1. business and industrial
2. company
3. merger and acquisition

COVER SHEET
1 7 4 6
S T I
ED U C A T I ON
H O L D I N G S,
S Y S T E MS
I N C.
(Company's Full Name)
7/ F
i A C A D E M Y
6 7 6 4
B L D G. ,
A Y A L A
A V E. ,
M A K A T I
C I T Y
1 2 2 6
(Business Address : No. Street City / Town / Province)
KATELYNE ANNE A. BROOKS
(6 3 2) 8 4 4 9 5 5 3
Contact Person
0 3
3 1
Month
Day
Company Telephone Number
SEC FORM 17-Q For the Quarter ended 30 June 2013
Last Friday of September
Month
FORM TYPE
Fiscal Year
Day
Annual Meeting
N A
Secondary License Type, If Applicable
C F D
N A
Amended Articles Number/Section
Dept. Requiring this Doc.
Total Amount of Borrowings
1
2
4
N A
5
Domestic
Total No. of Stocholders
To be accomplished by SEC Personnel concerned
File Number
LCU
Document I.D.
Cashier
STAMPS
N A
Foreign
SECURITIES AND EXCHANGE COMMISSION
SEC FORM 17-Q
QUARTERLY REPORT PURSUANT TO SECTION 17 OF THE SECURITIES
REGULATION CODE AND SRC RULE 17(2)(b) THEREUNDER
1.
For the quarterly period ended
30 JUNE 2013
2.
SEC Identification No.
1746
3.
BIR Tax Identification No.
000-126-853
4.
Exact name of registrant as specified
in its charter
STI EDUCATION SYSTEMS
HOLDINGS, INC.
5.
Province, Country or other
Jurisdiction of incorporation
or organization
Philippines
6.
(SEC Use Only)
Industry Classification
Code
_____________________
7.
Address of Philippine Office
7/F iACADEMY Building
6764 Ayala Avenue
Makati City, 1226
8.
Registrant’s Telephone No.
including Area Code
(632) 844-9553
9.
Former name, former address, former
fiscal year, if changed since last report
10.
JTH DAVIES HOLDINGS, INC.
Securities Registered pursuant to Sections 4 and 8 of the RSA.
Title of Each Class
Number of Shares of
Common Stock Outstanding
and Amount of Debt
Outstanding
-----------------------------------------------------------------------------------------------------COMMON SHARES – 9,904,806,924 - ISSUED AND OUTSTANDING
-----------------------------------------------------------------------------------------------------9,108,989,135 – LISTED SHARES
-----------------------------------------------------------------------------------------------------
11.
Are any or all of these securities listed on the Philippine Stock Exchange?
Yes [ x ]
No [ ]
Annex “A”
STI EDUCATION SYSTEMS HOLDINGS, INC.
AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
ASSETS
Current Assets
Cash and cash equivalents (Note 6)
Receivables (Notes 7and 16)
Inventories
Prepaid expenses and other current assets
Total Current Assets
P
Noncurrent Assets
Property and equipment (Note 8)
Investment properties
Investments in and advances to associates and
joint ventures (Notes 9 and 13)
Noncurrent receivables (Notes 12 and 16)
Available-for-sale financial assets (Note 16)
Deferred tax assets
Goodwill, intangible and other noncurrent assets
(Notes 10 and 16)
March 31, 2013
April 30, 2012
(Unaudited)
(As Restated)
(As Restated)
1,303,451,320 P
200,802,097
35,528,385
43,075,354
1,582,857,156
1,489,451,909 P
250,773,204
34,740,103
37,467,793
1,812,433,009
2,829,080,302
38,831,494
2,635,275,971
39,325,291
1,544,229,394
47,107,290
2,064,260,559
463,978,935
33,251,747
11,024,332
2,905,319,376
463,978,935
4,663,478
10,962,122
1,588,440,147
227,704,573
4,987,638
9,581,891
704,329,551
Total Noncurrent Assets
P
LIABILITIES AND EQUITY
Current Liabilities
Short-term loans (Note 16)
June 30, 2013
P
642,000,576
6,144,756,920
7,727,614,076 P
-
P
556,282,842
267,499,863
42,143,148
25,818,664
891,744,517
272,093,879
6,701,525,749
8,513,958,758 P
3,694,144,812
4,585,889,329
P
746,687,336
-
Accounts payable and other current liabilities
(Notes 10 and 16)
332,674,452
320,685,820
301,720,294
Current portion of obligations under finance lease
Income tax payable
Total Current Liabilities
5,237,161
16,191,936
354,103,549
6,419,251
5,030,213
332,135,284
9,741,235
2,015,617
1,060,164,482
Noncurrent Liabilities
Obligations under finance lease - net of current
portion
Pension liabilities
Total Noncurrent Liabilities
Total Liabilities (Carried Forward)
11,767,785
26,034,945
37,802,730
391,906,279
13,339,807
23,061,832
36,401,639
368,536,923
8,956,367
55,415,856
64,372,223
1,124,536,705
Total Liabilities (Brought Forward)
Equity Attributable to Equity Holders of the
Parent Company
Capital stock (Note 12)
Additional paid-in capital (Note 12)
Cost of shares held by a subsidiary (Note 12)
Unrealized mark-to-market loss on available-forsale financial assets
Share in associates’ unrealized mark-to-market
gain on available-for-sale financial assets
Cumulative actuarial gain (loss)
Other equity reserve (Note 12)
Retained earnings (Note 12)
Appropriated
Unappropriated
Total Equity Attributable to Equity Holders
of the Parent Company
Equity Attributable to Non-controlling
Interests
391,906,279
368,536,923
4,952,403,462
1,119,079,467
(500,009,337)
4,952,403,462
1,119,079,467
(500,009,337)
(140,032)
(121,773)
923,148,957
23,615,353
(1,649,448,394)
800,000,000
1,558,284,152
1,905,291,022
23,615,353
(1,649,448,395)
800,000,000
1,352,261,000
1,039,792,824
(14,120,007)
648,667,135
800,000,000
668,528,846
7,226,933,628
8,003,070,799
3,272,159,378
108,774,169
Total Equity
P
7,335,707,797
7,727,614,076 P
142,351,036
8,145,421,835
8,513,958,758 P
1,124,536,705
551,500,000
77,592,234
(500,009,337)
207,683
189,193,246
3,461,352,624
4,585,889,329
STI EDUCATION SYSTEMS HOLDINGS, INC.
AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED JUNE 30, 2013 AND 2012
Three Months Ended
June 30
2013
2012
(Unaudited)
REVENUES
Sale of services:
Tuition and other school fees
Educational services
Royalty fees
Others
Sale of goods Sale of educational materials and supplies
P
COSTS AND EXPENSES
Cost of educational services
Cost of educational materials and supplies sold
General and administrative expenses
INCOME BEFORE OTHER INCOME
