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A ANNUAL REPORT PURSUA - FEU Investor Relations

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In this way, the students and other stakeholders are assured that services provided by FEU are in accordance with standard procedures in its QMS which are continuously improved for the satisfaction of the University's customers. Since the school which is the main core of the business is located in the University Belt, the competitors are prestigious colleges and universities within the specified area.

Legal Proceedings

Pending Court Cases as of 1 April 2012

The employee and faculty unions have never gone on strike in the last ten years and do not pose a strike threat in the foreseeable future. Working capital: All of the company's working capital for existing operations for the fiscal year April 1, 2011 to March 31, 2012 was generated internally.

Submission of Matters to a Vote of Security Holders

OPERATIONAL AND FINANCIAL INFORMATION

Market for Registrants Common Equity and Related Stockholders Matters DIVIDENDS DECLARED FOR THE FISCAL YEAR ENDED MARCH 31, 2012

  • Test of Liquidity
    • Current ratio measures the number of times that the current liabilities could be paid with the available current assets (Adequate: at least 5:1)
    • Quick ratio measures the number of times that the current liabilities could be paid with the available quick assets (Adequate: at least 1:1)
    • Equity to asset ratio measures the amount of assets provided by the owner relative to the total assets of the company (Adequate: 50% or more)
  • Test of Profitability
    • Return on total assets measures how well management has used its assets under its control to generate income (Adequate: at least equal to the
    • Return on owner’s equity measures how much was earned on the owners’
    • Earnings per share measures the net income per share
  • Product Standard
    • Teaching performance in the University is constantly being monitored to maintain a satisfactory level of excellence. Various incentives are given to
    • The Philippine Association of Colleges and Universities Commission on Accreditation (PACUCOA) has granted Certificates of Level III Re-
    • Performance of FEU graduates in their respective Board Exams is generally better than the national passing rate with the following board placers
  • Market Acceptability
    • Below is a schedule of the first semester enrollment for the past 4 years
    • Below is a schedule of Entrance and Entrance Merit Scholars for the past 4 years
    • The current economic condition may still affect the sales/revenues/income from operations
    • There are no known events that would result in any default or acceleration of an obligation
    • There are no known events that will trigger direct or contingent financial obligation that may be material to the company
    • There are no material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the company with
    • There are no sales of Unregistered or Exempt Securities including Recent Issuance of Securities Constituting an Exempt Transaction
    • A new school site (FEU Makati Campus) was constructed and opened in June 2010 at the Makati area to offer business courses. Its educational income for the year ended
    • There are no significant elements of income or loss from continuing operations
    • Seasonal aspects that has material effect on financial statements

Most of the company's current assets were quick assets amounting to P2,348.2 million, an amount more than sufficient to cover the company's total liability of P576.9 million when due. The company's retained earnings consisted of P975.1 million. restricted/granted retained earnings and P942.8 million. free/unallocated retained earnings.

A. Liquidity

Solvency

  • Debt to Equity ratio = Total liabilities Total Stockholder's Equity
  • Debt to Asset ratio = Total liabilities Total assets
  • Equity to Asset ratio = Total Stockholder's Equity Total assets

Profitability

  • Return on Owner's Equity = Net Profit

Financial Statements

FAR EASTERN UNIVERSITY

The Far Eastern University, Incorporated March 31, 2012, 2011 and 2010

University, Incorporated, which include the March and 2010 statements of financial position and statements of comprehensive income, statement of changes in equity and statement of cash flows for each of the then-ended years and a summary of significant accounting policies for counting and other explanatory information. Management is responsible for the preparation and fair presentation of these financial statements in accordance with Philippine Financial Reporting Standards and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement. contain as a result of fraud or error.

Punongbayan BLAraulio

CORPORATE INFORMATION

The University is a private, non-sectarian educational institution comprising the following various institutes offering specific courses, namely the Institute of Arts and Sciences; Institute of Accounting, Business and Finance; Institute for Education; Institute of Architecture and Fine Arts; Institute of Nursing; Institute of Engineering; Institute of Tourism and Hotel Management; Institute of Law; and the Institute for Postgraduate Studies. In 2010, the university established the FEU Makati campus (branch) in Makati City (see note 7).

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  • Basis of Preparation of Financial Statements
  • Adoption of New and Amended PFRS
  • Separate Financial Statements and Investments in Subsidiaries, Associate and a Joint Venture
  • Financial Assets
  • Property and Equipment
  • Investment Property
  • Financial Liabilities
  • Provisions and Contingencies
  • Revenue and Expense Recognition
  • Leases
  • Foreign Currency Transactions
  • Impairment of Non-financial Assets
  • Employee Benefits (a) Post-employment Benefits
  • Deposits Payable
  • Trust Funds
  • Income Taxes
  • Related Party Transactions
  • Equity
  • Offsetting of Financial Instruments
  • Events After the Reporting Period
  • Earnings Per Share

Items included in the University's financial statements are measured using its functional currency. Financial instruments are recognized when the University becomes a party to the contractual terms of the financial instrument.

SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES

  • Critical Management Judgments in Applying Accounting Policies
  • Key Sources of Estimation Uncertainty

The carrying value of investments in the University's AFS and the amounts of changes in fair value recognized over the years in those assets are disclosed in Note 8. The University's policy for assessing the impairment of non-financial assets is discussed in detail in Note 2.12.

RISK MANAGEMENT OBJECTIVES AND POLICIES

  • Interest Rate Risk
  • Credit Risk
  • Liquidity Risk
  • Other Price Risk

The University has overdue but unimpaired accounts receivable at the end of each year. The university's exposure to price risk stems from its investments in equity securities, which are classified as available-for-sale investments in the statements of financial position.

CATEGORIES AND FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES

  • Comparison of Carrying Amounts and Fair Values
  • Fair Value Hierarchy

The breakdown of the University's FVTPL, AFS investments and liabilities measured at fair value in its statements of financial position from March and 2010 is as follows (see Note 8):.

CASH AND CASH EQUIVALENTS

Interest income earned on cash and cash equivalents is presented as part of financial income in the statements of comprehensive income (see note 16.1). Taking into account the limitation in such an amount of cash and cash equivalents, this is included as part of the account of other current assets in the statements of financial position (see note 4.2).

RECEIVABLES

The University provides cash advances to support certain operating requirements (such as faculty salaries) for FEFI, FERN College, FECSI and ICF-CCE, Inc. In relation to the improvements on the Crans Montana property, the University has made advances to contractors in the amount of P52.0 million, which remained outstanding as of March 31, 2010.

AVAILABLE-FOR-SALE INVESTMENTS

Such advances are presented as part of Other current assets in the 2010 statement of financial position. Liabilities account while the net fair values ​​of these embedded cross currency swaps as of March 31, 2011 amounting to P8.5 million were presented as Financial Assets at FVTPL account in the 2012 and 2011 statements of financial position respectively.

INVESTMENTS IN SUBSIDIARIES, ASSOCIATE AND JOINT VENTURE

In 2012 and 2011, some of the university's AFS investments in debt securities included derivatives resulting from cross currency swaps. Below is an analysis of the movement in the book value of the university's investments with trustee banks.

INVESTMENT PROPERTIES

Out of the total consideration, P19.6 million was paid in cash and the balance of P6.4 million was settled by offsetting advances (see Note 19.2). Based on the discounted net future cash flow model, management determined that the total fair value of investment properties as of March 31, 2012 amounted to P242.2 million.

PROPERTY AND EQUIPMENT

ACCOUNTS PAYABLE AND OTHER LIABILITIES This account consists of

TRUST FUNDS

EDUCATIONAL REVENUES

OPERATING EXPENSES Operating expenses consists of

FINANCE INCOME AND FINANCE COSTS 1 Finance Income

  • Finance Costs

EMPLOYEES’ HEALTH, WELFARE AND RETIREMENT FUND

INCOME TAXES

As permitted under applicable tax laws, the University has the option to claim an optional standard deduction of 40% of gross sales or an itemized deduction.

RELATED PARTY TRANSACTIONS

  • Interest-bearing Advances
  • Noninterest-bearing Advances
  • Lease of Manila Campus Premises from FRC
  • Lease of Makati Campus Premises from FRC
  • Lease of Certain Building Floor to FRC
  • Lease of Certain Buildings to EAEF
  • Management Services
  • Key Management Personnel Compensation

The total rental expense charged to operations was P7.7 million in 2012 and P2.6 million in 2011 and is presented as part of rent under administrative expenses. P13.9 million as of March or 2010 and is presented as part of receivables from EAEF under the receivables account in the statements of financial position (see note 7).

EQUITY

  • Capital Stock
  • Prior Period Adjustments and Reclassification a. Prior period Adjustments
  • Retained Earnings

In 2012, the University restated its prior year financial statements to record the retrospective change in revenue recognition resulting from the change in trust fund accounting practices. The University sets aside an amount in cash and cash equivalents equal to the outstanding balance of trust funds at the end of each year, presented as part of other current assets in the statement of financial position.

EARNINGS PER SHARE

Unpaid dividends from March and 2010 are presented as dividends payable under Accounts Payable and Other Liabilities in the statements of financial position (see Note 12). As of March and 2010, the University has no dilutive potential ordinary shares, so the diluted EPS is the same as basic EPS in all the years presented.

