946, the Philippine Trade Act fixed the sugar quota which could be exported to the US. This quota amounted to about 15% of the total US sugar requirements until 1974 when the quota was suspended. It was reinstated in 1982 and since then, the prices paid for sugar exported to the US have always been higher than the price at which sugar could otherwise be exported. 2. The SRA Quota System. The major regulating influence in the Philippine sugar industry is SRA Sugar Order Number 1 which was issued in August 1987. The order deals specifically with the allocation of Philippine sugar. Among others, the Order allocated the country’s total domestic sugar into the following categories: “A” for export to the US, “B” for domestic sugar, “C” for reserve sugar, and “D” for export to other foreign markets. These allocations are determined by the SRA Board at the beginning of every crop year and these ultimately affect the total amount of raw sugar available for domestic refineries. 3. Value Added Tax System The present value-added tax (VAT) system imposes a 12% tax on refined sugar. The manufacturer of refined sugar is allowed a presumptive input VAT of 3% on raw sugar purchases in addition to the 12% input tax on the value of materials and supplies used in the manufacture of refined sugar. These are creditable against the 12% output VAT. The tax consequence does not adversely affect the company’s business because the tax is passed on to the buyer or consumer. 4. Executive Order 313. Executive Order No. 313 issued on 29 March 1996 modified the nomenclature and the rates of Import Duty on certain imported articles under Section 104 of the Tariff and Customs Code of 1978, as amended. For certain articles, two rates of import duties are provided. For these articles, a Minimum Access Volume (MAV) is provided. The MAV refers to the volume of a specific agricultural product that is allowed to be imported with a lower rate of duty. The In-Quota rate of duty applies to importation that is within the MAV provided for an agricultural product while the Out-Quota rate of duty applies when the importation is in excess of the MAV specified for an agricultural product. 5. Executive Order 420. Executive Order No. 420 issued on 17 June 1997 modified the rates of duty on sugar as provided under the Tariff and Customs Code of 1978, as amended, in order to implement the ASEAN preferential rates of duty on cane sugar and beet sugar, among others. Under the Order, the tariff on these products was placed at 65% from 1997 up to 1998; after which, sugar could be placed under the sensitive list allowing the gradual phase-down of tariffs. Additionally, it provided that the margins of preference (MOP) accorded under the ASEAN Preferential Trading Arrangements (PTA) will no longer be extended to any of the products covered under the same Order. Executive Order No. 313 was issued to modify the rates of duty on certain agricultural products, including sugar, while Executive Order No. 420 was issued to modify the rates of duty on sugar alone. Both orders are geared towards helping the Philippine sugar industry to be efficient and globally competitive. 10% of its revenues. It received the following recognition/awards for its pioneering efforts in waste management: 1. 2010.00 per Lkg. Executive Order 295. x) Costs and effects of compliance with environmental laws. Executive Order No. 431 issued on 05 August 1997 provides for the creation of the National Coordinating Council for the Philippine sugar industry. During the last three (3) years.00 per Lkg. Waste minimization implementation in CADPI began in 1993 with the activation of an Interior Pollution Management Appraisal Team. CACI also contributes P2. as amended. Zero Basura Olympics Master Award and Championship in Composting Award – awarded by the Philippine Business for Social Progress (PBSP) ZBO for Business 2010 “A Race to Conquer Garbage in 300 Days” competition during the Earth Day celebration on April 22. the Order provides that sugar which are entered and withdrawn from warehouses in the Philippines for consumption shall be imposed the ASEAN CEPT rates of duty therein prescribed subject to qualification under the Rules of Origin as provided for in the Agreement on the CEPT Scheme for the ASEAN Free Trade Area signed on 28 January 1992.5 million to research and development and this amount constitutes 0. Executive Order No. IEMP advocates waste minimization through Pollution Management Appraisals (PMA). Executive Order No. of sugar produced to the Philippine Sugar Research Institute Foundation. Under the Order.01) under Section 104 of the Tariff and Customs Code of 1978. ix) Estimated amount spent on research and development for the past three fiscal years. series of 1995. extent to which these costs are borne by customers.6. 2. An active PMA Team tasked to address the environmental concerns of the sugar factory complemented the expansion and modernization program of the company. CADPI contributed about P16. sugar which are entered and withdrawn from warehouses in the Philippines for consumption shall be levied the MFN (Most Favored Nation) rates of duty therein prescribed. CADPI contributes P2. and good housekeeping. The Council is tasked to promote effective government and private sector coordination in pursuing the national efforts to enhance the development and global competitiveness of the local sugar industry.14% of its revenues. Moreover. to PHILSURIN. in order to implement the commitment to reduce the tariff rates on sixty percent (60%) of the products in the inclusion list to zero percent (0%) under the Common Effective Preferential Tariff (CEPT) scheme for the Asean Free Trade Area (AFTA). Executive Order No. 8. . if applicable. During the last three (3) years. Executive Order 268. Likewise. 268 issued on 09 January 2004 modified the rates of duty on other sugars (Heading 17. 295 issued on 03 March 2004 modified the nomenclature and rates of import duty on sugar (Heading 17. characterization. CACI contributed about P6. 7.02) under Section 104 of the Tariff and Customs Code of 1978. (PHILSURIN) in compliance with SRA Sugar Order No. 431.77 million to research and development and this amount constitutes 0. A significant reduction in wastewater needing treatment was achieved through segregation. as amended. Inc. CADPI was the first sugar factory in the country which volunteered in the Industrial Environmental Management Project (IEMP) funded by the United States Agency for Industrial Development (US-AID) under the supervision of the Department of Environment and Natural Resources (DENR). CACI has a Pollution Control Department tasked to handle its pollution control activities. a Pollution Control Officer IIII of the Company was adjudged as one of the recipients of the Ten Outstanding Pollution Control Officers (PCO) Award (TOPCO) for the year 1998. CADPI had 649 regular employees as of 30 June 2010. (PSMA) and the Association of Integrated Millers (AIM) on 17-19 August 1994. Likas Yaman Award for Environmental Excellence. on the other hand. The total involvement and concern of CACI in its pollution control has earned it the following awards: 1. 3. 2.awarded by the DENR on 30 June 1995. Activated Sludge Wastewater Treatment System with Sessil Trickling Filter. RHI had ten (10) executive officers and sixty-four (64) regular employees. Recipient of a Resolution of Appreciation from the Sanggunian Bayan of Pontevedra. As of 30 June 2010. Inc. The company has a Collective Bargaining Agreement (CBA) with the Mag-Isa Mag-Ugyon Asosasyon Sang Mamumugon Sa Central Azucarera de la Carlota (MAMCAC) for a period of five (5) years from June 2005 to May 2010. (PCAPI) during the PCAPI Convention on 27 April 1995. Mijares. 3. Mr. CADPI spent about P20. Award of Recognition . had 657 regular employees as of 30 June 2010. Most Environmental Friendly Sugar Mill Award . Totally close-loop cooling system for the sugar mill and refinery where 100% of cooling water is recycled. Negotiations between the company and MAMCAC for a collective bargaining . 5. CADPI has also made substantial investments in the following pollution control facilities: 1.awarded by the DENR on 29 June 1994 for its pioneering initiative in waste minimization in an industrial plant. social and environmental responsibility. CACI spent about P17.awarded by the DENR on 28 June 1996. Inc. Region VI . 3. Likas Yaman Award. as Best Partner in the Industry (National Winner) awarded by the DENR on 10 June 1996. The company has a standing Collective Bargaining Agreement (CBA) with the Batangas Labor Union (BLU) for a period of five (5) years from 01 July 2006 to 30 June 2011. Jeffrey G. CACI. xi) Total number of employees and number of full-time employees. Plaque of Appreciation . 2. Wet Scrubbers for the steam boilers. Negros Occidental for a Zero-Pollution of Pontevedra River located at the downstream portion of the company's premises. Plaque of Recognition – awarded by Nestle Philippines on 23 November 2006 for having exemplified its commitment to Sustainable Development by its well-balanced approach in achieving excellence in its business.2 million in its pollution management program. For the fiscal year 2009-2010. 4. 3. For the fiscal year 2009-2010. 4.10 million for the maintenance and improvement of its pollution control program.2.awarded by the Philippine Sugar Millers Association. On the other hand. Most Environment Friendly Company in Western Visayas.for its pioneering efforts in Waste Minimization by the Pollution Control Association of the Philippines. Best Partner in the Industry in Western Visayas (Regional Winner) . xiii) Legal Proceedings. at P21. these cases do not have material adverse affects on the financial condition of the company. Negros Occidental including various farm implements and transportation equipment.754. Total construction in progress as of 30 June 2010 amounted to P1. CACI is the owner of parcels land located in Barangay Consuelo. Nasugbu Batangas with aggregate value of Nineteen Million Three Hundred Thirty-three Thousand Seven Hundred Fifty (P19.562. In the opinion of the company.) is the owner of parcels of land located at La Granja/Esperanza valued at Eleven Million Seven Hundred Fifty-four Seven Hundred Eighty (P11. Cubay. xii) Property. through the solicitation of proxies or otherwise. CFSI had 6 regular employees as of 30 June 2010. In the ordinary course of its business. The land is now currently leased to CADPI for a period of one (1) year from January 2010 to December 2010 subject to renewal on terms that are mutually agreeable to both parties. xiv) Submission of Matters to a Vote of Security Holders.192.00) CADPI is the owner of sugar milling and refining facilities. Roxol (Roxol Bioenergy Corp. transportation equipment and tools located in Nasugbu. at P3. Roxol had 28 regular employees as of 30 June 2010.750. net of depreciation.00 CFSI (CADP Farm Services.485 billion. Batangas. These properties are presently mortgaged with banking institutions to secure certain loan obligations. . As of 30 June 2010 these properties are valued. at P4.00) both in La Carlota City. Philippine currency.150. Negros Occidental and in Barrio Remanente. transportation equipment and tools.1 million. net of depreciation.333. The company is the owner of a parcel of land located in Nasugbu.987. Cubay valued at One Million Six Hundred Thirty Nine Thousand One Hundred Fifty (P1. Batangas valued at One Billion Three Hundred Seventy Three Million Two Hundred Thirty Four Thousand Seven Hundred Fifty Pesos (P1. As of 30 June 2010.) is the owner of parcel of land in Brgy. The company likewise invested in properties in Bacolod. The land is also presently mortgaged to secure certain loan obligations. La Carlota City and in the Municipalities of La Castellana and Pontevedra in Negros Occidental including improvements machineries and installations. furniture and fixtures. As of 30 June 2010. Negros Occidental.000).780) and in Brgy. the company is engaged in litigation either as complainant or defendant.985 billion. For the past three (3) years. Roxol is on the tail end of its plant construction as of 30 June 2010. net of depreciation.369. No matter was submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders. machineries and furniture and fixtures.639. these properties were valued. La Carlota City. These properties are presently mortgaged with banking institutions to secure certain loan obligations. Inc. these properties are valued.agreement for the next five (5) years is on-going. the labor unions of CADPI and CACI have not staged a strike.202. Roxas Holdings. Inc. Manzano Jr. Maricarmen R.80 2. 9.688 2. 2. East West Banking Corporation Willington Chua Emilio Pantoja Armando M.724 2.204.289. 11. Inc.12% 0.22% 0. & Investment Corp. Antonio &/or Gaudencio Antonio.000 914.212 3. Ltd. 12.12% 0.50 3. 14. July 2008 through June 2009 Quarter st 1 nd 2 rd 3 th 4 July 2009 through June 2010 Quarter st 1 nd 2 rd 3 th 4 High 3.12% 0. PCD Nominee Corp.947.50 2. 18.09% 0. Inc.PART II – SECURITIES OF THE REGISTRANT (A) Market Price of and Dividends on Registrant’s Common Equity and Related Stockholder Matters.24% 0. 7. The top twenty (20) holders of the common shares as of such date were: TOTAL NO.000 785.55 High 3.850 2.925 47.10% 0.00% 5. 5.24% 0. 3.476.431. 19.80 2. Gilbert Liu Magnolia W.000 1. Rizal Commercial Banking Corp.290 836.520 1. Pesan Holdings. 6.014. OF SHARES 597.007 1. Insular Life Assurance Co.40 3.50 2. Market information.70 Low 2. STOCKHOLDERS Roxas & Company. 17.603 1. (2) Holders.840 6.670 118.996 15.24% 1. Medina NATIONALITY Filipino Filipino Filipino Filipino Filipino Other Alien Spanish Filipino Filipino Filipino Filipino Filipino Filipino New Zealander Filipino Filipino Filipino Filipino Filipino Filipino Filipino % 65.43% 0. de Elizalde Anthony U.759.000 29.79% 3.029.014.00 3. Que Pedro E.393.16% 0. 15.74% 0. 4.13% 0. 20.80 The company’s shares were trading at P2. (1) High and low of share price for the last two (2) fiscal years.078 770.11% 0..014.92 per share as of 30 September 2010. Jr.606.198.351 holders of the company’s common shares as of 30 September 2010.00 Low 2.72% 0. Peter Matuszak Jose A.455.08% . RHI’s shares are listed and traded in the Philippine Stock Exchange. 13.09% 0. There were about 2.90 2. Retirement Fund PCD Nominee Corporation Marta Roxas Olgado Pan Malayan Mgmt.480 1.00 2.70% 13.640 1.050. Roxas EBC Investments.142 34.654. 8.55 2. Inc.194. 16. 10.21% 3.30 2. 1.30 2.000 1. No applications for exemption from the registration requirements of the Securities Regulation Code were filed by the company during the fiscal year 2009-2010.P0.000.500.Sub – total Other Stockholder TOTAL OUTSTANDING SHARES (3) Dividends.06 per share Cash .P0.665 39.06 per share Cash .424. (a) Securities Sold There were no recent sale of unregistered or exempt securities. (b) Exemption from Registration Claimed. and the limitation on the discretion of the Board of Directors to declare dividends based on their fiduciary duty. (4) Recent Sales of Unregistered Securities.05 per share Cash . (a) History of dividends paid: Declaration Date 28 June 2006 27 September 2006 20 June 2007 19 September 2007 25 June 2008 3 October 2008 24 June 2009 Record Date 14 July 2006 12 October 2006 13 July 2007 15 October 2007 17 July 2008 15 October 2008 15 July 2009 870.00) per share.P0. i.06 per share Cash – P0. The Company’s independent external auditor is the auditing firm of Sycip Gorres Velayo & Co. 14 Series of 2004. the prohibition on capital impairment. defer or prevent a change in the control of the company.500.040.35% 100.953 909.06 per share Cash .189 common shares under its share buy-back program. among others. The authorized capital stock of the company is One Billion Five Hundred Million Pesos (P1.00% Type and Amount of Dividends Cash .236 95. as well as the tender offer conducted in February-April 2008. PART III – FINANCIAL INFORMATION (A) Information on Independent Accountant.P0.65% 4.06 per share (b) The ability of the company to declare and pay dividends on its common equity is generally restricted or limited by the pertinent provisions of the Corporation Code of the Philippines. As of 30 June 2010.571.P0. (SGV). the company had repurchased a total of 259. (c) Description of Registrant’s Securities.000. . The following presents the External Audit Fees required in SEC MC Circular No. The shareholders do not have pre-emptive rights to subscribe to issues or disposition of the shares of stock of the company of any class unless the Board of Directors decides otherwise.06 per share Cash – P0.e.000) consisting of One Billion Five Hundred Million (1. There are no provisions in its charter or by-laws which would delay.552.000) common shares with par value of One Peso (P1. while RHI’s ownership interest in CADPGC increased from 73. is submitted by the external auditor to the Board of Director’s Audit Committeefor review and for approval.3 billion CADPGC’s common shares with par value of P1 per share. (RCI). . The name CADP Group Corporation was likewise changed to Roxas & Company. (formerly. The 95. including the corresponding audit fees. RCI and CADPGC merged with the latter as the surviving company. 1980. Corporate Reorganization Following the Reorganization Program approved by the Philippine SEC on December 11. CADPGC ended up as a shell company and was eventually sold by the Company to their ultimate parent.28% following a declaration of property dividends to its shareholders.300.000 none none none none (b) The Audit Plan. inflationary increase in cost and the prevailing market price for such services in the audit industry.17% to 95. Aggregate fees billed for professional services for tax accounting.000 1. In July 1996.’s (RHI or the “Company”) corporate life was extended for another 50 years until 2030. the Company exchanged its shareholdings in CADPI. 1930 for the purpose of operating mill and refinery facilities to manufacture sugar and allied products.78% equity ownership of the Company in CADPGC has been reduced to 89. Inc.000 none P 700. Subsequently.70% owned by Roxas & Company. The Company is now 65. 2008. (CCSI) and CADP Farm Services. 1996. RCI. compliance and other tax services 4. Batangas was spun-off to Central Azucarera Don Pedro. Inc. Inc. The committee evaluates and decides on the fees on the basis of reasonableness. the scope of work involved in the audit. The sugar milling and refinery business of the Company in Nasugbu. emerged as a holding and investment company with specific focus on sugar milling and refining business. (CADPI) on December 1. With the sale of all its operating assets and liabilities to the Company. (B) Management’s Discussion and Analysis or Plan of Operation.a) Aggregate fees filled for each of the last two (2) fiscal years for professional services rendered by external auditor for: 20008-09 2009-10 1. CCSI and CFSI became 100% subsidiaries of CADPGC. while its subsidiary. On November 1. Roxas Holdings. a company incorporated and domiciled in the Philippines. Inc. RHI has been transformed into a holding and investment corporation. Audit of registrants’ annual financial statements: 2. (CFSI) for 1. the Company’s shares of stock were listed in the Philippine Stock Exchange (PSE). Central Azucarera Don Pedro) was organized and registered with the Philippine Securities and Exchange Commission (SEC) on October 30. All other fees P 650. Thereafter. which consisted of several corporate actions leading to the sale by CADPGC to the Company of its interest in all sugarrelated operating subsidiaries and associate of the Group. Inc. CADPI. Other assurance and related services 3. CADP Consultancy Services. Inc. CADP Group Corporation (CADPGC). Inc. On December 16. the Company offered its shares to the public through an initial public offering and on August 8.78%. 2001. 2002. the Roxas Group undertook another corporate reorganization. CORPORATE INFORMATION AND BUSINESS OPERATIONS Corporate Information Roxas Holdings. Roxol Bioenergy Corporation (RBC) On February 29. but not limited to. together with RHI associate. anhydrous alcohol. are synonymous to that of the Group except for certain items because RHI reports financial statements on full consolidation basis until January 2009. including but not limited to steam. 2010. It is envisioned though that the two (2) listed companies. molasses. electricity and power”. Hawaiian Philippine Company (HPCo). being its only major operating subsidiary. whose financial statements were fully consolidated under that of the Sugar Group.) bag per day refinery. Its primary purpose is to engage in the business of manufacturing sugar. rectified spirits and extraneutral alcohol from sugarcane and related raw materials. but not limited to. 2008. electricity and power. The financial statements of CADPGC. In Negro Occidental. a by-product. both hydrous and anhydrous products from sugarcane and related raw materials. RHI owned majority of CADPGC. RBC was incorporated to engage in the business of producing.RHI is now the listed company for all the sugar-related businesses of the Roxas Group while RCI will initially have interest in both sugar and property businesses of the Roxas Group. sweeteners and other related products and by-products and to trade the same on wholesale/retail basis. Inc. The discussion below provides an overview of the operation of RHI and subsidiaries. marketing and selling of bio-ethanol fuel and industrial and potable ethanol including. RHI and RCI. consultancy. including but not limited to steam. renewable and alternative energy resources. CADPI also offers tolling or sugar refining services to various traders and planters. CACI.000 50-Kg. rectified spirits and extra-neutral alcohol which business will include the construction and operation of an integrated sugar mill and bio-ethanol distillery complex that will produce bio-ethanol fuel. It has a market share of over 45% with the remaining 55% market share held by six other mills. It also operates an 18. CADPI’s refinery operations represent a significant portion of the revenues of the Group. renewable and alternative energy resources. guarantee and lease income from CADPGC and subsidiaries. On April 29. a lustrous white-colored sugar.000-tons-caneper-day sugar mill producing raw sugar and molasses. owns and operates an 11. 2009. After which. marketing and selling of bioethanol fuel. has the second largest market share of about 21% based on tons cane milled. Central Azucarera de La Carlota. Negros Occidental. both hydrous and anhydrous and industrial and potable ethanol including. Batangas. the Company amended the Articles of Incorporation which revised the Company’s primary business objective to “engage in the business of producing. To ensure maximum utilization of the refinery. CADPI is the largest sugar manufacturer in the Luzon region in terms of capacity and production. operates a 12. This involves the processing of raw sugar (mill share and purchased) into refined sugar. which is based in Nasugbu. anhydrous alcohol.000-tons-cane-per day sugar mill that manufactures raw sugar granular and light brown to yellowish in color. will eventually focus on their respective businesses – sugar for RHI and real estate for RCI. which business will include the construction and operation of an integrated sugar mill and bioethanol distillery complex that will produce bioethanol fuel. RHI as parent company received management. . (CACI) CACI whose operations are located in La Carlota City. The Company is formed primarily to operate the sugar milling facilities in Negros Occidental. syrups. (CADPI) CADPI. CADPGC was deconsolidated and became a shell company until its merger with RCI in June 29. (Lkg. Prior to June 2008 reorganization plan. Inc. and molasses. The Sugar Group’s consolidated subsidiaries are as follows: Central Azucarera Don Pedro. Najalin Agri-Ventures. management services and insurance. maintaining and operating plants. 2010 and testing and commissioning of the plant is ongoing and is expected to be completed in the last quarter of 2010. It is a stand-alone Bio-ethanol plant with a capacity of 100. distribution and sale of electricity for light and power and any other use to which electricity may be applied and to engage in the general business of providing port ancillary services such as port cargo handling. Inc. It started to operate in Crop Year 2009-2010 both Batangas and Negros with the primary goal of helping existing cane areas increase their productivity per unit area at the least cost through farm mechanization and the use of proven and accepted technologies such as use of high yielding varieties of cane.000 liters of anhydrous alcohol per day. respectively. sugar and its by-products including all kinds of commercial cargoes to and from sugar factories. The Company has not yet started its commercial operations as of June 30.86% minimum purity. Inc. use of can ripeners. La Carlota City. Inc. poles wire. As a registered entity. As of June 30. The anhydrous plant will also use molecular sieve technology that will produce fuel ethanol grade alcohol with 99. In December 2009. CADP Farm Services. acquiring.000 tons cane per day (TCD) to 31. (NAVI). RBC is entitled to certain tax incentives such as income tax holiday (ITH) of six (6) years for its anhydrous ethanol and four (4) years for its hydrous ethanol. Its plant facility located at Barangay La Granja/Esperanza. respectively. The Companies have not yet started commercial operations. On October 24. etc. However. Other Subsidiaries CCSI. constructing. use of bio-organic fertilizer. millsites or warehouses and or similar establishments by land with seconday purpose of engaging in various sugar farm services. from January 2010 or actual start of commercial operations. Inc. work systems. arrastre and stevedoring. due to delay in the construction of the plant. respectively. proper timing and method of fertilizer application. whichever is earlier. the Board of Investments (BOI) approved its application for registration under EO No. the Sugar Group started to implement strategic projects to improve profitability and cash flows. Combined milling capacity will increase from 23. shoring. the expansion projects are substantially complete for both Batangas and Negros plant sites.RBC substantially completed its plant construction. Roxas Power Corporation (RPC) and CADP Port Services. ducts and subway for the production. lashing. conduit.000 TCD. (CPSI) were organized to engage in the business of buying. In Crop Year 2007-2008. refinery expansion was deferred for the meantime. Inc.4 billion. Negros Occidental will cost approximately US$ 34 million or P1. the Company has yet to start its commercial operations in the last quarter of 2010. poles. (CIAI) are engaged in various activities such as consulting. . 2010.000 bags/year. supply. 226 as New Producer of Bioethanol (Anhydrous) and Potable (Hydrous) Ethanol on a Pioneer Status and Non-Pioneer Status. cane hauling. sugar refineries. shipping rebundling. cleaning. Jade Orient Management Services. 2008. RBC filed a letter request extending its start of commercial operations to July 2010. sugarcane farming. CACI will have a heightened capacity to produce Direct Consumption Raw Sugar (DCRS) at 700. (CFSI) CFSI was organized and registered principally to engage in the business of transporting sugar cane. through capacity expansion. However. rebugging and other related services on board vessels. (JOMSI) and CADP Insurance Agency. farm services and ethanol venture. leasing. 1 billion level in 2010 and 2009. FULL FISCAL YEAR Financial Condition Roxas Holdings.25:1. being prudent and cautious in capital investments and reduction of manufacturing and operating costs. • • Change in Financial Condition The 16% surge in the Group’s total assets to P15. RHI Group also remains committed to its corporate social responsibility to maintain the environmental integrity in areas where it operates and to contribute to the welfare of communities surrounding its facilities. Debt service coverage ratio for the current crop year is within the minimum permissible level of 1.79:1. 16% or P2. commitments.1 billion.8 billion and P2. .00 in 2010 versus 0.2 billion higher over June 30. Current liabilities slid to P3.00. Unused working capital lines as at June 30.00 in prior year.00 in 2009.2 billion in the current year from P3. Significant elements of income or loss that arose from continuing operations. events or uncertainties that will result in or that are reasonably likely to result in the Company’s material liquidity problem.5 billion. with greater emphasis given on direct sales to industrial customers.8 billion. Current assets remained at P3.00 and 1.9 billion in prior crop year.5 billion in 2009 was substantially due to increased property. Inc. Book value per share slightly increased to P6.97:1. and Seasonal aspects that had a material effect on the financial condition or results of operations. P2.00 and 1. respectively.37:1.33:1. Known trends.e. and Subsidiaries’ (the “Group”) consolidated resources rose to P15.58 per share from P6. Leverage position stayed within the limits of certain loan covenant. construction of bioethanol plant and acquisition of farm tractors and implements). manufacturing efficiencies through better management of production stream and usage of fuel and electricity and reducing manufacturing downtime. debt to equity ratio this year is 1. This year’s ratio is 1. capacity expansion of sugar mills. plant and equipment (PPE) that amounted to P11.29 per share in previous year.61:1. It is a signatory to the United Nations Global Compact. 2009 balance of P13. events or uncertainties that have had or that are reasonably expected to have a material favorable or unfavorable impact on net sales or revenues or income from continuing operations.84:1.The Group continues to optimize production-marketing mix. There are no: • • Known trends or any known demands. The increase was attributable to strategic projects of the Group (i.00.1 billion or 22% higher than the P9. which enlists the participation of private corporations in the protection of human rights of children and labor and advocates environmental commitment and the fight against corruption. Maximum debt to equity ratio allowable is at 2.7 billion in 2010 from P13.96:1.7 billion.00 last year.7 billion posted in June 2009. 2010 and 2009 from local banks amounted to P2. The Group achieved a current ratio of 0. Current assets remained the same from 2009 at P3. Current portion of long term liabilities amounted to P52 million in 2010. Inventories went up to P1. Customers’ deposits also went down to P123 million from P186 million due to application.1 billion in prior year. Also. Total tonnage for the period reached 1. This was due to recognition of deferred charges amounting to P22. respectively.9 billion in June 2009. The surge was due to increase in input taxes substantially from RBC and unused creditable withholding taxes.9 billion in prior period due to increased long term borrowings from P3. higher by 18% or P285 million from previous year’s P1. Accounts payable and accrued expenses moved down to P609 million from previous year’s P780 million.238 million . reducing trade receivables to P681 million from P757 million in previous period. The Group’s cash balance decreased by P110 million or 38%. consequently. Non-current liabilities were up by 67% to P6. 2010 and 2009. This was due to settlement of short-term obligations and the on going projects. Production Performance Crop Year 2009-2010 versus 2008-2009 Batangas Operations CADPI’s raw production for crop year 2009-2010 dropped to 2. The decrease was attributable to reduction in trade payables from P306 million to P131 million as a result of substantial completion of strategic projects and cost containment measures through reduction in materials inventory balance. Total advances to related party amounted to P49 million and P201 million in June 2010 and 2009. Dividends payable went down from P41 million to P16 million due to non-declaration of dividends in the current year versus declaration in 2009 which was paid in July 2010.9 billion.5 billion this year versus P0.9 billion in prior crop year. 2010. in prior crop year due to low tons cane milled this year.2 billion from P3.4 billion compared to P2. Advances to related party significantly declined due to receipt of payment this year.702 million Lkg.0 billion and P5. Cash and cash equivalents was retained at its optimum level of P177 million from P267 million in prior year. The increase was due to high refined sugar inventory level as of the current period due to slow withdrawal by customers coupled with high inventory cost.1 billion. Despite decrease in cash balance in 2010. Total current liabilities decreased to P3. Total receivables as at crop year end amounted to P833 million versus P1.7 billion in June 30.1 billion to P5.4 billion from P3. 2009 pertaining to undrawn portion of credit facility and was considered as reduction from the outstanding loans upon full availments of the undrawn portion of the credit facility in 2010.3 million as of June 30. deferred tax asset of P5 million was set up due to NOLCO of a subsidiary this year. The increase was mainly due to income earned during the year. lower availment and transfer of bridge loans to long-term this year.9 billion as short term borrowings decreased to P2.466 million Lkg. Other non current assets decreased to P27 million from P45 million.7 billion. from 2. This is due to payment.6 billion. Combined raw and refined sugar and molasses cost amounted to P1. respectively. increasing long-term borrowings. Stockholders’ equity was recorded at P6. collections improved. While there was decrease in net pension benefit obligation to P41 million from P74 million due to payment. Prepayments and other current assets went up to P229 million from P152 million in 2009. The Group’s strategic loans were fully drawn as of June 30. 5% in 2010.20.467 million tons cane milled last year. Cost of production went up as bunker usage doubled from 4. Equity in net earnings of an associate increased to P132 million from P80 million due to higher operating results of HPCo.06 Lkg/TC compared to 2. Other income was up this year due to recovery from insurance claim of CADPI amounting to P141 million and increased scrap sales of the two subsidiaries. Results of Operations The RHI Group generated consolidated total revenues of P6. taxes. Though sales volume was down this year due to lower production volume in the current period. versus 3. In addition to the effect in the decrease of 6% in national production.965 million Lkg. Gross profit rate for the period slightly decreased from 15.497 million Lkg. Moreover.3 billion from P5. thus total tonnage for the year suffered and went down to 1.584 million in 2009. Canes were diverted mostly to other mills in the northern area. Earnings before interest. as the expansion projects were substantially completed this year and closed to corresponding PPE accounts. Negros Operations Due to overall decline in cane tonnage and fierce competition in the Negros area. . This translated to earnings per share of P0. Coupled with lower recovery this period of 2. depreciation started. Likewise.209 million from 1. Total interest expense. net this period amounted to P314 million from P126 million in prior year. likewise due to frequent stoppages in the plant.85 Lkg/TC to 1. bagasse supply from production went down as tonnage decreased in the current period. Likewise. depreciation and amortization (EBITDA) increased to P984 million from P697 million in 2009. raw production this year dropped by 23% from 3.34 this year from last year’s P0.2 billion for the year. thus total charged to operations this year increased to P407 million versus P304 in previous year. The growth is attributable to higher average selling prices of raw and refined sugar and molasses as sugar prices went up in the third quarter of crop year 2009-2010. particularly on various incentive programs offered to planters by other sugar mills.9 million liters in 2010. Refined sugar production also went down to 3. sugar recovery improved from 1.25 Lkg/TC last year. Cost of sales increased by 7% or P347 million to P5.5% to 14.324 million Lkg. thus canes were diverted to the other mill. interest expenses went up as the related interest on loans used in the strategic projects closed to PPE were charged to expense. CACI’s share on cane supply declined. The Group posted net income of P311 million higher by P168 million from P143million last year. in 2010.245 million Lkg to 2. The decrease in provision for taxes from P175 million to P84 million was due to sugar inventory write off in CADPI and high interest expense (capitalized and expensed out).0 billion in 2009. However.tons cane compared to 1. due to frequent stoppages in the operations. while operating expenses were slightly up by P1 million to P621 million in the current year.8 million liters in 2009 to 8.99 Lkg/TC. the decrease in tonnage was due to downtime resulting from breakdowns and commissioning of new equipment. 6% higher than last year. 2009.4 billion in the current year from P3. Inc. Current ratio improved to 0. The Group’s leverage position stayed within the limits of certain loan covenant.25:1. Thus.70:1. 2010 versus P13. from P6.2 million in purchased bagasse. Net consolidated finance costs grew to P126 million in 2009 from P48 million in 2008 due to higher loan availments this year. Consolidated gross profit margin fell from 17% in 2008 to 15% in 2009. respectively. Earnings before interest. Equity in net earnings of an associate increased due to higher income – P80 million for 2009 and P70 million for 2008. CADPI incurred marketing expense for selling D sugar abroad amounting to P3 million.98 billion this year and P4.Results of operations Crop Year 2008-2009 versus 2007-2008 Consolidated revenue decreased by P213 million or 4%.99:1.00 in June 2009. which cost the Batangas operation P88 million in bunker consumption and P8. registered at 1.9 billion in prior crop year. Raw and refined sugar sales. The decline was due to weak market brought about by the challenging global economic environment during this period. General and administrative expenses rose to P560 million from P509 million in 2008. and expenses incurred by the two new companies.4 billion this period from P3.9 billion in 2009. Cost of sales amounted to P4.00 in March 2010 compared to 0. depreciation and amortization (EBITDA) decreased to P669 million in the current crop year from P973 million in 2008 due to drop in operating income this year.00. Debt to equity ratio is at 1. Current assets increased to P3.5 billion for the crop year ended June 30. insurance and transfer cost brought about by increased materials and supplies for expansion projects. Debt service coverage ratio is within the minimum permissible level of 1. the Group ended the crop year 2008-2009 with a significant slide in net income of 69% or P143 million from P455 million in 2008. Selling expenses amounted to P37 million and P34 million in 2009 and 2008. taxes.1 billion in June 2009. The slight net increase was driven by the spillover of costly refinery operation in July and August 2008.94 billion in previous year. 2009. This was brought about by increased taxes and licenses due to corporate reorganization and assessment.8 billion as at March 31. as well as tolling volume went down in the current year. Current liabilities also went down to P3. . During the year. and subsidiaries (the “Group”) stood at P15. CY 2008-2009 Financial Condition Consolidated total assets of Roxas Holdings.28:1. rentals of communication leased lines and vehicles. RBC and CFSI.1 billion in 2008 to P5. ratio is 5.25:1.00.33:1.00 this period while in June 30.79:1.00 in the current period versus 1.00 at the end of crop year 2009. Maximum debt to equity ratio allowable is at 2.37:1.00. rd INTERIM RESULTS – 3 QUARTER 2009-2010 VS. Increase in net other income to P76 million from P53 million in 2008 was attributable to sale of scrap from discontinued railroad operations. two (2) days delayed from last year. cash and cash equivalents went down to P219 million compared to P287 million last year due to settlement of short-term borrowings this period. The decrease in tonnage was due to downtime resulting from breakdowns and commissioning of new equipment. P1. likewise decreased from P272 million to P235 million as deposits to suppliers went down to P46 million from P120 million in June 2009. 2010 posted at 1. This was due to on-going expansion of milling and refining facilities of CADPI and CACI. Recovery improved this period.983 million Lkg versus 2. customer’s deposits moved down to P178 million from prior period’s P186 million.8 billion and P5. Stockholders’ equity was recorded at P5. 2009.7 billion from P3.4 billion in March 2010 as short term borrowings decreased to P2. . This is due to payment. the construction of ethanol plant in La Carlota City for RBC and acquisition of farm implements for the farm operations of CFSI.039 million versus 1. consequently. Accounts payable and accrued expenses. Advances to related parties significantly reduced due to settlement this year amounting to P48 million in March 2010 from prior year’s P201 million. 2010 and June 30. refined sugar production went down to 2.215 million Lkg same period last year. 2009. collections improved in the current year.6 billion.5 billion as of June 30. 1.238 million last year.Unused working capital lines as of March 31. were almost completed. also decreased by 3% as expansion project in CAC. Likewise. 2010 amounted to P2.055 million Lkg compared to 2.42 from P6.7 billion posted in June 2009. Prepayments and other current assets. Current assets also increased to P3. However. thus.5 billion versus P3. plant and equipment (PPE) account this period. non-current liabilities were up by 69% to P6. lower availment and transfer of bridge loans to long term this period. This was attributable to high sugar inventory level this year due to slow withdrawal of customers coupled with high inventory cost. On the other hand. Likewise. higher by 40% or P1. respectively. Results of Operations Batangas Operations CADPI started its mill operations on November 26.3 billion and P938 million.07 billion in June. 2009. Inc. 2010 and June 30.93 Lkg/tc compared to 1. Total current liabilities fell by P545 million or 14% from P3.9 billion in June 2009.4 billion compared to P2. Book value per share slightly increased to P6. reducing trade receivables to P631 million from P757 million in previous period. PPE balance as at March 2010 amounted to P11. increasing long-term borrowings to P5. 2009 from local banks amounted to P2. Raw and refined sugar inventory amounted to P1.5 billion this year versus P925 million in prior crop year. Total tonnage for the period reached 1. Total inventories as of March 31.9 billion in June 2009 to P3.635 million Lkg due to frequent stoppages.4 billion from P3.7 billion in March 31.9 billion or 20% higher than the P9. respectively.1 billion due to increased inventories this period. Raw sugar production as of March 31. Change in Financial Condition The 17% upsurge in the Group’s total assets is mainly attributable to increased property.9 billion in prior period.28 in prior crop year.81 Lkg/tc in prior year.1 billion. 494 million tons in prior year.6 billion from prior year’s P1.374 per bag in previous period. In addition. This translated to earnings per share of P0. ability to source sugar canes and the efficiencies and productivity of manufacturing facilities. depreciation and amortization (EBITDA) increased to P510 million from P381 million. Coupled with lower recovery this period of 2. Consolidated revenues increased by 15% from P3. amounting to P141 million. CACI’s tonnage this year went down to 1. average selling prices increased to P1.209 million tons versus 1. Refined sugar production – the most important determinant of revenues and computed as the gross volume of refined sugar produced by the CADPI refinery both as direct sales to industrial customers and traders or as tolling manufacturing service. The Group posted net income of 119 million versus P61 million in prior period due to higher other operating income recognized this year.13 this year from last year’s of P0. taxes. as an associate. increased outside services due expansion. • • .3 billion this year due to higher refined sugar sales this year amounting to P2. the Company’s financial performance is determined to a large extent by the following key results: • Raw sugar production – a principal determinant of consolidated revenues and computed as the gross amount of raw sugar output of CADPI and CACI as consolidated subsidiaries and HPCo. Sales of scrap also increased from P9 million to P43 million this year. Other operating income substantially increased from P47 million to P216 million due to gain from insurance claim of CADP.9 billion. Inc. Equity in net earnings of an associate increased from P49 million to P70 million this year due to higher operating results of HPCo. Cost of sales this year amounted to P3. General and administrative expenses surged this year to P441 million versus P424 million last year or 4% higher due to higher transfer cost of materials from P6 million to P13 million. Refined sales volume went up by 375.075 million Lkg in previous year.524 per bag from P1.1 billion last year. Net financing cost this year went up to P146 million from P72 million due to expensing of borrowing costs related to expansion of CAC.069 Lkg/tc last year. Gross profit margin decreased to 11% versus 15% in previous year.617 Lkg from 1.066 Lkg/tc compared to 2.Negros Operations With the decline in cane supply in Negros area and diversion of canes to other mills. and pertains to production capacity.497 million Lkg from 3. Unit cost this year increased due to low production and high bunker usage. increased labor and labor related expenses due to CBA salary adjustments and additional light allowance. limited by production capacity and by the ability of the Group to market its services to both types of customers. Raw sugar milling recovery – a measure of raw sugar production yield compared to unit of input and is computed as the fraction of raw sugar produced (in Lkg bags) from each ton of sugar cane milled (Lkg/TC). as projects were substantially completed this period.7 billion in prior year to P4. raw production this year decreased to 2. Top Five Performance Indicators As maybe concluded in the foregoing description of the business of the Group. Inc.8 billion from P3.347 million Lkg last year.08 Earnings before interest. Return on Equity – denotes the capability of the Group to generate returns on the shareholders’ fund computed as a percentage of net income to total equity. 5. The company is not aware of any known trends. presenting the top five performance indicators of the Group in three (3) fiscal years. shows general improvement in the financial and operating results: Performance Indicator Raw sugar production Refined sugar production Milling recovery EBITDA Return on EQUITY 2010 6. taxes. income taxes and adding back allowances for depreciation and other cash amortization. P27. The Group had an allocation of P442. arrangements.947 M bags 3. 4. events or uncertainties that will have material impact on sales.02 Lkg/TC P669 million 3% 2008 9. 6. 3. but excluding finance charges from loans.002 M bags 3.83 LKg/TC P973 million 8% Key Variable and Other Qualitative and Quantitative Factors 1. events or uncertainties that will result in or that are reasonably likely to result in any material cash flow or liquidity problem. P47 million for CACI. including any default or acceleration of an obligation. and other relationships of the Company with unconsolidated entities or other persons created during the reporting period.6 million to complete the expansion project for crop year 2010-2011 of which P87 million for CADPI.6 million for CPSI and P281 million for RBC.659 M bags 1.• Earnings before interest. The company is not aware of any material off-balance sheet transactions. Description of material commitments for capital expenditures. depreciation and allowances (EBITDA) – the measure for cash income from operation and computed as the difference between revenues and cost of sales and operating and other expenses. broken down into P22 million for the CADPI integrated mill and refinery operations and P70 million for CACI. .123 M bags 3. The company is not aware of causes for any material changes from period to period in the financial statements. The company is not aware of any events that will trigger direct or contingent financial obligation that is material to the Company.09 Lkg/TC P984 million 5% 2009 8. obligations (including contingent obligations).965 M bags 2.324 M bags 2. An allocation of P92 million for regular capital expenditures in 2010-2011. The company is not aware of any known trend. 