AND INCOME TAX
252,439,728 P
42,830,901
3,609,784
7,264,481
24,299,990
330,444,884
227,719,369
40,088,673
3,500,882
22,713,822
26,402,721
320,425,467
82,958,013
17,820,061
190,065,488
290,843,562
89,019,055
19,795,675
185,624,409
294,439,139
39,601,322
25,986,328
199,588,455
(349,481)
1,489,473
2,971,987
14,932
(36,300,592)
(6,699,695)
111,292,273
(16,971,496)
2,154,635
6,341,719
16,155
-
160,715,079
102,833,286
200,316,401
128,819,614
OTHER INCOME
Equity in net gains of associates and joint ventures
(Note 9)
Interest expense (Note 10)
Rental income (Note 12)
Interest income (Notes 6 and 12)
Dividend income
Loss on sale of :
Loss on deemed sale
Loss on swap
INCOME BEFORE INCOME TAX
PROVISION FOR (BENEFIT FROM) INCOME
TAX
Current
Deferred
NET INCOME (Carried Forward)
P
15,105,924
(62,210)
12,679,173
(14,463,323)
15,043,714
(1,784,150)
185,272,687 P
130,603,764
NET INCOME (Brought Forward)
P
OTHER COMPREHENSIVE INCOME (LOSS)
Actuarial gain
-
Share in associates’ unrealized mark-to-market gain on
available-for-sale financial assets, net of realized mark-tomarket gain (loss) recognized to profit or loss
Unrealized mark-to-market loss on available-for-sale
financial assets
Realized mark-to-market gain on available-for-sale
financial assets recognized to profit or loss
TOTAL COMPREHENSIVE INCOME (LOSS)
Net Income Attributable To
Equity holders of the Parent Company
Non-controlling interests
(994,968,464)
(18,260)
(994,986,724)
(994,986,724)
38,640,001
21,892,756
(475,326)
21,417,430
60,057,431
(809,714,037) P
190,661,195
P
206,023,152 P
(20,750,465)
185,272,687 P
127,518,724
3,085,040
130,603,764
(776,137,173) P
(33,576,864)
(809,714,037) P
185,143,240
5,517,955
190,661,195
P
P
Basic/Diluted Earnings Per Share on Net Income Attributable to Equity Holders
of the Parent Company
130,603,764
P
P
Total Comprehensive Income Attributable To
Equity holders of the Parent Company
Non-controlling interests
185,272,687 P
0.021
0.018
STI EDUCATION SYSTEMS HOLDINGS, INC.
AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 2013 AND 2012
Equity Attributable to Equity Holders of Parent Company
Capital Stock
At April 1, 2013, as previously
reported
P
Additional Paidin Capital
4,952,403,462 P 1,119,079,467 P
Cost of shares
held by a
Subsidiary
(500,009,337) P
Allowance for
gain on FV
changes in
investments in
equity securities
(121,773) P
Share in
Associates’
Unrealized
MTM gain on
AFS
1,905,291,022 P
Retained
Earnings appropriated
Other Equity
Reserve
-
P
(1,649,448,394) P
23,615,353
Effect of adoption PAS 19R
4,952,403,462
As restated
-
Net income
Other comprehensive income
Total comprehensive income
Balance at June 30, 2013
Cumulative
Actuarial Gain
(Loss)
P
1,119,079,467
-
4,952,403,462 P 1,119,079,467 P
(500,009,337)
(500,009,337) P
(121,773)
1,905,291,022
(18,259)
(18,259)
(140,032) P
23,615,353
(1,649,448,394)
(982,142,065)
(982,142,065)
923,148,957 P
-
23,615,353 P
800,000,000 P
(1,649,448,394) P
800,000,000
800,000,000 P
Retained
Earnings Unappropriate
d
1,351,854,503 P
Total
7,979,048,950 P
Equity
Attributable to
Non-Controlling
Interests
142,037,319 P
Total Equity
8,121,086,269
406,497
24,021,850
313,716
24,335,566
1,352,261,000
8,003,070,800
142,351,035
8,145,421,835
206,023,152
206,023,152
(20,750,466)
185,272,686
206,023,152
1,558,284,152 P
(982,160,324)
(776,137,172)
7,226,933,628 P
(12,826,400)
(33,576,866)
108,774,169 P
(994,986,724)
(809,714,038)
7,335,707,797
Equity Attributable to Equity Holders of Parent Company
Capital Stock
At April 1, 2012, as previously
