• Walang Nahanap Na Mga Resulta

FEU Investor Relations - Far Eastern University

N/A
N/A
Protected

Academic year: 2023

Share "FEU Investor Relations - Far Eastern University"

Copied!
226
0
0

Buong text

Aurelio Montinola III, 60, Filipino: Vice Chairman of the Board of Trustees of Far Eastern University, Inc. Echauz, 64, Filipino: President (June 2003 to present); Acting President (September 2002 to May 2003) and Board Member of Far Eastern University, Inc.

Compensation of Trustees and Executive Officers

Independent Public Accountant

Ratification and approval of the actions of the board of directors to promote the matters covered in the annual report 4. For all other matters to be decided upon, the affirmative vote of the majority of the company's shares present or represented and entitled to vote is required. at the annual meeting.

In the event that this proxy is returned without a choice being made in any or all of the above points, the undersigned hereby authorizes the appointed proxy to vote on his or her behalf, at the sole discretion of such proxy, to approve the matters or to reject. are discussed in the meeting. A proxy exercised by a shareholder shall be in the form of a board resolution duly certified by the Corporate Secretary or in this proxy form executed by a duly authorized corporate officer accompanied by a Corporate Secretary's Certificate stating the board resolution that said corporate officer authorizes to run the proxy.

Revocability of Proxy

Persons Making the Solicitation

Interest of Certain Persons in Matters to be Acted Upon

  • Brief Discussion of Business
  • Market Prices of Common Stocks: (Phil.Stock Exchange,Inc.) and Dividends Declared
  • Number of Shareholders
  • Management’s Discussion and Analysis or Plan of Operation
  • 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)
  • Test of Solvency
    • 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 as they are due. The company's retained earnings consisted of a P975.1 million restricted/vested retained earnings and a P942.8 million free/unvested retained earnings.

A. Liquidity

Solvency

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

Profitability

  • Return on Assets = Net Profit
  • Return on Owner's Equity = Net Profit
  • Corporate Governance
  • PARENT CORPORATION FINANCIAL STATEMENTS
  • CONSOLIDATED FINANCIAL STATEMENTS

On January 12, 2012, our corporate governance compliance officer filed his 2011 certification with the Securities and Exchange Commission regarding the extent of the company's compliance with its manual. , 2011.

FAR EASTERN UNIVERSITY

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

University, Incorporated, consisting of the statements of financial position as at March and 2010, and the statements of comprehensive income, statements of changes in equity and statements of cash flows for each of the years then ended, and a summary of significant by counting policies 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, whether due to fraud or error.

Punongbayan BLAraulio

CORPORATE INFORMATION

The University is a private, non-sectarian institution of learning comprising the following various institutes offering specific courses namely Institute of Arts and Sciences; Department of Accounting, Business and Finance; Department of Education; Department of Architecture and Fine Arts; Department of Nursing; Department of Engineering; Department of Tourism and Hotel Management; Institute of Law; and Department of Graduate Studies. In 2010, the university established the FEU Makati Campus (the 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 financial statements of the University are measured using its functional currency. Financial assets 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 values ​​of the University's AFS investments and the amounts of fair value changes recognized on those assets during the years are disclosed in Note 8. The University's policy on estimating the decline in value 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 as of March and 2010 are as follows (see note 8):

CASH AND CASH EQUIVALENTS

Interest income from cash and cash equivalents is shown as part of financial income in the statement of comprehensive income (see note 16.1). Subject to the limitation of such amount of cash and cash equivalents, this is included as part of the account Other current assets in the statements of financial position (see note 4.2).

RECEIVABLES

The university provides cash advances to support certain operational requirements (such as faculty payroll) for FEFI, FERN College, FECSI, and ICF-CCE, Inc. In connection with the improvements made to the Crans Montana property, the university has made advance payments to contractors amounting to P52.0 million that were outstanding as of March 31, 2010.

AVAILABLE-FOR-SALE INVESTMENTS

Such advances are presented in the 2010 balance sheet as part of Other current assets. Liabilities while the net fair value of these embedded cross currency swaps as of March 31, 2011 amounting to P8.5 million was presented as financial assets in the 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 include derivative assets derived from cross currency swaps. Analyzes of the movements in the accounting value of the university's investments held by trust banks are presented below.

INVESTMENT PROPERTIES

Of the total amount, P19.6 million was paid in cash and the balance of P6.4 million was settled through advance compensation (see note 19.2). Based on the discounted net future cash flow model, management determined that the total fair value of the investment properties as of March 31, 2012 was 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 rules, the university has the option to claim either the optional standard deduction of 40% of gross sales or itemized deductions.