2. • The table below. Mr. He is the President & CEO of Philippine Investment Management.. Inc.. He is also the Chairman of the Board of Directors of Elro Trading and a director of Central Azucarera Don Pedro. and the President of Atlas Holdings Corp.. Phinma F&A Outsource Corp. Inc. PART IV MANAGEMENT AND CERTAIN SECURITY HOLDERS A. Inc. on accounting and financial disclosure. and Central Azucarera de la Carlota. Philippine Sugar Millers Association. He is likewise the Vice-Chairman of Trans-Asia Oil & Energy Development Corp. and the Olavarria and Co. Leopando is presently the President & CEO of RCBC Capital Corporation and the Chairman of RCBC Securities Inc. Mr. where he obtained his degree in Bachelor of Science in Commerce. and Paramount Building Management & Services Corp. University of Pangasinan. is the Chairman of the Compensation Committee and a member of the Nomination Committee. United Pulp and Paper Co. del Rosario. and Microtel Development Corp. Elizalde obtained his Bachelor of Arts in Economics in Denison University. Antonio J. Inc. and a director of Phinma Property Holdings Corp. and Central Azucarera de la Carlota. Roxas is 54 years old and is a Filipino. President of Fundacion Santiago. Elizalde is 45 years old and is a Filipino. the Shell Company in Paris. Holcim (Phils. He was elected to the Board of Directors on 25 March 2009 and is a member of the Audit Committee. 2nd Vice-Chairman of Batangas Assets Corporation. Inc. the Chairman of Central Azucarera Don Pedro. is an independent director and has possessed all the qualifications and none of the disqualifications of an independent director since he was first nominated and elected to the Board of Directors of the company on 5 July 2002 and when he was re-elected as an independent director on 25 March 2010. and Ayala Corporation. He has been a member of the Board of Directors since 2002. Santiago R. Mr. Mr. Pedro E. There were no changes in or disagreements with Sycip Gorres Velayo & Co. Inc. Inc. and other subsidiaries of the company. Roxas is married to Ms. Fuego Development Corporation. Philippine Business for the Environment and Philippine Business for Social Progress. He has been a member of the Board of Directors since 1982 and is the Chairman of the Board of Directors as well as the Executive Committee. He is also a director of Roxas & Company. Cagayan de Oro College. Trans-Asia Renewable Energy Corp. Mr. del Rosario. Microtel Inns and Suites (Pilipinas). Banco de Oro (BDO) Private Bank. is 65 years old and is a Filipino. Roxas is the Chairman of the Nomination Committee. Roxas graduated from the University of Notre Dame in Indiana. He was the President of the Investment . He has been a member of the Board of Directors since 1982 and is the Chairman Emeritus of the company. the Manila Electric Company (Meralco). Mr. Directors and Executive Officers of the Issuer. He has been a member of the Board of Directors since 2000. USA where he obtained his degree in Business Administration. and Central Azucarera Don Pedro. Board of Directors. Inc. Inc. Ramon R. Roxas is 68 years old and is a Filipino. Mr. TA Power Generation Corp. Toon City Animation Inc. Inc. Phinma A&E Outsource Corp. Mr. Chairman of Hawaiian Philippine Company. and Lowry and Co.(C) Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.... Inc. the President & Vice-Chairman of Phinma Corp. Chairman & President of Roxas Foundation.). Mr. Mr.. Chairman of Club Punta Fuego. Roxas was educated at Portsmouth Abbey School. Inc. of New York. USA. del Rosario. Inc. He is also the Chairman and President & CEO of Roxas & Co. Jr. President of Roxaco Land Corporation. Inc. del Rosario graduated from Harvard Business School and De La Salle University and was a Ten Outstanding Young Men (TOYM) awardee in the field of Investment Banking and Finance in 1978. (PHINMA). Mr. USA and at the University of Notre Dame... University of Iloilo. USA. Roxas trained at the Standard Chartered Bank of London. Raul M. Jr. Mr.... Elizalde is a member of the Executive Committee as well as the Compensation and Nomination Committees.. del Rosario is also the Chairman of the Board of Directors of CIP II Power Corp. A copy of the company’s financial reports for the fiscal year ending 30 June 2009 is attached as Annex A.. Union Galvasteel Corp.. Roxas is a member of the Compensation Committee.. Jr. Inc. Leopando is 58 years old and is a Filipino. and a director of Philippine Long Distance Telephone Company (PLDT). Araullo University. Regina Tambunting and they have three (3) children. Mr. Geronimo C. He graduated Magna Cum Laude from the University of the East. Inc. Inc. a member of the Board of Directors of P&G Australia. Beatriz Roxas Olgado is 56 years old and a Spanish. Picornell was elected as a member of the Board of Directors and as President & CEO of the corporation on 25 March 2009. and Paxys. USA where he obtained . and a director of Philippine Long Distance Telephone Company (PLDT). Kapunan is a Senior Partner at the Law Firm of Kapunan Lotilla Garcia & Castillo.. Shulton.. Kapunan is the Corporate Secretary of the company. New Zealand. She was elected to the Board of Directors on 25 March 2009. Inc. Inc. Valencia obtained his degree in Bachelor of Science in General Engineering from the Philippine Military Academy in 1963 and his Master in Business Management from the Asian Institute of Management in 1971. Baord Adviser of Philippine Veterans Bank. Inc. BSC Accounting in San Beda College and his Masters in Business Administration from the Ateneo de Manila University. The directors hold office for one (1) year until their successors are elected and qualified. and is a Certified Public Accountant. He was elected to the Board of Directors on 29 September 2010. Mr. and a member of the Board of IHAP since 1986. Philippine Business for the Environment and Philippine Business for Social Progress. the Manila Electric Company (Meralco). a consultant to the Chairman and CEO and Vice-President for Finance of ABS-CBN Broadcasting Corporation.. a member of the Association of License Stock Brokers. Atty. Roxas was educated at Portsmouth Abbey School. among others. the Chairman of Central Azucarera Don Pedro. Inc. Norwich. He is also the President & CEO of Central Azucarera Don Pedro. Ms. Mr. Chairman & President of Roxas Foundation. He was elected to the Board of Directors on 25 March 2009 and is the Chairman of the Audit Committee. Inc. Chairman of Hypercah Payment Systems. Fuego Development Corporation. Inc. Valencia is 68 years old and is a Filipino. Estacio is 63 years old and is a Filipino. Chairman of Hawaiian Philippine Company. Inc. Mr. and other subsidiaries of the company and a director of Hawaiian-Philippine Company.. Estacio is an independent Director and he has possessed all the qualifications and none of the disqualifications of a director since he was first nominated and elected as a director of the company. and Bankard. P&G New Zealand. President of Fundacion Santiago. Banco de Oro (BDO) Private Bank. Inc. President of Roxaco Land Corporation. a nominee of the Philippine Stock Exchange. Inc. Australia and Shulton. Max Factor New Zealand. Jr. Renato C. Mr. Max Factor Australia. College of Business Administration. and Central Azucarera de la Carlota.. Ramon A. Inc. is 59 years old and is a Filipino. He has been a member of the Board of Directors since 1982 and is the Chairman of the Board of Directors as well as the Executive Committee. She obtained her Bachelor of Laws degree at the University of the Philippines. Chairman of Club Punta Fuego.. P&G Philippines. He was formerly the Dean of the College of Business Administration of the University of the East.. Makati Sports Club Inc. and other subsidiaries of the company. Atty. Philippines and a Trustee of P&G Pension Plan. Roxas is the Chairman of the Nomination Committee. Chairman of Bation Payment Systems. Noxell. Mr. Inc.House Association of the Philippines (IHAP) in 1990. Pedro E. director of Anglo Philippine Holdings Corporation. and Eagle Ridge Golf Club. Inc. He was likewise elected by the Board of Directors as a member of the Executive Committee and the Audit Committee on 29 September 2010. Olgado is presently a director of Roxas & Company. Mr. Mr. USA and at the University of Notre Dame. Picornell. Fil Hispano Ceramics Inc. Intervest Co. Mr. RCBC Capital Corp. Mr. He is also the Chairman and Presdient & CEO of Roxas & Co. Inc. a director for Regional Controls for Asia of the Procter & Gamble Company. and ViceChairman of Asia Pacific Network Holdings. Picornell was educated at the University of San Carlos and is a Mechanical Engineer. a member of the Phil... Roxas is 54 years old and is a Filipino. Corporate Officers.. Estacio is a member of the Board of Directors of Forefront Academic & Technical Center. Mr. Valencia is presently a director of Metropolitan Bank & Trust Company. Philippine Sugar Millers Association. Lorna Patajo-Kapunan is 57 years old and is a Filipino. Leopando obtained his degree in AB Economics from the University of the Philippines. and Central Azucarera de la Carlota.. 2nd Vice-Chairman of Batangas Assets Corporation. Leopnado is presently a member of the Board of Directors of Charter Land Inc. Coca Cola System Council Chairman of iPeople. He became a member of the Board of Polar Mining Corporation. Areilza is 32 years old. and other subsidiaries of the company and a director of Hawaiian-Philippine Company. He graduated from the University of the Philippines in Diliman with a Bachelor of Science degree in Metallurgical Engineering. Concepcion was formerly the Resident Manager of PASSI Sugar Central. Central Azucarera de la Carlota. Inc. 1997. Inc. Eduardo V. married and a Spanish citizen. and Central Azucarera de la Carlota. Regina Tambunting and they have three (3) children. Nasol is 51 years old and is a Filipino. 2002. Picornell was elected as a member of the Board of Directors and as President & CEO of the corporation on 25 March 2009. Areilza obtained his degree in Business Administration in 1999 at the University of CUNEF Madrid. He obtained his Master in Business Administration at the Ateneo de Manila University and earned his degrees in BSBA major in Marketing and AB Philisophy at the Ateneo de Davao University and Xavier University in Cagayan. He was appointed as VP-Strategic Projects on 25 March 2009 and was later designated as VP-Operations & Management Services of the company on April 12. She graduated from the University of Santo Tomas with a Bachelor of Science degree in Psychology. Mr. Quezon University. in Iloilo. is 50 years old and is a Filipino. Inc. Jr. Picornell. Jr. He obtained his BS Chemical Engineering degree from De La Salle University and completed his MBA in the University of San Agustin. Mamauag. Reyes was formerly the Program Director for Sales at the Ateneo de Manila University before he joined the company. He was appointed as VP for Marketing on 25 March 2009. has been the Assistant Corporate Secretary.his degree in Business Administration. She is also the VP for Human Resource Management & Services Division of Central Azucarera Don Pedro. is 59 years old and is a Filipino. Inc. Inc. Inc. Ramon A. Picornell was educated at the University of San Carlos and is a Mechanical Engineer. and Central Azucarera de la Carlota. Inc. Ms. Layson is 52 years old and is a Filipino. Aguilar is 50 years old and is a Filipino. He was appointed as VP-Resident Manager of Central Azucarera de la Carlota. Roxas is married to Ms. He is also the Corporate Secretary and Vice-President for Legal Affairs of Central Azucarera Don Pedro. Mr. Vice-President for Legal Affairs and Compliance Officer of the company since September 25.. Concepcion is 54 years old and is a Filipino. Nasol was formerly the Head for Center for Excellence in Globe Telecommunications. Layson holds a masteral degree in Business Administration from the Ateneo de Manila University and a BS Chemical Engineering from the Manuel L. Spain. Mr. Ma. Inc. Luis-Mari L. Dean L. She obtained her Master in Business Management from the Asian Institute of Management in Makati City and her Liberal Arts degree from the University of Santo Tomas. Florencio M. on 25 March 2009. Atty. Guevarra is 51 years old and is a Filipino. Central Azucarera de la Carlota. before she joined the company. 2010. BOARD OF ADVISORS: Eduardo R. Mr. Atty. and the other subsidiaries of the company. Aguilar is the Senior Vice-President for Finance & Treasurer of the company since January 28. She is also Senior Vice-President for Finance & Treasurer of Central Azucarera Don Pedro. and the other subsidiaries of the company. on 25 March 2009. Mr. Mr. Inc. Mr. Mamauag was educated at the San Beda College of Manila where he obtained his degrees in Accountancy and Law. He was appointed as VP Ethanol Project on 25 March 2009. He also completed Management Development Program at the Asian Institute of Management. Elizabeth D. Inc. Ramon S. Asuncion S. Zabaljauregui obtained his AB-BSBA degree from the De La Salle College in 1968 and his MBM degree from the Asian Institute of Management in 1971. . Melchor A.. He was appointed as VP-Resident Manager of Central Azucarera Don Pedro. He was appointed by the Board of Directors as one of the members of the Committee of Advisors to the Board on 25 March 2009. Mamauag. Inc. Jr. She was appointed as VP-Human Resource Management & Services on 25 March 2009. Mr. Reyes is 47 years old and is a Filipino. Zabaljauregui is 64 years old and is a Filipino. Ms. Inc. He is also the President & CEO of Central Azucarera Don Pedro. and several other companies. He founded Next Century Partners in 1997. He is also an independent director of Nido Petroleum. He was educated at the De La Salle University where he earned his degree in Commerce and at the University of Hawaii where he earned his Master in Business Administration. SM Investments and ST Telemedia. a power company focused on renewable power projects in emerging Asian countries. Del Monte Pacific and Fastech and in 2000. Gaspar was appointed by the Board of Directors as a member of the Committee of Advisors to the Board on 25 March 2009. He is the chairman of WWF-Philippines and was a member of the National Council of WWF-US. Gaspar was educated at the De La Salle College where he obtained his Bachelor of Science degree in Mechanical Engineering as well as his Diploma in Management Development.. T’boli Agro-Industrial Development. he founded Asian Conservation Company which acquired El Nido Resort. He is presently the CEO of Alternergy Partners. the company is not in possession of any information indicating that the above named persons have been convicted by final judgment of any offense punishable under the laws of the Philippines or of any other country. Miguel A. Inc. He is a licensed Mechanical Engineer and he held various responsible positions in a number of prestigious companies. Bacani was appointed by the Board of Directors as a member of the Committee of Advisors to the Board on 25 March 2009. Messrs. Mr. Santiago R. during the last five (5) years up to the present. He was appointed by the Board of Directors as a member of the Committee of Advisors to the Board on 25 March 2009. Roxas. Mr. Mr. The company is not aware of the existence of any legal proceeding/s. He was formerly the Secretary of the Department of Agriculture in 1990 until 1992. Corp. Perez was the youngest Philippine Energy Minister from June 2001 to March 2005. Roxas. Elizalde and Ms. Inc.. While the company is not highly dependent on the services of an employee who is not an Executive Officer so as to be key in the business. Mr. Mr. Involvement in Legal Proceedings. . Vincent S. Moreover. Swift Foods. Perez is 51 years old and is a Filipino. the company values its human resources and expects them to do their share in achieving its objectives. a private equity firm that invested in companies such as Smart Communications. Perez obtained his MBA at the Wharton Business School of the University of Pennsylvania in 1983 and a Bachelor’s Degree in Business Economics from the University of the Philippines in 1979. involving the members of its Board of Directors or Executive Officers or their property before any court of law or administrative body in the Philippines or elsewhere. Antonio J. He served briefly in early 2001 as Undersecretary for Industry at the Department of Trade and Industry. and is a Chairman of Merritt Partners. Perez is on the advisory board of the Center for Business and the Environment at Yale University. Mr. Beatriz Roxas Olgado are related within the fourth degree of consanguinity. Inc. Philippine Chamber of Agriculture & Food. Significant Employees. La Frutera. an energy advisory firm to international energy companies in Asia. Inc. Mr.. Pedro E.. Bacani holds key positions in a number of companies such as Ultrex Management & Investments. Family Relationships. Inc. and has consulted for ADB and IFC on renewable energy policy.Senen C. Bacani is 63 years old and is a Filipino. Gaspar is 70 years old and is a Filipino. Energy Development Corporation. and Filipinas Palmoil Industries Holding. 127.914 P 4.033.135 P 900. 19 of the By-Laws of the company provides that the Board of Directors shall be given 6% of the net income of the corporation before tax to be distributed as fees in the following manner: 2% to the Executive Committee and 4% to the Board of Directors. Jr.230. Roxas – Chairman A Ramon A. Presently.531 P 8. Art.405. – Vice Chairman B Ramon A. Aguilar-SVP Finance/Treas. Roxas – Chairman A Francisco F.00 annually.230. Neither are there any other arrangements or compensatory plans made between the company and the named executive officers. Executive Compensation.000* * Director’s Fees.. C Florencio M. No warrants or options were granted by the corporation to the Directors and Officers within the past three (3) years. Picornell.000 P 17. del Rosario..033. the Board of Directors receive a per diem of P25.750 P 32.000. Compensation of Directors. 1. Jr. Mamauag. Name and Principal Position Year Salary Bonus Other Annual Compensation CEO Pedro E.457.-VP Legal & Compliance Officer D CEO and top four executives E All officers & directors as group unnamed 2008-09 2008-09 2008-09 2008-09 2008-09 2008-09 2008-09 2009-10 2009-10 2009-10 2009-10 2009-10 2009-10 2009-10 P 19.914 P 4.-President & COO C Asuncion S. Aguilar-SVP Finance/Treas. Jr.127.208.-VP Legal & Compliance Officer E CEO and top four executives F All officers & directors as group unnamed CEO Pedro E.000* 2010-11 2010-11 2010-11 2010-11 2010-11 2010-11 P 19.437 P 5. The company’s fiscal year ends in June of every year.B. Aguilar-SVP Finance/Treas. Jr. Jr.531 P 8. Mamauag. Jr. – Vice Chairman B Ramon A. D Florencio M.President & CEO B Asuncion S.-VP Legal & Compliance Officer E CEO and top four executives F All officers & directors as group unnamed Estimated Compensation of Executive Officers for the ensuing crop year.457. The members of the audit.000* P 1. There are no employment contracts executed by the company with the above named executive officers.135 P 17. A Director who attends all regular quarterly meetings of the corporation is paid a total of P100.550. Roxas – Chairman A Francisco F. compensation and nomination committees receive a per diem of P25.405.000 P 5. D Florencio M. . del Rosario.000 for every meeting attended.437 P 650. Compensation of Executive Officers. Mamauag.President & CEO C Asuncion S. Jr. Picornell. CEO Pedro E.208. Picornell.750 P 32.000 for every meeting attended. 2. Jr. Paseo de Roxas. Makati City Parent Company PCD Nominee Corp..925 ( r) 13.236. 7/F CG Building. Pedro E. (RCI) are Antonio J. there is no employment contract or any compensatory plan or arrangement between the company and an executive officer. Jr. Roxas/ Pesan – PCD Lodged Shares/ PCD Lodged Shares/ PCD Lodged Shares &/or Account Filipino 61. Roxas. Security Ownership of Certain Record and Beneficial Owners of more than 5% of registrant securities as of 30 June 2010. or is to be compensated. Makati City Name of Beneficial Ownership and Relationship with Record Owner Roxas & Company. Elizalde. 101 Aguirre St. Jr.030. in RHI shall be voted. The members of the Board of Directors of Roxas & Co. Del Rosario. 1.. or indirectly. C.. during the registrant’s last completed fiscal year and the ensuing year for any service as a director.There are no arrangements pursuant to which any director of the company was compensated. Ramon Y. Roxas. Likewise. Makati City Pedro E. Title of Class Name and Address of Owner/Relationship with Issuer Roxas & Company. Eduardo R.. directly. Inc.670 (r &b) 65. Citizenship Number and Nature of Ownership Percent of Class Common Filipino 597... 101 Aguirre St. Francisco Jose Elizalde..940 ( r & b) 6. cor. Legaspi Village.289.606. Roxas 7F CG Bldg. they have the power to decide how the shareholdings of Roxas & Co. . Security Ownership of Certain Record and Beneficial Owners and Management. Roxas is authorized to vote the shares of RCI in the annual meeting. Inc. Beatriz Roxas.00 % Common Pesan Holdings. Collectively. Senen C. Pedro E./ Pedro E. 37F The Enterprise Centre Ayala Ave.70 % Common Various Participants Filipino 118. Carlos R. Inc.552. Inc. Bacani. Dimacali.71% The percentages of ownership of the above named shareholders were arrived at by dividing their shareholdings over the total shares issued and outstanding as of 31 August 2009 of 909. Areilza and Francisco F. Legaspi Vill. 01 % .000 406. during the last two (2) years.01 % . Layson VP Strategic Projects Dean L.008. to which the company was or is to be a party in which any of its directors or executive officers. Security Ownership of Management as of 30 June 2010. Roxas Chairman and CEO Geronimo C.000 (r & b) 67.000 120.01 % . The company likewise established an evaluation system to measure or determine the level of compliance of its Board of Directors and top-level management with the Manual.01 % .01 % . There were no transactions or proposed transactions. Changes in Control.112 50. President & CEO Asuncion S. conversion privilege or similar obligations. Guevarra VP Resident Manager/CADPI Directors and officers as a Group Citizenship Filipino Filipino Filipino Filipino Filipino Filipino Spanish Filipino Filipino Filipino Filipino Filipino Number and Nature of Ownership 50. Jr. the company submitted its Manual on Corporate Governance on 30 August 2002. the Chief Executive Officer and each of the key officers of the Company and the percentage of shareholdings of each: Title of Class Common Common Common Common Common Common Common Common Common Common Common Common Common Name of Beneficial Owner Antonio J. or otherwise.092 68.240 233.000 270.00 % 6. Valencia Director Ramon A. warrant. any nominee for election as a director. Certain Relationships and Related Transactions. the company has complied with the principles contained in the Manual insofar as they may be relevant to the company’s business.000 50. To the knowledge of the company.000 50. Jr. Corporate Governance In compliance with SEC Memorandum Circular No. Director Beatriz Olgado Roxas Director Renato C. any member of the immediate family of any of the persons named herein had or is to have direct or indirect material interest. Elizalde Director Raul M. D.01 % 7. 2 dated 05 April 2002. Picornell.864 79. Leopando Director Ramon del Rosario.000 50. Estacio Director Santiago R.03 % .377. paragraph (c) thereof.01 % .2.03 % . Roxas Chairman Emeritus Pedro E. Aguilar SVP-Finance and Treasurer Melchor A. there are no voting trust or similar arrangements made by its shareholders in respect its shares or other arrangements which may result in a change in control.12 % The above named officers have no rights to acquire additional shares of the company within thirty (30) days hereof from or under any option.308 (r & b) (r) (r & b) (r) (r) (r) (r) (r & b) (r & b) (r & b) (r ) Percent of Class 0. Measures are also being undertaken by the company to ensure full compliance with the leading practices it has . Since its effectivity on 1 January 2003.72 % .000 60.04 % . right. The following are the number of shares owned of record by the directors. any security holder named in response to Part V. Roxas Santiago R. executed a Milling Contract with its sugar cane planters in Negros Occidental who belong to the Asosacion de agricultores de la Carlota Y Pontevedra. (AALPI). Elizalde Beatriz Roxas Olgado Ramon R. Chairman Vice-Chairman President & CEO . The name of the Corporation is “ROXAS HOLDINGS. del Rosario. Roxas Francisco F. as member of the Board of Directors and as Chairman/Member of the Audit and Compensation Committees of the company. to read as follows: “1. Jr.” doing business under the name and style of “CADP GROUP”. del Rosario. 3. Roxas Antonio J. Jr. Raul M. the company disclosed: a) the approval of the Consolidated Financial Statements of the company as of 30 June 2009. 5. del Rosario. 1. (a) Exhibits. Picornell. Inc. Picornell. On 9 December 2009. b) the setting of the annual meeting of shareholders on 25 November 2009 and fixing 15 October 2009 as the record date of the annual meeting. On 25 November 2009. 2009. as external auditors for fiscal year 2009-2010. b) the election of the following: Officers: Pedro E. a wholly owned subsidiary of Roxas Holdings. the company disclosed: a) The approval of the resignation of Mr. Geronimo C. On 23 September 2009. the amendment of Article 13 of its By-Laws on the qualifications and disqualifications of its directors in order to adopt the provisions of the Manual.adopted in the Manual such as the constitution of the Audit. the election of the required number of independent directors to its Board of Directors. the company disclosed: a) the election of the following persons to the Board of Directors of the corporation for the fiscal year 2009-2010: Pedro E. 4. Compensation and Nomination Committees. Leopando b) the shareholders of the corporation also elected the auditing firm of Sycip Gorres Velayo & Co. The company has not deviated from or violated the provisions of the Manual. On 12 October 2009. the company disclosed that Central Azucarera de la Carlota. Certified Consolidated Financial Statements With Supplementary Schedules. Jr. Jr. Francisco F.. EXHIBITS AND SCHEDULES Exhibits and Reports on SEC Form 17-C. INC. Estacio Ramon A. The Milling Contract which has a duration of fifteen (15) crop-years would commence in crop-year 2009-2010 and will expire in crop-year 2023-2024. Inc. Jr. 2. the company disclosed :a) the approval of a resolution authorizing the corporation to amend Article 1 of the Articles of Incorporation of the corporation by the Board of the Directors. Inc. On August 7. (b) Reports on SEC Form 17-C. The company undertakes to improve its corporate governance as may be required by law or the exigency of business. Ramon A. Ramon del Rosario. Jr. Leopando Eduardo R. Jr. compensation and nomination committee as follows: Audit Committee: Geronimo C. Jr. del Rosario. Estacio Chairman Member Member Chairman Member Member Member (non-voting) Chairman Member Member Member (non-voting) c) The confirmation of the authority of the corporate officers of the company to act as authorized signatories to bank accounts namely: Pedro E. Estacio Francisco F. Leopando Eduardo R. Layson. Roxas. Elizalde Eduardo R. Jr. del Rosario. Melchor A. Jr . Antonio J. Francisco F. Asuncion S. Elizabeth D. e) The authority of the corporation to register its business name “CADP GROUP” with the Department of Trade & Industry. Elizalde. the company disclosed: a) The re-election of Mr. Florencio M. b) The re-organization of the audit. Areilza Chairman Member Member Member (non-voting) Chairman Member Member Member (non-voting) . Concepcion. Jr. Santiago R. Miguel A. Elizalde Geronimo C. del Rosario. Dean L.. Jr. Inc. g) The authority of the corporation to establish a retirement and/or gratuity program for the purpose of providing retirement and other employee benefits for all eligible officers and employees of the corporation and appointing Rizal Commercial Banking Corporation as the investment manager of the retirement fund of the corporation under an Investment Management Agreement. Raul M. Mamauag. as an independent director of the company. Areilza Compensation Committee: Ramon R. Areilza Nomination Committee: Pedro E. Ramon R. Reyes and Luis Mari L.Audit Committee: Geronimo C. Roxas Santiago R. Jr. d) The authority of the corporation to apply for the registration of all its business/trade names.. Areilza Compensation Committee: Geronimo C. 6. del Rosario. Ramon S. Guevarra. Eduardo V. logos and devices with the Intellectual Property Office. Elizalde Eduardo R. Roxas Santiago R. Raul M. On 25 March 2010.. Ramon A. f) The authority of the corporation to execute a second supplement to the second amended and restated Mortgage Trust Indenture (MTI) with BDO Unibank. Roxas Santiago R. trademarks. Nasol. d) The approval of the Revised Manual on Corporate Governance. Gaspar. del Rosario. Estacio Francisco F. Estacio Antonio J. Zabaljauregui. Aguilar. Picornell.-Trust & Investments Group and appoint the said entity as successor trustee. del Rosario.0 of the By-Laws of the corporation. affiliates. officers and directors. to issue un-certificated shares of the company and the authority of the company to link with the electronic registry of PASTRA Net. associates. and iii) delegating the following powers of the Executive Committee: i. del Rosario. On 24 August 2010. ii) electing Mr. Unionbank of the Philippines. iv. del Rosario. iii. operating budgets and management’s overall performance. Batangas to Digitel Mobile Phils. Renato C. e) The approval of the budget for crop-year 2010-2011. Renato C. 9. major stockholders. Chairman Member Member c) The approval of the authority of the company to obtain a Bills Purchase Line (BPL) from the Bank of the Philippine Islands. b) The approval of resolutions i) confirming the creation of an Executive Committee composed of three (3) members of the Board of Directors.. Elizalde Ramon R. c) The appointment of Mr. Jr. the company disclosed: a) The approval of a resolution appointing Mr.. Renato C.. Lumbangan. In accordance with Art. Batangas to Digitel Mobile Phils. Valencia as Advisor to the Board of Directors and the Executive Committee. Roxas. Periodically evaluate and monitor the implementation of such policies and strategies. including their spouses. and Mr. as Vice Chairman from the company and as member of the Executive and Audit committees effective 1 September 2010. Mr. e) The authority of the executive officers of the corporation to act as authorized signatories to the various bank accounts of the corporation. the company disclosed: a) the resignation of Mr. Adopt a system of check and balance with the Board. Nasugbu. Inc. children and dependent siblings and parents. and of interlocking director relationships by members of the Board. Francisco F. Elizalde as members of the Executive Committee. joint ventures. 20. b) The setting of the annual meeting of the shareholders on 24 November 2010 and fixing 15 October 2010 as the record date of the meeting. Francisco F.Nomination Committee: Pedro E. ii. and f) The confirmation of the authority of the company to lease a portion of the company’s land in Brgy. f) The authority of the executive officers of the corporation to act as authorized signatories of the corporation. Nasugbu. Establish programs that can sustain its long-term viability and strength. and c) The approval of the additional costs incurred in the expansion and strategic projects. Lumbangan. Santiago R. subsidiaries. Pedro E. Roxas Santiago R. Provide sound strategic policies and guidelines to the corporation on major capital expenditures. and h) Confirmation of the various resolutions/decisions of the Executive Committee. . the company disclosed: a) The election of Mr.. Inc. Valencia as member of the Board of Directors. On 28 June 2010. as member of the Executive Committee and a member of the Audit Committee of the company. d) The authority of its stock transfer agent. Jr. Formulate and implement policies and procedures that would ensure the integrity and transparency of related party transaction between and among the corporation and its parent company. On 29 September 2010. A regular review of the effectiveness of such system shall be conducted to ensure the integrity of the decision-making and reporting processes at all times.. g) The authority to open savings/current accounts with Land Bank of the Philippines – Asia Tower Branch. including the business plans. Jr. d) The authority of the company to lease a portion of its land in Brgy. Inc. Valencia as an additional member of its Board of Advisors. Identify key risk areas and performance indicators and monitor these factors with due diligence to enable the corporation to anticipate and prepare for possible threats to its operational and financial viability. 8. 7. INC.ROXAS HOLDINGS. 2010 TABLE OF CONTENTS FIRST SECTION Statement of Management’s Responsibility for Consolidated Financial Statements Report of Independent Auditors Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Changes in Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements SECOND SECTION Supplementary Schedules Marketable Securities Amounts Receivable from Directors. Officers. Related Parties and Principal Stockholders (Other than Affiliates) Non-Current Marketable Equity Securities. AND SUBSIDIARIES CERTIFIED CONSOLIDATED FINANCIAL STATEMENTS WITH SUPPLEMENTARY SCHEDULES FOR THE SECURITIES AND EXCHANGE COMMISSION JUNE 30.Other Assets Long-Term Borrowings Indebtedness to Related Parties (Long-Term Loans from Related Companies) Guarantees of Securities of Other Issuers Share Capital Schedule Reference A B C D E F G H I J K . Employees. Other Long-Term Investments in Stocks and other Investments Indebtedness of Unconsolidated Subsidiaries and Related Parties Property. plant and equipment Accumulated depreciation Intangible Assets . FIRST SECTION . Roxas Holdings, Inc. and Subsidiaries ( AS u b s i d i a r yo f R o x a s a n dC o mp a n y , I n c . ) C o n s o l i d a t e dF i n a n c i a l S t a t e me n t s J u n e3 0 , 2 0 1 0a n d2 0 0 9 a n d I n d e p e n d e n t A u d i t o r s ’ R e p o r t S y C i pG o r r e s V e l a y o&C o . c o n s o l i d a t e d s t a t e m e n t s o f c h a n g e s i n e q u i t y a n d c o n s o l i d a t e d s t a t e m e n t s o f c a s h f l o w s f o r e a c h o f t h e t h r e e y e a r s i n t h e p e r i o d e n d e d J u n e 3 0 . i m p l e m e n t i n g a n d m a i n t a i n i n g i n t e r n a l c o n t r o l r e l e v a n t t o t h e p r e p a r a t i o n a n d f a i r p r e s e n t a t i o n o f c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s t h a t a r e f r e e f r o mm a t e r i a l m i s s t a t e m e n t . Am e m b e r f i r mo f E r n s t &Y o u n g Gl o b a l L i m i t e d * S G V M C 3 1 0 9 6 2 * . 1 . a n d m a k i n g a c c o u n t i n g e s t i m a t e s t h a t a r e r e a s o n a b l e i n t h e c i r c u m s t a n c e s . 9 4 %a n d 4 . 1 2 % o f t h e c o n s o l i d a t e d t o t a l a s s e t s a s o f J u n e 3 0 . R o x a s H o l d i n g s . w e r e a u d i t e d b y o t h e r a u d i t o r s w h o s e r e p o r t w a s f u r n i s h e d t o u s . a n d a s u m m a r y o f s i g n i f i c a n t a c c o u n t i n g p o l i c i e s a n d o t h e r e x p l a n a t o r y n o t e s . i s b a s e d s o l e l y o n t h e r e p o r t o f t h e o t h e r a u d i t o r s . T h o s e s t a n d a r d s r e q u i r e t h a t w e c o m p l y w i t h e t h i c a l r e q u i r e m e n t s a n d p l a n a n d p e r f o r mt h e a u d i t t o o b t a i n r e a s o n a b l e a s s u r a n c e w h e t h e r t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s a r e f r e e f r o mm a t e r i a l m i s s t a t e m e n t . 3 2 %o f t h e c o n s o l i d a t e d n e t i n c o m e . 2 0 1 0 a n d 2 0 0 9 . 0 0 1 2 F R 2 I N D E P E N D E N TA U D I T O R S ’ R E P O R T T h e S t o c k h o l d e r s a n d t h e B o a r d o f D i r e c t o r s R o x a s H o l d i n g s . ( a s u b s i d i a r y o f R o x a s a n d C o m p a n y . w h i c h c o m p r i s e t h e c o n s o l i d a t e d b a l a n c e s h e e t s a s a t J u n e 3 0 . 0 9 %o w n e d a s s o c i a t e a c c o u n t e d f o r u n d e r e q u i t y m e t h o d . a n d o u r o p i n i o n o n t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s . 3 6 %a n d 1 . T h i s r e s p o n s i b i l i t y i n c l u d e s : d e s i g n i n g . Ma n a g e me n t ’ s R e s p o n s i b i l i t y f o r t h e C o n s o l i d a t e dF i n a n c i a l S t a t e me n t s Ma n a g e m e n t i s r e s p o n s i b l e f o r t h e p r e p a r a t i o n a n d f a i r p r e s e n t a t i o n o f t h e s e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s i n a c c o r d a n c e w i t h P h i l i p p i n e F i n a n c i a l R e p o r t i n g S t a n d a r d s . I n c . 0 0 0 1 S E CA c c r e d i t a t i o nNo . 1 5 %o f t h e c o n s o l i d a t e d r e v e n u e a n d 4 2 . T h e f i n a n c i a l s t a t e m e n t s o f H a w a i i a n P h i l i p p i n e C o m p a n y ( H P C o ) .S y C i pGo r r e sV e l a y o&Co . 2 0 0 9 a n d 2 0 0 8 r e p r e s e n t s 2 . w h e t h e r d u e t o f r a u d o r e r r o r . c o n s o l i d a t e d s t a t e m e n t s o f c o m p r e h e n s i v e i n c o m e . 5 5 . s e l e c t i n g a n d a p p l y i n g a p p r o p r i a t e a c c o u n t i n g p o l i c i e s . ’ s i n v e s t m e n t i n H P C o r e p r e s e n t s 3 . I n c . I n c . 6 7 6 0A y a l a A v e n u e 1 2 2 6Ma k a t i Ci t y P h i l i p p i n e s P h o n e :( 6 3 2 ) 8 9 10 3 0 7 F a x : ( 6 3 2 ) 8 1 90 8 7 2 w ww . We c o n d u c t e d o u r a u d i t s i n a c c o r d a n c e w i t h P h i l i p p i n e S t a n d a r d s o n A u d i t i n g . 2 0 1 0 . 2 0 1 0 a n d 2 0 0 9 . ) a n d s u b s i d i a r i e s . c o m. I n c . We h a v e a u d i t e d t h e a c c o m p a n y i n g c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s o f R o x a s H o l d i n g s . s g v . a n d t h e c o n s o l i d a t e d s t a t e m e n t s o f i n c o m e . i n s o f a r a s i t r e l a t e s t o t h e a m o u n t s i n c l u d e d f o r H P C o . p h B OA / P RCRe g . 8 2 %a n d 1 5 . 1 3 %. 4 7 %. No . r e s p e c t i v e l y . 4 5 . a n d i t s s h a r e i n H P C o ’ s n e t i n c o m e i n 2 0 1 0 . A u d i t o r s ’ R e s p o n s i b i l i t y O u r r e s p o n s i b i l i t y i s t o e x p r e s s a n o p i n i o n o n t h e s e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s b a s e d o n o u r a u d i t s . 2 0 1 0 a n d 2 0 0 9 . i n a l l m a t e r i a l r e s p e c t s . a n d t h e i r f i n a n c i a l p e r f o r m a n c e a n d t h e i r c a s h f l o w s f o r e a c h o f t h e t h r e e y e a r s i n t h e p e r i o d e n d e d J u n e 3 0 . Ma k a t i C i t y S e p t e m b e r 2 9 . a n d s u b s i d i a r i e s a s o f J u n e 3 0 . b u t n o t f o r t h e p u r p o s e o f e x p r e s s i n g a n o p i n i o n o n t h e e f f e c t i v e n e s s o f t h e e n t i t y ’ s i n t e r n a l c o n t r o l . t h e f i n a n c i a l p o s i t i o n o f R o x a s H o l d i n g s . O p i n i o n I n o u r o p i n i o n . T h e p r o c e d u r e s s e l e c t e d d e p e n d o n t h e a u d i t o r s ’ j u d g m e n t . 2 0 8 7 5 3 4 . t h e a u d i t o r c o n s i d e r s i n t e r n a l c o n t r o l r e l e v a n t t o t h e e n t i t y ’ s p r e p a r a t i o n a n d f a i r p r e s e n t a t i o n o f t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s i n o r d e r t o d e s i g n a u d i t p r o c e d u r e s t h a t a r e a p p r o p r i a t e i n t h e c i r c u m s t a n c e s . J a n u a r y 4 . S Y C I PG O R R E SV E L A Y O&C O . 2 0 1 0 . I n m a k i n g t h o s e r i s k a s s e s s m e n t s . E s t o m o P a r t n e r C P AC e r t i f i c a t e N o . 0 0 7 8 A R 2 T a x I d e n t i f i c a t i o n N o . b a s e d o n o u r a u d i t s a n d t h e r e p o r t o f t h e o t h e r a u d i t o r s . J o s e p h i n e H . i n c l u d i n g t h e a s s e s s m e n t o f t h e r i s k s o f m a t e r i a l m i s s t a t e m e n t o f t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s . A n a u d i t a l s o i n c l u d e s e v a l u a t i n g t h e a p p r o p r i a t e n e s s o f a c c o u n t i n g p o l i c i e s u s e d a n d t h e r e a s o n a b l e n e s s o f a c c o u n t i n g e s t i m a t e s m a d e b y m a n a g e m e n t . 1 0 2 0 8 6 2 0 8 P T RN o . 2 0 1 0 * S G V M C 3 1 0 9 6 2 * . We b e l i e v e t h a t t h e a u d i t e v i d e n c e w e h a v e o b t a i n e d a n d t h e r e p o r t o f t h e o t h e r a u d i t o r s a r e s u f f i c i e n t a n d a p p r o p r i a t e t o p r o v i d e a b a s i s f o r o u r a u d i t o p i n i o n . t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s p r e s e n t f a i r l y . a s w e l l a s e v a l u a t i n g t h e o v e r a l l p r e s e n t a t i o n o f t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s .2 A n a u d i t i n v o l v e s p e r f o r m i n g p r o c e d u r e s t o o b t a i n a u d i t e v i d e n c e a b o u t t h e a m o u n t s a n d d i s c l o s u r e s i n t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s . 2 0 1 0 i n a c c o r d a n c e w i t h P h i l i p p i n e F i n a n c i a l R e p o r t i n g S t a n d a r d s . I n c . w h e t h e r d u e t o f r a u d o r e r r o r . 4 6 3 4 9 S E CA c c r e d i t a t i o n N o . 0 0 0 7 7 9 . 5 8 4 4 1 . 1 3 7 2 2 9 . 6 7 3 1 2 3 . 1 1 4 . 0 6 5 * S G V M C 3 1 0 9 6 2 * . 8 0 5 . 8 6 1 . 5 3 0 1 8 5 . 5 0 9 1 5 2 . 0 8 7 . 5 5 2 – 4 4 . 3 3 4 P = 1 5 .R O X A SH O L D I N G S . 9 7 7 2 7 . 9 3 7 . 9 0 4 6 0 8 . 1 8 8 1 . 5 7 3 . 4 8 5 . I N C . 7 1 1 2 . 1 4 4 . 1 3 a n d 2 6 ) T o t a l C u r r e n t L i a b i l i t i e s N o n c u r r e n t L i a b i l i t i e s L o n g t e r mb o r r o w i n g s n e t o f c u r r e n t p o r t i o n ( N o t e s 9 . 0 7 5 . I n c . 1 9 9 3 . 8 2 7 8 3 2 . 1 1 1 . 4 3 2 1 4 2 . 0 0 1 6 1 8 . 0 6 9 5 1 . 7 2 4 3 . 2 3 7 2 . 1 4 a n d 2 6 ) I n v e n t o r i e s ( N o t e 6 ) P r e p a y m e n t s a n d o t h e r c u r r e n t a s s e t s ( N o t e 7 ) T o t a l C u r r e n t A s s e t s N o n c u r r e n t A s s e t s P r o p e r t y . 2 1 0 7 1 1 . 5 1 7 . ( AS u b s i d i a r y o f R o x a s a n dC o mp a n y . 1 5 0 6 . 9 4 3 . 8 1 3 4 1 . p l a n t a n d e q u i p m e n t ( N o t e s 9 a n d 1 3 ) : A t c o s t A t a p p r a i s e d v a l u e s I n v e s t m e n t i n s h a r e s o f s t o c k o f a n a s s o c i a t e ( N o t e 8 ) N e t p e n s i o n p l a n a s s e t s ( N o t e 1 5 ) D e f e r r e d i n c o m e t a x a s s e t s n e t ( N o t e 2 2 ) O t h e r n o n c u r r e n t a s s e t s ( N o t e s 5 a n d 1 3 ) T o t a l N o n c u r r e n t A s s e t s T O T A LA S S E T S L I A B I L I T I E SA N DE Q U I T Y C u r r e n t L i a b i l i t i e s S h o r t t e r mb o r r o w i n g s ( N o t e s 1 0 a n d 2 6 ) A c c o u n t s p a y a b l e a n d a c c r u e d e x p e n s e s ( N o t e s 1 1 a n d 2 6 ) C u s t o m e r s ’ d e p o s i t s ( N o t e s 1 2 a n d 2 6 ) D i v i d e n d s p a y a b l e ( N o t e s 2 3 a n d 2 6 ) C u r r e n t p o r t i o n o f l o n g t e r mb o r r o w i n g s ( N o t e s 9 . 3 2 2 1 4 0 . 5 8 8 . 6 6 9 = P 2 . 9 7 3 7 4 . 4 7 9 P = 1 7 6 . 4 4 8 . 6 8 5 . 4 1 7 5 . 8 8 1 J u n e 3 0 2 0 0 9 = P 2 8 6 . 8 3 1 9 . 3 1 0 3 . 4 0 7 . 6 8 2 . 3 4 2 1 2 . ) A N DS U B S I D I A R I E S C O N S O L I D A T E DB A L A N C ES H E E T S ( A m o u n t s i n T h o u s a n d s ) 2 0 1 0 A S S E T S C u r r e n t A s s e t s C a s h a n d c a s h e q u i v a l e n t s ( N o t e s 4 a n d 2 6 ) R e c e i v a b l e s ( N o t e s 5 . 0 7 4 – 3 . 4 6 5 3 . 6 9 8 . 6 4 8 7 . 1 0 9 1 6 . 4 5 5 4 . 2 9 7 . 8 7 3 . 2 1 5 7 . 0 9 7 7 2 5 . 5 5 8 9 . 6 6 0 5 5 7 . 1 1 7 3 . 6 6 2 1 . 2 4 9 . 7 5 6 1 0 . 5 2 1 . 8 0 0 1 . 1 3 a n d 2 6 ) N e t p e n s i o n b e n e f i t o b l i g a t i o n ( N o t e 1 5 ) D e f e r r e d i n c o m e t a x l i a b i l i t i e s n e t ( N o t e 2 2 ) T o t a N o n c u r r e n t L i a b i l i t i l e s T o t a l L i a b i l i t i e s ( F o r w a r d ) P = 2 . 1 1 1 = P 1 3 . 4 4 9 . 6 7 0 . 9 7 6 5 5 4 . 8 3 4 2 0 7 . 6 6 1 5 . 2 1 5 = P 1 . 2 0 0 9 P = 1 . 6 0 4 = P 1 3 . 1 6 8 .2 J u n e 3 0 2 0 1 0 E q u i t y ( N o t e 2 3 ) A t t r i b u t a b l e t o t h e e q u i t y h o l d e r s o f t h eP a r e n t C o m p a n y : S h a r e c a p i t a l S h a r e p r e m i u m E x c e s s o f c o n s i d e r a t i o n r e c e i v e d f r o mp a r e n t c o m p a n y o v e r c a r r y i n g a m o u n t o f d i s p o s e d s u b s i d i a r y ( N o t e 2 3 ) E f f e c t o f c h a n g e i n o w n e r s h i p i n t e r e s t s i n s u b s i d i a r i e s ( N o t e 2 3 ) R e v a l u a t i o n i n c r e m e n t o n p r o p e r t i e s ( N o t e 2 3 ) S h a r e i n r e v a l u a t i o n i n c r e m e n t o n l a n d o f a n a s s o c i a t e ( N o t e 8 ) R e t a i n e d e a r n i n g s ( N o t e 2 3 ) T r e a s u r y s h a r e s a t c o s t N o n c o n t r o l l i n g i n t e r e s t s ( N o t e 2 3 ) T o t a l E q u i t y T O T A LL I A B I L I T I E SA N DE Q U I T Y S e e a c c o m p a n y i n g N o t e s t o C o n s o l i d a t e d F i n a n c i a l S t a t e m e n t s . 4 4 1 . 9 7 6 5 5 4 . 8 6 0 ) 5 . 6 6 0 2 0 7 . 2 3 2 5 . 9 6 0 5 7 7 . 7 1 6 . 5 6 7 1 . 6 8 5 . 9 6 0 5 7 7 . 1 2 7 ( 7 6 8 . 6 6 9 * S G V M C 3 1 0 9 6 2 * . 4 4 4 . 1 6 8 . 4 2 9 ( 7 6 8 . 5 2 1 . 2 4 4 4 0 . 1 4 8 4 4 . 7 4 9 . 4 1 2 . 4 9 2 2 . 1 4 8 4 4 . 9 4 6 . 8 6 0 ) 5 . 4 9 2 2 . 9 8 6 . 3 7 2 4 6 . 5 6 7 1 . 9 0 5 P = 1 5 . 6 8 3 5 2 . 9 6 7 5 .R O X A SH O L D I N G S . 8 6 5 1 7 5 . 0 8 0 ) 1 1 . 4 3 8 7 5 . 4 4 0 P = 3 0 7 . 7 3 9 ( 6 0 . 7 7 2 3 2 . 6 1 8 4 . 0 9 6 5 4 . 5 6 4 ( 1 3 3 . 6 1 7 6 6 5 . I N C . 2 2 7 ( 2 4 . 1 4 5 = P 4 5 5 . 1 6 0 = P 4 1 0 . E x c e p t B a s i c / D i l u t e dE a r n i n g s p e r S h a r e ) 2 0 1 0 R E V E N U E( N o t e 1 7 ) C O S TO FS A L E S( N o t e 1 8 ) G R O S SP R O F I T S e l l i n g e x p e n s e s G e n e r a l a n d a d m i n i s t r a t i v e e x p e n s e s ( N o t e 1 9 ) E q u i t y i n n e t e a r n i n g s o f a n a s s o c i a t e ( N o t e 8 ) I n t e r e s t e x p e n s e ( N o t e s 1 0 a n d 1 3 ) I n t e r e s t i n c o m e ( N o t e 4 ) O t h e r i n c o m e n e t ( N o t e 2 1 ) I N C O MEB E F O R EI N C O MET A X P R O V I S I O NF O RI N C O MET A X( N o t e 2 2 ) C u r r e n t D e f e r r e d N E TI N C O ME A t t r i b u t a b l e t o : E q u i t y h o l d e r s o f t h e P a r e n t C o m p a n y N o n c o n t r o l l i n g i n t e r e s t s B A S I C / D I L U T E DE A R N I N G SP E RS H A R E ( N o t e 2 4 ) S e e a c c o m p a n y i n g N o t e s t o C o n s o l i d a t e d F i n a n c i a l S t a t e m e n t s . I n c . 2 3 3 ) 7 9 . 6 9 0 ) 1 3 2 . 5 4 4 4 . 7 4 0 9 0 0 . 2 0 2 . 7 4 2 P = 3 1 1 . Y e a r s E n d e dJ u n e 3 0 2 0 0 9 2 0 0 8 = P 5 . 4 8 1 ( 3 6 . 9 9 6 8 3 . 4 8 0 ) 5 . 3 9 P = 6 . 5 8 5 ) ( 5 9 5 . 9 7 9 . 0 7 7 . 3 3 4 ) 7 . 6 5 6 P = 3 1 1 . 5 2 9 P = 1 8 0 . 6 5 1 3 9 5 . 5 7 3 1 . 9 1 9 1 3 8 . 3 0 2 . 6 9 8 3 . 0 1 5 4 5 . 7 0 0 ) ( 5 6 0 . 2 6 3 ( 3 1 9 . 3 1 2 ) ( 5 0 8 . ( AS u b s i d i a r y o f R o x a s a n dC o mp a n y . 6 6 4 ) 6 9 . 4 4 0 P = 0 . 9 5 4 1 7 8 . 1 3 4 . 0 2 2 2 1 0 . 3 9 0 = P 1 4 2 . 7 1 0 2 9 6 . 8 6 4 . 5 2 5 3 6 . 7 2 0 ) = P 1 4 2 . 3 4 * S G V M C 3 1 0 9 6 2 * . 5 2 9 = P 0 . 7 9 4 = P 4 5 5 . 2 4 9 ( 3 7 . 9 4 2 . 2 0 = P 6 . 1 6 0 = P 0 . ) A N DS U B S I D I A R I E S C O N S O L I D A T E DS T A T E ME N T SO FI N C O ME ( A m o u n t s i n T h o u s a n d s . 6 6 0 2 8 . 9 7 1 ( 3 4 . 7 0 3 3 1 7 . 1 3 7 8 8 5 . 1 2 9 ) P = 2 7 0 . p l a n t a n d e q u i p m e n t ( N o t e 9 ) I n c o m e t a x e f f e c t T O T A LC O MP R E H E N S I V EI N C O ME A t t r i b u t a b l e t o : E q u i t y h o l d e r s o f t h e p a r e n t N o n c o n t r o l l i n g i n t e r e s t s Y e a r s E n d e dJ u n e 3 0 2 0 0 9 2 0 0 8 = P 1 4 2 . 5 2 9 5 3 1 . 4 4 0 ( 5 8 . ) A N DS U B S I D I A R I E S C O N S O L I D A T E DS T A T E ME N T SO FC OMP R E H E N S I V EI N C O ME ( A m o u n t s i n T h o u s a n d s ) 2 0 1 0 N E TI N C O ME O T H E RC O MP R E H E N S I V EI N C O ME( L O S S ) I n c r e a s e ( d e c r e a s e ) i n r e v a l u a t i o n i n c r e m e n t o n p r o p e r t y . 9 8 4 = P 7 8 1 . I N C . 3 1 1 P = 2 7 5 . 8 7 3 ( 5 . 3 1 1 – – – = P 1 4 2 . I n c . ( AS u b s i d i a r y o f R o x a s a n dC o mp a n y . 3 5 3 ) 3 7 1 . 1 6 0 P = 3 1 1 . 1 4 5 = P 8 2 6 .R O X A SH O L D I N G S . 8 2 4 = P 8 2 6 . 5 2 9 P = 1 8 0 . * S G V M C 3 1 0 9 6 2 * . 9 8 4 S e e a c c o m p a n y i n g N o t e s t o C o n s o l i d a t e d F i n a n c i a l S t a t e m e n t s . 7 2 0 ) = P 1 4 2 . 1 7 7 ( 1 5 9 . 7 5 6 ) 1 7 . 5 2 9 = P 4 5 5 . 6 2 7 ( 4 1 . 5 6 2 ) P = 2 7 0 . 8 3 9 4 5 . 