reported
Effect of adoption PAS 19R
As restated
Transaction costs - offering
Net income
Other comrehensive income
Total comprehensive income
Acquisition of non-controlling
interest
Balance at June 30, 2012
P
551,500,000 P
551,500,000
Additional Paidin Capital
77,592,234 P
77,592,234
Cost of shares
held by a
Subsidiary
(500,009,337) P
(500,009,337)
Allowance for
gain on FV
changes in
investments in
equity securities
207,684 P
207,684
Share in
Associates’
Unrealized
MTM gain on
AFS
1,039,792,823 P
1,039,792,823
Cumulative
Actuarial Gain
(Loss)
Retained
Earnings appropriated
Other Equity
Reserve
- P
(14,120,007)
(14,120,007)
648,667,134 P
800,000,000 P
648,667,134
800,000,000
Retained
Earnings Unappropriate
d
668,670,934 P
(142,087)
668,528,847
127,518,724
-
P
551,500,000 P
-
77,592,234 P
-
(500,009,337) P
(455,732)
(455,732)
(248,048) P
21,005,762
21,005,762
1,060,798,585 P
37,074,486
37,074,486
22,954,479 P
-
648,667,134 P
-
800,000,000 P
127,518,724
796,047,571 P
Total
Equity
Attributable to
Non-Controlling
Interests
Total Equity
3,286,421,472 P
(14,262,094)
3,272,159,378
189,795,480 P
(602,235)
189,193,245
3,476,216,952
(14,864,329)
3,461,352,623
127,518,724
57,624,516
185,143,240
3,085,040
2,432,915
5,517,955
130,603,764
60,057,431
190,661,195
3,457,302,618 P
194,711,200 P
3,652,013,818
STI EDUCATION SYSTEMS HOLDINGS, INC.
AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 2013 AND 2012
2013
2012
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
Depreciation and amortization (Note 8)
Provision for impairment
Interest expense
Pension expense
Interest income
Equity in net earnings of associates (Note 9)
Loss (gain) on sale of:
Loss on swap
Loss on deemed sale of investments in associates
Dividend income
Operating income before working capital changes
Decrease (increase) in:
Receivables
Inventories
Prepaid expenses and other current assets
Increase in accounts payable and other current liabilities
Contributions to plan assets
Net cash generated from operations
Interest received
Income and other taxes paid
Net cash flows provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of:
Property and equipment (Note 8)
Noncurrent receivable
Investments in and advances to associates and affiliates
Decrease (increase) in:
Investments in and advances to associates and joint ventures
Goodwill and other noncurrent assets
Interest received
Dividends received
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from:
Short-term loans
Obligation under capital lease
Dividend paid
Interest paid
Net cash flows provided by (used in) financing activities
P
200,316,400 P
128,819,614
37,501,613
333,494
5,185,745
(2,240,245)
(199,588,455)
6,699,695
36,300,592
(14,932)
84,493,907
34,883,505
5,779,023
16,971,496
1,587,140
(6,341,719)
(111,292,273)
-
49,971,106
(788,282)
(7,911,636)
11,988,632
137,753,727
2,240,245
(3,852,756)
136,141,216
(7,224,192)
5,100,169
3,929,988
94,334,785
(1,730,738)
164,800,643
(3,869,934)
1,492,096
162,422,805
(230,812,148)
(85,928,008)
(2,328,975)
14,932
(319,054,199)
(633,383,528)
(26,020,916)
(9,060,615)
(2,754,112)
(333,494)
(3,087,606)
529,000,000
(583,119)
(550)
(16,971,496)
511,444,835
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS(186,000,589)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
1,489,451,909
P 1,303,451,320 P
CASH AND CASH EQUIVALENTS AT END OF YEAR
(16,155)
70,390,631
(11,431,373)
1,991,769
16,155
(677,888,508)
(4,020,868)
556,282,842
552,261,974
-1-
STI EDUCATION SYSTEMS HOLDINGS, INC.