COMMITMENTS AND CONTINGENCIES

  • Operating Lease Commitments – University as Lessee (a) Lease Agreement with FRC
  • Legal Claims
  • Others

However, the University has allocated a portion of its retained earnings for the occurrence of these types of contingencies (see Note 20.3). There are other contingencies that arise in the normal course of business that are not recognized in the University's financial statements.

CAPITAL MANAGEMENT OBJECTIVES, POLICIES AND PROCEDURES

Management is of the opinion that any losses resulting from these liabilities and contingencies will not materially affect its accounts, however the university has generally chosen to use a portion of its retained earnings to cover such contingencies (see note 20.3).

SUPPLEMENTARY INFORMATION REQUIRED BY THE BUREAU OF INTERNAL REVENUE

  • Requirements Under Revenue Regulations (RR) 15-2010
  • Requirements Under RR 19-2011

This recent RR requires that schedules of taxable income and other non-operating income, cost of sales and services, and itemized deductions be disclosed in the notes to financial statements. The composition of the University's taxable income for the financial year ended 31 March 2012 at a special tax rate of 10% mainly consists of tuition and other school fees amounting to P.

The Far Eastern University, Incorporated- and Subsidiaries

Basis of Preparation of Consolidated Financial Statements (a) Statement of Compliance with Philippine Financial Reporting Standards

The Group's consolidated financial statements have been prepared in accordance with Philippine Financial Reporting Standards (PFRS). Items included in the group's consolidated financial statements are measured in its functional currency.

Consolidated Financial Statements and Investments in an Associate and a Joint Venture

The group's share in a jointly controlled company is recognized in the group's consolidated financial statements using the equity method. The group's share of the joint venture's profit is adjusted for any unrealized gains arising from.

Business Combinations

Financial Assets

Financial assets (other than derivatives and financial instruments originally designated as financial assets at FVTPL) may be. The Group has derivative assets (including embedded derivatives such as cross-currency swaps), which are included under this category, which are presented as Financial Assets at Fair Value through Profit or Loss account in the consolidated statement of financial position.

Real Estate Held-for-sale

All income and expenses, including impairment losses, relating to financial assets recognized in the income statement are presented as part of the financial income or expense statement in the consolidated statement of comprehensive income. Uncompounded interest and other cash flows arising from holding financial assets are recognized in profit or loss as earned, regardless of how the related carrying amount of financial assets is measured.

Property and Equipment

Financial assets are derecognised when the contractual rights to receive cash flows from the financial instruments expire, or when the financial assets and all substantial risks and rewards of ownership have been transferred. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in profit or loss in the year the item is derecognised.

Investment Property

This includes construction costs, applicable borrowing costs (see Note 2.18) and other directly attributable costs to bring the asset into condition for its intended use. Transfers of investment property occur when and only when there is a change in use, evidenced by commencement of owner occupation or commencement of development for sale.

Financial Liabilities

The transfer is made to the long-term tangible asset invested when and only when there is a change in use, evidenced by the end of administration by the owner, the start of an operating lease to another party or the completion of construction or development.

Provisions and Contingencies

Correspondingly, possible inflows of financial benefits to the group that do not yet meet the recognition criteria for an asset are considered contingent assets and are therefore not recognized in the consolidated financial statements. On the other hand, any consideration that the Group can be almost certain to collect from a third party in respect of the liability is recognized as a separate asset that does not exceed the amount of the related provision.

Revenue and Expense Recognition

In those cases where the possible outflow of economic resources as a result of current obligations is considered unlikely or remote, or the amount to be provided for cannot be measured reliably, no liability is recognized in the consolidated financial statements. Costs and expenses are recognized in profit or loss on receipt of goods, use of services or on the date they are incurred.

Leases

Foreign Currency Transactions

Impairment of Non-financial Assets

An impairment loss is recognized for the amount by which the carrying amount of the asset or cash-generating unit exceeds its recoverable amount. Impairment losses are charged in proportion to other assets in the cash-generating unit.

Employee Benefits (a) Post-employment Benefits

All assets are then reassessed for indications that a previously recognized impairment loss may no longer exist and the carrying amount of the asset is adjusted to its recoverable amount, resulting in the reversal of the impairment loss.

Deposits Payable

Trust Funds

Borrowing Costs

Income Taxes

Most changes in deferred tax assets or liabilities are recognized as part of the tax expense in the income statement. Only changes in deferred tax assets or liabilities that relate to items recognized in OCI or directly in equity.

Related Parties

Equity

Offsetting of Financial Instruments

Events After the Reporting Period

Earnings Per Share

Segment Reporting

The Group's consolidated financial statements prepared in accordance with IFRS require management to make judgments and estimates that affect the amounts reported in the consolidated financial statements and related notes. Judgments and estimates are constantly evaluated and based on past experience and other factors, including expectations about future events, that we believe are reasonable under the circumstances.

