CENTURY PACIFIC FOOD, INC. AND SUBSIDIARIES (A Subsidiary of Century Pacific Group, Ine, Formerly Century Canning Corporation) Consolidated Financial Statements ‘December 31, 2015 and 2014 and Independent Auditors’ Report Suite 505, Centerpoint Building, Julia Vargas St., Ontigas Center Pasig City, Metro Manila, PhilippinesCenterpoint Building, Julia Vargas Ave,, (Ortigas Center, Pasig City, Philippines & CENTURY PACIFIC FOOD, INC. woncntmcnconsh STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS: ‘The management of Century Pacific Food, Inc. is responsible for the preparation and fair presentation of the consolidated financial starements, including the additional components therein, for the years ended December 31, 2015 and 2014, and the period October 25, 2013 to December 31, 2013, in accordance with Philippine Financial Reporting Standards. This responsibility includes designing and implementing internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud ‘or errs, selecting and applying appropriate accounting polices, and making accounting estimates that are xeasonable in the circumstances. ‘The Board of Directors reviews and approves the financial statements and submits the same to the stockholders or members. Navarro Amper & Co., the independent auditors, appointed by the stockholders has examined the Gnancial statements of the compaay in accordance with Philippine Standards on Anditing, and in its report to the stockholders or members, has expressed its opinion on the fairness of presentation upon completion of such examipa; j CHRISTOPHER T. PO Chairman of the Board/Chief Executive Officer oscar Wt POBRE Chief Financial Officer Signed this 31st day of March, 2016 Note For issers of securities the public tbe SMR should be signed under oath.SUBSCRIBED AND SWORN to before me this _APR14 2016 at Pasig City, affiants exhibiting to me his/ their Tax Identification Numbers, as follows: [AMES TINNO. Christopher T. Po 119-779-651 Oscar A. Pobre 138-775-570 Doc.No: 20; Page No.:___ 9 Book No. __¥ Series of 2016. KRISTINE Appomiment Ng ‘yotary Pbn hor Pose city ‘Unt December 33,2017 Aitorney's Rol No. 60858 1318 Floor The Ovent Square FeOrugas i Road, Ortigas Contes Pasig Cy PTRNo, 1385890. 03 0516, Pasig BP Nos 1018258, 04.06.16, ASMNavarroAmper&Co. tence 1a" sor Net Lis Plaza sh avenue comer 26" sire Bonifacio Global City, Tagug 1634 Phiippines Tek: 4032 581 9000 Fae 9637 869 2676 wae dette corp BOAPIRC Reg, No, 0904 SEC Accreditation No, OTR INDEPENDENT AUDITORS’ REPORT. ‘The Boaed of Directors and Shareholders CENTURY PACIFIC FOOD, INC. (A Subsidiary of Century Pacific Group, Inc. formerly, Century Canning Corporation) Suite 505, Centerpoint Building, Julia Vargas St, Ortigas Center Pasig City, Metro Manila Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of Century Pacific Food, Inc. and subsidiaries, which comprise the consolidated statements of financial position as at December 31, 2015 and 2014, and the consolidated statements of comprehensive income, covsolidated statements of changes in equity and consolidated statements of cash flows for the years ended December 31, 2015 and 2014 snd the period October 25, 2013 10 December 31, 2013, and a summaty of significant accounting policies and other explanatory information. Managentent’s Responsibility for the Consolidated Financial Stateoents ‘Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Philippine Financial Reporting Standards, and for such intemal control as Managemeat determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or etzor. Auditors Responsibility Our responsibilty is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Philippine Standards on Auditing. ‘Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from ‘material misstatement, An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. ‘The procedures selected depend on the auditors? judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the aucit evidence we have obtained is sufficient and appropriate to provide a basis, for ovr audit opinion. . HNL Deloitte. vitae emtreactorar csOpinion Tn our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Century Pacific Food, Inc. and subsidiaries as at December 31, 2015 and 2014, and their financial performance and their cash flows for the years ended December 31, 2015 and 2014 and the period ended Decembet 31, 2013 in accordance with Philippine Financial Reporting Standards. Navarro Amper & Co. BOA Registration No. 0004, valid from December 4, 2015 to December 31, 2018 SEC Accreditation No. 0001-FR-4, issued on January 7, 2016; effective until January 6, 2019, Group A “TIN 005299331 By: ancis B. Albalate Hartner CPA License No. 0088499 SEC AN. 0104-AR-4, issued on June 30, 2015; effective until June 29, 2018, Group A TIN 120319015 BIR A.N. 08-002552-32-2014, issued on October 3, 2014; effective until October 3, 2017 PIR No. A-2798353, issued on January 6, 2016, Taguig City Taguig City, Philippines March 31, 2016CENTURY PACIFIC FOOD, INC. AND SUBSIDIARIES Subsidiary of Century Pacific Group, Inc. formerly, Century Canning ‘CONSOLIDATED STATEMENTS OF FINANCIAL POSITION December 31 Notes 2015 2014 ASSETS Curcent Assets Cash and cash equivalents 8 P 722,164,343 P1,264,209,896 “Trade and other receivables net 9 3,592,691,726 2,561,731 689 ‘Due from related pasties n 41,309,475 212,656,754 Held-to- maturity investments ~ eurrent 10 14,686,601 152,435,863 Inventories - net " 5,925,978,924 5,194,205,392 Biological assets 4 31,429,138 37,478,189 Prepayments and other current assets net 2 218,683,647 113,611,442 “Total Content Assets 10,547 003,851 541 329.125 ‘Non-cusrent Assets Held-to-matusty investments - non current 20 13,108,859, 28230,588 Propesy, plant and equipment net 5 3,133,982,196 1,421,369,020 Jotangible assess 3 2,955,325,199 40,000,060 Deferred tax assets 33 81,725,977 56,683,629 Other non-current assets 16 50,842,437 wo1a12,707 “Total Non-current Assets 6,234,944,668 1,647,395,944 P16,781,948,519___P11,188,725,069) LIABILITIES AND EQUITY Cursent Liabilities Notes payable aw 2,250,000,000 =P 2 “Trade and other payables 18 3,863,970,207 4,099,492,499 Income tax payable 146,533,363 128,489,582 Due to related pasties 2 13,979,192 286,074,805 “Total Current Liabilities 6,274, 482,762 4,514, 056,886 ‘Noa-Current Liabilities Deecsed tax lability 3 3,594,077 460,022 Retizement benefit obligation 19 157,039,771 93,870,878 “Total Non-current Liabilities 160,633,848, 94330,900 6.435,116,610 4,608.387,786 Equity Shaee pital 20 2,360,685,935, 2,231,021,604 Shave premium 20 4,911,986,439 2,769,337,810 Shae-based compensation reserve 28 5,262,300 3,376,984 Other reserves 5 30,628,942 30,628,942 Cusseney translation adjustment 5 48,506,727 19,477,591 Retined exrnings 29 2,989,761,508, 494,752 “Total Equity 10,346,831,909 ‘oul Liabilities and Equity P16,781,948,519___P11,188,725,069 ‘See Notes 0 Contoudated Finencial Statements,‘CENTURY PACIFIC FOOD, INC. AND SUBSIDIARIES (a Subeiinyof Century ace Gop, le, formed Canning Comoro ‘CONSOLIDATED STATENENTS OF COMPREHENSIVE INCOME or the Years Bade Decembe I, 218 and 2018 andthe Two Months Ended December 32013 7 ae Ey Noes __(OneVeur) (Om Ye (ee Mona Net eveouss| 2) PASSDAARSTD—PAyBKSSSUN—PIA21ga14 Cort of Goods Sold 2 WrArmisao _wspaayosow 131420577 ‘Grom Prose 69666507 ——SST4sG1900 10401927 Other Income 2 swoasi7nt___"s.007 23307788 Gaesig18 E5540 sates Opening Espen 24 smsoaa6 ago «SSCA Other Espenses 3 3912300 sas. 19.5 Finanoe Goat a 118883, se 9H ngs 3306104 3274s 459.299 Profi (Loss) Before Tae 27M 0769 228279 sca) acon Tax Denefic (xpense) 2 ost) "(ois 30 ‘sr7208 Profi (Las forthe Period senaTIS 1571590382 e724) ‘Other Comprehensive Income (Loss) ‘ee hat wil be Recasied Subsoguealy o Profit ot Loss Casey nan ajuemers 5 apans.as6 169350 4s0s2it ‘ecm hat will not be Reclasifed Subsequent to Profit ot Lass lf of eucanenenofetcamen bene obligation = tof we 19 3200700) 8368519) 13516 4525485 904529) 1472057 “Total Comprehensive Income Ppsgseazis _P1s8235 906 13376507 asc a Died Pains Po See 0 Past ro7ua e000 + Ths Paco Company was epee wit the Securit ad Kachange Commision on Oca 25, 201%‘tee ee sno 90 vow snap pa enema ep pao we Sone mE Wikia erred —_avanGliGhd Teo OTET Te TEMG HN TERT ca SS ET RT caves eactoneri we Wee oeveatez . TORT TavTEOTEET caine, te worse @ wae w oseor's 5 ewer ansevoe oncongoost RTE e : pean os) 4 7 ogtotvosta oe Say RT ay se 0 resus ames poses x14 NI SSONVHD do SUNaWLELVIS GaLVArTOSNOD RE ry Desig pena or tery gerd oD ese WT SANIVIAISANS NY "ONIGOOs DsIOVa KAALNADCENTURY PACIFIC FOOD, INC. AND SUBSIDIARIES Sdn of Coty Pie Gon, Tn, fone, Ceara Cn ‘CONSOLIDATED STATEMENT OF CASH FLOWS. Fore Yeus Bed Desember 3, 2015 and 20H andthe Two Months Kaded December 3, 20s ae a Notcr___(One'Yeu) (Ore Vox) Monthpt (Cash Flows rom Operating esis rf (le ef tae P aruames —raasn79s © 56848 dence oe ‘Depeiien, 6 wsgasgse —asa7oae BRITT Retirement bene expense » smo == unzase 2460 Lens mete mle a riginss «= ThmasT ata non ipatment ofigpt VAT 2 1420 : - Unt og echange los i) 4.0857 53002) ~ bf com expat ° ssn 3030743. 2 Pooidoae 6 816262 3 : Lost on din in rae of vector 0 sia g : ose je) on pol f rope ana pret 5 3550869 ome asian Sse be orpenatin expense » sar6os4 . Feomer ote ” samo 3s? oyron vai: of emset bret ion » ‘995909 = lotion 2 passa wn. ‘Open Hows eles wong apt changer Basaie’s 2476466 Decree (nro) in Trade and ter scree csieonrm, (swig sys8 ‘Due ee pares Maman — possinas) —@iser87H leven, (s6rs35) B6ws755 —TSTTES300 lel ete ‘peas TAS) repamesia and ober ener ate tora 24566061 sans2o0 Othernrreurent emt Sesto CATHOLIC werent Dees i Traded ether pb aoxena4y — aposrazann Bs 980.226) eto wl pains uamaassyen —suns3720 - Eachuge cific on nning opting wc and ables (@27sysmusarass 1 415.05 ‘Cah gos rom operons weaisa0 7377012 «SAND ‘Cota 0 he ren fee » Geis) — GSA TES) Income te Canaan eR — erase Innes ed osra0 [Neti fom ue i) opr sie (Gaseomy — 2anes 10,75 ‘Cash Flows fm Inveriog Ave Aspe eid eh asi) 1 Baseatas6) = gasostasi) ‘Aso of pepe, pant nd eguent 15 GuMerasi)—97B6 Ky GHAATTA) ruses fom popes plat and enspm serena amc 78,701 90 aie (Ruin) of HTM insets 0 istaio00 —(a51820) : Invert nen rece 2595914344709 0300 Neth medi rong ies rpwTon —_Goes5a779 own FTA TEN, ‘Cash Flow rom Financing Activin ‘Proceed frm insice of oe ep 228 AamgIssss—5smgsy4 1. st0~000m0 Prowse fom nes pale 1 2asmtan000 : Divide pad a (4520421) e = etic om ted pari t Sagas. Netsepanent fos ” S eakecons, — 95782998) nao cons pid Z oszmpw cise [Neca fws Goacing sie Ae7G9097—_1aTUNTIeS—_Laz2s82913 "Net Incteae(Decrest in Cah a Cath Equivalents Gaeissss) — RasaHiaey TACT ‘ 1265208 sigan a P2149 06CENTURY PACIFIC FOOD, INC. AND SUBSIDIARIES A Subsi of Century Pacific Group, Inc., formerly, Century Canning Corporatio NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2015 AND 2014 AND FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 AND FOR THE PERIOD OCTOBER 25, 2013 TO DECEMBER 31, 2013 CORPORATE INFORMATION Century Pacific Food, Inc. (the “Parent Commpazny” or “CPFT”) was incorporated and registered with the Philippine Securities and Exchange Commission (SEC) on October 25, 2013. ‘The Parent Company is primarily engaged in the business of buying and selling, processing, canning and packaging and manufacturing all kinds of food and food products, such as but not limited to fish, seafood and other marine products, cate, hog and other animals and animal products, fruits, vegetables and other agricultural crops and produce of land, including by-products thereof, ‘The Parent Company's shares of stocks were listed in the Philippine Stock Exchange (PSE) ‘on May 6, 2014 through initial public offering (IPO) and listing of 229.65 million shares in the PSE at a total value of P3.3 billion, as discussed in Note 20. ‘The Company is 73.72% in 2015 and 89.7% in 2014 owned subsidiary of Century Pacific Group, Inc. (CPGI) formerly, Century Canning Corporation (CCC), the ultimate patent, « corporation registered with the SEC and domiciled in the Philippines, ‘The Company's registered office and principal place of business, is located at Suite 505, Centerpoint Building, Julia Vargas St, Ortigas Center, Pasig City, Metro Manila ‘The Parent Company has the following subsidiaries as at December 31, 2015 and 2014: Ownership Interest, 2015 2014 General Tuna Corporation (GTC) 100% 100% Snow Mountain Dairy Corporation (SMDC) 100% 100% Allforward Warehousing, Inc. (AW) 100% 100% Century Pacific Agricultural Ventures, Inc. (CPAVI) 100% . Century Pacific Seacrest Inc. (CPSI) 100% - Centennial Global Corporation (CGC) 100% : GTC was incorporated in the Philippines and registered with the SEC on Mazch 10, 1997, It is presently engaged in manufacturing and exporting private label canned, pouched and frozen tuna products. Its processing plant is located at the National Highway, Bray. Tambler, General Santos City. On September 25, 2012, the BOD approved GTC’s registration as a new expanding export producer of frozen tuna loins on a non-pioneer status. GTC is entitled to income tax holiday (TH) for a period of three years beginning February 1, 2013 because of the project’ ability to conizibute to the economy's development pursuant to Article 7 of Executive Order No. 226, based on the following parmmeters in this order: (1) project’s net value added; (2) job generation; (3) multiple effect; and (4) measured eapacity. SMDC was incorporated in the Philippines and registered with the SEC on February 14, 2001, SMDC is engaged in producing, canning, freezing, preserving, refining, packing, buying and selling at wholesale and zetail, food products including all kinds of mille and dairy products, fuits and vegetable juices and other milk or dairy preparations and by-products, Tt principal place of business is located at 32 Arturo Drive, Bagumbayan, Taguig City MOAANT was incorporated in the Philippines and registered with the SEC on October 3, 2014 to engage in the business of operating cold storage facilites, handling, leasing, maintaining, buying, selling, warehouse and storage facilities, including its equipment, forklif, conveyors, pallet towers and other related machincties, tools and equipment necessary in warchousing, snd storage operation. Its principal place of business is located at Units 701 -706, 7 Floor, Centerpoint Building, Julia Varges St. comer Garnet Road, Ortigas, Pasig City. CPAVI was incorporated in the Philippines and registered with the SEC on August 29, 2012 to engage in the business of manufacturing and distributing all kinds of food and beverage products and other foodstuffs derived from fruits, and other agricultural products Its principal place of business is located at Suite 505, Centerpoint Building, Julia Vargas St. corner Garnet Road, Ortigas, Pasig City. (On December 22, 2015, the Pasent Company entered into a share purchase agreement with CPGI to acquire 100% equity interest in CPAVI for a total purchase price of P3,396,810,681. To facilitate the acquisition, the Parent Company availed of short-term loans of P2.25 billion fom certain financial institutions, as disclosed in Note 17. ‘The agreement also provided for the Parent Company to advance to CPAVI a total amount of P1,103,189,333 for the lattes to pay its advances to CPGI. ‘The sale was completed when CPGI and the Parent Company signed the deed of absolute sale covering the CPAVI shares on December 29, 2015. CPSI was incorporated and registered with the SEC on November 13, 2015 to engage in the business of developing and designing, acquiring, selling, transferring, exchanging, managing, licensing, franchising and generally to exercise all rights, powers and privileges of ownership cor granting any right or privilege of ownership of any interest to label marks, devices, brands, trademark rights and all other forms of intellectual property, including the tight to receive, collect and dispose of any and all payments, dividends, interests and income derived from therefrom. Its principal place of business is located at the 7th Floor, Centerpoint Building, J. Vargas Ave. comer Garnet Road, Ortigas, Pasig City. CGC was incorporated in the British Virgin Islands (BVI) on November 13, 2006. CGC is a company limited by shares. CGC’s registered office is at P.O. Box 957, Offshote Incorporations Centre, Road Towa, Tortola, British Virgin Islands and its registered agent is Offshore Incorporations Limited. On February 25, 2015, the Parent Company acquired 100% interest in CGC, the corporate vehicle that holds the various brands, trademarks, and related intellectual propesty of the Century Group of Companies. On February 15, 2015, the Company acquired the shares for $100, or P4438, representing 100% in CGC from Shinning Ray Limited, a wholly owned subsidiary of CPGL CGC holds the various brands, trademarks, and related intellectual property of the Century Group of Companies. On December 28, 2015, CGC sold certain trademarks to CPSI for a total consideration of P50,000,000 FINANCIAL REPORTING FRAMEWORK AND BASIS OF PREPARATION AND. PRESENTATION Statement of Compliance ‘The consolidated financial statements of the Parent Company and its subsidiaries (the “Group”) have been prepared in accordance with Philippine Financial Repotting Standards (PFRS), which includes all applicable PFRS, Philippine Accounting Standards (PAS), snd interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC), Philippine Interpzetations Committee (PIC) and Standing Interpretations Committee IC) as approved by the Financial Reporting Standards Council (FRSC) and the Board of ‘Accountancy (BOA), and adopted by the SEC. ilBasis of Preparation and Presentation Basis of Preparation ‘The consolidated financial statements have been prepared on the historical cost basis, except for: + certain financial instruments carried at amortized cost; + inventories carried at the lower of cost and net realizable value (NRV); and + reticement benefit obligation recognized as the net total of the present value of the obligation less fair value of plan assets, Histotical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an otderly tuansaction between market participants at the measurement date, regardless of whether that price is directly observable of estimated using another valuation technique. In estimating the fair value of an asset ot a liability, the Group takes into account the characteristics of the asset or liability if masket participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for ‘measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of PFRS 2, leasing transactions that ate within the scope of PAS 17, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in PAS 2 or value in use in PAS 36. In addition, for financial reporting purposes, fair value measurements are categorized into Levels 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows © Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; + Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or lability either ditectly or indirectly; and + Level 3 inputs are unobservable inputs for the asset or liability. The financial statements of the Group have been prepared on the historical cost basis, except for certain financial instruments carried at amortized cost. Functional and Presentation Currency ‘These financial statements are presented in Philippine Peso, the currency of the primary ‘economic envionment in which the Group operates. Allamounts are presented in the neatest Peso unless otherwise indicated. ‘The separate financial statements of GTC are presented in United States (US) Dollar, the currency of the ptimary economic environment in which it operates. GTC’s financial statements are presented in Philippine Peso as its presentation currency. GTC translated its financial position and results of operations from US Dollar to Philippine Peso using the following procedures ‘+ assets and Liabilities for each statement of financial position presented, are presented at the closing rate at the date of that statement of financial position; + for each period presented, income and expenses recognized in the period are translated using the average exchange rate at that periods and + all resulting exchange differences are recognized in other comprehensive income (OCD as curreney translation adjustment. SOBASIS OF CONSOLIDATION AND COMPOSITION OF THE GROUP Basis of Consolidation and Non-controlling Interest ‘The consolidated financial statements incorporate the financial statements