2 4 9 ( 3 7 . R O X A SH O L D I N G S , I N C . ( AS u b s i d i a r y o f R o x a s a n dC o mp a n y , I n c . ) A N DS U B S I D I A R I E S C O N S O L I D A T E DS T A T E ME N T SO FC A S HF L O WS ( A m o u n t s i n T h o u s a n d s ) Y e a r s E n d e dJ u n e 3 0 2 0 0 9 2 0 1 0 C A S HF L O WSF R O MO P E R A T I N GA C T I V I T I E S I n c o m e b e f o r e i n c o m e t a x A d j u s t m e n t s f o r : D e p r e c i a t i o n ( N o t e s 9 , 1 8 a n d 1 9 ) L o s s ( g a i n ) o n d i s p o s a l o f p r o p e r t y a n d e q u i p m e n t E q u i t y i n n e t e a r n i n g s o f a n a s s o c i a t e ( N o t e 8 ) C h a n g e s i n f a i r v a l u e o f b i o l o g i c a l a s s e t s ( N o t e 7 ) I n t e r e s t i n c o m e ( N o t e s 4 a n d 5 ) I n t e r e s t e x p e n s e ( N o t e s 1 0 a n d 1 3 ) Mo v e m e n t i n n e t p e n s i o n p l a n a s s e t s N e t c a s h f r o mo p e r a t i o n s b e f o r e w o r k i n g c a p i t a l c h a n g e s D e c r e a s e ( i n c r e a s e ) i n : R e c e i v a b l e s I n v e n t o r i e s P r e p a y m e n t s a n d o t h e r c u r r e n t a s s e t s I n c r e a s e ( d e c r e a s e ) i n : A c c o u n t s p a y a b l e a n d a c c r u e d e x p e n s e s C u s t o m e r s ’ d e p o s i t s C a s h g e n e r a t e d f r o mo p e r a t i o n s I n t e r e s t r e c e i v e d I n c o m e t a x e s p a i d , i n c l u d i n g c r e d i t a b l e w i t h h o l d i n g a n d f i n a l t a x e s N e t c a s h f r o mo p e r a t i n g a c t i v i t i e s C A S HF L O WSF R O MI N V E S T I N GA C T I V I T I E S A d d i t i o n s t o p r o p e r t y , p l a n t a n d e q u i p m e n t ( N o t e 9 ) P r o c e e d s f r o ms a l e o f p r o p e r t y , p l a n t a n d e q u i p m e n t D i v i d e n d s r e c e i v e d ( N o t e 8 ) D i s p o s a l o f ( a d d i t i o n s t o ) o t h e r n o n c u r r e n t a s s e t s N e t c a s h u s e d i n i n v e s t i n g a c t i v i t i e s ( F o r w a r d ) P = 3 9 5 , 0 9 6 4 0 7 , 0 2 5 ( 9 7 2 ) ( 1 3 2 , 2 6 3 ) ( 3 , 5 3 1 ) ( 5 , 7 1 0 ) 3 1 9 , 4 8 0 ( 3 1 , 0 1 6 ) 9 4 8 , 1 0 9 2 5 4 , 3 8 8 ( 2 8 4 , 6 2 8 ) ( 4 2 , 5 7 3 ) ( 2 7 1 , 1 3 3 ) ( 6 2 , 7 0 4 ) 5 4 1 , 4 5 9 5 , 7 1 0 ( 8 5 , 4 7 5 ) 4 6 1 , 6 9 4 = P 3 1 7 , 9 1 9 3 0 4 , 4 2 6 9 , 8 7 8 ( 7 9 , 5 6 4 ) 5 , 9 9 5 ( 7 , 4 3 8 ) 1 3 3 , 3 3 4 ( 1 2 , 0 8 9 ) 6 7 2 , 4 6 1 ( 2 8 4 , 5 7 6 ) ( 1 2 0 , 6 0 2 ) ( 7 8 , 8 2 2 ) 1 9 4 , 7 4 7 ( 2 9 , 5 0 0 ) 3 5 3 , 7 0 8 7 , 4 3 8 ( 2 7 2 , 0 6 1 ) 8 9 , 0 8 5 2 0 0 8 = P 6 6 5 , 9 5 4 3 2 8 , 1 0 3 – ( 6 9 , 7 3 9 ) ( 5 , 9 4 0 ) ( 1 1 , 6 8 3 ) 6 0 , 0 8 0 ( 6 , 2 8 3 ) 9 6 0 , 4 9 2 2 1 8 , 6 9 7 2 7 , 8 5 8 ( 7 3 , 0 1 6 ) 8 7 , 7 3 8 1 3 0 , 0 2 9 1 , 3 5 1 , 7 9 8 1 1 , 6 8 3 ( 2 1 7 , 5 1 3 ) 1 , 1 4 5 , 9 6 8 3 , 4 1 8 , 7 2 8 ) ( 2 , 1 2 5 , 6 3 0 ) ( 2 , 5 3 8 , 6 2 8 ) ( 2 2 , 0 2 8 1 0 , 6 4 9 5 , 8 0 5 6 8 , 5 2 0 6 8 , 8 0 5 7 1 , 3 7 3 1 1 , 1 5 8 ( 9 , 6 1 4 ) ( 5 2 1 ) 3 , 3 1 7 , 0 2 2 ) ( 2 , 0 5 5 , 7 9 0 ) 2 , 4 6 1 , ( 9 7 1 ) ( * S G V M C 3 1 0 9 6 2 * 0 0 0 ( 5 8 0 . 6 6 2 = P 3 9 7 . 3 0 6 ) ( 1 5 1 . 0 0 0 ( 1 3 . 4 9 6 ) ( 2 6 8 . 6 1 1 ) 3 5 0 . 8 2 7 ( 2 9 . 0 0 5 ) – ( 1 0 ) 1 . 2 7 3 = P 2 8 6 . 4 4 8 ( P = 4 8 7 . 8 5 0 . 9 2 1 = P 3 5 0 . 4 4 2 ( 1 0 9 . 9 4 0 ) ( 3 . 1 4 3 ) ( 1 0 ) 3 . 1 4 0 ) ( 2 5 . 6 6 2 P = 1 7 6 . 9 3 8 ) 7 1 7 . 1 6 4 . 7 8 3 ) ( 6 0 . 0 0 0 1 . 2 4 9 . 0 0 0 2 . 3 2 6 ( 6 3 . 8 3 5 ) 2 8 6 . 8 9 0 . 1 7 4 ( 1 9 2 . 6 4 8 ) 5 4 2 . 3 3 3 ) – ( 1 1 7 . 7 4 4 ) ( 6 7 5 . 2 3 4 . 4 4 7 ) – – ( 1 5 9 . 6 7 1 . 2 0 0 8 P 2 .2 Y e a r s E n d e dJ u n e 3 0 2 0 0 9 2 0 1 0 C A S HF L O WSF R O MF I N A N C I N GA C T I V I T I E S N e t p r o c e e d s f r o m( p a y m e n t s o f ) s h o r t t e r mb o r r o w i n g s ( N o t e 1 0 ) P r o c e e d s f r o ml o n g t e r mb o r r o w i n g s ( N o t e 1 3 ) P a y m e n t s o f l o n g t e r mb o r r o w i n g s ( N o t e 1 3 ) I n t e r e s t p a i d D e b t c o m m i t m e n t f e e s p a i d D i v i d e n d s p a i d ( N o t e 2 3 ) R e a c q u i s i t i o n o f s h a r e s o f s t o c k b y t h e C o m p a n y ( N o t e 2 3 ) R e a c q u i s i t i o n o f s h a r e s o f s t o c k b y s u b s i d i a r i e s ( N o t e 2 3 ) N e t c a s h f r o mf i n a n c i n g a c t i v i t i e s N E TD E C R E A S EI NC A S HA N D C A S HE Q U I V A L E N T SF O RT H EY E A R C A S HA N DC A S HE Q U I V A L E N T SA T B E G I N N I N GO FY E A R C A S HA N DC A S HE Q U I V A L E N T SA T E N DO FY E A R( N o t e 4 ) S e e a c c o m p a n y i n g N o t e s t o C o n s o l i d a t e d F i n a n c i a l S t a t e m e n t s . 2 7 3 * S G V M C 3 1 0 9 6 2 * . 0 9 6 ) = 1 . 1 1 5 ) ( 5 7 . I n c . C e n t r a l A s u c a r e r a d e l a C a r l o t a . 3 9 3 e q u i t y h o l d e r s a s o f J u n e 3 0 . I n c . ( C C S I ) a n dC A D PF a r m s S e r v i c e s .P r i o r t ot h e m e r g e r e f f e c t i v e J u n e 2 9 .R O X A SH O L D I N G S . t h e C o m p a n yo f f e r e di t s s h a r e s t o t h e p u b l i c t h r o u g h a ni n i t i a l p u b l i c o f f e r i n g .T h eC o m p a n yh a s 2 . 9 2 7 . C F S I . I nJ u l y 1 9 9 6 . 7 0 %o w n e db yR o x a sa n dC o m p a n y .O nD e c e m b e r 1 6 . I n c . 3 5 6 a n d 2 . 3 6 %w h e n C A D P G Cr e a c q u i r e d p o r t i o no f i t s s h a r e s ( s e eN o t e2 3 f ) . 2 0 0 1 . e m e r g e d a s a h o l d i n g a n d i n v e s t m e n t c o m p a n y w i t hs p e c i f i cf o c u so ns u g a rm i l l i n ga n dr e f i n i n gb u s i n e s s .N a j a l i nA g r i V e n t u r e s . N a s u g b u . ( C A C I ) . B a t a n g a s w a s s p u n o f f t oC e n t r a l A z u c a r e r aD o nP e d r o . N e g r o s O c c i d e n t a l .O n A u g u s t 8 .O nJ a n u a r y2 3 . t h e C o m p a n y ’ s s h a r e s o f s t o c k w e r e l i s t e d i n t h e P h i l i p p i n e S t o c k E x c h a n g e .S u b s e q u e n t l y . 8 3 8 . T h eC o m p a n y ’ sc o r p o r a t eo f f i c ei sl o c a t e da tt h e6 t hF l o o r . * S G V M C 3 1 0 9 6 2 * . 1 7 %t o9 5 . R H Ih a sb e e nt r a n s f o r m e di n t oad i v e r s i f i e dh o l d i n ga n di n v e s t m e n tc o r p o r a t i o n . C C S I . I n c . 7 8 %e q u i t yo w n e r s h i po f R H I o v e r C A D P G Cr e d u c e d t o 8 9 . I N C . B a t a n g a sa n dB a r r i oC o n s u e l o . t h e C o m p a n y w a s 6 5 . 0m i l l i o n . R H Is o l di t s i n v e s t m e n t i n C A D P G Ct o R o x a s &C o m p a n y . 1 2 %o w n e d b y R o x a s & C o m p a n y .( J O MS I ) . w h i l et h em a n u f a c t u r i n gp l a n t so fi t so p e r a t i n g s u b s i d i a r i e s( s e eN o t e2 7 ) a r ei nB a r r i oL u m b a n g a n . C a c h o G o n z a l e sB u i l d i n g . 1 9 3 0f o r t h e p u r p o s eo f o p e r a t i n gm i l l a n dr e f i n e r yf a c i l i t i e s t om a n u f a c t u r es u g a r a n da l l i e dp r o d u c t s . a sw e l l a sc e r t a i na s s e t sa n dl i a b i l i t i e so f C A D P G Cf o rat o t a l c o n s i d e r a t i o no f= P 3 . 1 0 1 A g u i r r eS t r e e t .( N A V I ) ]a n d a s s o c i a t e[ H a w a i i a n P h i l i p p i n eC o m p a n y( H P C o ) ] . S t a t u s o f O p e r a t i o n s a n dC o r p o r a t e R e o r g a n i z a t i o n s a n dA p p r o v a l o f t h e C o n s o l i d a t e dF i n a n c i a l S t a t e me n t s C o r p o r a t e I n f o r m a t i o n R o x a s H o l d i n g s . 3 3 0 . 3 m i l l i o n ( s e e N o t e 2 3 c ) . L a C a r l o t a C i t y . I n c . 2 0 0 8 . ( R H I o r t h e“ C o m p a n y ” ) w a s o r g a n i z e di nt h eP h i l i p p i n e s a n dr e g i s t e r e d w i t ht h eP h i l i p p i n eS e c u r i t i e sa n dE x c h a n g eC o m m i s s i o n( S E C ) o nO c t o b e r 3 0 . ap u b l i c l yl i s t e dc o m p a n yi n c o r p o r a t e da n dd o m i c i l e di nt h eP h i l i p p i n e s . . Ma k a t i C i t y . L e g a s p i V i l l a g e . 7 8 %. f o r = P 3 . C A D PG r o u p C o r p o r a t i o n ( C A D P G C ) . 2 0 1 0 . ac o m p a n yi n c o r p o r a t e da n dd o m i c i l e di nt h eP h i l i p p i n e s . t h eC o m p a n yi s6 5 . C C S I a n d C F S I b e c a m e 1 0 0 %s u b s i d i a r i e s o f C A D P G C . ( C F S I ) f o r1 . A so f J u n e3 0 .I n c . 3b i l l i o no f C A D P G C ’ sc o m m o ns h a r e sw i t hap a rv a l u eo f = P 1p e rs h a r e .T h es u g a rm i l l i n ga n dr e f i n e r y b u s i n e s so f t h eC o m p a n yi nN a s u g b u . I n c . w h i l e R H I ’ s o w n e r s h i pi n t e r e s t i nC A D P G Ci n c r e a s e df r o m7 3 . I n c . 2 0 0 9 .w h i l ei t s s u b s i d i a r y . ( R C I ) . R H I a c q u i r e dC A D P G C ’ s s u g a r r e l a t e d o p e r a t i n g s u b s i d i a r i e s [ C A D P I . 1 9 8 0 . I n c . C A D P I . T h e9 5 . 2 . 1 9 9 6 . t h e C o m p a n ye x c h a n g e di t s s h a r e h o l d i n g s i nC A D P I .O n N o v e m b e r 1 . t h e C o m p a n y ’ s c o r p o r a t e l i f e w a s e x t e n d e d f o r a n o t h e r 5 0 y e a r s u n t i l 2 0 3 0 . r e s p e c t i v e l y .I n c . R H I i n c r e a s e d i t s e q u i t yo w n e r s h i pi n C A D P G Ct o 8 9 .C o r p o r a t e I n f o r ma t i o n . I n c . I n 2 0 0 8 . S t a t u s o f O p e r a t i o n s a n d C o r p o r a t e R e o r g a n i z a t i o n s F o l l o w i n gt h e R e o r g a n i z a t i o nP r o g r a ma p p r o v e db yt h e P h i l i p p i n e S E Co nD e c e m b e r 1 1 . 2 0 0 9 a n d 2 0 0 8 . 2 0 1 0a n d2 0 0 9 . ) A N DS U B S I D I A R I E S N O T E ST OC O N S O L I D A T E DF I N A N C I A LS T A T E ME N T S 1 . J a d eO r i e n tMa n a g e m e n tS e r v i c e s . 2 0 0 9 a s d i s c u s s e d b e l o w . 2 8 %f o l l o w i n g t h e d e c l a r a t i o n o f p r o p e r t y d i v i d e n d s t o i t s s h a r e h o l d e r s . ( C A D P I ) o nD e c e m b e r 1 . C A D PC o n s u l t a n c yS e r v i c e s . ( AS u b s i d i a r y o f R o x a s a n dC o mp a n y . 2 0 0 2( s e e N o t e 2 3 b ) . P F R S8w i l l r e p l a c e P A S1 4 . 2 0 0 9 . 7 1 C A D P G C ’ s s h a r e s o f s t o c k w e r e e x c h a n g e d f o r e v e r y s h a r e o f s t o c k o f R C I . t h es t a n d a r di n t r o d u c e st h es t a t e m e n t o f c o m p r e h e n s i v e i n c o m e . e x c e p t f o r l a n d . T h e a r e a s i n v o l v i n ga h i g h e r d e g r e e o f j u d g m e n t o r c o m p l e x i t y .P h i l i p p i n eA c c o u n t i n g S t a n d a r d s( P A S ) .T h eG r o u ph a se l e c t e dt op r e s e n ta l li t e m so f r e c o g n i z e d i n c o m e a n d e x p e n s e i n t w o l i n k e d s t a t e m e n t s .i n c l u d e sa l la p p l i c a b l eP F R S . O p e r a t i n gS e g m e n t s . I t a l s or e q u i r e s m a n a g e m e n t t oe x e r c i s e j u d g m e n t i nt h e p r o c e s s o f a p p l y i n gt h e G r o u p ’ s a c c o u n t i n gp o l i c i e s . a m e n d m e n t s t o e x i s t i n g s t a n d a r d s a n d n e wa n d a m e n d m e n t s t o P h i l i p p i n e I n t e r p r e t a t i o n w h i c h b e c a m e e f f e c t i v e J u l y 1 .I na d d i t i o n .S u mma r y o f S i g n i f i c a n t A c c o u n t i n g a n dF i n a n c i a l R e p o r t i n g P o l i c i e s B a s i s o f P r e p a r a t i o n a n d S t a t e m e n t o f C o m p l i a n c e T h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s o f t h e C o m p a n y a n d s u b s i d i a r i e s ( c o l l e c t i v e l y r e f e r r e d t o a s “ t h eG r o u p ” ) h a v eb e e np r e p a r e di na c c o r d a n c ew i t hP h i l i p p i n eF i n a n c i a l R e p o r t i n gS t a n d a r d s ( P F R S ) . t h r o u g h a s h a r e s w a p w h e r e i n 1 1 . w h i c hi s s t a t e da t r e v a l u e da m o u n t s a n dc o n s u m a b l e b i o l o g i c a l a s s e t s w h i c ha r e c a r r i e da t f a i r v a l u e . T h e p r e p a r a t i o n o f t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s i n a c c o r d a n c e w i t h P F R Sr e q u i r e s t h e u s e o f c r i t i c a l a c c o u n t i n ge s t i m a t e s . u p o na p p r o v a l o f P h i l i p p i n e S E Co nJ u n e 2 3 . * S G V M C 3 1 0 9 6 2 * . w i t h C A D P G Ca s t h e s u r v i v i n g e n t i t y . S e g m e n t R e p o r t i n g .2 E f f e c t i v e J u n e 2 9 . s e p a r a t e s o w n e r a n dn o n o w n e r c h a n g e s i ne q u i t y .O p e r a t i n g s e g m e n t i n f o r m a t i o nb a s e do nP F R S8i n c l u d i n gt h e r e l a t e dr e v i s e dc o m p a r a t i v e i n f o r m a t i o n i s p r e s e n t e d i n N o t e 2 7 .T h et e r mP F R S . 2 0 0 9 .e i t h e ri nas i n g l e s t a t e m e n t .w i t hn o n o w n e rc h a n g e si ne q u i t yp r e s e n t e di nar e c o n c i l i a t i o no fe a c h c o m p o n e n t o f e q u i t y . o r a r e a s w h e r e a s s u m p t i o n s a n d e s t i m a t e s a r e s i g n i f i c a n t t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s a r e d i s c l o s e d i n N o t e 3 . a n d a r e p r e s e n t e di n P h i l i p p i n e p e s o . A p p r o v a l o f t h e C o n s o l i d a t e d F i n a n c i a l S t a t e m e n t s T h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s a s o f J u n e 3 0 . a n di s r e q u i r e d t o b e a d o p t e d o n l y b ye n t i t i e s w h o s e d e b t o r e q u i t yi n s t r u m e n t s a r e p u b l i c l y t r a d e d . I n c .i ng e n e r a l . P r e s e n t a t i o no f F i n a n c i a l S t a t e m e n t s . e x c e p t w h e n o t h e r w i s e i n d i c a t e d . t h e C o m p a n y ’ s f u n c t i o n a l c u r r e n c y . a d o p t saf u l lm a n a g e m e n ta p p r o a c ht or e p o r t i n gs e g m e n t i n f o r m a t i o n .T h e s t a t e m e n t o f c h a n g e s i ne q u i t yi n c l u d e s o n l yd e t a i l s o f t r a n s a c t i o n s w i t ho w n e r s . A m e n d m e n t t o P A S1 . 2 0 1 0 h a v e b e e n a p p r o v e d a n d a u t h o r i z e d f o r i s s u e b y t h e C o m p a n y ’ s B O Do n S e p t e m b e r 2 9 . C h a n g e s i n A c c o u n t i n g P o l i c i e s T h e a c c o u n t i n gp o l i c i e s a d o p t e da r e c o n s i s t e n t w i t ht h o s e o f t h e p r e v i o u s f i n a n c i a l y e a r s e x c e p t f o r t h e a d o p t i o n o f t h e f o l l o w i n g n e wa n d r e v i s e d s t a n d a r d s . O n t h e s a m e d a t e . 2 0 1 0 a n d 2 0 0 9 a n d f o r e a c h o f t h e t h r e e y e a r s i n t h e p e r i o d e n d e d J u n e 3 0 .w h i c hp r e s e n t sa l li t e m so fr e c o g n i z e di n c o m ea n de x p e n s e . P h i l i p p i n e S E C a p p r o v e d t h e c h a n g e i n C A D P G C ’ s c o r p o r a t e n a m e t o R o x a s a n d C o m p a n y .o ri nt w ol i n k e ds t a t e m e n t s . 2 . o r a r e i n t h e p r o c e s s o f f i l i n gi t sf i n a n c i a l s t a t e m e n t sw i t has e c u r i t i e sc o m m i s s i o no rs i m i l a rp a r t y . T h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s h a v e b e e n p r e p a r e d u s i n g t h e h i s t o r i c a l c o s t b a s i s .a n di n t e r p r e t a t i o n so ft h eS t a n d i n gI n t e r p r e t a t i o n sC o m m i t t e e . a n d r o u n d e d t o t h e n e a r e s t t h o u s a n d s . 2 0 0 9 . C A D P G Cm e r g e d w i t h R C I . P F R S8 . 2 0 1 0 .P h i l i p p i n e I n t e r p r e t a t i o n sC o m m i t t e ea n dI n t e r n a t i o n a lF i n a n c i a lR e p o r t i n gI n t e r p r e t a t i o n sC o m m i t t e e ( I F R I C ) w h i c hh a v e b e e na p p r o v e db yt h e P h i l i p p i n e F i n a n c i a l R e p o r t i n gS t a n d a r d s C o u n c i l a n d a d o p t e d b y t h e P h i l i p p i n e S E C . T h e a d d i t i o n a l d i s c l o s u r e s a r e p r e s e n t e d i n N o t e 2 6 . H o w e v e r . t h a t ( a ) c h a n g e i n o w n e r s h i pi n t e r e s t s o f a s u b s i d i a r y ( t h a t d o n o t r e s u l t i n l o s s o f c o n t r o l ) w i l l b e a c c o u n t e d f o r a s a n e q u i t y t r a n s a c t i o n a n d w i l l h a v e n o i m p a c t o n g o o d w i l l n o r w i l l i t g i v e r i s e t oag a i no r l o s s . A m e n d m e n t s t oP F R S7 . P h i l i p p i n eI n t e r p r e t a t i o nI F R I C1 7 . F i n a n c i a l I n s t r u m e n t s :D i s c l o s u r e s I m p r o v i n gD i s c l o s u r e s a b o u t F i n a n c i a lI n s t r u m e n t s .r e q u i r ea d d i t i o n a ld i s c l o s u r e sa b o u tf a i rv a l u em e a s u r e m e n ta n d l i q u i d i t yr i s k . C o n s o l i d a t e da n dS e p a r a t e F i n a n c i a lS t a t e m e n t s . a n d( b ) i nc a s e s o f r e o r g a n i z a t i o n s w h e r e an e wp a r e n t i s i n s e r t e da b o v e a n e x i s t i n gp a r e n to ft h eg r o u p( s u b j e c tt om e e t i n gs p e c i f i cr e q u i r e m e n t s ) . J o i n t l y C o n t r o l l e dE n t i t y o r A s s o c i a t e .D i s t r i b u t i o n so fN o n c a s hA s s e t st oO w n e r s . a m o n g o t h e r s . a n dt h e d e s i g n a t i o no f i n f l a t i o na s ah e d g e dr i s ko r p o r t i o ni np a r t i c u l a r s i t u a t i o n s .i n t r o d u c e san u m b e ro fc h a n g e si nt h ea c c o u n t i n gf o rb u s i n e s s c o m b i n a t i o n s t h a t w i l l i m p a c t t h e a m o u n t o f g o o d w i l l r e c o g n i z e d . A m e n d m e n t st oP A S2 7 . a n d w h e nt od e r e c o g n i z et h ea s s e ta n dl i a b i l i t ya n dt h ec o n s e q u e n c e so fd o i n gs o . t h e r e p o r t e dr e s u l t s i nt h e p e r i o dt h a t a na c q u i s i t i o no c c u r s . a n dw i l l a f f e c t f u t u r ea c q u i s i t i o n sa n dt r a n s a c t i o n sw i t hn o n c o n t r o l l i n g i n t e r e s t s . ( b ) l o s s e s i n c u r r e db yt h e s u b s i d i a r yw i l l b e a l l o c a t e d b e t w e e nt h ec o n t r o l l i n ga n dn o n c o n t r o l l i n gi n t e r e s t s( p r e v i o u s l yr e f e r r e dt oa s“ m i n o r i t y i n t e r e s t s ” ) . C o n s o l i d a t e da n dS e p a r a t eF i n a n c i a lS t a t e m e n t s-C o s to f a n I n v e s t m e n t i naS u b s i d i a r y . t h e p a y m e n t o f s u c hd i v i d e n d s r e q u i r e s t h ee n t i t yt oc o n s i d e r w h e t h e r t h e r ei s a n i n d i c a t o r o f i m p a i r m e n t .c o v e r s a c c o u n t i n gf o ra l l n o n r e c i p r o c a l d i s t r i b u t i o no fn o n c a s ha s s e t st oo w n e r s . a n y r e t a i n e d i n t e r e s t w i l l b e r e m e a s u r e d t o f a i r v a l u e a n dt h i s w i l l i m p a c t t h e g a i no r l o s s r e c o g n i z e do nd i s p o s a l .T h ea m e n d m e n t sa l s oc l a r i f yt h e r e q u i r e m e n t s f o r l i q u i d i t y r i s k d i s c l o s u r e s w i t h r e s p e c t t o d e r i v a t i v e t r a n s a c t i o n s a n d f i n a n c i a l a s s e t s u s e d f o r l i q u i d i t y m a n a g e m e n t . m a k i n gt h e d i s t i n c t i o nb e t w e e np r e a c q u i s i t i o na n dp o s t a c q u i s i t i o np r o f i t s n o l o n g e r r e q u i r e d . r e c o n c i l i a t i o nb e t w e e nt h eb e g i n n i n ga n d e n d i n gb a l a n c ef o r l e v e l 3f a i r v a l u em e a s u r e m e n t si sn o wr e q u i r e d . f o r a l l f i n a n c i a l i n s t r u m e n t s r e c o g n i z e da t f a i r v a l u e . T h i s i n t e r p r e t a t i o n w i l l b e a p p l i e d o n f u t u r e d i s t r i b u t i o n o f n o n c a s h a s s e t s t o s h a r e h o l d e r s .3 R e v i s e dP F R S3 . e v e ni f t h e l o s s e s e x c e e dt h e n o n c o n t r o l l i n ge q u i t yi n v e s t m e n t i nt h e s u b s i d i a r y . A m e n d m e n t t oP A S3 9 .F a i rv a l u em e a s u r e m e n t sr e l a t e dt oi t e m sr e c o r d e da t f a i rv a l u ea r et ob e d i s c l o s e d b y s o u r c e o f i n p u t s u s i n g a t h r e e l e v e l f a i r v a l u e h i e r a r c h y . a sw e l l a ss i g n i f i c a n t t r a n s f e r sb e t w e e nl e v e l si nt h ef a i rv a l u eh i e r a r c h y .I tp r o v i d e s g u i d a n c eo nw h e nt or e c o g n i z eal i a b i l i t y . B u s i n e s sC o m b i n a t i o n sa n dr e v i s e dP A S2 7 .T h e c h a n g e s i n t r o d u c e db yt h e r e v i s e dP F R S3m u s t b e a p p l i e dp r o s p e c t i v e l ya n dP A S2 7m u s t b e a p p l i e dr e t r o s p e c t i v e l y .A l l d i v i d e n d s w i l l b e r e c o g n i z e di nt h e c o n s o l i d a t e d s t a t e m e n t o f i n c o m e .T h e r e v i s e dP A S2 7r e q u i r e s . a d d r e s s e s o n l yt h ed e s i g n a t i o no f ao n e s i d e dr i s ki nah e d g e di t e m . b y c l a s s . F i n a n c i a l I n s t r u m e n t s :R e c o g n i t i o na n dMe a s u r e m e n t -E l i g i b l e H e d g e dI t e m s . h o wt om e a s u r e i t a n dt h e a s s o c i a t e da s s e t s . a n df u t u r e r e p o r t e dr e s u l t s . t h ec o s to ft h e s u b s i d i a r y i s t h e p r e v i o u s c a r r y i n g a m o u n t o f i t s s h a r e o f e q u i t y i t e m s i n t h e s u b s i d i a r y r a t h e r t h a n i t s f a i r v a l u e . * S G V M C 3 1 0 9 6 2 * . e x c e p t f o rs o m es c e n a r i o s . T h e a m e n d m e n t c l a r i f i e s t h a t a n e n t i t y i s p e r m i t t e d t o d e s i g n a t e a p o r t i o n o f t h e f a i r v a l u e c h a n g e s o r c a s h f l o w v a r i a b i l i t y o f a f i n a n c i a l i n s t r u m e n t a s a h e d g e d i t e m .I na d d i t i o n . a n d ( c ) o n l o s s o f c o n t r o l o f a s u b s i d i a r y . h a s c h a n g e s i nr e s p e c t o f t h e h o l d i n g c o m p a n i e s ’ s e p a r a t e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s i n c l u d i n g ( a ) t h e d e l e t i o n o f ‘ c o s t m e t h o d ’ . I n t e r p r e t a t i o n s a n d A m e n d m e n t s t o E x i s t i n g S t a n d a r d s E f f e c t i v e S u b s e q u e n t t o J u n e 3 0 . * S G V M C 3 1 0 9 6 2 * . P F R S2 .T h ef e a t u r e si n d i c a t i n ga ne n t i t yi sa c t i n ga s ap r i n c i p a l a r ew h e t h e r t h ee n t i t y : ( a ) h a s p r i m a r yr e s p o n s i b i l i t yf o r p r o v i d i n gt h eg o o d s o r s e r v i c e s .T h i s d i dn o t h a v e a ni m p a c t t ot h e G r o u p a s i t s p o l i c y h a s b e e n t o c a p i t a l i z e b o r r o w i n g c o s t s o n q u a l i f y i n g a s s e t s . A m e n d m e n t st oP A S3 2 . H e d g e s o f a N e t I n v e s t m e n t i n a F o r e i g n O p e r a t i o n P h i l i p p i n e I n t e r p r e t a t i o n I F R I C1 8 . P r e s e n t a t i o no f F i n a n c i a l S t a t e m e n t s P u t t a b l e F i n a n c i a l I n s t r u m e n t s a n d O b l i g a t i o n s A r i s i n g o n L i q u i d a t i o n A m e n d m e n t t o P F R S2 . s p e c i f i e sn ot r a n s i t i o n a l p r o v i s i o n s . A c c o r d i n g l y . R e v e n u e . ( c ) h a s d i s c r e t i o n i n e s t a b l i s h i n g p r i c e s .T h e r e l e v a n t d i s c l o s u r e s w i l l b ei n c l u d e di nt h en o t e s t ot h ec o n s o l i d a t e df i n a n c i a l s t a t e m e n t sw h e n t h e s e b e c o m e e f f e c t i v e .E x c e p t a s o t h e r w i s e i n d i c a t e d . c l a r i f i e st h es c o p ea n dt h ea c c o u n t i n gf o r g r o u p s e t t l e ds h a r e b a s e dp a y m e n t t r a n s a c t i o n s . N e wA c c o u n t i n g S t a n d a r d s . c l a r i f i e s t h a t t h e c o n t r i b u t i o no f a b u s i n e s s o n f o r m a t i o no f a j o i n t v e n t u r ea n dc o m b i n a t i o n s u n d e r c o m m o nc o n t r o l a r en o t w i t h i nt h es c o p eo f P F R S2 e v e n t h o u g h t h e y a r e o u t o f s c o p e o f P F R S3 . S h a r e b a s e dP a y m e n t G r o u pC a s h s e t t l e dS h a r e b a s e dP a y m e n t T r a n s a c t i o n s . a n d ( d ) b e a r s t h e c r e d i t r i s k . E f f e c t i v e 2 0 1 1 A m e n d m e n t s t oP F R S2 . T r a n s f e r s o f A s s e t s f r o mC u s t o m e r s I m p r o v e m e n t s t o P F R S s T h e o m n i b u s a m e n d m e n t s t o P F R S s i s s u e d i n 2 0 0 9 w e r e i s s u e d p r i m a r i l y w i t h a v i e wt o r e m o v i n g i n c o n s i s t e n c i e sa n dc l a r i f y i n gw o r d i n g s . A m e n d m e n t t ot h eA p p e n d i xt oP A S1 8 .Aq u a l i f y i n ga s s e t i s a na s s e t t h a t n e c e s s a r i l yt a k e s a s u b s t a n t i a l p e r i o do f t i m e t og e t r e a d yf o r i t s i n t e n d e du s eo r s a l e . t h e a m e n d m e n t i se f f e c t i v ei m m e d i a t e l ya n dr e t r o s p e c t i v e l y . ( b ) G r o u ph a s i n v e n t o r y r i s k . F i n a n c i a l I n s t r u m e n t s : P r e s e n t a t i o na n dP A S1 . a n dc o n c l u d e dt h a t i t i s a c t i n ga s p r i n c i p a l i n a l l a r r a n g e m e n t s . C u s t o m e r L o y a l t y P r o g r a m m e s P h i l i p p i n e I n t e r p r e t a t i o n I F R I C1 6 . t h e G r o u p d o e s n o t e x p e c t t h e a d o p t i o n o f t h e s e n e wc h a n g e s i nP F R St oh a v e a s i g n i f i c a n t i m p a c t o nt h e c o n s o l i d a t e df i n a n c i a l s t a t e m e n t s .T h e r ea r es e p a r a t et r a n s i t i o n a l p r o v i s i o n sf o re a c h s t a n d a r d . S h a r e b a s e dP a y m e n t . I n t a n g i b l e A s s e t s P h i l i p p i n e I n t e r p r e t a t i o n I F R I C9 . R e a s s e s s m e n t o f E m b e d d e d D e r i v a t i v e s P h i l i p p i n e I n t e r p r e t a t i o n I F R I C1 3 . T h e G r o u p a s s e s s e d i t s r e v e n u e a r r a n g e m e n t s a g a i n s t t h e s e c r i t e r i a . 2 0 1 0 T h e G r o u pw i l l a d o p t t h e f o l l o w i n gs t a n d a r d s a n di n t e r p r e t a t i o n s e n u m e r a t e db e l o ww h e nt h e s e b e c o m e e f f e c t i v e .T h ea m e n d m e n t a d d sg u i d a n c e ( w h i c h a c c o m p a n i e s t h e s t a n d a r d ) t o d e t e r m i n e w h e t h e r a n e n t i t y i s a c t i n g a s a p r i n c i p a l o r a s a na g e n t . r e q u i r e s c a p i t a l i z a t i o n o f b o r r o w i n g c o s t s w h e n s u c h c o s t s r e l a t e t oa q u a l i f y i n ga s s e t .4 T h e f o l l o w i n g c h a n g e s i n P F R Sa r e e i t h e r n o t a p p l i c a b l e o r d i d n o t h a v e a n y s i g n i f i c a n t i m p a c t o n t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s . n oc h a n g ew a sm a d ei nt h eG r o u p ’ sr e v e n u er e c o g n i t i o n p o l i c y . R e v i s e d P A S2 3 . B o r r o w i n g C o s t s . S h a r e b a s e d P a y m e n t V e s t i n g C o n d i t i o n s a n d C a n c e l l a t i o n s P A S3 8 . * S G V M C 3 1 0 9 6 2 * . P A S1 . I f t h e i r f a i r v a l u e c a n n o t b e r e l i a b l ym e a s u r e d . s c o p ee x e m p t i o nf o r c o n t r a c t sb e t w e e na na c q u i r e r a n dav e n d o ri na b u s i n e s s c o m b i n a t i o n .T h e a m e n d m e n t n o wr e q u i r e s t h a t l e a s e so f l a n da r ec l a s s i f i e da se i t h e r “ f i n a n c e ”o r “ o p e r a t i n g ”i na c c o r d a n c ew i t ht h e g e n e r a l p r i n c i p l e s o f P A S1 7 .c l a r i f i e st h a ts e g m e n ta s s e t sa n dl i a b i l i t i e sn e e do n l yb e r e p o r t e dw h e nt h o s e a s s e t s a n dl i a b i l i t i e s a r e i n c l u d e di nm e a s u r e s t h a t a r e u s e db yt h e c h i e f o p e r a t i n g d e c i s i o n m a k e r .E x t i n g u i s h i n gF i n a n c i a lL i a b i l i t i e sw i t hE q u i t y I n s t r u m e n t s . P A S7 . I t c l a r i f i e st h a t : ( a ) t h e e n t i t y ’ s e q u i t y i n s t r u m e n t s i s s u e d t o a c r e d i t o r a r e p a r t o f t h e c o n s i d e r a t i o n p a i d t oe x t i n g u i s h t h e f i n a n c i a l l i a b i l i t y . i st h eo p e r a t i n gs e g m e n t a sd e f i n e di nP F R S8b e f o r e a g g r e g a t i o n f o r r e p o r t i n g p u r p o s e s .P r i o r t ot h e a m e n d m e n t . c l a r i f i e s t h a t t h e l a r g e s t u n i t p e r m i t t e d f o r a l l o c a t i n g g o o d w i l l . P h i l i p p i n eI n t e r p r e t a t i o nI F R I C 1 9 . S t a t e m e n t o f C a s hF l o w s . T h e s e t r a n s a c t i o n s a r e o f t e n r e f e r r e d t o a s d e b t f o r e q u i t y s w a p s . F i n a n c i a l I n s t r u m e n t s :R e c o g n i t i o na n dMe a s u r e m e n t . a c q u i r e di nab u s i n e s sc o m b i n a t i o n . s u c hr i g h t s i s s u e s a r e c l a s s i f i e d a s e q u i t y r e g a r d l e s s o f t h e c u r r e n c y i n w h i c h t h e e x e r c i s e p r i c e i s d e n o m i n a t e d . L e a s e s .a d d r e s s e st h ea c c o u n t i n gf o rr i g h t si s s u e s( r i g h t s . T h e a m e n d m e n t s w i l l b e a p p l i e d r e t r o s p e c t i v e l y . I m p a i r m e n t o f A s s e t s . P A S3 9 .T h e d i s c l o s u r e r e q u i r e m e n t s o f o t h e r P F R S s o n l ya p p l yi f s p e c i f i c a l l yr e q u i r e df o r s u c hn o n c u r r e n t a s s e t s o r d i s c o n t i n u e d o p e r a t i o n s . c l a r i f i e s t h a t t h e t e r m s o f al i a b i l i t yt h a t c o u l d r e s u l t a t a n y t i m ei ni t s s e t t l e m e n t b yt h e i s s u a n c eo f e q u i t yi n s t r u m e n t s a t t h eo p t i o no f t h e c o u n t e r p a r t y d o n o t a f f e c t i t s c l a s s i f i c a t i o n .H o w e v e r .O p e r a t i n gS e g m e n t s . A m e n d m e n t t o P A S3 2 . e x p l i c i t l ys t a t e st h a t o n l ye x p e n d i t u r et h a t r e s u l t si na r e c o g n i z e d a s s e t c a n b e c l a s s i f i e d a s a c a s h f l o wf r o mi n v e s t i n g a c t i v i t i e s . a n d g a i n s o r l o s s e s o n c a s h f l o wh e d g e s o f a f o r e c a s t t r a n s a c t i o n . p r o v i d e sg u i d a n c eo nh o wt oa c c o u n t f o rt h ee x t i n g u i s h m e n to faf i n a n c i a l l i a b i l i t y b y t h e i s s u e o f e q u i t y i n s t r u m e n t s . C l a s s i f i c a t i o n o f R i g h t s I s s u e s .o p t i o n so r w a r r a n t s ) t h a t a r e d e n o m i n a t e di n a c u r r e n c yo t h e r t h a n t h e f u n c t i o n a l c u r r e n c yo f t h e i s s u e r . I t c l a r i f i e s t h e r e q u i r e m e n t s o f P F R S s w h e n a n e n t i t y r e n e g o t i a t e s t h e t e r m s o f a f i n a n c i a l l i a b i l i t y w i t h i t s c r e d i t o r a n d t h e c r e d i t o r a g r e e s t o a c c e p t t h e e n t i t y ’ s s h a r e s o r o t h e r e q u i t yi n s t r u m e n t st os e t t l et h ef i n a n c i a l l i a b i l i t yf u l l yo r p a r t i a l l y . F i n a n c i a l I n s t r u m e n t s :P r e s e n t a t i o n . p r o v i d e dc e r t a i n c o n d i t i o n s a r e m e t . P A S1 7 . p r o v i d e sc l a r i f i c a t i o no n p r e p a y m e n t o p t i o n . P A S3 6 . P F R S8 .t h e a m e n d m e n t i s s u e dt o d a y r e q u i r e s t h a t . P r e v i o u s l ys u c hr i g h t si s s u e sw e r ea c c o u n t e df o ra sd e r i v a t i v el i a b i l i t i e s . N o n c u r r e n t A s s e t sH e l df o rS a l ea n dD i s c o n t i n u e dO p e r a t i o n s .5 P F R S5 . l e a s e s o f l a n dw e r e c l a s s i f i e d a s o p e r a t i n gl e a s e s . c l a r i f i e st h a t t h e d i s c l o s u r e s r e q u i r e di nr e s p e c t o f n o n c u r r e n t a s s e t s a n dd i s p o s a l g r o u p s c l a s s i f i e da s h e l df o r s a l e o r d i s c o n t i n u e d o p e r a t i o n s a r e o n l y t h o s e s e t o u t i n P F R S5 . P r e s e n t a t i o no f F i n a n c i a l S t a t e m e n t s . ( b ) t h e e q u i t y i n s t r u m e n t s i s s u e d a r e m e a s u r e d a t t h e i r f a i r v a l u e . t h e e q u i t yi n s t r u m e n t s s h o u l db e m e a s u r e dt or e f l e c t t h e f a i r v a l u e o f t h e f i n a n c i a l l i a b i l i t y e x t i n g u i s h e d a n d ( c ) t h e d i f f e r e n c e b e t w e e n t h e c a r r y i n g a m o u n t o f t h e f i n a n c i a l l i a b i l i t y e x t i n g u i s h e d a n d t h e i n i t i a l m e a s u r e m e n t a m o u n t o f t h e e q u i t y i n s t r u m e n t s i s s u e d i s i n c l u d e d i n t h e e n t i t y ’ s p r o f i t o r l o s s f o r t h e p e r i o d . r e m o v e s t h es p e c i f i cg u i d a n c eo nc l a s s i f y i n gl a n da s al e a s e . t h i s a m e n d m e n t t o P A S3 2 . P F R S9 . 0 0 1 0 0 . F i n a n c i a l I n s t r u m e n t s : R e c o g n i t i o na n dMe a s u r e m e n t . 0 0 9 9 . a p p l i e si nt h el i m i t e dc i r c u m s t a n c e sw h e na ne n t i t yi ss u b j e c t t om i n i m u m f u n d i n gr e q u i r e m e n t sa n dm a k e sa ne a r l yp a y m e n to fc o n t r i b u t i o n st oc o v e rt h o s e r e q u i r e m e n t s . i f a n y . E f f e c t i v e 2 0 1 3 P h i l i p p i n eI n t e r p r e t a t i o nI F R I C1 5 . d o c u m e n t a t i o n a n d e f f e c t i v e n e s s r e q u i r e m e n t s o f P A S3 9 t h a t r e l a t e t o a n e t i n v e s t m e n t h e d g e a r e s a t i s f i e d . q u a l i f y i n g h e d g i n g i n s t r u m e n t s m a y b eh e l db ya n ye n t i t yo r e n t i t i e sw i t h i nt h eg r o u p . 0 0 1 0 0 . 2 2 8 9 . 2 2 – 1 0 0 . i n a h e d g e o f a n e t i n v e s t m e n t i n a f o r e i g n o p e r a t i o n . 9 9 – 9 9 . 9 9 ( 1 ) C A D P G C C A D P I C A C I ( 2 ) C A D P I n s u r a n c e A g e n c y .A g r e e m e n t sf o rC o n s t r u c t i o no fR e a lE s t a t e . 0 0 1 0 0 . I n c . I ta l s or e q u i r e sas i n g l e i m p a i r m e n t m e t h o d t o b e u s e d . ( C I A I ) C C S I C F S I J O MS I I n d i r e c t – 8 9 . 0 0 – 1 0 0 . 0 0 – 1 0 0 . 2 1 ( F o r w a r d ) * S G V M C 3 1 0 9 6 2 * . R e l a t e dP a r t yD i s c l o s u r e s ( R e v i s e d ) w a s r e v i s e di nr e s p o n s et oc o n c e r n s t h a t t h e p r e v i o u s d i s c l o s u r e r e q u i r e m e n t s a n d t h e d e f i n i t i o no f a ‘ r e l a t e d p a r t y ’ w e r e t o o c o m p l e xa n d d i f f i c u l tt oa p p l yi np r a c t i c e .c o v e r s a c c o u n t i n gf o r r e v e n u e a n da s s o c i a t e de x p e n s e s b ye n t i t i e s t h a t u n d e r t a k e t h e c o n s t r u c t i o no f r e a l e s t a t e d i r e c t l y o r t h r o u g h s u b c o n t r a c t o r s . 2 2 8 9 . P h i l i p p i n e I n t e r p r e t a t i o n I F R I C1 6 . T h e G r o u pc o n t i n u e s t oa s s e s s t h ei m p a c t o f t h ea b o v en e wa n da m e n d e da c c o u n t i n gs t a n d a r d s a n di n t e r p r e t a t i o n s e f f e c t i v e s u b s e q u e n t t o2 0 1 0o nt h e c o n s o l i d a t e df i n a n c i a l s t a t e m e n t s p r i o r t o p e r i o d o f i n i t i a l a p p l i c a t i o n . 2 2 8 9 . a s l o n g a s t h e d e s i g n a t i o n . T h ea m e n d m e n t p e r m i t ss u c ha ne n t i t yt ot r e a t t h eb e n e f i t o f s u c ha ne a r l y p a y m e n t a s a n a s s e t . 2 2 8 9 . P r e p a y m e n t so faMi n i m u mF u n d i n g R e q u i r e m e n t . C o n s o l i d a t i o n T h ec o n s o l i d a t e df i n a n c i a l s t a t e m e n t s i n c l u d et h ef i n a n c i a l s t a t e m e n t so f t h eC o m p a n ya n dt h e f o l l o w i n g s u b s i d i a r i e s ( a l l i n c o r p o r a t e d i n t h e P h i l i p p i n e s ) : P e r c e n t a g e o f O w n e r s h i p 2 0 0 9 2 0 0 8 2 0 1 0 D i r e c t D i r e c t – 8 9 . w i l l b e i n c l u d e d i n t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s w h e n t h e r e l e v a n t a c c o u n t i n g s t a n d a r d s a n d i n t e r p r e t a t i o n a r e a d o p t e d s u b s e q u e n t t o J u n e 3 0 . H e d g e s o f a N e t I n v e s t m e n t i n a F o r e i g n O p e r a t i o n . s t a t e s t h a t . I t a d d r e s s e st h e s ec o n c e r n sb yp r o v i d i n gap a r t i a l e x e m p t i o nf o rg o v e r n m e n t r e l a t e de n t i t i e sa n db ys i m p l i f y i n gt h ed e f i n i t i o no fa r e l a t e dp a r t ya n dr e m o v i n g i n c o n s i s t e n c i e s . 0 0 1 0 0 . 0 0 – 1 0 0 . 0 0 – 1 0 0 .T h e a p p r o a c hi nt h i s n e ws t a n d a r di s b a s e do nh o wa ne n t i t ym a n a g e si t sf i n a n c i a li n s t r u m e n t s( i t sb u s i n e s sm o d e l )a n dt h e c o n t r a c t u a lc a s hf l o wc h a r a c t e r i s t i c so ft h ef i n a n c i a la s s e t s .F i n a n c i a lI n s t r u m e n t s .i n t r o d u c e sn e wr e q u i r e m e n t so nt h ec l a s s i f i c a t i o na n d E f f e c t i v e 2 0 1 4 m e a s u r e m e n t o f f i n a n c i a l a s s e t s . 0 0 – 1 0 0 . P A S2 4 . 2 0 1 0 .e s p e c i a l l yi ne n v i r o n m e n t sw h e r eg o v e r n m e n tc o n t r o li s p e r v a s i v e . r e p l a c i n g t h e m a n y d i f f e r e n t r u l e s i n P A S3 9 .T h e e f f e c t s a n d r e q u i r e d r e v i s e dd i s c l o s u r e s . r e p l a c i n g t h e m a n y d i f f e r e n t i m p a i r m e n t m e t h o d s i n P A S3 9 . i n c l u d i n gt h ef o r e i g no p e r a t i o ni t s e l f .6 E f f e c t i v e 2 0 1 2 A m e n d m e n tt oP h i l i p p i n eI n t e r p r e t a t i o nI F R I C1 4 . I t u s e s as i n g l ea p p r o a c ht od e t e r m i n ew h e t h e r af i n a n c i a l a s s e t i s m e a s u r e d a t a m o r t i z e d c o s t o r f a i r v a l u e . 2 2 8 9 . 0 0 1 0 0 . 2 7 – 7 7 . * S G V M C 3 1 0 9 6 2 * . 0 0 1 0 0 .I f t h e c o s t o f a c q u i s i t i o ni s l e s s t h a n t h e f a i r v a l u e o f t h e C o m p a n y ’ s s h a r e o ft h en e ta s s e t so ft h es u b s i d i a r ya c q u i r e d . S u b s i d i a r i e s a r e a l l e n t i t i e s o v e r w h i c ht h e C o m p a n yh a s t h e p o w e r t og o v e r nt h ef i n a n c i a l a n d o p e r a t i n gp o l i c i e sg e n e r a l l ya c c o m p a n y i n gas h a r e h o l d i n go f m o r et h a no n e h a l f o f t h ev o t i n g r i g h t s . C h a n g e s i n t h e c o n t r o l l i n g o w n e r s h i pi n t e r e s t . 0 0 – 5 0 .T h ec o s t o f a na c q u i s i t i o ni sm e a s u r e da t t h ef a i r v a l u eo f t h ea s s e t sg i v e n . ( C P S I ) ( 4 ) R o x a s P o w e r C o r p o r a t i o n ( R P C ) ( 1 ) I n d i r e c t 6 3 . . i .7 P e r c e n t a g e o f O w n e r s h i p 2 0 0 9 2 0 0 8 2 0 1 0 D i r e c t D i r e c t 7 7 . R e s u l t s o f o p e r a t i o n o f C A D P G Ca r e i n c l u d e d i n t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s u n t i l J a n u a r y 2 3 . e . R B Cw a s i n c o r p o r a t e d o n F e b r u a r y 2 9 . a r e a c c o u n t e df o r a s e q u i t y t r a n s a c t i o n s . 2 0 0 8 a n d h a s c o m p l e t e d t h e c o n s t r u c t i o n o f i t s p l a n t f a c i l i t y a s o f J u n e 3 0 . 2 0 0 9 ( s e e N o t e 1 ) . S u b s i d i a r i e s a r e f u l l y c o n s o l i d a t e df r o mt h e d a t e o nw h i c h c o n t r o l i s t r a n s f e r r e d t o t h e C o m p a n y . s e p a r a t e l y f r o mC o m p a n y ’ s e q u i t y . B u s i n e s s C o m b i n a t i o n s T h e p u r c h a s em e t h o do f a c c o u n t i n gi s u s e dt oa c c o u n t f o r t h e a c q u i s i t i o no f s u b s i d i a r i e s b yt h e C o m p a n y . 9 6 – – – ( 2 ) ( 3 ) ( 4 ) T h e l o s s o f o w n e r s h i p i n t e r e s t i n C A D P G Ci s t h e r e s u l t o f t h e r e s t r u c t u r i n g u n d e r t a k e n b y t h e G r o u p t h r o u g h s a l e o f a l l i t s e q u i t y i n t e r e s t i n C A D P G Ct o R C I e f f e c t i v e J a n u a r y 2 3 .T h ee x i s t e n c ea n de f f e c to fp o t e n t i a l v o t i n gr i g h t st h a ta r ec u r r e n t l ye x e r c i s a b l eo r c o n v e r t i b l ea r ec o n s i d e r e dw h e na s s e s s i n gw h e t h e rt h eC o m p a n yc o n t r o l sa n o t h e re n t i t y . C o n s o l i d a t e df i n a n c i a ls t a t e m e n t sa r ep r e p a r e du s i n gu n i f o r ma c c o u n t i n gp o l i c i e sf o rl i k e t r a n s a c t i o n s a n d o t h e r e v e n t s i n s i m i l a r c i r c u m s t a n c e s . w h e r e n e c e s s a r y . p l u s c o s t s d i r e c t l y a t t r i b u t a b l et ot h ea c q u i s i t i o n . 2 0 0 9 . 0 0 1 0 0 . a c q u i s i t i o n o f n o n c o n t r o l l i n g i n t e r e s t o r p a r t i a l d i s p o s a l o f i n t e r e s t o v e r as u b s i d i a r yt h a t d on o t r e s u l t i nal o s s o f c o n t r o l . T h e y a r e d e c o n s o l i d a t e d f r o mt h e d a t e o n w h i c h c o n t r o l c e a s e s . A s a r e s u l t . I n c . A d j u s t m e n t s . i r r e s p e c t i v e o f t h e e x t e n t o f a n y n o n c o n t r o l l i n g i n t e r e s t . N o n c o n t r o l l i n g i n t e r e s t r e p r e s e n t s a p o r t i o n o f p r o f i t o r l o s s a n d n e t a s s e t s o f s u b s i d i a r i e s n o t h e l d b y t h e G r o u p . 3 8 1 0 0 . t h e d a t e o n w h i c h t h e C o m p a n y ’ s c o n t r o l c e a s e d . e q u i t y i n s t r u m e n t s i s s u e da n dl i a b i l i t i e s i n c u r r e do r a s s u m e da t t h e d a t e o f e x c h a n g e .b a l a n c e sa n du n r e a l i z e dg a i n so nt r a n s a c t i o n sb e t w e e ng r o u p c o m p a n i e sa r ee l i m i n a t e d . I n t e r c o m p a n yt r a n s a c t i o n s . t h e C o m p a n y h a s n o wa d i r e c t o w n e r s h i p i n t e r e s t i n t h e s u g a r r e l a t e d o p e r a t i n g s u b s i d i a r i e s w h i c h w e r e p r e v i o u s l y o w n e d b y C A D P G C . T h e C o m p a n y h a s c o n t r o l o n R P Cs i n c e i t h a s t h e p o w e r t o c a s t t h e m a j o r i t y o f v o t e s a t t h e B O D ’ s m e e t i n g s a n d t h e p o w e r t o g o v e r n t h e f i n a n c i a l a n d r e p o r t i n g p o l i c i e s o f R P C . 2 0 0 8 a n d h a v e n o t y e t s t a r t e d c o m m e r c i a l o p e r a t i o n s . 2 0 0 9 a n d h a s n o t y e t s t a r t e d c o m m e r c i a l o p e r a t i o n s . T h e e x c e s s o f t h e c o s t o f a c q u i s i t i o no v e r t h ef a i r v a l u eo f t h eC o m p a n y ’ s s h a r eo f t h ei d e n t i f i a b l en e t a s s e t s a c q u i r e di s r e c o r d e d a s g o o d w i l l . a r e m a d e t o e n s u r e c o n s i s t e n c y w i t h t h e p o l i c i e s a d o p t e d b y t h e G r o u p . 0 0 5 0 . I d e n t i f i a b l ea s s e t sa c q u i r e da n dl i a b i l i t i e sa n dc o n t i n g e n t l i a b i l i t i e sa s s u m e di nab u s i n e s sc o m b i n a t i o na r em e a s u r e di n i t i a l l ya t t h e i r f a i rv a l u e sa t t h e a c q u i s i t i o n d a t e . 2 0 1 0 b u t h a s n o t y e t s t a r t e d c o m m e r c i a l o p e r a t i o n s . C I A I w a s i n c o r p o r a t e d o n A u g u s t 1 9 .t h ed i f f e r e n c ei sr e c o g n i z e dd i r e c t l yi nt h e c o n s o l i d a t e d s t a t e m e n t o f i n c o m e .U n r e a l i z e dl o s s e sa r ea l s oe l i m i n a t e db u ta r ec o n s i d e r e da sa n i m p a i r m e n t i n d i c a t o r o f t h e a s s e t s t r a n s f e r r e d . T o t a l c o m p r e h e n s i v e i n c o m e i s a t t r i b u t e d t ot h ep o r t i o nh e l db yt h eG r o u pa n dt ot h en o n c o n t r o l l i n gi n t e r e s t se v e ni f t h i sr e s u l t si nt h e n o n c o n t r o l l i n g i n t e r e s t s h a v i n g a d e f i c i t b a l a n c e . d i r e c t l yo r i n d i r e c t l y . 0 0 – 1 0 0 . a n d a r e p r e s e n t e ds e p a r a t e l yi n t h e c o n s o l i d a t e d s t a t e m e n t o f i n c o m e a n d w i t h i n t h e e q u i t y s e c t i o n o f t h e c o n s o l i d a t e d b a l a n c e s h e e t a n d c o n s o l i d a t e d s t a t e m e n t o f c h a n g e s i n e q u i t y . C P S I a n d R P Cw e r e i n c o r p o r a t e d o n J u l y 1 7 . 