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

Total rental expenses charged to operations amounted to P7.7 million in 2012 and P2.6 million in 2011 and are presented as part of Rent under administrative expenses. P13.9 million in March and 2010, respectively, 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 the prior years' financial statements to record the retrospective change in revenue recognition resulting from the change in accounting policy for trust funds. The University sets aside an amount of 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 statements of financial position.

EARNINGS PER SHARE

Unpaid dividends from March and 2010 are shown as liabilities for dividends in the item Liabilities and other liabilities in the statements of financial position (see note 12). As of March and 2010, the University has no dilutive potential common shares, so diluted earnings per share are equal to basic earnings per share for all 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 believes that losses, if any, arising from these liabilities and contingencies will not materially affect its financial statements, however the University has chosen to generally apply a portion of its retained earnings to 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

The composition of the university's taxable income for the fiscal year ended March 31, 2012 at a special tax rate of 10% consists primarily of tuition and other school fees amounting to P. The details of taxable non-operating and other income in fiscal year 2012 subject to a special tax rate of 10% are listed below.

Report of Independent Auditors to Accompany SEC Schedules

Philippine Interpretation IFRIC 2 Philippine Interpretation li'RIC 4 Philippine Interpretation ll'RIC 5 Philippine Interpretation li'RIC 6 Philippine Interpretation li'RIC 7. Philippine Interpretation IFRIC 16 Philippine Interpretation li'RIC 17 Philippine Interpretation li'RIC 1HRIC Philippine Interpretation 19.

The Far Eastern University, Incorporated- and Subsidiaries

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

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

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

The Group's interest in a jointly controlled entity is recognized in the consolidated financial statements of the Group using the equity method. The Group's share of the profit or loss of the JV is adjusted for any unrealized profits arising.

Business Combinations

Financial Assets

Financial assets (except 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 significant risks and rewards of ownership have been transferred. Any gain or loss arising from the derecognition of an asset (calculated as the difference between the net proceeds from disposal and the book value of the asset) is included in the profit or loss in the year in which the asset was derecognised.

Investment Property

This includes the cost of construction, applicable borrowing costs (see Note 2.18) and other costs directly related to bringing the asset into working order for its intended use. The transfer is made of the long-term tangible invested asset when and only when there is a change in use, evidenced by the beginning of ownership by the owner or the beginning of development with the intention of selling.

Financial Liabilities

Transfer is made to investment property when, and only when, there is a change in use, as evidenced by the end of owner-managed, commencement of an operating lease to another party or by the end of construction or development.

Provisions and Contingencies

Similarly, potential inflows of economic benefits to the Group that do not yet meet the criteria for recognizing an asset are considered contingent assets, so they are not recognized in the consolidated financial statements. On the other hand, any reimbursement that the Group can be virtually 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. Impairments are charged pro rata to the 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 a component of tax expense in profit or loss. Only changes in deferred tax assets or liabilities related to items recognized in other comprehensive income 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 PFRS, require management to make judgments and estimates that affect the amounts reported in the consolidated financial statements and related notes. Judgments and estimates are continually evaluated and are based on past experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical Judgments in Applying Accounting Policies

BOT has overall responsibility for establishing and monitoring the group's risk management framework. A description of the group's risk management objectives and policies for financial instruments can be found 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

CASH AND CASH EQUIVALENTS

Taking into account the limitation on such amount of cash and cash equivalents, it is included as part of the Other current assets account in the consolidated statements of financial position. With respect to the improvements made to the Crans Montana property, the University made advances to contractors amounting to P52.0 million as of March 31, 2010.

AVAILABLE-FOR-SALE INVESTMENTS

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

REAL ESTATE HELD-FOR-SALE

The related fair value gains or losses are presented as part of Financial Income (Cost) in the 2012 and 2011 consolidated statements of comprehensive income (see Note 19). The net changes in 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, are included as part of Finance Costs in the 2012 and 2011 consolidated statements of comprehensive income while the related liability is presented as part of accrued expenses under accounts payable and other liabilities in the 2012 and 2011 consolidated statements of financial position (see Note 14).

INVESTMENTS IN AN ASSOCIATE AND A JOINT VENTURE

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

Total outstanding receivables resulting from this transaction of P61.5 million. is presented as part of receivables under the receivables account in the consolidated statement of financial position for 2012. Total gain recognized from this transaction amounted to P211.6 million. and is presented as a gain (loss) on the sale of investment property account in the 2010 consolidated statement of.

ACCOUNTS PAYABLE AND OTHER LIABILITIES

The payment to the contractor represents the amount owed to the 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 contribution determined by the pension board, which is the sum of the contributions of the employees and the university. The employees' contribution amounts to 5% of the basic salary, while the university's contribution corresponds 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

Mga Sanggunian

NAUUGNAY NA DOKUMENTO

2 A person will be deemed to have an indirect beneficial interest in any equity security which is: A held by members of a person's immediate family sharing the same household; B