of the Patent Company and all subsidiaries it controls, Control is achieved when the Patent Company has power over the investee, is exposed, of has tights, to variable retumns from its involvement ‘with the investee; and has the ability to use its power to affect its returns, The Parent Company reassesses whether or not it controls an investee if facts and ciccumstances indicate that there are changes to one or more of these three elements of control ‘When the Parent Company has less than a majority of the voting rights of an investe, it has power over the investee when the voting tights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. ‘The Parcat Company considers all relevant facts and ciceumstances in assessing whether ot not the Parent Company’s voting rights in an investee are sufficient to pive it power, including: + the size of the Parent Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holdets; ‘+ potential voting rights held by the Parent Company, other vote holders ot other parties; ‘© ghts arising from other contractual artangements; and ‘© any additional faets and circumstances that indicate that the Parent Company hes, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous sharcholders’ meetings. Composition of the Group Details of the Parent Company's subsidiaries as at December 31, 2015 and 2014 are as follows: (Ownership Interest 2015 2014 General Tuna Corporation (GTC) 100% 100% Snow Mountain Dairy Corporation (SMDC) 100% 100% Allforward Warehousing, Inc. (AW!) 100% 100% Century Pacific Agricultural Ventures, Inc. (CPAVI) 00% - Century Pacifie Seacrest Inc. (CPSI) 100% - Centennial Global Corporation (CGC) 100% - “The significant financial information on the financial statements of wholly owned subsidiaries of the Parent Company as at and for the periods ended December 31, 2015, 2014 and 2013 are shown below. ‘The summarized financial information below represents smounts before intragroup eliminations, ULcrc ‘The significant information on the audited financial statements of GTC as translated to its preseotation currency as at and for the periods ended December 31, 2015, 2014 and 2013 are as follows: 2015 2014 2013 Financial Position Current assets P2,657,391,874 P3,214,412,312P2,667,452,209 Non-current assets 798,459,762 747,268,895 674,620,902 “Total assets 3,455,851,636 __ 3,961,681,207 _ 3,542,073,111 Current liabilities 2,378,726,302 3,053,369,615 2,597,767,176 Non-current liabilities 15,056,760 3,785,440 598,656 Total liabilities 2,393,783,062__3,057,155,055__2,598,365,832 Bgui P1,062,068,574 _P_904,526,152_P_ 743,707,279 Results of Operations Revenue P5,484,596,163P5,384,279468 P5,989,543,372 Cost and expenses 5,336,462,276 _5,225,446,450__5,852,025,893 Profit for the period P_148,133,887_P_158,833,018_P_157,517,679 sMDC 2015 2014 2013 Financial Position Current assets P 1,103,874,398 P $37,049,852 P 679,327,353, Non-current assets 238,422,232 251,060,281 __ 210,393,858 Total assets 1,342,296,630__1,088,110,133 889,721,211 Current liabilities 494,507,744 418,238,460 382,700,568 Non-current liabilities 57,865 = - “Total liabilities 494,565,609 418,238,460 ___ 382,700,568 Equity P_ 847,731,021 _P 669,871,673 _P 507,020,643 Results of Operations Revenue P2,466,620,708 P2,035,611,340 PI, Cost and expenses 2,288,199,446 _1,872.417,060 _1,514,587,292 Profit for the period P_178,421,262_P_163,194,280_P 41,771,589 NAA A4 Awl 2015 2014 2013 Financial Position Current assets P.69,400,168 18,751,667 P- Non-current assets 245,545,511 328,345 és “Total assets 314,945,679 19,080,012 = Current liabilities 212,920,612 1,094,067 - Non-current liabilities 87,323,707 2 a “Total Liabill 300,244,219 1,094,067, - Equity P14,701,460_P17,985,943 P- Results of Operations Revenue P 7311841 P 3 Pp Cost and expenses 10,596,027 764,055 - ‘Loss for the petiod P_ 3,284,486) 764055) “The significant information on the Gnancial statements as at and for the year then ended December 31, 2015 for CPAVI and CGC, and for the period November 13, 2015 to December 31, 2015 for CPSI are as follows: _ CPAVI Pst cee Financial Position Current assets P_ 581,892,639 P50,000,761 50,000,000 Non-current assets 1,085,239,441, 25,113,012 : Total assets 1,667,132,080 75,113,773 50,000,000 ‘Curtent liabilities 1,278,564,433___25,376,387 : Equity P 388,567,647 __P49,737,416 _P50,000,000 Results of Operations Revenue P - P 4,111 50,000,000 Cost and expenses : 263,695 - Profit (Loss) for the period (P _ 262,584) _P50,000,000 ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS Adoption of New and Revised Accounting Standards Effective in 2015 ‘The following new and revised accounting standards and interpretations that have been published by the International Accounting Standards Board (TASB) and issued by the FRSC in the Philippines were adopted by the Group effective on January 1, 2015, Annual Improvements te TERSs 2010-2012 Gyele ‘The annual improvements address the Following: Amendment to IFRS 2, Shar-baved Paynrent “The amendment provides new definitions of ‘vesting condition’ and ‘market condition’ and adds definitions for ‘performance condition’ and ‘service condition’ (which were previously part of the definition of ‘vesting condition’). ‘The amendment had no significant impact on the Group’s consolidated financial Satan OO TAmendment to IERS 3, Business Combinations (with consequential amendnents to other standards) This amendment clarifies that contingent consideration that is classified as an asset or a liability shall be measured at fair value at each reporting date. ‘The amendment had no impact on the Geoup’s consolidated financial statements Amendments to IFRS 8, Operating Segments ‘The amendments require an entity to disclose the judgments made by Management in applying, the aggregation criteria to operating segments, These also clarify that an entity shall only provide reconciliations of the total of the reportable segments” assets to the entity’s assets if the sepment assets are reported regula. ‘The amendments had no significant impact on the Group’s consolidated financial statements Amendment to PERS 13, Fair Vale Measurement famendntent fo the bass af conclusions on, with consequential amendnsens to the base of consions of tber standards) ‘This amendment states that issuing PFRS 13 and amending PERS 9 and PAS 39 did not remove the ability to measure shor'-term receivables and payables with no stated interest rate at their invoice amounts without discounting if the effect of not discounting is immaterial ‘The amendment had no significant impact on the Group's consolidated financial statements. Amendinent to PAS 16, Propery, Plent and Equipment ‘The amendment requires that when an item of propetty, plant and equipment is revalued, the gross carrying amount shall be adjusted in a manner that is consistent with the revaluation of the carrying amount. ‘The amendment had no impact on the Group’s consolidated financial statements. Amendment to PAS 24, Relaed Party Dislasans The amendment states that an entity providing key management personnel services to the reporting entity of to the parent of the reporting entity is a related party of the reporting catity ‘The amendment had no significant impact on the Group's consolidated financial statements, Amendment to PAS 38, Intangible Assets ‘The amendment requires that when an intangible asset is tevalued, the gross carrying amount shall be adjusted in a manner that is consistent with the revaluation of the carrying amount. ‘The amendment had no impact on the Group’s consolidated financial statements. Aunual Improvements to PERSs 2011-2013 Cle “These annual improvements address the following: Amendment to IFRS 3, Basiness Combinations “The amendment clarifies that IFRS 3 excludes from its scope the accounting for the formation of a joint arrangement in the financial statements of the joint arrangement itself ‘The amendment had no impact on the Group's consolidated financial statements. {OAH AAmendment to PERS 13, Fair Value Measurement ‘The amendment stresses that the scope of the portfolio exception defined in paragraph 52 of PFRS 13 includes all contracts accounted for within the scope of PAS 39, Financial Insironens: Reception and Measurentent, ot PERS 9, Pinancal Tnsroments, regardless of whether they meet the definition of financial assets or financial liabilities as defined in PAS 32, Financia! Instrument: Prsentation The amendment had no significant impact on the Group's consolidated financial statements. Amendments to PAS 19, Employee Benefits ‘The amendments clarify the requirements that relate to how contributions from employees or third parties that are linked to service should be attributed to periods of service. In addition, it pesinits a practical expedient ifthe amount of the contributions is independent of the number of years of service, in those contributions, can, but are not required, to be recognized as a reduction in the service cost in the period in which the related service is rendered. The amendments had no impact on the Group's consolidated financial statements as the Group does not have contributions from employees or thied parties that are linked to petiod of service. New Accounting Standards Effective after the Reporting Period Ended December 31, 2015, ‘The Group will adopt the following PERS when they become effective: ‘Amendments to PFRS 11, Accounting for Acquisitions of Interests in Jint Operations ‘The amendments clasfy the accounting for acquisitions of an interest ina joint operation when the operation constitutes a business such that the acquirer is required to apply all of the ppsinciples on business combinations in PFRS 3 nnd other PFRSs with the exception of those painciples that conflict with the guidance in PFRS 11. Accordingly, a joint operator that is an acquirer of such an interest has to: + measure most identifiable assets and liabilities at fair values + expense acquisition-telated costs (other than debt or equity issuance costs); + cecognize deferred taxes; + cecognize any goodwill or bargain purchase gain; + perform impairment tests for the cash generating units to which goodwill has been allocated: and ‘+ disclose information required relevant for business combinations. ‘The amendments apply to the acquisition of an interest in an existing joint operation and also to the acquisition of an intezest in a joint operation on its formation, unless the formation of the joint operation coincides with the formation of the business. ‘The amendments are effective for annual periods beginning on or after January 1, 2016. Earlier application is permitted but corresponding disclosures are required. ‘The amendments apply prospectively. ‘The future adoption of the amendments will not have an impact on the Group's consolidared financial statements as the Group does not have interests in joint operations. INQ CTAPERS 14, Regelatory Deftral Arconnts ‘The standard petmits an entity which is a first-time adopter of Intemational Financial Reporting Standards (IFRS) to continue to account, with some limited changes, for regulatory deferral account balances in accordance with its previous Generally Accepted Accounting Principles (GAAP), both on initial adoption of PFRS and in subsequent financial statements, Regulatory deferral account balances, and movements in them, are presented separately in the statement of financial position and statement of profit or loss and OCI, and specific disclosures, are required. The standard is effective for annual reporting periods beginning on or after January 1, 2016. Earlier application is permitted. ‘The future adoption of the standard will not have an impact on the Group's consolidated financial statements since the Group is no longer a first-time adopter of PFRS on its mandatory effective date Amendments to PAS 16, Property, Plant and Equipment ‘These amendments clavify that a depreciation method that is based on revenue generated by an activity that includes the use of an asset is not appropriate. This is because such methods seflects a pattera of generation of economic benetits that arise from the operation of the business of which an asset is part, ather than the pattern of consumption of an asset’s expected fature economic benefits, “The amendments are effective for annual periods beginning on or after January 1, 2016, Eatlier application is permitted. “The futuze adoption of the amendments will not have an impact on the Group's consolidated financial statements as the Group’s depreciation methods are not based on revenue. Amendments to PAS 16, Prperty, Plant and Egnipment, and Amendments to PAS 41, Asriceure ‘The amendments include ‘beater plants’ within the scope of PAS 16 rather than PAS 41, allowing such assets to be accounted for a property, plant and equipment and measured afier initial recognition on a cost or revaluation basis in accordance with PAS 16 and introduce definition of "bearer plants’ as a living plant that is used in the production or supply of agricultural produce, is expected to bear produce for more than one period and has a remote likelihood of being sold as agricultural produce, except for incidental scrap sales, However, the amendments clarify that produce growing on bearet plants remains within the scope of PAS 41. ‘The amendments are effective for annual periods beginning on or after January 1, 2016, with carlice application being permitted, The future adoption of the amendments will not have a significant impact on the Group's, consolidated financial statements. Amendments to PAS 27, Sépanale Financia! Statements ‘The amendments reinstate the equity method as an accounting option for investments in subsidiaries, joint ventures and associates in an entity’s separate financial statements, ‘The amendments are effective for annual periods beginning on of after Januaty 1, 2016, with earlier application being permitted. ‘The Group may in the future choose to adopt equity method in accounting for its investments in its subsidiaries instead of cost method in its separate financial statements. NANAAmendments to PAS 38, Iniangible Ascets ‘These amendments introduce rebuttable presumption that a revenue-based amortization method for intangible assets is inappropriate for the same reasons as in PAS 16, However, the TASB states that there are limited cizcumstances when the presumption can be overcome: + the intangible asset is expressed as a measure of revenue (the predominant limiting factor inherent in an intangible asset is the achievement of a revenue threshold); and + it can be demonstrated that revenue and the consumption of economic benefits of the intangible asset are highly correlated (the consumption of the intangible asset is directly linked to the revenue generated from using the asset. “The amendments are effective for annual periods beginning on or after January 1, 2016. Earlier application is permitted ‘The future adoption of the amendments will not have impact on the Group’s consolidated financial statements as the Group does not have intangible assets, Amendments to PERS 10, Consolidated Financial Statements, and PAS 28, Investments in Associates and Joint Ventures (2011) ‘The amendments include the following: + Amendment to PAS 28 (2011) so that the current requirements regarding the partial pain or loss recognition for transactions between an investor and its associate or joint venture only apply to the gain or loss resulting from the sale o contsibution of assets that do not constitute a business as defined in PERS 3, Business Combination, and the gain or loss resulting from the sale or contribution to an associate ot a joint venture of assets that constirate a business as defined in PFRS 3 is recognized in full, + Amendment to PERS 10 so that the gain or loss resulting from the sale or contribution of a subsidiary that docs not constitute « business as defined in PFRS 3 to an associate or joint venture is recognized only to the extent of unrelated investors’ interests in the associate or joint venture. ‘The amendments are effective for annual periods beginning on or after January 1, 2016. “The future adoption of the amendments will not have an impact on the Group’s consolidated financial starements as the Group does not have investments in associates and joint ventures. Annual Ingprotements to PFRSs 2012-2014 Cele ‘The annual improvements address the following Amendment to PERS 5, Now-cirent Assets Held for Sale and Disvontinned Operations ‘The amendment adds specific guidance in PERS 5 for cases in which an entity recassifies an asset from held for sale to held for distribution or vice versa and cases in which held-for-distribution accounting is discontinued. ‘The furure adoption of the amendment will not have an impact on the Group's consolidated financial statements. Amendments to PFRS 7, Financial Instrumente: Ditcosurs ‘The amendments provide additional guidance to clarify whether a servicing contract is continuing involvement in a transferred asset for the purpose of determining the disclosures required and clasification on the applicability of the amendments to PFRS 7 on offsetting disclosures to condensed interim financial statements. ‘The future adoption of the amendments will not have a significant impact on the Group's consolidated financial statements. LAAmendment to PAS 19, Haploye Benefits ‘The amendinent clarifies that the high quality corporate bonds used in estimating the discount rate for post-employment benefits should be denominated in the same currency as the benefits to be paid (thus, the depth of the market for high quality corporate bonds should be assessed at currency level) ‘The future adoption of the amendment will not have a significant impact on the Group's consolidated financial statements. Amendment to PAS 34, Inder Financial Reporting ‘The amendment clarifies the meaning of ‘elsewheze in the interim report’ and requires « cross-reference. ‘The fatuze adoption of the amendment will not have an impact on the Group's consolidated financial statements as the Group does not have interim financial reporting ‘The above improvements are effective for annual periods beginning on or afer January 1, 2016, However, eaely application of these improvements is permitted. Amendments to PFRS 10, PFRS 12 and PAS 28, Inesiment Butiter. Applying the Consolidation Exeeption ‘The amendments address the issues that have arisen in relation to the exemption from consolidation for investment entities: + Whether an investment entity parent should account for an investment entity subsidiary at frie value, when the subsigiary provides investment-related services to third partie. +The interaction between the investment entity amendments and the exemption from preparing consolidated financial statements requirements in PERS 10. Whether a non-iavestment entity must ‘unwind? the fair value accounting of its joint ventures ‘or associates that are investment entities. ‘An investment entity measucing all of its subsidiasies at fair value provides the disclosures selating to investment entities requited by PFRS 12. ‘These amendments will not have an impact on the Group's consolidated financial statements. Amendments to PAS 1, Presentation of Financial Statements ‘Phe amendments include the following: © Materiality. The amendments clarify that (1) information should not be obscured by ‘aggregating or by providing immaterial information, (2) materiality considerations apply to the all parts of the financial statements, and (3) even when a standard requires a specific isclosure, materiality considerations do apply. «© Statement of financial position and statement of profit or loss and other comprehensive income. ‘The amendments (1) introduce a clarification that the list of line items to be presented in these statements can be disepgregated snd apprepated as relevant and additional guidance on subtotals in these statements and (2) clatfy that an entity’s share of OCT of equity-accounted associates and joint ventures should be presented in aggregate as single line items based on whether or not it will subsequently be reclassified to profit or loss. + Notes. The amendments provide additional examples of possible ways of ordering the notes to clasify that understandability and comparability should be considered when determining the order of the notes and to demonstrate that the notes need not be presented in the order so far listed in paragraph 114 of PAS 1, ‘The IASB also temoved guidance and examples with regard to