0 0 N A V I ( 3 ) R o x o l B i o e n e r g y C o r p o r a t i o n ( R B C ) ( 4 ) C A D PP o r t S e r v i c e s . ( b )w h o s eo p e r a t i n gr e s u l t sa r er e g u l a r l y r e v i e w e db yt h eG r o u p ’ ss e n i o rm a n a g e m e n t .T h e d i f f e r e n c e i nt h e a m o u n t r e c o g n i z e d a n dt h ef a i r v a l u eo f t h ec o n s i d e r a t i o ng i v e n . t h eC o m p a n ys h a l l a c c o u n t f o r t h e t r a n s a c t i o n s i m i l a r t o a p o o l i n go f i n t e r e s t s . w h e n a s u b s i d i a r y i s d i s p o s e d i n a c o m m o n c o n t r o l t r a n s a c t i o n . s h a l l b e c o n s i d e r e d .U n r e a l i z e dl o s s e sa r ea l s oe l i m i n a t e du n l e s st h e t r a n s a c t i o n p r o v i d e s e v i d e n c e o f a ni m p a i r m e n t o f t h e a s s e t t r a n s f e r r e d . . i f t h e t r a n s a c t i o n w a sd e e m e dt oh a v es u b s t a n c ef r o mt h ep e r s p e c t i v eo ft h er e p o r t i n ge n t i t y . T h eG r o u p ’ ss h a r eo fi t sa s s o c i a t e ’ sp o s t a c q u i s i t i o np r o f i t so rl o s s e si sr e c o g n i z e di nt h e c o n s o l i d a t e ds t a t e m e n t o fi n c o m e . F o rp u r p o s e so fm a n a g e m e n tr e p o r t i n g . w h e r e n e c e s s a r y . * S G V M C 3 1 0 9 6 2 * . U n r e a l i z e dg a i n s o n t r a n s a c t i o n s b e t w e e nt h e G r o u pa n di t s a s s o c i a t e a r e e l i m i n a t e d t ot h e e x t e n t o ft h eG r o u p ’ si n t e r e s ti nt h ea s s o c i a t e . I nc a s e sw h e r et h eb u s i n e s sc o m b i n a t i o nh a s n os u b s t a n c e . A d j u s t m e n t s .I nd e t e r m i n i n g w h e t h e r t h eb u s i n e s sc o m b i n a t i o nh a s s u b s t a n c e . w i t he a c hc o m p a n y r e p r e s e n t i n g a s t r a t e g i c b u s i n e s s s e g m e n t . a n d( c ) f o r w h i c h d i s c r e t e f i n a n c i a l i n f o r m a t i o n i s a v a i l a b l e . C o m p a r a t i v e ss h a l l b er e s t a t e dt oi n c l u d eb a l a n c e sa n dt r a n s a c t i o n sa si f t h ee n t i t i e sh a db e e n a c q u i r e da t t h eb e g i n n i n go f t h ee a r l i e s t p e r i o dp r e s e n t e da s i f t h ec o m p a n i e sh a da l w a y s b e e n c o m b i n e d .Wh e nt h e G r o u p ’ s s h a r e o f l o s s e s i na na s s o c i a t e e q u a l s o r e x c e e d s i t s i n t e r e s t i n t h e a s s o c i a t e . F u r t h e r . t h ed i f f e r e n c ei nt h ea m o u n t r e c o g n i z e da n dt h ef a i rv a l u ec o n s i d e r a t i o n r e c e i v e d . I n v e s t m e n t i n S h a r e s o f S t o c k o f a n A s s o c i a t e A s s o c i a t e s a r e a l l e n t i t i e s o v e r w h i c h t h e G r o u p h a s s i g n i f i c a n t i n f l u e n c e b u t n o t c o n t r o l . a s e i t h e r a c o n t r i b u t i o n o r d i s t r i b u t i o n o f e q u i t y . i . e .T h e f i n a n c i a l s t a t e m e n t s o f t h e a s s o c i a t e a r e p r e p a r e df o r t h e s a m e r e p o r t i n gp e r i o do f t h e C o m p a n y .t om a k e d e c i s i o n s a b o u t r e s o u r c e s t ob e a l l o c a t e dt ot h e s e g m e n t a n da s s e s s i t s p e r f o r m a n c e . f a c t o r s s u c ha s t h eu n d e r l y i n gp u r p o s eo f t h e b u s i n e s s c o m b i n a t i o n a n d t h e i n v o l v e m e n t o f p a r t i e s o t h e r t h a n t h e c o m b i n i n g e n t i t i e s s u c h a s t h e n o n c o n t r o l l i n g i n t e r e s t .T h ec u m u l a t i v ep o s t a c q u i s i t i o nm o v e m e n t sa r ea d j u s t e da g a i n s tt h e c a r r y i n ga m o u n t o f t h ei n v e s t m e n t . i n c l u d i n g a n y o t h e r u n s e c u r e d r e c e i v a b l e s . t h e G r o u p d o e s n o t r e c o g n i z ef u r t h e r l o s s e s . i sa l s oa c c o u n t e df o ra sa ne q u i t yt r a n s a c t i o n .i t sc h i e fo p e r a t i n gd e c i s i o nm a k e r .8 C o m m o n c o n t r o l t r a n s a c t i o n s Wh e r e t h e r e a r e b u s i n e s s c o m b i n a t i o n s i nw h i c ha l l t h e c o m b i n i n ge n t i t i e s w i t h i nt h e G r o u pa r e u l t i m a t e l yc o n t r o l l e db yt h e s a m e u l t i m a t e p a r e n t b e f o r e a n da f t e r t h e b u s i n e s s c o m b i n a t i o na n d t h a t t h ec o n t r o l i sn o t t r a n s i t o r y( “ b u s i n e s sc o m b i n a t i o n su n d e rc o m m o nc o n t r o l ” ) . t h eG r o u p ’ so p e r a t i n gb u s i n e s s e sa r eo r g a n i z e da n d m a n a g e d s e p a r a t e l y o n a p e r c o m p a n y b a s i s . u n l e s si t h a si n c u r r e do b l i g a t i o n so r m a d ep a y m e n t so nb e h a l f o f t h e a s s o c i a t e . t h eG r o u p a c c o u n t s s u c h b u s i n e s s c o m b i n a t i o n s u n d e r t h e p u r c h a s e m e t h o do f a c c o u n t i n g .A sd i s c u s s e di nN o t e1 . a n di t ss h a r eo fp o s t a c q u i s i t i o nm o v e m e n t si nr e s e r v e si s r e c o g n i z e di ne q u i t y . t h eG r o u p r e c o r d e dt h ed i f f e r e n c ea s e x c e s so f c o n s i d e r a t i o no v e r c a r r y i n ga m o u n t o f d i s p o s e ds u b s i d i a r y a n d p r e s e n t e d a s s e p a r a t e c o m p o n e n t o f e q u i t y i n t h e c o n s o l i d a t e d b a l a n c e s h e e t . i s a c c o u n t e df o r a s a ne q u i t yt r a n s a c t i o n . g e n e r a l l y a c c o m p a n y i n gas h a r e h o l d i n go f b e t w e e n2 0 %a n d5 0 %o f t h ev o t i n gr i g h t s . S e g m e n t R e p o r t i n g O p e r a t i n gs e g m e n t sa r ec o m p o n e n t so f t h eG r o u p : ( a ) t h a t e n g a g ei nb u s i n e s sa c t i v i t i e sf r o m w h i c ht h e ym a ye a r nr e v e n u ea n di n c u r e x p e n s e s ( i n c l u d i n gr e v e n u e s a n de x p e n s e s r e l a t i n gt o t r a n s a c t i o n sw i t ho t h e rc o m p o n e n t so ft h eG r o u p ) .I n v e s t m e n t si n a s s o c i a t e s a r e a c c o u n t e d f o r u s i n g t h e e q u i t ym e t h o do f a c c o u n t i n g a n d a r e i n i t i a l l y r e c o g n i z e d a t c o s t .T h e a s s e t s a n dl i a b i l i t i e s o f t h e a c q u i r e de n t i t i e s a n d t h a t o f t h e G r o u pa r e r e f l e c t e da t t h e i r c a r r y i n gv a l u e s . a r e m a d e t o e n s u r e c o n s i s t e n c y w i t h t h e p o l i c i e s a d o p t e d b y t h e G r o u p . F i n a n c i a l a s s e t s a r e c l a s s i f i e d i n t o t h e f o l l o w i n g c a t e g o r i e s : a . F a i r v a l u ei sd e t e r m i n e db y r e f e r e n c et ot h et r a n s a c t i o np r i c eo r o t h e r m a r k e t p r i c e s . w h i c h a r e m a n a g e d a n d t h e i r p e r f o r m a n c ei se v a l u a t e do naf a i r v a l u eb a s i s . . e . d e p o s i t s h e l d a t c a l l w i t h b a n k s a n do t h e r s h o r t t e r mh i g h l y l i q u i d i n t e r e s t b e a r i n g f u n d p l a c e m e n t s w i t h o r i g i n a l m a t u r i t i e s o f t h r e e m o n t h s o r l e s s f r o mt h e d a t e o f a c q u i s i t i o n a n d s u b j e c t t o i n s i g n i f i c a n t r i s k i n f l u c t u a t i o n s i n v a l u e .H e l d t o m a t u r i t y i n v e s t m e n t s d .F i n a n c i a l a s s e t s a t f a i r v a l u e t h r o u g h p r o f i t o r l o s s b .F i n a n c i a l a s s e t s o r f i n a n c i a l l i a b i l i t i e s a t f a i r v a l u e t h r o u g h p r o f i t o r l o s s F i n a n c i a la s s e t so rf i n a n c i a ll i a b i l i t i e sc l a s s i f i e di nt h i sc a t e g o r ya r ef i n a n c i a la s s e t so r f i n a n c i a l l i a b i l i t i e s t h a t a r e h e l d f o r t r a d i n go r f i n a n c i a l a s s e t s a n d f i n a n c i a l l i a b i l i t i e s t h a t a r e d e s i g n a t e db ym a n a g e m e n t a s a t f a i r v a l u e t h r o u g hp r o f i t o r l o s s o ni n i t i a l r e c o g n i t i o nw h e n a n y o f t h e f o l l o w i n g c r i t e r i a a r e m e t : T h e d e s i g n a t i o ne l i m i n a t e s o r s i g n i f i c a n t l yr e d u c e s t h e i n c o n s i s t e n t t r e a t m e n t t h a t w o u l d o t h e r w i s e a r i s e f r o mm e a s u r i n gt h e a s s e t s o r l i a b i l i t i e s o r r e c o g n i z i n gg a i n s o r l o s s e s o n t h e mo n a d i f f e r e n t b a s i s . i . o r T h ea s s e t s a n dl i a b i l i t i e s a r ep a r t o f ag r o u po f f i n a n c i a l a s s e t s a n df i n a n c i a l l i a b i l i t i e s .d i s c o u n t e du s i n gt h ep r e v a i l i n gm a r k e tr a t e so fi n t e r e s tf o rs i m i l a r i n s t r u m e n t s w i t h s i m i l a r m a t u r i t i e s .L o a n s a n d r e c e i v a b l e s c . e x c e p t f o r f i n a n c i a l i n s t r u m e n t sm e a s u r e da t f a i r v a l u et h r o u g hp r o f i t o r l o s s .A v a i l a b l e f o r s a l e f i n a n c i a l a s s e t s F i n a n c i a l l i a b i l i t i e s .F i n a n c i a l l i a b i l i t i e s a t f a i r v a l u e t h r o u g h p r o f i t o r l o s s b . t h ed a t et h a t t h e G r o u pc o m m i t s t op u r c h a s e t h e a s s e t .9 C a s h a n d C a s h E q u i v a l e n t s C a s h a n d c a s he q u i v a l e n t s i n c l u d e c a s ho n h a n d . F i n a n c i a l i n s t r u m e n t s a r e c l a s s i f i e d a s l i a b i l i t i e s o r e q u i t yi n a c c o r d a n c e w i t h t h e s u b s t a n c e o f t h e c o n t r a c t u a l a r r a n g e m e n t . n e t o f a n y r e l a t e di n c o m e t a xb e n e f i t s . a . w h e r e a l l o w e d a n d a p p r o p r i a t e .A l l r e g u l a rw a y p u r c h a s e sa n ds a l e so f f i n a n c i a l a s s e t sa r er e c o g n i z e do nt h et r a d ed a t e .R e g u l a r w a yp u r c h a s e s o r s a l e s a r e p u r c h a s e s o r s a l e s o f f i n a n c i a l a s s e t st h a t r e q u i r ed e l i v e r yo ft h ea s s e t sw i t h i nt h ep e r i o dg e n e r a l l ye s t a b l i s h e db y r e g u l a t i o n o r c o n v e n t i o n i n t h e m a r k e t p l a c e . a r e c l a s s i f i e d i n t o t h e f o l l o w i n g c a t e g o r i e s : a .F i n a n c i a l i n s t r u m e n t s a r e o f f s e t w h e nt h e r e i s al e g a l l ye n f o r c e a b l e r i g h t t oo f f s e t a n di n t e n t i o nt os e t t l ee i t h e r o nan e t b a s i s o r t or e a l i z et h ea s s e t a n ds e t t l et h e l i a b i l i t y s i m u l t a n e o u s l y . F i n a n c i a l a s s e t s a n d f i n a n c i a l l i a b i l i t i e s a r e r e c o g n i z e d i n i t i a l l y a t f a i r v a l u e .I n t e r e s t .O t h e r f i n a n c i a l l i a b i l i t i e s T h e c l a s s i f i c a t i o no f f i n a n c i a l i n s t r u m e n t s d e p e n d s o nt h e p u r p o s e f o r w h i c ht h e yw e r e a c q u i r e d a n d w h e t h e r t h e y a r e q u o t e d i n a n a c t i v e m a r k e t . T h e G r o u p d e t e r m i n e s t h e c l a s s i f i c a t i o n a t i n i t i a l r e c o g n i t i o n a n d . F i n a n c i a l A s s e t s a n d F i n a n c i a l L i a b i l i t i e s C l a s s i f i c a t i o n a n d r e c o g n i t i o n T h eG r o u pr e c o g n i z e s af i n a n c i a l a s s e t o r af i n a n c i a l l i a b i l i t yi nt h ec o n s o l i d a t e db a l a n c e s h e e t w h e ni tb e c o m e sap a r t yt ot h ec o n t r a c t u a l p r o v i s i o n so ft h ei n s t r u m e n t .I f s u c hm a r k e t p r i c e s a r en o t r e a d i l y d e t e r m i n a b l e . d i v i d e n d s . a r er e p o r t e da se x p e n s eo r i n c o m e . o r b o t h f i n a n c i a l a s s e t s a n d f i n a n c i a l l i a b i l i t i e s . r e s p e c t i v e l y . T r a n s a c t i o n c o s t s a r e i n c l u d e di nt h ei n i t i a l m e a s u r e m e n t o fa l l f i n a n c i a l a s s e t sa n df i n a n c i a l l i a b i l i t i e s . g a i n s a n d l o s s e s r e l a t i n g t o a f i n a n c i a l i n s t r u m e n t o r ac o m p o n e n t t h a t i saf i n a n c i a l l i a b i l i t y . r e e v a l u a t e s t h i s c l a s s i f i c a t i o n a t e v e r y r e p o r t i n g d a t e . t h ef a i rv a l u eo ft h ec o n s i d e r a t i o ni se s t i m a t e da st h es u mo fa l l f u t u r ec a s h p a y m e n t so rr e c e i p t s . i na c c o r d a n c ew i t had o c u m e n t e dr i s k m a n a g e m e n t o r i n v e s t m e n t s t r a t e g y . o r * S G V M C 3 1 0 9 6 2 * . o n t h e o t h e r h a n d .D i s t r i b u t i o n st o h o l d e r so f f i n a n c i a l i n s t r u m e n t sc l a s s i f i e da se q u i t ya r ec h a r g e dd i r e c t l yt oe q u i t y . 1 0 T h e f i n a n c i a l i n s t r u m e n t c o n t a i n s a n e m b e d d e d d e r i v a t i v e . w h i l e d i v i d e n di n c o m e i s r e c o r d e di no t h e r i n c o m e a c c o r d i n gt ot h e t e r m s o f t h e c o n t r a c t . F i n a n c i a l a s s e t s a r e c l a s s i f i e d a s h e l d f o r t r a d i n g i f t h e s e a r e a c q u i r e d f o r t h e p u r p o s e o f s e l l i n g i n t h e n e a r t e r m . t h e G r o u ph a s e m b e d d e dp r e p a y m e n t o p t i o no ni t s l o n g t e r m b o r r o w i n g s . 2 0 1 0a n d2 0 0 9 .L o a n sa n dr e c e i v a b l e sa r ei n c l u d e di n c u r r e n t a s s e t si f m a t u r i t yi sw i t h i n1 2m o n t h sf r o mt h ee n do f r e p o r t i n gp e r i o d . b .G a i n s a n dl o s s e s a r e r e c o g n i z e di nt h e c o n s o l i d a t e ds t a t e m e n to fi n c o m ew h e nt h el o a n sa n dr e c e i v a b l e sa r ed e r e c o g n i z e da n d i m p a i r e d . T h e G r o u ph a s n o t d e s i g n a t e d a n y f i n a n c i a l a s s e t o r f i n a n c i a l l i a b i l i t y a s a t f a i r v a l u e t h r o u g h p r o f i t o r l o s s a s o f J u n e 3 0 . t h e v a l u e o f w h i c h i s i m m a t e r i a l .I n t e r e s ti n c u r r e di sr e c o r d e da si n t e r e s t e x p e n s e . E m b e d d e d d e r i v a t i v e s t h a t a r e b i f u r c a t e d f r o mt h e h o s t c o n t r a c t s a r e a c c o u n t e d f o r a s f i n a n c i a l a s s e t s o r f i n a n c i a l l i a b i l i t i e s a t f a i r v a l u e t h r o u g h p r o f i t o r l o s s . i n c l u d i n g s e p a r a t e d e m b e d d e d d e r i v a t i v e s .S u b s e q u e n t c h a n g e s i n f a i r v a l u e a r e r e c o r d e d i n t h e c o n s o l i d a t e ds t a t e m e n to fi n c o m e . A s o f J u n e 3 0 . u n l e s s t h e e m b e d d e d d e r i v a t i v e d o e s n o t s i g n i f i c a n t l y m o d i f y t h e c a s h f l o w s o r i t i s c l e a r . t h e s e a r e c l a s s i f i e d a s n o n c u r r e n t a s s e t s .A m o r t i z a t i o ni s d e t e r m i n e du s i n gt h ee f f e c t i v e i n t e r e s t r a t e m e t h o d . T h eG r o u pa s s e s s e sw h e t h e re m b e d d e dd e r i v a t i v e sa r er e q u i r e dt ob es e p a r a t e df r o mh o s t c o n t r a c t w h e nt h e G r o u pf i r s t b e c o m e s ap a r t yt ot h e c o n t r a c t . 2 0 1 0 a n d 2 0 0 9 . t h a t i t w o u l d n o t b e s e p a r a t e l y r e c o r d e d .L o a n s a n d r e c e i v a b l e s L o a n s a n d r e c e i v a b l e s a r e n o n d e r i v a t i v e f i n a n c i a l a s s e t s w i t h f i x e d o r d e t e r m i n a b l e p a y m e n t s t h a t a r e n o t q u o t e d i n a n a c t i v e m a r k e t . * S G V M C 3 1 0 9 6 2 * . a n d T h e h y b r i d o r c o m b i n e d i n s t r u m e n t i s n o t r e c o g n i z e d a t f a i r v a l u e t h r o u g h p r o f i t o r l o s s .C h a n g e s i n t h e f a i r v a l u e s a r e i n c l u d e d i n t h e c o n s o l i d a t e d s t a t e m e n t o f i n c o m e . o t h e r w i s e .D e r i v a t i v e s .I n t e r e s te a r n e di sr e c o r d e da si n t e r e s ti n c o m e . w i t h l i t t l e o r n o a n a l y s i s . As e p a r a t ei n s t r u m e n t w i t ht h es a m et e r m s a s t h ee m b e d d e dd e r i v a t i v ew o u l dm e e t t h e d e f i n i t i o n o f a d e r i v a t i v e . a sw e l l a st h r o u g ha m o r t i z a t i o np r o c e s s .L o a n sa n d r e c e i v a b l e s a r e c a r r i e da t a m o r t i z e dc o s t i nt h ec o n s o l i d a t e db a l a n c e s h e e t . T h e y a r i s e w h e n t h e G r o u p p r o v i d e s m o n e y . a r e a l s o c l a s s i f i e d a s h e l d f o r t r a d i n g u n l e s s t h e y a r e d e s i g n a t e d a s e f f e c t i v e h e d g i n g i n s t r u m e n t s . T r a d e r e c e i v a b l e s w i t ha v e r a g e c r e d i t t e r m s o f 3 0d a y s a r e r e c o g n i z e d a n dc a r r i e da t o r i g i n a l i n v o i c e a m o u n t l e s s a n y a l l o w a n c e f o r i m p a i r m e n t . g o o d s o r s e r v i c e sd i r e c t l yt oad e b t o rw i t hn oi n t e n t i o no ft r a d i n gt h er e c e i v a b l e s .I t i s s e p a r a t e df r o mt h eh o s t f i n a n c i a l o r n o n f i n a n c i a l c o n t r a c t i f a l l t h e f o l l o w i n g c o n d i t i o n s a r e m e t : T h e e c o n o m i c c h a r a c t e r i s t i c s a n d r i s k s o f t h e e m b e d d e dd e r i v a t i v e a r e n o t c l o s e l y r e l a t e d t o t h e e c o n o m i c c h a r a c t e r i s t i c o f t h e h o s t c o n t r a c t .R e a s s e s s m e n t o n l yo c c u r s i f t h e r ei sc h a n g ei nt h et e r m so f t h ec o n t r a c t t h a t s i g n i f i c a n t l ym o d i f i e st h ec a s hf l o w st h a t w o u l d o t h e r w i s e b e r e q u i r e d . F i n a n c i a l a s s e t s a n d f i n a n c i a l l i a b i l i t i e s a t f a i r v a l u e t h r o u g h p r o f i t o r l o s s a r e r e c o r d e di n t h e c o n s o l i d a t e d b a l a n c e s h e e t a t f a i r v a l u e . o r w h e n t h er i g h to ft h ep a y m e n th a sb e e ne s t a b l i s h e d . E m b e d d e d D e r i v a t i v e s A ne m b e d d e dd e r i v a t i v ei sa c o m p o n e n to fa c o m b i n e di n s t r u m e n tt h a ti n c l u d e sa n o n d e r i v a t i v e h o s t c o n t r a c t w i t h t h e e f f e c t t h a t s o m e o r a l l o f t h e c a s h f l o w s o f t h e c o m b i n e d i n s t r u m e n t v a r yi naw a ys i m i l a r t oas t a n d a l o n ed e r i v a t i v e . T h e s ec h a n g e si nf a i r v a l u e sa r er e c o g n i z e di n e q u i t y u n t i l t h e i n v e s t m e n t i s s o l d . t r a d e r e c e i v a b l e s . e . a d v a n c e s t oe m p l o y e e s a n do t h e r r e c e i v a b l e s a s o f J u n e 3 0 .a n yd i f f e r e n c eb e t w e e nt h ep r o c e e d s( n e to f t r a n s a c t i o nc o s t s ) a n dt h er e d e m p t i o nv a l u ei sr e c o g n i z e di nt h ec o n s o l i d a t e ds t a t e m e n t o f i n c o m e o v e r t h e p e r i o d o f t h e b o r r o w i n g s u s i n g t h e e f f e c t i v e i n t e r e s t r a t e m e t h o d . g .s h o r ta n dl o n g t e r mb o r r o w i n g s . c . o r o t h e r w i s e d i s p o s e do f o r u n t i l t h e i n v e s t m e n t i s d e t e r m i n e d t o b e i m p a i r e d . n e t o f t r a n s a c t i o n c o s t s i n c u r r e d . d . * S G V M C 3 1 0 9 6 2 * . t h e s e a r e d e e m e d t o b e d i s p o s e do f o n a f i r s t i n f i r s t o u t b a s i s . g . f r o mr e p o r t e de a r n i n g s . B o r r o w i n g s a r es u b s e q u e n t l ys t a t e da ta m o r t i z e dc o s t .I n t e r e s t e a r n e do r p a i d o n t h e i n v e s t m e n t s i s r e p o r t e d a s i n t e r e s t i n c o m e o r e x p e n s e u s i n gt h e e f f e c t i v e i n t e r e s t r a t e m e t h o d . . 2 0 1 0 a n d 2 0 0 9 . T h e yi n c l u d ee q u i t yi n v e s t m e n t s . B o r r o w i n g s a r e r e c o g n i z e d i n i t i a l l y a t f a i r v a l u e .D i v i d e n d s e a r n e do n i n v e s t m e n t s a r e r e c o g n i z e d i n t h e c o n s o l i d a t e d s t a t e m e n t o f i n c o m e w h e n t h e r i g h t o f p a y m e n t h a sb e e ne s t a b l i s h e d . c o l l e c t e d .T h e s ef i n a n c i a l a s s e t sa r ec l a s s i f i e da sn o n c u r r e n t a s s e t su n l e s st h e i n t e n t i o n i s t o d i s p o s e s u c h a s s e t s w i t h i n 1 2 m o n t h s f r o mt h e e n d o f r e p o r t i n g p e r i o d .d i v i d e n d sp a y a b l e ) a c t i v i t i e s . o t h e r w i s e .1 1 C l a s s i f i e da s l o a n s a n dr e c e i v a b l e s a r e t h e G r o u p ’ s c a s hi nb a n k s a n dc a s he q u i v a l e n t s . a t w h i c h t i m e t h e c u m u l a t i v e g a i n o r l o s s p r e v i o u s l y r e p o r t e d i n e q u i t y a r e i n c l u d e d i n t h e c o n s o l i d a t e d s t a t e m e n t o f i n c o m e . h e l d t o m a t u r i t yi n v e s t m e n t s a r es u b s e q u e n t l yc a r r i e da t a m o r t i z e dc o s t i nt h ec o n s o l i d a t e d b a l a n c e s h e e t . a c c o u n t s p a y a b l e a n d a c c r u e de x p e n s e s ) a n df i n a n c i n g ( e . a n dm a yb es o l di nr e s p o n s et ol i q u i d i t yr e q u i r e m e n t so rc h a n g e si nm a r k e t c o n d i t i o n s . Wh e r e t h e G r o u p h o l d s m o r e t h a n o n e i n v e s t m e n t i n t h e s a m e s e c u r i t y . T h e u n r e a l i z e dg a i n s a n dl o s s e s a r i s i n gf r o mt h e f a i r v a l u a t i o no f a v a i l a b l e f o r s a l ef i n a n c i a l a s s e t s . a d v a n c e s t or e l a t e dp a r t i e s . T h e G r o u ph a s n o t d e s i g n a t e da n yf i n a n c i a l a s s e t s a s a v a i l a b l e f o r s a l e a s o f J u n e 3 0 .A s s e t s u n d e r t h i s c a t e g o r y a r e c l a s s i f i e d a s c u r r e n t a s s e t s i f m a t u r i t y i s w i t h i n 1 2 m o n t h s f r o mt h e e n d o f r e p o r t i n g p e r i o d .O t h e r f i n a n c i a l l i a b i l i t i e s O t h e r f i n a n c i a l l i a b i l i t i e s p e r t a i n t o f i n a n c i a l l i a b i l i t i e s t h a t a r e n o t h e l d f o r t r a d i n g a n d a r e n o t d e s i g n a t e d a t f a i r v a l u e t h r o u g h p r o f i t o r l o s s u p o n t h e i n c e p t i o n o f t h e l i a b i l i t y .T h e y a r e p u r c h a s e da n dh e l d i n d e f i n i t e l y .A m o r t i z a t i o ni s d e t e r m i n e du s i n gt h ee f f e c t i v ei n t e r e s t r a t em e t h o d . e x c e p t f o r t h ef o r e i g ne x c h a n g ef l u c t u a t i o n so na v a i l a b l e f o r s a l ed e b t s e c u r i t i e s a n dt h e r e l a t e de f f e c t i v e i n t e r e s t .A v a i l a b l e f o r s a l e f i n a n c i a l a s s e t s A v a i l a b l e f o r s a l e f i n a n c i a l a s s e t s a r e n o n d e r i v a t i v e f i n a n c i a l a s s e t s t h a t a r e e i t h e r d e s i g n a t e d i n t h i s c a t e g o r yo r n o t c l a s s i f i e di na n yo f t h e o t h e r c a t e g o r i e s .m o n e ym a r k e tp a p e r sa n do t h e rd e b t i n s t r u m e n t s .A f t e r i n i t i a l m e a s u r e m e n t . a n da r e r e c o g n i z e di nt h e s t a t e m e n t o f c o m p r e h e n s i v e i n c o m e a n da r e r e p o r t e di nt h e e q u i t y s e c t i o no f t h ec o n s o l i d a t e db a l a n c es h e e t . T h e s e i n c l u d e l i a b i l i t i e s a r i s i n g f r o mo p e r a t i n g ( e . 2 0 1 0a n d 2 0 0 9 . 2 0 1 0 a n d 2 0 0 9 ( s e e N o t e 2 6 ) . . n e t o f t a x .a d v a n c e st or e l a t e dp a r t i e s .t h ee n t i r ec a t e g o r yw o u l db et a i n t e da n dr e c l a s s i f i e da s a v a i l a b l e f o r s a l e i n v e s t m e n t s f o r a t l e a s t t h e t w of i n a n c i a l y e a r s .H e l d t o m a t u r i t y i n v e s t m e n t s H e l d t o m a t u r i t yi n v e s t m e n t sa r eq u o t e dn o n d e r i v a t i v ef i n a n c i a la s s e t sw i t hf i x e do r d e t e r m i n a b l e p a y m e n t s a n df i x e dm a t u r i t i e s w h e r e i n t h e G r o u ph a s t h e p o s i t i v e i n t e n t i o n a n d a b i l i t y t o h o l d t h e mt o m a t u r i t y . T h e G r o u ph a s n o t d e s i g n a t e d a n y f i n a n c i a l a s s e t a s h e l d t o m a t u r i t y a s o f J u n e 3 0 . a r e e x c l u d e d . t h e s e a r e c l a s s i f i e d a s n o n c u r r e n t a s s e t s .Wh e r e t h e G r o u p s e l l s o t h e r t h a n a n i n s i g n i f i c a n t a m o u n t o f h e l d t o m a t u r i t yi n v e s t m e n t s . t h e a m o u n t o f l o s s i s m e a s u r e d a s t h e d i f f e r e n c e b e t w e e n t h e a s s e t ’ s c a r r y i n g a m o u n t a n d t h e p r e s e n t v a l u e o f e s t i m a t e d f u t u r e c a s h f l o w s ( e x c l u d i n g f u t u r e * S G V M C 3 1 0 9 6 2 * . o r ( b ) h a s n e i t h e r t r a n s f e r r e d n o r r e t a i n e d s u b s t a n t i a l l y a l l t h e r i s k s a n d r e w a r d s o f t h e a s s e t . A c c o u n t s p a y a b l e . O t h e r f i n a n c i a l l i a b i l i t i e s a r e r e c o g n i z e di n i t i a l l y a t f a i r v a l u e a n d a r e s u b s e q u e n t l y c a r r i e da t a m o r t i z e d c o s t . s u c h a n e x c h a n g e o r m o d i f i c a t i o n i s t r e a t e d a s a d e r e c o g n i t i o n o f t h e o r i g i n a l l i a b i l i t y a n d t h e r e c o g n i t i o no fan e wl i a b i l i t y . o r t h e G r o u ph a s t r a n s f e r r e di t s r i g h t s t o r e c e i v e c a s h f l o w s f r o mt h e a s s e t a n de i t h e r ( a ) h a s t r a n s f e r r e d s u b s t a n t i a l l y a l l t h e r i s k s a n d r e w a r d s o f t h e a s s e t . c a n c e l l e d o r h a s e x p i r e d . D e r e c o g n i t i o n o f F i n a n c i a l A s s e t s a n d F i n a n c i a l L i a b i l i t i e s a .F i n a n c i a l a s s e t s Af i n a n c i a l a s s e t ( o r . a n dt h ed i f f e r e n c ei nt h er e s p e c t i v ec a r r y i n ga m o u n t si s r e c o g n i z e d i n t h e c o n s o l i d a t e d s t a t e m e n t o f i n c o m e .F i n a n c i a l a s s e t s c a r r i e d a t a m o r t i z e d c o s t I f t h e r ei so b j e c t i v ee v i d e n c et h a t a ni m p a i r m e n t l o s so nl o a n sa n dr e c e i v a b l e sc a r r i e da t a m o r t i z e d c o s t h a s b e e n i n c u r r e d . a c c r u e de x p e n s e s . a p a r t o f a f i n a n c i a l a s s e t o r p a r t o f a g r o u po f s i m i l a r f i n a n c i a l a s s e t s ) i s d e r e c o g n i z e d w h e n : t h e r i g h t s t o r e c e i v e c a s h f l o w s f r o mt h e a s s e t h a v e e x p i r e d .T h e s ea r em e a s u r e da t a m o r t i z e dc o s t . t h eG r o u pr e t a i n st h er i g h t t or e c e i v ec a s hf l o w sf r o mt h ea s s e t .t h ea s s e ti sr e c o g n i z e dt ot h ee x t e n to ft h eG r o u p ’ sc o n t i n u i n g i n v o l v e m e n t i nt h e a s s e t . Wh e r e t h e G r o u ph a s t r a n s f e r r e d i t s r i g h t s t o r e c e i v e c a s h f l o w s f r o ma n a s s e t a n d h a s n e i t h e r t r a n s f e r r e dn o r r e t a i n e ds u b s t a n t i a l l ya l l t h er i s k sa n dr e w a r d so f t h ea s s e t n o r t r a n s f e r r e d c o n t r o lo ft h ea s s e t . I m p a i r m e n t o f F i n a n c i a l A s s e t s T h eG r o u pa s s e s s e s a t t h ee n do f e a c hr e p o r t i n gp e r i o dw h e t h e r af i n a n c i a l a s s e t o r ag r o u po f f i n a n c i a l a s s e t s i s i m p a i r e d . o r t h e t e r m s o f a ne x i s t i n gl i a b i l i t ya r e s u b s t a n t i a l l ym o d i f i e d . a . b u t h a sa s s u m e da n o b l i g a t i o nt op a yt h e mi nf u l l w i t h o u t m a t e r i a l d e l a yt oat h i r dp a r t yu n d e ra‘ p a s s t h r o u g h ’ a r r a n g e m e n t . w h e r e a p p l i c a b l e . b . n o r m a l l y e q u a l t o n o m i n a l a m o u n t . d i v i d e n d s p a y a b l e a n do t h e r l i a b i l i t i e s a r e r e c o g n i z e d i n t h ep e r i o di nw h i c ht h er e l a t e dm o n e y . b u t h a s t r a n s f e r r e d c o n t r o l o f t h e a s s e t . t a k i n g i n t o a c c o u n t t h e i m p a c t o f a p p l y i n g t h e e f f e c t i v e i n t e r e s t r a t e m e t h o d o f a m o r t i z a t i o n ( o r a c c r e t i o n ) f o r a n y r e l a t e d p r e m i u m( o r d i s c o u n t ) a n d a n y d i r e c t l y a t t r i b u t a b l e t r a n s a c t i o n c o s t s .F i n a n c i a l l i a b i l i t i e s Af i n a n c i a l l i a b i l i t yi sd e r e c o g n i z e dw h e nt h eo b l i g a t i o nu n d e r t h el i a b i l i t yi sd i s c h a r g e d . Wh e r ea ne x i s t i n gf i n a n c i a ll i a b i l i t yi sr e p l a c e db ya n o t h e rf r o mt h es a m el e n d e ro n s u b s t a n t i a l l yd i f f e r e n t t e r m s . g o o d so rs e r v i c e sa r er e c e i v e do rw h e nal e g a l l y e n f o r c e a b l ec l a i ma g a i n s t t h eG r o u pi se s t a b l i s h e d .C o n t i n u i n gi n v o l v e m e n t t h a t t a k e s t h e f o r mo f a g u a r a n t e e o f o v e r t h e t r a n s f e r r e d a s s e t i s m e a s u r e d a t t h e l o w e r o f o r i g i n a l c a r r y i n g a m o u n t o f t h e a s s e t a n d t h e m a x i m u ma m o u n t o f c o n s i d e r a t i o n t h a t t h e G r o u p c o u l d b e r e q u i r e d t o p a y .1 2 B o r r o w i n g s a r e c l a s s i f i e da s c u r r e n t l i a b i l i t i e s u n l e s s t h e G r o u ph a s a nu n c o n d i t i o n a l r i g h t t o d e f e r s e t t l e m e n t o f t h e l i a b i l i t y f o r a t l e a s t 1 2 m o n t h s a f t e r t h e e n d o f r e p o r t i n g p e r i o d . t h ep r e v i o u s l y r e c o g n i z e di m p a i r m e n t l o s si s r e v e r s e d . . i nas u b s e q u e n t p e r i o d . T h e a m o u n t o f l o s s . t h e i m p a i r m e n t l o s s i s r e v e r s e d t h r o u g h i n c o m e .T h ei m p a i r m e n t a s s e s s m e n t i sp e r f o r m e da t t h ee n do fe a c h r e p o r t i n g p e r i o d . a b r e a c ho f c o n t r a c t . o r a d e r i v a t i v e a s s e t t h a t i s l i n k e dt oa n dm u s t b e s e t t l e db yd e l i v e r yo f s u c ha nu n q u o t e de q u i t yi n s t r u m e n t h a s b e e ni n c u r r e d . b u t n o t l i m i t e dt o . l e s s a n y i m p a i r m e n t l o s s o n t h a t f i n a n c i a l a s s e t p r e v i o u s l y r e c o g n i z e d i n t h e c o n s o l i d a t e d s t a t e m e n t o f i n c o m e i s r e m o v e d f r o me q u i t y a n d r e c o g n i z e d i n c o n s o l i d a t e d s t a t e m e n t o f i n c o m e .1 3 c r e d i t l o s s e s t h a t h a v e n o t b e e ni n c u r r e d ) d i s c o u n t e d a t t h e f i n a n c i a l a s s e t ’ s o r i g i n a l e f f e c t i v e i n t e r e s t r a t e( i .I n c r e a s e si nf a i r v a l u e a f t e r i m p a i r m e n t a r e r e c o g n i z e d d i r e c t l y i n t h e c o n s o l i d a t e d s t a t e m e n t o f c o m p r e h e n s i v e i n c o m e a n d p r e s e n t e d i n t h e c o n s o l i d a t e d s t a t e m e n t o f c h a n g e s i n e q u i t y .A v a i l a b l e f o r s a l e f i n a n c i a l a s s e t s I nt h e c a s e o f e q u i t yi n v e s t m e n t s c l a s s i f i e da s a v a i l a b l e f o r s a l e f i n a n c i a l a s s e t s .F u t u r e i n t e r e s t i n c o m ei s b a s e do nt h er e d u c e dc a r r y i n ga m o u n t a n di s a c c r u e db a s e do nt h er a t eo f i n t e r e s t u s e dt o d i s c o u n t c a s h f l o w s f o r t h e p u r p o s e o f m e a s u r i n g i m p a i r m e n t l o s s . c . T h ec a r r y i n g a m o u n t o f t h e a s s e t s h a l l b e r e d u c e d t h r o u g h t h e u s e o f a n a l l o w a n c e a c c o u n t . t o t h e e x t e n t t h a t t h e c a r r y i n g v a l u e o f t h e a s s e t d o e s n o t e x c e e d i t s a m o r t i z e d c o s t a t t h e r e v e r s a l d a t e . t h ee f f e c t i v ei n t e r e s t r a t ec o m p u t e da t i n i t i a l r e c o g n i t i o n ) .A s s e t st h a ta r ei n d i v i d u a l l ya s s e s s e df o r i m p a i r m e n t a n df o r w h i c ha ni m p a i r m e n t l o s s i s r e c o g n i z e da r en o t i n c l u d e di nac o l l e c t i v e a s s e s s m e n t o fi m p a i r m e n t . L o a n s a n dr e c e i v a b l e s . i f a n y . a r e w r i t t e no f f w h e nt h e r e i s n o r e a l i s t i c p r o s p e c t o f f u t u r e r e c o v e r ya n da l l c o l l a t e r a l h a s b e e nr e a l i z e d . i s r e c o g n i z e d i n t h e c o n s o l i d a t e d s t a t e m e n t o f i n c o m e . F o r t h e p u r p o s e o f a c o l l e c t i v e e v a l u a t i o n o f i m p a i r m e n t .I f . i n s u b s e q u e n t y e a r . p a y m e n t h i s t o r y . w h e t h e r s i g n i f i c a n t o r n o t . T h eG r o u pf i r s t a s s e s s e sw h e t h e ro b j e c t i v ee v i d e n c eo f i m p a i r m e n t e x i s t si n d i v i d u a l l yf o r f i n a n c i a l a s s e t s t h a t a r e i n d i v i d u a l l ys i g n i f i c a n t . e . i m p a i r m e n t w o u l di n c l u d eas i g n i f i c a n t o r p r o l o n g e dd e c l i n ei nt h ef a i r v a l u eo f t h ei n v e s t m e n t s b e l o w t h e i r c o s t .F i n a n c i a l a s s e t s c a r r i e d a t c o s t I f t h e r e i s a n o b j e c t i v e e v i d e n c e t h a t a n i m p a i r m e n t l o s s o f a n u n q u o t e d e q u i t y i n s t r u m e n t t h a t i s n o t c a r r i e da t f a i r v a l u e b e c a u s e i t s f a i r v a l u e c a n n o t b e r e l i a b l ym e a s u r e d .A n ys u b s e q u e n t r e v e r s a l o f a ni m p a i r m e n t l o s si s r e c o g n i z e d i n t h e c o n s o l i d a t e d s t a t e m e n t o f i n c o m e . a n di n d i v i d u a l l yo r c o l l e c t i v e l yf o r f i n a n c i a l a s s e t s t h a t a r e n o t i n d i v i d u a l l ys i g n i f i c a n t . p a s t d u e s t a t u s a n d t e r m . t h e a m o u n t o f t h el o s s i s m e a s u r e da s t h e d i f f e r e n c e b e t w e e nt h e a s s e t ’ s c a r r y i n g a m o u n t a n d t h e p r e s e n t v a l u e o f e s t i m a t e d f u t u r e c a s h f l o w s d i s c o u n t e d a t t h e c u r r e n t m a r k e t r a t e o f r e t u r n f o r a s i m i l a r f i n a n c i a l a s s e t . t h e a s s e t i s i n c l u d e di n t h e g r o u po f f i n a n c i a l a s s e t s w i t h s i m i l a r c r e d i t r i s k a n d c h a r a c t e r i s t i c s a n d t h a t g r o u p o f f i n a n c i a l a s s e t si sc o l l e c t i v e l ya s s e s s e df o ri m p a i r m e n t . O b j e c t i v ee v i d e n c ei n c l u d e s o b s e r v a b l ed a t at h a t c o m e s t ot h e a t t e n t i o no f t h e G r o u pa b o u t l o s s e v e n t s s u c ha s .t h ea m o u n to ft h ei m p a i r m e n tl o s sd e c r e a s e sa n dt h ed e c r e a s ec a nb er e l a t e d o b j e c t i v e l yt oa ne v e n to c c u r r i n ga f t e rt h ei m p a i r m e n tw a sr e c o g n i z e d . * S G V M C 3 1 0 9 6 2 * . I f i t i s d e t e r m i n e d t h a t n o o b j e c t i v e e v i d e n c e o f i m p a i r m e n t e x i s t s f o r a n i n d i v i d u a l l y a s s e s s e d f i n a n c i a l a s s e t .I f . s u c ha s a d e f a u l t o r d e l i n q u e n c y i ni n t e r e s t o r p r i n c i p a l p a y m e n t s .Wh e r e t h e r e i s e v i d e n c e o f i m p a i r m e n t l o s s . p r o b a b i l i t yt h a t t h e b o r r o w e r w i l l e n t e r b a n k r u p t c yo r o t h e r f i n a n c i a l r e o r g a n i z a t i o n . f i n a n c i a l a s s e t s a r e g r o u p e d o n t h e b a s i s o f s u c h c r e d i t r i s k c h a r a c t e r i s t i c s s u c h a s c u s t o m e r t y p e . t h e f a i r v a l u e o f a d e b t i n s t r u m e n t i n c r e a s e s a n d t h e i n c r e a s e c a n b e r e l a t e d o b j e c t i v e l y t o a n e v e n t o c c u r r i n g a f t e r t h e i m p a i r m e n t l o s s w a s r e c o g n i z e d i n i n c o m e . t h e c u m u l a t i v e l o s s m e a s u r e d a s t h e d i f f e r e n c e b e t w e e n t h e a c q u i s i t i o n c o s t a n d t h e c u r r e n t f a i r v a l u e . i m p a i r m e n t i s a s s e s s e db a s e d o nt h e s a m ec r i t e r i aa s f i n a n c i a l a s s e t s c a r r i e da t a m o r t i z e dc o s t . s i g n i f i c a n t f i n a n c i a l d i f f i c u l t yo f t h e c o u n t e r p a r t y . I nt h e c a s e o f d e b t i n s t r u m e n t s c l a s s i f i e da s a v a i l a b l e f o r s a l e . b . t o g e t h e r w i t ht h e r e l a t e da l l o w a n c e . I m p a i r m e n t l o s s e s o n e q u i t y i n v e s t m e n t sa r en o t r e v e r s e dt h r o u g hc o n s o l i d a t e ds t a t e m e n t o f i n c o m e . i . Wh e nc u r r e n t b i da n d a s k i n gp r i c e s a r e n o t a v a i l a b l e .N R Vi st h ee s t i m a t e ds e l l i n gp r i c ei nt h eo r d i n a r y c o u r s e o f b u s i n e s s l e s s v a r i a b l e s e l l i n g e x p e n s e . r a w a n dr e f i n e ds u g a r a n dm o l a s s e s . t h e G r o u pd e t e r m i n e s t h e a p p r o p r i a t e m e t h o d o f r e c o g n i z i n g a D a y 1 d i f f e r e n c e a m o u n t . w h i c hi n c l u d e s f e r t i l i z i n g . t h e r e i s ac u r r e n t l ye n f o r c e a b l e l e g a l r i g h t t oo f f s e t t h e r e c o g n i z e d a m o u n t s a n dt h e r ei s a ni n t e n t i o nt os e t t l eo nan e t b a s i s . D a y 1 d i f f e r e n c e Wh e r et h et r a n s a c t i o np r i c ei nan o n a c t i v em a r k e t i sd i f f e r e n t f r o mt h ef a i r v a l u ef r o mo t h e r o b s e r v a b l e c u r r e n t m a r k e t t r a n s a c t i o n s i nt h e s a m e i n s t r u m e n t o r b a s e do nav a l u a t i o nt e c h n i q u e w h o s ev a r i a b l e s i n c l u d eo n l yd a t af r o mo b s e r v a b l em a r k e t . e . o r t or e a l i z et h ea s s e t a n ds e t t l et h e l i a b i l i t ys i m u l t a n e o u s l y .1 4 D e t e r m i n a t i o n o f f a i r v a l u e T h e f a i r v a l u e o f f i n a n c i a l i n s t r u m e n t s t r a d e di na c t i v e m a r k e t s a t t h e e n do f r e p o r t i n gp e r i o di s b a s e do n t h e i r q u o t e d m a r k e t p r i c e o r d e a l e r p r i c e q u o t a t i o n s ( b i d p r i c e f o r l o n g p o s i t i o n s a n d a s k p r i c ef o r s h o r t p o s i t i o n s ) . Ag a i no r l o s s a r i s i n go ni n i t i a l r e c o g n i t i o no f ac o n s u m a b l eb i o l o g i c a l a s s e t a t f a i r v a l u el e s s e s t i m a t e d c o s t s t o s e l l a n d f r o ma c h a n g e i n f a i r v a l u e l e s s e s t i m a t e d c o s t s t o s e l l i s r e c o g n i z e di n t h e c o n s o l i d a t e d s t a t e m e n t o f i n c o m e f o r t h e p e r i o d i n w h i c h i t a r i s e s . C o s t s t os e l l .T h i s i s n o t g e n e r a l l yt h ec a s ew i t hm a s t e r n e t t i n ga g r e e m e n t s .Mo l a s s e s i n v e n t o r yi s c a r r i e da t t h e l o w e r o f c o s t a n dN R V .F o r e a c ht r a n s a c t i o n .Ap r o v i s i o n f o r i n v e n t o r y l o s s e s i s p r o v i d e d f o r s l o wm o v i n g .T h e f a i r v a l u e h a s b e e n a r r i v e d a t b y d i s c o u n t i n g t h e p r e s e n t v a l u e o f e x p e c t e dn e t c a s h f l o w s f r o ms t a n d i n gc a n e s d i s c o u n t e da t t h e r e l e v a n t m a r k e t d e t e r m i n e dp r e t a xr a t e . F o r a l l o t h e r f i n a n c i a l i n s t r u m e n t s n o t t r a d e d i n a n a c t i v e m a r k e t . . o b s o l e t e . t h e f a i r v a l u e i s d e t e r m i n e d b y u s i n g a p p r o p r i a t e v a l u a t i o n t e c h n i q u e s . c u l t i v a t i o n a n do t h e r d i r e c t e x p e n s e s . w i t h o u t a n yd e d u c t i o nf o r t r a n s a c t i o nc o s t s .d e f e c t i v ea n dd a m a g e di n v e n t o r i e sb a s e do np h y s i c a li n s p e c t i o na n dm a n a g e m e n t e v a l u a t i o n . I n v e n t o r i e s R a wa n dr e f i n e ds u g a r i n v e n t o r yi s v a l u e da t t h el o w e r o f c o s t a n dn e t r e a l i z a b l ev a l u e ( N R V ) . C o n s u m a b l e B i o l o g i c a l A s s e t s C o n s u m a b l e b i o l o g i c a l a s s e t i s m e a s u r e do ni n i t i a l r e c o g n i t i o na n da t t h ee n do f e a c hr e p o r t i n g p e r i o da t i t sf a i rv a l u el e s se s t i m a t e dc o s t st os e l l . O f f s e t t i n g f i n a n c i a l i n s t r u m e n t s F i n a n c i a l a s s e t s a n d f i n a n c i a l l i a b i l i t i e s a r e o f f s e t a n d t h e n e t a m o u n t r e p o r t e d i n t h e c o n s o l i d a t e d b a l a n c e s h e e t i f . t h e d i f f e r e n c e b e t w e e n t h e t r a n s a c t i o n p r i c e a n dm o d e l v a l u ei so n l yr e c o g n i z e di nt h ec o n s o l i d a t e ds t a t e m e n to fi n c o m ew h e nt h ei n p u t sb e c o m e o b s e r v a b l e o r w h e nt h e i n s t r u m e n t i s d e r e c o g n i z e d . a n do n l yi f . c o s t b e i n gd e t e r m i n e du s i n gt h ew e i g h t e da v e r a g em e t h o d . t h e p r i c e o f t h e m o s t r e c e n t t r a n s a c t i o np r o v i d e s e v i d e n c e o f t h e c u r r e n t f a i r v a l u e a s l o n ga s t h e r eh a s n o t b e e nas i g n i f i c a n t c h a n g ei ne c o n o m i cc i r c u m s t a n c e s s i n c e t h e t i m e o f t h e t r a n s a c t i o n .T h e c o s t s o f m o l a s s e s i n c l u d ei t s p u r c h a s e c o s t w i t hu n i t c o s t d e t e r m i n e du s i n gm o v i n ga v e r a g em e t h o d . P r o d u c t i o nc o s t i s a l l o c a t e du s i n gt h e r e l a t i v e s a l e s v a l u e o f e a c ho f t h e j o i n t p r o d u c t s . u n l e s st h ef a i rv a l u ec a n n o t b em e a s u r e d r e l i a b l y . c o s t b e i n gd e t e r m i n e d u s i n g t h e m o v i n g a v e r a g e m e t h o d .I nc a s e s w h e r e t h e i n p u t s a r e m a d e o f d a t a w h i c h i s n o t o b s e r v a b l e . * S G V M C 3 1 0 9 6 2 * .E x p e c t e d c a s h f l o w s h a v e b e e n c o m p u t e d b y e s t i m a t i n g t h e e x p e c t e d c r o p a n d t h e s u g a r e x t r a c t i o n r a t e a n d t h e f o r e c a s t s o f s u g a r p r i c e s w h i c hw i l l p r e v a i l i nt h e c o m i n gy e a r . Ma t e r i a l s a n ds u p p l i e s i n v e n t o r yi s v a l u e da t t h e l o w e r o f c o s t a n dN R V .T h ec o s t o f a l c o h o l i n c l u d e sd i r e c t m a t e r i a l s a n dl a b o r a n dap r o p o r t i o no f m a n u f a c t u r i n go v e r h e a dc o s t s w i t hu n i t c o s t d e t e r m i n e d u s i n gt h e m o v i n ga v e r a g e m e t h o d . a r e e s t i m a t e d b a s e do n t h e y e a r l y b u d g e t s o f t h e G r o u p . t h e G r o u pr e c o g n i z e s t h ed i f f e r e n c e b e t w e e nt h e t r a n s a c t i o n p r i c e a n d f a i r v a l u e ( a D a y 1d i f f e r e n c e ) i n t h e c o n s o l i d a t e d s t a t e m e n t o f i n c o m e u n l e s s i t q u a l i f i e s f o r r e c o g n i t i o na s s o m e o t h e r t y p e o f a s s e t . a n dt h e r e l a t e df i n a n c i a l a s s e t sa n df i n a n c i a l l i a b i l i t i e sa r ep r e s e n t e dg r o s si nt h ec o n s o l i d a t e db a l a n c e s h e e t . A n a n n u a l t r a n s f e r f r o mt h e a s s e t r e v a l u a t i o n r e s e r v e t o r e t a i n e d e a r n i n g s i s m a d e f o r t h e d i f f e r e n c e b e t w e e n d e p r e c i a t i o n b a s e d o n t h e r e v a l u e d c a r r y i n g a m o u n t o f t h e a s s e t s a n d d e p r e c i a t i o n b a s e d o n t h e a s s e t s o r i g i n a l c o s t . i n c l u d i n g b o r r o w i n g c o s t s o n q u a l i f y i n g a s s e t s . e x c e p t f o r l a n dw h i c hi s s t a t e da t r e v a l u e da m o u n t l e s s a n yi m p a i r m e n t . S u b s e q u e n t c o s t s a r e i n c l u d e di n t h e a s s e t ’ s c a r r y i n g a m o u n t o r r e c o g n i z e d a s a s e p a r a t e a s s e t . 2 0 0 4 .D e p r e c i a t i o no no t h e r p r o p e r t y . a s a p p r o p r i a t e . P l a n t a n d E q u i p m e n t P r o p e r t y . n e t o f r e l a t e dd e f e r r e di n c o m e t a xl i a b i l i t y . T h e n e t a p p r a i s a l i n c r e m e n t r e s u l t i n g f r o mt h e r e v a l u a t i o n o f l a n d i s p r e s e n t e d u n d e r “ R e v a l u a t i o n i n c r e m e n t o np r o p e r t i e s ” .1 5 P r o p e r t y . T h e G r o u pu s e dt h e c a r r y i n ga m o u n t o f C A D P I ’ s d e p r e c i a b l e a s s e t s a s o f J u l y1 .T h eC o m p a n y ’ ss h a r ei nn e t a p p r a i s a l i n c r e a s e r e s u l t i n gf r o mt h e r e v a l u a t i o no f l a n do f a na s s o c i a t e i s s h o w na s “ S h a r e i nr e v a l u a t i o n i n c r e m e n t o n l a n d o f a n a s s o c i a t e ” i n t h e c o n s o l i d a t e d b a l a n c e s h e e t a n d c o n s o l i d a t e d s t a t e m e n t o f c h a n g e si ne q u i t y .A l l o t h e r r e p a i r sa n d m a i n t e n a n c e a r e c h a r g e d t o t h e s t a t e m e n t o f i n c o m e d u r i n g t h e f i n a n c i a l p e r i o d .I n c r e a s e si nt h ec a r r y i n ga m o u n t a r i s i n go nr e v a l u a t i o no f p r o p e r t i e sa r e r e c o g n i z e di nt h ec o n s o l i d a t e ds t a t e m e n t o f c o m p r e h e n s i v ei n c o m ea n dc r e d i t e dt or e v a l u a t i o n i n c r e m e n t i nt h e c o n s o l i d a t e ds t a t e m e n t o f c h a n g e s i ne q u i t y . F i r s t t i m e A d o p t i o no f P h i l i p p i n e F i n a n c i a l R e p o r t i n g S t a n d a r d s . C o n s t r u c t i o ni np r o g r e s sw h i c hr e p r e s e n t sp r o p e r t i e su n d e rc o n s t r u c t i o ni ss t a t e da t c o s t a n d d e p r e c i a t e d o n l y f r o ms u c h t i m e a s t h e r e l e v a n t a s s e t s a r e c o m p l e t e d a n d p u t i n t oo p e r a t i o n a l u s e . o n l yw h e ni t i s p r o b a b l e t h a t f u t u r e e c o n o m i c b e n e f i t s a s s o c i a t e dw i t ht h e i t e mw i l l f l o wt ot h eG r o u pa n dt h ec o s t o f t h ei t e m sc a nb em e a s u r e dr e l i a b l y . U p o nc o m p l e t i o n .V a l u a t i o n s a r e p e r f o r m e d f r e q u e n t l ye n o u g ht oe n s u r e t h a t t h e f a i r v a l u e o f p r o p e r t i e s d o e s n o t d i f f e r s i g n i f i c a n t l yf r o mi t s c a r r y i n g a m o u n t . p l a n t a n de q u i p m e n t i s c a l c u l a t e d u s i n g t h e s t r a i g h t l i n e m e t h o d t o a l l o c a t e t h e i r c o s t l e s s t h e i r r e s i d u a l v a l u e s o v e r t h e i r e s t i m a t e d u s e f u l l i v e s . p l a n t a n de q u i p m e n t a c c o u n t . f i x t u r e s a n d e q u i p m e t o n t 3 1 0 * S G V M C 3 1 0 9 6 2 * .A l l o t h e r d e c r e a s e s a r e c h a r g e dt ot h e c o n s o l i d a t e ds t a t e m e n t o f i n c o m e . t h e s e p r o p e r t i e s a r e r e c l a s s i f i e dt ot h e r e l e v a n t p r o p e r t y . p l a n t a n d e q u i p m e n t a r e c a r r i e d a t h i s t o r i c a l c o s t l e s s a c c u m u l a t e d d e p r e c i a t i o n a n d a n y i m p a i r m e n t . w h i c hi s t h e r e v a l u e d a m o u n t l e s s a c c u m u l a t e d d e p r e c i a t i o n f r o mt h e G r o u p ’ s p e r s p e c t i v e . L a n di s n o t d e p r e c i a t e d . a s f o l l o w s : N u m b e r o f Y e a r s B u i l d i n g a n d i m p r o v e m e n t s 1 0 t o 2 5 Ma c h i n e r y a n d e q u i p m e n t : F a c t o r y m a c h i n e r y a n d i n s t a l l a t i o n s 1 7 t o 2 5 L o c o m o t i v e s a n d o t h e r e q u i p m e 5 t n t o 2 0 S a f e t y e q u i p m e n t 5 S e r v i c e v e h i c l 5 t o e s 6 R a i l r o a d e q u i p m e 1 0 t o n t 2 0 O f f i c e f u r n i t u r e . i n w h i c h t h e y a r e i n c u r r e d . i nt h e c o n s o l i d a t e db a l a n c e s h e e t a n dc o n s o l i d a t e ds t a t e m e n t o f c h a n g e si ne q u i t y . n e t o f r e l a t e dd e f e r r e dt a xl i a b i l i t y .H i s t o r i c a l c o s t i n c l u d e se x p e n d i t u r et h a t i sd i r e c t l ya t t r i b u t a b l et ot h ea c q u i s i t i o no f t h ea s s e t . a s t h e i r d e e m e d c o s t s a t t h a t d a t ew h e nt h e G r o u pa d o p t e dP F R S1 . A n yr e s u l t i n gd e c r e a s e i s d i r e c t l yc h a r g e da g a i n s t t h e r e l a t e dr e v a l u a t i o ni n c r e m e n t t ot h e e x t e n t t h a t t h e d e c r e a s e d o e s n o t e x c e e d t h e a m o u n t o f t h e r e v a l u a t i o n i nr e s p e c t o f t h e s a m e a s s e t . T h e a s s e t ’ s r e s i d u a l v a l u e . I m p a i r m e n t o f N o n f i n a n c i a l A s s e t s T h e c a r r y i n g v a l u e s o f p r o p e r t y .N o n f i n a n c i a l a s s e t so t h e rt h a n g o o d w i l l t h a t s u f f e r e di m p a i r m e n t a r e r e v i e w e df o r p o s s i b l er e v e r s a l o f t h ei m p a i r m e n t a t e a c h r e p o r t i n g d a t e .T h a t i n c r e a s e d a m o u n t c a n n o t e x c e e d t h e c a r r y i n g a m o u n t t h a t w o u l d h a v e b e e n d e t e r m i n e d . T h e a s s e t ’ s c a r r y i n ga m o u n t i s w r i t t e nd o w ni m m e d i a t e l yt oi t s r e c o v e r a b l e a m o u n t i f t h e a s s e t ’ s c a r r y i n g a m o u n t i s g r e a t e r t h a n i t s e s t i m a t e d r e c o v e r a b l e a m o u n t . u s e f u l l i f e a n d d e p r e c i a t i o n m e t h o d a r e r e v i e w e d p e r i o d i c a l l y t o e n s u r e t h a t t h e r e s i d u a l v a l u e s . i n w h i c h c a s e t h e r e v e r s a l i s t r e a t e d a s a r e v a l u a t i o n i n c r e a s e .I f t h a t i s t h e c a s e .1 6 D e p r e c i a t i o n c o m m e n c e s w h e n a n a s s e t i s i n i t s l o c a t i o n o r c o n d i t i o n c a p a b l e o f b e i n g o p e r a t e d i n t h e m a n n e r i n t e n d e d b y m a n a g e m e n t .A ni m p a i r m e n t l o s s i s r e c o g n i z e df o r t h e a m o u n t b yw h i c ht h e a s s e t ’ s c a r r y i n ga m o u n t e x c e e d s i t s r e c o v e r a b l e a m o u n t . h a d n o i m p a i r m e n t l o s s b e e n r e c o g n i z e d f o r t h ea s s e t i np r i o r y e a r s . p e r i o d a n d m e t h o d o f d e p r e c i a t i o n a r e c o n s i s t e n t w i t h t h e e x p e c t e d p a t t e r n o f e c o n o m i c b e n e f i t s f r o mi t e m s o f p r o p e r t y .S u c hr e v e r s a l i sr e c o g n i z e di nt h ec o n s o l i d a t e ds t a t e m e n t o f i n c o m e u n l e s s t h e a s s e t i s c a r r i e d a t r e v a l u e d a m o u n t . I n c r e m e n t a l c o s t s d i r e c t l y a t t r i b u t a b l e t o t h e i s s u e o f n e w s h a r e s o r o p t i o n s a r e s h o w ni ne q u i t ya s ad e d u c t i o nf r o mp r o c e e d s . s h o u l d n o t b e r e v e r s e d a t y e a r e n d . D e p r e c i a t i o n c e a s e s a t t h e e a r l i e r o f t h e d a t e t h a t t h e i t e mi s c l a s s i f i e da s h e l df o r s a l e ( o r i n c l u d e di nad i s p o s a l g r o u pt h a t i s c l a s s i f i e da s h e l df o r s a l e ) i n a c c o r d a n c e w i t h P F R S5 .I f s u c hi n d i c a t i o n e x i s t s . A n a s s e s s m e n t i s m a d e a t e a c h r e p o r t i n g d a t e a s t o w h e t h e r t h e r e i s a n y i n d i c a t i o n t h a t p r e v i o u s l y r e c o g n i z e di m p a i r m e n t l o s s e sm a yn ol o n g e r e x i s t o r m a yh a v ed e c r e a s e d . N o n c u r r e n t A s s e t s H e l df o r S a l e a n dD i s c o n t i n u e dO p e r a t i o n s .e i t h e ra ne q u i t y i n s t r u m e n t o r a f i n a n c i a l a s s e t c a r r i e d a t c o s t . n e t o f r e l a t e dd e f e r r e d i n c o m e t a xl i a b i l i t y . T h e r e c o v e r a b l e a m o u n t i s t h eh i g h e r o f a na s s e t ’ s f a i r v a l u e l e s s c o s t s t os e l l a n dv a l u e i n u s e . a n d t h e d a t e t h e a s s e t i s d e r e c o g n i z e d . r e a l i z e d u p o n d i s p o s a l o f t h e p r o p e r t y i s t r a n s f e r r e d t o u n r e s t r i c t e d r e t a i n e d e a r n i n g s . w h i c h e v e r i s s o o n e r .T h ee x c e s s o f p r o c e e d s f r o mt h e i s s u a n c e o f s h a r e s o v e r t h e p a r v a l u e o f s h a r e s i s c r e d i t e d t o s h a r e p r e m i u m . t h e r e c o v e r a b l e a m o u n t i s e s t i m a t e d . I m p a i r m e n t l o s s e s o f c o n t i n u i n g o p e r a t i o n s a r e r e c o g n i z e d i n t h e c o n s o l i d a t e d s t a t e m e n t o f i n c o m e i nt h o s ee x p e n s e c a t e g o r i e s c o n s i s t e n t w i t ht h e f u n c t i o no f t h ei m p a i r e da s s e t . t h e c a r r y i n g a m o u n t o f t h e a s s e t i s i n c r e a s e d t o i t s r e c o v e r a b l e a m o u n t . F o r t h e p u r p o s e s o f a s s e s s i n gi m p a i r m e n t .Ap r e v i o u s l y r e c o g n i z e di m p a i r m e n t l o s s i s r e v e r s e d o n l yi f t h e r e h a s b e e n a c h a n g e i n t h e e s t i m a t e s u s e d t od e t e r m i n e t h e a s s e t ’ s r e c o v e r a b l e a m o u n t s i n c e t h e l a s t i m p a i r m e n t l o s s w a s r e c o g n i z e d . Ma j o r r e n o v a t i o n s t h a t q u a l i f i e d f o r c a p i t a l i z a t i o n a r e d e p r e c i a t e d o v e r t h e r e m a i n i n g u s e f u l l i f e o f t h e r e l a t e d a s s e t o r t o t h e d a t e o f t h e n e x t m a j o r r e n o v a t i o n . n e t o f d e p r e c i a t i o n .I m p a i r m e n t l o s s r e c o g n i z e dd u r i n gi n t e r i mp e r i o di nr e s p e c tt og o o d w i l lo ra ni n v e s t m e n t . n e t o f t a x . o na s y s t e m a t i c b a s i s o v e r i t s r e m a i n i n g u s e f u l l i f e . p l a n t a n d e q u i p m e n t . T h e p o r t i o no f r e v a l u a t i o ni n c r e m e n t i nl a n d . * S G V M C 3 1 0 9 6 2 * . p l a n t a n d e q u i p m e n t . S h a r e C a p i t a l a n d S h a r e P r e m i u m C o m m o n s h a r e s a r e c l a s s i f i e d a s e q u i t y .A f t e r s u c h a r e v e r s a l . l e s s a n yr e s i d u a l v a l u e . t h e d e p r e c i a t i o n c h a r g e i s a d j u s t e d i n f u t u r e p e r i o d s t o a l l o c a t e t h e a s s e t ’ s r e v i s e dc a r r y i n ga m o u n t . i n v e s t m e n t i n s h a r e s o f s t o c k o f a n a s s o c i a t e a n do t h e rn o n c u r r e n ta s s e t sa r er e v i e w e df o ri m p a i r m e n tw h e n e v e re v e n t so rc h a n g e si n c i r c u m s t a n c e s i n d i c a t e t h a t t h e c a r r y i n ga m o u n t m a yn o t b e r e c o v e r a b l e . a s s e t s a r e g r o u p e da t t h e l o w e s t l e v e l s f o r w h i c ht h e r e a r es e p a r a t e l yi d e n t i f i a b l ec a s hf l o w s( c a s h g e n e r a t i n gu n i t s ) . G a i n s a n dl o s s e s o nd i s p o s a l a r e d e t e r m i n e db yc o m p a r i n gp r o c e e d