AND SUBSIDIARIES
NOTES TOINTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
1. Corporate Information
a. General
STI Education Systems Holdings, Inc. (formerly JTH Davies Holdings, Inc., “STI Holdings”
or the “Parent Company”) and its subsidiaries (hereafter collectively referred to as the
“Group”) are all incorporated in the Philippines and registered with the Philippine Securities
and Exchange Commission (“SEC”). STI Holdings was originally established in 1928 as the
Philippine branch office of Theo H. Davies & Co., a Hawaiian corporation. It was
reincorporated as a Philippine corporation and registered with the SEC on June 28, 1946. STI
Holdings’ shares were listed on the Philippine Stock Exchange on October 12, 1976. On June
25, 1996, the SEC approved the extension of the Company’s corporate life for another 50
years. The primary purpose of the Company is to invest in, acquire, use, transfer, lease,
mortgage, exchange or otherwise dispose of personal and movable property, including shares
of stock, evidence of indebtedness and other securities or obligations of any entity and
exercise all the rights, powers and privilege of ownership, but not to act as dealer in securities.
STI Holdings aims to focus on education and education-related activities and investments.
STI Holdings’ registered office address, which is also its principal place of business, is at 7/F,
iAcademy Building, 6764 Ayala Avenue, Makati City.
b. Change in ownership of STI Holdings
i) STI Education Services Group, Inc. (“STI ESG”) and Capital Managers and Advisors,
Inc. (“CMA”) owns 45.54% and 45.50%, respectively, of STI Holdings’ shares as of
March 31, 2012(see Note 12).
On June 14, 2012 and August 10, 2012, the Board of Directors (“BOD”) and stockholders
of STI Holdings, respectively, approved the following: (i) change in its corporate name to
STI Education Systems Holdings, Inc., (ii) the share-for-share swap agreement (“Share
Swap”) with the shareholders of STI ESG (“STI ESG Stockholders”) and (iii) the
corresponding increase in its authorized capital stock from 1,103,000,000 shares with an
aggregate par value of P
=551.5 million to 10,000,000,000 shares with an aggregate par
value of P
=5,000.0 million (see Notes 3 and 12). The change in corporate name was
approved by the SEC on September 10, 2012 while the Share Swap agreement and
increase in the authorized capital stock were approved on September 28, 2012.
In view of the increase in its authorized capital stock and pursuant to the Share Swap, STI
Holdings issued 5,901,806,924 shares to STI ESG Stockholders in exchange for
907,970,294 STI ESG shares. As a result, immediately after the Share Swap, the STI
ESG Stockholders who joined the Share Swap owned approximately 84% interest in STI
Holdings while STI Holdings owned 96% of STI ESG (see Notes 3 and12).
-2-
ii) On August 28, 2012, the BOD approved the offering and issuance by way of a follow-on
offering of up to a maximum 3,000,000,000 common shares (the “Offer”) at an offer price
to be determined based on a bookbuilding process and from discussion between STI
Holdings and the International Lead Manager and Domestic Lead Manager. The Offer
comprised of the following: (i) up to 2,627,000,000 common shares offered to the public
on a primary basis (“Primary Offering”); (ii) up to 105,209,527 common shares offered to
the public on a secondary basis by Korea Merchant Banking Corporation (“Secondary
Offering”); and (iii) over-allotment option to purchase up to 273,000,000 common shares
(“Over-allotment Option”), granted to UBS AG, in its role as Stabilizing Agent, on the
same terms and conditions as the Primary Offering and Secondary Offering. The offer
price was set at P
=0.90 per share on October 22, 2012. The Primary Offering and
Secondary Offering were completed on November 7, 2012 while the Over-allotment
Option was exercised on November 28, 2012(see Note 12).
iii) In November and December 2012, STI Holdings subscribed to 2,100,000,000 STI ESG
shares at a consideration price equal to its par value of P
=2,100.0 million. As a result, STI
Holdings’ ownership interest in STI ESG increased to approximately 99% as of March 31,
2013.
c. STI Education Services Group, Inc. and Subsidiaries (collectively referred to as “STI ESG”)
The Group has investments in several entities which own and operate STI ESG schools. STI
ESG is involved in establishing, maintaining, and operating educational institutions to provide
pre-elementary, elementary, secondary, and tertiary as well as post-graduate courses, postsecondary and lower tertiary non-degree programs. STI ESG also develops, adopts and/or
acquires, entirely or in part, such curricula or academic services as may be necessary in the
pursuance of its main activities, relating but not limited to information technology services,
information technology-enabled services, nursing, education, hotel and restaurant
management, engineering, business studies and care-giving. Other activities of STI ESG
include computer services, such as, but not limited to, programming, systems design and
analysis, feasibility studies, installation support, job processing, consultancy, and other related
activities.