the identification of significant accounting policies that were perceived as being potentially unhelpful OTN‘The amendments are effective for annual periods beginning on or after January 1,2016. Earlier application is permitted. Application of the amendments need not be disclosed. ‘The future adoption of the amendments will not have a significant impact on the Group's consolidated financial statements, PERS 9, Financial Instruments (2014) ‘This standard consists of the following three phases: ‘Phase 1: Classification and measurement of financial assets and financial liabilities With respect to the classification and measurement under this standard, all recognized financial assets that aze cusrently within the scope of PAS 39 will be subsequently measured at either amortized cost of fair value, Specifically: +A debrinstrment that () is held within a business model whose objective isto collect the contiactual cash flows and (ji) has contractual cash flows that are solely payments of principal and interest on the principal amount outstanding must be measured at amortized cost (net of any write done for impairment), unless the asset is designated at fair value through profit or loss (FVIPL) under the fair value option, ‘+ Addebtinstrament that () is held within a basiness model whose objective is achieved both by collecting contractual cash flows and selling financial assets and (i) has contractual terms that give rise on specified dates to cash lows that are solely payments of principal and interest on the principal amount outstanding, must be measured at fait value through other comprehensive income (FVIOCD, unless the asset is designated at FVIPL. under the fair value option. + Allother debt instruments must be measured at FVIPL, +All equity investments ate to be measured in the statement of financial position at fair ‘value, with gains and losses recognized in profit or loss except that if an equity investment is not held for trading, an irrevocable election can be made at initial recognition to measure the investment at FVTOCI, with dividend income recognized in profit or loss. ‘This standazd also contains requirements for the classification and measurement of financial liabilities and detecognition requirements. One major change fom PAS 39 relates to the presentation of changes in the fair value of a financial lability designated as at FVIPL. attributable to changes in the credit risk for the lsbilty. Under this standard, such changes are presented in OCI, unless the presentation of the effect of the change in the liability ccedit risk in OCI would ereate or enlarge an accounting mismatch in profit ot loss, Changes in fair value attributable to a financial Lability’s credit risk are not subsequently reclassified to profit or loss. Under PAS 39, the entire amount of the change in the fair value of the financial ability designated as FVIPL is presented in profit ot loss. Phase 2: Impairment methodology “The impairment model under this standard reflects expected credit losses, as opposed to incurred credit losses under PAS 39. Under the impairment approach of this standard, itis no longer necessary for a credit event to have occurred before credit losses ate recognized. Instead, an entity always accounts for expected credit losses and changes in those expected credit losses. The amount of expected credit losses should be updated at each reporting date to reflect changes in credit risk since initial recognition. LTRPhase 3: Hedge accounting The general hedge accounting requirements for this standard retain the thzee types of hedge accounting mechanism in PAS 39. However, greater flexibility has been introduced to the types of transactions eligible for hedge accounting, specifically broadening the types of instruments that qualify 2s hedging instruments and the types of risk components of non-financial items that ate eligible for hedge accounting. In addition, the effectiveness test has been overhauled sad replaced with the principle of economic relationships. Retrospective assessment of hedge effectiveness is no longer required, Far more disclosure requirements about an entity's tisk management activities have been introduced. ‘The standard is effective for annual reporting periods beginning on or after January 1, 2018, Earlicr application is permitted. ‘The Managements still evaluating the impact of PFRS 9 on the Group’s consolidated financial assets and liabilities as of the eporting period. New Accounting Standards Issued by International Accounting Standard Board (IASB) which is Effective After the Reporting Period Ended December 31, 2015 but pending for adoption in the Philippines. ‘The Group will adopt the PFRS 15 once it becomes effective. PERS 15, Rewenue from Contras with Custooars ‘The standard combines, enhances, and replaces specific guidance on recognizing revenue with ‘single standauds. Iedefines a new five-step model to secognize revenue from customer contracts. ‘The standard is mandatory for annual reporting petiods beginning on or after January 1, 2018, Earlier application is permitted. “The Management does not anticipate thatthe application of the new accounting standard will have a significant impact on the Group's consolidated financial statements as the Group does not have complex revenve transactions. Amendments to IAS 12, Remgnition of Defered Tax Anes jor Unrealized Losies ‘The amendments clarify the following aspects: + Unrealized losses on debt instruments measured at fxr value and measured at cost for tax purposes give rise to a deductible temporary difference regardless of whether the debt instrument's holder expects to recover the carrying amount of the debt instrument by sale or by use. +The eerrying amount of an asset does not limit the estimation of probable future taxable profits ‘+ Estimates for furure taxable profits exclude tax deductions resulting from the reversal of deductible temporary differences. ‘An entity assesses a deferred tax asset in combination with other deferted tax assets, Where tex law restricts the utilization of tax losses, an entity would assess a deferred tax asset in combination with other deferred tax assets of the same type. ‘The amendments are effective for annual reporting periods beginning on or after Januagy 1, 2017. ‘The future adoption of the amendments will not have @ significant impact on the Group's consolidated financial statements ;Amendments to TAS, Disclosure Initiative ‘The amendments clarify that entities shall provide disclosures that enable users of financial statements to evaluate changes in liabilities arising, from financing activities. ‘The amendments are effective for annual reporting periods beginning on or after Januaey 1, 2017, The future adoption of the amencments will not have a significant impact on the Group’s consolidated financial statements. PERS 16, Leases This standard specifies how a PERS reporter will recognize, measure, present and disclose leases, It provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has ow value. Lessors continue to classify leases as operating or finance, with PFRS 16's approach to lessor accounting substantially unchanged from its predecessor, PAS 17. "The standatd is effective for annual reporting periods beginning on ot after Januazy 1, 2019. ‘The Management is still evaluating the impact of the future adoption on the Group's consolidated Ginancial statements, SIGNIFICANT ACCOUNTING POLICIES Business Combination Common control business combinations ace excluded from the scope of PERS 3, Business Combinations, However, there are no specific rules under existing PFRS which presctibe how such transactions shall be accounted for. In August 2011, the PIC issued Q&A No, 2011 - 02, PERS 3.2 - Common Control Business Combinations, to provide ‘guidance in accounting for common control business combinations in ozder to minimize diversity in the current practices until farther guidance is provided by the Intemational Accounting Standards Board (IASB). ‘The consensus in Q&A No. 2011-02 provides that common control business combinations shall be accounted for using either (a) the pooling of interests method, o (b) the acquisition method in accordance with PFRS 3. However, where the acquisition method of accounting is selected, the transaction must have commercial substance from the perspective of the reporting entity In accordance with PIC Q&A No. 2011-02, the Parent Company’s acquisitions of businesses ‘under common control are accounted for using either the acquisition method oF the pooling of interest method, depending on the specific circumstances of the acquisition, Acquisition method Under the acquisition method, the consideration transferred in a business combination is ‘measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the ‘equiree and the equity interest issued by the Group in exchange for control of the acquizee “Acquisition related costs are generally recognized in profit or loss as incurred. [At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair value except that + deferred tax assets or lisbilities, and assets or liabilities related to employee benefit arrangements are recognized and measured in accordance with PAS 12 Income'Taxes and PAS 19, Emplyee Bengfis, respectively,+ liabilities and equity instruments selated to share-based payment arrangements of the sequiree o share-based payment arrangement of the Group entered into 10 replace share- based payment arrangements of the acquiree are measured in accordance with PERS 2, Share-based Payment at the acquisition date; and + assets (or disposal groups) that are classified as held for sale in accordance with PERS 5, Nowurvent assets Held for Sale and Discontinued Operations are measured in accordance with that standard. Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquirce (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transfetred, the amount of any non-controlling interests in the acquisee and the fair value of the acquircr’s previously held interest in the acquire (if any) is secognized immediately in profit or loss as barguin purchase gain. Non-controlling interests that are present ownership interests and entitle their holders 10 a proportionate share of the entity’s net assets in the event of liquidation may be initially measured cither at fair value or at the non-controlling interests’ proportionate share of the recognized amounts of the acquitee’s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interest are ‘measured at fair value or, when applicable, on the basis specified in another PFRS. \Whea the consideration transferred by the Group in a business combination includes assets ot liabilities resulting from a contingent consideration arrangement, the contingent consiceration is measured at its acquisition-date fair value and included as part of the consideration twansferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill, Measurement period adjustments are adjustments that arise from additional information obtained during the measurement period (which cannot exceed one year from acquisition date) about facts and circumstances that ‘existed atthe acquisition date ‘The subsequent accounting for the changes in fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration thats classified as equity is not measured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset ora lixbilty is remeasured at subsequent seporting dates in accordance with PAS 39, Financia! Instruments: Resnguiton and Measurement, ot PAS 37, Provisions, Contingent Liabties and Contingent Assets, 28 appropriate, with the corresponding gain or loss being recognized in profit or loss. Pooling of interest methad ‘Common control business combinations are accounted for using the “pooling of interests method”. “The pooling of interests method is generally considered to involve the following: + The assets and liabilities of the combining entities are reflected in the consolidated financial statements at their carrying amounts, No adjustments are made to reflect fair values, of recognize any new assets or liabilities, at the date of the combination that otherwise would have been done under the acquisition method. The only adjustments that are made are those adjustments to harmonize accounting policies. + No ‘new’ goodwill is recognized! as a result of the combination. The only goodwill that is recognized is any existing goodwill relating to either of the combining entities. Any difference between the consideration paid or transferred and the equity ‘acquired? is reflected within equity. IE A+ The consolidated income statement reflects the results of the combining entities for the full yea, irsespective of when the combination took place. + Comparntives are presented as ifthe entities had always been combined, ‘The Company applied the pooling of interest method when it acquired GTC and SMDC as both companies remained to be wholly owned subsidiaries at the time of the acquisition, Goodwill Goodwill sequized in a business combination is initially measured at cost being the excess of the cost of business combination over the interest in the net fair value of the acquirer's identifiable assets, liabilities and contingent liabilities. Subsequently, goodwill arising on an acquisition of a business is measured at cost less any accumulated impairment losses. For the purposes of impairment testing, goodwill is allocated to each of the Groups of cash-generating units (CGUs) that are expected to benefit from the synergies of the combination. A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when theze is indication that the unit may be impaired. If the recoverable amount Of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit Any impairment loss for goodwill is recognized directly in profit of loss in the consolidated statement of comprehensive income. An impairment loss recognized for goodwill is not zeversed in subsequent periods. On disposal of the relevant CGU, the amount attributable to goodwill is included in the determination of the profit or loss on disposal Financial Assets Initial recognition Financial assets are recognized in the Group's consolidated financial statements when the Group becomes a party to the contractual provisions of the instrument. Financial assets are recognized initially at fair value. Transaction costs are included in the initial measurement of the Group's financial assets, except for investments classified at FVIPL. Classification and subsequent measurement Financial assets are clasified into the following specified categories: financial assets at FVIPL, held-to-matutity (HTM) investments, available-for-sale (AFS) financial assets and loans and seceivables. ‘The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognized and derccognized on a trade date basis. Regular way purchases oz sales are purchases or sales of financial assets that requive delivery of assets within the time frame established by regulation or convention in the marketplace. Currently, the Group’s financial assets consist of HTM investments and loans and receivable. EITM investments HTM investments ate non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the Group has the positive intent and ability to hold to maturity. Subsequent to initial recognition, HTM investments are measured st amortized cost using the effective interest method less any impairment, with revenue recognized on an effective yield basis. HIM investments are classified in the consolidated statements of financial position as current when the investment is expected to mature within 12 months after the reporting date. Othersise, HTM investments are classified as non-cusrent. AMO OTLoans and recvivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables, After inital recognition, loans and receivables are subsequently measured at amortized cost using the effective interest method, less any impairment and are included in current assets, except for ‘maturities greater than 12 months after the end of the reporting period. ‘The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument of, when appropriate, « shorter period, to the net carrying amount on initial recognition. Interest income is recognized by applying the effective interest rate, except for short-term receivables when the secognition of interest would be immaterial “The Group's financial assets classified under this eategory include cash and cash equivalents, trade and other receivables, due from related parties, security deposits and deposits on utilities, Impairment of financial assets Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each seporting period. Financial assets are consideted to be impaired when there is objective evidence that, as a result of one ot moze events that occurred after dhe inital recognition of the financial asct, the estimated future cash flows of the investment have been affected, For all financial assets cazsied at amoztized cost, objective evidence of impairment could include: + significant financial difficulty of the issuer or counter party; or + breach of contract, such as default of delinquency in intetest or principal payments; or «it has become probable that the borrower will entee bankruptcy or financial re-organization; oF «the disappearance of an active market for that financia] asset because of financial difficulties; or + the lender, for economic or legal reasons relating to the borrower's financial difficulty, ‘granting to the bozrower a concession that the lender would not otherwise consider; of + observable data indicating that there is a measurable dectease in the estimated fuure cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the group. For certzin categories of financial asset, such as trade receivables, assets that ate assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. ‘Objective evidence of impairment fora portfolio of receivables could include the Group's past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average exedit period as well as observable changes in national ot local economic conditions that correlate with default on receivables, Financial assets carried at amortized cost If there is objective evidence that an impairment loss on loans and receivables cattied at amortized cost has been incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows, excluding future credit losses that have not beea incussed, discounted at the financial asset’s original effective interest ste, ie, the effective interest rate computed at initial recognition. NA‘The carrying amount of financial assets catried at amortized cost is reduced directly by the impairment loss with the exception of trade receivables, wherein the carrying amount is reduced through the use of an allowance account. When trade receivables are considered uncollectible, these are written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account, Changes in the carrying amount of the allowance account are ecognized in profit or los, Ti, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impaitment was tecognized, the previously recognized impairment loss shall be reversed. ‘The ceversal shall not result in a carrying amount of the financial asset that exceeds what the amortized cost would have been. had the impairment not been recognized at the date the impairment is reversed. ‘The amount of the reversal shall be secognized in profit or loss. Offsetting of financial instruments Financial assets and liabilides are offset and the net amount reported in the consolidated statements of financial position when there is a legally enforceable right to offset the recognized amounts and there is an intention to seitle on a net basis or realize the asset and settle the liability simultaneously. ‘Derecognition of financial assets ‘The Group desecognizes financial assets when the contractual rights to the cash lows from the asset expire, or when it transfers the financial asset and substantially all the tisk and rewards of ownership of the asset to another party. If the Group neither transfers nor retains substantially all the sisks and rewards of ownership and continues (0 control the transferred asset, the Group recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risk and rewards of ownership of a transferred financial asset, the Group continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received. (On detecognition of financial asset in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognized in profit or loss Inventories Inventories are initially measured at cost which includes costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition, Subsequently, inventories are stated atthe lower of cost and net realizable value. ‘The costs of inventories are calculated as follows: Raw materials Moving average Work-in-process Moving average Finished goods Weighted average Net realizable value represents the estimated selling price less all estimated costs of completion and costs necessary to make the sale. ‘When the net realizable valve of the inventories is lower than the cost, the Group provides an allowance for the decline in the value of the inventory and secopnizes the write-down as an expense in profit or loss, The amount of any reversal of any write-down of inventories, arising, from an increase in net realizable value, is recognized 2s a reduction in the emount of inventosies zecogaized as an expense in the period in which the reversal occurs, INO 1BProvision for inventory losses is ‘established for slow moving, obsolete, defective and damaged inventories based on physical inspection and management evaluation.’ Inventories end its related provision for impairment are written off when the Group has determined that the related inventory is already obsolete and damaged. Write-offs represent the release of previously tecorded provision from the allowance account and credited to the rclated inventory account following the disposal of the inventories. Destruction of the obsolete and damaged inventories is made in the presence of regulatory agencies. Reversals of previously recorded impairment provisions are credited in the consolidated statement of comprehensive income based on the result of management's curtent assessment, considering available facts and circumstances, including but not limited to net realizable value atthe time of disposal. When inventories ate sold, the carying amount of those inventories is recognized as an cexpente in the period in which the related revenue is recognized, Prepayments Prepayments represent expenses not yet incurred but already paid in cash. Prepayments are initially recotded as assets and measured at the amount of cash paid. Subsequently, these are charged to profit ot loss a they are consumed in operations or expire with the passage of time. Prepayments are classified in the consolidated statements of financial position as current assets when the cost of goods or services related to the prepayments are expected to be incurred within one year of the Group's normal operating cycle, whichever is longer. Otherwise, prepayments are classified as non-current assets, Property, Plant and Equipment Propetty, plant and equipment are intially measured at cost. The cost of an item of property, plant and equipment comprises: + its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates; «any costs disectly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management; and. ‘© the initial estimate of the future costs of dismantling and removing the item and restoring the site on which itis located, the obligation for which an entity incurs either when the item is aequited o: ss a consequence of having used the item during a particular period for purposes other than to produce inventories during that period. "The cost of self-constructed asscts includes the cost of materials and dizect bor, any other costs irectly atributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and borrowing costs on qualifying assets. Major spare patts and stand-by equipment quiliy as property, plant and equipment when the Group expects to use them during more than one period. Similarly, if the spare parts and servicing equipment can be used only in connection with an item of property, plant and ‘equipment, they are accounted for as property, plant and equipment, At the end of each reporting period, item of property, plant and equipment measured are caztied at cost less any subsequent accumulated depreciation and impairment losses. Subsequent expenditures relating to an item of property, plant and equipment that have alzeady been recognized are added to the carrying amount of the asset when itis probable that future economic benefits, in excess of the originally assessed standard of performance of the existing asset, will flow to the Group. All other subsequent expenditures ate recognized as expenses in the period in which those are incurred.Depreciation is computed on the straight-line method based on the estimated useful lives of the assets 28 follows: Buildings 15 to 24 years Building improvements 5 to 15 years Plant, machinery and equipment 2 to 40 years ‘Transportation and delivery equipment 5 years Office furniture, fixtures and equipment 5 years Laboratory tools and equipment 2 to 10 years Land improvements 5 tot 15 years Properties in the course of construction for production, rental or administrative purposes, or for purposes not yet determined, are carried at cost, less any recognized impairment loss. Cost includes professional fees and for qualifying asscts, borrowing costs capitalized in accordance ‘with the Group's accounting policy. Depreciation of these assets, on the same basis as other ‘property assets, commences atthe time the assets are ready for their intended use. ‘An item of property, plant and equipment is derecognized upon disposal or when no furare economic benefits are expected to arise from the continued use of the asset. Gain or loss arising con the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit ot loss. Biological Assets Biological assets oz agsicultaal produce are recognized only when the Group controls the assets as a result of past events, itis probable that future economic benefits associated with the assets will low to the Group and the cost of the assets can be measured reliably. Biological assets are required to be measured on initial recognition and at the end of cach reporting period at fair value less costs to sell, unless fair value cannot be measured rdiably. Accordingly, the Management shall exercise its judgment in determining the best estimate of fair value, Afver exerting its best effort in determining the fair value of the Group’s biological assets, ‘Management believes thatthe fair valne of its biological assets cannot be measuted reliably since the market determined prices or values are not available and other methods of reasonably «estimating fie value are determined to be cleasly unreliable. Thus, the Group measures biological assets at its cost less any accumulated! impairment losses. Biological assets of the Group are classified as consumable biological assets which include fish in farms. The Group manages the growth of fish which will subsequently be used in production upon harvest. Biological assets are recognized as cost of inventories when consumed. Intangible Assets Intangible assets are initially metsured at cost. Subsequent to initial recognition, intangible ‘assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over the estimated useful lives, The estimated useful life and the amortization method are reviewed at the end of each reporting petiod, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquited separately ate caztied at cost less accumulated impairment losses. Subsequent to inital recognition, intangible assets aequited in a business combination are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that are acquired separately. AONE 000 Ul 2[An intangible assct is derecognized on disposal, ot when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognized in profit or loss when the asset is dexecognized. Impairment of Tangible and Intangible Assets [At the end of each reporting period, the Group assesses whether there is any indication that any of its tangible and intangible assets may have suffered sn impaitment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the ‘extent of the impairment loss, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the CGU to which the asset belongs. ‘When a reasonable and consistent basis of allocation ean be identified, assets ate also allocated to individual CGU, or otherwise they are allocated to the smallest group of CGU for which a reasonable and consistent allocation basis can be identified. Intangible assets with indefinite useful lives and intangible assets not yer available for use axe tested for impairment annually and whenever there is an indication that the asset may be impaired. Recoversble amount is the higher of fair value less costs to sell and value-in-use, In assessing ‘value-in-use, the estimated future cash flows are discounted to their present value using a pre- tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted, If the recoverable amount of an asset o CGU is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognized as an expense. Impairment losses recognized in respect of CGUs are allocated to the assets in the unit on a pre-rata basis. Impairment losses recognized in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists. An impairment loss is seversed if there has been a change in the estimates used to determine the recoverable amount. ‘An impairment loss is reversed only to the extent that the asset’s cazzying amount does not exceed the canying amount that would have been determined, net of depreciation or amortization, if no itmpaitment loss had been recognized. reversal of aa inapaisment loss is recognized as income. Financial Liabilities and Equity Instruments ssi Lor equity Debt and equity instruments are classified as cither financial liabilities or as equity in ‘accordance with the substance of the contractual arrangements and che definitions of « financial liability and equity instrument Einancial liabilities: Financial liabilities are recognized in the Group's consolidated financial statements when the Group becomes a party to the contractual provisions of the instrument. Financial liabilities ase initially recognized at fair value. ‘Transaction costs arc included in the initisl measurement of the Group's financial liabilities except for debt instruments classified at FVIPL. Financial liabilities are classified as either financial liabilities at FVIPL or other financial liabilities, Since the Group does not have finaacil liabilities classified at FVTPL, all Gnancial liabilities which include, trade and other payables, notes payable and due to related parties are subsequently measured at amortized cost using the effective interest method, with interest cxpenteaeedguardon an elective ld bas MONA a‘The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. ‘The effective interest rate is the sate that exactly discounts estimated future cash payments through the expected life of, the financial lability ox, when appropriate, 2 shorter peziod, to the net carrying amount on initial recognition Offsetting financial instruments Financial assets and liabilities are offset and the net amount feported in the consolidated statement of financial position when there is a legally enforceable sight to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously Derecognision Financial Liabilities are derecognized by the Group when the obligation under the liability is discharged, cancelled or expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss. Equity Instruments ‘An equity instrument is any conteact that evidences a fesidual interest in the assets of the Group after deducting all of its liabilities, Equity instruments issued by Group are recognized at the proceeds received, net of direct issue costs Shate Capital Common shates are classified as equity, Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds, net of tax ‘Shate premium ‘When the shaces are sold ata premium, the difference between the proceeds and the par value is credited to the share premium. Direct costs incurred related to equity issuance are chargeable to share premium account. Tfadditional paid-in capital is not sufficient, the excess is charged against retained earnings, ency translation Currency translation adjustment represents the exchange differences resulting from tsanslating the financial position and results of operations of GTC whose functional cutrency differs from the functional currency of the group. ‘Retained earnings (Deficit) Retained earnings or deficit represent accumulated profit of loss attributable to equity holders of the Parent Group after deducting dividends declared, Retained earnings may also include the effect of changes in accounting policy as may be required by the standard's transitional provisions. Provisions, Contingent Liabilities and Contingent Assets Provisions Provisions are recognized when the Group has a present obligation, either legal or constructive, as a result of a past event, itis probable that the Group wall be required to settle the obligation through an outflow of resources embodying economic benefits, and the amount of the obligation can be estimated reliably.‘The amount of the provision recognized is the best estimate of the consideration zequited to settle the present obligation at the end of each reporting period, taking into account the risks and uncertainties surrounding the obligation. A provision is measured using the eash flows estimated to settle the present obligation; its carrying amount is the present value of those cash flows. ‘When some of all of the economic benefits required to settle a provision are expected to be recovered from a thitd party, the receivable is recognized as an asset ifit is virtually cestain that teimbursement will be feceived and the amount of the receivable can, be measured reliably. Provisions ate reviewed at the end of each reporting period and adjusted to reflect the current best estimate. fit is no longer probable that a transfer of economic benefits will be required to settle the obligation, the provision should be reversed. Employce Benefits wort-tezm benef ‘The Group recognizes a liability net of amounts altesdy paid and an expense for services rendered by employees during the accounting period that are expected 10 be settled wholly before 12 months after the end of the reporting period. A liability is also recognized for the amount expected to be paid under short-term eash bonus if the Group has a ptesent legal or constructive obligation to pay this amountas a result of past service provided by the employee, and the obligetion can be estimated reliably. Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the selated service is provided. For defined benefit retitement plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being cattied out at the end of each ‘annual reporting period, Remeasurement, comprising actuatial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the retum on plan assets (excluding interest), is reflected immediately in the statements of financial position with charge or credit recognized in OCI in the petiod in which they occur. Remeasurement recognized in OCT is reflected immediately in retained eamings and will not be zeclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit Liability ot asset. Defined benefit costs are categorized as follows: + Sorvice cost (including current service cost, past sexvice cost, as well as gains and losses on curtailments and settlements). + Net interest expense or income. + Remeasurement, ‘The Group presents the fizst ewo components of defined benefit costs in profit of loss in the line item zetizement benefits expense ‘The retirement benefit obligation recognized in the consolidated statement of financial position represents the actual deficit in the Group’s defined benefit plans. OVALShare-based Payments dled share-based payments Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date, ‘The fair value determined at the grant date of the equity-settled share-based payments to employees is recognized as expense on a straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with @ corresponding increase in equity. At end of each seporting period, the Group revises its estimate of the number of equity instruments expected to vest. ‘The impact of the revision of the original estimates, if any, is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-setiled employee benefits Equity-settled share-based payment transactions with other pacties are measured at the fair value of the goods or services received, except when the fair value cannot be estimated reliably, in which case they aze measured at the fair value of the equity instrusnents granted, measured atthe date the entity obtains the goods or the counterparty renders the service, Revenue Recognition Revenue is recognized to the extent that itis probable that the economic benefits will ow to the Group and the revemme can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable and represents amounts teceivable for goods and secvices provided in the normal course of business. Sale of goods Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume eebates. Revenue from sale of goods is recognized when all the following conditions are satisfied: + the Group has transferred to the buyer the significant risks and rewards of ownership of the goods; © the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; + the amount of revenue can be measured reliably; + itis probable that the economic benefits associated with the transaction will flow to the Group; and + the costs incurred oF to be incurred in respect of the transaction can be measured reliably. fit is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognized as a reduction of revenue as the sales are recognized. Rendering of services Revenue from a contract to provide services is recognized by reference to the stage of completion of the contract. Under this method, revenue is recognized in the accounting petiods in which the services are rendered, Revenue from a contract to provide services is recognized when all of the following conditions are satisfied: + the amount of revenue can be measured reliably; + itis probable that the economic benefits associated with the transaction will flow to the Group; ‘+ the stage of completion of the transaction ean be measured reliably; and I ATT‘+ the costs incurred for the transaction and the costs to complete the transaction can be mensured reliably ‘The percentage of completion from the contract to provide service is determined from the time the service is recognized at the contractual rates as labor hours and direct expenses are incurred, Interest income Interest income from a financial asset is recognized when it is probable that the economic benefits will low to the Group and the amount of income can be measused scliably. Intezest income is accrued on a time proportion basis, by reference to the principal outstanding, and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carsying amount Other income Other income is income generated outside the normal course of business and is recognized ‘when itis probable that the economic benefits will flow to the Group and it can be measured reliably. Expense Recognition Expenses are recognized in profit ot loss when decrease in future economic benefit related to a decrease in an asset or an increase in a liability has arisen that can be measured reliably. Expenses are recognized in profit or loss: on the basis of a direct association between the costs incurred and the earning of specific items of income; on the basis of systematic and rational allocation procedures when cconomic benefits are expected to arise over several accounting periods and the association with income can only be broadly or indirectly determined; or immediately when an expenditure produces no future economic benefits oF ‘when, and to the extent that, future economic benefits do not qualify, or cease to qualify, for recognition in the statements of financial position as an asset. Expenses in the consolidated statement of comprehensive income are presented using the function of expense method. Costs of sales are expenses incurred that are associated with the goods sold. Operating expenses are costs aitributable to administrative, marketing, selling and. other business activities of the Group. Leases ‘Leases ae classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. ‘The Group as lessor Rental income from operating leases is recognized as income on a straight-line basis over the term of the relevant lease, Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term. Initial dizect costs incusred by the Group in negotating and arranging an operating lease is added to the carrying amount of the leased asset and recognized as an expense over the lease term on the same basis as the lease income. AThe Group as lessee Operating lease payments ate recognized as an expense on a straight-line basis over the lense teem, except when another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent zentals arising under operating leases are cecognized as an expense in the period in which they are incurred. In the event that lease incentives are received to enter into operating leases, such incentives ‘are recognized as a liability. ‘The aggregate benefit of incentives is recognized as a reduction of zental expense on a straight-line basis, except when another systematic basis is more representative of the time pattem in which economic benefits from the leased asset are consumed. Foreign Currency ‘Transactions in currencies other than the functional currency of the Group are recorded at the rates of exchange prevailing on the dates of the transactions. At the end of each reporting period, monetary asscts and Tibilities that are denominated in foreign currencies are rettanslated at the rates prevailing at the end of the zepozting period, ‘Translation to presentation currency ‘The separate financial statements of GTC whose functional currency is the US Dollar are translated to Philippine Peso using the prevailing current exchange tate for the statements of financial position accounts and average rate during the petiod for statements of compsehensive iacome accounts. Any resulting difference from the translation is charged to currency translation adjustments in OCI. Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of ‘qualifying assets, which ate assets that necessarily take « substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use ot sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. [All other borrowing costs are recognized in profit or loss in the period in which they ate incurred, ‘Borrowing costs ate expensed in full when the amounts are not material Related Party Transactions ‘A.celated party transaction is « transfer of resources, services or obligations between the Group and a related party, regardless of whether a price is charged. Parties are considered related if one patty has control, joint contro, of significant influence over the other party in making financial and operating decisions. An entity that is 4 postemployment benefit plas for the employees of the Group and the key management personnel of the Group are also considered to be related patties, Upon consolidation, significant intea-group balances are eliminated to reflect the Group's consolidated financial position and performance asa single entity. (MM‘Taxation Income tax expense represents the sum of current tax expense and deferred tax Current tax “The current tax expense is based on taxable profit for the period. ‘Taxable profit differs from ‘net profit as reported in the statements of comprehensive income because it excludes items of income or expense that aze taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's current tax expense is calculated using 30% repular corporate income tax (RCIT) rate or 2% minimum corporate income tax (MCIT) rate, whichever is higher. As disclosed in Note 1, GTC’s frozen tuna loins operation was granted an ITH for a period of three years beginning February 1, 2013. Deferred Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are gencrally recognized forall taxable temporaty differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent tat it is probable that taxable profits will be available against which those deductible temporary differences can be utilized Deferred tax liabilities are recognized for tasable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and itis probable tat the temporary difference will not reverse in the foreseeable future. Deferred tax assets arsing from deductible temporary differences associated with such investments and interests are only recognized to the extent that itis probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future. ‘The carrying amount of deferred tax assets is reviewed at the end of each reporting petiod and seduced to the extent that itis no longer probable that sufficient taxable profits will be available to allow all ox past of the asset to be recovered. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the lnbility is setded or the asset realized, based on tax rates (and tax laws) that have been enacted of substantively enacted by the end of the reporting period. Current and deferred tax for the year Current and deferred tax are recognized in profit or loss, except whea they relate to items that are recognized in OCI ot directly in equity, in which case, the cusrent and deferred tax are also ecognized in OCI or directly in equity respectively. Earnings or Loss Per Share ‘The Group computes its basic earnings or loss per share by dividing profit ot loss for the period attributable to common equity holders of the Parent Company by the weighted average number of common shares outstanding during the period. For the purpose of calculating diluted earnings or loss per share, profit or loss for the period attributable to common equity holders of the Parent Company and the weighted average number of shares outstanding are adjusted for the effects of dilative potential common shares. OT6 Events After the Reporting Period ‘The Group identifies events after the end of each reporting period as those events, both favorable and unfavorable, that occur between the end of the reporting period and the date when the consolidated financial statements are authorized for issue. The consolidated financial statements of the Group are adjusted to reflect those events that provide evidence of conditions that existed at the end of the reporting period, Non-adjusting events after the end of the reporting period are disclosed in the notes (o the consolidated financial statements when materia Segment Reporting ‘An operating segment is a component of the Group that engages in business activities from ‘which it may earn revenues and incur expenses, including revenues end expenses that relate to transactions with any of the Group's other components. All operating sepments’ operating results are reviewed repulasly by the Group’s Chief Operating Decision Maker (CODM) to. make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. “The Group reports separately, information about an operating segment that meets any of the following quantitative thresholds: + its reported revenue, including both sales to external customers and intes-segment sales ot teansfers, is 10% of mote of the combined revenue, internal snd extemal, of all operating segments, provided that; «the absolute amount of its reported profit of loss is 10% or more of the greater, in absolute amount, of the combined reported! profit of all operating segments that did not report a loss and the combined reported loss of all operating segments that reported a loss; and + Its assets are 10% oF mote of the combined assets of all operating segments. Operating segments that do not meet any of the quantitative thresholds may be considered reportable, and sepssately disclosed, if Management believes that information about the segment would be useful to users of the consolidated financial statements. ForManagement purposes, the Group is currently organized into six business segments which are Canned and Processed fish, Canned Meat, Milk, Tuna Export, Coco Water and Corporate. “These divisions are the basis on which the Group reports its primary segment information Scgment capital expenditure is the total cost incutred during the period to acquire property, plant and equipment CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY In the application of the Group’s accounting policies, Management is sequired to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that aze not readily apparent from other sources. ‘The estimates and associated assumptions are based on the historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. ‘The estimates and undeslying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates sre recognized in the period in which the estimate is revised if the revision affects only that period o: in the period of the revision and future peziods ifthe revision affects Doth current and future periods. AVCritical Judgments in Applying Accounting Policies “The following are the critical judgments, apart from those involving estimations, that Management has made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements, ‘The Group’s consolidated financial statements are presented in Philippine Peso, which is also the Group's functional currency. For each entity, the Group determines the functional currency 2nd items included in the financial statements of each entity are measured using that functional curzency. ‘The results of operations and financial position of GYC, which are measured using US Dollar, were translated into Philippine Peso using the accounting policies in Note 5. ‘HTM investments Management reviewed the Group's HTM investments in the light of its capital maintenance and liquidity requitements and confirmed its positive intention and ability to hold those assets to maturity. The cactying amount of HTM investments as at December 31, 2015 and 2014 amounted to P27,795,460 and P180,666,591, respectively as shown in Note 10, Leases ‘The evaluation of whether an arrangement contains a lease is based on its substance. Leases ate classified as finance leases whenever the terms of the lease transfer substantially all the risk and rewards of the ownership to the lessce, otherwise, leases are classified as operating leases, Judgment is used in determining whether the significant risk and rewards of ownership are tansferred to the lessce. In making such judgment, the Group evaluates the terms and conditions of the lease arrangement, Failure to make the right judgment would disectly affect the Group's assets and liabilities. Based on Management evaluation, the lease arrangements entered into by the Group asa lessor and as a lessee are accounted for as operating leases because the Group has determined that the lease arrangement will not transfer the ownetship of the leased assets upon termination of the lease and it does not provide an option to purchase the asset at a price that is suificiently ower than the fair value at the date of the option. ‘Determination of useful lives of trademarks Under the Intellectual Property Code of the Philippines, the legal life of trademark is 10 years and may be perpetually zenewed thereafter for another 10 years. However, considering that the Management does not expect any circumstances or events which will cause it to decide not to renew its trademarks every 10 years, Management has taken the position that the useful lives of its trademarks are indefinite, hence, the related costs are not amortized but subjected to annual impairment testing. Changes in the assumption and circumstances in the future will substantially affect the consolidated financial statements of the Group, particularly the carrying values of such asset. ‘The carrying value of the Group's trademarks as at December 31, 2015 and 2014 is disclosed in Note 13, (OABiological assets Biological assets are required 0 be measured on initial recognition and at the end of each reporting period at fair value less costs to sell, unless fair value cannot be meaouted reliably. “Accordingly, the Management shall exercise its judgment in determining the best estimate of fair value, _Mfier exerting its best effoxt in determining the fair value of the Group's biological assets, Management believes that the fair value of its biological assets cannot be measured reliably since the market determined prices or values are not available and other methods of reasonably estimating fir value are determined to be clearly unreliable. Accordingly, the Groups biological assets are measused at cost less any accumulated impairment loss as at December 31, 2015 and 2014, and amounted to P51,429,135 and P37,478,189, respectively, as disclosed in Note 14. Dei Land significane it “Management exercises its judgment in determining whether the Parent Company has contzol or significant influence over another entity by evaluating the substance of relationship that indicates conteol ot significant influence of the Parent Company over the entities. The recognition aad measurement of the Parent Company's investment over these entities will depend on the zesult of the judgment made. ‘As disclosed in Note 1, the Parent Company has a 100% ownership interest and voting rights in GTC, SMDC, AWA, CPAVI, CSPI and CGC. Acquistion of investment in subsidiary “The Group adopted the acquisition method in acquiting CPAVI. In selecting the acquisition method, the Management considers the involvement of outside parties in the transaction, such as non-controlling interests or other third parties (26.28% public ownership in CPF1), ‘The tuansaction price is likewise arm’s length determined based on a third party valuation whieh provides commercial substance to the transaction. ‘The Management believes that it is appropriate to account said transaction using the acquisition method. Key Sources of Estimation Uncertainty “The following ate the key assumptions concerning the future and other key sources of estimation uncertainty at the end of each reporting period that have a sigaificant risk of causing 4 material adjustment to the carrying amounts of assets and liabilities within the next Sinancial year. Extiatng useful les of property, plat and equipment ‘The useful lives of the Group's assets with definite lives are estimated based on the period over which the assets are expected to be available for use. ‘The estimated useful lives of property, plant and equipment are reviewed periodically and are updated if expectations differ from previous estimates duc to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the Group's assets. In addition, the estimation of the useful lives is based on the Group's collective assessment of industry practice, internal technical evaluation and experience with similar assets, It is possible, however, that future results of operations could be matesially affected by changes in estimates brought about by changes in factors mentioned above, ‘The amounts and timing of recorded expenses for any petiod would be affected by changes in these factots and circumstances, reduction in the tstimated useful lives of property, plant and equipment would increase the recognized operating expenses and decrease non-current assets. [As at December 31, 2015 and 2014, the carrying amounts and accumulated depreciation of the Group's property, plant and equipment as disclosed in Note 15 amounted to P3,133,942,196 .4 P1,421,369,020, and P1436,991,187 and P1,123,004,813, respectively. AMA 0Asse impairment ‘The Group performs an impairment review when certain indicators are present. Determining the recoverable amounts of property, plant and equipment and intangible assets requires the Group to make estimates and assumptions that can materially affect the consolidated financial statements. Any resulting impairment loss could have a material adverse ‘impact on the Group’s financial position and result of operations. While the Group believes that its assumptions are approptiate and seasonable, significant changes in the assumptions may materially affect the assessment of recoverable values and may lead to futuce additional impairment charges. ‘Total carrying amounts of property, plant and equipment and intangible assets as at December 31, 2015 and 2014 are disclosed in Notes 15 and 13, respectively. [As at December 31, 2015 and 2014, Management believes that the recoverable amounts of the Group's property, plant and equipment and intangible assets exceed their carrying amounts, aceording}y, no impairment loss was recognized in 2015 and 2014 Deferred ta assets ‘The Group reviews the carcying amounts at the end of each reporting petiod and reduces deferred tax assets to the extent that itis no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be utilized. However, there is no assurance that the Group will generate sufficient taxable profit to allow all of part of its deferced tax assets to be utilized. “Total deferred tax assets recognized in the consolidated statements of financial position as at December 31, 2015 and 2014 amounted to P81,725,977 and P56,683,629, respectively, as disclosed in Note 33. Estimating allowance for doubt acount “The Group estimates the allowance for doubtful accounts related to its receivables based! on assessment of specific accounts when the Group has information that certain counterparties fare unable to mect their financial obligations. In these cases, judgment used was based on the best available facts and cizcumstances including but not limited to, the length of relationship with the counterparty and the counterparty’s current credit status based on credit reposts and known market factors. The Group used judgment to record specific reserves for counterparties against amounts due to reduce the expected collectible amounts. These specific reserves are re-evaluated and adjusted as additional information received impacts the amounts estimated ‘The amounts and timing of recorded expenses for any period would differ if different judgments were made or different estimates were utilized. An incrcase in the allowance for doubtful accounts would increase the recognized operating expenses and decrease current assets Total trade and other receivables recognized in the Group's consolidated statements of financial position amounted to P3,592,691,726 and P2,561,731,649 as at December 31, 2015 ‘and 2014, respectively, which is net of the related allowance for doubtful accounts amounting, to P28,619,597 and P36,958,537 as at those dates, as shown in Note 9. GUATEstimating net realable value The net realizable value of inventories represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. The Group determines the estimated selling price based on the recent sale transactions of similar goods ‘with adjustments to reflect any changes in economic conditions since the date the transactions occurred, The Group records provision for excess of cost over net realizable value of inventories. While the Group believes that the estimates are reasonable and appropriate, sighificant differences in the actual experience or significant changes in estimates may materially affect the profit or loss and equity. ‘Total inventories recognized in the Group’s consolidated statements of financial position amounted to P5,925,978,924 and P5,194,205,392 as at December 31, 2015 and 2014, respectively, 28 shown in Note 11. Port ampayment and other employee benefits ‘The determination of the retirement obligation cost and other retirement benefits is dependent oon the selection of certain assumptions used by actuaries in calculating such amounts. ‘Those assumptions include among others, discount rates, mortality and rates of compensation increase. Actual results that differ from the assumptions are immediately recognized. While the Group belicves that the assumptions are reasonable and appropriate, significant differences in the actual experience or significant changes in the assumptioas may materially affect the pension and other retirement obligations. ‘The total retirement benefit expense recognized in 2015, 2014 and 2013 amounted to 57,822,016, P18,082,852 and P2,094,690, respectively, and retirement benefit obligation as at December 31, 2015 and 2014 amounted to P157,039,771 and P93,870,878, respectively, as shown in Note 19. ‘Provisions The Group recognized provision for estimated losses selating to uncertainties that are associated with the nature ofits basiness operations amounting co P7,848,982, as disclosed in Note 18. These was no similar transaction in 2014SEGMENT INFORMATION Business segments For Management purposes, the Group is organized into six major business segments: Canned and Processed fish, Canned Meat, Mill, Tuna Export, Coco Water and Corporate. ‘These divisions are the b: oa which the Group reports its primary segment information 10 the CODM for the purposes of resource allocation and assessment of segment performance Focuses on the types of goods or serviees delivered or provided. The principal products and services of each of these