s w i t hc a r r y i n ga m o u n t o f t h e a s s e t a n d a r e r e f l e c t e d a s o t h e r i n c o m e i n t h e c o n s o l i d a t e d s t a t e m e n t o f i n c o m e . i t i s p r o b a b l e t h a t f u t u r e e c o n o m i c b e n e f i t s w i l l f l o wi n t o t h e e n t i t y a n d s p e c i f i c c r i t e r i a h a v e b e e n m e t f o r e a c h o f t h e G r o u p ’ s a c t i v i t i e s a s d e s c r i b e d b e l o w . S a l e o f m o l a s s e s S a l e o f m o l a s s e s i s r e c o g n i z e d u p o n t r a n s f e r o f m o l a s s e s w a r e h o u s e r e c e i p t s . n e t o fa n yd i r e c t l ya t t r i b u t a b l e i n c r e m e n t a l t r a n s a c t i o n s c o s t s a n dt h e r e l a t e di n c o m e t a xe f f e c t . r e t u r n s a n d d i s c o u n t s . R e v e n u e f r o mt o l l i n g s e r v i c e s R e v e n u e f r o mt o l l i n gs e r v i c e s i s r e c o g n i z e dw h e nt h ee q u i v a l e n t r e f i n e ds u g a r i s p r o d u c e df r o m r a ws u g a r o w n e d b y t o l l e e s . F a r mi n c o m e F a r mi n c o m e i s r e c o g n i z e d w h e n t h e r e l a t e d s e r v i c e i s r e n d e r e d . I n t e r e s t i n c o m e I n t e r e s t i n c o m eo nc a s hi nb a n k sa n do t h e rs h o r t t e r mi n v e s t m e n t si sr e c o g n i z e do nat i m e p r o p o r t i o n b a s i s u s i n g t h e e f f e c t i v e i n t e r e s t r a t e m e t h o d . S a l e o f r a wa n d r e f i n e d s u g a r S a l e o f r a ws u g a r i s r e c o g n i z e du p o ne n d o r s e m e n t a n dt r a n s f e r o f q u e d a n s . a n yc o n s i d e r a t i o nr e c e i v e d . R e v e n u e i s s h o w n n e t o f v a l u e a d d e d t a x .T h e a m o u n t o f r e v e n u e i s n o t c o n s i d e r e d t o b e r e l i a b l y m e a s u r e d u n t i l a l l c o n t i n g e n c i e s r e l a t i n g t o t h e s a l e h a v e b e e n r e s o l v e d . w h i l e s a l e o f r e f i n e d s u g a r i s r e c o g n i z e d u p o n s h i p m e n t o r d e l i v e r y . i s i n c l u d e di ne q u i t y a t t r i b u t a b l e t o t h e C o m p a n y ’ s e q u i t y h o l d e r s . i s d e d u c t e d f r o me q u i t y u n t i l t h e s h a r e s a r e c a n c e l l e d . U n a p p r o p r i a t e d r e t a i n e d e a r n i n g s r e p r e s e n t t h a t p o r t i o nw h i c hi s f r e ea n dc a nb ed e c l a r e da s d i v i d e n d s t os h a r e h o l d e r s .1 7 T r e a s u r y S h a r e s Wh e r e a n ym e m b e r o f t h e G r o u pp u r c h a s e s t h e C o m p a n y ’ s e q u i t y s h a r e c a p i t a l ( t r e a s u r y s h a r e s ) . * S G V M C 3 1 0 9 6 2 * . R e v e n u e R e c o g n i t i o n R e v e n u e c o m p r i s e s t h e f a i r v a l u e o f t h e s a l e o f g o o d s a n ds e r v i c e s i nt h e o r d i n a r yc o u r s e o f t h e G r o u p ’ s a c t i v i t i e s . O t h e r i n c o m e O t h e r i n c o m e i s r e c o g n i z e d w h e n e a r n e d . t h e c o n s i d e r a t i o n p a i d . i n c l u d i n g a n yd i r e c t l y a t t r i b u t a b l e i n c r e m e n t a l c o s t s ( n e t o f r e l a t e d t a x e s ) .Wh e r e s u c h s h a r e s a r es u b s e q u e n t l ys o l do rr e i s s u e d . R e t a i n e d E a r n i n g s R e t a i n e de a r n i n g s r e p r e s e n t t h e c u m u l a t i v e b a l a n c e o f n e t i n c o m e o r l o s s . A p p r o p r i a t e dr e t a i n e de a r n i n g s r e p r e s e n t t h a t p o r t i o nw h i c hh a s b e e nr e s t r i c t e da n dt h e r e f o r ei s n o t a v a i l a b l e f o r a n y d i v i d e n d d e c l a r a t i o n . O t h e r C o m p r e h e n s i v e I n c o m e O t h e r c o m p r e h e n s i v e i n c o m e c o m p r i s e s i t e m s o f i n c o m e a n d e x p e n s e s ( i n c l u d i n g i t e m s p r e v i o u s l y p r e s e n t e d u n d e r t h e s t a t e m e n t o f c h a n g e s i n e q u i t y ) t h a t a r e n o t r e c o g n i z e d i n p r o f i t o r l o s s f o r t h e y e a r i n a c c o r d a n c e w i t h P F R S . D i v i d e n d D i s t r i b u t i o n D i v i d e n dd i s t r i b u t i o nt ot h eC o m p a n y ’ ss h a r e h o l d e r sa n dt h en o n c o n t r o l l i n gi n t e r e s t si s r e c o g n i z e da sal i a b i l i t yi nt h ec o n s o l i d a t e df i n a n c i a l s t a t e m e n ti nt h ep e r i o di nw h i c ht h e d i v i d e n d s a r e a p p r o v e d b y t h e C o m p a n y ’ s B O Da n d s h a r e h o l d e r s . r e i s s u e d o r d i s p o s e d o f . e f f e c t s o f t h e c h a n g e s i n a c c o u n t i n g p o l i c y a n d o t h e r c a p i t a l a d j u s t m e n t s . d i v i d e n dd i s t r i b u t i o n s . T h eG r o u pr e c o g n i z e sr e v e n u ew h e nt h ea m o u n to fr e v e n u ec a nb er e l i a b l ym e a s u r e d . P e n s i o nc o s t s a r e a c t u a r i a l l yd e t e r m i n e du s i n gt h e p r o j e c t e du n i t c r e d i t m e t h o d . * S G V M C 3 1 0 9 6 2 * .I t i s r e c o g n i z e d a s e x p e n s e w h e n r e l a t e d g o o d s a r e s o l d . Ad e f i n e d b e n e f i t p l a n i s a p e n s i o n p l a n t h a t d e f i n e s a n a m o u n t o f p e n s i o n b e n e f i t t o b e p r o v i d e d . P e n s i o n c o s t s a n d o b l i g a t i o n s T h el i a b i l i t yr e c o g n i z e di nt h ec o n s o l i d a t e db a l a n c es h e e t i nr e s p e c t o f d e f i n e db e n e f i t p e n s i o n p l a n i s t h e p r e s e n t v a l u e o f t h e d e f i n e d b e n e f i t o b l i g a t i o n a t t h e e n d o f r e p o r t i n g p e r i o d l e s s t h e f a i r v a l u e o f p l a n a s s e t s . P l a n a s s e t s r e p r e s e n t a s s e t s t h a t : ( a ) a r e h e l d b y a n e n t i t y ( a f u n d ) t h a t i s l e g a l l y s e p a r a t e f r o mt h e G r o u p .A c t u a r i a l g a i n s a n dl o s s e s a r e r e c o g n i z e da s i n c o m eo r e x p e n s e w h e nt h e n e t c u m u l a t i v e u n r e c o g n i z e da c t u a r i a l g a i n s a n d l o s s e s f o r t h e p l a n a t t h e e n d o f t h e p r e v i o u s r e p o r t i n g y e a r e x c e e d e d 1 0 %o f t h e h i g h e r o f t h ep r e s e n t v a l u eo f d e f i n e db e n e f i t o b l i g a t i o na n dt h ef a i r v a l u eo f p l a na s s e t s a t t h a t d a t e . o r ( i i ) t h ea s s e t s a r e r e t u r n e dt ot h eG r o u pt or e i m b u r s e i t f o r e m p l o y e e b e n e f i t s a l r e a d y p a i d . u s u a l l y a s a f u n c t i o no f o n e o r m o r e f a c t o r s s u c h a s a g e . t h eG r o u pm e a s u r e st h e r e s u l t i n g a s s e t a t ( a ) t h e l o w e r o f t h e e x c e s s o f t h e f a i r v a l u e o f p l a n a s s e t s o v e r t h e p r e s e n t v a l u e o f t h ed e f i n e db e n e f i t o b l i g a t i o na t t h ee n do f r e p o r t i n gp e r i o dt o g e t h e rw i t ha d j u s t m e n t sf o r u n r e c o g n i z e da c t u a r i a l g a i n s o r l o s s e s a n dp a s t s e r v i c e c o s t s a n d( b ) t h e t o t a l o f a n yc u m u l a t i v e u n r e c o g n i z e dn e t a c t u a r i a l l o s s e sa n dp a s t s e r v i c ec o s t a n dt h ep r e s e n t v a l u eo f a n ye c o n o m i c b e n e f i t s a v a i l a b l e i n t h e f o r mo f r e f u n d s f r o mt h e p l a no r r e d u c t i o n s i n f u t u r e c o n t r i b u t i o n s t o t h e p l a n . T h ep r e s e n t v a l u eo f t h ed e f i n e db e n e f i t o b l i g a t i o ni s d e t e r m i n e db yd i s c o u n t i n gt h ee s t i m a t e d f u t u r e c a s ho u t f l o wu s i n gi n t e r e s t r a t e s o f d e b t s e c u r i t i e s t h a t a r e d e n o m i n a t e di n P h i l i p p i n e p e s o ( c u r r e n c yi nw h i c ht h e b e n e f i t s w i l l b e p a i d ) a n dt h a t h a v e t e r m s t om a t u r i t ya p p r o x i m a t i n gt h e t e r m s o f t h e r e l a t e d p e n s i o n l i a b i l i t y . a n d t h o s e r e l a t e d i n d i r e c t c o s t i n c u r r e d . P e n s i o n p l a n a s s e t T h e a s s e t s o f t h e G r o u p r e c o g n i z e di n t h e c o n s o l i d a t e d b a l a n c e s h e e t i n r e s p e c t o f d e f i n e d b e n e f i t p e n s i o n p l a n s i s t h e l o w e r o f ( a ) t h e e x c e s s o f t h e f a i r v a l u e o f p l a n a s s e t s o v e r t h e p r e s e n t v a l u e o f t h ed e f i n e db e n e f i to b l i g a t i o na tt h ee n do fr e p o r t i n gp e r i o dt o g e t h e rw i t ha d j u s t m e n t sf o r u n r e c o g n i z e da c t u a r i a l g a i n s o r l o s s e s a n dp a s t s e r v i c e c o s t s a n d( b ) t h e t o t a l o f a n yc u m u l a t i v e u n r e c o g n i z e dn e t a c t u a r i a l l o s s e sa n dp a s t s e r v i c ec o s t a n dt h ep r e s e n t v a l u eo f a n ye c o n o m i c b e n e f i t s a v a i l a b l e i n t h e f o r mo f r e f u n d s f r o mt h e p l a no r r e d u c t i o n s i n f u t u r e c o n t r i b u t i o n s t o t h e p l a n . E m p l o y e e B e n e f i t s T h e C o m p a n y a n d i t s s u b s i d i a r i e s h a v e i n d i v i d u a l a n d s e p a r a t e d e f i n e d b e n e f i t p l a n i n a c c o r d a n c e w i t h l o c a l c o n d i t i o n s a n d p r a c t i c e s i n t h e P h i l i p p i n e s . y e a r s o f s e r v i c e o r c o m p e n s a t i o n . a n d( c ) a r en o t a v a i l a b l et ot h eG r o u p ’ so w nc r e d i t o r s .1 8 C o s t a n d E x p e n s e s C o s t o f s a l e s C o s t o f s a l e s i n c l u d e d i r e c t m a t e r i a l s a n d l a b o r c o s t s . T h e s e c o s t s a r e e x p e n s e d w h e n i n c u r r e d . a n dc a n n o t b er e t u r n e dt ot h eG r o u pu n l e s s : ( i )t h e r e m a i n i n g a s s e t s o f t h e f u n d a r e s u f f i c i e n t t om e e t a l l t h e r e l a t e de m p l o y e e b e n e f i t o b l i g a t i o n s o f t h e p l a no r t h e G r o u p .G e n e r a l a n da d m i n i s t r a t i v e e x p e n s e s c o n s t i t u t e c o s t s o f a d m i n i s t e r i n g t h e b u s i n e s s . t o g e t h e r w i t h a d j u s t m e n t s f o r a c t u a r i a l g a i n s a n d l o s s e s a n d p a s t s e r v i c e c o s t s . S e l l i n g .T h e p l a n s a r e g e n e r a l l yf u n d e d t h r o u g h p a y m e n t s t o t r u s t e e a d m i n i s t e r e d f u n d s a s d e t e r m i n e d b y p e r i o d i c a c t u a r i a l c a l c u l a t i o n s . ( b ) a r ea v a i l a b l et ob eu s e do n l yt op a yo rf u n de m p l o y e e sb e n e f i t s . g e n e r a l a n d a d m i n i s t r a t i v e e x p e n s e s S e l l i n ge x p e n s e sa r ec o s t si n c u r r e dt os e l lo rd i s t r i b u t eg o o d s . I n c a s e s w h e n t h e a m o u n t d e t e r m i n e d r e s u l t s i n a s u r p l u s ( b e i n g t h e e x c e s s o f t h e f a i r v a l u e o f t h e p l a na s s e t so v e rt h ep r e s e n t v a l u eo f t h ed e f i n e db e n e f i t o b l i g a t i o n ) . l e a s e a c c o u n t i n g s h a l l c o m m e n c e o r c e a s e f r o mt h e d a t e w h e n t h e c h a n g e i nc i r c u m s t a n c e s g a v e r i s e t or e a s s e s s m e n t f o r s c e n a r i o s ( a ) . C o n t i n g e n t r e n t i s r e c o g n i z e da s i n c o m eo r e x p e n s ei nt h ep e r i o d s i nw h i c ht h e ya r ee a r n e do r i n c u r r e d .D e b t c o m m i t m e n t f e e s r e l a t i n gt ot h e u n d r a w nl o a n s a r e r e c o r d e da s d e f e r r e dc h a r g e s a n da r e a m o r t i z e du s i n gs t r a i g h t l i n em e t h o d . L e a s e s w h e r e a s i g n i f i c a n t p o r t i o n o f t h e r i s k s a n d r e w a r d s o f o w n e r s h i p a r e r e t a i n e d b y t h e l e s s o r a r ec l a s s i f i e da so p e r a t i n gl e a s e s . t h e p a s t s e r v i c e c o s t s a r e a m o r t i z e d o n a s t r a i g h t l i n e b a s i s o v e r t h e v e s t i n g p e r i o d . P a s t s e r v i c e c o s t s a r e r e c o g n i z e di m m e d i a t e l yi ni n c o m e .O u t s t a n d i n gt r a n s i t i o n a l l i a b i l i t ya s o f J u n e 3 0 .A m o r t i z a t i o no fd e b tc o m m i t m e n tf e e si sr e c o g n i z e da si n t e r e s te x p e n s ea n d p r e s e n t e d i n t h e c o n s o l i d a t e d s t a t e m e n t o f i n c o m e . 2 0 0 5 . B o r r o w i n g C o s t s B o r r o w i n gc o s t s t h a t a r e d i r e c t l ya t t r i b u t a b l e t ot h ea c q u i s i t i o n . ( c ) t h e r ei s ac h a n g ei nt h ed e t e r m i n a t i o no f w h e t h e r f u l f i l l m e n t i s d e p e n d e n t o n a s p e c i f i e d a s s e t . o r ( d ) t h e r e i s s u b s t a n t i a l c h a n g e t o t h e a s s e t . o r w h e na ne m p l o y e ea c c e p t sv o l u n t a r yr e d u n d a n c yi ne x c h a n g ef o r t h e s eb e n e f i t s . o t h e r t h a na r e n e w a l o r e x t e n s i o no f t h e a r r a n g e m e n t .T h e G r o u pr e c o g n i z e s t e r m i n a t i o nb e n e f i t s w h e ni t i s d e m o n s t r a b l yc o m m i t t e dt oe i t h e r : t e r m i n a t i n g t h e e m p l o y m e n t o f c u r r e n t e m p l o y e e s a c c o r d i n gt oad e t a i l e df o r m a l p l a nw i t h o u t p o s s i b i l i t yo f w i t h d r a w a l . c o n s t r u c t i o no r p r o d u c t i o no f a q u a l i f y i n g a s s e t w h i c h n e c e s s a r i l y t a k e s a s u b s t a n t i a l p e r i o d o f t i m e t o p r e p a r e f o r i t s i n t e n d e d u s e a r e i n c l u d e d i n t h e c o s t o f t h a t a s s e t . o r ( d ) a n da t t h e d a t e o f r e n e w a l o r e x t e n s i o n p e r i o d f o r s c e n a r i o ( b ) . ( b ) a r e n e w a l o p t i o ni s e x e r c i s e do r e x t e n s i o n g r a n t e d . u n l e s s t h e t e r mo f t h e r e n e w a l o r e x t e n s i o nw a s i n i t i a l l y i n c l u d e di nt h el e a s et e r m . ( c ) . o r c o n t a i n s a l e a s e i s b a s e do n t h e s u b s t a n c e o f t h e a r r a n g e m e n t a t i n c e p t i o nd a t e o f w h e t h e r t h e f u l f i l l m e n t o f t h e a r r a n g e m e n t i s d e p e n d e n t o n t h eu s eo fas p e c i f i ca s s e t o ra s s e t so rt h ea r r a n g e m e n t c o n v e y sar i g h t t ou s et h ea s s e t . G a i n s o r l o s s e s o n t h e c u r t a i l m e n t o r s e t t l e m e n t o f a d e f i n e d b e n e f i t p l a n a r e r e c o g n i z e d w h e n t h e c u r t a i l m e n t o r s e t t l e m e n t o c c u r s . 6 m i l l i o n w a s f u l l y a m o r t i z e d i n 2 0 1 0 ( s e e N o t e 1 5 ) .B e n e f i t sf a l l i n gd u em o r et h a n1 2m o n t h sa f t e re n do fr e p o r t i n gp e r i o da r e d i s c o u n t e d t o p r e s e n t v a l u e .1 9 T h e s eg a i n s o r l o s s e s a r e r e c o g n i z e do v e r t h ee x p e c t e da v e r a g e r e m a i n i n gw o r k i n gl i v e s o f t h e e m p l o y e e s p a r t i c i p a t i n g i n t h e p l a n . S u c h b o r r o w i n g c o s t s a r e c a p i t a l i z e d a s p a r t o f t h e c o s t o f t h e a s s e t w h e ni t i s p r o b a b l e t h a t t h e yw i l l r e s u l t i nf u t u r ee c o n o m i cb e n e f i t s t ot h eG r o u pa n dt h e c o s t s c a n b e m e a s u r e d r e l i a b l y . L e a s e s T h e d e t e r m i n a t i o n o f w h e t h e r t h e a r r a n g e m e n t i s .P a y m e n t sm a d eu n d e ro p e r a t i n gl e a s e sa r ec h a r g e dt ot h e c o n s o l i d a t e d s t a t e m e n t o f i n c o m e o n a s t r a i g h t l i n e b a s i s o v e r t h e p e r i o d o f t h e l e a s e . T e r m i n a t i o n b e n e f i t s T e r m i n a t i o nb e n e f i t s a r ep a y a b l ew h e ne m p l o y m e n t i s t e r m i n a t e db e f o r et h en o r m a l r e t i r e m e n t d a t e . u n l e s s c h a n g e s t ot h e p e n s i o np l a na r e c o n d i t i o n a l o nt h ee m p l o y e e sr e m a i n i n gi ns e r v i c ef o r as p e c i f i e dp e r i o do f t i m e( t h ev e s t i n g p e r i o d ) . T r a n s i t i o n a l l i a b i l i t y r e s u l t i n g f r o mt h e G r o u p ’ s i n i t i a l a d o p t i o no f P A S1 9i s b e i n g a m o r t i z e d f o r ap e r i o do f f i v ey e a r s f r o mJ u l y1 .I n t h i s c a s e . Wh e r e a r e a s s e s s m e n t i s m a d e . D e b t c o m m i t m e n t f e e s r e l a t i n gt ot h ed r a w na m o u n t a r ea m o r t i z e du s i n ge f f e c t i v ei n t e r e s t r a t e m e t h o da n da r ep r e s e n t e da sr e d u c t i o ni nt h ep r i n c i p a l l o a nb a l a n c e . A r e a s s e s s m e n t i s m a d e a f t e r i n c e p t i o n o n t h e l e a s e o n l y i f o n e o f t h e f o l l o w i n g a p p l i e s : ( a ) t h e r e i s a c h a n g e i nc o n t r a c t u a l t e r m s . * S G V M C 3 1 0 9 6 2 * . o r p r o v i d i n g t e r m i n a t i o n b e n e f i t s a s a r e s u l t o f a n o f f e r m a d e t oe n c o u r a g e v o l u n t a r y r e d u n d a n c y . 2 0 0 9 a m o u n t e d t o = P 3 2 . a s s o c i a t e s a n d i n t e r e s t s i n j o i n t v e n t u r e s . H o w e v e r . Wh e r e t h e r e a r e a n u m b e r o f s i m i l a r o b l i g a t i o n s .R e s t r u c t u r i n gp r o v i s i o n sc o m p r i s el e a s et e r m i n a t i o np e n a l t i e sa n d e m p l o y e e t e r m i n a t i o n p a y m e n t s . o na l l t e m p o r a r y d i f f e r e n c e s a t t h e e n do f r e p o r t i n gp e r i o db e t w e e nt h e t a xb a s e s o f a s s e t s a n dl i a b i l i t i e s a n dt h e i r c a r r y i n g a m o u n t s f o r f i n a n c i a l r e p o r t i n g p u r p o s e s . C o n t i n g e n t l i a b i l i t i e sa r en o t r e c o g n i z e di nt h ec o n s o l i d a t e df i n a n c i a l s t a t e m e n t s . Ac o n t i n g e n t a s s e t i s n o t r e c o g n i z e d i n t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s b u t d i s c l o s e d w h e n a n i n f l o wo f e c o n o m i c b e n e f i t s i s p r o b a b l e . I n c o m e T a x e s C u r r e n t t a x C u r r e n t t a xa s s e t sa n dl i a b i l i t i e sf o r t h ec u r r e n t a n dp r i o r p e r i o d sa r em e a s u r e da t t h ea m o u n t e x p e c t e dt ob e r e c o v e r e df r o mo r p a i dt ot h e t a x a t i o na u t h o r i t i e s .F o r e i g ne x c h a n g e d i f f e r e n c e s a r e c r e d i t e d o r c h a r g e d d i r e c t l y i n t h e c o n s o l i d a t e d s t a t e m e n t o f i n c o m e . i n c l u d i n g a s s e t r e v a l u a t i o n s . d e f e r r e d t a x l i a b i l i t i e s a r e n o t p r o v i d e d o n n o n t a x a b l e t e m p o r a r y d i f f e r e n c e s a s s o c i a t e d w i t h i n v e s t m e n t s i n d o m e s t i c s u b s i d i a r i e s . u s i n gt h eb a l a n c es h e e t l i a b i l i t ym e t h o d .Ap r o v i s i o ni s r e c o g n i z e d e v e ni f t h e l i k e l i h o o do f a n o u t f l o ww i t h r e s p e c t t o a n y o n e i t e mi n c l u d e d i n t h e s a m e c l a s s o f o b l i g a t i o n s m a y b e s m a l l . P r o v i s i o n s a r e n o t r e c o g n i z e d f o r f u t u r e o p e r a t i n g l o s s e s . i t i s m o r e l i k e l y t h a nn o t t h a t a n o u t f l o wo f r e s o u r c e s w i l l b e r e q u i r e d t o s e t t l e t h e o b l i g a t i o n . D e f e r r e di n c o m et a xl i a b i l i t i e sa r er e c o g n i z e df o ra l l t a x a b l et e m p o r a r yd i f f e r e n c e s . D e f e r r e d t a x D e f e r r e di n c o m et a xi sp r o v i d e d . P r o v i s i o n s a r e m e a s u r e d a t t h e p r e s e n t v a l u e o f t h e e x p e n d i t u r e s e x p e c t e d t o b e r e q u i r e dt os e t t l e t h eo b l i g a t i o nu s i n gap r e t a xr a t e t h a t r e f l e c t s c u r r e n t m a r k e t a s s e s s m e n t s o f t h e t i m ev a l u eo f m o n e ya n dt h e r i s k s s p e c i f i ct ot h eo b l i g a t i o n .D e f e r r e di n c o m e t a xl i a b i l i t yi s n o t r e c o g n i z e dw h e ni t a r i s e s f r o mt h e i n i t i a l r e c o g n i t i o no f a na s s e t o r l i a b i l i t yi nat r a n s a c t i o nt h a t i s n o t ab u s i n e s s c o m b i n a t i o na n d . r e s t r u c t u r i n g c o s t s a n d l e g a l c l a i m s a r e r e c o g n i z e dw h e n : t h e G r o u ph a s a p r e s e n t l e g a l o r c o n s t r u c t i v e o b l i g a t i o n a s a r e s u l t o f p a s t e v e n t s . P r o v i s i o n s a r e r e v i e w e d a t t h e e n d o f e a c h r e p o r t i n g p e r i o d a n d a d j u s t e d t o r e f l e c t t h e c u r r e n t b e s t e s t i m a t e .2 0 P r o v i s i o n s a n d C o n t i n g e n c i e s P r o v i s i o n f o r e n v i r o n m e n t a l r e s t o r a t i o n . a f f e c t sn e i t h e r t h ea c c o u n t i n gp r o f i t o r l o s sn o r t a x a b l ep r o f i t o r l o s s . t h e l i k e l i h o o d t h a t a n o u t f l o ww i l l b e r e q u i r e d i n s e t t l e m e n t i sd e t e r m i n e db yc o n s i d e r i n gt h ec l a s so fo b l i g a t i o n sa saw h o l e .T h e t a xr a t e s a n dt h e t a xl a w s u s e dt oc o m p u t et h ea m o u n t a r et h o s et h a t a r ee n a c t e do r s u b s t a n t i v e l ye n a c t e da t t h ee n do f r e p o r t i n g p e r i o d . a t t h e t i m eo f t h et r a n s a c t i o n . F o r e i g n C u r r e n c y D e n o m i n a t e d T r a n s a c t i o n s a n d T r a n s l a t i o n s I t e m s i n c l u d e di nt h e f i n a n c i a l s t a t e m e n t s o f e a c ho f t h e G r o u p ’ s e n t i t i e s a r e m e a s u r e du s i n gt h e f u n c t i o n a l c u r r e n c y . * S G V M C 3 1 0 9 6 2 * .T h e i n c r e a s ei nt h e p r o v i s i o nd u e t op a s s a g e o f t i m e i s r e c o g n i z e d a s i n t e r e s t e x p e n s e . T r a n s a c t i o n s d e n o m i n a t e d i n f o r e i g n c u r r e n c i e s a r e r e c o r d e d u s i n g t h e e x c h a n g e r a t e a t t h e d a t e o f t h e t r a n s a c t i o n . a n d t h e a m o u n t h a s b e e nr e l i a b l ye s t i m a t e d .T h e s ea r e d i s c l o s e du n l e s st h ep o s s i b i l i t yo fa no u t f l o wo fr e s o u r c e se m b o d y i n ge c o n o m i cb e n e f i t si s r e m o t e .O u t s t a n d i n gm o n e t a r y a s s e t s a n d l i a b i l i t i e s d e n o m i n a t e di n f o r e i g n c u r r e n c i e s a r e t r a n s l a t e du s i n gt h ec l o s i n gr a t eo f e x c h a n g ea t t h ee n do f r e p o r t i n gp e r i o d . 2 1 D e f e r r e di n c o m e t a xa s s e t s a r e r e c o g n i z e df o r a l l d e d u c t i b l e t e m p o r a r yd i f f e r e n c e s . a n d / o r a m o n g t h er e p o r t i n ge n t e r p r i s ea n di t sk e ym a n a g e m e n t p e r s o n n e l . T h e G r o u p m a k e s e s t i m a t e s a n d * S G V M C 3 1 0 9 6 2 * .D i l u t e d e a r n i n g sp e r s h a r ei sc o m p u t e db ya d j u s t i n gt h ew e i g h t e da v e r a g en u m b e ro f o r d i n a r ys h a r e s o u t s t a n d i n g t o a s s u m e c o n v e r s i o n o f a l l t h e d i l u t i v e p o t e n t i a l o r d i n a r y s h a r e s i n t o o r d i n a r y s h a r e s . R e l a t e d P a r t y R e l a t i o n s h i p s a n d T r a n s a c t i o n s R e l a t e dp a r t yr e l a t i o n s h i pe x i s t s w h e no n e p a r t yh a s t h e a b i l i t yt oc o n t r o l . E v e n t s a f t e r t h e R e p o r t i n g P e r i o d P o s t y e a r e n de v e n t s t h a t p r o v i d e a d d i t i o n a l i n f o r m a t i o n a b o u t t h e G r o u p ’ s p o s i t i o n a t t h e e n do f r e p o r t i n gp e r i o d( a d j u s t i n ge v e n t s ) a r er e f l e c t e di nt h ec o n s o l i d a t e df i n a n c i a l s t a t e m e n t s . i n c o m e a n d e x p e n s e s a n d r e l a t e d d i s c l o s u r e s . c a r r y f o r w a r d b e n e f i t s o f u n u s e dt a xc r e d i t s ( e x c e s s o f m i n i m u mc o r p o r a t e i n c o m e t a x e s o r MC I To v e r r e g u l a r c o r p o r a t e i n c o m e t a x e s o r R C I T ) a n d u n u s e d t a x l o s s e s ( n e t o p e r a t i n g l o s s c a r r y o v e r o r N O L C O ) . o r b e t w e e n . A c c o u n t i n g E s t i ma t e s a n dA s s u mp t i o n s T h ep r e p a r a t i o no f t h ec o n s o l i d a t e df i n a n c i a l s t a t e m e n t si na c c o r d a n c ew i t hP F R Sr e q u i r e s t h e G r o u p t o e x e r c i s e j u d g m e n t . d i r e c t o r so ri t ss t o c k h o l d e r s . D e f e r r e di n c o m e t a xa s s e t s a n dd e f e r r e di n c o m e t a xl i a b i l i t i e s a r e o f f s e t i f al e g a l l ye n f o r c e a b l e r i g h t e x i s t s t os e t o f f t h ed e f e r r e di n c o m et a xa s s e t sa g a i n s t t h ed e f e r r e dt a xl i a b i l i t i e s a n dt h e d e f e r r e d i n c o m e t a x r e l a t e t o t h e s a m e t a x a b l e e n t i t y a n d t h e s a m e t a x a t i o n a u t h o r i t y . a t t e n t i o ni s d i r e c t e dt ot h e s u b s t a n c eo f t h e r e l a t i o n s h i p . b a s e do n t a x r a t e s ( a n d t a xl a w s ) t h a t h a v e b e e n e n a c t e d o r s u b s t a n t i v e l y e n a c t e d a t t h e e n d o f r e p o r t i n g p e r i o d . 3 . D e f e r r e di n c o m et a xi t e m sa r er e c o g n i z e di nc o r r e l a t i o nt ot h eu n d e r l y i n gt r a n s a c t i o n e i t h e r i n o t h e r c o m p r e h e n s i v e i n c o m e o r d i r e c t l y i n e q u i t y . o re x e r c i s es i g n i f i c a n t i n f l u e n c eo v e rt h eo t h e rp a r t yi n m a k i n gf i n a n c i a l a n do p e r a t i n gd e c i s i o n s . a n d n o t m e r e l y t o t h e l e g a l f o r m .S u c hr e l a t i o n s h i p s a l s oe x i s t b e t w e e na n d / o r a m o n g e n t i t i e s w h i c h a r e u n d e r c o m m o nc o n t r o l w i t h t h e r e p o r t i n ge n t e r p r i s e . E a r n i n g s p e r S h a r e B a s i ce a r n i n g s p e r s h a r ei s c a l c u l a t e db yd i v i d i n gt h ep r o f i t a t t r i b u t a b l e t oe q u i t yh o l d e r o f t h e C o m p a n yb yt h e w e i g h t e da v e r a g e n u m b e r o f o r d i n a r y s h a r e s i ni s s u e d u r i n gt h e y e a r . T h e c a r r y i n g a m o u n t o f d e f e r r e d i n c o m e t a x a s s e t s i s r e v i e w e d a t t h e e n d o f e a c h r e p o r t i n g p e r i o d a n dr e d u c e dt ot h e e x t e n t t h a t i t i s n ol o n g e r p r o b a b l e t h a t s u f f i c i e n t f u t u r e t a x a b l e p r o f i t w i l l b e a v a i l a b l et oa l l o wa l l o r p a r t o f t h ed e f e r r e di n c o m et a xa s s e t st ob eu t i l i z e d .U n r e c o g n i z e d d e f e r r e di n c o m e t a xa s s e t s a r e r e a s s e s s e d a t t h e e n do f e a c h r e p o r t i n gp e r i o d a n da r e r e c o g n i z e d t o t h e e x t e n t t h a t i t h a s b e c o m e p r o b a b l e t h a t s u f f i c i e n t f u t u r e t a x a b l e p r o f i t w i l l a l l o wt h e d e f e r r e d t a x a s s e t t o b e r e c o v e r e d . d i r e c t l y . t o t h e e x t e n t t h a t i t i s p r o b a b l e t h a t s u f f i c i e n t f u t u r e t a x a b l e p r o f i t w i l l b e a v a i l a b l e a g a i n s t w h i c h t h e d e d u c t i b l e t e m p o r a r yd i f f e r e n c e s a n dc a r r y f o r w a r db e n e f i t s o f u n u s e dt a xc r e d i t s a n du n u s e d t a x l o s s e s c a n b e u t i l i z e d . D e f e r r e d i n c o m e t a x r e l a t i n g t o i t e m s r e c o g n i z e d o u t s i d e p r o f i t o r l o s s i s r e c o g n i z e d o u t s i d e p r o f i t o r l o s s .P o s t y e a r e n de v e n t st h a ta r en o ta d j u s t i n ge v e n t sa r ed i s c l o s e di nt h en o t e st ot h ec o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s w h e n m a t e r i a l . l i a b i l i t i e s .S i g n i f i c a n t J u d g me n t s . e x c l u d i n g o r d i n a r yo r c o m m o ns h a r e sp u r c h a s e db yt h eC o m p a n ya n dh e l da st r e a s u r ys h a r e s .I n c o n s i d e r i n ge a c hp o s s i b l e r e l a t e dp a r t yr e l a t i o n s h i p . o r i n d i r e c t l y t h r o u g ho n eo rm o r ei n t e r m e d i a r i e s . m a k e e s t i m a t e s a n d u s e a s s u m p t i o n s t h a t a f f e c t t h e r e p o r t e d a m o u n t s o f a s s e t s . D e f e r r e di n c o m e t a xa s s e t s a n dl i a b i l i t i e s a r e m e a s u r e d a t t h e t a xr a t e s t h a t a r e e x p e c t e dt oa p p l y t o t h e p e r i o dw h e n t h e a s s e t i s r e a l i z e d o r t h e l i a b i l i t yi s s e t t l e d . A s s u c h . af i n a n c i a l l i a b i l i t yo r a ne q u i t y i n s t r u m e n t . T h er e s u l t i n ga c c o u n t i n ge s t i m a t e sw i l l . i t i s t h e c u r r e n c yo f t h e p r i m a r y e c o n o m i c e n v i r o n m e n t i n w h i c h i t s s u b s i d i a r i e s a n d a s s o c i a t e o p e r a t e . a n d r e l a t e d i m p a c t a n d a s s o c i a t e d r i s k i n t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s . T h ec l a s s i f i c a t i o n so ft h ev a r i o u sf i n a n c i a la s s e t sa n df i n a n c i a ll i a b i l i t i e so ft h eG r o u pa r e d i s c l o s e di nN o t e 2 6 . h a se n t e r e di n t op r o p e r t yl e a s e sw h e r ei t h a s d e t e r m i n e dt h a t t h er i s k s a n d r e w a r d s r e l a t e d t o t h o s e p r o p e r t i e s a r e r e t a i n e dw i t h t h e l e s s o r s . o ni n i t i a l r e c o g n i t i o na sa f i n a n c i a l a s s e t . t h e s ea r ec o n s i d e r e da s f i n a n c el e a s e s . w h i c hh a s t h e m o s t s i g n i f i c a n t e f f e c t o n t h e a m o u n t s r e c o g n i z e d i n t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s . C l a s s i f i c a t i o n o f l e a s e s Ma n a g e m e n t e x e r c i s e s j u d g m e n t i nd e t e r m i n i n gw h e t h e r s u b s t a n t i a l l y a l l t h e s i g n i f i c a n t r i s k s a n d r e w a r d s o f o w n e r s h i p o f t h e a s s e t s h e l d f o r l e a s e a r e r e t a i n e d b y t h e G r o u p . * S G V M C 3 1 0 9 6 2 * . a f i n a n c i a l l i a b i l i t y o r a n e q u i t y i n s t r u m e n t i n a c c o r d a n c e w i t h t h e s u b s t a n c e o f t h e c o n t r a c t u a l a r r a n g e m e n t a n dt h e d e f i n i t i o n s o f af i n a n c i a l a s s e t . b yd e f i n i t i o n .T h e G r o u p . 5 m i l l i o n a n d = P 8 .2 2 u s e sa s s u m p t i o n sc o n c e r n i n gt h ef u t u r e . 7 3 5 . t h i s i s m e a s u r e d a t N R Va n d t h e v a l u e i s d e d u c t e d f r o mt h e c o s t o f t h e r a wa n d r e f i n e d s u g a r . 3 m i l l i o n a s o f J u n e 3 0 . s e l d o me q u a l t h e r e l a t e d a c t u a l r e s u l t s . 2 0 0 9 ( s e e N o t e 2 6 ) . g o v e r n si t s c l a s s i f i c a t i o n i n t h e G r o u p ’ s c o n s o l i d a t e d b a l a n c e s h e e t . J u d g m e n t s . C l a s s i f i c a t i o n o f f i n a n c i a l i n s t r u m e n t s T h eG r o u pc l a s s i f i e saf i n a n c i a l i n s t r u m e n t . a n d = P 1 .Wh e nt h e c o s t s o f c o n v e r s i o no f e a c hp r o d u c t a r e n o t s e p a r a t e l yi d e n t i f i a b l e . L e a s e c o n t r a c t s w h i c h t h e G r o u pr e t a i n s s u b s t a n t i a l l y a l l t h e r i s k s a n dr e w a r d s i n c i d e n t a l t oo w n e r s h i po f t h e l e a s e i t e m a r ea c c o u n t e df o r a s o p e r a t i n gl e a s e s . t h e s e l e a s e a g r e e m e n t s a r e a c c o u n t e d f o r a s o p e r a t i n g l e a s e . i n c l u d i n ge x p e c t a t i o n so ff u t u r ee v e n t st h a t a r eb e l i e v e dt ob e r e a s o n a b l e u n d e r t h e c i r c u m s t a n c e s .O t h e r w i s e . r e s p e c t i v e l y . A l l o c a t i o n o f c o s t t o m o l a s s e s i n v e n t o r y Ma n a g e m e n t u s e s j u d g m e n t t om e a s u r e a n da l l o c a t e v a l u e t ot h e m o l a s s e s i n v e n t o r y . t h e ya r e a l l o c a t e da m o n gt h e p r o d u c t s o n a r a t i o n a l a n d c o n s i s t e n t b a s i s . t h e f u n c t i o n a l c u r r e n c yi s d e t e r m i n e dt ob e P h i l i p p i n e p e s o . e s t i m a t e sa n da s s u m p t i o n sa r ec o n t i n u o u s l ye v a l u a t e da n da r eb a s e do nh i s t o r i c a l e x p e r i e n c ea n do t h e rf a c t o r s . r a t h e rt h a ni t sl e g a l f o r m . F u t u r e e v e n t s m a y o c c u r w h i c h w i l l c a u s e t h e a s s u m p t i o n s u s e d i n a r r i v i n g a t t h e e s t i m a t e s t o c h a n g e . e s t i m a t e s a n da s s u m p t i o n s t h a t h a v e a s i g n i f i c a n t r i s ko f c a u s i n ga m a t e r i a l a d j u s t m e n t t ot h e c a r r y i n ga m o u n t o f a s s e t s a n d l i a b i l i t i e s . m a n a g e m e n t e x e r c i s e dj u d g m e n t o n t h e f o l l o w i n gi t e m s . T h e G r o u pb e l i e v e s t h e f o l l o w i n gr e p r e s e n t a s u m m a r yo f j u d g m e n t s . 9 m i l l i o n .T h e a g g r e g a t e c a r r y i n gv a l u e o f t h e G r o u p ’ s f i n a n c i a l a s s e t s a n df i n a n c i a l l i a b i l i t i e s a m o u n t e d t oP = 9 6 9 . a s al e s s e e . D e t e r m i n a t i o n o f t h e C o m p a n y ’ s f u n c t i o n a l c u r r e n c y B a s e do nt h ee c o n o m i c s u b s t a n c e o f t h e u n d e r l y i n gc i r c u m s t a n c e s r e l e v a n t t ot h e C o m p a n y .A l s o . r e s p e c t i v e l y .T h es u b s t a n c eo faf i n a n c i a l i n s t r u m e n t . a p a r t f r o mt h o s e i n v o l v i n ge s t i m a t i o n s .T h e e f f e c t s o f a n y c h a n g e i n e s t i m a t e s a r e r e f l e c t e d i n t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s a s t h e y b e c o m e r e a s o n a b l y d e t e r m i n a b l e . 7 m i l l i o n a n d P = 6 . w i t h i n t h e n e x t f i s c a l y e a r . 7 7 6 . o r i t sc o m p o n e n t p a r t s . a s o f J u n e 3 0 . a s w e l l a s t o t h e r e l a t e d r e v e n u e s a n de x p e n s e s .T h e a l l o c a t i o n i s b a s e d o n r e l a t i v e s a l e s v a l u e o f c a n e p r o d u c t a t t h e c o m p l e t i o n o f p r o d u c t i o n . 3 2 3 . 2 0 1 0 .Wh e n t h e c o s t o f m o l a s s e s i s d e e m e d i m m a t e r i a l . J u d g m e n t s I nt h e p r o c e s s o f a p p l y i n gt h e G r o u p ’ s a c c o u n t i n gp o l i c i e s . T h e s e e s t i m a t e s c o n s i d e r t h e f l u c t u a t i o n s o f p r i c e o r c o s t d i r e c t l y r e l a t i n g t o e v e n t s o c c u r r i n g a f t e r t h e e n do f t h e p e r i o dt ot h e e x t e n t t h a t s u c he v e n t s c o n f i r mc o n d i t i o n s e x i s t i n ga t t h e e n do f t h e p e r i o d . An e wa s s e s s m e n t i s m a d eo f N R Vi ne a c hs u b s e q u e n t p e r i o d .A ni n c r e a s ei nt h eG r o u p ’ sa l l o w a n c ef o ri m p a i r m e n t o f r e c e i v a b l e sw o u l d i n c r e a s e i t s r e c o r d e d g e n e r a l a n d a d m i n i s t r a t i v e e x p e n s e s a n d d e c r e a s e i t s c u r r e n t a s s e t s . S e c o n d . 2 0 1 0a n d2 0 0 9 . s p e c i f i c a c c o u n t s a r e e v a l u a t e db a s e do ni n f o r m a t i o nt h a t c e r t a i nc u s t o m e r s m a yb e u n a b l e t om e e t t h e i r f i n a n c i a l o b l i g a t i o n s . r e s p e c t i v e l y ( s e e N o t e 5 ) . 0 8 7 . o f t h e a m o u n t t h a t t h e i n v e n t o r i e s a r e e x p e c t e d t o b e r e a l i z e d . F i r s t . 1 m i l l i o n a n d = P 1 . t h ec a r r y i n ga m o u n t o f t h eG r o u p ’ sr e c e i v a b l e sa m o u n t e dt o = P 8 3 2 . D e t e r m i n a t i o n o f p r o v i s i o n f o r i m p a i r m e n t o f r e c e i v a b l e s T h ep r o v i s i o nf o r i m p a i r m e n t o f r e c e i v a b l e s i s e s t i m a t e db a s e do nt w om e t h o d s . i n c l u d i n g b u t n o t l i m i t e d t o .T h e s e s p e c i f i ca l l o w a n c e s a r e r e e v a l u a t e da n da d j u s t e da s a d d i t i o n a l i n f o r m a t i o n r e c e i v e d i m p a c t s t h e a m o u n t s e s t i m a t e d .T h eG r o u p . T h eG r o u p ’ si n v e n t o r i e sa so fJ u n e3 0 . 8m i l l i o na n d= P 1 . t h e a m o u n t o f t h ew r i t e d o w ni s r e v e r s e ds ot h a t t h en e wc a r r y i n ga m o u n t i s t h el o w e r o f t h ec o s t a n dt h e r e v i s e dN R V . E s t i m a t e s a n d A s s u m p t i o n s T h e k e y a s s u m p t i o n s c o n c e r n i n g t h e f u t u r e a n do t h e r k e y s o u r c e s o f e s t i m a t i o n u n c e r t a i n t y a t t h e e n d o f r e p o r t i n g p e r i o d t h a t h a v e a s i g n i f i c a n t r i s k o f c a u s i n g a m a t e r i a l a d j u s t m e n t t o t h e c a r r y i n g a m o u n t s o f a s s e t s a n d l i a b i l i t i e s w i t h i n t h e n e x t f i s c a l y e a r s a r e d i s c u s s e d b e l o w . c u l t i v a t i o na n do t h e rd i r e c t e x p e n s e s .T h ea m o u n t s c a l c u l a t e d u s i n g e a c h o f t h e s e m e t h o d s a r e c o m b i n e d t o d e t e r m i n e t h e t o t a l a m o u n t t o b e p r o v i d e d . j u d g m e n t i s u s e d .C o s t st os e l l .n e to fa l l o w a n c ef o ri m p a i r m e n to fr e c e i v a b l e so f = P 2 0 . D e t e r m i n a t i o n o f p r o v i s i o n f o r u n r e c o v e r a b l e c r e d i t a b l e w i t h h o l d i n g t a x e s P r o v i s i o nf o ru n r e c o v e r a b l ec r e d i t a b l ew i t h h o l d i n gt a x e si sm a i n t a i n e da t al e v e l c o n s i d e r e d a d e q u a t et op r o v i d ef o rp o t e n t i a l l yu n r e c o v e r a b l ec l a i m s . D e t e r m i n a t i o n o f f a i r v a l u e l e s s e s t i m a t e d c o s t s t o s e l l o n c o n s u m a b l e b i o l o g i c a l a s s e t Ma n a g e m e n t d e t e r m i n e s t h ea g eo f t h es u g a r c a n ea n db a s e s t h ef a i r v a l u eo f t h es u g a r c a n eo n o b s e r v a b l em a r k e t d a t a . 9m i l l i o np e r t a i n st o a l l o c a t e d c o s t f r o mt h et o t a l p r o d u c t i o n c o s t s o f m i l l e d r a wa n d r e f i n e d s u g a r a s o f J u n e 3 0 . r e s p e c t i v e l y ( s e e N o t e 7 ) . t or e c o r ds p e c i f i ca l l o w a n c e s a g a i n s t a m o u n t s d u e t or e d u c e r e c e i v a b l e a m o u n t s e x p e c t e dt ob e c o l l e c t e d .2 0 1 0a n d2 0 0 9 . w h i c hi n c l u d e sf e r t i l i z i n g . 9 m i l l i o n . 5 m i l l i o n . r e s p e c t i v e l y ( s e e N o t e 6 ) . 2m i l l i o n . A so f J u n e3 0 . 2 0 1 0 a n d 2 0 0 9 . 3 m i l l i o n a n d = P 1 4 . D e t e r m i n a t i o n o f N R Vo f i n v e n t o r i e s T h e G r o u p ’ s e s t i m a t e s o f t h e N R Vo f i n v e n t o r i e s a r e b a s e d o n t h e m o s t r e l i a b l e e v i d e n c e a v a i l a b l e a t t h e t i m e t h e e s t i m a t e s a r e m a d e . 5 8 8 . m a k e s ar e v i e wo f t h es t a t u s o f t h ec l a i m s . b a s e do nt h e b e s t a v a i l a b l e f a c t s a n d c i r c u m s t a n c e s . m a n a g e m e n t u s e s j u d g m e n t b a s e do nt h e b e s t a v a i l a b l e f a c t s a n dc i r c u m s t a n c e s . Wh e nt h e c i r c u m s t a n c e s t h a t p r e v i o u s l y c a u s e d i n v e n t o r i e s t o b e w r i t t e n d o w n b e l o wc o s t n o l o n g e r e x i s t o r w h e n t h e r e i s a c l e a r e v i d e n c e o f a ni n c r e a s e i nN R Vb e c a u s e o f c h a n g e i ne c o n o m i c c i r c u m s t a n c e s . e x p e r i e n c ea n dc u s t o m e rp a y m e n t t e r m si sd e t e r m i n e d .t h eG r o u p ’ sc o n s u m a b l eb i o l o g i c a la s s e t sa m o u n t e dt o = P 2 4 .I nt h e s e c a s e s . 3m i l l i o na n dP = 1 9 .T h e a m o u n t a n dt i m i n go f r e c o r d e de x p e n s e s f o r a n yp e r i o dw o u l d t h e r e f o r e d i f f e r b a s e d o n t h e j u d g m e n t s o r e s t i m a t e s m a d e . 8 7 3 . a r e e s t i m a t e d b a s e d o n t h e y e a r l y b u d g e t s o f t h e G r o u p . T h ea m o u n t a n d t i m i n go f r e c o r d e de x p e n s e sf o ra n yp e r i o dc o u l dt h e r e f o r ed i f f e rb a s e do nt h ej u d g m e n t so r e s t i m a t e sm a d e . o nac o n t i n u i n gb a s i s .2 3 Ap o r t i o no fm o l a s s e si n v e n t o r ya m o u n t i n gt oP = 2 5 . r e s p e c t i v e l y ( s e e N o t e 6 ) .2 0 1 0a n d2 0 0 9a m o u n t e dt o = P 1 .I nt h e s e c a s e s . w r i t e o f f . a c o l l e c t i v e a s s e s s m e n t o f h i s t o r i c a l c o l l e c t i o n . t h e l e n g t h o f r e l a t i o n s h i pw i t h t h e c u s t o m e r a n dt h ec u s t o m e r ’ sc u r r e n tc r e d i ts t a t u sb a s e do nt h i r dp a r t yc r e d i tr e p o r t sa n dk n o w n m a r k e t f a c t o r s . 6 m i l l i o n a n d = P 2 3 . A so fJ u n e3 0 . d e s i g n e dt oi d e n t i f yt h o s et ob ep r o v i d e dw i t ha n y i m p a i r m e n t l o s s e s . 8 m i l l i o n . * S G V M C 3 1 0 9 6 2 * . I t i s p o s s i b l e .I fs u c h i n d i c a t i o n e x i s t s . R e v a l u a t i o n s a r e m a d e o nar e g u l a r b a s i s t oe n s u r e t h a t t h e c a r r y i n ga m o u n t s d on o t d i f f e r m a t e r i a l l yf r o mt h o s e w h i c h w o u l db ed e t e r m i n e du s i n gf a i rv a l u e sa t e n do fr e p o r t i n gp e r i o d . i nt h e e q u i t y s e c t i o n o f t h e c o n s o l i d a t e d b a l a n c e s h e e t s a n d i n t h e c o n s o l i d a t e d s t a t e m e n t s o f c h a n g e s i n e q u i t y . 2 0 1 0 a n d 2 0 0 9 . t h e e n t i t y s h a l l e s t i m a t e t h e r e c o v e r a b l e a m o u n t o f t h e a s s e t . * S G V M C 3 1 0 9 6 2 * . T h ec a r r y i n gv a l u eo f t h eG r o u p ’ si n v e s t m e n t i ns h a r eo f s t o c ko f a na s s o c i a t ea m o u n t e dt o = P 6 1 8 . 7m i l l i o n( s e e N o t e 9 ) . r e s p e c t i v e l y ( s e e N o t e 8 ) . r e s p e c t i v e l y ( s e e N o t e 9 ) . p l a n t a n de q u i p m e n t w o u l di m p a c t t h e r e c o r d e d o p e r a t i n ge x p e n s ea n dn o n c u r r e n t a s s e t s .E s t i m a t i n g t h e v a l u e i n u s e r e q u i r e s t h e G r o u p t o m a k e a n e s t i m a t e o f t h e e x p e c t e d f u t u r e c a s h f l o w s f r o mt h e c a s h g e n e r a t i n g u n i t a n d a l s ot oc h o o s e a na p p r o p r i a t e d i s c o u n t r a t e i no r d e r t oc a l c u l a t e t h e p r e s e n t v a l u eo f t h o s ec a s h f l o w s . S u c h e s t i m a t i o n i s b a s e d o n ac o l l e c t i v ea s s e s s m e n to fp r a c t i c e so fs i m i l a rb u s i n e s s e s . 7 m i l l i o n a n d = P 9 .Ac h a n g e i n t h e e s t i m a t e d u s e f u l l i f e o f a n yi t e mo f p r o p e r t y . 1 4 4 . 5 1 7 . 5m i l l i o n . 4 m i l l i o n . E s t i m a t i o n o f u s e f u l l i v e s a n d r e s i d u a l v a l u e s o f p r o p e r t y . I m p a i r m e n t o f n o n f i n a n c i a l a s s e t s T h e G r o u pa s s e s s e s a t e a c hr e p o r t i n gd a t ew h e t h e r t h e r e i s a n yi n d i c a t i o nt h a t ap r o p e r t y . 2 m i l l i o n a n d = P 9 . t e c h n i c a l o r c o m m e r c i a l o b s o l e s c e n c e a n d l e g a l o r o t h e r l i m i t s o n t h e u s e o f t h e a s s e t . 4 m i l l i o n a s o f J u n e 3 0 . T h e r e s u l t i n gi n c r e a s e i nt h ev a l u a t i o no f t h e s e a s s e t s b a s e do nt h e 2 0 0 8a n d2 0 0 6v a l u a t i o n s i s p r e s e n t e du n d e r “ R e v a l u a t i o ni n c r e m e n t o np r o p e r t i e s ” .T h e f a i r v a l u ew a s a r r i v e da t u s i n gt h e Ma r k e t D a t a A p p r o a c h f o r l a n d b a s e d o n t h e g a t h e r e d a v a i l a b l e m a r k e t e v i d e n c e s . 4 8 5 . w h i c h i s t h e h i g h e r o f a n a s s e t ’ s f a i r v a l u e l e s s c o s t s t o s e l l a n d i t s v a l u e i n u s e .T h ev a l u a t i o no f l a n di sp e r f o r m e db y p r o f e s s i o n a l l yq u a l i f i e di n d e p e n d e n t a p p r a i s e r s . 3m i l l i o na n d= P 5 3 .2 4 A s o f J u n e 3 0 .i n t e r n a lt e c h n i c a le v a l u a t i o na n d e x p e r i e n c e w i t h s i m i l a r a s s e t s . 2 0 1 0a n d2 0 0 9 . p l a n t a n de q u i p m e n t a n di n v e s t m e n t i ns h a r e so fs t o c ko fa na s s o c i a t em a yb ei m p a i r e d . p l a n t a n de q u i p m e n t a s o f J u n e 3 0 . 2 0 1 0a n d2 0 0 9a m o u n t e dt o= P 2 .n e to fa l l o w a n c ef o rl o s s e sa m o u n t i n gt o = P 1 3 . T h e t o t a l c a r r y i n gv a l u eo f t h e G r o u p ’ s p r o p e r t y . w h i c h a p p r o x i m a t e i t s f a i r v a l u e a t t h e d a t e o f t h e r e v a l u a t i o n . 3 m i l l i o n a n d = P 5 5 7 . r e s p e c t i v e l y ( s e e N o t e 9 ) . r e s p e c t i v e l y ( s e e N o t e 7 ) .T h eG r o u pd e t e r m i n e dt h a t t h ec a r r y i n gv a l u e so f p r o p e r t y . 6 6 2 . n e t o f t h er e l a t e dd e f e r r e di n c o m et a x l i a b i l i t ya n d“ S h a r e i nr e v a l u a t i o ni n c r e m e n t o nl a n do f a na s s o c i a t e ” . 7 m i l l i o n . 8 m i l l i o n . p l a n t a n de q u i p m e n t a n d i n v e s t m e n t i n s h a r e s o f s t o c k o n a n a s s o c i a t e a r e r e c o v e r a b l e . 2 0 1 0a n d2 0 0 9a m o u n t e dt oP = 9 .T h et o t a l c a r r y i n gv a l u eo f t h eG r o u p ’ sd e p r e c i a b l e p r o p e r t y . 2 9 7 . h o w e v e r . V a l u a t i o n o f l a n d u n d e r r e v a l u a t i o n b a s i s T h e G r o u p ’ s l a n d i s c a r r i e d a t r e v a l u e d a m o u n t . T h e e s t i m a t e d u s e f u l l i f e o f e a c h a s s e t i s r e v i e w e d p e r i o d i c a l l y a n d u p d a t e di f e x p e c t a t i o n s d i f f e r f r o mp r e v i o u s e s t i m a t e s d u e t o p h y s i c a l w e a r a n d t e a r . t h a t f u t u r e r e s u l t s o f o p e r a t i o n s c o u l d b e m a t e r i a l l y a f f e c t e d b y c h a n g e s i n t h e a m o u n t s a n d t i m i n g o f r e c o r d e de x p e n s e s b r o u g h t a b o u t b yt h e c h a n g e s i nt h e f a c t o r s m e n t i o n e da b o v e . 7 8 2 . 0m i l l i o na n dP = 2 . 2m i l l i o na n d = P 7 . p l a n t a n de q u i p m e n t a s o f J u n e3 0 . r e s p e c t i v e l y . p l a n t a n de q u i p m e n t i s e s t i m a t e db a s e d o n t h e p e r i o d o v e r w h i c h t h e a s s e t i s e x p e c t e d t o b e a v a i l a b l e f o r u s e .L a n dc a r r i e da t r e v a l u e d a m o u n t s a s o f J u n e 3 0 . 2 0 1 0a n d 2 0 0 9 a m o u n t e d t o = P 1 1 . p l a n t a n d e q u i p m e n t T h e u s e f u l l i f e o f e a c ho f t h e G r o u p ’ s i t e m s o f p r o p e r t y . t h e c a r r y i n ga m o u n t o f t h e G r o u p ’ s c r e d i t a b l e w i t h h o l d i n gt a x e s a m o u n t e dt o= P 8 4 . l e s sa n ya c c u m u l a t e di m p a i r m e n t l o s s e s . 5 %t o 3 . 1 . R e c o g n i t i o n o f d e f e r r e d i n c o m e t a x a s s e t s T h eG r o u pr e v i e w st h ec a r r y i n ga m o u n t sa t t h ee n do f e a c hr e p o r t i n gp e r i o da n dr e d u c e st h e a m o u n t o f d e f e r r e di n c o m et a xa s s e t s t ot h ee x t e n t t h a t i t i sn ol o n g e r p r o b a b l et h a t s u f f i c i e n t t a x a b l e p r o f i t i nt h e f u t u r ew i l l b e a v a i l a b l e t oa l l o wa l l o r p a r t o f t h ed e f e r r e dt a xa s s e t s t ob e u t i l i z e d . 4m i l l i o na n d= P 1 0 1 .T h e G r o u ph a s d e d u c t i b l e t e m p o r a r yd i f f e r e n c e s a n dc a r r y f o r w a r db e n e f i t s o f N O L C O a n dMC I Ta m o u n t i n gt o= P 1 1 7 . r e s p e c t i v e l y . e x p e c t e d r a t e o f r e t u r n o n p l a n a s s e t s a n d r a t e o f s a l a r y i n c r e a s e . 1 m i l l i o n a n d P = 7 4 . 2 0 0 9a n d2 0 0 8 .T h ea v e r a g em a t u r i t i e so f t h e s ep l a c e m e n t s i s3 0d a y st o6 0d a y s . 7 m i l l i o n . 4m i l l i o na so fJ u n e3 0 . A ne s t i m a t e o f t h e p r o v i s i o ni s b a s e do nk n o w ni n f o r m a t i o na t t h e e n do f r e p o r t i n g p e r i o d . p r o v i s i o n s a r e d i s c o u n t e du s i n g a c u r r e n t p r e t a xr a t e t h a t r e f l e c t s t h e r i s k s s p e c i f i c t ot h e l i a b i l i t y . 7 m i l l i o n i n 2 0 1 0 . P r o v i s i o n s T h e G r o u pp r o v i d e s f o r p r e s e n t o b l i g a t i o n s ( l e g a l o r c o n s t r u c t i v e ) w h e r e i t i s p r o b a b l e t h a t t h e r e w i l l b e a no u t f l o wo f r e s o u r c e s e m b o d y i n ge c o n o m i cb e n e f i t s t h a t w i l l b e r e q u i r e dt os e t t l e s a i d o b l i g a t i o n s . 2 0 1 0a n d2 0 0 9 . 7 0 5 = P 2 8 6 . a n d t a x a s s e s s m e n t s t h a t a r e n o r m a l t o i t s b u s i n e s s . 6m i l l i o n . 4 m i l l i o n a n d = P 1 1 . r e s p e c t i v e l y . 