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Academic year: 2023



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The debt-to-assets ratio measures the amount of funds provided by creditors relative to the total amount of the Group's assets. The equity to assets ratio measures the amount of assets provided by the owners relative to the total assets of the group.

CORPORATE INFORMATION 1 Background of the University

The Condensed Consolidated Financial Statements (CCFS) of the Group for the nine months ended 29 February 2020 (including the comparisons for the nine months ended 28 February 2019) were approved for issue by the Audit Committee of the BOT on 6 April 2020.


The items included in the consolidated financial statements of the Group are measured in its functional currency. The management estimates that the amendments do not have a significant impact on the consolidated financial statements of the Group. Management estimated that the clarification had no significant impact on the Group's consolidated financial statements.

The amendments clarify that the interest previously held in a joint operation will be remeasured when the Group takes control of the business. Among the provisions of the RCC, the following would affect the Group's consolidated financial statements: Leases that do not transfer to the Group substantially all the risks and rewards of ownership of the asset are classified as operating leases.

The Group determines whether an agreement is, or contains, a lease based on the substance of the agreement.


The Group has elected to account for short-term leases (less than 12 months) and leases of low-value assets (the value of the asset is based on its cash price if purchased) using practical means. BOT has overall responsibility for establishing and overseeing the Group's risk management framework. The Group's exposure to price risk arises from its investments in equity securities, which are classified as part of financial assets in the FVTPL accounts and financial assets in the FVOCI accounts in the consolidated statements of financial position.

The Group's exposure to credit risk for its other receivables from debtors and related parties is managed through close account monitoring and setting limits. Also, none of the Group's financial assets are secured by collateral or other credit enhancements; except for cash and cash equivalents as described above. In relation to the credit risk arising from its financial assets, the Group's maximum exposure is equal to the book value of these instruments.

The Group has no overdue but unvalued financial assets at the end of each year.


Treasury controls and procedures are in place to ensure that sufficient cash is held to cover day-to-day operating and working capital needs. Management closely monitors the Group's future and contingent liabilities and ensures that sufficient cash is collected in the future to meet them in accordance with internal policies. All other financial assets and financial liabilities are settled on a gross basis; however, each party to the financial instrument (i.e. related parties) has the option to settle all such amounts on a net basis by approval of the BOT or BOD of both parties.

As such, the Group's outstanding receivables from and payable to the same related parties, if any, may be offset to the extent of their corresponding outstanding balances.


The above tables show the hierarchy of fair value of the classes of financial assets and financial liabilities of the Group measured at fair value in the consolidated statements of financial position on a recurring basis from:. Accordingly, the Group no longer presented a comparison of their fair values ​​with their book values ​​and, accordingly, their level in the fair value hierarchy. The following tables show the levels in the hierarchy of non-financial assets measured at fair value as of February 29, 2020 and May 31, 2019.

The fair values ​​of these non-financial assets were determined based on the following approaches: i) Fair value measurement for land. Under this approach, higher estimated costs used in the valuation will result in higher fair value of the properties. There were also no transfers to or out of the various levels of the fair value hierarchy per 29 February 2020 and 31 May 2019.

There were no transfers into or out of Level 3 fair value hierarchy during the periods ended 29 February 2020 and 31 May 2019.


Segment assets include all operating assets used by a segment and consist primarily of operating cash and cash equivalents, trade and other receivables, financial assets at FVTPL, financial assets at FVTPL, investment securities at amortized cost , real estate held for sale, investment properties, and property and equipment. Segment assets do not include investments in a participation, deferred tax assets and other assets that are not allocated to the assets of any segment. Segment liabilities include all operating liabilities as presented in the consolidated statements of financial position, with the exception of deferred tax liabilities.