divisions are as follows: Canned and Processed Fish Canned Meat ‘Tuna Export Coco Water Corporate ‘Tuna Sardines (Other seafood-based products Comed Beef Meatloaf Other meat-based products Canned Milk Powdered Milk Other dairy products Private label canned, pouched and frozen tuna Other Coconut Beverages Coconut Oil Coconut Shells Other coconut products Management Services Warehousing ‘The segments’ results of operations of the reportable segments for the years ended December 31, 2015, 2014 and 2013 are as follows: 2015 2014 2013 Segment ‘Segment Profit Segment Segment Profit Before Segment — (Lows) Before Segment Profit (Loss) Revenue Reveaue Tax Revenue Before Tox ‘Canned and Processed Fish P9,935,986,391 PL,325,018,608 P 8882,214,782 PI,195,712,966 P > § « Cannes] Meat 780,967,863 909,677,038 90.378 319 ‘a34,382.455 5 : Milk 5,140,344,992 281,286,280 2,172,491,781 203,322,393 57738048 2,549,681, ‘Tona Export 5,334,262,578 184,788,046 5,384279,468 181,149,605 1,044.241,156 9,006,991 Corporate 7,941,039 53,888,741 3351917 (170819.478) = o7z2i.n6 Segmental 27,899,502,863 24754,623,713 225027164607 2.258,27,41 1421,621,004 604,444) Elmminations (274974286) "(24.236,094) _2.094.161,459) is : - 23,324,528,679 _P2,730,387,619_P20.438,555,008 2.238247, 941M 604 _(P 5.564.444‘The Coco Water segment was acquired towards the end of 2015, hence, did not contribute in the results of operations in 2015. ‘The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 5. Segment profit represents the profit before tax by each segment ‘without allocation of central administration costs and directors’ salaries, investment income, other gains and losses, as well as finance costs. This is the measure repotted to the CODM for the purposes of resource allocation and assessment of segment performance. ‘The segment assets and liabilities as at December 31, 2015 and 2014 are as follows: ms 2014 ‘Assets Liabilities ‘Assets Liabilities Canned and Processed Fish P28,068,238,200 P26,312,946,321 P15213,209,073 P14,378,488,348 Canned Meat 6881,774,525—5,665,531,859 78837478950 Milk 3840,373,839 _2,700,602,686 71997 958.349, “Tuna export 3,A55,851,639 ——2,393,783,062 5 76651658853, Coca Water 41,662,148,976 | 1,273,581,331 : Gospocare 16;583,009,865 _91822,956,171__13,108,459.26 _9,494,958,952 ‘Sepmient tral 60,191 797,134 48,168,791,40043,954,880,735 37,374 543.52 Elimination (43,409,848,615) _(41,733,674,790) _32.766,158,666) _(32.766,155,666) P16,781,948,519__P 6,$35,116,610_P11,188,725,060_P 4,608.387,786 For the purposes of monitoring segment performance and allocating resources between segments: + Allassets are allocated to reportable segments other than other financial assets, and current and deferred tax assets, Assets used jointly by reportable segments are allocated on the basis of the revenues earned by individual reportable segments. ‘+All Wabilises are allocated to reportable segments other than loans, other financial liabilities, current and deferred tex liabilities. Liabilities for which reportable segments are jointly liable are allocated in proportion to segment assets. ‘+ Eliminations include transactions among the segments of the Parent Company. ‘Other segment information as at and for the year ended December 31, 2015 are as follows: ‘Additions to Property and Finance Finance Equipment Depreciation Income __Costs Canned and Processed Fish P 499,153,522 P34,404,935 PP Canned Mest 158,843,006 18,008,047, = « Mik 20,821,668 16,551,085 - - ‘Tuna Expoxt 126,114,526 $7,490,686 - - Coco Watert 1,263,506,157 - - - Comporate 296,142,088 __ 33,839,825 7,620,951 1,158,333 P2,364,580,967_P152,384,578_P7,629,931_PI,158,333 "Params Pop, Plat and pep acai erg buses son aton.8 Other segment information as at and for the year ended December 31, 2014 ate as follows: ‘Adkltions to Peopesty and Finance Equipment Depreciation __Income Canned and Processed Fish P273897617 P 13573091P Cand Meat “190,397 377.730 “ ilk 56,081,767 and - “Tuna Expose 116334969 86814059 = = Comporate 49331510 43,168,054 9,165,276 _ 15,287 944 P539.736.460__P52740.848_P9.165.276_P15,287.944 Revenues and non-curzent assets are mainly based in the Philippines, which is the countey of domicile of the Group. “There were no business segments in 2013. CASH AND CASH EQUIVALENTS Cash and cash equivalents at the end of the reporting period, as shown in the consolidated statements of cash flows, can be reconciled to the related items in the consolidated statements of Binancial position as follows 2015 2018 ‘Cash on hand P 4153,084 P 285,648 Cash in banks 599,011,289 660,662,945 Cash equivalents 122,000,000 603,261,303, P722,164,343_P1,264,209,896 Cash on hand includes petty cash fund. Cash in banks eam interest ranging from 1% to 0.5% and 0.25 to 0.37% per annum in 2015 and 2014, respectively, and are unrestricted and immediately available for use in the current operations of the Group. Cash equivalents represent short-term fund placements and investments in unit investment trust funds (UITF3) with local banks, Short-term fund placements will mature in three months of less from the date of acquisition with annual interest rates ranging from 0.7% to 1.83% in 2015 and 2014 and 1.63 to 2.25% in 2013. These placements ate from excess cash and can be ‘withdrawn anytime for operations. Interest income eamed fiom bank deposits and placements amounted to P5,484,577, P7,547,753 and P495,102 in 2015, 2014 and 2013, respectively, as disclosed in Note 23,9. 10. ‘TRADE AND OTHER RECEIVABLES - net ‘The Group’s trade and other receivables consist of: 2015 2014 “Trade receivables P3,370,997,803 P2,302,244,515 Less: Allowance for doubtful accounts 28,619,597 36,958,537 3,342,378,206 —2,265,285,978 Advances to suppliers 231,522,573 '221,905,227 ‘Advances to officers and employees 12,497,052, 14,815,425 Accrued interest receivables 206,080 2,700,097 Others 6,087,815 57,024,922 P3,592,691,726 _P2,561,731,649 ‘Trade receivables represent short-term, non-interest bearing teceivables from various customers and generally have 30 days term or less. Advances to officers and employees are noninterest-bearing and are liquidated within one month, Advances to officers include salary loans which earned average interest rate of 8% per annum, Interest income eamed from salaty loans amounted to P517,144 in 2015, and nil in 2014 and 2013 as disclosed in Note 23. Other receivables, which consist mainly of receivables from vatious parties for transactions other than sale of goods, are noninterest-bearing and generally have terms of 30 to 45 days. Movements in the allowance for doubtful accounts as at December 31 are as follows: Notes __ 2018 2014 Balance, January 1 36,958,537 P 7,839,257 Reversal of impairment 2B - (1,242,810) Waite off (14,506,372) = Provision 4 5,587,422 30,307,633 “Translation adjustment 580,010 54,457 Balance, December 31 619,597 ‘The Group recognized additional impairment losses for the years ended December 31, 2015, 2014 and 2013 amounting to 5,587,422, P30,307,633 and nil, respectively, as disclosed in Note 24. In determining the recoverability of trade receivables, the Group considers any change in the ‘edit quality of the trade receivable from the date credit was initially granted up to the end of the reporting petiod. The concentration of credit risk is limited due to the customer base being lege and unrelated. Accordingly, the Management believes that there is no farther allowance for doubtful accounts required in excess of those that were already provided. HELD-TO-MATURITY INVESTMENTS. HITM investments pertain to treasury bonds which bear effective interest rates ranging from 2.84% to 3.62% per annum in 2015 with maturities sanging from two to three years, from date of acquisition, and 1.94% to 2.60% per ansum in 2014 and with maturities ranging from five to 30 months. ‘The HTM investments were acquired at a premium of P1,243,895 and 4,321,824 in 2015 and 2014, respectively.1. “The details of the Group's HTM investments are as follows: 2015, 2014 Curcent P14,686,601P152,435,803 Non-current 13,108,859 28,230,588 P27,195,460_P 180,666,391 ‘Movement in the Group’s HTM investments for 2015 and 2014 ate as follows: 201s 2014 Balance, beginning, 180,666,391 P = Acquisitions - 182,952,657 Maturities (151,410,000) - Amostization of premium 2,460,931) (2,266,266) P.27,795,460__P 180,666,391 Interest eared fiom HTM investments amounted to P1,628,210 and P1,617,523 in 2015 and 2014, respectively, as disclosed in Note 23. The unamortized premium amounted to P695,460 and P2,156,391 a8 at December 31, 2015 and 2014, respectively. INVENTORIES - net Details of the Group's inventories ate as follows: Note 2015 2014 Finished goods 22 -P3,401,906,532 P2,559,748,609 Work in process 22 83,814,607" 79,506,827 Raw materials 2 2,386,530,403 2,452,922,572 Spare parts and supplies 181,561,825 173,219,881 6,023,813,367 5,265,397,889 Allowance for decline in value (28,307,695) ~ Allowance for obsolescence (69,526,748) (71,192,497) P5,925,978,924 P5,194,205,392 Cost of inventories recognized as expense in 2015, 2014 and 2013 amounted to P17,128,162,072, P15,063,993,046 and P1,311,20,577, sespectively, as disclosed in Note 22. In 2015, the Group tecogaized loss on inventory write down due to the excess of cost over NRV amounting to P32,022,919. OF this amount, P3,715,224 was directly written off in finished goods inventory and recognized as part of operating expenses in Note 24. ‘The remaining amount of P28,307,695 came from CPAVI which was provided as an allowance for cecline in value of finished goods inventory.Bb. “Movement in the allowance for obsolescence of inventories are as follows: Note 2015 2014 2013, Balance, January 1 P7L,192,497 4,462,318 PO Provision during the period = 22, 17,913,363 71,192,497 4,162,318 Weitten off (19,579,112) (4,462,318) = Balance, December 31 69,526,748 __P71,192,497__P 4,462,318 “The Group provided allowance for obsolescence of inventories amounting to 17,913,363, 71,192,497 and P4,462,318 in 2015, 2014 and 2013, respectively, shown as part of cost of {goods sold in Note 22. PREPAYMENTS AND OTHER CURRENT ASSETS - net ‘The details of the Group's prepayments and other cusrent assets are shown below, Note 2015 2014 Input value added tax (VA'T) - net 140,356,308 P 48,956,339 Tax credits 59,934,235 38,622,973 Prepaid insueance 10,341,575 10,208,647 Prepaid rent 31 4,074,212 2,650,547 Other prepayments 18,443,884 18,176,936 233,150,214 118,611,442 Allowance for tax credits (14,466,567) 2 218,683,647 _P118,611,442 Input VAT in 2015, 2014 and 2013 are presented net of output VAT' of P556,243,538, 1P892,793,501 and P1,573,480, respectively. ‘Tax credits include creditable withholding taxes withheld by the Group’s customers and tax ‘xedit certificates (TCC) issued by the Bureau of Customs (BOC) to GTC, TCCs from BOC are granted to Boatd of Investment (BOI) registered companies and ate given for taxes and duties paid on raw materials used for the manufacture of theit export products. GTC can apply its ‘TCC against tax liabilies other than withholding tax ot can be refunded a8 cash. In psior years, the Group filed an application with the BOC for the conversion of its input ‘VAT to TCC. In 2015, the Group recognized an impairment loss on the amount of input VAT applied with BOC amounting to P14,466,567, as disclosed in Note 25, of winich amount, 1,442,247 pertains to CPAVI. INTANGIBLE ASSETS ‘The details of the Group's intangible assets are as follows: 2015, 2014 Goodwill P2,915,325,199 P 2 ‘Trademarks 40,000,000 40,000,000 P2,955,325,199__P40,000,000 {AULAGoodsill “The goodwill relates to the excess of the investment cost over the fair value of the net assets of CPAVI at the time of acquisition. Based on Management review at yeat-end of impairment indicators, goodwill is not impaired as at December 31, 2015, based on a third party valuation made on CPAVL, Trademarks ‘This amount represents Kafe de Oro and Home Pride trademarks registered with the Intellectual Property Office under the name of General Milling Corporation (GMO) that were acquired in 2008. The Group's trademarks are subject to annual impairment testing, [No impairment loss was recognized in 2015, 2014 and 2013 as Management believes that the recoverable amounts of the intangible assets ate higher than theit eartying amounts, BIOLOGICAL ASSETS Biological assets of the Group comprised of fingerings and mature milk fish with the following costs: 2015 2014 Balance, January 1 37,478,189 P= Purchased fingerlings 12,661,790 19,295,960 Consumed feeds 67,697,503 94,673,838 Direct labor 4,223,709 4,049,752 Overhead 8,744,169 3,543,118 Total cost 130,805,360 121,362,668, Decreases due to harvest (99,376,225) (85,884,479) 31,429,135 P 37,478,189 MANACAGE Te HL Te LrsORGd TES OLT Cea Tava thd wound wre ad TEDL ICE erSHOL a MEISE Ed ITO Wed TSLSOC Ed SEEVAL Sd SOVCIETR A GISTOSTECTA OOF SPEDE BORTOLE d Hoe Te sawsoG ey Swunoury Busse TAPTGGOEFT THOU ORF —_—ESINTP—~«CLTORMG~—=«C POTION «CET OREDS Foe TERM HHT Gareao oxee) Gee) arteee) ser) Toda BLE ree TST suze, cov eaa's eLoT 86 issuer torso sonspardagy CSET eee aurea coosiseor = zayIzz0r uogesnquio> ssomsnq wfnonA aoREMESy ustboo'eci"t eave: esos Lovessoc ——_osr'szc'one. ——_—acosc'rec —_Lev'vov'ss log “Te seamN29q| DOR CRD Dare) Teeron) aeSO Pee) IW = THOUCT sieorczst aigzisur ——zas'ton'e Wesgecst —96c'sit'zon Las i9s'LE ‘vonepasdoq, suoeIv0s6 ccversz bests (oro'esez zov'oes'az9 = Lsw'o08oze 0g "1 ores “amet wonepexiag pasejawnoay weRGUST FEED _—_—~SOTTTES_—«UBF UTR GLEE _ OF RTS She TERRES DTT seconde TOTS rR L——ORFTIS SSaRIpE MONET, Gu'ss00L0 ‘oz60e) Gaver) (ssn) 7 sesodsic] a = ‘ces czor suo s7a>3{ ovs'ructtor't sev'ese1 ‘vo0'oscor 0LsC 981 suomippY esr'90s'e9c't wesse's Tovses's cero eee, wonq3309 ssouning nosey uouEnboy ceveucres'? corres sc ov'ne gsu'sou'trs ous ter'e9 hoe “ie BquI0CT OUR TeLeCE OMT zie Wee Giacirec') Gove'ers) Gear'res'or) 7 oovorc'ecs §—aeLizuczse 005991 ZWisee 007d Lasers sor'zce'eoa og *t eeunf 90m 3909, Fer So SRT SRST ‘yuonaenswo;, por somieid pur, :saoq[oy st are auoundnb puv syd ‘Guradord s.dnow arp jo simoure Rurdanes ap ur siuawsAOpy 8 - LNTNdINOA NV LNVId ‘KLNAdONd “ST16. 17. Detsils of depreciation charged to profit or loss are disclosed below. 2015 2014 2013 Notes (One Year) (One Yeas)__(Ivo Months) Cost of goods sold 22 PM18,990,084 P121,679,500—PI,574,137 Operating expenses 2-4 33,394,494 31,069,848 6,643,057 152,384,578 _P152,740,348 8,217,174 Construction in progress pertains to accumulated costs incusred on the ongoing construction of the Group's new produetion plant and administration building as part of the Group's expansion program. Tn 2015, loss on sale of property, plant and equipment amounting to P3,353,569 was recognized, 2s disclosed in Note 25. In 2014, gain on sale of certain equipment amounting to 309,965 was recognized as disclosed in Note 23, Loss recognized from the disposal of land in 2013 amounted to P1,816,723, as disclosed in Note 25. Management believes that there is no indication that an impairment loss has occurred on its property, plant and equipment. OTHER NON-CURRENT ASSETS ‘The Group's other non-curtent assets consist of: Note 2015 2014 Seeurity deposits 31 32,837,594 P 81,936,265, Deposits on utilities 12,559,937 : Input VAT - non-cutrent - 13,809,408, Returnable containers 4,857,681 526,000 Others 587,225 4,841,034 50,842,437 101,112,707 Sccusity deposits pertain to deposits required under the terms of the lease agreements of the Group with certain lessors. Input VAT represents the unamortized amount relating to purchases of capital goods which is applied over five years against output VAT. Returnable containers are assets used in the delivery of the Group's products. Products for delivery do not include the value of these containers. Others represent deposits to public utility companies, NOTES PAYABLE ‘The notes payable in 2015 pertains to loans obtained by CPFI amounting to P2.25 billion, as disclosed in Note 1 On December 23, 2015, CPFI entered into short-term financing facilites with certain financial institutions through the issuance of promissory notes for the acquisition of CPAVI totaling P2,250,000,000. The notes payable are unsecured, All notes payable will all mature on March 22, 2016 subject to annual interest rates ranging from 2.25% to 2.50%. ‘There were loans outstanding in 2013 obtained by GTC and SMDC which were all fully paid in 2014, Finance costs charged to operations amounted to P1,158,333, P15,287,944 and P11,332,127, in 2015, 2014 and 2013, respectively18. wv. TRADE AND OTHER PAYABLES The Group's trade and other payables consist of Note 2015 2014 Trade payables P2,588,439,074 P2,396,694,531 Accrued expenses 1,107,762,877 1,196,337,134 Non-trade payables 48,337,508 202,640,092 Withholding taxes payable 85,432,108 84,314,296 Provisions 24 7,848,982 2 Output VAT - net - 47,031,421 Others 26,149,961 172,475,025 P3,863,970,207_P4,099,492,499 ‘The credit period on purchases of ce:tain goods from suppliers ranges from 30 to 120 days. No interest is charged on trade payables. Accrued expenses are non-interest bearing and are normally settled within one year. The Group has financial tisk management policies in place to ensure that all payables are paid within the credit period Non-trade payables pertain to payables to government and reimbursements to employees which are payable on demand and no interest is charged. Provisions recognized pertains to estimated losses relating to uncertainties that are associated with the natuze of its business operations. Other payables include liabilities relating to utilities and other payables. Breakdown for accrued expenses is as follows: 2015 2014 ‘Accrued trade payables, P 759,174,433 P995,658,174 Accrued product related cost 254,508,297 158,772,902 Accrued taxes 46,958,588, 7 ‘Accrued personnel cost 39,561,323 40,552,972 ‘Accrued utlities 6,390,760 860,623 Accrued professional cost 1,169,176 492,463 P1,107,762,577_P1,196,337,134 RETIREMENT BENEFIT OBLIGATION ‘The Group has set up the Century Pacific Group of Companies Multiemployer Retirement Plan which is « non-contributory and of the defined benefit type which provides a retirement benefit sanging from 100% to 130% of plan salary for every credited service, Benefits are paid in a lump sum upon setirement or separation in accordance with terms of the plan. Under the existing regulatory framework, Republic Act (RA) No. 7641, requires a provision for retirement pay to qualified private sector employees in the absence of any retirement plan in the eatity provided, however, that the employee's retirement benefits under any collective bargaining and other agreements shall not be less than those provided under the law. The law does not require minimum funding of the fund. ‘The Retirement Plan ‘Trustee, as appointed by the Group in the Trust Agreement executed by the Group and the duly appointed Retirement Plan Trustee, is responsible for the general administration of the retirement plan and the management of the retirement plan,As at December 31, 2015 and 2014, the Group's retirement fund has investments in various shares of stocks under the stewardship of a reputable bank. All of the Funé’s investing decisions are made by the Board of Trustees which is composed of certain officers of the Company. ‘The power to exercise the voting tights rests with the Board of Trustees, ‘The plan typically exposes the Group to actuarial risks such as: investment risk, interest sate risk, longevity risk and salary risk, Investment risks ‘The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to high quality corporate bond yields; ifthe return on plan asset is below this rae, it will create a plan deficit. Currently the plan’s investments are in the form of debt instruments of government security bonds, equity instruments and fixed income instruments, Due to the long-teem nature of the plan liabilities, the board of the pension fund. considers it appropriate that a reasonable postion of the plan assets should be invested in government security bonds. Interest ate risk A decrease in the government sceurity bond interest rate will increase the retirement benefit plan obligation Longevity risks ‘The present value of the defined benefit plan lability is calculated by reference to the best estimate of the mortality of plan participants both dusing and after their employment. ‘An increase in the life expectancy of the plan pasticipants will increase the setirement benefit obligation. Salary