2. Basis of Preparation and Changes to the Group’s Accounting Policies
Basis of Preparation
The accompanying interim condensed consolidated financial statements of the Group have been
prepared in accordance with Philippine Accounting Standards (PAS) 34, Interim Financial
Reporting. Accordingly, the interim condensed consolidated financial statements do not include
all the information and disclosures required in the annual financial statements, and should be read
in conjunction with the annual financial statements of STI Holdings as of and for the year ended
March 31, 2013.
Changes in Accounting Policies, Disclosures and Presentation
The accounting policies adopted in the preparation of the interim condensed consolidated financial
statements are consistent with those followed in the preparation of the annual financial statements
of STI Holdings for the year ended March 31, 2013, except for the adoption of the new and
amended PFRS that became effective beginning on or after April 1, 2013. The adoption of the
following amendments and interpretations did not have any significant effect on the accounting
policies, financial position or performance of the Group, except for additional disclosures:

PFRS 7, Financial instruments: Disclosures - Offsetting Financial Assets and Financial
-3-
Liabilities (Amendments)
These amendments require an entity to disclose information about rights of set-off and related
arrangements (such as collateral agreements). The new disclosures are required for all
recognized financial instruments that are set off in accordance with PAS 32. These disclosures
also apply to recognized financial instruments that are subject to an enforceable master netting
arrangement or ‘similar agreement’, irrespective of whether they are set-off in accordance
with PAS 32. The amendments require entities to disclose, in a tabular format unless another
format is more appropriate, the following minimum quantitative information. This is presented
separately for financial assets and financial liabilities recognized at the end of the reporting
period:
a) The gross amounts of those recognized financial assets and recognized financial liabilities;
b) The amounts that are set off in accordance with the criteria in PAS 32 when determining
the net amounts presented in the statement of financial position;
c) The net amounts presented in the statement of financial position;
d) The amounts subject to an enforceable master netting arrangement or similar agreement
that are not otherwise included in (b) above, including:
i. Amounts related to recognized financial instruments that do not meet some or all of
the offsetting criteria in PAS 32; and
ii. Amounts related to financial collateral (including cash collateral); and
e) The net amount after deducting the amounts in (d) from the amounts in (c) above.
The amendments are applicable to the Group and based on the evaluation, the amendments
have no impact on the Group’s financial position or performance but will affect disclosures
only..

PFRS 10, Consolidated Financial Statements
PFRS 10 replaces the portion of PAS 27, Consolidated and Separate Financial Statements,
that addresses the accounting for consolidated financial statements. It also includes the issues
raised in SIC 12, Consolidation - Special Purpose Entities. PFRS 10 establishes a single
control model that applies to all entities including special purpose entities. The changes
introduced by PFRS 10 will require management to exercise significant judgment to determine
which entities are controlled, and therefore, are required to be consolidated by a parent,
compared with the requirements that were in PAS 27.
A reassessment of control was performed by the Group on all its subsidiaries and associates in
accordance with the provisions of PFRS 10. Following the reassessment and based on the
new definition of control under PFRS 10, the Group determined that the adoption of this
standard does not change its relationship over its subsidiaries and associates, therefore, has no
impact on the Group’s financial position or performance.

PFRS 11, Joint Arrangements
PFRS 11 replaces PAS 31, Interests in Joint Ventures, and SIC 13, Jointly Controlled Entities
- Non-Monetary Contributions by Venturers. PFRS 11 removes the option to account for
jointly controlled entities using proportionate consolidation. Instead, jointly controlled entities
that meet the definition of a joint venture must be accounted for using the equity method.