Critical Judgments in Applying Accounting Policies

BOT has overall responsibility for establishing and overseeing the Group's risk management framework. A description of the Group's risk management objectives and policies for financial instruments is provided in Note 4.

Business Segments

Segment Assets and Liabilities

36 - 6.3 Transactions between segments Segment revenues, expenses and performance include revenues and purchases between business segments and between geographic segments.

Reconciliation

March and 2010 are limited as required by the group's online credit card payment method at a designated local bank. Claims on loans are represented by promissory notes issued by a certain domestic rental and leasing company in favor of the group's assets, which are managed by a certain local bank.

AVAILABLE-FOR-SALE INVESTMENTS

Such advances are presented as part of the other current assets account in the 2010 consolidated statement of financial position. March 31, 2011 of P8.5 million was presented as financial assets in the FVTPL account in the 2012 and 2011 consolidated statements of financial position, respectively.

REAL ESTATE HELD-FOR-SALE

Gains or losses related to fair value are presented as part of financial income (Costs) in the 2012 and 2011 consolidated statements of comprehensive income (see note 19). The net changes in the carrying amount of the related interest payable from these cross-currency swaps amounting to P5.6 million and P3.4 million, as of March 31, 2012 and 2011, respectively, were presented as part of finance costs in the 2012 and Consolidated Statements of Comprehensive Income of 2011, while the corresponding liability is presented as part of the expenses calculated under the Accounts Payable and Other Liabilities account in the consolidated statements of financial position of 2012 and 2011 (see note 14).

INVESTMENTS IN AN ASSOCIATE AND A JOINT VENTURE

  • Sale of Investment Property
  • Rental Income
  • Reclassification
  • Fair Values of Investment Property

The total outstanding receivable resulting from this transaction amounting to P61.5 million is presented in the 2012 consolidated balance sheet as part of the accounts receivable under the Accounts Receivable account. The total gain from this transaction was P211.6 million and is presented as a gain (loss) on sale of investment properties in the 2010 consolidated statement of.

ACCOUNTS PAYABLE AND OTHER LIABILITIES

Payable to the contractor represents the amount owed to a construction company for the construction of the FRC building in Silang, Cavite.

NOTES PAYABLE

TRUST FUNDS

TUITION AND OTHER SCHOOL FEES

COSTS AND OPERATING EXPENSES Costs and operating expenses consist of

FINANCE INCOME AND FINANCE COSTS 1 Finance Income

  • Finance Costs

EMPLOYEES’ HEALTH, WELFARE AND RETIREMENT FUND

Contributions to this fund are in accordance with the defined contribution set by the Retirement Board, which is the sum of the employees' and the University's contributions. Employees' contribution is 5% of basic salary while the University's contribution is equivalent to 20% of the employees' basic salary.

INCOME TAXES

As a group policy, any contributions paid by the university in recent years and subsequently forfeited due to the termination of covered employees prior to retirement vesting may be used as employer contributions in subsequent years. As there were forfeited contributions paid by the university in previous years that were used for contributions in 2012, pension costs in 2012 were only P19.9 million.

RELATED PARTY TRANSACTIONS

  • Noninterest-bearing Advances
  • Lease of Campus Premises
  • Management Services
  • Key Management Personnel Compensation
  • Eliminated Intercompany Transactions
  • Capital Stock
  • Prior Period Adjustments and Reclassification a. Prior period Adjustments
  • Retained Earnings

Total rental income from EAEF, presented as part of the rental account in the consolidated statements of comprehensive income, was P53.8 million in 2012, P48.2 million in 2011 and P39.2 million in 2010. Unpaid receivables that arising from this transaction amounted to P47.8 million, P18.3 million and P13.9 million as of March 2010, respectively, is presented as part of receivables from EZEF under the receivables account in the consolidated statements of financial position (see Note 8).

EARNINGS PER SHARE

  • Purchase of Condominium Unit
  • Operating Lease Commitments – Group as Lessor
  • Legal Claims
  • Others

Per As of March 31, 2010, the University is a defendant in certain civil actions pending in the local courts, certain wrongful dismissal actions pending before the National Labor Relations Commission, and a class action for damages by certain students pending before the Court of Appeals. However, the university has allocated part of its retained earnings to the occurrence of this type of unforeseen events (see note 23.3).

CAPITAL MANAGEMENT OBJECTIVES, POLICIES AND PROCEDURES

There has been no recent change in and disagreement with accountants regarding accounting and financial disclosure.

CONTROL AND COMPENSATION Item 9. Trustees and Executive Officers

Mga Sanggunian

NAUUGNAY NA DOKUMENTO

Encarnacion Head Gentlemen: Please be informed that the Board of Trustees at its meeting held on December 18, 2012, passed the following resolutions: RESOLVED, That a cash dividend