5m i l l i o na n d = P 1 4 2 . = P 9 5 7 1 7 6 . * S G V M C 3 1 0 9 6 2 * . N o p r o v i s i o n i s d e e m e d n e c e s s a r y a s o f J u n e 3 0 . 5 %t o 5 . c l a i m s .A c t u a l r e s u l t s t h a t d i f f e rf r o mt h eG r o u p ’ sa s s u m p t i o n sa r ea c c u m u l a t e da n da m o r t i z e do v e rf u t u r ep e r i o d sa n d t h e r e f o r e . r e s p e c t i v e l y ( s e e N o t e 2 2 ) . I f t h e e f f e c t o f t h e t i m e v a l u e o f m o n e yi s m a t e r i a l . B a s e d o n t h e o p i n i o n o f t h e G r o u p ’ s l e g a l c o u n s e l s o n t h e p r o g r e s s a n d l e g a l g r o u n d s o f t h e s e c a s e s . 4 . A ss u c h . P = 8 2 7 – 5 . N e tp e n s i o np l a na s s e t sa so fJ u n e3 0 . 0 %a n d 1 . C o n t i n g e n c i e s T h e G r o u p i s i n v o l v e d i n v a r i o u s o t h e r l a b o r d i s p u t e s . 2 0 1 0 a n d 2 0 0 9 . 5 %.2 5 E s t i m a t i o n o f r e t i r e m e n t b e n e f i t s c o s t T h e d e t e r m i n a t i o n o f t h e o b l i g a t i o n a n d c o s t f o r p e n s i o n a n d o t h e r r e t i r e m e n t b e n e f i t s i s d e p e n d e n t o nt h es e l e c t i o no f c e r t a i na s s u m p t i o n s d e t e r m i n e db ym a n a g e m e n t a n du s e db yt h ea c t u a r yi n c a l c u l a t i n g s u c h a m o u n t s . n e t o f a n y e s t i m a t e d a m o u n t t h a t m a y b e r e i m b u r s e d t o t h e G r o u p . 1 % p e r a n n u mi n2 0 1 0 . d i s c o u n t r a t e . = P 7 . 2 0 1 0 a n d 2 0 0 9 a m o u n t e d t o P = 4 1 .n op r o v i s i o nw a sm a d ef o rt h e s eo t h e r c o n t i n g e n c i e s a s o f J u n e 3 0 .T h e a m o u n t o f p r o v i s i o ni s b e i n gr e a s s e s s e da t l e a s t o na na n n u a l b a s i s t o c o n s i d e r n e wr e l e v a n t i n f o r m a t i o n . n e t p e n s i o nb e n e f i t o b l i g a t i o na so f J u n e3 0 . 8 2 7 C a s h o n h a n d a n d i n b a n k s S h o t e r mp l a c e m e n r t t s S h o r t t e r mp l a c e m e n t s e a r n i n t e r e s t r a n g i n gf r o m1 .2 0 1 0a n d2 0 0 9a m o u n t e dt o= P 1 4 0 .O nt h eo t h e r h a n d . r e s p e c t i v e l y . a m o n g o t h e r s . r e s p e c t i v e l y ( s e e N o t e 1 5 ) .I n t e r e s t i n c o m ee a r n e do nc a s hi nb a n k sa n ds h o r t t e r mp l a c e m e n t s a m o u n t e d t o = P 5 . 6 6 2 P = 1 7 6 . t h e G r o u pb e l i e v e s t h a t i t d o e s n o t h a v e a p r e s e n t o b l i g a t i o n a r i s i n g f r o m ap a s t e v e n t a n d / o rt h el i k e l yo u t c o m ea n de s t i m a t e dp o t e n t i a l c a s ho u t f l o wc a n n o t b e r e a s o n a b l yd e t e r m i n e da so ft h i st i m e . l i t i g a t i o n s . g e n e r a l l y a f f e c t t h e r e c o g n i z e d e x p e n s e a n d r e c o r d e d o b l i g a t i o n i n s u c h f u t u r e p e r i o d s . T h o s e a s s u m p t i o n s a r e d e s c r i b e d i n N o t e 1 5 a n d i n c l u d e . 2 0 0 9 a n d 2 0 0 8 . 3 %t o 2 . 2 m i l l i o n .C a s ha n dC a s h E q u i v a l e n t s C a s h a n d c a s h e q u i v a l e n t s a t J u n e 3 0 c o n s i s t o f : 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s ) 2 8 0 . 2 0 1 0 a n d 2 0 0 9 ( s e e N o t e 1 6 ) . 1 9 2 3 0 . 2 0 1 0a n d2 0 0 9a m o u n t i n gt o = P 3 . 8 9 3 = P 1 . n e t o f u n e a r n e d i n t e r e s t i n c o m e ( p r e s e n t e d a s a d e d u c t i o n f r o ms u c h r e c e i v a b l e ) a m o u n t i n g t o = P 0 . 2 1 6 = P 7 5 6 . 5 4 0 1 0 3 – 2 3 P = 3 5 6 ( 3 ) 6 . 9 1 5 2 0 0 8 6 . 2 7 6 – 9 . 0 4 4 1 . 6m i l l i o n . a s o f J u n e 3 0 f o l l o w : A d d i t i o n s A d d i t i o n s ( N o t e 1 9 )Wr i t e o f f s 2 0 0 9 ( N o t e 1 9 ) Wr i t e o f f s 2 0 1 0 ( I n T h o u s a n d s ) P = 6 . 1 4 4 – 1 . 4 m i l l i o n a s o f J u n e 3 0 .N a s u g b u . 4 8 1 2 7 . 7 0 5 8 5 3 . 1 8 8 T r a d e A d v a n c e s t o : R e l a t e d p a r t i e s ( N o t e 1 4 ) E m p l o y e e s P l a n t e r s a n d c a n e h a u l e r s A d v a n c e s f o r r a ws u g a r p u r c h a s e s O t h e r s L e s s a l l o w a n c e f o r i m p a i r m e n t o f r e c e i v a b l e s A d v a n c e st oe m p l o y e e sp e r t a i nt oa d v a n c e sf o r t h eG r o u p ’ se x p e n s e sw h i c ha r es u b s e q u e n t l y l i q u i d a t e d . 6 6 4 1 6 . 5 0 2 P = 2 3 0 P = – P = 6 .B a t a n g a st oi t se m p l o y e e s . 6 8 0 4 9 . 8 m i l l i o n a n d P = 2 . 2m i l l i o n a n d = P 6 . 8 9 1 – 1 5 0 P = 2 . 8 7 1 1 . 2 7 6 9 . D u et ot h e R e o r g a n i z a t i o n P r o g r a md i s c u s s e d i n N o t e 1 . 7 3 2 P = – ( P = 3 . 8 9 3 1 . 9 6 2 5 7 . r e s p e c t i v e l y .T h e s e a d v a n c e s a l s o i n c l u d e n o n i n t e r e s t b e a r i n g s a l a r y . h o u s i n g a n d e d u c a t i o n a l l o a n s t h a t a r e c o l l e c t e d t h r o u g h s a l a r y d e d u c t i o n . 7 1 8 P = 2 3 . i s p r e s e n t e du n d e r “ O t h e r n o n c u r r e n t a s s e t s ” a c c o u n t n e t o f u n e a r n e d i n t e r e s t i n c o m e o f = P 0 . 6 4 4 T r a d e A d v a n c e s t o p l a n t e r s a n d c a n e h a u l e r s A d v a n c e s t o e m p l o y e e s O t h e r s * S G V M C 3 1 0 9 6 2 * . N o n c u r r e n t p o r t i o no f l o a n s t oC A D P I e m p l o y e e s a so f J u n e3 0 . 2 m i l l i o n .T h e s el o a n sb e a r a n n u a l i n t e r e s t o f 1 2 %a n da r e p a y a b l e o v e r 1 0 y e a r s u n t i l 2 0 1 2 . 7 6 2 3 8 . r e s p e c t i v e l y .R e c e i v a b l e s R e c e i v a b l e s a t J u n e 3 0 c o n s i s t o f : 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s ) P = 6 8 1 . r e m a i n i n g b a l a n c e o n t h e c u r r e n t p o r t i o n o f s u c h r e c e i v a b l e a m o u n t e d t o = P 4 . 2 9 0 ) P = 2 0 . 0 2 2 3 8 . 0 8 1 2 3 . 7 4 1 ( = P 3 ) P = 2 3 .2 6 5 .T h e a c c o u n t a l s o i n c l u d e s o u t s t a n d i n g r e c e i v a b l e f r o mt h e 2 0 0 2 s a l e o f a p o r t i o n o f t h eC o m p a n y ’ sl a n di nB a r r i oB i l a r a n . 1 1 1 . 2 0 1 0 a n d 2 0 0 9 . w h e r e a s . 4 7 3 ) 8 . 0 8 7 . 4 1 8 ( P = 5 . 6 4 4 P = 8 3 2 . 0 4 1 – 8 . r e s p e c t i v e l y . t h e e m p l o y e e s w e r e t r a n s f e r r e d t o C A D P I . 8 m i l l i o n a n d P = 0 . 5 4 7 1 5 . 8 1 7 ) P = 2 . 1 m i l l i o n . A s o f J u n e 3 0 . 2 7 6 ( 1 . 4 2 3 5 0 . t h er e c e i v a b l er e m a i n e dw i t ht h eC o m p a n y . D e t a i l sa n dm o v e m e n t o fa l l o w a n c ef o ri m p a i r m e n t o fr e c e i v a b l e s . d e t e r m i n e du s i n gs p e c i f i c a s s e s s m e n t . 8 0 0 2 0 1 . 2 0 1 0 a n d 2 0 0 9 . 0 3 5 – 1 . O t h e r r e c e i v a b l e s i n c l u d e a d v a n c e s t os u p p l i e r s f o r t h e p u r c h a s e o f l o c a l a n di m p o r t e dm a t e r i a l s a n d s u p p l i e s . 4 4 4 2 0 . 9 9 5 1 2 . 1 1 1 . 2 0 0 9a n d2 0 0 8 . 1 1 7 5 3 . 7 1 5 = P 1 5 2 . C o s to fi n v e n t o r i e sr e c o g n i z e da se x p e n s ea n di n c l u d e di n“ C o s to fs a l e s ”a m o u n t e dt o = P 3 . 5 2 6 = P 1 . 6 0 1 ) ( 3 1 . 5 4 5 ) = P 2 1 . = P 3 . 8m i l l i o ni n2 0 1 0 . 7 9 6 2 0 . 1 3 4 P = 1 . 7 6 1 = P 2 5 . 7m i l l i o na n d= P 3 . 1 3 7 2 0 0 9 A t c o s t : R e f i n e d s u g a r A l c o h o l Ma t e r i a l s i n t r a n s i t A t N R V : R a ws u g a r Mo l a s s e s Ma t e r i a l s a n d s u p p l i e s = P 3 1 0 .P r e p a y me n t s a n dO t h e r C u r r e n t A s s e t s P r e p a y m e n t s a n d o t h e r c u r r e n t a s s e t s a t J u n e 3 0 c o n s i s t o f : 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s ) = P 6 3 . 2 3 6 P = 1 1 1 . 6 6 6 = P 3 0 . 5 9 3 – 1 3 2 . 3 2 2 9 . 3 6 5 ( 2 . 2 7 8 1 9 . I n p u t v a l u e a d d e d t a x e s a r i s e f r o mp u r c h a s e s o f e q u i p m e n t a n d s e r v i c e s r e l a t i n g t o t h e E x p a n s i o n P r o j e c t a n d R B CP l a n t c o n s t r u c t i o n ( s e e N o t e 9 ) . 2 6 7 2 4 .I n v e n t o r i e s I n v e n t o r i e s a t J u n e 3 0 c o n s i s t o f : 2 0 1 0 ( I n T h o u s a n d s ) P = 7 3 2 . 3m i l l i o n . 5 8 8 . 7 5 9 ) = P – Ma t e r i a l s a n d S u p p l i e s 2 0 0 9 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s ) = P 1 0 . n e t o f a l l o w a n c e o f P = 1 3 . 1 1 8 . 8 6 9 5 1 1 . 1 3 8 P = 2 2 9 . 9 7 6 1 1 . r e s p e c t i v e l y ( s e e N o t e 1 8 ) . 0 9 2 2 1 . 0 7 6 1 3 5 . 0 8 4 6 1 4 . 9 7 6 = P 2 9 . 9 9 5 = P 3 0 . 1 9 9 I n p u t V A Ta n d o t h e r p r e p a i d t a x e s C r e d i t a b l e w i t h h o l d i n g t a x e s . 2 3 4 5 . 8 m i l l i o n i n 2 0 0 9 ( N o t e 1 9 ) C o n s u m a b l e b i o l o g i c a l a s s e t s O t h e r s C o n s u m a b l e b i o l o g i c a l a s s e t s p e r t a i n t o s t a n d i n g s u g a r c a n e s o f N A V I . 5 3 2 5 8 4 . 8 7 3 . 6 8 5 – – – – – ( 4 . 3 1 0 2 . 0 2 5 3 8 1 . * S G V M C 3 1 0 9 6 2 * . 4 3 7 1 9 .2 7 6 . 7 m i l l i o n i n 2 0 1 0 a n d P = 9 . 1 1 6 R e c o v e r yo f i n v e n t o r yl o s s e s o f r a ws u g a r p e r t a i n s t ot h e i n c r e a s e i nt h en e t r e a l i z a b l e v a l u eo f i n v e n t o r y d u e t o h i g h e r s e l l i n g p r i c e . 7 . 4 5 2 1 4 . 3 9 0 8 4 . 0 7 1 . 5 0 9 D e t a i l sa n dm o v e m e n t so fa l l o w a n c e sf o ri n v e n t o r yl o s s e so fr a ws u g a ra n di n v e n t o r y o b s o l e s c e n c e o f m a t e r i a l s a n d s u p p l i e s a s o f J u n e 3 0 f o l l o w : R a wS u g a r 2 0 1 0 B e g i n n i n g P r o v i s i o n s R e c o v e r y Wr i t e o f f s E n d i n g P = 2 1 . 2 8 3 2 6 7 . 1 1 7 1 4 . 2 0 1 0 . 5 4 7 . 6 6 7 B u i l d i n g s a n d I mp r o v e me n t s C o s t B e g i n n i n g b a l a n c e s A d d i t i o n s D i s p o s a l s R e c l a s s i f i c a t i o n E n d i n g b a l a n c e s ( F o r w a r d ) = P 1 . 7 2 0 . 2 2 5 2 9 3 . 2 0 4 9 2 . 4 5 . 9 3 3 2 2 2 . 4 4 9 ) 4 . 5 9 5 1 . 2 2 4 .P r o p e r t y . 3 7 3 2 8 2 . P l a n t a n dE q u i p me n t D e t a i l s a n d m o v e m e n t s o f p r o p e r t y . p l a n t a n d e q u i p m e n t . 0 4 1 . 9 3 5 2 0 1 0 P = 5 2 7 . 9 8 6 7 6 6 . 2 5 5 8 0 0 . 5 0 5 * S G V M C 3 1 0 9 6 2 * . 3 4 6 1 5 4 . 3 8 4 ( 9 8 2 ) – ( 1 3 0 . 4 7 7 8 . 4 3 5 7 8 1 . 8 0 8 . 6 4 6 = P4 . 7 9 8 1 2 9 . d e t a i l s o f t h e i n v e s t m e n t i nH P C o . 1 6 5 . T h e s u m m a r i z e d f i n a n c i a l i n f o r m a t i o n o f H P C o a s o f a n d f o r t h e y e a r s e n d e d J u n e 3 0 . 4 9 8 . 3 0 4 . 9 6 7 . 0 8 6 . 4 2 1 1 . 6 8 8 = P 1 2 3 . 1 4 4 2 3 . 3 6 3 ) ( 2 1 . 0 0 7 2 0 7 . 8 2 0 ) 2 . 6 4 3 3 2 . 2 7 0 7 1 . 9 8 2 7 3 1 . 9 3 3 P = 1 2 7 . 0 9 %o w n e da s s o c i a t e . a n d R a i l r o a d F i x t u r e s a n d C o n s t r u c t i o n E q u i p me n t E q u i p me n t E q u i p me n t i n P r o g r e s s ( I n T h o u s a n d s ) P = 5 .2 8 O t h e r c u r r e n t a s s e t s c o n s i s t o f p r e p a i di n s u r a n c e a n dr e n t a l s . 8 . 2 0 0 9 a n d 2 0 0 8 a r e a s f o l l o w s : 2 0 1 0 C u r r e n t a s s e t s N o n c u r r e n t a s s e t s C u r r e n t l i a b i l i t i e s N o n c u r r e n t l i a b i l i t i e s N e t a s s e t s R e v e n u e N e t i n c o m e 9 . 3 3 4 = P 1 2 . f o l l o w : 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s ) = P 1 2 7 . 6 7 0 ( 1 0 . 4 1 4 3 1 9 . 8 9 7 2 0 7 . f o r t h e y e a r s e n d e d J u n e 3 0 a r e s h o w n b e l o w : O f f i c e Ma c h i n e r y F u r n i t u r e . 0 4 4 9 1 6 . a d v a n c e p a y m e n t s m a d e t oa s u g a r m i l l i n g c o m p a n y f o r t o l l i n g s e r v i c e s a n d a d v a n c e d i n p u t V A Tf o r r e f i n e d s u g a r s a l e s . 8 7 4 1 7 6 . 3 3 1 2 0 0 9 ( I n T h o u s a n d s ) = P 4 3 3 . 1 4 6 2 . 4 9 2 P = 6 1 8 . 4 9 2 = P 5 5 7 . 1 0 3 3 0 5 . 5 6 4 . 0 9 5 T o t a l P = 6 0 5 . 5 2 7 6 8 . 2 0 1 0a n d2 0 0 9 .I n v e s t me n t i n S h a r e s o f S t o c k o f a n A s s o c i a t e A s a t J u n e 3 0 . 5 0 9 1 . 2 6 3 3 5 4 . 5 6 4 2 9 0 . a n d i n c o r p o r a t e d i n t h e P h i l i p p i n e s . 2 5 1 ) ( 8 0 3 . 8 8 0 7 5 0 . 4 3 2 A c q u i s i t i o n c o s t A c c u m u l a t e d e q u i t y i n n e t e a r n i n g s B e g i n n i n g o f y e a r E q u i t y i n n e t e a r n i n g s f o r t h e y e a r L e s s d i v i d e n d r e c e i v e d E n d o f y e a r S h a r e i n r e v a l u a t i o n i n c r e m e n t H P C oi s p r i m a r i l ye n g a g e di nt h e m a n u f a c t u r i n ga n dt r a d i n go f r a wa n dr e f i n e ds u g a r . 9 5 3 9 6 . m o l a s s e s a n d o t h e r s u g a r b y p r o d u c t s . 5 6 3 7 9 7 . 9 6 3 7 9 . 5 6 7 . 2 1 7 . 0 5 2 3 8 6 . 4 0 8 – 6 8 6 . 9 1 1 ) 6 8 . 3 2 2 2 1 0 . 6 7 0 3 . 5 9 7 ( 1 1 8 . 3 0 7 . 5 3 9 1 4 . 3 4 6 . 5 2 0 2 2 2 . 8 8 9 2 . 3 6 1 1 . 0 0 7 1 3 2 . v a l u e d a t c o s t b a s i s . 4 5 7 2 0 0 8 P = 4 3 6 . 5 5 7 ) ( 2 . a s w e l l a s c o n s t r u c t i o n a n d i m p r o v e m e n t o f w a s t e a n d p o l l u t i o n f a c i l i t i e s o f t h e G r o u p . 6 4 6 4 8 9 . 1 4 7 ( 1 . 3 2 6 = P 1 . 9 7 5 ( 5 . 0 9 7 – ( 5 8 . 2 0 1 0a n d2 0 0 9p e r t a i n sm a i n l yt ot h ef o r e g o i n g m i l l i n gp l a n t i m p r o v e m e n t p r o j e c t . R a i l r o a d F i x t u r e s a n d C o n s t r u c t i o n E q u i p m e n t E q u i p m e n t i n P r o g r e s s ( I n T h o u s a n d s ) = P 1 2 1 . 7 5 6 ) = P 2 . 7 9 8 6 5 9 . 0 5 1 O f f i c e F u r n i t u r e . 3 6 1 3 . a n d R a i l r o a d F i x t u r e s a n d C o n s t r u c t i o n E q u i p me n t E q u i p me n t E q u i p me n t i n P r o g r e s s ( I n T h o u s a n d s ) = P 3 . 7 7 5 . 6 5 0 – 5 1 5 . 1 5 2 P = 1 . 4 4 2 6 7 . 4 2 6 ( 1 0 . F l o r i d a . 4 9 4 = P 9 0 . 3 5 6 Ma c h i n e r y a n d E q u i p m e n t = P 5 . 2 2 4 . 3 5 3 . 1 4 4 . 4 1 8 ) ( 2 1 . 6 0 7 .C o n s t r u c t i o n i n p r o g r e s s C o n s t r u c t i o ni np r o g r e s sa so fJ u n e3 0 . 2 8 3 4 . 5 1 7 . 5m i l l i o n . 5 5 8 . 0 5 1 ( 6 . 9 3 5 2 0 0 9 = P 5 1 5 . 0 4 2 3 0 4 . 9 4 1 . 0 0 0 = P 2 1 . 2 6 8 = P 9 . 3 6 1 = P 1 . C A D P G Ce n t e r e di n t oap u r c h a s e a g r e e m e n t . Mi l l i n g p l a n t i m p r o v e m e n t p r o j e c t ( t h e E x p a n s i o n P r o j e c t ) Wi t ht h e i n t e n t o f i m p r o v i n gi t s r e v e n u e g e n e r a t i n gc a p a b i l i t y . 0 3 0 ) ( 3 6 2 ) 1 1 . 4 1 0 ) 5 . 4 9 4 1 0 . 5 4 7 . 3 5 3 = P 1 4 . 2 3 1 ) 1 . 2 9 7 . P = 7 1 5 B e g i n n i n g b a l a n c e a t a p p r a i s a l v a l u e s A d d i t i o n s R e v a l u a t i o n d e c r e a s e E n d i n g b a l a n c e a t a p p r a i s a l v a l u e s A t c o s t a . 3 3 4 T o t a l P = 8 . 1 1 7 2 0 1 0 T o t a l = P 4 . 1 1 8 ) 7 3 6 . 4 8 3 ) 3 . 1 5 8 1 8 7 ( 1 9 ) 1 2 1 . 6 0 7 . 5 7 2 4 0 7 . 4 8 5 . 5 7 2 = P 7 . 6 6 0 P = 2 . a * S G V M C 3 1 0 9 6 2 * . 3 1 7 P = – – – – – = P 3 . 1 7 9 2 3 5 . 3 9 9 . 6 1 4 ( 5 . 8 7 1 ( 6 4 0 ) ( 4 7 1 . 8 9 6 ) 4 . I nA u g u s t 2 0 0 7 . 0 3 4 1 8 3 . 2 0 1 . 9 3 0 2 . C A D P I a n d C A C I . 1 0 8 ( 2 9 . 9 9 5 ( 1 2 . 6 6 0 – 2 6 . 7 4 8 ) 4 7 7 . 3 7 2 ) 5 4 . 0 6 6 ( 1 1 8 . 7 1 1 L a n d a t a p p r a i s e d v a l u e s a n d h a d i t b e e n c a r r i e d a t c o s t a t t h e b e g i n n i n g a n d e n d o f J u n e 3 0 a r e a s f o l l o w s : 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s ) = P 2 . 4 4 2 = P 5 2 7 . 0 5 3 . 7 9 1 – 6 0 5 . 9 6 7 . 9 4 1 . 3 1 0 3 2 1 .T h ep u r c h a s ep e r t a i n st o d i f f e r e n t p i e c e so f d i s a s s e m b l e de q u i p m e n t t h a t o r i g i n a t e df r o m“ B r y a n t S u g a r H o u s e ” . 3 2 6 8 . 6 6 0 P = 2 . 8 6 1 4 2 . 0 2 5 ( 1 2 5 . w i t h a f o r e i g n c o r p o r a t i o n t o b u y c e r t a i n s u g a r m i l l e q u i p m e n t f o rat o t a l p u r c h a s ep r i c eo fU S $ 1 9 . 5 1 7 . 1 6 1 ) 1 2 3 . 5 5 4 = P 4 . 6 4 8 . 4 4 5 ( 4 2 . 1 5 8 3 . 8 1 8 = P 5 6 3 . 6 4 0 3 . f o r a n do nb e h a l f o f i t s t h e n w h o l l y o w n e d s u b s i d i a r i e s . 2 3 7 B u i l d i n g s a n d I m p r o v e m e n t s C o s t B e g i n n i n g b a l a n c e s A d d i t i o n s D i s p o s a l s E n d i n g b a l a n c e s A c c u mu l a t e dd e p r e c i a t i o n B e g i n n i n g b a l a n c e s D e p r e c i a t i o n D i s p o s a l s E n d i n g b a l a n c e s N e t B o o kV a l u e = P 1 . 3 7 7 . 0 8 6 . 6 6 3 1 4 1 . 9 6 7 . 0 5 3 . 9 8 3 . = P 6 2 0 5 8 . 8 4 4 2 5 . 7 3 4 O f f i c e Ma c h i n e r y F u r n i t u r e . 8 5 5 4 1 . A u s t r a l i a . 3 1 0 = P 1 . 0 0 1 3 2 . 1 4 4 1 2 1 . 1 6 5 . 9 8 3 . 4 0 4 – 4 . t h e G r o u pp u r c h a s e ds e c o n d h a n dm i l l s a n d r e l a t e de q u i p m e n t f r o mB r y a n t . 8 0 2 ) 1 2 . U n i t e d S t a t e s o f A m e r i c a ( U S A ) a n d F a i r y m e a d . 9 4 1 4 . 5 1 7 . 3 9 4 ) 6 9 7 . 3 0 4 . 4 0 9 .2 9 - B u i l d i n g s a n d I mp r o v e me n t s A c c u mu l a t e dd e p r e c i a t i o n B e g i n n i n g b a l a n c e s D e p r e c i a t i o n D i s p o s a l s R e c l a s s i f i c a t i o n E n d i n g b a l a n c e s N e t B o o kV a l u e = P 6 9 7 . 3 3 4 – – – – = P 4 . r e f i n e r yp l a n t i n s t a l l a t i o no f s i e v i n gf a c i l i t i e s . 1 3 4 = P 1 2 1 . 0 3 7 – ( 2 8 . 9 1 1 ) 5 . 2m i l l i o na n d = P 3 7 0 . 9m i l l i o n a n dP = 4 5 . 2 0 4 P = 3 8 1 . 1m i l l i o n .A s o f J u n e 3 0 . 2m i l l i o na n d = P 1 1 1 . t h e b a l a n c e i n t h e c o n s t r u c t i o n i n p r o g r e s s r e l a t i n g t o R B Cp l a n t a m o u n t e d t o P = 1 . 2 4 5 = P 3 2 8 .= P 2 . * S G V M C 3 1 0 9 6 2 * . 8m i l l i o na n d = P 6 8 . 2 0 0 8 . 4 0 4 . 6 %i n 2 0 1 0 . 2 0 0 9 a n d 2 0 0 8 . a r e s t i l l b e i n gu s e di n o p e r a t i o n s . w i t ha n a g g r e g a t e c o s t o f = P 1 .D e p r e c i a t i o n D e p r e c i a t i o n c h a r g e d t o o p e r a t i o n s a r e a s f o l l o w s : 2 0 0 9 ( I n T h o u s a n d s ) = P 2 7 4 . 7m i l l i o n . i nl i n e w i t h t h e G r o u pE x p a n s i o n P r o j e c t . 1 0 3 C o s t o f s a l e s ( N o t e 1 8 ) G e n e r a l a n d a d m i n i s t r a t i v e e x p e n s e s ( N o t e 1 9 ) A so f J u n e3 0 . 2 0 1 0 a n d 2 0 0 9 . 0 6 4 P = 4 0 7 .3 0 s u g a r m i l l l o c a t e di nB r y a n t . 9 6 1 2 0 1 0 2 5 . 4 0 0 . w h i c h a r e t h e a v e r a g e e f f e c t i v e i n t e r e s t r a t e s o f t h e b o r r o w i n g s . 2 m i l l i o n a n d = P 5 8 4 . 2 0 0 9a n d2 0 0 8 . U S A . 2 0 1 0a n d2 0 0 9 . 8 m i l l i o n . 0 2 5 3 0 .U n a m o r t i z e d c a p i t a l i z e di n t e r e s ta so fJ u n e3 0 . N o n c a s h a d d i t i o n s t o p r o p e r t y . C a p i t a l i z a t i o n o f b o r r o w i n g c o s t s I n t e r e s t s f r o ms h o r t a n dl o n g t e r mb o r r o w i n g s a m o u n t i n gt o= P 1 7 4 . 6m i l l i o n . 8 %. T oc o m p l e m e n t t h em i l l sf r o mB r y a n t S u g a rH o u s e . r e s p e c t i v e l y( s e eN o t e2 2 ) . 2 0 2 . 7 %a n d 6 . F l o r i d a . p l a n t a n de q u i p m e n t . r e s p e c t i v e l y .p l a n ta n de q u i p m e n t . = P 2 7 7 . 4 2 6 2 0 0 8 = P 3 0 1 . 1m i l l i o n . 8 5 8 2 6 . m i l l c o m p o n e n t sa n ds h r e d d e rw e r e p u r c h a s e d f r o mA u s t r a l i a i n Ma r c h 2 0 0 8 .T h eG r o u pa m o r t i z e ss u c h c a p i t a l i z e d i n t e r e s t o v e r t h e u s e f u l l i f e o f t h e q u a l i f y i n g a s s e t t o w h i c h i t r e l a t e s . r e s p e c t i v e l y . 6 . o f w h i c ht h e s e l l e r s h a dp u r c h a s e df r o mU n i t e d S t a t e sS u g a rC o r p o r a t i o nt h r o u g hap u r c h a s ea n dr e m o v a la g r e e m e n te x e c u t e do n A p r i l 3 0 . i n c u r r e dt of i n a n c et h eE x p a n s i o n P r o j e c tw e r ec a p i t a l i z e dt op r o p e r t y . 2 0 0 9 a n d 2 0 0 8 . 2 0 0 7 . 2 2 2 = P 3 0 4 . T h e G r o u po b t a i n e ds h o r t a n dl o n g t e r mb o r r o w i n g s f r o mv a r i o u s l o c a l b a n k s t of i n a n c e t h e E x p a n s i o n P r o j e c t ( s e e N o t e s 1 0 a n d 1 3 ) . R B CP l a n t C o n s t r u c t i o n P r o j e c t O n J u n e 2 7 . T h er a t e su s e dt od e t e r m i n et h ea m o u n to f b o r r o w i n g c o s t s e l i g i b l e f o r c a p i t a l i z a t i o n w e r e 8 .2 0 1 0a n d2 0 0 9a m o u n t e dt oP = 5 2 4 . p l a n t a n d e q u i p m e n t T h eG r o u ph a so u t s t a n d i n gl i a b i l i t i e sf o r p u r c h a s eo f e q u i p m e n t r e l a t i n gt ot h eE x p a n s i o n P r o j e c ta n dR B CP l a n tc o n s t r u c t i o na m o u n t i n gt o= P 5 4 . r e s p e c t i v e l y . r e s p e c t i v e l y . 4m i l l i o nw i t hc o r r e s p o n d i n gd e f e r r e di n c o m et a xl i a b i l i t yo fP = 1 5 7 . 5m i l l i o ni n2 0 1 0 . R B Ce n t e r e di n t oa n a g r e e m e n t t oc o n s t r u c t i t s b i o e t h a n o l p l a n t i nL aC a r l o t aC i t y . b . r e s p e c t i v e l y . 9 m i l l i o n . N e g r o s O c c i d e n t a l f o r at o t a l c o n t r a c t e d a m o u n t o f U S $ 2 0 . 1 m i l l i o n a s o f J u n e 3 0 . 6m i l l i o na n dP = 1 . 2 0 1 0 . f u l l yd e p r e c i a t e dp r o p e r t y . 8 7 4 5 6 . 6 5 0 P = 6 0 8 .P r o p e r t y . a r e s u b j e c t t oa n n u a l i n t e r e s t r a t e s r a n g i n gf r o m4 . 5 m i l l i o n a n d = P 1 . 7 0 4 P = 1 3 1 . 5 . 7 5 %a n d 4 . 5 4 2 . w h i c ha r e p a y a b l e i nl u m ps u mo nv a r i o u s d a t e s . r e s p e c t i v e l y . 2 0 0 9 . 1 0 . 2 0 0 9a n d 2 0 0 8 . 8 m i l l i o n a s o f J u n e 3 0 . t h e b a l a n c e o f t h e s h o r t t e r ml o a n s . 6 3 8 3 1 . 2 0 1 0 a n d 2 0 0 9 . e x c l u d i n gi n t e r e s t o f = P 4 2 . 2 0 0 8 . 5 2 3 6 . 6 7 3 3 5 . d . 2 3 4 1 0 .T h el o a n s . r e s p e c t i v e l y . 2 0 1 0 a n d 2 0 0 9 . 5 3 0 T r a d e s u p p l i e r s A c c r u e d e x p e n s e s : I n t e r e ( N o t e s 1 0 a n d s t 1 3 ) C o n t r a c t o r s O u t s i d e s e r v i c e s P a y r o l l a n d o t h e r b e n e f i t s P u r c h a s e s a n d o t h e r s D u e t o p l a n t e r s P a y a b l e t o g o v e r n m e n t a g e n c i e s f o r t a x e s a n d c o n t r i b u t i o n s P a y a b l e t r e t i r e m e n t f u n ( N o t e o d 1 4 ) O t h e r s O t h e rp a y a b l e si n c l u d el i a b i l i t i e st ot h i r dp a r t i e sf o rs u g a rl i e n s . 0 m i l l i o n i n 2 0 0 9 w h i c h w e r e c a p i t a l i z e d ( s e e N o t e 9 ) . p l a n t a n de q u i p m e n t o f t h e G r o u pa r e m o r t g a g e dt os e c u r e t h e G r o u p ’ s l o a n o b l i g a t i o n s w i t h c r e d i t o r b a n k s ( s e e N o t e 1 3 ) . 2 0 0 9a n d2 0 0 8 . 7 3 1 1 5 6 . 7 5 2 1 7 . 2m i l l i o ni n2 0 1 0 . 4 4 9 . 0 m i l l i o n . a n d p u r c h a s e s o f e q u i p m e n t r e l a t i n g t o t h e E x p a n s i o n P r o j e c t ( s e e N o t e 9 ) . 7 1 4 1 3 . C A C I a n d C A D P I o b t a i n e du n s e c u r e d s h o r t t e r ml o a n s f r o mv a r i o u sl o c a l b a n k st om e e t t h e i rw o r k i n gc a p i t a l r e q u i r e m e n t s . 0 %t o 9 . 9 3 7 . S h o r t t e r mB o r r o w i n g s A t v a r i o u s d a t e s i n 2 0 1 0 . 0 %. A c c o u n t s P a y a b l e a n dA c c r u e dE x p e n s e s A c c o u n t s p a y a b l e a n d a c c r u e d e x p e n s e s a t J u n e 3 0 c o n s i s t o f : 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s ) = P 3 0 5 . 7 %t o 8 . 2 8 2 = P 7 7 9 . = P 7 6 . 6 8 1 5 8 . a m o u n t e d t o = P 2 . 7 3 8 9 . 0 5 3 . 3m i l l i o n . 1 1 .3 1 c . 0 m i l l i o n i n 2 0 1 0 a n d = P 3 6 . A s o f J u n e 3 0 . 8 5 7 7 3 . a n do t h e rr e l a t e df e e s .C a p i t a l e x p a n s i o n c o m m i t m e n t s T h e G r o u p h a s o u t s t a n d i n g c a p i t a l e x p a n s i o n c o m m i t m e n t s a m o u n t i n g t o = P 1 . r e s p e c t i v e l y . 1 4 1 4 7 . 9 m i l l i o n a n d = P 2 . 1 %a n d h a v e t e r m s r a n g i n g f r o m2 9 t o 3 2d a y s . 3 0 t o 3 2 d a y s a n d 2 8 t o 1 7 9 d a y s i n 2 0 1 0 . * S G V M C 3 1 0 9 6 2 * . 4 8 8 8 0 . 6 8 9 1 1 5 . 1 1 9 1 8 . p l a n t a n d e q u i p m e n t a s c o l l a t e r a l S o m e p r o p e r t y . T o t a li n t e r e s te x p e n s er e c o g n i z e df r o ms h o r t t e r mb o r r o w i n g sa m o u n t e dt oP = 1 5 9 . 8 3 4 6 4 . 7 %t o 7 . n e t o f r e l a t e d u n a m o r t i z e d d e b t c o m m i t m e n t f e e s . 4m i l l i o na n d= P 5 3 . 5 5 5 1 0 9 . r e s p e c t i v e l y . 9 9 9 4 3 . 5 8 4 9 4 0 . R H I O n Ma y 5 . 0m i l l i o na n d = P 4 . 0 0 0 1 . t h e p r i n c i p a l o f t h e l o a n w i l l b e p a y a b l e q u a r t e r l y s t a r t i n g o n t h e 4 t h y e a r o f t h e o r i g i n a l 1 0 y e a r t e r m . 0m i l l i o n . 5 0 0 . s u b j e c t t o q u a r t e r l y r e p r i c i n g a s a g r e e d b y t h e p a r t i e s . 0 0 %a n dp a y a b l eo nt h e5 t h * S G V M C 3 1 0 9 6 2 * . C A D P I O nF e b r u a r y1 4 . 8 4 %b e g i n n i n gA u g u s t 5 . 1 3 .I na d d i t i o n . t h e C o m p a n ye x e r c i s e di t s o p t i o n t o f i xt h e q u a r t e r l yi n t e r e s t r a t e o f t h el o a n s a t 8 .T r a n c h e“ A ”o ft h el o a n a m o u n t i n gt o= P 3 0 0 . 0 0 0 ( 3 5 . r e s p e c t i v e l y . 2 0 0 8 . L o n g t e r mB o r r o w i n g s L o n g t e r mb o r r o w i n g s a t J u n e 3 0 c o n s i s t o f : 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s ) = P 1 . 2 0 0 8 . 1 m i l l i o n a n d P = 1 8 5 .w e r er o l l e do v e rt ol o n g t e r mb o r r o w i n g s . r e s p e c t i v e l y . 0 7 5 . 0 9 9 . 9 7 3 – = P 3 . C u s t o m e r s ’ d e p o s i t sa m o u n t e dt o = P 1 2 3 . 0m i l l i o nb e a r sf i x e da n n u a li n t e r e s to f8 . 0 m i l l i o n . 7 3 4 . R H I a v a i l e dt h el o a nf a c i l i t yf r o mB D Ow i t ha na g g r e g a t ea m o u n t o f = P 6 . 1 8 9 . C A D P I a n dC A C I e n t e r e di n t oaS y n d i c a t e dL o a nA g r e e m e n t w i t hB P I a n d R C B C( w i t h B P I a s t h e l e a d b a n k ) f o r a t o t a l c r e d i t l i n e o f P = 1 . I n c . 7 2 4 P = 5 . 0 0 0 ( 2 3 . 5 7 0 . A so f J u n e3 0 .2 0 0 8a n dO c t o b e r2 9 . 9 4 4 3 . 2 0 0 9 . C u s t o me r s ’ D e p o s i t s C u s t o m e r s ’ d e p o s i t s r e p r e s e n t n o n i n t e r e s t b e a r i n g c a s h d e p o s i t s f r o mb u y e r s o f t h e G r o u p ’ s s u g a r a n dm o l a s s e s . 7 7 0 . 9 %p e r a n n u m . C A D P I e n t e r e di n t oal o a na g r e e m e n t w i t hB P I t oa v a i l l o a n si nt w o t r a n c h e sw i t ha na g g r e g a t ep r i n c i p a la m o u n to f= P 5 0 0 . R H I a v a i l e dl o a n s f r o mB D Oa m o u n t i n g t o = P 1 4 3 . o n F e b r u a r y1 4 . 2 0 0 9u n t i l t h ee n do f t h el o a n t e r m s .T h e s ed e p o s i t sw i l l b ea p p l i e da g a i n s t f u t u r ed e l i v e r i e so f s u g a r a n dm o l a s s e s w h i c ha r ee x p e c t e dt ob ec o m p l e t e di nt h en e x t 1 2m o n t h s . 2 0 0 8 . 6 8 2 . 0m i l l i o n . 9 7 3 B a n c o d e O r o U n i b a n k . 6 9 2 ) 5 . 7 7 0 . 0m i l l i o n . 0 0 0 5 0 0 .T h e p r i n c i p a l o f t h e l o a ni s p a y a b l e q u a r t e r l y s t a r t i n go n t h e 4 t hy e a r o f t h e 1 0 y e a r t e r m . 5 6 2 2 1 9 .I n 2 0 1 0 . 5 0 0 . 0 0 0 5 . 0 2 7 ) 3 . T h ep r i n c i p a la m o u n to fd e b ta c c o m m o d a t i o ni ss h a r e db yR H Ia n d C A D P I / C A C I a m o u n t i n gt oP = 1 . r e s p e c t i v e l y . 6 1 9 . S h o r t t e r ml o a n sa v a i l e df r o mB D Oo nMa y5 . t h ei n t e r e s t r a t eo f t h el o n g t e r ml o a n sw a s5 . 2 0 0 8 .3 2 1 2 . A s s u c h . 0 7 5 . 4 9 4 P = 3 . 3 0 8 5 1 . 9 3 8 . ( B D O ) S y n d i c a t e d L o a n A g r e e m e n t : B a n k o f t h e P h i l i p p i n e I s l a n d s ( B P I ) R i z a l C o m m e r c i a l B a n k i n g C o r p o r a t i o n ( R C B C ) U n a m o r t i z e d d e b t c o m m i t m e n t f e e L e s s c u r r e n t p o r t i o n O nF e b r u a r y8 . 2 0 1 0 a n d 2 0 0 9 .2 0 0 8a m o u n t i n gt o = P 4 0 0 . 3 m i l l i o n t o f i n a n c e i t s S h a r e s B u yB a c k P r o g r a m . 0m i l l i o n . 0m i l l i o na n dP = 1 7 5 . 8 m i l l i o n a s o f J u n e 3 0 . r e s p e c t i v e l y . L o a n s a v a i l e d f r o mB P I a n d R C B Cw i t h f i x e d i n t e r e s t r a t e o f 8 . r e s p e c t i v e l y . 2 0 1 1 . r e s p e c t i v e l y . 2m i l l i o na n dP = 1 1 3 . 5 0 %a n d6 . 2 0 0 9 .r e s p e c t i v e l y .C A C Ia v a i l e dl o a n sf r o m B P I .C A D P Ia v a i l e da d d i t i o n a ll o a nf r o m B D O a m o u n t i n gt o = P 3 6 5 . O nA u g u s t1 2 . r e s p e c t i v e l y . t h e i n t e r e s t r a t e s o f t h e a v a i l e d l o a n s f r o mB D O . 2 0 0 8 . 9 3 % f o r B D Oa n d R C B Cl o a n s . 9m i l l i o n . B P I a n dR C B C w e r e 5 . P = 1 . 8 0 %a n d5 . 9 0 %. I n 2 0 1 0 . 9 0 %.A s o f J u n e 3 0 . 5 . t h e i n t e r e s t r a t e w a s 5 . 7 9 %f o r B P I l o a n s a n d 8 .O nN o v e m b e r 5 . 9 0 %a n d 5 . 6 . 2 0 0 9 .C A C Ia v a i l e da d d i t i o n a ll o a n sf r o mB P Ia n dR C B Ca m o u n t i n gt o = P 2 3 0 . 2 0 0 8 . 2 0 1 8 . o nt h e o t h e r h a n d . r e s p e c t i v e l y . i n t e r e s t r a t e sw e r e5 . 8 8 %. I n t e r e s t r a t e w a s f i x e d t o 8 . 2 0 1 0 . 8m i l l i o n . r e s p e c t i v e l y . 5 0 %a n d 6 . a d d i t i o n a l l o a n sw e r ea v a i l e db yC A D P If r o mB D O . 2 0 0 9 u n t i l t h e e n d o f t h e l o a n t e r m s . r e s p e c t i v e l y . 9m i l l i o n . c a r r i e s f i x e di n t e r e s t r a t e o f 8 . C A D P I a v a i l e dl o a n s f r o mB P I a n dR C B Ca m o u n t i n gt oP = 1 6 7 . C A C I O n Ma y5 .T h e p r i n c i p a l o f t h e l o a ni s p a y a b l e q u a r t e r l ys t a r t i n go nt h e 4 t hy e a r o f t h e 1 0 y e a r t e r m .3 3 a n n i v e r s a r yd a t eo f t h eb o r r o w i n g . 2 0 0 9 . 9 0 %s u b j e c t t or e p r i c i n gb a s e do nl o a n a g r e e m e n t s . C A D P I a l s o e x e r c i s e d i t s o p t i o n t o f i x t h e q u a r t e r l y i n t e r e s t r a t e s o f t h e f l o a t i n g r a t e l o a n s a v a i l e d i n Ma y 2 0 0 8 a n d O c t o b e r 2 0 0 8 . 4 m i l l i o n . a n dw i t hi n t e r e s t r a t e s o f 6 . P r o m i s s o r yn o t e s i s s u e db yC A D P I t ot h e b a n k s a r e u n d e r t h e t e r m s s e t f o r t hi nt h e S y n d i c a t e d L o a n A g r e e m e n t . L i k e w i s e . 7 0 %a n d8 . C A C I e x e r c i s e d i t s o p t i o n t o f i x t h e q u a r t e r l y i n t e r e s t r a t e o f r e p r i c i n g B P I l o a n s a t 8 . 0 m i l l i o n .2 0 0 9 . 4 0 %a n dp a y a b l eo na ni n s t a l l m e n tb a s i s .O nt h eo t h e r h a n d . r e s p e c t i v e l y . 8 4 %b e g i n n i n g A u g u s t 5 . 3m i l l i o na n dP = 6 4 . = P 1 4 3 . s u b j e c t t oq u a r t e r l y r e p r i c i n g a s a g r e e d b y t h e p a r t i e s . w h i c hi s t h ee n do f t h e t h r e ey e a r s g r a c e p e r i o df r o mi n i t i a l d r a w d o w nd a t e dMa y2 0 0 8 . 6 0 %. I n 2 0 1 0 . L o a n s a v a i l e d a r e w i t h 1 0 y e a r t e r m s a n d w i l l a l l m a t u r e o n Ma y 5 . B D Oa n dR C B Ca m o u n t i n gt o= P 3 2 9 . O nO c t o b e r2 9 . C A D P I a v a i l e da d d i t i o n a l l o a n sf r o mt h eu n d r a w np o r t i o no f t h et o t a l c r e d i t f a c i l i t yf r o mB P I .2 0 0 8 .L o a n s a v a i l e da r e w i t h1 0 y e a r t e r m s a n dp a y a b l e i n2 9a n d2 8 q u a r t e r l yi n s t a l l m e n t sb e g i n n i n gMa y2 0 1 1f o rB P Ia n dR C B Ca n dA u g u s t 2 0 1 1f o rB D O . 8 0 %a n d5 . O nF e b r u a r y1 2 .o n Ma y5 . w h i c h b e c a m e e f f e c t i v e b e g i n n i n g A u g u s t 5 .A so f J u n e3 0 .A s o f J u n e 3 0 . a r e p a y a b l e i n 2 9 e q u a l q u a r t e r l y i n s t a l l m e n t s b e g i n n i n g Ma y 2 0 1 1 . 7 4 %a n d 8 . 8 4 %. 2 0 0 9 . B P I a n dR C B Cw e r e5 . w i t h i n t e r e s t r a t e s o f 6 . = P 2 . O nMa y5 . 6 0 %. * S G V M C 3 1 0 9 6 2 * . 8 0 %. 2 0 1 1 .L o a n s a v a i l e df r o mB D O . 6m i l l i o n . 2 0 0 9 . 5 m i l l i o n a n d = P 7 1 . r e s p e c t i v e l y . r e s p e c t i v e l y . 6 0 %. 0 5 0 . 0 m i l l i o n . 2m i l l i o na n d = P 8 3 . 3m i l l i o n . B P Ia n dR C B C a m o u n t i n g t o P = 4 5 9 .w h i c hb e a ri n t e r e s to f6 . 5 0 %.B D O a n dR C B C a m o u n t i n gt o = P 1 2 9 . 0m i l l i o no nt h e5 t ha n d6 t ha n n i v e r s a r yd a t eo ft h eb o r r o w i n ga n dt h eb a l a n c eo nt h e 7 t ha n n i v e r s a r y d a t e o f t h e b o r r o w i n g . 9 0 %. 6 . 9 0 %f o rB P Ia n dR C B Cl o a n . 7 9 % a n d B D Oa n d R C B Cl o a n s a t 8 . 6 0 %a n d6 . 8 4 %a n da r ep a y a b l ei n2 8m o n t h l y i n s t a l l m e n t s b e g i n n i n g A u g u s t 5 . 5 . 2m i l l i o n . 9 4 %a n d a r e p a y a b l e i n 2 8 q u a r t e r l y i n s t a l l m e n t s b e g i n n i n g A u g u s t 5 . L o a n sa v a i l e df r o mB P Ia n dR C B Cw i t hf i x e di n t e r e s t r a t e so f 8 . a r ep a y a b l ei n2 9e q u a l q u a r t e r l yi n s t a l l m e n t sb e g i n n i n gMa y 2 0 1 1 . 0m i l l i o nb e a r sf i x e da n n u a li n t e r e s to f8 . 6 0 %. 5m i l l i o na n d = P 1 6 6 . 9m i l l i o n . L o a n sa v a i l e df r o mB D Oc a r r i e sf i x e di n t e r e s t r a t eo f 8 . r e s p e c t i v e l y . i n t e r e s t r a t e s o f t h e a v a i l e dl o a n s w i t hB D O . P = 3 9 5 .A s o f J u n e 3 0 . C A C I a l s oo b t a i n e d a d d i t i o n a l l o a n f r o mB D Oa m o u n t i n g t o P = 7 8 1 . T r a n c h e“ B ”o f t h el o a na m o u n t i n gt o = P 2 0 0 . r e s p e c t i v e l y .2 0 0 8 .r e s p e c t i v e l y . 2 0 0 9 u n t i l t h e e n d o f t h e l o a n t e r m s . w h i c h i s t h e e n d o f t h e t h r e e y e a r s g r a c e p e r i o d f r o mi n i t i a l d r a w d o w n d a t e d Ma y2 0 0 8 . = P 2 9 . O f t h e t o t a l a m o u n t o f d e b t c o m m i t m e n t f e e s p a i d . B P I a n dR C B C . * S G V M C 3 1 0 9 6 2 * . B o r r o w i n g c o s t s I n t e r e s t sf r o m l o n g t e r m b o r r o w i n g sr e c o g n i z e da se x p e n s ea m o u n t e dt o= P 1 6 0 . 0 b i l l i o n a s o f J u n e 3 0 . = P 2 4 1 . w h i c h i n c l u d e t h e f o l l o w i n g : m a i n t e n a n c e o f a r e a s o n a b l e a m o u n t o f d e p o s i t w i t h t h e c r e d i t o r b a n k s . p r o h i b i t i o no np u r c h a s eo fa d d i t i o n a le q u i p m e n t se x c e p ti np u r s u a n c eo fi t ss u g a r e x p a n s i o n a n d e t h a n o l p r o j e c t . 6m i l l i o n . t h e G r o u p i s i n c o m p l i a n c e w i t h t h e s e l o a n c o v e n a n t s . B P I a n dR C B C . 6m i l l i o np e r t a i n s t ot h e u n d r a w np o r t i o n( p r e s e n t e da s “ D e f e r r e dc h a r g e s ” u n d e r “ O t h e rn o n c u r r e n t a s s e t s ” ) . I n a d d i t i o n . B a t a n g a sw h i c h c o n s i s tm a i n l yo fR H I ’ sl a n da n dC A D P I ’ sp r o p e r t i e sw i t ha na g g r e g a t ec a r r y i n gv a l u eo f = P 1 . 4 m i l l i o n i n 2 0 0 8 .U n d e r t h i s A g r e e m e n t . 0 m i l l i o n .r e s p e c t i v e l y . 2 0 1 0a n d2 0 0 9 . w h i c h m u s t b e f r e e f r o ml i e n s a n d l i a b i l i t i e s . t h ed e f e r r e dc h a r g e sa m o u n t i n gt oP = 1 6 . A s o f J u n e 3 0 . T h e s u r e t y s h i ps h a l l r e m a i ni nf u l l f o r c ea n de f f e c t u n t i l f u l l a n dd u ep a y m e n t o f t h ei n d e b t e d n e s s u n d e r t h e S y n d i c a t e d L o a n A g r e e m e n t .C A D P I .R H I . w h i l et h e r e m a i n i n g= P 2 9 .I n2 0 1 0 . 5b i l l i o n . C A D P I a n dC A C I . n e t o f c a p i t a l i z e d a m o u n t s o f = P 1 3 6 .A so f J u n e3 0 . R H I . = P 5 6 .a n dC A C I ’ sp r o p e r t i e si nL aC a r l o t a . 7 m i l l i o n a n d = P 2 3 . 2 0 0 9 a n d 2 0 0 8 . 2 0 1 0 a n d 2 0 0 9 . 9m i l l i o n a n d = P 4 5 . 2 0 1 0 . 2 0 0 9w a s a l l r e c o g n i z e da s r e d u c t i o nf r o mt h e o u t s t a n d i n gl o a n s u p o nf u l l a v a i l m e n t o f t h eu n d r a w np o r t i o no f t h ec r e d i t f a c i l i t y . T h e a b o v e l o a n a g r e e m e n t s s t i p u l a t e c e r t a i n c o v e n a n t s . 2m i l l i o n . 8 m i l l i o np e r t a i n s t o t h e d r a w np o r t i o no f t h e t o t a l c r e d i t f a c i l i t y( r e f e r r e d t o a s “ U n a m o r t i z e dd e b t c o m m i t m e n t f e e s ”a n dp r e s e n t e da sar e d u c t i o nf r o mt h ep r i n c i p a l l o a nb a l a n c e ) . F u r t h e r . m a i n t e n a n c e o f d e b t s e r v i c e c o v e r a g e r a t i o a n d d e b t t o e q u i t y r a t i o . r e g i s t r a t i o n o f a l l c o l l a t e r a l s . B D Os h a l l h a v e t h e r i g h t t o s e t o f f t h e s e c u r e d o b l i g a t i o n s i n s o l i d a r i t y a g a i n s t a l l t h e b o r r o w e r s ’ p r o p e r t i e s . t h e G r o u p i n c u r r e d d e b t c o m m i t m e n t f e e s a m o u n t i n g t o P = 5 9 . 9m i l l i o n a n d = P 6 .3 4 D e b t c o m m i t m e n t f e e s A s p a r t o f t h e S y n d i c a t e d L o a n A g r e e m e n t w i t h B P I / R C B C . e n t e r e di n t oaC o n t i n u i n gS u r e t y s h i pA g r e e m e n t w i t hB D O . O nF e b r u a r y1 4 .2 0 0 8 . T h eMT I c o v e r s p r o p e r t i e si nN a s u g b u . 9b i l l i o na n d= P 4 .e n t e r e di n t oas e p a r a t es u r e t y s h i p a g r e e m e n t a r i s i n go u t o f t h eS y n d i c a t e dL o a nA g r e e m e n t w h i c hw a r r a n t st h ed u ea n df a i t h f u l p e r f o r m a n c e b yt h e b o r r o w e r s o f a l l o b l i g a t i o n s d u e t ot h e c r e d i t o r b a n k s . 3m i l l i o na so f J u n e 3 0 . 9m i l l i o n .C A C Ia n dR B C . 5 m i l l i o n i n 2 0 1 0 . u n a m o r t i z e dd e b t c o m m i t m e n t f e e s o n l o n g t e r ml o a n s a m o u n t e d t o = P 3 5 . 2 0 0 8 . C A D P I a n dC A C I e x e c u t e da Mo r t g a g e T r u s t I n d e n t u r e ( MT I ) t os e c u r e t h e l o a n s o b t a i n e df r o mB D O .N e g r o s O c c i d e n t a l a m o u n t i n g t o = P 4 . r e s p e c t i v e l y . a l l l i e n s o f t h e c r e d i t o r b a n k s s h a l l h a v e r i g h t s o f s e t o f f i n s o l i d a r i t y a g a i n s t t h e b o r r o w e r ’ s p r o p e r t i e s . m o r t g a g e t r u s t i n d e n t u r e a n d d e b t c o v e n a n t s I nr e l a t i o nw i t ht h e B D OL o a nF a c i l i t ye x e c u t e do nF e b r u a r y8 . r e s p e c t i v e l y . S u r e t y s h i p a g r e e m e n t . a n d p r o h i b i t i o n o n a n y m a t e r i a l c h a n g e i n o w n e r s h i p o r c o n t r o l o f i t s b u s i n e s s o r c a p i t a l s t o c k o r i n t h e c o m p o s i t i o n o f i t s t o p l e v e l m a n a g e m e n t . R H I . t h e n o r m a l r e t i r e m e n t a g e i s 6 5 .O nD e c e m b e r 1 6 . 1 2 9 – 3 3 . r e s p e c t i v e l y . 2 0 1 0a n d2 0 0 9 . t e r m i n a t i o n b e n e f i t s a n d s h a r e b a s e d p a y m e n t . 2 0 0 9a n d 2 0 0 8a m o u n t e d t o = P 0 . 6 3 0 . 6 m i l l i o n . 3 5 8 2 0 0 9 ( I n T h o u s a n d s ) = P 3 3 . 1 9 2 1 . n o n c o n t r i b u t o r yd e f i n e db e n e f i t p l a n( t h eP l a n ) c o v e r i n ga l l e l i g i b l ee m p l o y e e s .Ap a r t i c i p a n t m a y o p t t o r e t i r e a t a g e 6 0o r a f t e r r e n d e r i n g2 0y e a r so fc o n t i n u o u ss e r v i c e .3 5 T h e m a t u r i t i e s o f t h e n o n c u r r e n t p o r t i o n o f t h e l o n g t e r mb o r r o w i n g s a s o f J u n e 3 0 i s a s f o l l o w s : 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s ) = P – P = 7 9 7 .K e y m a n a g e m e n t c o m p e n s a t i o n f o r t h e y e a r s e n d e d J u n e 3 0 f o l l o w s : 2 0 1 0 S a l a r i e s a n d w a g e s E m p l o y e e a n d o t h e r b e n e f i t s ( i n c o m e ) P = 3 2 . 7 3 4 . 1 2 8 8 . 0m i l l i o ni n2 0 1 0a n d = P 2 . C A D P I a n dC A C I u n d e rs u c ht e r m sa n dc o n d i t i o n sm u t u a l l ya c c e p t a b l et oa l l p a r t i e s . b . 9 7 3 P = 5 . 0 3 8 2 . 4 4 5 . 2 0 0 . t h e C o m p a n ya n dC A D P G Cm a i n t a i na n i n d i v i d u a l a n ds e p a r a t e l yf u n d e d . R e l a t e dP a r t y T r a n s a c t i o n s I n t h e n o r m a l c o u r s e o f b u s i n e s s . t h e C o m p a n y a l s oe n t e r e di n t o a l e a s e a g r e e m e n t w i t h C A D P R F I . w h i c h i s r e n e w a b l e a n n u a l l y . 2 5 2 ( 3 . R H I g r a n t e dt h ea d v a n c e st oR C I i n2 0 0 9 w h i c h w e r e u s e d t o d e f r a y c o s t a n d e x p e n s e s r e l a t i n g t o t h e r e s t r u c t u r i n g a c t i v i t i e s u n d e r t a k e n b y t h e G r o u p d u r i n g t h e y e a r . f o r t h e l e a s e o f i t s o f f i c e s p a c e . 8 m i l l i o n i n 2 0 0 9 . U n d e r t h e P l a n . = P 1 2 9 2 0 0 8 P = 3 3 . 1 8 3 .R e t i r e m e n t b e n e f i t f o rb o t hn o r m a l r e t i r e m e n t si s e q u i v a l e n t t o t w o m o n t h s a v e r a g e b a s i c s a l a r y f o r e a c h y e a r o f s e r v i c e r e n d e r e d . t h eC o m p a n ya s s u m e dt h et r a n s f e r r e de m p l o y e e s c o v e r e d b y t h e P l a n a n d a c q u i r e d t h e r e l a t e d n e t p e n s i o n p l a n a s s e t s f r o mC A D P G C . r e q u i r e s a m o n t h l y r e n t a l o f = P 5 6 . * S G V M C 3 1 0 9 6 2 * . 4 0 4 1 . 9 3 5 2 .R e l a t e d r e n t e x p e n s e c h a r g e d t oo p e r a t i o n s i n 2 0 1 0 . 7 1 2 = P 3 . 0 5 7 ) 3 0 . t h e C o m p a n y a s a l e s s e e . w h i c hi s r e n e w a b l e a n n u a l l ya t t h e o p t i o no f t h e C o m p a n y . 2 3 0 P = 4 0 . i n c l u d i n g t h e r e l a t e dd e f e r r e di n c o m e t a xl i a b i l i t i e s . T h e a c q u i r e d n e t p e n s i o n p l a n a s s e t s .I nD e c e m b e r 2 0 0 5 .A so fJ u n e3 0 . 3 0 8 B e t w e e n o n e a n d t w o y e a r s B e t w e e n t w o a n d f i v e y e a r s O v e r f i v e y e a r s 1 4 . ( C A D P R F I ) . 7 3 6 . A s o f J u n e 3 0 . 0m i l l i o na n d= P 2 0 1 . c . R e t i r e me n t B e n e f i t P l a n s N e t P e n s i o n P l a n A s s e t s P r i o r t oR e s t r u c t u r i n gi nf i s c a l y e a r 2 0 0 9( s e e N o t e 1 ) . 4m i l l i o n . 2 0 1 0 a n d 2 0 0 9 .T h e c o n t r a c t . h a s a o n e y e a r l e a s e a g r e e m e n t w i t h C A D PR e t i r e m e n t F u n d . 2 0 0 8 . t h eG r o u p ’ so u t s t a n d i n ga d v a n c e st oR C Ia m o u n t e dt o = P 4 9 . I n c . = P 1 9 5 T h e r e a r e n o o t h e r l o n g t e r mb e n e f i t s . 1 5 . t h e G r o u p h a s t r a n s a c t i o n s w i t h r e l a t e d p a r t i e s a s f o l l o w s : a . d . w e r e p a r t o f t h e t o t a l c o n s i d e r a t i o nr e c e i v e df r o mt h ea c q u i s i t i o no f C A D P G C ’ si n v e s t m e n t si ns h a r e so f s t o c ka n d c e r t a i n a s s e t s a n d l i a b i l i t i e s ( s e e N o t e 1 ) . R e l a t e dr e n t e x p e n s ec h a r g e dt oo p e r a t i o n sa m o u n t e dt o= P 3 . 0 7 5 . 0 2 0 1 1 . 5m i l l i o na n dP = 1 4 2 . 3 5 0 4 . 0 0 3 1 5 . 8 9 3 ( 1 . 5 4 4 ) ( 1 4 3 . A so f J u n e3 0 . p e n s i o np l a na s s e t s . 3 7 0 P = 2 5 2 . 7 6 8 ) – ( 2 2 . 7 6 8 ) – ( 1 6 0 ) ( 1 9 . r e s p e c t i v e l y . 5 1 4 = P 1 0 9 . 5 5 2 ) ( P = 1 4 0 . 7 8 8 P = 1 0 9 .T h en e t p e n s i o np l a na s s e t sa so fJ u n e3 0 . 1 4 6 ( 1 . 3 0 3 ) ( 7 8 . a r e d e t e r m i n e d a s f o l l o w s : 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s ) = P 1 0 9 . i n c l u d e i n v e s t m e n t s i n e q u i t y s e c u r i t i e s o f R H I w i t h a f a i r v a l u e a m o u n t i n g t o = P 1 0 4 . 2 0 1 1 . 5 5 4 5 . n e t o f d e f e r r e d i n c o m e t a x l i a b i l i t y . 8 9 9 B e g i n n i n g o f y e a r I n t e r e s t c o s t C u r r e n t s e r v i c e c o s t B e n e f i t s p a i d A c t u a r i a l l o s s ( g a i n ) E n d o f y e a r T h e m o v e m e n t s i n t h e f a i r v a l u e o f p l a n a s s e t s d u r i n g t h e y e a r a r e a s f o l l o w s : 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s ) = P 2 3 3 . * S G V M C 3 1 0 9 6 2 * . 1 4 2 P = 1 6 9 . 7 8 2 P = 2 4 8 . w h i c ha r em a n a g e db yat r u s t e e . 8 m i l l i o n . 2 0 1 0a n d2 0 0 9 . i s n o t a v a i l a b l e f o r d i v i d e n d d e c l a r a t i o n ( s e e N o t e 2 3 ) . 7 6 2 6 6 .3 6 T h e a m o u n t s r e c o g n i z e d i n t h e c o n s o l i d a t e d b a l a n c e s h e e t s a t J u n e 3 0 . 4 5 5 ) P r e s e n t v a l u e o f o b l i g a t i o n F a i r v a l u e o f p l a n a s s e t s S u r p l u s U n r e c o g n i z e d a c t u a r i a l g a i n ( l o s s ) N e t p e n s i o n p l a n a s s e t s P l a na s s e t sc a n n o t b er e t u r n e dt oR H I u n l e s so nc i r c u m s t a n c e sd i s c u s s e di nN o t e2 . 4 4 5 2 1 . 4 4 5 S t o c k s a n d g o v e r n m e n t s e c u r i t i e s C a s h a n d r e c e i v a b l e s A mo u n t ( I n T h o u s a n d s ) P = 1 8 1 . 8 1 0 ) ( = P 1 4 2 . w i l l b e u s e dt or e d u c e f u t u r e c o n t r i b u t i o n s t ot h e r e t i r e m e n t f u n d .2 0 1 0a n d2 0 0 9o fP = 1 4 0 . 5 4 4 B e g i n n i n g o f y e a r E x p e c t e d r e t u r n o n p l a n a s s e t s B e n e f i t s p a i d A c t u a r i a l l o s s E n d o f y e a r T h e C o m p a n y ’ s p l a n a s s e t s a t J u n e 3 0 c o n s i s t o f : 2 0 1 0 P e r c e n t a g e 7 3 % 2 7 % 1 0 0 % 2 0 0 9 A mo u n t P e r c e n t a g e ( I n T h o u s a n d s ) = P 1 8 6 .C o n s e q u e n t l y . 4 5 2 ) 4 3 . T h e m o v e m e n t s i n t h e d e f i n e d b e n e f i t o b l i g a t i o n d u r i n g t h e y e a r s f o l l o w : 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s ) = P 1 1 6 . 8 9 9 ( 2 5 2 . 1 4 2 1 2 . 6m i l l i o n . 6 3 6 1 0 0 % = P 2 5 2 . a p o r t i o n o f t h e G r o u p ’ s 2 0 0 9 r e t a i n e d e a r n i n g s r e l a t e d t o p e n s i o n p l a n a s s e t . 4 4 5 ) ( 2 4 8 . = P 4 4 5 P = 2 4 8 . 0 4 7 ) 2 5 2 . 8 0 9 7 4 % 2 6 % 6 5 . 5 4 4 T h e C o m p a n y h a s n o e x p e c t e d c o n t r i b u t i o n s f o r t h e f i s c a l y e a r e n d i n g J u n e 3 0 . 1 4 2 P = 1 6 9 . 6 4 5 ) 7 5 1 ( 6 1 . N o r m a l a n de a r l y r e t i r e m e n t b e n e f i t s a r e e q u i v a l e n t t o o n e m o n t h l a t e s t s a l a r y f o r e v e r y y e a r o f s e r v i c e . t h e n o r m a l r e t i r e m e n t a g e i s 6 5i r r e s p e c t i v e o f y e a r s o f s e r v i c e . 5 5 0 ) ( 7 . a t h i s o p t i o n . = P 0 2 1 2 6 1 . 4 8 1 ) ( 4 1 . = P 7 8 0 3 3 4 . e l e c t t or e t i r e o r C A C I m a y . 0 9 8 ( 6 4 . P = 2 7 3 B e g i n n i n g o f y e a r E x p e c t e d r e t u r n o n p l a n a s s e t s C o n t r i b u t i o n s B e n e f i t s p a i d A c t u a r i a l l o s s ( g a i n ) E n d o f y e a r * S G V M C 3 1 0 9 6 2 * . 7 8 0 ) 8 9 . 6 4 7 1 1 4 . 8 7 7 ( 4 1 . 0 9 7 = P 7 4 . 9 0 1 5 6 . 5 5 4 1 9 .N o r m a l r e t i r e m e n t b e n e f i t sc o n s i s to fa na m o u n te q u i v a l e n t t ot w ot i m e st h ee m p l o y e e ’ sl a t e s tm o n t h l ys a l a r y m u l t i p l i e d b y t h e n u m b e r o f y e a r s o f s e r v i c e . 6 2 7 ) ( 4 8 . t h e n o r m a l r e t i r e m e n t a g e i s 6 5i r r e s p e c t i v e o f y e a r s o f s e r v i c e . 7 0 4 ) 5 3 . P = 9 2 0 = P 5 3 7 B e g i n n i n g o f y e a r I n t e r e s t c o s t C u r r e n t s e r v i c e c o s t B e n e f i t s p a i d C u r t a i l m e n t g a i n A c t u a r i a l o s s g a l ( i n ) E n d o f y e a r T h e m o v e m e n t s i n t h e f a i r v a l u e o f p l a n a s s e t s d u r i n g t h e y e a r a r e a s f o l l o w s : 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s ) 2 4 4 .U n d e r t h e p l a n . n o n c o n t r i b u t o r yd e f i n e db e n e f i t p l a nc o v e r i n ga l l i t sr e g u l a r e m p l o y e e s . C A D P Ia l s om a i n t a i n sf u n d e d .n o n c o n t r i b u t o r yd e f i n e db e n e f i tp l a nc o v e r i n ga l li t se l i g i b l e e m p l o y e e s . 2 7 3 ) ( 2 6 1 . 3 7 6 . 5 3 1 1 0 6 . T h ea m o u n t s r e c o g n i z e da s n e t p e n s i o nb e n e f i t o b l i g a t i o ni nt h ec o n s o l i d a t e db a l a n c es h e e t s a t J u n e 3 0 a r e d e t e r m i n e d a s f o l l o w s : 2 0 1 0 2 0 0 9 ( I n T h o u s a n d s ) P = 4 2 3 . a t i t s o p t i o n . 4 8 1 ) ( 1 5 .A p a r t i c i p a n t m a y . 4 4 3 3 7 . 9 2 0 ) P = 4 1 . r e t i r e a n yp a r t i c i p a n t a t a n y t i m e a f t e r a t t a i n i n g t h e a g e o f 5 0 r e g a r d l e s s o f n u m b e r o f y e a r s i n s e r v i c e o r u p o n c o m p l e t i o n o f 2 0y e a r so f c o n t i n u o u ss e r v i c et oC A C I e v e ni f b e l o w5 0y e a r so f a g e . 7 5 7 – ( 3 2 .U n d e r t h e p l a n . 9 2 0 = P 3 7 6 . P = 7 8 0 1 7 . ( 3 2 8 6 9 5 ) 4 2 3 . 