risk ‘The present value of the defined benefit plan obligation is calculated by reference to the fatare salasies of plan participants. As such, an increase in the salary of the plan participants will increase the retirement benefit obligation. “The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation wece carried out by an independent actuary for the year ended December 31, 2015. ‘The present value of the defined benefit obligation and the related current service cost was measured using the Projected Unit Credit Method. ‘The principal assumptions used for the purpose of the actuarial valuation were as follows: Valuation at 2015 Valuation at 2014 Expected Rate of Expected Rate of Discount Rate Salary Increase Discount Rate__ Salary Increase PFI 5.03% 4.00% 457% 4.00% Gre 520% 4.00% 47% 4.00% SMDC 4.93% 4.00% 4.66% 4.00% CPAVI 4.24% 4.00% - -Amounts secognize! in the consolidated statements of comprehensive income in respect of this defined benefit plan is as follows: 2015 2014 Service costs: Cusrent service cost 21,698,545 P 20,179,530 Past service cost 32,578,192 = Net interest expense 3,545,279 (2,096,678) Components of defined benefit costs recognized in profit or loss 57,822,016 __ 18,082,852 Remeasurement on the net defined benefit asset: (Return) Loss on plan assets (excluding amounts included in net interest expense) 6,839,004 1,886,849 Effect of asset ceiling (50,115) 16,648 “Actuarial (pains) losses: fom changes in financial assumptions (5,231,011) 5,763,174 from experience adjustments 33,018,837 2,463,583 from changes in demogeaphics : 80,243,059 Components of defined benefit costs recognized in OCL___ 34,576,715 90,373,313, P92,398,731_P 108,456,165 ‘The amount included in the consolidated statements of financial position arising from the Group’s defined benefit retirement plan is as follows: 2015 2014 Present value of defined benefit obligation 1P282,892,172 P195,721,431 Fair value of plan assets (125,852,401) (101,898,430) 157,039,771 93,822,995 Effect of asset ceiling _ = 47,883 Retirement bencfit obligation P157,039,771__P 93,870,878 ‘Movements in the present value of defined benefit obligations are as follows: 2015 2014 Balance, January 1 195,721,431 P 21,001,085 Current service cost 21,698,545 20,179,530 Past service cost 32,578,192 , Interest cost 9,033,203 904,347 Benefits paid (5,496,347) (12,916,842) Remeasurement (gain) loss: from changes in financial assumption (5,231,011) 5,763,174 from changes in experience adjustment 33,018,864 82,706,642 “Transfer of setizement obligations of acquized subsidiary 623,158 78,544,562 Effect of foreign currency exchange rate changes - 356,849 “Translation adjustments 946,137 (1,017,916 Balance, December 31 282,892,172 _P 195,721,431 IONIAN‘Movements in the fair value of plan assets are as follows: 2015 2014 Balance, Jamvary 1 PIOL848,436 21,054,582 Conisibutions paid into the plan 30,621,903 30,554,623 Interest income 5,305,709 2,984,940 Benefits paid (5,496,347) (12,916,842) Remuta on plan assets (excluding amounts included in ‘ct interest expense/income) (6,839,004) (1,886,849) Bffectof foreign curvency exchange rate changes - (623,464) Transfer of plan asset of acquised subsidiary 363,879 62,548,753 ‘Teanslation adjustments 47,825 32,693, Balance, December 31 125,852,401 _P101,848,436 In 2014, the Parent Company assumed the allocated retirement plan assets and bencfit ‘obligations to employees it absorbed from other related parties. The net obligation assumed amounting to P15,995,809 was recognized as pat of other expenses, under operating expenses in Note 24. “The following are the composition of plan assets at the December 31, 2015: Percentage Cash and cash equivalents 5.28 Debt instraments - Government bonds 36.59 Debt instruments - Other bonds 14.43 Unie investment trust fands 39.94 Others (market gains or losses, accrued receivables, et) 3.80 100.00 ‘The Retirement Trust Fund assets are valued by the fund manager at fait value using the mark-to-market valuation. While no significant changes in assct allocation are expected in the next financial year, the Retirement Plan Trustee may make changes at any time. ‘The Retirement Plan Trustee has no specific matching steategy between the plan assets and the plan liabilities. “Actual setuen on plant assets as at December 31, 2015 and 2014 ate as follows: 2015 2014 Interest income 5,305,709 —-P2,984,940 Remeasurement gain (loss) (6,839,004) (1,886,849) Actual return (1,533,295) __P1,098,091 Movement in the OCI zelating to retirement obligation for 2013 and 2014 are as follows: 2015 2014 Accumulated OCI, beginning P 90,373,313 (P 1,575,081) “Actuatial losses on DBO 27,787,826 93,851,891 Remeasurement losses on plan assets 6,839,004 (1,886,849) Effect of asset cellin (60,115) (16,648) 34,576,715 91,948,394 Accumulated OCT, ending 124,950,028 90,373,313 ANAmounts of OCI, net of tax recognized in the consolidated statements of comprehensive income for 2015 and 2014 ate computed below 2015 2014 Actuarial losses on DBO 27,787,826 P93,851,891 Remezsuzement losses on plan assets 6,839,004 (1,886,849) Effect of asset ceiling (60,115) (16,648) 34,576,715 91,048,394 Deferred tax asset (10,373,014) 584,518) OCI, net of tax P24,203,701___P 64,363,876 Significant actuarial assumptions for the determination of the defined obligation ate discount rate, expected salary increase and mortality. ‘The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the seporting petiod, while holding all other assumptions constant. ‘The following table surnmarizes the effects of changes in the significant actuarial assumptions vsed in the determination of the defined benefit obligation as at December 31, 2015 and 2014: Impict on post-employinent defined benefit obligation Change Increase in Deerese in Assumption Assumption Assumption 2018 Pri Discoust mite 411% (P21743,209 ——_-P25,402,508 Salesy increase sate 4+/-1% 23,081,779, (20,191,882) sMDC Discount rate 11624 10 13.5% (667,694) 9427 Salay inerease sate HIS1% to 13.0% aT (640,168) ere Discount rate +/-1% 379.018) 3.972.208 Salary increase rate +) 3,686,539) 6715270) cPAVI Discount mate 4/-1% 2.244), 100,602 Salury increase sate +/-1% 8938, 3,785) 2014 cert Discount ste 41.1% 7.824945) 8,770,623, Salary inevease rate 411% 7,619,625 (63962387) sMDC Discount sate (27,143) 320391 Salary inecease rate 284,374 261,769) Gre Discount sate (1,358,365) 1.492394 Salary increase rte 1279,169 1947308) “The sensitivity analysis presented above may not be representative of the actual change in the Gefined benefit obligation as itis unlikely that tae change in assumptions would occur in isolation ‘of one another as some of the assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the Projected Unit Credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation lability recognized in the consolidatedstatements of financial position “There wus no change in the methods and assumptions used in preparing the sensitivity analysis from prior years. ACASHARE CAPITAL 2015, 2014 Number of ‘Number of Shares Amount Shares ‘Authorized: ACPI par value £6,000,000,000_P6,000,000,000 10 Fully-paid and outstanding: Balance, January 2,231,021,604 P2,231,021,604 1,500,000,000 P1,500,000,000 Issuance 129,664,329 129,664,329 731,021,604 __731,021,604 Balance, December 31 2,360,685,953_P2,360,685,933 _2,251,021,604 P2,251,021,604 On December 29, 2015, CPGI subscribed t0 128,205,129 common shares of the Parent Company ata subscription price of P17.55 per shate fora total of P2,250,000,014. ‘On December 25, 2015, the Parent Company awarded stock grants of 40,000 common shares to cach of the executive commitiee members for a total of 400,000 common shares at an issue price of P16,54 per share, as disclosed in Note 28. On February 6, 2014, the Parent Company received subseriptions for $00,000,000 shares at P1 per share or P500 million. ‘The subscription was paid on the same date and the shares were issued on February 8, 2014, As disclosed in Note 1, the Parent Company filed with the SEC and the PSE on February 6 and 7, 2014, respectively, for an IPO consisting of 229.65 million primary shares ata maximum offer price of P14.50 per share. On May 6, 2014, The Parent Company's shares ‘were listed in the PSE, ‘The Parent Company has one class of common shares which carry one vote per share and carry @ right o dividends, Share premium of P4,911,986,439 and P2,769,337,410 as at December 31, 2015 and 2014, respectively, pertains 10 excess of proceeds from issuance of share capital over the par value, net of issuance costs. ‘The history of the share issuances from the initial public offering IPO of the Parent Company is as follows: Number of ‘Transaction Subscriber Registration Shaves Issued Issuance at incorporation Various 2013 1,500,000,00 PO Various 2014 229,650,000 Issuance subsequent to IPO Various 2014 500,004,404 Equity settled share based compensstion Various 2014 1,367,200 Issuance Various 2015 128,203,129 Equity-settled share based Various 2015 1,059,200 Stock grants Various 2015 490,000 2,360,685,933,21, NBT REVENUES ‘The account consists of 2015 2014 2013 Note __(One Year) (One Vest) ‘wo Months) Sales 2} P26,037,905,911—P22,324,199,815 P1,454,049,383 Less: Sales returns and discounts 2,733,377 332 1,885,644,807 32,427,779 23,324,528,579 __P20,438,555,008_P1,421,621,604 COST OF GOODS SOLD 2015 2014 2013 Notes __(One Year) __(One Yeas) __(Two Months) Raw materials used 1 P15,430,114,131 P14,497,648,79 _P1,831,058,191 Disect labor 26 1,481,491,082 —1,114,559,482 39,299,004 Factory overhead 15,2631 1,040,801,419 ——1,061,070,470 108,980,997 Loss on inventory obsolescence au 17,913,363, 71,192,497 4.462.318 Total manufacturing cost 17,910,319,995P16,744,471,228 —1,985,800,510 Changes in finished goods 11 (842,157,923) __(1,580,478,182) 672,579,933 P17,128,162,072 _P15,063,993,046 _P1,311,220,577 Direct labor includes salaties, outside manpower and employee benefits incurred from contractual and permanent employees OTHER INCOME “The Group’s other income consists of: 2015 2014 2013 Notes (One Yea) (ze Year) __(Two Months) Shared services fee 27 P 27,284,044 P 30,207,675 Poe Income from marketing support 27,247,817 15,263,411 “ Sale from serap 24,771,153 17,528,583 ~ Service income a 10,753,332 25,106,006 - Interest income 89,10 7,629,931 9,165,276 495,102 Supplier's incentive 4,706,810 66,949,200 : Reversal of impairment 9 - 1,242,810 B Rent income 31 e : 16,572,333, Foreign currency gaia - 17,811,310 6.178.334 Gain oa sale of property, plant and equipment 15 - 309,965 . Others 758,884 7,272,771 6,172,019 100,151,771 _P190,857,007__P29,417,78824, OPERATING EXPENSES “The Group's operating expenses consist of: 2015 2018 2013 Notes __(One Year) _(One Year) _(Lwo Months) ‘Advertising and trade promotion PA,582,060,441 P1,706,234,147 11,834,330 Freight and handling. 719,728,610 562,428,813 47,008,372 Salaties and employee benefits 26 564,244,171 283,272,444 177,597 Rent 3t 115,973,521 99,031,576 4,638,075 Outside services 107,065,105 169,136,678 1,435,847 Legal and professional fees 80,038,474 73,575,406 4,068,075, ‘Teavel and entertainment 74,501,855 62,371,563 Repairs and maintenance 59,649,997 35,566,770 Utilities 38,217,872 28,446,191 ° ‘Taxes and licenses 36,676,638 33,514,671 21,451,733 Depzeciation 15 33,394,494 31,069,848, 6,683,037 Supplies 23,245,385 34,875,805, 221,541 Insurance 14,405,501 19,170,527 55,989 Commission 12,381,634 6,726,450, 473,130 Pees and dues 11,356,257 28,432,068, Provisions 18 7,848,982 7 ; Doubtful accounts expense 9 5,587,422 30,307,633 - Inventory loss u 3,715,224 2 = Shared cost seimbussement 7 * 17,112,880, Others 19 38,438,693 68,142,774 8,750,701, P3,529,030,226 _P3,272,303,364 _P131,961,307 OTHER EXPENSES 2015 2014 2013 Notes (One Year) (One Year) (Iwo Months) Inpaizment loss on input VAT 12 PI3,024,320 Po Foreign exchange lors - net 5,923,019 77,066,838 2 Bank charges 4,357,964 5,343,913 : Loss on disposal of property, plant and equipment 15 3,553,509 = Miscellaneous. 9,083,228 6,260,469 P35,942,100_P39,579,720 2,189,82526, | BMPLOYEE BENEFITS “Aggregate employee benefits expense comprised of: 2015 2014 2013 Notes (One Year) __(One Yeas) __(Two Months) Cost of goods sokt Short-term benefits 177,317,700 425,754,926 51,309,209, Postemployment benefits 19 5,673,268 2,819,689 2 22 182,990,968 428,574,615 51,309,209, Operating expenses: Short-term benefits 510,210,046 264,632,297 6,082,907 Post-employment benedits 19 52,148,748 15,263,163 2,094,690 Share-based payments 28 1,885,377 3,376,984 : 24 364,284,171 283,272,444 177,597 741,235,139 __ P7184 27. RELATED PARTY TRANSACTIONS. In the normal course of business, the Group transacts with companies which are considered related parties under PAS 24, Relifed Party Transactions, as summarized below. Relationship PGI ‘Ultimate Parent Company ‘The Pacific Meat Company, Inc. (PMCI) Fellow Subsidiary Columbus Seafoods Corporation (CSC) Fellow Subsidiary Yoshinoya Century Pacific, Inc. Fellow Subsidiary RSPO Foundation, Ine. Fellow Subsidiary Century Pacific Vietnam Co., Ltd. Fellow Subsidiary ‘The summary of the Group’s transactions and outstanding balances with related parties as at sand for the years ended December 31, 2015 and 2014 is as follows: ‘Amount of Transactions During the CGunaning Reecivale Year (Payable) Related Party Category __Notes 2015 2018 2018 2014 ‘Ultimate Parent Company Perches ofiavemtores » Po PB (P126,764,208) Sale of faventores| 5 - 734,693 161,746.59 Service income : 19,611,538 = = Rental e 31,258,633, 17,352,000 004,679) Shazed cost seimbursemient € 13.486, a2iass.59s, E Fellow Subsidiaries Sale of faventores a 205,167,671 839,658,302 40,018,789 44382079 Purchase of inventoces b 23,990,996 -2,473,318,949 (19745515) (158,135,843) Shared services fee 4 27,234,044 30,207,673 6'528,326 Servi income « 14494,408 1,380,686 Royalty f - Shared cost seimbussement © 35,468,132 (62,463,994) 3 Retirement Fund CConteibutions from the employee 19 30,973,957, 30,554,623, 2 E ‘Due feom Related Pasties Psh369,875 212,656,754, Due to Related Pacties 13,979,192) __ (286,074,805 {ATA AE‘Terms and Conditions of Transactions with Related Partos Outstanding balances at year-end are unsceured, interest free and settlement occurs in cash or ‘non-cash, There have been no guarantees provided or received for any related party receivables cor payables. As at December 31, 2015 and 2014, no related party has recognized any impairment losses of receivables relating t0 amounts advanced to another related party. ‘This assessment is undertaken each financial year through a teview of the financial position of the related party and the market in which the related party operates. The Parent Company enters into sale transactions with its Ultimate Parent Company and fellow subsidiaries for the distribution of products to certain ateas where Management deems it necessary to establish customers, Sales are considered pass through sales, hence, they were made without mark-up. b. The Parent Company purchases goods from its related parties. These purchase transactions ate pass thtough transactions, hence, they wete made without mark-up, © The Parent Company shares cost with its related patties including repairs and maintenance, supplies, fees and dues, utilities and other operating expenses. The Parent Company entered into a Master Service Agreement (MSA) with related parties to provide corporate office services. In accordance with the terms of the MSA, the Parent Company provides management service for manpower, training and development. For and in consideration thereof, the Parent Company shall chayge the zelated parties theie share of the costs on a monthly basis for the services rendered. ‘The MSA shall be in effect from date of execution and shall automatically cenew on a ‘month-to-month basis, unless terminated by either party through the issuance of a written advice to that effect at least 30 days prior to the intended date of termination, Shared services fee amounted to P27,284,044, P30,207,675, and nil in 2015, 2014 and 2013, respectively, which is included in Other Income account in the consolidated statements of comprehensive income shown in Note 23, e The Group, as a lessee, has a lease agreement with CPGI for the use of the latter’s office space in Centerpoint, Ortigas. f In 2014, the Group has entered into Trademark Licensing Agreements whereby the “Licensor”, CGC, granted to the Group the exclusive right to use the various trademarks for a nominal fee for each trademark used. Remuneration of Key Management Personnel The temunesation of the Directors and other members of key management personnel of the Group are set out below in aggregate for each of the categories specified in PAS 24, Related Party Disclosures 2015 2014 Short-term employee benefits *P303,690,427 P211,068,659 Postemployment benefit 9,937,444 7,541,952 Shate-based compensation expense 1,885,376 2.452.275 315,513,247 P221,062,886 “The short-term employee benefits of the key management personnel are included as part of compensation and other benefits in the consolidated statements of comprehensive income. ‘The Group hes provided share-based payments to its key management employees for the years ended December 31, 2015 and 2074, as disclosed in Note 28 IASHARE-BASED PAYMENTS Employee Stock Purchase Plan (ESPP) ‘The ESPP gives benefit-eligible employees an opportunity to purchase the common shares of the Parent Company at a price lower than the fait market value of the stock at grant date ‘The benefit-eigible employee must be « regular employee of the Group who possesses a sttong pesformance record. The benefit-eligible employee shall be given the option to subscribe or purchase up to a specified number of shares at a specified option price set forth below. The eligible employee has the option to participate, or not. There ace designated ESPP purchase periods and an employee may elect to contribute an allowable percentage of the base pay through salary deduction. ‘The plan took effect upon the shareholder's approval on September 26, 2014 and was approved by the SEC on December 19, 2014. On June 3, 2015, the Parent Company’s BOD authorized to amend the existing ESPP to increase the undeslying shares from 3,269,245 shates to 8,269,245 shares. ‘The number of options granted is calculated in accordance with the performance-based formula approved by shareholders at the previous annual general meeting and is subject to approval by the remuneration committee. ‘As at December 31, the aggregate number of shares that may be granted to any single individual during the term of the ESPP in the form of stock purchase plans shall be determined in the following capping of shates as follows: 2015 2014 Head Maximum Total Shares Head Maximum Total Shares| Level Count Share Allocated Subscribed Count Share Allocated Subscribed ‘Vice President oz Board members 5 49,000 600,000 12, 40,000 480,000 Assistant Vice Presidents 9 18,300 164,700 15, 18,000 274,995 Managers 55 6,000 294,500 153 6000 918,000 Supervisors - - - 436 2500 1,090,000 Rank nd File : : - 405, 1250 506,250, oral n 3,059,200 1,021 3,269,245 In 2015 and 2014, the purchase period schedules and option price ate as follows: ‘Maximum Number of Purchase Period Available Shares Option Price 15% discount on the 3-mos average of ‘Volume Weighted aAverage Price (VWAP) 4s of the date of approval by the Company's December stockholders or ata Floor Price of IPO 1-31, 2015 8,269,245, price of P1482 15% discount on the 3-mos average of VWAP as ‘of the date of approval by the Company’s December stockioldess or at a Floor Price of IPO price of 1-10, 2014 3,269,245 P1375, ‘The ESPP was granted on December 19, 2014 upon the approval by the SEC. OF the total shares available under the ESPP, employees subscribed to 1,059,200 shares at P14.82 per shace in 2015 and 1,367,200 shares at P13.75 per share in 2014 shown as subscribed capital in the share capital in Note 20. wil 52.29. 