Segment revenues, costs and performance include revenues and purchases between business segments and between geographic segments. Quezon City, Cavite and Muntinlupa Marikina City Manila Makati Batangas City and Rizal Total February 29, 2020 (unrevised). Presented below and on the following page is a reconciliation of the Group's segment information to the key financial information presented in its consolidated financial statements (in thousands) for the nine months ended February 29, 2020 and February 28, 2019 and as of February 29, 2020 and May 31, 2019.



Based on the most recent valuation report of an independent appraiser, the total fair value of the investment properties amounted to P205.1 million as of February 29, 2020 and May 31, 2019. Fair value measurement information and related disclosures the invested properties are presented in Note 6.4.


The outstanding principal and other relevant details of the Group's outstanding loans are shown as follows:. Relate to loans with a local commercial bank subject to loan agreements beginning with the current fiscal year that require the university to maintain a debt service coverage ratio of at least 1.2x and a debt to equity ratio of no more than 2:1. The base rate is determined based on the Philippine Trading System Treasury Reference three-month bid yield for Philippine government securities.

The total interest owed by the Group on all these loans is shown as part of financial expenses in the consolidated statements of profit or loss, while all outstanding interest liabilities are recognized as part of operating and other liabilities in the consolidated statements of financial position. As of February 29, 2020 and May 31, 2019, there are no funds that are used and/or required as collateral for interest-bearing loans and Group loans. Also, as of February 29, 2020 and May 31, 2019, the Group is in compliance with the requirements and conditions related to the loans taken out.


During the year ended 31 May 2019, the university reversed part of the grants, as the purpose of the grants was fulfilled. In the period ending 29 February 2020, the university granted an additional grant for the purchase of equipment and fixtures. Such a grant is expected to be realized within one year from the end of the reporting period.

In the same period, the university reversed grants when the purpose of these grants had been fulfilled. Management considers that the university has de facto control over FRC, even though it holds less than 50% of the voting shares in FRC, because it is exposed or entitled to variable returns through its power over FRC (see note 1.1). In the event of voluntary or involuntary liquidation, dissolution, distribution of assets or winding up of EACCI's or FEUAI's operations, the holders of preference shares shall have preference and priority with respect to EACCI's or FEUAI's net assets or the proceeds thereof over the holders of ordinary shares.

The University holds a 51% stake in Edustria Incorporated, a newly formed subsidiary jointly owned with TIP, established to operate as an educational institution (see notes 1.1).


During the year ended 31 May 2019, BOT EACCI declared cash dividends to all its shareholders. February 28, 2019; therefore, diluted EPS is equal to basic EPS for all periods presented.


Accordingly, the University and EACCI have been released and exempted from all deficiency tax assessments until tax year 2019. Likewise, as of the same date, the University is sued in certain civil cases pending before the National Labor Relations Commission, the Court of Appeals and the Supreme Court. Per 29 February 2020 no final decision has been made by the courts in the above cases; therefore, no provisions are recognized for unforeseen expenses.

There are recognized provisions in the consolidated statements of financial position that arise in the normal course of certain subsidiary's operations. There are also other contingencies that arise in the normal course of business that are not recognized in the Group's consolidated financial statements. Management believes that losses, if any, arising from these provisions, obligations and contingencies will not materially affect its consolidated financial statements, however the Group has chosen to cover a generally applicable portion of its retained earnings for such contingencies.

CAPITAL MANAGEMENT OBJECTIVES, POLICIES AND PROCEDURES The Group aims to provide shareholder return on equity while operationally managing.

CAPITAL MANAGEMENT OBJECTIVES, POLICIES AND PROCEDURES The Group aims to provide returns on equity to shareholders while managing operational

This is in accordance with the University's banking covenants relating to its borrowings, which require the University to maintain a debt structure ratio of no more than and debt service coverage ratio of at least 1.2x. The University has met its covenant obligations, including maintaining the required debt-to-equity ratio for all years presented. There was no significant change in the Group's approach to capital management during the periods presented.


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A self-administered questionnaire served as the tool to determine the profile of respondents, services provided by the cooperative and frequency rate of availment by members, overall