8 9 0 3 9 . 2 1 0 P r e s e n t v a l u e o f o b l i g a t i o n s F a i r v a l u e o f p l a n a s s e t s D e f i c i t U n r e c o g n i z e d n e t t r a n s i t i o n o b l i g a t i o n U n r e c o g n i z e d a c t u a r i a l l o s s N e t p e n s i o n b e n e f i t o b l i g a t i o n T h e m o v e m e n t s i n t h e p r e s e n t v a l u e o f t h e d e f i n e d b e n e f i t o b l i g a t i o n o v e r t h e y e a r a r e a s f o l l o w s : 2 0 1 0 2 0 0 9 ( I n T h o u s a n d s ) P = 3 7 6 . 5 3 7 = P 3 6 4 .3 7 N e t P e n s i o n B e n e f i t O b l i g a t i o n C A C Im a i n t a i n sa f u n d e d . 6 0 6 ) – ( 2 . 5 3 7 ( 3 3 4 . 6 0 6 ) ( 6 4 . 1 9 6 2 6 1 . 0 9 3 1 9 .A p a r t i c i p a n t m a y o p t t o r e t i r e a t a g e 6 0 r e g a r d l e s s o f n u m b e r o f y e a r s i n s e r v i c e o r u p o n c o m p l e t i o n o f 2 0y e a r s o f c o n t i n u o u s s e r v i c e t oC A D P I e v e ni f b e l o w6 0y e a r s o f a g e . 0 0 8 ) 1 3 . 8 4 2 1 6 . 9m i l l i o ni n2 0 1 0 . 6 2 7 ( 2 . r e s p e c t i v e l y . 0 4 7 ) ( 2 . 0 9 9 2 7 % 7 0 . 7 % 5 %t o 7 % 5 % 2 0 0 8 1 0 . 8 6 0 3 2 . 8 %t o 9 . 9 8 6 4 9 . 2 9 % 7 %t o 9 % 8 % 2 0 0 7 8 % 7 %t o 9 % 8 % A s o f J u n e 3 0 . 1 2 7 4 7 . A s s u m p t i o n sr e g a r d i n gf u t u r em o r t a l i t ya n dd i s a b i l i t ya r eb a s e do na d v i c ef r o mp u b l i s h e d s t a t i s t i c s a n d e x p e r i e n c e i n t h e P h i l i p p i n e s . 1 1 4 2 0 0 8 = P 3 1 . 2 0 0 9 a n d 2 0 0 8 . 2m i l l i o n . 2 4 5 3 8 % 1 2 6 . T h e e x p e c t e d r e t u r n o n p l a n a s s e t s w e r e d e t e r m i n e d b a s e do n a r e p u t a b l e f u n d t r u s t e e ’ s y i e l d r a t e f o r r i s k p o r t f o l i o s i m i l a r t o t h a t o f t h e f u n d w i t h c o n s i d e r a t i o n t o t h e f u n d s ’ p a s t p e r f o r m a n c e . t h e f o l l o w i n g a r e t h e a s s u m p t i o n s : d i s c o u n t r a t e p e r a n n u mo f 8 . 4 3 0 ( 9 . T h e p r i n c i p a l a c t u a r i a l a s s u m p t i o n s u s e d i n d e t e r m i n i n g r e t i r e m e n t b e n e f i t s a n d g r a t u i t i e s c o s t f o r t h e G r o u p ’ s p l a n s a s o f J u l y 1 o f e a c h y e a r : D i s c o u n t r a t e E x p e c t e d r e t u r n o n p l a n a s s e t s F u t u r e s a l a r y i n c r e a s e s 2 0 0 9 8 . 1 m i l l i o n a n d P = 7 4 . 6 5 2 P = 2 4 . 2 0 1 0a n d2 0 0 9 . 2 0 1 1 . 9 6 2 ) 5 . 8 9 8 3 2 . e x p e c t e d r e t u r n o n p l a n a s s e t s o f 5 %t o 7 %. 5 %t o 1 0 . 8 4 5 ) ( 3 2 .3 8 T h e s u b s i d i a r i e s ’ p l a n a s s e t s a t J u n e 3 0 c o n s i s t o f : 2 0 1 0 A mo u n t P e r c e n t a g e ( I n T h o u s a n d s ) 6 3 % P = 2 1 1 . 7 0 4 ) – = P 6 2 . r e s p e c t i v e l y .A so f J u n e3 0 . 0 7 2 ( 3 6 . 2 %. 5 7 4 5 0 . 6 2 4 ) = P 7 6 . 6 2 7 6 . 6 8 1 – – 1 0 0 % = P 2 6 1 . 1 9 0 ) ( 4 9 9 ) 2 0 1 0 3 2 . 7 9 3 ( 3 8 . 2 m i l l i o n . 8 9 9 ) 1 0 0 % P = 3 3 4 . 6 2 7 – – P = 7 5 . 5 6 8 C u r r e n t s e r v i c e c o s t I n t e r e s t c o s t R e t u r n o n p l a n a s s e t s A c t u a r i a l l o s s ( g a i n ) r e c o g n i z e d A m o r t i z a t i o n o f n e t t r a n s i t i o n a l l i a b i l i t y C u r t a i l m e n t l o s s ( g a i n ) A s s e t c e i l i n g a d j u s t m e n t T h ea c t u a l r e t u r no np l a na s s e t sw a s= P 2 6 . 9 2 7 ( 1 %) ( 3 . 7 8 0 S t o c k s a n d g o v e r n m e n t s e c u r i t i e s C a s h a n d r e c e i v a b l e s P a y a b l e a n d a c c r u e d l i a b i l i t i e s C A D P I a n d C A C I a r e e x p e c t e d t o c o n t r i b u t e a t o t a l o f = P 1 0 7 . P e n s i o n C o s t T h e c o n s o l i d a t e d p e n s i o n c o s t s r e c o g n i z e d f o r t h e y e a r s e n d e d J u n e 3 0 f o l l o w : 2 0 0 9 ( I n T h o u s a n d s ) = P 2 3 . 2 7 3 2 0 0 9 A mo u n t P e r c e n t a g e ( I n T h o u s a n d s ) 7 3 % = P 1 9 1 . a n d f u t u r e a n n u a l i n c r e a s e o n s a l a r y o f 5 %. 8m i l l i o na n d= P 8 . 2 0 1 0 . 0 m i l l i o n t o t h e i r r e s p e c t i v e f u n d f o r t h ey e a re n d i n gJ u n e3 0 . = P 2 6 . * S G V M C 3 1 0 9 6 2 * . n e t p e n s i o np l a no b l i g a t i o n a m o u n t e d t o P = 4 1 . 6 7 9 P = 4 8 1 . 3 0 3 ) 1 8 0 . C A C Ia n dN A V Ic o m p u t e dt h e i r t r a n s i t i o n a ll i a b i l i t yf o rd e f i n e db e n e f i tp l a na so fJ u l y1 . 0 0 2 ) 2 0 1 0 – ( 2 5 . C A D P I . 5 2 1 2 0 0 6 P = 5 0 6 . 0 8 1 2 . 3 8 2 8 9 3 P = 1 .t o t a la m o u n tf o l l o w s( I n t h o u s a n d s ) : P r e s e n t v a l u e o f t h e o b l i g a t i o n a t t h e d a t e o f a d o p t i o n F a i r v a l u e o f p l a n a s s e t s a t t h e d a t e o f a d o p t i o n T r a n s i t i o n a l l i a b i l i t y P e n s i o n l i a b i l i t y a l r e a d y r e c o g n i z e d I n c r e a s e i n n e t p e n s i o n l i a b i l i t y P = 3 3 3 . 0 0 5 – ( 4 . 1 3 5 T h e G r o u pr e c o g n i z e s t h e i n c r e a s e i nn e t p e n s i o nl i a b i l i t ya s a ne x p e n s eo nas t r a i g h t l i n e b a s i s o v e rap e r i o do f f i v ey e a r sf r o mJ u l y1 .T h ea m o r t i z a t i o n r e c o g n i z e d a m o u n t s t o = P 3 2 . 8 1 7 2 8 . 8 8 5 ) ( 1 1 . 6 5 4 ) ( 2 9 . 0 1 4 1 . 6 4 5 ( 1 5 3 .T o t a l p a y m e n t s m a d e i n 2 0 0 8 a m o u n t e d t o = P 4 3 . b .A s o f J u n e 3 0 . C o mmi t me n t s a n dC o n t i n g e n c i e s a . 2 8 7 ) ( 1 2 0 . p r o d u c e d e v e r y c r o p y e a r . * S G V M C 3 1 0 9 6 2 * . a sa l l o w e du n d e rP A S1 9 . 2 2 5 4 7 7 . o f s u g a r . C A C I a n n o u n c e di t se a r l yr e t i r e m e n t p r o g r a mt oe m p l o y e e s . 2 m i l l i o n . 0 2 5 ) 2 3 . C A C I ’ s R i g h t s i z i n g P r o g r a m C A C Ii m p l e m e n t e dar i g h t s i z i n gp r o g r a mw h i c hi n v o l v e dt w op h a s e s . O nJ u l y2 0 . 6 7 8 = P 5 8 8 .C A C I a n dC A D P I ( t h e “ Mi l l s ” ) h a v e m i l l i n gc o n t r a c t s w i t ht h e p l a n t e r s w h i c hp r o v i d e f o r a 6 5 %a n d 3 5 %s h a r i n g b e t w e e n t h e p l a n t e r s a n d t h e Mi l l s .2 0 0 5 . 1 8 7 7 4 .3 9 T h e G r o u p ’ s c o n s o l i d a t e d a m o u n t s f o r t h e c u r r e n t a n d p r e v i o u s y e a r s a r e a s f o l l o w s : 2 0 0 9 2 0 0 8 2 0 0 7 ( I n T h o u s a n d s ) = 4 8 5 . 2 6 8 4 3 2 .T h ef i r s t i sa ne a r l y r e t i r e m e n t p a c k a g ea n dt h es e c o n di s t h ep h a s i n go u t o r a b o l i t i o no f d e p a r t m e n t s . 5 4 6 ( 4 . r e s p e c t i v e l y . s e c t i o n s a n d p o s i t i o n s w h i c h h a v e b e e n i d e n t i f i e d a s r e d u n d a n t o r n o l o n g e r n e c e s s a r y t o C A C I ’ s c o r e b u s i n e s s . 2 6 4 1 . m o l a s s e s a n d o t h e r s u g a r c a n e b y p r o d u c t s . w h e r e b yt h e b e n e f i t i s e q u i v a l e n t t o 1 . 2 0 0 5 . 4 0 1 = P 5 9 3 . 3 8 4 5 0 6 1 . 1 6 . 2 0 0 7 . 2 0 7 ) = P 1 6 3 . 9 5 6 = P 2 . 3 9 1 4 6 7 . 2 8 2 ) P r e s e n t v a l u e o f o b l i g a t i o n s P l a n a s s e t s S u r p l u s ( d e f i c i t ) E x p e r i e n c e a d j u s t m e n t s o n p l a n a s s e t s l o s s ( g a i n ) E x p e r i e n c e a d j u s t m e n t s o n p l a n o b l i g a t i o n g a i n ( l o s s ) T r a n s i t i o n a l L i a b i l i t y U p o nt h eG r o u p ’ sa d o p t i o no fP A S1 9i n2 0 0 5 . 5 1 6 5 8 2 . 6 m i l l i o n e a c h y e a r u n t i l 2 0 1 0 . 9 7 1 R a ws u g a r R e f i n e d s u g a r * E q u i v a l e n t t o 5 0 k i l o g r a mb a g u n i t . 5 0 0 ( 4 . 9 1 0 ) ( 2 . 3 5 4 ) 5 1 . 3 4 2 ( 1 7 . e x c e p t b a g a s s e . 2t i m e s o f t h e m o n t h l y s a l a r y f o r e v e r yy e a r o f s e r v i c e . 8 1 9 P 5 1 4 . t h e G r o u p h a s i n i t s c u s t o d y t h e f o l l o w i n g s u g a r o w n e d b y q u e d a n h o l d e r s : 2 0 0 9 2 0 1 0 o t a l v o l u E s t i m a t m e e d T o t a l v o l u E s t i m a t me e d T I n t h o u s a n d s ) m a r k e t v a l u e ( I n t h o u s a n d s ) ma r k e t v a l u e ( ( L k g * ) ( I n Mi l l i o n s ) ( L k g * ) ( I n Mi l l i o n s ) 9 4 2 = P 9 9 8 3 8 7 P = 7 0 7 1 . 2 0 1 0 a n d 2 0 0 9 . R e l a t e dh a u l i n ge x p e n s ec h a r g e dt oo p e r a t i o n si n2 0 1 0 . A s p a r t o f t h e E R P A . C A D P I h a s o u t s t a n d i n g s a l e s c o n t r a c t s f o r r e f i n e ds u g a rw i t hat o t a l v a l u eo fP = 1 . a n d ( i i ) Ag u a r a n t e e / m o r t g a g e f e e o f P = 3 . ( i i ) C o n t r a c t f o r h a u l i n g s e r v i c e s f o r t h e t r a n s p o r t o f s u g a r c a n e f r o mt h e p l a n t a t i o n t o t h e m i l l . 0 9 1L k g . 5 m i l l i o n e a c h i n 2 0 0 9 a n d 2 0 0 8 .T h i s g u a r a n t e e f e e a g r e e m e n t e x p i r e di nA p r i l 2 0 0 9 .O nJ a n u a r y1 4 . = P 1 1 2 . g .T h e G r o u p i s a c c o u n t a b l e t o q u e d a n h o l d e r s f o r t h e v a l u e o f t r u s t e e d s u g a r o r t h e i r s a l e s p r o c e e d s .C A D P I e n t e r e d i n t o a g r e e m e n t s a s f o l l o w s : ( i )L e a s e o f o f f s i t e w a r e h o u s e f o r a p e r i o do f o n e y e a r r e n e w a b l e a t t h e o p t i o no f t h e l e s s e e t h r o u g hn o t i f i c a t i o ni nw r i t i n gn o tl a t e rt h a n9 0d a y sp r i o rt ot h ee x p i r a t i o no ft h e a g r e e m e n t . 0 0 0 m e t r i c t o n s o f c a r b o n d i o x i d e e a c h y e a r a n d h a s a c r e d i t i n g p e r i o d o f 1 0 y e a r s s t a r t i n g 2 0 1 0 . 5 m i l l i o n . d . R H I a n dB P I . 2m i l l i o nE m i s s i o nR e d u c t i o n P u r c h a s eA g r e e m e n t ( E R P A ) f o r t h ep u r c h a s eo f c a r b o ne m i s s i o nc r e d i t su n d e r t h eC l e a n D e v e l o p m e n t Me c h a n i s mo f t h e K y o t oP r o t o c o l .R H I c o n v e y e d u n t o B P I a s m o r t g a g e t r u s t e e i t s l a n d l o c a t e d i n N a s u g b u . 0 m i l l i o n s h a l l b e p a i d a n n u a l l y b y C A D P I t o c o m p e n s a t e R H I f o r t h e c o n t i n u a n c e o f t h e m o r t g a g e .R H I a g r e e dt oc o n t i n u et os u b j e c t t h em o r t g a g e dp r o p e r t yt ot h eMT I o nt h e f o l l o w i n g c o n d i t i o n s : ( i )C A D P Is h a l l p r o t e c tt h ep r o p e r t ya n dr e i m b u r s eR H Iw i t ha l le x p e n s e si nc a s et h e m o r t g a g e dp r o p e r t yi s a t t a c h e dt os a t i s f yt h e o b l i g a t i o n s o f C A D P I s e c u r e db yt h e MT I . p a r t o f t h e r e v e n u e f o r t h e p u r c h a s e o f t h e c r e d i t s w i l l b e u s e d t o f i n a n c e R B C ’ s c o m m u n i t y d e v e l o p m e n t p r o j e c t s ( s e e N o t e 2 8 ) . 2 0 0 9a n d2 0 0 8a m o u n t e dt o = P 1 0 5 . R o x o l a n dWo r l dB a n ks i g n e da$ 3 . 2 7 9 . 6m i l l i o n .4 0 T h e a b o v e v o l u m e o f s u g a r i s n o t r e f l e c t e di nt h e c o n s o l i d a t e db a l a n c e s h e e t s s i n c e t h e s e a r e n o t a s s e t s o f t h e G r o u p .C A D P I e n t e r e di n t os a l e s c o n t r a c t s w i t hp r i n c i p a l c u s t o m e r s f o r t h e s a l e o f r a wa n dr e f i n e d s u g a r a n d m o l a s s e s . 4 4 1 . e . r e s p e c t i v e l y . 2 0 1 0a n d 2 0 0 9 . r e s p e c t i v e l y .N ol o s s e sa r ee x p e c t e dt oa r i s ef r o mt h e s e c o n t r a c t u a l o b l i g a t i o n s . 0 m i l l i o n a n d = P 1 7 2 . 2 0 1 0 a n d2 0 0 9 .C A D P I e n t e r e di n t oa ni n d e m n i t ya n dg u a r a n t e e f e e a g r e e m e n t w i t hR H I t oc o n t i n u e t ob e a m o r t g a g e t r u s t i n d e n t u r e ( MT I ) b e t w e e na n da m o n gC A D P I . 3 m i l l i o n . t h e u l t i m a t e o u t c o m e o f t h e s e c a s e s w i l l n o t h a v e a m a t e r i a l i m p a c t o n t h e f i n a n c i a l p o s i t i o n a n d r e s u l t s o f o p e r a t i o n s o f t h e G r o u p .T h e r e a r e p e n d i n gl e g a l c a s e s i nt h eo r d i n a r yc o u r s eo f t h e G r o u p ’ s b u s i n e s s a s a t J u n e 3 0 . c . B a t a n g a s ( m o r t g a g e d p r o p e r t y ) ( s e e N o t e1 3 ) .R e l a t e d r e n t e x p e n s e c h a r g e d t o o p e r a t i o n s a m o u n t e d t o = P 0 . 2 0 0 9 . n op r o v i s i o nr e l a t e dt ot h e s e l e g a l c a s e s w a s m a d e i nt h e 2 0 1 0 . 6m i l l i o na n d= P 1 . f . 4 m i l l i o n i n 2 0 1 0 a n d = P 3 . A s o f J u n e 3 0 . * S G V M C 3 1 0 9 6 2 * . b u t i n t h e o p i n i o no f m a n a g e m e n t a n dl e g a l c o u n s e l . w h i c hw i l l b ea p p l i e da g a i n s t f u t u r ed e l i v e r i e so fs u g a ra n dm o l a s s e s . C A D P I r e c e i v e dc a s h d e p o s i t s f r o mc u s t o m e r s f o r t h e a b o v e t r a n s a c t i o n s a s o f J u n e 3 0 . 2 0 0 9 a n d 2 0 0 8 c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s . e q u i v a l e n t t o 7 4 4 . T h e s e d e p o s i t s a r e c l a s s i f i e d a s c u r r e n t l i a b i l i t i e s ( s e e N o t e 1 2 ) . C o n s e q u e n t l y .T h e E R P Aw i l l a l s oa v o i da t l e a s t 5 0 . 3 8 2L k ga n d8 1 7 . 6 9 6 2 2 9 . 9 1 3 7 7 1 4 . 4 8 9 1 . 7 6 2 6 4 1 . 5 1 0 3 8 4 . 5 4 7 ) 3 7 3 . 4 6 1 1 2 . 9 0 9 . 1 8 . 0 7 7 . 4 7 2 1 6 . 3 4 2 1 7 . 0 8 6 – 4 0 8 . 4 6 9 ) 3 4 7 . 8 7 5 = P 2 . 7 2 3 5 5 . 0 4 7 1 7 4 . 2 0 6 1 . 9 5 8 . 8 0 5 1 0 4 . 9 2 7 P = 2 . 2 0 5 ( 3 0 8 . 9 6 1 3 7 2 . 2 1 9 2 5 . l i g h t a n d w a t e r I n v e n t o r y l o s s e s a n d o b s o l e s c e n c e ( N o t e 6 ) O t h e r s * S G V M C 3 1 0 9 6 2 * . P = 5 . 8 3 1 4 7 9 . 8 0 8 . 2 6 8 2 4 . 4 3 3 2 5 6 . 2 3 5 2 9 0 . 9 0 7 2 2 . 8 1 4 . 5 4 4 2 9 . 4 1 6 3 0 1 . t h eG r o u ph a su n u s e dl i n e so fc r e d i t f r o ml o c a l b a n k s a m o u n t i n g t o = P 2 . 2 1 6 . 6 1 8 = P 6 . 2 0 1 0a n d2 0 0 9 . 1 2 4 . 9 4 9 3 1 8 . 2 4 3 1 0 3 . 3 0 4 . 5 7 3 1 8 0 . 2 2 4 3 8 . 1 0 7 5 0 . 6 2 2 = P 5 .A so fJ u n e3 0 . R e v e n u e T h e c o m p o n e n t s o f r e v e n u e a r e a s f o l l o w s : 2 0 1 0 R e f i n e d s u g a r R a ws u g a r Mo l a s s e s T o l l i n g f e e s O t h e r s P = 3 . 5 6 6 1 1 3 . 9 6 7 2 0 0 9 2 0 0 8 ( I n T h o u s a n d s ) = P 3 . 9 6 3 2 7 4 . 8 5 8 3 6 5 . 0 2 7 1 2 . 4 8 7 6 4 . 9 4 2 . 1 4 6 4 . 7 4 8 5 8 . 9 0 0 3 8 1 . 8 5 3 . 7 2 8 1 . 1 1 0 1 . 7 4 0 6 1 8 . 6 1 1 3 5 6 . 4 6 4 3 6 0 . 1 7 . 2 0 2 . r e s p e c t i v e l y ( s e e N o t e s 1 0 a n d 1 3 ) . 4 5 0 2 6 8 . 1 8 5 3 0 2 . 5 4 4 O t h e r si n c l u d ef a r m i n c o m ea n dc h a n g e si nf a i rv a l u eo fc o n s u m a b l eb i o l o g i c a la s s e t s ( s e e N o t e 7 ) . 2 0 4 3 5 8 . 7 1 6 . = P . 0 m i l l i o n a n d P = 2 . 3 0 9 P = 6 . 5 2 5 2 5 0 . 3 1 3 3 1 . 8 6 4 . 0 m i l l i o n . = P 5 7 3 2 0 1 0 P u r c h a s e d s u g a r ( N o t e 6 ) C o s t o f t r a n s p o r t i n g c a n e s t o m i l l ( N o t e s 6 a n d 1 6 ) N e t c h a n g e s i n i n v e n t o r i e s ( N o t e 6 ) D i r e c t l a b o r ( N o t e 2 0 ) T o l l i n g f e e s T r a d i n g c o s t Ma n u f a c t u r i n g o v e r h e a d : F u e l a n d o i l D e p r e c i a t i o n ( N o t e 9 ) R e p a i r s a n d m a i n t e n a n c e Ma t e r i a l s a n d c o n s u m a b l e s T a x e s a n d l i c e n s e s O u t s i d e s e r v i c e s R e n t ( N o t e s 1 4 a n d 1 6 ) C o m m u n i c a t i o n . 3 0 0 P = 3 . 4 4 9 3 8 . 3 9 9 4 4 .4 1 h . C o s t o f S a l e s T h e c o m p o n e n t s o f c o s t o f s a l e s a r e a s f o l l o w s : 2 0 0 9 2 0 0 8 ( I n T h o u s a n d s ) P = 2 . 7 7 6 . 0 4 1 1 . 0 8 9 7 3 . 9 7 9 ( 3 4 7 . 6 8 7 1 . 5 2 9 1 4 1 . 4 8 1 . 5 6 0 1 2 0 . 1 3 5 2 9 3 . 2 9 4 8 . 4 0 1 2 6 6 . 4 2 1 9 . 3 9 8 3 0 . P = 2 6 5 1 2 0 0 9 ( I n T h o u s a n d s ) = P – 2 0 . G e n e r a l a n dA d mi n i s t r a t i v e E x p e n s e s T h e c o m p o n e n t s o f g e n e r a l a n d a d m i n i s t r a t i v e e x p e n s e s a r e a s f o l l o w s : 2 0 1 0 E m p l o y e e b e n e f i t s ( N o t e 2 0 ) T a x e s a n d l i c e n s e s O u t s i d e s e r v i c e Ma t e r i a l s a n d c o n s u m a b l e s I n s u r a n c e D e p r e c i a t i o n ( N o t e 9 ) T r a v e l a n d t r a n s p o r t a t i o n R e n t ( N o t e s 1 4 a n d 1 6 ) R e p a i r s a n d m a i n t e n a n c e C o m m u n i c a t i o n . 2 4 5 ) 6 . 3 3 4 5 . 1 3 1 1 8 . 8 0 8 7 6 . 8 3 6 3 8 . 3 1 9 7 5 . 4 4 1 = P 5 2 . 3 5 0 1 4 . = P 6 1 6 S a l a r i e s a n d w a g e s ( N o t e s 1 8 a n d 1 9 ) A l l o w a n c e s a n d o t h e r e m p l o y e e b e n e f i t s ( N o t e s 1 8 a n d 1 9 ) P e n s i o n c o s t s ( N o t e 1 5 ) 2 1 . 9 8 4 6 9 8 3 . 0 2 9 P = 5 9 5 . 4 9 6 4 8 . 4 0 4 1 4 . 5 2 8 7 1 . 5 6 8 5 8 6 . 6 6 4 2 0 . P = 3 4 1 5 8 . 9 1 3 1 0 . 5 4 1 1 3 0 . 6 7 3 4 1 . 3 6 2 2 0 1 0 1 6 1 . 6 9 0 2 0 0 9 ( I n T h o u s a n d s ) = P 1 9 6 . 9 4 5 1 . 7 9 9 9 . 4 8 1 2 . 2 2 2 2 2 . 3 0 2 6 2 . 0 7 9 3 7 . 7 0 3 2 0 0 8 = P – 4 3 . 6 3 5 = P 5 0 8 . 5 3 1 5 2 . 9 9 2 9 6 . 8 0 1 ( 7 . 2 1 6 8 . 6 1 7 * S G V M C 3 1 0 9 6 2 * . 0 3 6 7 . 8 8 8 6 2 . 6 3 2 8 . 0 9 5 1 7 . 2 9 9 P = 3 7 3 . 7 4 4 8 2 . 0 6 4 2 0 . 1 1 4 5 4 4 . 2 3 3 2 0 0 8 = P 2 0 1 . E m p l o y e e B e n e f i t s T h e c o m p o n e n t s o f e m p l o y e e b e n e f i t s a r e a s f o l l o w s : 2 0 0 9 ( I n T h o u s a n d s ) = P 3 5 2 . 8 2 2 3 5 3 1 . = P 7 1 5 2 0 0 8 = P 3 7 9 . 6 0 5 = P 5 6 0 . 5 1 4 6 9 . 1 5 8 3 0 . 2 5 9 7 . 7 6 9 1 3 0 . 9 5 8 1 6 . 6 2 0 9 . 0 1 9 = P 7 5 . 0 1 3 2 0 . 8 2 4 7 3 . 5 5 8 2 2 . 4 8 4 2 5 . 2 6 1 3 8 . 2 7 9 7 6 . 8 3 9 8 . 6 4 0 8 . 3 0 2 2 5 . 2 4 5 3 1 . l i g h t a n d w a t e r C o r p o r a t e s o c i a l r e s p o n s i b i l i t y P r o v i s i o n f o r i m p a i r m e n t o f r e c e i v a b l e s a n d c r e d i t a b l e w i t h h o l d i n g t a x e s ( N o t e s 5 a n d 7 ) R e p r e s e n t a t i o n a n d e n t e r t a i n m e n t O t h e r s P = 2 3 7 . 8 6 0 P = 6 1 0 . O t h e r I n c o me N e t T h e c o m p o n e n t s o f o t h e r i n c o m e a r e a s f o l l o w s : 2 0 1 0 R e c o v e r f r n s u r a n c e c l a y o mi i m S a l e o f s c r a p S u g a r a n d m o l a s s e s h a n d l i n g f e e s F o r e i g n e x c h a n g e g a i n s ( l o s s e s ) n e t O t h e r s 1 4 1 . 8 6 1 3 1 . 3 5 5 2 6 . 0 4 3 2 6 . 5 4 6 8 . 1 1 5 ) ( 4 2 . 2 2 . 7 6 6 ) ( 1 . 5 9 8 9 . 2 9 6 1 3 . 1 2 8 ( = P 6 8 3 ) P = 1 1 3 . 8m i l l i o n a t t h e t i m e o f d a m a g ei n2 0 0 9 . 4 6 5 ) D e f e r r e di n c o me t a x a s s e t s o n : A l l o w a n c e f o r : I m p a i r m e n t o f r e c e i v a b l e s ( N o t e 5 ) S u g a r i n v e n t o r y l o s s e s ( N o t e 6 ) I n v e n t o r y o b s o l e s c e n c e ( N o t e 6 ) P e n s i o n b e n e f i t o b l i g a t i o n ( N o t e 1 5 ) U n a m o r t i z e d p a s t s e r v i c e c o s t U n r e a l i z e d f o r e i g n e x c h a n g e l o s s N O L C O E x c e s s MC I T D e f e r r e di n c o me t a x l i a b i l i t i e s o n : R e v a l u a t i o n i n c r e m e n t o n p r o p e r t i e s ( N o t e 2 3 ) U n a m o r t i z e d c a p i t a l i z e d i n t e r e s t ( N o t e 9 ) P e n s i o n p l a n a s s e t s ( N o t e 1 5 ) U n r e a l i z e d f o r e i g n e x c h a n g e g a i n U n a m o r t i z e d d e b t c o m m i t m e n t f e e s N e t d e f e r r e d i n c o me t a x a s s e t s ( l i a b i l i t i e s ) ( 1 ) ( 2 ) P e r t a i n t o R H I . 8 7 1 ) ( 1 1 1 . 7 7 2 – 7 . 5 9 1 ) ( = P 7 2 5 . 1 9 4 – 4 . I n c o me T a x e s a . 2 9 4 2 1 . 3 3 2 6 0 . 8 6 2 6 . 0 7 8 5 0 . 2 1 3 1 8 . 6 6 6 1 0 1 . 3 7 7 4 4 . 2 0 0 9 . 4 0 4 A p p l i e d ( P = 4 . 9 5 1 1 1 . b . R o x o l a n d N A V I .w h i c h r e p r e s e n t s r e c o v e r yf r o mi r r e p a r a b l e e q u i p m e n t w i t hc a r r y i n gv a l u e o f = P 1 . E x p i r e d 2 0 1 0 ( I n T h o u s a n d s ) ( = P 6 8 3 ) = P – – 1 8 . 0 7 8 – 5 0 . 3 9 5 ) ( 1 4 . 7 0 8 ) ( 8 3 7 . 7 4 7 6 . 2 4 8 ) ( 4 2 .4 3 R e c o v e r yf r o mi n s u r a n c ec l a i mp e r t a i n st ot h ea m o u n tc o l l e c t e df r o mt h ei n s u r e r .C o m p o n e n t s o f t h e G r o u p ’ s r e c o g n i z e d d e f e r r e d i n c o m e t a x a s s e t s a n d l i a b i l i t i e s a t J u n e 3 0 r e p r e s e n t t h e t a x e f f e c t s o f t h e f o l l o w i n g t e m p o r a r y d i f f e r e n c e s : 2 0 0 9 2 0 1 0 N e t D e f e r r e d N e t D e f e r r e d N e t D e f e r r e d I n c o m e T a x I n c o me T a x I n c o me ( 1 ) ( 1 ) ( 2 ) T a x L i a b i l i t i e s L i a b i l i t i e s A s s e t s ( I n T h o u s a n d s ) P = – – 7 8 3 – – – 4 . 5 3 0 ) – – – ( P = 4 . 8 6 9 1 . 5 9 1 3 8 1 9 . 8 4 1 ) ( = P 7 1 1 . 4 4 1 ( 6 2 7 . C A D P I . 3 7 6 ( 6 4 2 . 1 2 8 = P 1 1 8 . 1 5 0 ) P = 6 . 6 9 4 ) ( 8 1 2 . 1 3 7 ) – ( 1 0 . 4 2 3 1 5 .D e t a i l s o f b e n e f i t s a r i s i n g f r o mN O L C Oa n d MC I Ta n d t h e c o r r e s p o n d i n g a n a l y s i s o f d e f e r r e d i n c o m e t a x a s s e t s a s o f J u n e 3 0 f o l l o w : N O L C O I n c u r r e d i n 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 A m o u n t P = 5 . 8 2 5 – 1 0 . 5 3 0 ) B a l a n c e s a s o f J u n e 3 0 . n oa c c r u a l w a s m a d eo nt h ei n s u r a n c ec l a i ms i n c e m a n a g e m e n t a s s e s s e d t h a t t h e c o l l e c t a b i l i t y o f s u c h c l a i mw a s n o t v i r t u a l l y c e r t a i n . 1 9 1 T a x E f f e c t = P – 5 . P e r t a i n t o C F S I . 9 8 5 – 4 4 . 9 5 7 A v a i l a b l e U n t i l 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 * S G V M C 3 1 0 9 6 2 * . A so f J u n e3 0 . 2 3 8 = P 3 3 . 4 9 8 ) ( 1 5 7 . 8 9 5 1 1 2 . 9 7 7 = P 5 . 9 8 5 4 4 . C A C I . 9 7 7 – – – – – – = P 4 . 0 8 4 – – ( 1 . 5 2 9 – – 2 0 0 9 ( I n T h o u s a n d s ) = P 1 0 3 . 1 1 9 ) 2 0 0 8 = P 2 3 3 . 3 7 3 ) 4 . 0 4 3 P = 3 3 . w e r en o t r e c o g n i z e da s m a n a g e m e n t b e l i e v e s t h a t i t m a yn o t b ep r o b a b l et h a t f u t u r et a x a b l ep r o f i t sw i l l b ea v a i l a b l ea g a i n s t w h i c ht h eN O L C O . 4 0 5 1 . 5 1 7 5 . 2 7 1 A p p l i e d P = – – – – = P – E x p i r e d ( I n T h o u s a n d s ) ( P = 4 . 3 8 3 = P 1 2 . 9m i l l i o na so f J u n e3 0 . e x c e s s MC I Ta n do t h e r d e d u c t i b l e t e m p o r a r y d i f f e r e n c e s c a n b e u t i l i z e d .A n yb a l a n c e o f e x c e s s MC I Tw h i c hh a s n o t b e e na p p l i e da g a i n s t t h e n o r m a l i n c o m e t a xp a y a b l e f o r t h e t h r e e y e a r p e r i o dw i l l b e c l o s e dt op r o v i s i o nf o r i n c o m e t a xf o r f i n a n c i a l r e p o r t i n g p u r p o s e s . 5 1 7 5 . 8 5 6 ) B a l a n c e s a s o f J u n e 3 0 = P – 5 1 5 1 . 8 5 6 ) – – – ( P = 4 .4 4 MC I T I n c u r r e d i n 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 A m o u n t = P 4 . 3 5 9 ) – ( 2 . 8 5 6 5 1 5 1 . 8 2 7 * S G V M C 3 1 0 9 6 2 * . MC I Ta n do t h e rd e d u c t i b l et e m p o r a r y d i f f e r e n c e sa m o u n t i n gt oP = 1 1 . T h ee x c e s s o f MC I To v e r t h en o r m a l i n c o m et a xi s c a r r i e df o r w a r do na na n n u a l b a s i s a n d c r e d i t e da g a i n s t t h en o r m a l i n c o m et a xp a y a b l ef o rt h r e ei m m e d i a t e l ys u c c e e d i n gt a x a b l e y e a r s . c .D e t a i l so f N O L C O . 6 9 5 ) – ( 1 4 . 9 5 4 3 . i f n o r m a l i n c o m e t a x i s l e s s t h a n t h e c o m p u t e d MC I T . 4 1 5 A v a i l a b l e U n t i l 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 T h e C o m p a n ya n di t s s u b s i d i a r i e s a r e s u b j e c t t oMC I To f 2 %b a s e do ni t s g r o s s i n c o m e a s d e f i n e d u n d e r t h e P h i l i p p i n e T a x C o d e . 3 2 5 N O L C O E x c e s s MC I T A l l o w a n c e f o r i m p a i r m e n t o f r e c e i v a b l e s P e n s i o n b e n e f i t o b l i g a t i o n D e f e r r e di n c o m et a xa s s e t sp e r t a i n i n gt oN O L C O . 3 2 8 ( 3 5 .T h e r e c o n c i l i a t i o n b e t w e e nt h e p r o v i s i o nf o r i n c o m e t a xc o m p u t e da t t h e a p p l i c a b l e s t a t u t o r y t a x r a t e s a n d p r o v i s i o n f o r i n c o m e t a xp r e s e n t e di n t h e c o n s o l i d a t e d s t a t e m e n t s o f i n c o m e f o r t h e y e a r s e n d e d J u n e 3 0 f o l l o w s : 2 0 1 0 P r o v i s i o n f o r i n c o m e t a x a t s t a t u t o r y r a t e s A d j u s t m e n t s r e s u l t i n g f r o m : C a p i t a l g a i n s t a x o n s a l e o f s u b s i d i a r i e s ( N o t e 1 ) R e a l i z a t i o n o f r e v a l u a t i o i n c r e m e n n t A p p l i c a t i o n o f t e m p o r a r y d i f f e r e n c e s a n d N O L C Of o r w h i c h n o d e f e r r e d i n c o m e t a x a s s e t w a s p r e v i o u s l y r e c o g n i z e d E x p i r a t i o n o f e x c e s s MC I Tc r e d i t s ( F o r w a r d ) P = 1 1 8 . 2 2 0 5 2 0 1 . 3 8 3 = P 7 . 4 0 5 2 . 8m i l l i o na n dP = 1 7 . 2 0 1 0a n d2 0 0 9 . e x c e s s MC I Ta n do t h e r d e d u c t i b l et e m p o r a r yd i f f e r e n c e s f o r w h i c hn o d e f e r r e d i n c o m e t a x a s s e t s w e r e r e c o g n i z e d a s o f J u n e 3 0 f o l l o w : 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s ) = P 3 8 . d . 0 0 8 5 . 3 2 4 1 0 6 . r e s p e c t i v e l y . 2 0 0 8i n m a j o r n e w s p a p e r s o f g e n e r a l c i r c u l a t i o n . 7 7 0 9 5 ( 2 5 .U n d e r R e p u b l i c A c t 9 3 3 7 . a n d3 0 %s t a r t i n go nJ a n u a r y1 . T h e n e wl a ws h a l l b e e f f e c t i v e s t a r t i n gt a x a b l ey e a r 2 0 0 8 . 1 0 2 0 0 8 f o r t h e i m p l e m e n t i n g g u i d e l i n e s o f t h i s l a w . 2 0 0 8 .R A9 5 0 4b e c a m e e f f e c t i v e o nJ u l y7 . 2 0 0 5 a n d 3 3 %e f f e c t i v e J a n u a r y 1 . E q u i t y a . 5 0 0 .4 5 2 0 1 0 U n r e c o g n i z e d d e f e r r e d i n c o m e t a x a s s e t s a r i s i n g f r o m t e m p o r a r y d i f f e r e n c e s a n d N O L C O E f f e c t o f c h a n g e i n i n c o m e t a x r a t e s a p p l i e d o n d e f e r r e d i n c o m e t a x a s s e t s a n d l i a b i l i t i e s T a x e f f e c t s o f : E q u i t y i n n e t e a r n i n g s o f a n a s s o c i a t e ( N o t e 8 ) I n t e r e s t a n d d i v i d e n d i n c o m e s u b j e c t e d t o f i n a l t a x D e p r e c i a t i o n o n a p p r a i s a l i n c r e a s e U n a l l o w a b l e i n t e r e s t e x p e n s e O t h e r s P r o v i s i o n f o r i n c o m e t a x 2 0 0 9 ( I n T h o u s a n d s ) 2 0 0 8 P = 7 . 7 9 4 e . e f f e c t i v e N o v e m b e r 1 . 6 6 6 1 . 0 0 0 = P 1 . 5 0 0 . 5 0 0 . 0 0 0 = P 1 . 2 7 7 ) ( 2 4 . a n dt h e u n a l l o w a b l e d e d u c t i o nf o ri n t e r e s te x p e n s es h a l l b e4 2 %o ft h ei n t e r e s ti n c o m es u b j e c t t of i n a l t a x . 0 0 0 1 . 0 0 0 . 6 5 6 = P 1 8 . 4 0 8 ) ( 1 . 5 0 0 . 0 8 1 ) P = 8 3 . 0 0 0 . 2 0 0 9a n dt h e r e a f t e r . 2 5 3 ) 6 . i t s h a l l b e c o n s i d e r e d a s h a v i n g a v a i l e d o f t h e i t e m i z e d d e d u c t i o n s . 6 8 2 ( 3 . 2 0 0 8 . O nS e p t e m b e r2 4 .Ac o r p o r a t i o n m u s t s i g n i f y i n t h e r e t u r n i t s i n t e n t i o n t o a v a i l t h e O S D . 7 3 8 = P 2 1 0 . 5 5 6 ) 6 . 0 0 0 * S G V M C 3 1 0 9 6 2 * . 0 0 0 . C o r p o r a t i o n s . 2 3 . 4 1 1 3 . 9 0 7 = P 1 7 5 . 3 9 0 = P 4 . 2 0 0 5 . t h e E x p a n d e dV a l u e A d d e d T a x A c t o f 2 0 0 5 . 6 7 9 ) ( 3 8 1 ) 9 5 2 3 2 3 ( 2 . 2 0 0 5 .T h en e wl a wi n c l u d e sp r o v i s i o n sr e l a t i n gt ot h ea v a i l m e n t o f o p t i o n a ls t a n d a r d d e d u c t i o n s( O S D ) . 0 0 0 1 = P 1 . w h i c h t o o k e f f e c t o n N o v e m b e r 1 . 2 0 0 8R A9 5 0 4a m e n d i n gp r o v i s i o n s o f t h e 1 9 9 7 T a xC o d e .S h a r e c a p i t a l a n d t r e a s u r y s h a r e s D e t a i l s o f s h a r e c a p i t a l a n d t r e a s u r y s h a r e s a t J u n e 3 0 f o l l o w : 2 0 1 0 N u mb e r o f A mo u n t s h a r e s( I nT h o u s a n d s ) A u t h o r i z e d c o m m o n s h a r e s “ C a p i t a l A ” a t = P 1 p a r v a l u e e a c h 1 . 8 5 8 ) ( 1 . 2 0 0 9 .I f n o i n d i c a t i o n i s m a d e . t h eB u r e a uo fI n t e r n a l R e v e n u ei s s u e dR e v e n u eR e g u l a t i o nN o . 5 0 0 . m a yn o we l e c t t oc l a i ms t a n d a r dd e d u c t i o ni n a n a m o u n t n o t e x c e e d i n g4 0 %o f t h e i r g r o s s i n c o m e . 3 5 2 – ( 3 9 . t h e c o r p o r a t ei n c o m et a xr a t e s h a l l b e 3 5 %f o r t h r e ey e a r s e f f e c t i v eo n N o v e m b e r 1 . 0 0 0 ( F o r w a r d ) 2 0 0 9 N u m b e r o f A m o u n t s h a r e s ( I n T h o u s a n d s ) 2 0 0 8 N u m b e r o f A m o u n t s h a r e s ( I n T h o u s a n d s ) . T h e P r e s i d e n t s i g n e di n t ol a wo nJ u n e 1 7 . f i f t e e n( 1 5 ) d a y s a f t e r i t s p u b l i c a t i o n l a s t J u n e 2 2 . 1 9 0 7 0 1 4 . T h e a v a i l m e n t o f t h e O S Ds h a l l b e i r r e v o c a b l e f o r t h e t a x a b l e y e a r f o r w h i c ht h e r e t u r ni s m a d e .e x c e p tf o rn o n r e s i d e n tf o r e i g n c o r p o r a t i o n s . 5 0 0 . 1 6 8 . 1 8 9 ) ( 7 6 8 . 0m i l l i o n . C C S I a n d C F S I f o r1 . 9 4 9 5 5 . t h eG r o u ph a s u n d e r t a k e nm a j o r a c t i v i t i e s r e l a t i n gt ot h e R e o r g a n i z a t i o n P r o g r a m .2 0 0 4 . 8m i l l i o na n ds e t u ps h a r ei nr e v a l u a t i o n i n c r e m e n ti np r o p e r t i e so fs u b s i d i a r ya m o u n t i n gt o= P 1 5 0 . 6 m i l l i o n . 5 5 2 . i n c l u d i n gt h er e v a l u a t i o ni n c r e m e n t . 1 6 8 . 8m i l l i o no fC A D P G C ’ sc o m m o ns h a r e sw i t hap a rv a l u eo fP = 1p e rs h a r ef o r = P 2 .4 6 2 0 1 0 N u mb e r o f A mo u n t s h a r e s( I nT h o u s a n d s ) I s s u e d c o m m o n s h a r e s “ C l a s s A ” ` T r e a s u r y s h a r e s I s s u e d a n d o u t s t a n d i n g 1 . c . 2m i l l i o n . t h ec o s t o f i n v e s t m e n t si nt h eC o m p a n y ’ sb o o k si m m e d i a t e l yb e f o r et h e t r a n s f e r . O n J u l y 1 . 2 4 0 2 5 9 . t h e c a r r y i n g v a l u e o f t h e n e t a s s e t s t r a n s f e r r e d t oC A D P I . 4 b i l l i o n i n e x c h a n g e f o r C A C I ’ s 2 0 0 m i l l i o n c o m m o n s h a r e s a t P = 1 p e r s h a r e .T h u s . 9 7 6 . 6 4 6 . t h e G r o u ph a s u n d e r t a k e n a c o r p o r a t e r e s t r u c t u r i n g . w h i c h i n c l u d e d t h e l a n d a t a p p r a i s e d v a l u e . 4 2 5 ( 2 5 9 . 9 7 6 . 1 8 9 ) 9 0 9 . 1 8 9 C o s t ( I n T h o u s a n d s ) = P 2 9 . 0 5 0 .C o n s e q u e n t l y . 0m i l l i o n . 2 0 0 2 . 9 7 6 ( 7 3 9 . 4 2 4 . C A D P G Cr e c o r d e dap r e m i u mo f = P 5 9 6 . O n D e c e m b e r 1 .p l a n ta n d e q u i p m e n t a m o u n t i n g t o P = 1 5 0 . 2 3 6 R e a c q u i s i t i o n o f s h a r e s b y t h e P a r e n t C o m p a n y o n i t s S h a r e B u y B a c k P r o g r a mf o l l o w : Y e a r R e a c q u i r e d N u m b e r o f S h a r e s 8 . O n D e c e m b e r 1 6 . a s a p p r o v e db yt h e P h i l i p p i n e S E C o nF e b r u a r y1 0 .A sa r e s u l t . 4 2 4 . e x c l u d i n gt h e l a n d i nN a s u g b u .T h e s a i ds p i n o f f . 5 5 2 .t h e C o m p a n y ’ s o w n e r s h i pi n t e r e s t i nC A D P G Ci n c r e a s e da n dC A D P I . * S G V M C 3 1 0 9 6 2 * . 9 7 6 1 . 3 0 2 . 6m i l l i o n . 7 0 7 ) = P 4 2 9 . 1 6 8 .S u c h p r o p e r t i e st r a n s f e r r e di n c l u d er e v a l u a t i o ni n c r e m e n to nd e p r e c i a b l ep r o p e r t y . 5 m i l l i o n a n d p r e s e n t e d a s a s e p a r a t e c o m p o n e n t o f t h e G r o u p ’ s t o t a l c o n s o l i d a t e d e q u i t y .w h i c hr e p r e s e n t st h ec o s to fC A D P G C ’ s i n v e s t m e n t s i n s h a r e s o f s t o c ki n s u b s i d i a r i e s a n d a n a s s o c i a t e a m o u n t i n g t o = P 4 .T h e a s s e t s a n dl i a b i l i t i e s . 8 6 0 2 0 0 9 2 0 0 8 2 0 0 7 a n d p r e v i o u s y e a r s b . w a sd e e m e da st h eh i s t o r i c a l c o s t o f s u c h a s s e t s f o r C A D P I .S h a r e p r e m i u ma n d r e v a l u a t i o n i n c r e m e n t A sd i s c u s s e di nN o t e1 . 8 6 0 )( 2 5 1 .E x c e s so fc o n s i d e r a t i o nr e c e i v e df r o mp a r e n t c o m p a n yo v e rc a r r y i n ga m o u n t o fd i s p o s e d s u b s i d i a r y a n d e f f e c t o f c h a n g e i n o w n e r s h i p i n t e r e s t i n s u b s i d i a r i e s A s d i s c u s s e d i n N o t e 1 . 2 0 0 4 . 9 7 6 . w e r et r a n s f e r r e db yt h eC o m p a n ya sc a p i t a l c o n t r i b u t i o nt oC A D P I . 2 3 6 2 0 0 9 N u m b e r o f A m o u n t s h a r e s ( I n T h o u s a n d s ) 2 0 0 8 N u m b e r o f A m o u n t s h a r e s ( I n T h o u s a n d s ) P = 1 . R H I a c q u i r e dt h e s u g a r r e l a t e do p e r a t i n gs u b s i d i a r i e s a n da na s s o c i a t e f r o mC A D P G C f o rat o t a lc o n s i d e r a t i o no f= P 3 . i n2 0 0 2 . B a t a n g a s w a s s p u n o f f t oC A D P I ( s e e N o t e 1 ) . 1 6 8 . t h e s u g a r m i l l i n g a n d r e f i n e r y b u s i n e s s i n N a s u g b u . 2 0 0 8 . w h i c hw a s t h e l a s t p h a s e o f t h e R e o r g a n i z a t i o nP r o g r a m . 0m i l l i o n r e d u c e db yt h en e t l i a b i l i t i e st r a n s f e r r e db yC A D P G Ca m o u n t i n gt oP = 2 6 3 . 8 3 8 . 9 7 6 1 2 5 9 . 1 6 8 . 8 6 0 )( 0 9 . 9 4 0 6 3 .i n v o l v e dt h et r a n s f e ro fC A D P G C ’ sn e ta s s e t sa g g r e g a t i n gt o = P 1 . 2 6 9 . 1 8 9 ) = P 4 0 0 . 7 6 7 = P 7 6 8 . 4 2 5 P = 1 . 1 1 6 9 P = 1 . T h e b a s i s o f v a l u a t i o n o f t h e C A C I s h a r e s r e c e i v e d b y C A D P G Cw a s t h e c a r r y i n gv a l u e o f t h e t r a n s f e r r e d n e t a s s e t s . 1 0 1 . 2 3 6 = P 4 0 0 . t h e C o m p a n ye x c h a n g e di t s s h a r e h o l d i n g s i n C A D P I . C A D P G C ’ s N e g r o s s u g a r m i l l i n g b u s i n e s s w a s s p u n o f f . 0 0 7 . 3 3 0 . 1 6 8 . 1 5 3 6 7 5 . 4 2 4 .R H Ii n c r e a s e di t se f f e c t i v eo w n e r s h i pi n t e r e s ti nt h es u g a r r e l a t e do p e r a t i n g s u b s i d i a r i e s a n dr e c o g n i z e dt h e e f f e c t o f t h e c h a n g e i no w n e r s h i pi n t e r e s t i ns u b s i d i a r i e s a n d a n a s s o c i a t e a s a r e s u l t o f r e d u c t i o n o f n o n c o n t r o l l i n g i n t e r e s t s i n s u b s i d i a r i e s o f = P 4 4 . C C S I a n dC F S I b e c a m e 1 0 0 %o w n e d s u b s i d i a r i e s o f t h e C A D P G C . 0 0 0 1 9 6 . 4 2 5 ( 7 6 8 .A s p a r t o f t h i s . 1 1 6 9 1 7 . 0 9 4 . 3 2 2 . 2 0 0 7 N o d i v i d e n d s w e r e d e c l a r e d b y t h e C o m p a n y i n 2 0 1 0 . 0 2 6 . 8 6 0 2 0 1 0 9 8 . 7 8 6 = P 8 6 8 . 2 0 0 8 S e p t e m b e r 1 9 . 2 0 0 9 O c t o b e r 3 . t h en o t er e c e i v a b l ef r o mR C I a m o u n t i n gt oP = 3 . 8m i l l i o ns h a r eo f R C I i nt h ed i v i d e n d s d e c l a r e db yt h e C o m p a n y ( s e e N o t e 1 ) . 5 5 * S G V M C 3 1 0 9 6 2 * . U p o nm e r g e r o f C A D P G Ca n dR C I e f f e c t i v eJ u n e2 9 . R H I s o l di t s i n v e s t m e n t i nC A D P G Ct oR C I o na c c o u n t f o r a t o t a l c o n s i d e r a t i o no f = P 3 .u n r e s t r i c t e dr e t a i n e de a r n i n g si n c l u d ea c c u m u l a t e de a r n i n g so fc o n s o l i d a t e d s u b s i d i a r i e s a n du n c o n s o l i d a t e da s s o c i a t e a m o u n t i n gt oP = 1 . D i v i d e n d d e c l a r a t i o n C a s hd i v i d e n d sd e c l a r e db yt h eC o m p a n yf r o mr e t a i n e de a r n i n g sd u r i n gt h ey e a r se n d e d J u n e 3 0 . 5 0 2 . 2 0 0 9 . 0 6 0 . 0 6 0 . 0 5 8 J u l y 1 5 . 8 3 8 . 2 0 0 9 a n d 2 0 0 8 f o l l o w : D a t e A p p r o v e d J u n e 2 4 .T h e e x c e s s o f c o n s i d e r a t i o n r e c e i v e df r o mR C I o v e r t h ec a r r y i n ga m o u n t so f s h a r eo f t h eC o m p a n yi nt h en e t a s s e t so f C A D P G Ca m o u n t e dt o = P 5 7 7 . 2 0 0 8 N o v e m b e r 8 . 3 7 7 = P 8 0 3 . 2 0 0 8 5 5 . 2 0 0 8 J u l y 3 1 . 2 0 0 7 P e r S h a r e = P 0 . d . T h eh i g ha n dl o wt r a d i n gp r i c e s o f t h eC o m p a n y ’ s s h a r e s f o r e a c hq u a r t e r w i t h i nt h et h r e e f i s c a l y e a r s a r e a s f o l l o w s : Q u a r t e r J u l y 2 0 0 9 t h r o u g h J u n e 2 0 1 0 F i r s t S e c o n d T h i r d F o u r t h ( F o r w a r d ) H i g h P = 3 . 3m i l l i o n . 8 6 0 P = 7 6 8 . 8 0 2 . w h i c h a r e n o t a v a i l a b l e f o r d i s t r i b u t i o n t o t h e C o m p a n y ’ s s h a r e h o l d e r s u n l e s s r e c e i v e d a s c a s h d i v i d e n d s f r o mi n v e s t e e s . 0 0 3 . 2 m i l l i o n a s o f J u n e 3 0 . 5 7 5 O c t o b e r 1 5 . 4m i l l i o n . 0 8 4 T r e a s u r y s h a r e s P e n s i o n p l a n a s s e t n e t o f d e f e r r e d i n c o m e t a x l i a b i l i t y ( N o t e 1 5 ) F u r t h e r . 2 0 0 9 O c t o b e r 3 1 . 3m i l l i o nw a s s e t o f f t ot h e e x t e n t o f t h e = P 3 . 7 0 0 O c t o b e r 1 5 . r e s p e c t i v e l y . 3 1 9 P = 8 6 7 . 5 5 2 . 2 0 0 8 5 5 . 6 4 6 2 0 0 8 = P 7 3 9 . e . = P 6 3 4 . 7 0 L o w P = 2 . 0 6 0 . 2 0 0 9 . 1 m i l l i o n . 1 3 1 . 9 2 7 . 2 0 0 9 a n d 2 0 0 8 . 0m i l l i o nn o t e p a y a b l e f r o mC A D P G Ca n dP = 3 5 . 1 7 9 9 9 . 7 0 7 6 3 . f o l l o w i n g t h e a c q u i s i t i o n o f t h e s u g a r r e l a t e d o p e r a t i n g s u b s i d i a r i e s a n d a na s s o c i a t e f r o mC A D P G C . 1m i l l i o na n d = P 1 . 2 0 0 7 D a t e P a i d / I s s u e d J u l y 3 1 .4 7 O n J a n u a r y 2 3 .S h a r e p r i c e s T h ep r i n c i p a l m a r k e t f o r t h eC o m p a n y ’ s s h a r e so f s t o c ki st h eP h i l i p p i n eS t o c kE x c h a n g e . 5 0 3 . 2 0 1 0 . 5 7 5 J u l y 1 5 . 9 2 7 . 2 0 0 9 5 4 . 2 0 0 8 J u n e 2 5 . 8 0 2 . 0 5 T o t a l A m o u n t S t o c k h o l d e r s o f ( I n T h o u s a n d s ) R e c o r d D a t e = P 5 4 .R e t a i n e d e a r n i n g s R e s t r i c t e d r e t a i n e d e a r n i n g s T h ef o l l o w i n ga m o u n t so f r e t a i n e de a r n i n g sa so f J u n e3 0a r en o t a v a i l a b l ef o rd i v i d e n d d e c l a r a t i o n : 2 0 0 9 ( I n T h o u s a n d s ) = P 7 6 8 . 0 0 3 . 2 0 0 9 a n d 2 0 0 8 . T o m a i n t a i n o r a d j u s t c a p i t a l s t r u c t u r e . 0 0 0 s h a r e s ) . t h e C o m p a n y ’ s e f f e c t i v e o w n e r s h i p i n t e r e s t h a s i n c r e a s e d f r o m8 9 .S h a r e B u y B a c k P r o g r a m I n2 0 0 8 . 9 5 3 . 3 6 %. 3 0 2 . T h e d i f f e r e n c e b e t w e e n t h e r e a c q u i s i t i o n c o s t a n d t h e b o o k v a l u e o f s h a r e s a c q u i r e d b yt h eC o m p a n y( t h r o u g hC A D P G C )f r o m t h en o n c o n t r o l l i n gi n t e r e s ta m o u n t e dt o = P 1 . N o c h a n g e s w e r e m a d e i n t h e o b j e c t i v e s . E a r n i n g s P e r S h a r e E a r n i n g s p e r s h a r e ( E P S ) f o r t h e y e a r s e n d e d J u n e 3 0 i s c o m p u t e d a s f o l l o w s : 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s . 2 8 %t o 8 9 . * S G V M C 3 1 0 9 6 2 * . i nl i g h t o f c h a n g e s i n e c o n o m i c c o n d i t i o n s . 9m i l l i o n( 1 . 6 0 L o w P = 2 . 3 9 T h e r e a r e n o p o t e n t i a l d i l u t i v e c o m m o n s h a r e s a s a t J u n e 3 0 . p o l i c i e s o r p r o c e s s e s i n 2 0 1 0 a n d 2 0 0 9 . 5 0 2 . 0 6 2 . 6 0 2 .T h eG r o u pm a n a g e si t s c a p i t a l s t r u c t u r ea n dm a k e sa d j u s t m e n t t oi t . 2 4 . 5 0 6 . 9 0 2 . 0 0 2 . 4 0 3 . 4m i l l i o na n dw a sr e c o g n i z e di ne q u i t yu n d e r “ E f f e c t o f c h a n g ei no w n e r s h i pi n t e r e s t ” a c c o u n t . T h eG r o u p ’ sd i v i d e n dd e c l a r a t i o ni sd e p e n d e n to na v a i l a b i l i t yo fe a r n i n g sa n do p e r a t i n g r e q u i r e m e n t s . 6 4 8 = P 0 . 3 0 2 . 6 4 5 = P 0 . e x c e p t E P S ) P = 3 0 7 . 8 0 2 . A s a r e s u l t . 3 4 = P 1 8 0 . 4 8 2 . 6 0 3 . 2 0 2 0 0 8 H i g h P = 3 . C A D P G Cr e a c q u i r e dp o r t i o no f i t ss h a r e sa m o u n t i n gt oP = 2 . 2 4 9 9 0 9 . C a p i t a l Ma n a g e me n t T h ep r i m a r yo b j e c t i v eo f t h eG r o u p ’ s c a p i t a l m a n a g e m e n t i s t oe n s u r et h a t i t m a i n t a i n s s t r o n g c r e d i t a n d h e a l t h y c a p i t a l r a t i o s i n o r d e r t o s u p p o r t i t s b u s i n e s s a n d m a x i m i z e s h a r e h o l d e r v a l u e . 2 0 N e t i n c o m e f o r t h e y e a r a t t r i b u t a b l e t o t h e e q u i t y h o l d e r s o f t h e P a r e n t C o m p a n y We i g h t e d a v e r a g e n u m b e r o f c o m m o n s h a r e s o u t s t a n d i n g B a s i c / d i l u t e d E P S = P 4 1 0 . 0 6 3 . r e t u r n c a p i t a l t o s h a r e h o l d e r s o r i s s u e n e ws h a r e s . 2 0 1 0 . 2 5 . 0 1 5 1 . 5 5 2 P = 0 . 6 9 8 9 0 9 . 1 0 2 .4 8 Q u a r t e r J u l y 2 0 0 8 t h r o u g h J u n e 2 0 0 9 F i r s t S e c o n d T h i r d F o u r t h J u l y 2 0 0 7 t h r o u g h J u n e 2 0 0 8 F i r s t S e c o n d T h i r d F o u r t h f . t h e G r o u p m a y a d j u s t t h e d i v i d e n d p a y m e n t t o s h a r e h o l d e r s . s p e c i f i c a l l y . 0 0 0 . i n t e r e s t r a t e r i s k a n d f o r e i g n c u r r e n c y r i s k .T h e G r o u pm o n i t o r s i t s u s e o f c a p i t a l u s i n g l e v e r a g e r a t i o s . L i q u i d i t y r i s k L i q u i d i t y r i s k a r i s e s f r o mt h e p o s s i b i l i t y t h a t t h e G r o u pm a y e n c o u n t e r d i f f i c u l t i e s i n r a i s i n g f u n d s t o m e e t m a t u r i n g o b l i g a t i o n s .I t a l s o m o n i t o r s i t s d e b t s s e r v i c e c o v e r a g e r a t i o t o e n s u r e t h a t t h e r e w o u l d b e s u f f i c i e n t a m o u n t o f c a s hf l o wa v a i l a b l e t om e e t a n n u a l i n t e r e s t a n dp r i n c i p a l p a y m e n t s o nd e b t . 9 0 5 = P 1 3 . e x c e p t r a t i o ) = P 7 . 2 1 5 0 . p o l i c i e s o r p r o c e s s e s i n 2 0 1 0 a n d 2 0 0 9 . 6 2 : 1 . F i n a n c i a l I n s t r u me n t s F i n a n c i a l R i s k Ma n a g e m e n t O b j e c t i v e s a n d P o l i c i e s T h eG r o u p ’ sp r i n c i p a lf i n a n c i a li n s t r u m e n t sc o m p r i s eo fc a s ha n dc a s he q u i v a l e n t s . 5 2 1 . t h e G r o u p h a s t h e f o l l o w i n g f i n a n c i a l r a t i o s : 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s . d i v i d e n d s p a y a b l e a n d s h o r t a n d l o n g t e r mb o r r o w i n g s . Ma n a g e m e n t c o n s i d e r s t h e t o t a l c o n s o l i d a t e d e q u i t y r e f l e c t e d i n t h e c o n s o l i d a t e d b a l a n c e s h e e t s a s i t s c a p i t a l . a n d a c c o u n t s p a y a b l e a n d a c c r u e de x p e n s e s . 2 0 1 0a n d2 0 0 9 .D u e t o t h e d y n a m i c n a t u r e o f t h eb u s i n e s s . T h e G r o u p m o n i t o r s t h e m a r k e t p r i c e r i s k a r i s i n g f r o m a l l f i n a n c i a l i n s t r u m e n t s . c r e d i t r i s k . 3 1 0 5 . 0 6 5 P = 9 . t h eG r o u pa i m st om a i n t a i nf l e x i b i l i t yi nf u n d i n gb yk e e p i n gt r a c ko f d a i l yc a s h f l o w s a n d m a i n t a i n i n g c o m m i t t e d c r e d i t l i n e s a v a i l a b l e . 6 6 9 P = 1 5 . 0 0 T o t a l l i a b i l i t i e s T o t a l e q u i t y T o t a l l i a b i l i t i e s a n d e q u i t y D e b t r a t i o D e b t t o e q u i t y r a t i o 2 6 . T h e G r o u p ’ s o b j e c t i v e i s t om a i n t a i ns u f f i c i e n t c a s ha n dc a s he q u i v a l e n t s a n dt h e a v a i l a b i l i t yo f f u n d i n g t h r o u g h a n a d e q u a t e a m o u n t o f c o m m i t t e d c r e d i t f a c i l i t i e s . 0 0 1 .4 9 T h e G r o u p m e t i t s o b j e c t i v e s . 8 0 5 . 3 7 : 1 . d e b t r a t i o a n d d e b t t o e q u i t y r a t i o . w h i c h a r i s e d i r e c t l yf r o mi t s o p e r a t i o n s .A s o f J u n e 3 0 . 3 3 : 1a n dm i n i m u md e b t s e r v i c e c o v e r a g e r a t i oo f 1 . 6 2 : 1 . 2 5 : 1b yi t s b a n kc r e d i t o r s . T h e G r o u pi s r e q u i r e dt om a i n t a i nam a x i m u md e b t t o e q u i t yr a t i oo f 2 . 5 8 : 1 .T h e G r o u pi s a l s oe x p o s e d t o c o m m o d i t y p r i c e r i s k . * S G V M C 3 1 0 9 6 2 * . 9 8 6 . T h eG r o u ph a so t h e r f i n a n c i a l i n s t r u m e n t ss u c ha s a d v a n c e s t oe m p l o y e e sa n dar e l a t e dp a r t y . T h em a i nr i s k sa r i s i n gf r o mt h eG r o u p ’ sf i n a n c i a l i n s t r u m e n t sa r el i q u i d i t yr i s k . 6 0 4 5 . 6 9 8 .R i s km a n a g e m e n t i sc a r r i e do u t b yt h eP r e s i d e n t a n dS e n i o r V i c eP r e s i d e n t f o r F i n a n c ea n dT r e a s u r e r u n d e r t h e d i r e c t i o n o f t h e B O Do f t h e C o m p a n y . 7 1 6 . 0 0 1 . 6 8 5 .t r a d e r e c e i v a b l e s . 9 6 1 1 6 . 9 2 7 . 3 4 7 > 2 < 4 y r s > 4 < 5 y r s ( I n T h o u s a n d s ) P = – – – – P = – – – – > 5 y r s P = – – – – T o t a l = P 7 2 2 . 7 2 4 > 1 < 2 y r s > 2 < 4 y r s > 4 < 5 y r s ( I n T h o u s a n d s ) P = – – – – P = – – – – P = – – – – > 5 y r s P = – – – – T o t a l P = 5 3 4 . 5 4 2 4 8 . 9 9 6 P = – – – 4 . 1 6 6 P = 8 . 2 6 2 C a s h i n b a n k s a n d c a s h e q u i v a l e n t s = P 2 8 3 . 7 m i l l i o n * *I n c l u d e s e x p e c t e d i n t e r e s t p a y m e n t s f o r s h o r t t e r ma n d l o n g t e r mb o r r o w i n g s o f = P 1 1 . 9 6 6 . r e s p e c t i v e l y . 5 3 7 . 9 4 8 2 0 1 . J u n e 3 0 . 2 7 1 P = 3 4 7 . 5 8 7 *E x c l u d e s p a y a b l e t o g o v e r n m e n t a g e n c i e s a m o u n t i n g t o = P 7 3 . 9 2 7 . 0 3 0 P = 3 . 3 2 6 2 . 7 1 0 2 4 . 4 4 1 > 1 < 2 y r s P = – – – – 4 1 1 . 3 0 1 4 9 . 4 2 3 A d v a n c e s t o e m p l o y e e s * * * – O t h e r r e c e i v a b l e s – = P 5 8 1 . 7 m i l l i o n . 2 6 2 D i v i d e n d s p a y a b l e – S h o r t t e r mb o r r o w i n g s * * – C u r r e n t p o r t i o n o f l o n g t e r mb o r r o w i n g s – L o n g t e r mb o r r o w i n g s n e t o f c u r r e n t p o r t i o n * * – = P 6 3 9 . 3 1 2 . 2 8 0 7 4 9 . 8 2 3 4 . 2 2 6 P = 1 7 4 . * S G V M C 3 1 0 9 6 2 * . 1 4 6 2 . 4 6 0 . 3 6 1 P = 6 1 0 . 7 4 8 – 3 5 . 7 2 4 – 4 8 2 . 0 3 5 . 3 7 9 . 3 8 6 P = 6 6 5 . 0 6 9 – – < 1 y e a r P = 4 0 . 5 3 7 . 8 6 3 P = 4 1 1 . 0 3 2 P = 8 . 5 3 5 – = P 5 . 8 5 5 P = – – – – – P = – P = – – – – – P = – P = – – – – – P = – P = 1 7 4 . 3 8 6 P = – – – – – = P – P = – – – – – = P – P = – – – – – = P – * E x c l u d e s p a y a b l e t o g o v e r n m e n t a g e n c i e s a m o u n t i n g t o = P 5 6 . 3 2 6 P = 2 . 2 0 0 9 O n d e m a n d < 1 y e a r P = 8 3 . 0 3 0 . 7 8 2 P = 1 . 0 2 5 = P 1 . 3 2 3 6 6 5 .I t h a sp o l i c i e si np l a c et oe n s u r et h a t s a l e so f p r o d u c t sa r em a d et oc u s t o m e r sw i t ha n a p p r o p r i a t e c r e d i t h i s t o r y . 1 3 9 . 5 8 5 1 . 5 3 5 A c c o u n t s p a y a b l e a n d a c c r u e de x p e n s e s * P = 6 3 9 . 9 9 2 1 6 . 9 0 6 P = 1 1 . 0 m i l l i o n a n d e x c l u d e s n o n f i n a n c i a l a s s e t s a m o u n t i n g t o = P 1 . 7 8 2 1 . 0 6 0 . 3 0 7 = P 3 . 5 5 3 4 9 . 2 m i l l i o n . 4 8 8 . 3 1 2 . * * * E x c l u d e s a d v a n c e s t o e m p l o y e e s s u b j e c t t o l i q u i d a t i o n a m o u n t i n g t o = P 1 1 . 9 m i l l i o n . C r e d i t r i s k C r e d i t r i s ki s t h e r i s k t h a t t h e G r o u pw i l l i n c u r f i n a n c i a l l o s s t h r o u g hd e f a u l t b y c o u n t e r p a r t i e s i n p e r f o r m i n g t h e i r o b l i g a t i o n s . 0 7 4 3 . * * *I n c l u d e s n o n c u r r e n t p o r t i o n o f a d v a n c e s t o e m p l o y e e s a m o u n t i n g t o = P 4 . 5 8 4 .5 0 T h et a b l e sb e l o ws u m m a r i z et h em a t u r i t yp r o f i l eo f t h eG r o u p ’ sf i n a n c i a l l i a b i l i t i e sb a s e do n c o n t r a c t u a l u n d i s c o u n t e d p a y m e n t s a n d t h e r e l a t e d f i n a n c i a l a s s e t s u s e d f o r l i q u i d i t y m a n a g e m e n t : J u n e 3 0 . 6 4 4 A d v a n c e s t o r e l a t e d p a r t i e s 2 0 1 . 8 8 7 1 3 . 6 m i l l i o n * *I n c l u d e s e x p e c t e d i n t e r e s t p a y m e n t s f o r s h o r t t e r ma n d l o n g t e r mb o r r o w i n g s o f = P 6 9 0 . 7 m i l l i o n . 9 0 6 7 . 3 4 6 1 . 0 3 6 P = 1 . 5 0 6 P = 5 1 1 . 9 1 6 = P – 6 5 3 . 6 6 4 P = 9 6 7 . 4 6 0 . 1 3 0 = P 1 . 5 0 6 . 3 0 4 – 3 2 . 2 8 3 . 9 3 5 5 1 . 0 3 7 P = 2 8 3 . 0 6 0 . 2 0 1 0 A c c o u n t s p a y a b l e a n d a c c r u e de x p e n s e s * D i v i d e n d s p a y a b l e S h o r t t e r mb o r r o w i n g s * * C u r r e n t p o r t i o n o f l o n g t e r mb o r r o w i n g s L o n g t e r mb o r r o w i n g s n e t o f c u r r e n t p o r t i o n * * C a s h i n b a n k s a n d c a s h e q u i v a l e n t s T r a d e r e c e i v a b l e s A d v a n c e s t o r e l a t e d p a r t i e s A d v a n c e s t o e m p l o y e e s * * * O t h e r r e c e i v a b l e s * * * * O nd e ma n d P = 4 9 4 . 