31. TThe share-based compensation expense recognized from the ESPP amounted to P1,885,376 and P3,376,984, in 2015 and 2014, respectively, included in employee benefits in Note 26 and showa under equity as share-based compensation reserve. RETAINED EARNINGS (On July 30, 2015, the Parent Company’s BOD approved the declaration snd payment of the following cash dividends to shareholders of record as at July 30, 2015 and paid on Anugast 25, 2015: ‘a. Regular cash dividend of PO.10 per outstanding ordinary shates and b. Special cash dividend of P0.10 per outstanding ordinary share Total cash dividend declared amounted to P446,204,321, EARNINGS PER SHARE The calculation of the basic and diluted earnings per share is based on the following data: 2015 ami 2013 Profit (Loss) for the period PI,933,674,781P1,591,590,352 (P 1,147,240) ‘Weighted average number of common shares 2,231,782,198__2,004,316,379__1,500,000,000 Basicand diluted eaunings pershare PP 0.8664_P__—_—07600_(P_0.0008) ‘As at December 31, 2015, 2014 and 2013, the Parent Company has no potential dilutive shares, ‘accordingly, basic earnings per share of PO.8664, PO.7600 and P0.0008 in 2015, 2014 and 2013, respectively, are the same as diluted earnings per share. COMMITMENTS AND CONTINGENCIES Operating Leases The Group as hessor “The Company leases out its warchouse property in ‘Taguig, under an operating lease in 2013, Rent income in 2015 and 2014 amounted to ail, and P16,572,333 in 2013, as disclosed in Nove 23, ‘The Group as esee Operating lease payments represent rentals payable by the Group for leases of land, warehouses, office space and plant equipment. Leases are negotiated for an average term of berween one t0 10 years. ‘The amount of sent expense recognized as pact of cost of goods sold and operating expenses is as follows 2015 2014 2013 Note (One Year) (One Yess) __(I'wo Months) Cost of goods sold 22 —-P375,251,315 P523,252071 PO Operating expense 24 115,973,521 99,031,576 __4,638,075 491,224,836 P422,.283,647__ 4,638,075 AMINO O00 000 su‘The Group has a lease agreement with CPGI for the use of the latter's office space in Centerpoint, Ortigas. Rental expenses recognized in 2015 and 2014 amounted to P31,268,633, and P17,352,000, respectively, as disclosed in Note 27. Escalation clause ranges from 5% to 8% every two years. ‘Total rental deposits recognized in lidated statements of financial positon as part of non-current assets amounted 0 32,837,594 and P81,036,265 in 2015 and 2014, respectively, as disclosed in Note 16. Outstanding prepaid rentals as at December 31, 2015 and 2014 presented as part of ptepayments amounted to P4,074,212 and P2,650,547, respectively, as disclosed in Note 12, ‘There are also leases coveting warehouse and transportation equipment and venue rentals. ‘The lease texms for these leases cover short periods ranging from several days to one month, Future minimum sentals payable vader non-cancellable operating leases of the Group are as follows: 2015 2014 ‘Not later than one year 122,961,938 P 98,434,170 Later than one year but not later than five yeass 467,849,082 258,328,143 Latet than five years 50,871,783 161,737,848 641,682,803 __P518,520,161 ‘The credit facilities of the Group with several major banks are basically short-term omnibus lines intended for working capital use, Included in these omnibus bank line are revolving promissory note line, import letters of credit and trust receipts line, expott packing credit line, domestic and foreign bills purchase line, and foreign exchange line. ‘The ceedit facilities extended to the Group as at December 31, 2013 included a surety provision where loans obtained by the Group and its related parties, CPGI and PMCT, ace covered by exoss-cosporate guarantees ‘As at December 31, 2014, all loans of the Group have been fully settled and there were no loans outstanding, ‘As at December 31, 2015, the unused credit line facility amounted to P10,700,000,000. Capital Commitments As at December 31, 2015 and 2014, the Group has construction-in progress celating to its ‘ongoing civil works and installation of new machinery and equipment as past of the plant expansion and upgrade of the Parent Company, GTC and SMDC as follows: 2015 2014 CPEI 351,000,000 254,609,277 GIC 82,021,533 33,278,791 SMDC : 42,659,299 P433,021,533_P330,547,367‘The constmetion is expected to be completed in 2016 and has a remaining estimated costs to complete as follows: 2015, 2014 CPFL ‘P99,000,000 P_99,600,000 GTC 79,318,227 140,420,862 SMDC : 110,000,000 178,318,227 250,020,862 ‘These Group shall finance the zemaining estimated costs from internally generated cash from operations and remaining proceeds from IPO. Others ‘There are other commitments, guarantees, litigations and contingent liabilities that arise in the normal course of the Group’s operations which are not teflected in the accompanying consolidated financial statements. As at December 31, 2015, Management is of the opinion that losses, if any, from these commitments and contingencies will not have a maietial effect, on the Group's consolidated financial statements, INCOME TAXES Components of income tax expense (benefit) charged to profit or loss are as follows: 2015 2018 2013 Note __(One Year) (One Yeu) _ (Iwo Months ‘Curtent tax expense 804,636,643 PG62,890,422 5,642,790 Defetzed tax benefit 3 (7,923,802) (16,222,853) (10,159,994) P796,712,841 __P646,657,589_(P-4 517,204 ‘A reconciliation of tax on pretax income (loss) computed at the applicable statutory rate to tax expense (benefit) seported in the consolidated statements of comprehensive income is presented below. 2015 2014 2013 (One Year) (One Yeu) (Two Months) Accounting profit (loss) P2,730,387,619__P2,238,247.941 ___(P5,664,444) ‘Tax on pretax income (loss) at 30% P 819,116,286 P 671474382 (P1,699,333) Adjustment for income subjected to Tower income tax rate 794,866) 379,511) (169,193) ‘Tax effects of Initial public offering expenses chasged to equity) - (14,963,430) = Effects of previously unrecognized deferned tax asset * 149,165 2,056,127) Income under income tax holiday (25,963,866) (29,629,090) (1,111,713), Non-deduesible expenses 6,355,287 22,006,079 519,163 P 796,712,841 __P 646,657,589 4,517,204 ‘The Group’s net operating loss cazzy-over (NOLCO) in 2013 was applied in 2014, as follows: Yearof — Yearof 2013 2014 Incusvence__ Expiry Balance Addition Application Balance 2013 2016 217,294,411 P PITZ04411 Pe IONAMIN il33. DEFERRED 'TAXES ‘The Group recognized the deferred tax assets related to the following temporary differences as at December 31, 2015 and 2014 ‘Allowance Unread Excess of Post forsrcte- foreign Allowance contbution employment dovaof —curteney for Doutfl over seuzement —eneft inventory “lass” Accounts expense Obligation NOLCO Othe: Tout Deferred Tax Assets alee, January 1, 2014 9,285,249 PI,055,509 P3,301,574(P 102315) P-—P,N8IAS PP 726,912 (Charged to profit orlow for the year 12505672 (SITE) G7IBAID 4655 9132793054 (188.323) 533,89 16ee,8Ss Charged to OCI : = ~ 26)09,437 26,008,437 Trandation sdjusoments (2.507.669) 2.282.120 (153.189) (OpTor (259.19) > 3975 Balance, December 31,2014 15,282,252 ‘8867207 1.487.523 25,543,298 = SBR 56685,629 Charged to prot oo foe the year 935,798 . = 107.208 7148875 113012 51249 1081737 harged 0 OCI 7 : 7886315, p96 315 ansation adjustments 1,122,202 1954494 ; aaza60r_ 2412963 6328956 Balance, December 1, 2015 __P21,340.252 _PL954,424_P8,867.207 _PA,687,333_PA3,718,251_P 13.012 _P4,015,498_P81,725,977 ‘The deferred tax liability charged to profit oF loss for the years ended December 31, 2015, 2014 and 2013 amounted to P2,893,235, P460,222 and nil, respectively. In 2015, the Group recognized a deferred tax liability charged to OCI amounting to P240,820. Total deferred tax liability as at December 31, 2015 and 2014 amounted to P3,594,077 and P460,022, respectively. FAIR VALUE OF FINANCIAL INSTRUMENTS “The carrying amounts and fair values of the Group’s financial assets and financial liabilities as at December 31, 2015 and 2014 are shown below: 2015 2014 Canying Casing Amount Pair Value Amouat Fair Value Financial Asses Cash and cash equivalents P 22164643 P 722164343 F1,264,200,896 P2064 200,896 "Trade and other eccivables ~ net 3,592,691,726 3,592,601,726 2,561,731 649 2,561,731,649 Due from related partes 41,309,475 41369,475—"2ig656,754 212,050,754 HIM investments 23,795,460, 2,135,148 180,666,391 180,483,254 Security deposits 32837,594 32,837,594 81,936,265 81936265, Deposits on usin 12,559,987 123550,937, P5,429,418,535 _P4429,798,903 P4301 200,985 P4304,017,818 Financial Liabiliies [Notes payable P2,250,000,000 P2,250,000,000 P P 7 Trade and other payables 3722351612 3,722,381 612 3,968,146,782 968,140,782 Doe to seated pares 15,979,192 13,979,192 286,073,805 286,074,805 P5,986,330,804 _P5,986,330,804 174.254.201.587 __P4,254,221,587 Cash and cash equivalents, trade and other receivables, due from related parties, trade and other payables, which is net of government libilities and other mandatory contributions, notes payable and due to related pasties have maturities of less than 12 months, hence, their carrying, amounts aze considezed theit fac values as at December 31, 2015 and 2014. Total government liabilities and other mandatory contributions amounted to P141,618,595 and P131,345,717 as at December 31, 2013 and 2014, respectively. NMA35. ‘The fair values of security deposits and deposits on utilities were not determined using discounted cash flows because there are no available market data similar to the instrument. ‘Management believes that the discount using cash flow analysis is not material, hence, the carrying amount is considered its fair value. As at December 2015 and 2014, the fiir value of HM investments was determined using quoted bid prices in active markets under level 1 of the fair value hierarchy. Fair values were determined using the fair value hierarchy below: Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 fair value measurements are those detived from inputs other than quoted prices included within level 1 that are observable for the assets or lability, either direetly (Ge, as prices) or indireetly (ce, dexived from prices) Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset of liability that are not based on observable market data (unobservable inputs). FINANCIAL RISK MANAGEMENT: Financial rk management objecsioes and poles ‘The Group's activities expose it to a vatiety of financial risks: matket risk (which include interest rates risk and foreign currency exchange tisk), credit risk and liquidity tisk. ‘Ihe Group’s overall isk management program secks to minimize potential adverse effects on the financial performance of the Group. The policies for managing specific risks are summatized below: Market risk ‘Market risk happens when the changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's profit or the value of its holdings of financial instruments. The Group focuses on interest rate risk and foreign currency exchange risk. The “objective and management of this risk is discussed below. Interest rate risk: Interest rate risk arises when the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest. ‘The primary source of the Group’s interest sate tisk relates to cash and cash equivalents, HTM investments and notes payable. Interest rates are disclosed in Notes 8, 10 and 17. Cash equivalents are short-term in nature and with the current intetest rate level, any vatiation in the interest will not have a material impact on the profit of the Group, Notes payable is subject to specified interest rate referenced to the prevailing loan matket interest rate. Any variation in the interest will not have a material impact on profit or loss of the Group, HITM investments are carried at amortized cost, 2s disclosed in Note 10, and bear fixed effective interest rates, hence, any variation in the market interest will generally not have an impact on the profit or loss of the Group. Notes payable have short-term maturities and fixed interest rates, hence, any variation in the market interest will generally not have an impact on the profit or loss ‘The Group has no established policy is managing interest rate risk. Management believes that uctuations on the interest rates will not have significant effect on the Company's financial performance. EEOForeign carengyexebange rth Foreign currency exchange risk arises when an investment’s value changes due to movements in currency exchange rate. Foreign exchange risk also arises from furure commercial transactions and recognized assets and liabilities that are denominated in a currency that is not the Group's functional currency. ‘The Group undertakes certain transactions denominated in US Dollar, hence, exposures to exchange sate fluctustions arise with respect to transactions denominated in such currency. Significant fluctoation in the exchange rates could significantly affect the Group’s financial position. ‘The carrying amounts of the Group's foreign currency denominated (USD) financial assets and financial libilities at the end of each reporting period are as follows: 2015 2014 Cash and cash equivalents P 153,614,590 P333,732,031 Trade and other receivables 1,290,251,175 554,152,511 ‘Trade and other payables (862,027,886) _ (399,428,930) P_ 581,837,909 _P488,455,612 ‘The following table details the Company's sensitivity to a 0.15% increase and decrease in the functional currency of the Company against the US Dollar. The sensitivity rate used in reporting foreign currency risk internally to key management personnel is 0.15% and it represents Management’s assessment of the reasonably possible change in foreign exchange ste. The sensitivity analysis inchudes only outstanding foreign currency denominated monetary items and adjusts their translation at the end of the period for a 0.15% change in foreign currency rate. ‘The sensitivity analysis includes all of the Company's foreign currency denominated monetary ascets and liabilities, AA positive number below indicates an increase in profit and other equity when the functional eurreney of the Company strengthens 0.15% against the relevant currency. For a 0.15% decline of the functional currency of the Company against the selevant eusreney, there would be an equal and opposite impact on the profit as shown below: 2018 2014 Cash and cash equivalents (230,421) (P500,598) ‘Trade and other receivables (1,935,377) (831,228) “Trade and other payables 1,293,042 599,143 (P_ 872,756) (P732,683) Credit rst Credit risk refers to the sisk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. It has policies in place to ensure that services are sendered to customers with an appropriate credit history.‘The table below presents the Group's maximum exposure to eredit rske without taking into account the value of any collateral obtained: 2015 2014 Cash and cash equivalents P 724,011,289 P1,263,924,248 ‘Teade and other receivables 3592,691,726 2,561,731,649 Due from related parties 41,369,475 212,656,754 HITM investments Secutity deposits Deposits on utilities 27,795,460 180,666,391 32,837,594 81,936,265 12,559,937 : P4,428,265,481_P4,300,915,307 “The aging analysis of the Company's financial assets as at December 31 is as follows: = ast Due Aedount na Not pale Tpetel Ducner 180 Daps SL4UDays—G1-90Days OverS0Days Frm Impaired Vast Due Pastas PustDue__PustDue Assets Te 2018 Cohandosdepivae PTA Po PR. aang "Traded oir receivables 260,003,819 521200,051 152866252 S9,016643 MGSILATT 28619977 3,708,396089 De Sones partis 1,305,975 - = : is ~L3@.5 ETM investment aT795,460, : : > are5.460 Sceuity depuis SE807.598 : : e 5 ssrs94 Deposits ob uses ass997 : s 3 7 = ass9i907 3695.667574 P521200,051 PUS2,866,252 _PS9.076643_P 8631477 _P2K610,897_P4.45,970,594 Cashand cash events PI269924288 PP - Pe mp pagan Trade snd other reeiaes 1005951506 616760790 S85 627818 2 DoOL4ONd 307.1602 S6pSHST ZeIaTH ES ‘De om sete pases 7 ST ar66 754 TTIM ivestmenia 2 a 2 : 1406301 Secaniy deport = 2 z z = sips 724835,135464 POLGTEOO PSSSSI7SI POOQULAON _P307.162005 _P36I58537_P4SSI,S86 ‘The amount of tade receivables presented is gross of collections received but not applied against individual customer balances pending identification of the collections against specific customers amouating to P87,085,516 and P213,784,502 as at December 31, 2015 and 2014, respectively. The following table details the credit quality of the Group's neither past due nor impaired financial assets: ‘Nether Past Dve nor Impaired Acceptable Law HighGrude_ Suibctony Gaile Gage Grade ‘toed 208 (Cah and ch uiaente Pmouz@ — P : Pe P- P mouz9 Trae nd her recsvbler - 2,360,093519 : 2 acn.093819| De rom colt pais snes, : : 41300475, ETM invertmente 27795400 : . 2795460 Scout depose 32,937,504 : : S2837,508 Deposits on uakscs : wisspos7 : : 12555957 Progi6z24 _72.905,401,350, P3.595,067.574 a4 ash and eas equates Pigsg2ee —P P ? “Traleant oer ridley 1,095, 951,806 i ‘Due fom elated patie, 213656754 7 : HTM invesorenst 10,666,391 Seomnty deposit agseaes : biggie Pursue Be 12835,135454 AMO Im 5036. ‘The Company uses internal ratings to determine the credit quality of its financial assets. These have been mapped to the summary rating below: High Grade applies to highly rated financial obligors and strong co:porate counterparties. Satisfactory Grade ~ applies to financial assets that are performing as expected, including loans and advances to small and medium sized entities and recently established businesses. Acceptable Grade ~ applies to counterparties with tisk profiles that are subject to closer monitoring and scrutiny with the objective of managing risk and moving accounts to improved rating category. Liquidity risk, Liquidity tisk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.'The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient Liquidity to meet its Habiliies when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation, “The Company manages liquidity risk by continuously monitoring foreeast and actual cash flows and matching the maturity profiles of financial assets and liabilities. "The following tables detail the Group’s remaining contractual matutity for its non-derivative financial abilities. The tables have been drawn up based on the undiscounted cash flows of financial Habilities based om the earliest date on which the Group can be required to pay. ‘The table includes both interest and principal cash flows Weighted Less than More than Average Rate___One Year __One Year 2015 ‘Trade and other payables P3,729,042,261P Notes payable 05% 2,251,158,333 > ‘Due from related parties 13,979,475 P5,994,180,069 __P_— 2014 ‘Trade and other payables P3,908,146,782P ‘Due from related parties 286,074,805 : P4,254,221,587 PP - ‘The difference between the carrying amount of trade and other payables disclosed in the consolidated statements of financial position and the amount disclosed in this note pertains to government payables that are not considered financial liabilities. CAPITAL RISK MANAGEMENT ‘The Group’s objectives when managing capital are to increase the value of sharcholder’s investment and maintain high growth by applying free cash flows to selective investments that ‘would forther the Group's growth. ‘The Group sets strategies with the objective of establishing ‘versatile and resourceful financial management and capital structure. The Group's overall strategy remains unchanged from 2014, AMUN 0The BOD has overall esponsibility for monitoring working capital in proportion to risk. Financial analytical reviews are made and reported in the Group's financial reports for the BOD?s review on a regular basis. In case financial reviews indicate that the working capital sourced from the Group’s own operations may not support fature operations of projected capital investments, the Group obtains financial support from its related partis. ‘The Group’s management aims to maintain certain financial ratios that it deems prudent such as debt-to-equity ratio (aot to exceed 25:1) and current ratio (at least 1.0:1). The Group regularly reviews its financials to ensure the balance between equity and debt is monitored. In addition, when the Group is able to meet its targeted capital ratios and has a healthy liquidity position, the Group aims to pay dividends to its shareholders of up to 30% of previous year’s net income. ‘The Group’s total liabilities and total equity in 2015 and 2014 are as follows: 2015 2014 ‘Total liabilities P-6,435,116,610 P4,608,387,786 ‘Total equit 10,346,831,909 __6,580,337,283 Debtcto-equity ratio 0.6231 0701 Pursuant to the PSE’s rules in minimum public ownership, at least 10% of the issued and outstanding shares of a listed company must be owned and held by the public. As at December 31, 2015 and 2014, the public ownership is 15.28% and 10.3%, respectively. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS ‘The consolidated financial statements of the Group have been approved and authorized for issuance by the Board of Directors on March 31, 2016. OL