7 3 6 P = – 5 6 1 . 5 0 8 . 1 3 9 . 8 9 2 4 1 . 0 3 1 – 2 . 5 3 1 . 8 9 0 6 7 8 . 5 0 6 . 3 2 0 . 4 2 3 3 7 . 0 2 2 – 7 . 8 9 0 1 1 6 . * * * * I n c l u d e s n o n c u r r e n t p o r t i o n o f o t h e r r e c e i v a b l e s a m o u n t i n g t o = P 4 . 3 7 9 . 1 3 0 = P 7 3 3 . 1 4 6 P = 2 . 0 2 5 1 . 5 8 5 = P 1 . 0 m i l l i o n a n d = P 1 . 9 0 5 – 4 . 2 8 0 T r a d e r e c e i v a b l e s 9 6 . 8 6 3 P = – – – 5 . 0 m i l l i o n a n d = P 2 . 6 m i l l i o n . 8 m i l l i o n a n d e x c l u d e s a d v a n c e s t o e m p l o y e e s s u b j e c t t o l i q u i d a t i o n a m o u n t i n g t o = P 1 . 0 2 2 4 0 . r e s p e c t i v e l y . 0 7 4 3 . 9 0 5 – 2 6 7 . C o n c e n t r a t i o n o f c r e d i t r i s kw i t h r e s p e c t t o t r a d e r e c e i v a b l e s i s l i m i t e d d u e t o t h e l a r g e n u m b e r o f c u s t o m e r s c o m p r i s i n g t h e G r o u p ’ s c u s t o m e r b a s e a n dt h e i r d i s p e r s i o n a c r o s s d i f f e r e n t g e o g r a p h i c a r e a s . 6 3 0 4 1 . 9 3 5 5 1 . 0 6 9 2 . 0 0 7 4 8 . 2 7 6 4 1 . S u b s t a n d a r dg r a d e a c c o u n t s o nt h eo t h e r h a n d . T h em a x i m u me x p o s u r ei ss h o w ng r o s sb e f o r et h ee f f e c t o f m i t i g a t i o n t h r o u g h t h e u s e o f m a s t e r n e t t i n g a n d c o l l a t e r a l a g r e e m e n t s . C r e d i t q u a l i t y p e r c l a s s o f f i n a n c i a l a s s e t s T h ec r e d i t q u a l i t yo f r e c e i v a b l e si sm a n a g e db yt h eG r o u pt h r o u g hi t sMa r k e t i n gD e p a r t m e n t . 5 8 1 P a s t d u e b u t n o t i mp a i r e d I mp a i r e d O v e r 3 0 O v e r 9 0 O v e r 1 8 0 F i n a n c i a l D a D a D a A s s e t y s y s y s s ( I n T h o u s a n d s ) P = – 2 5 . 6 m i l l i o n . 2 5 2 – – 3 1 2 = P 3 9 . 1 2 7 P 7 7 *E x c l u d e s c a s h o n h a n d a m o u n t i n g t o = P 1 . 7 1 0 2 4 . 1 3 0 = P 1 .R i s kr a t i n g s a r e s u b j e c t t or e g u l a r r e v i s i o n .5 1 T h eG r o u ph a se s t a b l i s h e dac r e d i t q u a l i t yr e v i e wp r o c e s st op r o v i d ee a r l yi d e n t i f i c a t i o no f p o s s i b l e c h a n g e s i nt h e c r e d i t w o r t h i n e s s o f c o u n t e r p a r t i e s . 4 0 2 – – 5 0 0 = P 5 . 7 1 0 1 3 . 0 2 2 – – 4 0 . w h i c h a s s i g n s e a c hc o u n t e r p a r t yar i s kr a t i n g . 8 = – = 9 0 2 . H i g hg r a d ea c c o u n t sa r et h o s er e c e i v a b l e sf r o mc o u n t e r p a r t i e sw i t hw h o mc o l l e c t i o n sa r em a d e w i t h o u tm u c hc o l l e c t i o ne f f o r t . 3 0 1 4 9 . 9 m i l l i o n . 3 2 3 C a s h i n b a n k s a n d t i m e d e p o s i t s . 5 8 1 = P 2 . P P 1 7 4 . 0 2 2 4 0 . = 9 8 0 . 8 9 0 6 7 8 . 5 8 7 = P 2 8 3 . 7 = 5 0 8 . 4 2 3 3 7 . 2 0 5 4 9 . 9 1 5 6 8 1 . 5 6 4 P = – 5 . 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s ) P = 1 7 4 . 4 1 8 0 8 2 = P 1 2 . 9 0 2 T o t a l C a s h i n b a n k a n d t i m e d e p o s i t s * T r a d e r e c e i v a b l e s A d v a n c e s t o r e l a t e d p a r t i e s A d v a n c e s t o e m p l o y e e s * * O t h e r r e c e i v a b l e s T o t a l * * E x c l u d e s a d v a n c e s t o e m p l o y e e s s u b j e c t t o l i q u i d a t i o n a m o u n t i n g t o = P 1 . 6 3 9 – – 5 . 1 6 0 9 P 9 6 * S G V M C 3 1 0 9 6 2 * . Ma x i m u me x p o s u r e t o c r e d i t r i s k w i t h o u t t a k i n g a c c o u n t o f a n y c o l l a t e r a l a n d o t h e r c r e d i t e n h a n c e m e n t s T h e t a b l e b e l o ws h o w s t h e m a x i m u me x p o s u r e t o c r e d i t r i s k a s o f J u n e 3 0f o r t h e c o m p o n e n t s o f t h ec o n s o l i d a t e db a l a n c es h e e t . C o u n t e r p a r t y l i m i t s a r e e s t a b l i s h e d b y t h e u s e o f a c r e d i t r i s k c l a s s i f i c a t i o n s y s t e m .T h e c r e d i t q u a l i t y r e v i e wp r o c e s s a l l o w s t h e G r o u pt oa s s e s s t h e p o t e n t i a l l o s s a s a r e s u l t o f t h e r i s k s t ow h i c hi t i s e x p o s e d a n d t a k e c o r r e c t i v e a c t i o n . T h e t a b l e s b e l o ws h o wt h e c r e d i t q u a l i t yo f f i n a n c i a l a s s e t s a n d a n a g i n g a n a l y s i s o f p a s t d u e b u t n o t i m p a i r e d a c c o u n t s : J u n e 3 0 . 6 3 6 P = – 3 9 . a r er e c e i v a b l e s f r o mo t h e r c o u n t e r p a r t i e sw i t hh i s t o r yo f d e f a u l t e d p a y m e n t s . S t a n d a r dg r a d ea c c o u n t sc o n s i s to fr e c e i v a b l e sf r o m i t s d i s t r i b u t o r sw i t hg o o df i n a n c i a l c o n d i t i o na n dw i t hr e l a t i v e l yl o wd e f a u l t s . 3 1 3 9 6 1 = P 3 7 9 . 9 4 8 2 0 1 . 9 8 6 8 . e x c l u d i n g c a s h o n h a n d T r a d e r e c e i v a b l e s A d v a n c e s t o r e l a t e d p a r t i e s A d v a n c e s t o e m p l o y e e s O t h e r r e c e i v a b l e s C o l l a t e r a l s a n d o t h e r c r e d i t e n h a n c e m e n t s T h ea m o u n t a n dt y p eo f c o l l a t e r a l r e q u i r e dd e p e n d so na na s s e s s m e n t o f t h ec r e d i t r i s ko f t h e c o u n t e r p a r t y . 2 1 6 – 4 9 . 2 8 0 7 4 9 . 0 2 2 1 . 6 6 4 P = 9 6 7 . 5 4 2 4 8 . 9 9 7 = P 3 1 . 8 0 3 4 6 5 .G u i d e l i n e s a r ei m p l e m e n t e dr e g a r d i n gt h e a c c e p t a b i l i t yo f t y p e so f c o l l a t e r a l a n d v a l u a t i o n p a r a m e t e r s . i n c l u d i n gr e g u l a r c o l l a t e r a l r e v i s i o n s . 3 3 . 5 = P 8 9 3 0 1 1 4 2 . 1 . 3 2 0 . P = 1 7 4 . 2 0 1 0 N e i t h e r p a s t d u e n o r i mp a i r e d H i g h S t a n d a r dS u b s t a n d a r d G r a G r a d G r a d e d e e P = – – – – 2 . T h eG r o u p ’ ss a l e sc o m m i t m e n t sa r ec o n t r a c t e da tf i x e dp r i c e s . t h u s . 7 4 1 5 7 . T h e G r o u pa s s e s s e s i m p a i r m e n t i nt w ow a y s : i n d i v i d u a l l y a n d c o l l e c t i v e l y . I n t e r e s t r a t e r i s k I n t e r e s t r a t e r i s ki s t h e r i s kt h a t t h e f a i r v a l u e o r f u t u r e c a s hf l o w s o na f i n a n c i a l i n s t r u m e n t w i l l f l u c t u a t e b e c a u s e o f c h a n g e s i n m a r k e t i n t e r e s t r a t e s . 8 1 8 9 . 4 2 3 – A d v a n c e s t o e m p l o y e e s * * 3 6 2 3 6 . 0 6 5 P a s t d u e b u t n o t i m p a i r e d O v e r 3 0 O v e r 9 0 O v e r 1 8 0 D a y s D a y s D a y s ( I n T h o u s a n d s ) = P – = P – = P – 1 5 . 7 3 2 7 5 6 . 9 2 6 1 9 . 1 6 8 3 3 . A m o n g t h e i t e m s t h a t t h e G r o u pc o n s i d e r s i n a s s e s s i n gi m p a i r m e n t i s t h e i n a b i l i t y t o c o l l e c t f r o m t h ec o u n t e r p a r t yb a s e do nt h ec o n t r a c t u a l t e r m so f t h er e c e i v a b l e s . * S G V M C 3 1 0 9 6 2 * . A s o f J u n e 3 0 . I m p a i r m e n t a s s e s s m e n t T h e m a i nc o n s i d e r a t i o nf o r i m p a i r m e n t a s s e s s m e n t i n c l u d e s w h e t h e r t h e r e a r e k n o w nd i f f i c u l t i e s i nt h e c a s hf l o wo f t h e c o u n t e r p a r t i e s . 1 8 5 – – – – – – 4 . h a sn oi m p a c to nt h e c o n s o l i d a t e d c a s h f l o w s i n t h e n e x t t w e l v e m o n t h s . 9 m i l l i o n . 1 8 8 5 0 6 . 6 8 5 I m p a i r e d F i n a n c i a l A s s e t s T o t a l = P – P = 2 8 3 . 3 0 9 2 6 1 5 0 0 = P 1 9 . 7 m i l l i o n . t h eG r o u pd e t e r m i n e sa l l o w a n c ef o re a c hs i g n i f i c a n t r e c e i v a b l eo na ni n d i v i d u a l b a s i s . 0 7 2 * E x c l u d e s c a s h o n h a n d a m o u n t i n g t o = P 3 .T h e G r o u p d o e s n o t e n t e r i n t o c o m m o d i t y d e r i v a t i v e s . 2 0 0 9 N e i t h e r p a s t d u e n o r i m p a i r e d H i g h S t a n d a r dS u b s t a n d a r d G r a d e G r a d e G r a d e = P – 3 0 . 4 0 0 – 1 .5 2 J u n e 3 0 . F i r s t . C o m m o d i t y p r i c e r i s k T h e G r o u pi s e x p o s e dt oc o m m o d i t yp r i c e r i s kf r o mc o n v e n t i o n a l p h y s i c a l s a l e s a n dp u r c h a s e o f s u g a r m a n a g e d t h r o u g h v o l u m e . F o rc o l l e c t i v ea s s e s s m e n t . * * E x c l u d e s a d v a n c e s t o e m p l o y e e s s u b j e c t t o l i q u i d a t i o n a m o u n t i n g t o = P 1 1 . 6 1 9 = P 5 4 3 . w h i c hw e r e o r i g i n a l l yi s s u e da t v a r i a b l e r a t e s ( s e e N o t e 1 3 ) . 8 7 1 = P 1 7 . 0 8 2 2 . 1 8 7 P = 1 9 . 3 3 8 .a l l o w a n c e sa r ea s s e s s e df o rr e c e i v a b l e st h a ta r en o ti n d i v i d u a l l y s i g n i f i c a n t a n df o r i n d i v i d u a l l ys i g n i f i c a n t r e c e i v a b l e s w h e r et h e r ei sn o t o b j e c t i v ee v i d e n c eo f i n d i v i d u a l i m p a i r m e n t . 6 8 0 – 2 0 1 . t i m i n g a n d r e l a t i o n s h i p s t r a t e g i e s . 8 0 8 = P 6 5 . p a s t c o l l e c t i o n e x p e r i e n c e a n d o t h e r f a c t o r s t h a t m a y a f f e c t t h e i r c o l l e c t i b i l i t y . T h e G r o u ph a s r e c o g n i z e da ni m p a i r m e n t l o s s o ni t s f i n a n c i a l a s s e t s u s i n gs p e c i f i c a s s e s s m e n t i n 2 0 0 8 a m o u n t i n g t o P = 8 . 3 7 6 C a s h i n b a n k a n d t i m e d e p o s i t s * = P 2 8 3 . 3 m i l l i o n . 0 1 2 O t h e r r e c e i v a b l e s 8 . 3 9 1 = P 3 . 2 8 0 6 .B o r r o w i n g s i s s u e d a t f i x e d r a t e s e x p o s e t h e G r o u p t o f a i r v a l u e i n t e r e s t r a t e r i s k . 7 4 9P = 1 . I m p a i r m e n t l o s s e s a r e e s t i m a t e d b y t a k i n g i n t o c o n s i d e r a t i o n t h e a g e o f t h e r e c e i v a b l e s . 1 6 7 A d v a n c e s t o r e l a t e d p a r t i e s 2 0 1 . 2 7 6 3 8 . 2 0 1 0 . R e c e i v a b l e si n c l u d e di nt h e s p e c i f i c a s s e s s m e n t a r e t h e a c c o u n t s t h a t h a v e b e e ne n d o r s e d t o t h e l e g a l d e p a r t m e n t . t h e G r o u p i s e x p o s e d t o f a i r v a l u e i n t e r e s t r a t e r i s k a r i s i n g f r o mi t s f i x e d r a t e s l o n g t e r mb o r r o w i n g s . 4 2 3 1 . n o n m o v i n g a c c o u n t s r e c e i v a b l e a n d o t h e r a c c o u n t s o f d e f a u l t e d c o u n t e r p a r t i e s . 2 8 0 = P – T r a d e r e c e i v a b l e s 1 7 6 . N o i m p a i r m e n t l o s s w a s r e c o g n i z e d i n 2 0 1 0 a n d 2 0 0 9 . 3 6 6 8 8 6 T o t a l = P 6 6 9 . 7 9 5 ) P = – 2 1 . 1 4 5 ( 1 2 . ( 2 . F o r e i g n c u r r e n c y r i s k F o r e i g nc u r r e n c yr i s ki s t h e r i s kt h a t t h e f a i r v a l u e o r f u t u r e c a s hf l o w s o f a f i n a n c i a l i n s t r u m e n t w i l l f l u c t u a t e b e c a u s e o f c h a n g e s i n f o r e i g n e x c h a n g e r a t e s . 1 a n d = P 4 4 . 8m i l l i o ne a c hi n 2 0 0 9a n d 2 0 0 8 . 3 8 . = P 8 . r e s p e c t i v e l y . t h e e x c h a n g e r a t e s w e r e = P 4 6 . T h e G r o u p ’ s f o r e i g nc u r r e n c yd e n o m i n a t e da s s e t c o n s i s t o f c a s hi nb a n k s i nU S $a m o u n t i n gt o U S $ 0 . = P 4 8 . 0 0 % 2 .A s o f J u n e 3 0 . 0 0 % 6 1 4 ) 5 . 0 0 . 8 2 1 ) 1 2 . r e s p e c t i v e l y . 5 % ( P = 9 2 4 ) 8 . 8m i l l i o ng a i n . 2 0 0 9a n d2 0 0 8 . Ma n a g e m e n t c l o s e l ym o n i t o r s t h e f l u c t u a t i o n s i ne x c h a n g e r a t e s s oa s t oa n t i c i p a t e t h e i m p a c t o f f o r e i g nc u r r e n c yr i s k s a s s o c i a t e dw i t ht h ef i n a n c i a l i n s t r u m e n t s . 3m i l l i o ni n 2 0 1 0a n d $ 0 .T h e f o l l o w i n gt a b l e d e m o n s t r a t e s t h e s e n s i t i v i t yt oa r e a s o n a b l e p o s s i b l e c h a n g e i ni n t e r e s t r a t e s . 7 9 5 – ( 1 1 5 . S h o w nb e l o wi st h ei m p a c t o nt h eG r o u p ’ si n c o m eb e f o r ei n c o m et a xo f r e a s o n a b l yp o s s i b l e c h a n g e s i n e x c h a n g e r a t e o f t h e U S $ a g a i n s t t h e P h i l i p p i n e p e s o a s o f J u n e 3 0 : Mo v e m e n t i N e t e f f e c n t U S $ P h i l i p p i n i n c o m e b e f o r e n e i p e s o e x c h a n g e r a t i n c o m e t a e s x ( I n T h o u s a n d s ) + 8 . 3 8 . 2 0 1 0 . 2m i l l i o nl o s s i n2 0 1 0 . 2 0 0 9 a r e s u s c e p t i b l e t o c a s h f l o wi n t e r e s t r a t e r i s k . 3 . 1 4 5 ) 1 1 5 . w i t h a l l o t h e r v a r i a b l e s h e l d c o n s t a n t . w i t h o t h e r v a r i a b l e s h e l d c o n s t a n t : C h a n g e i n i n t e r e s t r a t e s ( i n p e r c e n t a g e ) F o r m o r e t h a n a y e a r F o r l e s s t h a n a y e a r + 1 7 % 1 7 % + 1 0 % 1 0 % E f f e c t i n i n c o m e b e f o r e i n c o m e t a x 2 0 0 9 2 0 1 0 ( I n T h o u s a n d s ) ( = P 2 1 . T h e s e n s i t i v i t yo f t h e c o n s o l i d a t e ds t a t e m e n t o f i n c o m ei s t h ee f f e c t o f t h e a s s u m e dc h a n g e s i n i n t e r e s t r a t e s o n t h e c o n s o l i d a t e d i n c o m e b e f o r e i n c o m e t a x f o r o n e y e a r . 2 0 0 9a n d 2 0 0 8 .5 3 T h e G r o u ph a s l o n g t e r mb o r r o w i n g s a s o f J u n e 3 0 . b a s e d o n t h e f l o a t i n g r a t e n o n t r a d i n g f i n a n c i a l l i a b i l i t i e s h e l d a t J u n e 3 0 . 5 % 9 2 4 + 5 . 8 2 1 T h e r e i s n oo t h e r i m p a c t o nt h e G r o u p ’ s e q u i t yo t h e r t h a nt h o s e a l r e a d ya f f e c t i n gt h e p r o f i t a n d l o s s . N e tf o r e i g ne x c h a n g eg a i n so rl o s s e sr e c o g n i z e di nt h ec o n s o l i d a t e ds t a t e m e n t so fi n c o m e a m o u n t e dt oP = 2 . 9 p e r U S $ 1 . T h eG r o u p ’ sf o r e i g nc u r r e n c yr i s kr e l a t e st oi t sU S $ d e n o m i n a t e dc a s ha n dc a s he q u i v a l e n t s .T h eG r o u pc u r r e n t l yd o e s n o t e n t e r i n t o d e r i v a t i v e t r a n s a c t i o n s t o h e d g e i t s c u r r e n c y e x p o s u r e . * S G V M C 3 1 0 9 6 2 * . o f t h e G r o u p ’ s c o n s o l i d a t e d s t a t e m e n t o f i n c o m e . 8m i l l i o ng a i na n d= P 7 . 6 1 4 2 0 1 0 2 0 0 9 T h e r e i s n oo t h e r i m p a c t o nt h e G r o u p ’ s e q u i t yo t h e r t h a nt h o s e a l r e a d ya f f e c t i n gt h e p r o f i t a n d l o s s . L o n g t e r mb o r r o w i n g s f i x e di n t e r e s t b e a r i n gl o a n s .T h ec a r r y i n ga m o u n t so ft h e s ei n s t r u m e n t s a p p r o x i m a t e f a i r v a l u e s d u e t o t h e i r s h o r t t e r mm a t u r i t i e s . 9 3 7 1 7 4 . 5 8 6 T h ef o l l o w i n gm e t h o d sa n da s s u m p t i o n sa r eu s e dt oe s t i m a t et h ef a i rv a l u eo fe a c hc l a s so f f i n a n c i a l i n s t r u m e n t s : C a s ha n dc a s he q u i v a l e n t s . 4 4 9 . 0 7 4 2 . 7 7 6 . a n d L e v e l 3 a t i n p u t s t h a t a r e n o t b a s e d o n o b s e r v a b l e m a r k e t d a t a . 7 2 4 P = 1 . 3 0 1 4 9 . 9 %a t J u n e 3 0 . 2 7 3 P = 1 3 1 .T h ef a i r v a l u e s a r eb a s e do nt h ee x p e c t e d c a s h f l o w s o n t h e i n s t r u m e n t s . 3 8 2 2 8 3 . 4 8 8 2 1 6 . a d v a n c e s t oe m p l o y e e s a n dr e l a t e dp a r t i e s . 0 2 2 4 0 . 6 6 4 P = 9 6 9 . 8 %a n d6 . 8 7 4 1 8 8 . 8 5 7 1 6 8 . s h o r t t e r mb o r r o w i n g s . 9 3 7 . 2 0 5 1 6 . f o r c o m p a r a b l e i n s t r u m e n t s i nt h e m a r k e t . L o n g t e r mb o r r o w i n g s v a r i a b l ei n t e r e s tb e a r i n gl o a n s . * S G V M C 3 1 0 9 6 2 * . 3 8 2 2 8 3 . 3 2 3 . 7 0 5 2 0 0 9 F a i r V a l u e = P 3 . 1 3 0 = P 1 . 1 3 0 = P 1 . 0 0 0 – 3 . 6 9 0 . 3 8 2 P = 3 0 5 . 3 0 1 4 7 . 5 8 4 P = 8 . 4 8 8 2 1 6 . 4 2 3 3 7 . 5 6 1 4 8 . 0 1 3 4 1 . 4 2 3 3 7 . 2 0 5 1 6 . 0 7 5 . 9 3 7 . 0 0 0 – 3 . 7 0 4 1 8 1 . 8 9 0 6 7 8 .T h ec a r r y i n gv a l u eo ft h ef i n a n c i a l i n s t r u m e n t a p p r o x i m a t e s t h e f a i r v a l u e a t J u n e 3 0 . 8 5 7 1 6 8 . 5 4 2 4 8 . 4 4 9 . 9 0 4 5 1 . 6 6 4 P = 9 6 9 . 4 4 2 1 8 . T h e G r o u p ’ s f i n a n c i a l i n s t r u m e n t s r e c o r d e d a t f a i r v a l u e h a v e t h e f o l l o w i n g h i e r a r c h y l e v e l s : L e v e l 1 a t q u o t e d p r i c e s i n a c t i v e m a r k e t s . 0 6 9 2 .T h e r a t e s w e r e o b t a i n e df r o mB a n g k oS e n t r a l n gP i l i p i n a s . 7 3 5 . 9 4 8 2 0 1 . 8 7 4 1 8 8 . 6 9 3 P = 8 . a c c o u n t s p a y a b l e a n da c c r u e de x p e n s e s . 2 0 1 0a n d2 0 0 9r e s p e c t i v e l y . 2 8 0 7 4 9 . 8 9 0 6 7 8 . e i t h e r d i r e c t l y o r i n d i r e c t l y . T h e G r o u p d i d n o t h o l d a n y f i n a n c i a l i n s t r u m e n t s c a r r i e d a t f a i r v a l u e . 3 2 3 . 7 1 0 2 4 . 6 1 6 2 4 . 6 8 2 . 4 3 0 P = 1 3 1 . d i s c o u n t e d u s i n gt h e p r e v a i l i n gi n t e r e s t r a t e s o f 7 . 0 1 3 4 1 . 7 6 8 . 7 2 4 5 . r e p r e s e n t i n gb a n ka v e r a g e l e n d i n gr a t e s i n2 0 1 0a n d 2 0 0 9 . 5 2 4 2 0 1 0 C a r r y i n g F a i r V a l u e V a l u e ( I n T h o u s a n d s ) = P 3 . 9 3 9 P = 3 0 5 . 4 4 2 1 8 . 0 6 7 . 6 2 0 P = 6 . 7 2 4 5 . L e v e l 2 a t i n p u t s o t h e r t h a n q u o t e d p r i c e s i n c l u d e dw i t h i n L e v e l 1 t h a t a r e o b s e r v a b l e f o r t h e a s s e t o r l i a b i l i t y . 0 6 9 2 . 9 0 4 5 1 . 0 2 2 4 0 . 2 8 0 7 4 9 . 2 0 0 9 d u e t o q u a r t e r l y r e p r i c i n g o f i n t e r e s t r a t e s . o t h e r r e c e i v a b l e s . 9 4 8 2 0 1 . 7 4 3 . 9 7 3 P = 6 . 7 0 4 1 8 1 . 9 3 7 1 7 4 . t r a d er e c e i v a b l e s .5 4 F a i r V a l u e s T h ef o l l o w i n gi s ac o m p a r i s o nb yc a t e g o r yo f c a r r y i n ga m o u n t s a n df a i r v a l u e s o f t h e G r o u p ’ s f i n a n c i a l i n s t r u m e n t s t h a t a r e r e f l e c t e d i n t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s a s o f J u n e 3 0 : C a r r y i n g V a l u e F i n a n c i a l a s s e t s : C a s h o n h a n d L o a n s a n d r e c e i v a b l e s : C a s h i n b a n k s a n d t i m e d e p o s i t s T r a d e r e c e i v a b l e s A d v a n c e s t o r e l a t e d p a r t i e s A d v a n c e s t o e m p l o y e e s O t h e r r e c e i v a b l e s F i n a n c i a l l i a b i l i t i e s : O t h e r f i n a n c i a l l i a b i l i t i e s : A c c o u n t s p a y a b l e a n da c c r u e d e x p e n s e s : T r a d e p a y a b l e s A c c r u e d a n d o t h e r l i a b i l i t i e s D u e t o p l a n t e r s O t h e r l i a b i l i t i e s D i v i d e n d s p a y a b l e S h o r t t e r mb o r r o w i n g s C u r r e n t p o r t i o n o f l o n g t e r mb o r r o w i n g s L o n g t e r mb o r r o w i n g s n e t o f c u r r e n t p o r t i o n P = 1 . a n dc u r r e n tp o r t i o no fl o n g t e r mb o r r o w i n g s . 3 0 1 4 7 . d i v i d e n d s p a y a b l e . 3 0 1 4 9 . 0 7 4 2 . m a r k e t i n g a n d s e l l i n g o f b i o e t h a n o l f u e l . a d i v e r s i f i e d h o l d i n g a n d i n v e s t m e n t c o r p o r a t i o n w i t h s p e c i f i c f o c u s o n s u g a r m i l l i n g a n d r e f i n i n gb u s i n e s s . F i n a n c i n g c o s t s ( i n c l u d i n g i n t e r e s t e x p e n s e ) a n d i n c o m e t a x e s a r e m a n a g e d o n p e r c o m p a n y b a s i s a n d a r e n o t a l l o c a t e d t o o p e r a t i n g s e g m e n t s . m o l a s s e s a n d o t h e r r e l a t e d p r o d u c t s o r b y p r o d u c t s a n d o f f e r s t o l l i n g s e r v i c e s t o t r a d e r s a n d p l a n t e r s . i s l o c a t e d i n L a C a r l o t a .S e g m e n t r e v e n u ea n ds e g m e n t e x p e n s e s a r e m e a s u r e di n a c c o r d a n c e w i t h P F R S .R H I . B a t a n g a s w i t h d a i l yc a n ec a p a c i t yo f1 3 .N e g r o s . I t h a s a r a ws u g a r m i l l i n g a n dr e f i n e r y p l a n t l o c a t e di n N a s u g b u . g e o g r a p h i c a l b u s i n e s s i n f o r m a t i o n i s n o t r e q u i r e d . O t h e r s e g m e n t so f t h eG r o u pw h i c ha r en o t r e p o r t e ds e p a r a t e l yp e r t a i nm a i n l yt oc o n s u l t a n c y b u s i n e s s .R B C . 2 0 1 0 a n d 2 0 0 9 . m i l l s i t e so rw a r e h o u s e sa n d / o rs i m i l a re s t a b l i s h m e n t sb yl a n d .5 5 2 7 .r e s p e c t i v e l y . w h i c h a r e c o n s i s t e n t w i t h t h e s e g m e n t s r e p o r t e d t o t h e s e n i o r m a n a g e m e n t . T h e r e f i n e r y o p e r a t i o n . 0 0 0 m e t r i c t o n s a s o f J u n e 3 0 . C A C I a n d R B C . N e g r o s O c c i d e n t a l . w h i c h h a s a s i m i l a r p r o c e s s w i t h C A D P I a n d h a s a d a i l y c a n e c a p a c i t y o f 1 3 . T h eG r o u po p e r a t e sa n dd e r i v e sp r i n c i p a l l ya l l o f i t sr e v e n u ef r o md o m e s t i co p e r a t i o n s . d e a l e r a n d t r a d e r o f a g r i c u l t u r a l p r o d u c t s a n d p r e o p e r a t i n g c o m p a n i e s . e . I t s p l a n t f a c i l i t y i s l o c a t e d i n L a C a r l o t a . s u g a ra n di t sb y p r o d u c t si n c l u d i n ga l lk i n d so fc o m m e r c i a lc a r g o e st oa n df r o ms u g a rf a c t o r i e s .T o e n s u r em a x i m u mu t i l i z a t i o no ft h er e f i n e r y . T h u s . S e g m e n t R e p o r t i n g T h e G r o u p ’ s i d e n t i f i e d o p e r a t i n g s e g m e n t s .C F S Ic u r r e n t l y c a t e r sv a r i o u sp l a n t e r si nB a t a n g a s . al u s t r o u s w h i t e c o l o r e ds u g a r . T h e G r o u ph a s o n l yo n eg e o g r a p h i c a l s e g m e n t a s a l l o f i t s a s s e t s a r e l o c a t e di nt h e P h i l i p p i n e s .C a n e sa r es o u r c e df r o mb o t h d i s t r i c ta n dn o n d i s t r i c tp l a n t e r sa n da r em i l l e db yC A D P Iu n d e rap r o d u c t i o ns h a r i n g a g r e e m e n t ( s e e N o t e 1 6 ) .C A D P Ia l s oo f f e r st o l l i n gs e r v i c e s . b o t h h y d r o u s a n d a n h y d r o u s p r o d u c t s f r o ms u g a r c a n e a n d r e l a t e d r a wm a t e r i a l s . I t s s u g a r m i l l i n g p l a n t . C A D P I ’ s r a ws u g a r m i l l i n g i s i n v o l v e d i n t h e e x t r a c t i o n o f j u i c e s f r o mt h e c a n e s t o f o r ms w e e t g r a n u l a rs u g a r w h i c hi sl i g h t b r o w nt oy e l l o w i s hi nc o l o r . I t a l s os e l l s r e f i n e ds u g a r u p o nt o l l i n gi t s r a ws u g a r w i t ho t h e r s u g a r m i l l s . o n t h e o t h e r h a n d . i n v o l v e s t h e p r o c e s s i n g o f r a ws u g a r ( m i l l s h a r e a n dp u r c h a s e d ) i n t or e f i n e ds u g a r . T h e C o m p a n y ’ s s e n i o r m a n a g e m e n t r e g u l a r l y r e v i e w s t h e o p e r a t i n g r e s u l t s o f t h e b u s i n e s s u n i t s t o m a k ed e c i s i o n so nr e s o u r c ea l l o c a t i o na n da s s e s s p e r f o r m a n c e . w h i c h i s e n g a g e d i n t h e b u s i n e s s o f p r o d u c i n g .s u g a r r e f i n e r i e s . d . e s t a b l i s h e dt oe n g a g ei nt h eb u s i n e s so f t r a n s p o r t i n gs u g a rc a n e .T h e p r e s e n t a t i o n a n d c l a s s i f i c a t i o no f s e g m e n t r e v e n u e sa n ds e g m e n te x p e n s e sa r ec o n s i s t e n tw i t ht h ec o n s o l i d a t e ds t a t e m e n to fi n c o m e .2 0 1 0a n d2 0 0 9 . N e g r o s O c c i d e n t a l . b .C A D P I . p a r t i c u l a r l yC A D P I .C A C I . w h i c h p r o d u c e s r a ws u g a r a n d m o l a s s e s a n d t o t r a d e t h e s a m e o n w h o l e s a l e / r e t a i l b a s i s .a n do t h e rp r o v i n c i a la r e a si nV i s a y a sa n d S o u t h e r n L u z o n .C F S I . a r e a s f o l l o w s : a . c . I t p r o v i d e sm a n a g e m e n t s e r v i c e st oi t ss u b s i d i a r i e s . 0 0 0m e t r i ct o n sa so fJ u n e3 0 .w h i c h c o n v e r t s r a ws u g a r o w n e db yp l a n t e r s a n dt r a d e r s i n t or e f i n e ds u g a r i nc o n s i d e r a t i o nf o r a t o l l i n g f e e . e s t a b l i s h e d t o e n g a g e i n t h e b u s i n e s s o f p r o d u c i n g . m a r k e t i n g a n d s e l l i n g r a wa n d r e f i n e d s u g a r . * S G V M C 3 1 0 9 6 2 * . 3 0 2 ( 3 6 . 8 2 8 ) 6 . 6 0 6 ) P = – = P 3 . 5 8 0 ) 4 . 8 7 0 . 4 9 4 ) 4 9 . 2 2 7 ( 2 8 8 ) 1 5 . 1 1 3 4 . 3 9 7 ) 7 0 ( 1 6 . w h i c h p e r t a i n t o s a l e s o f C A D P I . 4 9 3 2 8 . w h o l e s a l e r s a n db e v e r a g ec o m p a n i e s . 3 5 7 ) 2 6 2 . 5 0 3 ) 6 8 4 ( 5 . 4 4 0 * S G V M C 3 1 0 9 6 2 * . 2 1 9 ( 3 5 . 9 6 0 2 3 5 . 8 3 3 2 . 5 9 3 . 0 0 4 . 4 5 4 6 2 . 2 6 3 = P 6 3 . 0 2 4 3 0 1 .I t s c u s t o m e r s c o n s i s t l a r g e l yo f s u g a r t r a d e r s . 2 3 5 – 2 4 . 9 2 3 . 0 m i l l i o n a n d P = 6 2 6 . 8 2 8 ) – ( 9 6 8 . 9 6 7 8 9 7 . 6 9 0 . 4 7 9 ) 2 0 7 ( 6 8 9 ) 1 4 . 6 5 1 ( 2 4 . 1 2 5 ( 8 3 . 1 7 7 ) 1 3 2 . 5 3 8 2 6 . 0 7 9 2 . 0 1 5 ) ( 6 8 1 5 . 2 3 2 1 7 9 . p l a n t a n de q u i p m e n t . 9 6 7 ( 9 6 8 . 6 2 9 = P 1 2 2 .e x c e p tf o rR H Ii n v e s t m e n tp r o p e r t i e s w h i c ha r ec a r r i e da t d e e m e dc o s t i nt h ep a r e n t c o m p a n yf i n a n c i a l s t a t e m e n t s s i n c ea d o p t i o no f P A S4 0 . n e t o f r e l a t e da c c u m u l a t e dd e p r e c i a t i o n .S e g m e n t s a s s e t s a n d l i a b i l i t i e s d o n o t i n c l u d e d e f e r r e d i n c o m e t a x e s . 5 3 7 1 6 . 0 m i l l i o n a n d = P 6 7 6 . 1 2 0 ( 1 3 5 . 0 0 0 – – 4 . a .R H I ’ si n v e s t m e n t p r o p e r t y . w i t hc o n c e n t r a t i o ni nt h e V i s a y a s a n d Me t r o Ma n i l a .S u c h t r a n s f e r s a r e a c c o u n t e df o r a t c o m p e t i t i v e m a r k e t p r i c e s c h a r g e d t o u n r e l a t e d c u s t o m e r s o r b y s u p p l i e r s f o r s i m i l a r g o o d s o r s e r v i c e s . 2 0 2 . 9 2 7 1 . 6 5 5 4 . 8 5 3 . 2 0 2 . 9 7 4 ( 1 1 . 2 8 8 . 7 1 6 . w h i c ha r e s i t u a t e di nv a r i o u s p a r t s o f t h e P h i l i p p i n e s . 6 5 6 ) ( 6 9 . 4 5 6 . 7 0 3 ) 1 . 9 3 9 – = P 1 5 . 8 7 1 7 2 2 . 2 0 1 0 : E l i mi n a t i o n s A l l a n d O t h e r s A d j u s t me n t sC o n s o l i d a t e d R H I R e v e n u e E x t e r n a l c u s t o m e r s R e f i n e d s u g a r R a ws u g a r T o l l i n g f e e s Mo l a s s e s O t h e r s I n t e r s e g m e n t C o s t s a n de x p e n s e s I n t e r e s t i n c o m e I n t e r e s t e x p e n s e O t h e r s I n c o m e ( l o s s ) b e f o r e i n c o m e t a x P r o v i s i o n f o r i n c o m e t a x S e g me n t p r o f i t ( l o s s ) E q u i t y i n n e t e a r n i n g s o f a n a s s o c i a t e C o n s o l i d a t e d p r o f i t ( l o s s ) ( F o r w a r d ) C A D P I C A C I R B C C F S I ( I n T h o u s a n d s ) P = – – – – – – – – ( 3 1 .I n t e r s e g m e n t t r a n s f e r s S e g m e n t r e v e n u e . I n v e s t m e n t P r o p e r t y . 4 2 9 = P 2 1 0 . 3 2 2 ) P = – – – – 2 1 . 6 0 6 ) – ( P = 1 1 . 7 6 4 4 0 . 0 m i l l i o n i n 2 0 1 0 a n d = P 1 . 7 7 0 ) 2 9 6 . 3 2 9 9 . 3 6 9 7 9 . 4 5 4 1 2 1 . 2 6 8 2 . t h em e a s u r e m e n t o f t h es e g m e n t si st h es a m ea st h o s ed e s c r i b e di nt h es u m m a r yo f s i g n i f i c a n ta c c o u n t i n ga n df i n a n c i a l r e p o r t i n gp o l i c i e s . 3 0 9 – 6 . 5 7 7 – 1 4 2 . 2 3 5 – 1 . 2 6 8 – 3 1 8 . 8 6 6 ( 5 . 5 7 7 ( 6 1 .5 6 F u r t h e r . 9 4 9 – 2 9 0 . 3 0 2 – 2 1 . 4 0 5 ( 9 1 . 3 5 1 . 2 1 7 6 9 2 3 . c .S e g m e n t a s s e t s a n d l i a b i l i t i e s S e g m e n t a s s e t si n c l u d ea l l o p e r a t i n ga s s e t su s e db yas e g m e n t a n dc o n s i s t p r i n c i p a l l yo f o p e r a t i n gc a s h . r e c e i v a b l e s . 7 8 7 – 2 9 0 . 4 5 4 4 . 0 0 5 . 1 3 6 . 2 0 6 – 1 . w h i c hi sb e i n gl e a s e do u t t oi t s s u b s i d i a r y . 6 7 6 6 6 6 . 3 2 2 ) – ( P = 3 5 . 1 6 0 2 3 5 . p l a n t a n de q u i p m e n t a n da d j u s t e da t t h e c o n s o l i d a t e dl e v e l t o r e f l e c t i t s f a i r v a l u e . e x p e n s e s a n dr e s u l t si n c l u d et r a n s f e r s b e t w e e nb u s i n e s s s e g m e n t s . 5 6 9 ) 1 4 ( 1 . R e v e n u e f r o mt w o m a j o r c u s t o m e r s a m o u n t e d t o = P 1 . 5 9 6 – 3 . a c c r u a l s a n dc u s t o m e r s ’ d e p o s i t s . 0 m i l l i o n i n 2 0 0 9 . 7 6 8 5 7 . i n v e n t o r i e s . 0 5 6 ( 3 1 9 . 3 5 9 ) ( 8 . T h e f o l l o w i n g t a b l e s p r e s e n t i n f o r m a t i o n a b o u t t h e G r o u p ’ s o p e r a t i n g s e g m e n t s : A s o f a n d f o r t h e y e a r e n d e d J u n e 3 0 . 8 3 5 – – – = P 4 9 . 7 1 0 ) 7 . 3 0 3 ) ( 1 9 ) ( 3 5 . 4 8 0 ) ( 6 . 0 3 1 = P 3 1 1 .S e g m e n t l i a b i l i t i e s i n c l u d e a l l o p e r a t i n gl i a b i l i t i e s a n d c o n s i s t p r i n c i p a l l yo f t r a d e p a y a b l e s . 8 3 5 = P – 2 0 . b . 4 2 9 2 1 0 . 5 3 6 ) ( ) ( ) 4 6 2 2 0 7 . 1 3 4 = P 1 9 . 6 5 1 ( 7 1 . 5 3 7 . 1 3 4 1 9 . 2 6 8 – – 2 5 8 . p r e p a y m e n t s a n dp r o p e r t y . 5 9 2 1 . 7 5 7 1 3 5 . 9 3 9 P = – P = 3 . m o l a s s e s a n dr e f i n e d s u g a r . 5 9 6 ) ( ) ( ) 1 . i s r e c l a s s i f i e dt op r o p e r t y . 3 0 2 2 1 . 2 6 3 1 3 2 .S e g m e n t r e v e n u e a n d e x p e n s e s T h eG r o u p ’ sm a i nr e v e n u es t r e a mc o m e s f r o mt h es a l eo f r a ws u g a r . 3 3 4 ( = P 5 . 9 5 2 . 1 5 2 3 . 2 2 0 2 9 . 5 4 9 . 2 8 5 . 0 3 5 ( 1 3 3 . 9 9 7 ) – P = 4 0 7 . 4 3 2 P = 1 2 3 . 9 8 9 – – = P 1 9 1 . 7 0 3 ( 2 5 4 . 1 2 5 ) ( 2 5 7 . 2 2 5 3 . 3 0 0 – 1 . 6 8 1 S e g me n t p r o f i t ( l o s s ) 1 E q u i t y i n n e t e a r n i n g s o f a n a s s o c i a t e – C o n s o l i d a t e d p r o f i t = P 1 2 9 . 4 3 3 4 . 1 6 4 1 . 8 8 1 ( 3 . 0 1 2 . 0 4 3 2 6 . 3 2 8 1 6 9 . 0 6 5 * S G V M C 3 1 0 9 6 2 * . 5 1 8 – P = 3 . 8 6 4 . 1 5 9 . 3 6 9 6 1 5 . 7 5 5 ) ( 2 . 1 1 1 . 8 1 9 1 . 3 8 4 1 7 . 3 4 5 )P = 1 3 . 5 1 6 . 4 2 1 . 3 6 1 . 6 2 3 ( 8 3 . 0 8 9 N o n c u r r e n t A s s e t s 5 . 9 1 3 ( 2 . 2 0 3 2 3 0 . 8 3 1 ( P = 2 . 4 5 3 = P 1 . 4 6 4 1 5 7 . 5 9 5 ) P = 3 . 0 4 3 4 . 7 0 0 . 1 7 7 ( 5 6 . 7 7 4 1 7 8 . 2 6 8 – 1 . 0 7 3 ) ( 3 2 . 7 6 9 8 6 . 4 0 7 ) P = – = P 3 . 4 2 9 4 3 0 6 4 1 . 6 8 5 . 1 4 4 = P 3 . 6 9 3 = P 1 . 2 7 3 ( = P 2 . 5 6 4 = P 1 4 2 . 4 2 8 – 1 8 . 1 1 0 – 3 5 6 . 1 0 0 = P 1 . 0 2 2 P = – – – – 1 . 4 2 8 – = P 4 . 1 2 8 6 4 6 . 6 4 0 ) 7 5 . 3 4 7 . 6 3 5 . 2 6 8 1 . 3 8 8 )P = 1 5 . 2 6 9 ) P = 9 . 5 8 1 – = P 4 . 2 0 0 . 4 0 6 6 . 2 4 9 . 7 4 9 . 9 0 0 = P 3 0 5 . 9 0 6 = P 2 0 3 . 8 9 2 1 0 . 6 5 2 ) – ( = P 1 . 9 0 1 . 5 4 0 1 . 2 6 7 ) C F S I E l i m i n a t i o n s A l l a n d O t h e r s A d j u s t m e n t s C o n s o l i d a t e d C o s t s a n d e x p e n s e s I n t e r e s t i n c o m e I n t e r e s t e x p e n s e O t h e r s I n c o m e ( l o s s ) b e f o r e i n c o m e t a x 1 2 1 . 5 6 4 . 9 8 4 = P 6 . 0 8 3 F u e l a n d o i l – Ma t e r i a l s a n d c o n s u m a b l e s 3 . 4 0 7 ) – ( = P 7 . 6 0 5 – = P 5 . 2 7 1 P = 1 . 9 3 1 1 . 8 4 7 ( 6 7 . 3 2 2 P = 3 . 3 9 6 2 . 4 2 2 – – – = P 2 . 0 2 5 . 6 0 6 = P 1 . 3 9 9 8 1 8 P = – – 7 8 2 = P 2 1 7 – 4 2 2 5 P = – – – – P = 3 0 4 . 6 6 6 P = 1 . 5 6 4 ( = P 1 7 7 . 7 8 2 = P 6 3 4 . 4 8 8 . 6 6 9 = P 1 6 5 . 3 1 0 A s o f a n d f o r t h e y e a r e n d e d J u n e 3 0 . 5 1 2 . 2 2 5 3 . 9 4 7 2 . 3 3 4 ) ( 6 . 4 1 3 = P 6 8 4 . 7 3 0 . 3 6 1 – 3 . 0 5 8 . 9 0 5 = P 2 9 4 . 2 9 1 3 . 4 6 0 2 0 . 3 5 2 = P 3 5 8 . 3 5 8 = P 2 . 2 6 7 . 7 7 2 C u r r e n t L i a b i l i t i e s = P 3 7 8 . 1 4 5 – P = 1 . 4 6 1 P r o v i s i o n f o r i n c o m e t a x 8 . 2 0 0 9 : R H I R e v e n u e E x t e r n a l c u s t o m e r s R e f i n e d s u g a r R a ws u g a r T o l l i n g f e e s Mo l a s s e s O t h e r s I n t e r s e g m e n t C A D P G C C A D P I C A C I R B C ( I n T h o u s a n d s ) P = – – – – – – – – ( 1 9 . 2 1 5 ( P = 2 . 9 1 9 . 5 7 6 . 8 8 7 1 4 9 . 5 9 2 5 5 7 . 9 3 0 ) = P 3 . 1 1 1 = P 3 5 3 . 9 6 7 1 2 4 . 6 9 1 = P 2 . 7 1 3 P = 1 . 1 0 8 ) 7 9 . 5 3 1 . 3 1 4 ) ( 2 3 . 8 2 2 . 7 0 7 . 0 2 2 – = P 5 6 . 4 3 8 3 . 2 3 3 . 7 8 8 1 . 6 1 8 ( 7 3 6 . 6 5 2 ) – ( 1 . 0 7 1 . 5 9 1 2 1 . 7 4 1 2 . 6 7 2 – ( 4 5 . 6 2 6 = P 1 . 5 9 9 P = 3 . 5 7 0 ) 1 5 2 . 4 0 7 . 7 3 6 = P 2 3 3 . 0 5 3 8 2 . p l a n t a n d e q u i p m e n t O t h e r n o n c u r r e n t a s s e t s I n v e s t m e n t i n a s s o c i a t e A s s e t s a n dL i a b i l i t i e s C u r r e n t a s s e t s N o n c u r r e n t a s s e t s T o t a l a s s e t s C u r r e n t l i a b i l i t i e s N o n c u r r e n t l i a b i l i t i e s T o t a l l i a b i l i t i e s C A D P I C A C I R B C C F S I ( I n T h o u s a n d s ) = P 2 . 4 1 7 6 8 . 1 4 4 – = P 9 0 . 6 8 3 T o t a l A s s e t s = P 6 . 2 7 3 . 8 6 4 .5 7 E l i mi n a t i o n s A l l a n d O t h e r s A d j u s t me n t sC o n s o l i d a t e d R H I O t h e r I n f o r ma t i o n Ma j o r c o s t s a n d e x p e n s e s D e p r e c i a t i o n a n d a m o r t i z a t i o n F u e l a n d o i l Ma t e r i a l s a n d c o n s u m a b l e s R e p a i r s a n d m a i n t e n a n c e A d d i t i o n s t o n o n c u r r e n t a s s e t s P r o p e r t y . 6 1 8 4 8 5 . 0 0 4 6 . 1 5 1 ( = P 1 . 2 7 5 . 4 4 8 . 9 9 2 ( 7 . 7 7 8 ) = P 7 . 0 3 6 ( 3 8 . 3 7 2 – = P 3 6 0 . 9 4 3 . 7 2 6 . 4 9 0 . 5 6 5 = P 7 2 . 2 5 3 = P 3 6 8 . 2 0 4 3 . 1 4 7 . 1 2 4 . 6 1 5 ) 5 6 . 1 6 6 9 4 . 9 4 8 – 2 2 7 . 6 6 2 . 8 6 1 . 0 5 9 P = – – – – – – 2 6 8 . 8 8 0 ) 1 6 7 3 5 . 4 0 9 ) – ( 7 3 6 . 1 5 6 2 9 . 9 6 5 7 9 . 6 4 3 ) 1 2 . 3 9 3 T o t a l L i a b i l i t i e s = P 1 . 7 2 6 . 3 8 5 – = P 3 2 9 – = P 6 5 6 6 1 4 3 – – P = 4 4 . 1 1 6 . 7 4 5 )P = 3 . 3 7 9 = P 6 3 8 . 1 1 4 . 6 4 3 – = P 1 9 . 0 2 5 4 0 8 . 5 2 8 . 6 8 1 7 2 . 4 2 6 2 5 0 . 7 5 0 ) 1 0 . 2 9 6 – 9 4 . 2 6 7 ) – ( = P 2 8 . 4 6 4 – 2 9 3 . 2 4 5 P = – = P 2 . 9 4 5 . 7 7 4 3 . 7 7 6 ) 2 3 5 – ( 4 . 0 5 1 . 2 7 3 3 . 2 3 0 = P 3 . 9 6 3 3 7 6 . 6 9 8 . 9 3 2 8 . 3 4 6 – – – P = – – = P – = P – – P = – 1 . 4 5 8 . 3 9 2 ( 4 2 . 0 5 3 – = P 1 5 2 . 0 6 9 1 2 4 . 5 5 8 2 2 9 . 5 7 1 1 4 7 . 6 4 3 2 3 5 . 3 0 8 1 . 0 4 4 3 8 6 . 7 0 1 5 1 . 7 5 9 3 . 5 4 4 ( = P 2 . 0 8 7 . 0 7 0 ) – 7 . 9 0 9 . 9 6 0 ) 8 2 2 1 . 3 4 6 – 3 5 6 . 9 9 4 . 4 8 1 = P 1 2 4 . 4 7 9 1 5 1 . 4 6 4 5 5 5 = P 3 . 9 0 8 ) 3 . 1 2 9 = P 9 0 . 8 6 9 ) 1 . 7 2 3 – = P 5 . 0 3 1 ( 5 . 6 5 2 ) = P – 1 9 . 3 5 5 6 7 0 P = 1 7 8 . 3 9 0 ) 6 2 . 9 0 4 . p l a n t a n d e q u i p m e n t 1 0 . 3 0 4 . 6 5 7 1 . 2 2 8 5 3 2 . 6 3 7 ( 2 6 . 0 4 7 = P 9 0 6 . 7 2 3 ) 3 1 6 ( 7 . 9 0 3 ) 1 ( 1 7 ) ( 1 ) ( 1 . 0 6 7 = P 6 . 8 1 6 2 6 8 . 2 7 7 2 . 4 9 1 ) 8 . 7 2 4 . 2 0 4 ) 1 9 . 7 0 3 6 3 . 9 6 3 2 8 7 . 2 7 5 . 9 8 2 2 0 7 . 5 2 1 . 2 8 2 2 0 2 . 4 1 5 6 1 8 . 4 5 0 – 1 . 0 4 9 . 2 6 8 ( 2 . 9 1 6 ) ( 3 . 4 8 5 3 8 . 3 2 6 . 9 2 2 ) 3 0 6 ( 1 . 1 5 4 . 5 2 9 = P 1 0 2 – 5 . 2 2 0 . 6 3 6 = P 2 1 8 . 8 5 5 ) ( 4 . 9 9 4 = P 7 9 . 8 8 6 1 . 2 5 8 = P 8 . 8 7 7 3 8 5 . 4 5 7 ( = P 4 . 6 6 0 . 3 5 3 . 7 1 1 = P 1 2 3 . 5 2 7 . 0 8 6 = P 7 7 . 5 0 9 2 6 2 1 . 1 1 0 P = 2 0 7 . 6 3 3 I n v e s t m e n t i n a s s o c i a t e – A s s e t s a n d L i a b i l i t i e s C u r r e n t A s s e t s = P 3 5 1 . 6 4 8 ( = P 9 9 8 . 2 6 9 5 . 8 8 8 = P 4 . 3 0 3 9 . 3 5 5 ( 1 7 5 . 5 1 2 . 6 6 6 N o n c u r r e n t L i a b i l i t i e s 1 . 6 5 5 – = P 5 7 2 – = P 1 1 . 4 6 4 – – 1 9 7 . 0 0 1 – – 3 . 9 6 9 – – P = 6 9 . 6 7 5 ) P = 3 . 6 9 7 R e p a i r s a n d m a i n t e n a n c e 5 1 4 A d d i t i o n s t o n o n c u r r e n ta s s e t s P r o p e r t y . 8 0 5 . 2 9 4 – 5 . 7 7 5 – – – – 3 . 9 2 9 1 7 3 . 1 8 2 P = – – = P – – ( 9 0 2 . 5 4 4 ) 2 3 8 . 0 8 4 ) ( 5 8 . 4 4 5 3 6 . 2 7 4 . 4 6 9 – 1 . 6 8 9 . 1 2 6 – – P = 5 1 . 0 1 9 = P 4 . 6 8 1 ( l o s s ) O t h e r I n f o r ma t i o n Ma j o r c o s t s a n d e x p e n s e s D e p r e c i a t i o n a n d a m o r t i z a t i o n = P 1 . 4 0 9 ) 5 . 3 8 8 2 7 . 2 8 0 . 9 4 3 2 2 . 9 8 3 ) ( 2 . 2 9 5 1 . 2 7 2 = P 4 . 5 7 3 . 1 7 0 . 4 1 2 ) ( 2 8 . 8 2 1 2 2 6 . 8 2 4 O t h e r n o n c u r r e n t a s s e t s 4 . 8 1 6 ( 9 4 . 0 0 8 C u r r e n t L i a b i l i t i e s = P 4 7 1 . 6 1 1 2 . 2 7 2 4 . 3 5 2 3 0 3 . 2 9 0 2 . 3 7 6 – 8 . 2 9 3 = P 1 5 7 . 7 8 0 ( 5 . 8 2 3 . 1 9 0 ) – ( 7 2 6 . O . 2 7 2 3 1 . 1 0 8 ) ( 8 4 . 8 1 8 5 1 . 0 7 8 T o t a l L i a b i l i t i e s = P 1 . 3 6 1 A d d i t i o n s t o n o n c u r r e n t a s s e t s P r o p e r t y . 6 1 7 ( 3 8 1 . 7 2 1 ) 9 7 ( 1 . 0 7 7 . 3 6 7 ) 2 4 8 . 5 2 0 .A s a r e g i s t e r e de n t e r p r i s e . 6 8 7 – – – – – – – 4 . 6 0 1 R e p a i r s a n d m a i n t e n a n c e 7 5 9 3 7 2 1 7 . U n d e r t h e t e r m s o f i t s r e g i s t r a t i o n . 4 7 7 = P 2 . 3 5 2 = P 3 0 3 . 0 5 8 1 5 7 . 7 6 7 F u e l a n d o i l – – 1 6 2 . 3 8 8 N o n c u r r e n t L i a b i l i t i e s 5 9 9 . 1 9 7 4 . ( 5 ) e x e m p t i o n f r o mw h a r f a g e d u e s . 4 8 5 ) ( 1 7 . 3 0 2 . 4 9 9 3 7 6 . 0 7 7 . 6 1 9 . 0 3 9 .5 8 A s o f a n d f o r t h e y e a r e n d e d J u n e 3 0 . 7 7 1 ) ( 2 . 9 9 5 ( 3 4 ) 2 . 7 1 7 = P 2 3 9 . 1 9 5 ) 2 2 4 ( 1 . 1 3 6 1 . 0 8 4 P = 2 6 2 . 4 8 7 3 . 2 9 3 ) ( 4 . 4 6 6 P = – = P – = P 3 . 1 2 5 P = 4 7 5 . 3 3 4 1 1 6 . 6 8 2 1 0 . 0 9 2 6 4 6 . 0 7 1 . 0 9 6 . 9 0 5 ) ( 1 0 . 5 5 4 ) – ( 3 8 1 . 5 5 4 ) 6 9 . 2 2 6 ( 6 . 4 1 8 . 3 1 2 S e g me n t p r o f i t ( l o s s ) E q u i t y i n n e t e a r n i n g s o f a n a s s o c i a t e – – – – C o n s o l i d a t e d p r o f i t = P 1 5 4 . ( 2 ) e x t e n s i o no f I T Hp r o v i d e dt h a t t h ea g g r e g a t e dI T Ha v a i l m e n t d o e sn o t e x c e e de i g h t y e a r s . 8 1 5 ) 5 9 6 . 8 0 1 2 . 3 6 6 . 3 1 8 ) ( 1 7 1 . 7 5 0 . 4 5 4 1 . 1 8 0 ) E l i m i n a t i o n s A l l a n d O t h e r s A d j u s t m e n t sC o n s o l i d a t e d C o s t s a n d e x p e n s e s I n t e r e s t i n c o m e I n t e r e s t e x p e n s e O t h e r s I n c o m e ( l o s s ) b e f o r e i n c o m e t a x 1 6 2 . 5 4 4 2 9 2 . 5 5 9 ( = P 6 3 8 . 8 6 7 . 8 5 3 1 . 6 2 2 – 6 . 2 7 6 P = 2 . 2 1 5 ( 2 1 0 . a m o n go t h e r s : ( 1 ) i n c o m et a xh o l i d a y( I T H ) o f s i xy e a r sf o r i t sa n h y d r o u se t h a n o l a n df o r f o u r y e a r sf o r i t s h y d r o u s e t h a n o l . ( 3 ) f o r t h e f i r s t f i v ey e a r s f r o mt h ed a t eo f r e g i s t r a t i o n . 3 3 9 ( = P 6 . 9 3 7 ) ( 7 7 . 6 1 1 – 3 6 0 . f r o mJ a n u a r y 2 0 1 0 o r a c t u a l s t a r t o f c o m m e r c i a l o p e r a t i o n s . 2 6 6 . 3 1 7 . 1 8 4 P = 1 7 7 . 6 3 2 ) = P 7 2 . 3 6 9 ) ( 3 . 0 9 6 1 5 1 . 9 6 4 4 2 . 7 3 9 = P 4 5 5 . w h i c h e v e r i s e a r l i e r . 1 3 5 – 2 6 8 . 1 5 5 P = 4 . 7 8 4 = P 9 9 0 . 2 5 5 ( 5 . 8 1 5 . 6 1 9 Ma t e r i a l s a n d c o n s u ma b l e s 5 6 2 . s u b j e c t t oc e r t a i nc o n d i t i o n s . 7 3 8 4 0 . s p a r e p a r t s a n d a c c e s s o r i e s a t 0 %d u t y f r o md a t e o f r e g i s t r a t i o n u p t o J u n e 1 6 . a d d i t i o n a l d e d u c t i o nf r o mt a x a b l ei n c o m eo f5 0 %o ft h ew a g e sa r i s i n gf r o ma d d i t i o n a l w o r k e r sh i r e d . 0 2 5 N o n c u r r e n t A s s e t s 4 . 0 0 3 1 8 . 8 8 1 ) ( 1 4 . 6 7 0 4 7 5 . 1 6 0 P = – – 2 – – – – – P = 6 7 1 0 0 = P 1 6 7 = P 4 7 8 – = P 4 7 8 P = – – – – – – – – = P 2 8 9 – = P 2 8 9 = P 4 7 – = P 4 7 = P 3 1 7 – 9 3 1 0 4 P = – – – – P = 3 2 8 . 2 3 9 3 . 9 4 9 ) 5 . ( 4 ) t a xc r e d i t f o r t a x e s a n dd u t i e s o n r a wm a t e r i a l s a n d s u p p l i e s a n d s e m i m a n u f a c t u r e d p r o d u c t s u s e d i n p r o d u c i n g i t s e x p o r t p r o d u c t . 5 7 4 3 5 . 3 6 8 ) 7 2 . 0 8 9 P = 5 1 8 . 6 9 3 1 . 5 2 8 a n d i t s I m p l e m e n t i n g R u l e s a n d R e g u l a t i o n s a n d ( 7 ) t a x a n d d u t y f r e e i m p o r t a t i o n o f e q u i p m e n t . 7 0 8 ( 3 6 . 9 8 9 1 . 3 8 1 P = 4 . 1 3 4 9 . 8 1 9 1 8 1 . 0 9 2 ( = P 4 8 7 . 1 8 0 ) P = – = P 3 . 2 0 1 1 p u r s u a n t t o E . 8 1 4 . 8 5 1 ) ( 2 0 . 2 4 1 . 6 5 7 7 1 . 6 4 2 – – – – 2 . 4 7 2 O t h e r n o n c u r r e n t a s s e t s 1 . * S G V M C 3 1 0 9 6 2 * . 7 3 1 – 1 7 . ) 2 2 6 . 7 9 4 ) 3 8 5 . 1 9 3 . 6 2 2 2 6 . 1 0 3 . 4 8 7 3 7 5 . 6 8 7 – 8 . 2 8 7 = P 9 7 5 . 7 7 8 = P 9 . 9 9 6 ( P = 6 3 8 . 5 7 5 . 7 0 4 . p l a n t a n d e q u i p m e n t 7 3 2 4 5 9 1 . 9 0 1 – – 3 6 0 . 8 1 8 = P 5 1 . 6 2 9 . O . 8 6 5 = P 1 . 9 4 0 P = 1 . 9 8 3 T o t a l A s s e t s = P 4 . 4 8 9 – 1 . 4 8 8 = P 4 . ( 6 ) m a y q u a l i f y t o i m p o r t c a p i t a l e q u i p m e n t . 0 8 5 . 9 5 8 . 8 8 7 ) ( 2 . 6 1 5 . 7 7 2 ( 6 0 . 3 0 3 6 9 . 4 1 6 2 4 4 . R o x o l i se n t i t l e dt oc e r t a i nt a xi n c e n t i v e s . 2 8 9 P = 3 2 . 4 8 5 . 6 8 2 6 1 . p r o v i d e dt h a t i t i s n o t s i m u l t a n e o u s l ya v a i l e dw i t ht h e I T H . 2 6 9 = P 1 4 5 . 7 9 3 ) 1 5 4 . 1 1 3 . 4 6 2 ) 1 . t h e B O I a p p r o v e d t h e r e g i s t r a t i o n o f R o x o l a s N e wP r o d u c e r o f B i o e t h a n o l ( A n h y d r o u s ) a n dP o t a b l e ( H y d r o u s ) E t h a n o l o na P i o n e e r S t a t u s u n d e r t h e O m n i b u s I n v e s t m e n t s C o d e o f 1 9 8 7 o r E x e c u t i v e O r d e r ( E . 1 2 4 . 2 0 0 8 . 0 7 8 1 7 0 . 8 2 5 1 8 1 . a n y e x p o r t t a x . 4 2 1 6 9 . 0 1 7 . 6 4 4 ( 1 9 . 4 4 8 . 5 4 4 ( 7 2 6 . 4 0 6 7 . 5 9 1 1 . 4 4 8 5 4 6 . 1 4 6 – – 1 5 0 . 1 0 3 1 7 4 . 0 7 2 I n v e s t m e n t i n a s s o c i a t e – – – – A s s e t s a n dL i a b i l i t i e s C u r r e n t A s s e t s = P 1 8 1 . 1 0 5 P r o v i s i o n f o r i n c o m e t a x ( 8 . 0 2 0 1 2 7 . 7 7 2 – – 3 1 2 . 2 0 0 8 : R H I C A D P G C R e v e n u e E x t e r n a l c u s t o m e r s R e f i n e d s u g a r R a ws u g a r Mo l a s s e s T o l l i n g f e e s O t h e r s I n t e r s e g m e n t C A D P I C A C I R B C C F S I ( I n T h o u s a n d s ) P = – – – – – – – – ( 3 7 3 ) – – – ( 3 7 3 ) – ( 3 7 3 ) – ( = P 3 7 3 ) P = – – – – – – – – ( 3 8 ) – – – ( 3 8 ) – ( 3 8 ) – ( = P 3 8 ) ( = P 4 . 3 9 1 ) 1 1 . 3 1 2 ( l o s s ) O t h e r I n f o r ma t i o n Ma j o r c o s t s a n d e x p e n s e s D e p r e c i a t i o n a n d a m o r t i z a t i o n = P 5 2 8 = P 1 9 8 =1 P 6 9 . 2 6 5 ) = P 2 8 1 . 4 8 1 . 6 7 9 . 1 8 4 = P 1 . 7 3 9 ( = P 3 1 1 . 9 8 5 . R o x o l i s r e q u i r e d t oa c h i e v ec e r t a i np r o d u c t i o na n ds a l e s v o l u m ef o r b o t ha n h y d r o u s a n dh y d r o u se t h a n o l . 0 6 5 . 4 9 9 3 7 6 . 0 8 0 ) – 5 2 . 0 7 8 . 8 3 6 6 1 1 . 1 9 0 ) 6 . 6 4 6 = P – 1 6 . 0 8 4 2 6 2 . 0 9 9 ) 2 8 . 5 3 5 5 . 9 8 9 2 7 2 . 5 4 8 ) ( 9 . 7 9 7 1 1 . O t h e r Ma t t e r R e g i s t r a t i o n w i t h t h e B o a r d o f I n v e s t m e n t s ( B O I ) O n O c t o b e r 2 4 . 8 4 8 = P 3 9 3 . 3 8 8 P = 2 . d u t i e s i m p o s t s a n d f e e s f o r t e n y e a r s f r o md a t e o f r e g i s t r a t i o n . 9 1 3 4 7 . w h i c hi n c l u d e . . 878) 39.468 =431. Inc. beginning Add: Net income actually earned/realized during the year Net income during the year closed to retained earnings Less: Movement of deferred income tax assets Add: Reversal of appropriation of retained earnings during the year Total unrestricted retained earnings available for dividend declaration. 2010 (Amounts in Thousands) Unrestricted retained earnings.ROXAS HOLDINGS. as adjusted to available for dividend declaration.551 1.) SUPPLEMENTARY SCHEDULE OF RETAINED EARNINGS AVAILABLE FOR DIVIDEND DECLARATION FOR THE YEAR ENDED JUNE 30.805 P 49. INC. (A Subsidiary of Roxas and Company. end =390.429 (9.824 P . . SECOND SECTION . INC. AND SUBSIDIARIES MARKETABLE SECURITIES (Current Marketable Equity Securities and Other Short-term Cash Investments) JUNE 30. 2010 (AMOUNTS IN THOUSAND PHILIPPINE PESOS) Name of issuing entity and description of each issue Number of shares or principal amount of bonds and notes Amount shown in the balance sheet NONE Value based on market quotation at balance sheet date Income received and accrued .SCHEDULE A ROXAS HOLDINGS. 2010 (AMOUNTS IN THOUSAND PHILIPPINE PESOS) Name and designation of debtor Various employees (educational loans/advances) Balance at beginning of year =264.784 P Non current =– P Balance at end of year =87.705 P Additions =3. INC.SCHEDULE B ROXAS HOLDINGS. RELATED PARTIES AND PRINCIPAL STOCKHOLDERS (OTHER THAN AFFILIATES) JUNE 30. AND SUBSIDIARIES AMOUNTS RECEIVABLE FROM DIRECTORS.500 P Amounts collected =180. EMPLOYEES. OFFICERS.421 P Amounts written off = P Current =87.784 P . 549. OTHER LONG-TERM INVESTMENTS IN STOCK AND OTHER INVESTMENTS JUNE 30.09%) Equity in net earnings of investee for the period =132.432 P Net additions (deductions) Share in an associate’s negative goodwill upon adoption Dividend of PFRS income =– P (P =71.365 =618.322 P Name of issuing entity and description of investment Hawaiian -Philippine Company (45.263 P Other =– P Dividends received from investments not accounted for by the equity method = P– .549.365 =557. INC. AND SUBSIDIARIES NON-CURRENT MARKETABLE EQUITY SECURITIES. EXCEPT NUMBER OF SHARES) Beginning balance Number of shares or principal amount of bonds Amount and notes in Pesos 28.373) Ending balance Number of shares or principal amounts of bonds Amount and notes in Pesos 28.SCHEDULE C ROXAS HOLDINGS. 2010 (AMOUNTS IN THOUSAND PHILIPPINE PESOS. SCHEDULE D ROXAS HOLDINGS. AND SUBSIDIARIES INDEBTEDNESS OF UNCONSOLIDATED SUBSIDIARIES AND RELATED PARTIES JUNE 30. INC. 2010 (AMOUNTS IN THOUSAND PHILIPPINE PESOS) Name of Affiliates Balance at beginning of year NONE Balance at end of year . 346.603. fixtures and equipment Construction in progress Beginning balance =2.097 P 129.485.660 P 1.506 P . PLANT AND EQUIPMENT JUNE 30.798 5.095 8.224. INC.481 P Retirements =– P (10.756) 686.506 P Classification Land Buildings and improvements Machinery and equipments Railroad equipments Office furnitures.670 3.670 23.517.363) =33.146 =2.165.408 1.SCHEDULE E ROXAS HOLDINGS.967.217.477 4. 2010 (AMOUNTS IN THOUSAND PHILIPPINE PESOS) Other chargesAdditions (deductions) (P =58.943 P Additions at cost =26.667) Ending balance =2.597 267.041.820) (118.646 4.935 68.144 605.983.643 (803.590.117 =16.889 2.563 797.361 123.557) (2.001 P 2.307.547.334 =14.808.449) (982) – (P =80. AND SUBSIDIARIES PROPERTY.688 32. 310 121.911) Ending balance =– P 736.201.399.268 P =– P – (6.025 P Charged to other accounts =– P 28.941. fixtures and equipment Construction in progress Beginning balance =– P 697.037 321.941 (362) (471.118 477.748) (118.000 54.361 4. AND SUBSIDIARIES ACCUMULATED DEPRECIATION JUNE 30.554 11.372) – (P =21.572 P Additions at cost =– P 67. 2010 (AMOUNTS IN THOUSAND PHILIPPINE PESOS) Other charges-Additions (deductions) Classification Land Buildings and improvements Machinery and equipments Railroad equipments Office furnitures.066 10.871 – =407.051 8.418) . INC.030) (640) – (P =125.353 – =5.494 – =4.442 3.SCHEDULE F ROXAS HOLDINGS.607.326 515. 2010 (AMOUNTS IN THOUSAND PHILIPPINE PESOS) Charged to costs and expenses =– P Other changesadditions (deductions) =– P Description Goodwill Beginning balance =9. INC. AND SUBSIDIARIES INTANGIBLE ASSETS .SCHEDULE G ROXAS HOLDINGS.OTHER ASSETS JUNE 30.796 P .796 P Additions =– P Charged to other accounts =– P Ending Balance =9. 276 P Remarks Refer to Note 13 of the 2010 consolidated financial statements for additional information on long-term borrowings.836 1. AND SUBSIDIARIES LONG-TERM BORROWINGS JUNE 30. Rizal Commercial Banking Corporation Bank of the Philippine Islands Amount shown under caption“ Long-term borrowings” in related consolidated balance sheets =3.483 =51. .440 =5. Inc.241 34.724 P Title of issue and type of obligation Loans payable to local banks: Banco De Oro Unibank.000 P 493.SCHEDULE H ROXAS HOLDINGS.718.454.770. INC. 2010 (AMOUNTS IN THOUSAND PHILIPPINE PESOS) Amount shown under caption “Current portion of long-term borrowings” in related consolidated balance sheets =– P 17. INC. AND SUBSIDIARIES INDEBTEDNESS TO RELATED PARTIES (LONG-TERM LOANS FROM RELATED COMPANIES) JUNE 30.SCHEDULE I ROXAS HOLDINGS. 2010 (AMOUNTS IN THOUSAND PHILIPPINE PESOS) Name of Affiliate Balance at beginning of year NONE Balance at end of year . AND SUBSIDIARIES GUARANTEES OF SECURITIES OF OTHER ISSUERS JUNE 30. 2010 (AMOUNTS IN THOUSAND PHILIPPINE PESOS) Name of issuing entity of securities guaranteed by the Company for which this statement is filed Title of issues of each class of securities guaranteed Total amount guaranteed and outstanding Amount owed by person for which statement is filed Nature of guarantee NONE . INC.SCHEDULE J ROXAS HOLDINGS. 2010 Number of shares issued and outstanding shown under related consolidated balance sheets caption Title of issue Common shares (P1 par value) Number of shares authorized Number of shares reserved for options.721 217.500.000.038. AND SUBSIDIARIES SHARE CAPITAL JUNE 30.849 Please refer to Note 23 of the 2010 consolidated financial statements for additional information on share capital. warrants conversion.SCHEDULE K ROXAS HOLDINGS.403.236 – 627. .0000 909.552. INC.109. and other rights Number of shares held by related parties Directors and officers Others 1.666 65.