There is no impact on the Group’s financial position or performance since its investments in
joint ventures are accounted for under equity method in its consolidated financial statements.

PFRS 12, Disclosure of Involvement with Other Entities
-4-
PFRS 12 includes all of the disclosures related to consolidated financial statements that were
previously in PAS 27, as well as all the disclosures that were previously included in PAS 31
and PAS 28, Investments in Associates. These disclosures relate to an entity’s interests in
subsidiaries, joint arrangements, associates and structured entities. A number of new
disclosures are also required. The standard is applicable to the Group and based on the
Group’s adoption of this standard it will affect disclosures only and have no impact on the
Group’s financial position or performance.

PFRS 13, Fair Value Measurement
PFRS 13 establishes a single source of guidance under PFRSs for all fair value measurements.
PFRS 13 does not change when an entity is required to use fair value, but rather provides
guidance on how to measure fair value under PFRS when fair value is required or permitted.
This standard should be applied prospectively as of the beginning of the annual period in
which it is initially applied. Its disclosure requirements need not be applied in comparative
information provided for periods before initial application of PFRS 13. The standard is
applicable to the Group and based on the Group’s adoption of this standard it does not have a
significant impact on the Group’s financial position and performance.

PAS 1, Presentation of Financial Statements - Presentation of Items of Other Comprehensive
Income or OCI(Amendments)
The amendments to PAS 1 change the grouping of items presented in OCI. Items that can be
reclassified (or “recycled”) to profit or loss at a future point in time (for example, upon
derecognition or settlement) will be presented separately from items that will never be
recycled. The amendments are applicable to the Group and based on the evaluation, the
amendments affect presentation only and have no impact on the Group’s financial position or
performance.
The Group opted not to present supporting notes for the opening balance sheet as permitted by
the amendment to PAS 1, Presentation of financial statement-clarification of the requirements
for comparative information.

PAS 19, Employee Benefits (Revised)
Amendments to PAS 19 range from fundamental changes such as removing the corridor
mechanism and the concept of expected returns on plan assets to simple clarifications and
rewording. The revised standard also requires new disclosures such as, among others, a
sensitivity analysis for each significant actuarial assumption, information on asset-liability
matching strategies, duration of the defined benefit obligation, and disaggregation of plan
assets by nature and risk. Once effective, the Group has to apply the amendments
retroactively to the earliest period presented.
The Group reviewed its existing employee benefits and determined that the amended standard
has significant impact on its accounting for retirement benefits. The Group obtained the
services of an external actuary to compute the impact to their consolidated financial
statements. The effects are detailed as follows:
-5-
March 31,
2013
Increase (Decrease)
Consolidated Statements of
Financial Position
Net pension liability
Deferred tax asset
Other comprehensive income (loss)
Retained earnings
(P
=24,381,322)
(45,756)
23,923,760
411,806
April 1,
2012
=14,880,782
P
16,454
(14,716,241)
148,087
For the Three months Ended June 30
2012
Increase (Decrease)
Consolidated Statements of
Income
Net pension income
Provision for deferred income tax
Net income
Other comprehensive income (loss)

=(622,103)
P
(62,210)
559,893
38,640,001
PAS 27, Separate Financial Statements (as revised in 2011)
As a consequence of the issuance of the new PFRS 10 and PFRS 12, what remains of PAS 27
is limited to accounting for subsidiaries, jointly controlled entities, and associates in the
separate financial statements. The amendment is applicable to the Group and based on the
evaluation, the adoption of the amended PAS 27 will not have a significant impact on the
separate financial statements of the entities in the Group.

PAS 28, Investments in Associates and Joint Ventures (as revised in 2011)
As a consequence of the issuance of the new PFRS 11 and PFRS 12, PAS 28 has been
renamed PAS 28, Investments in Associates and Joint Ventures, and describes the application
of the equity method to investments in joint ventures in addition to associates. The
amendment is applicable to the Group and based on the evaluation, the adoption of the
amended PAS 28 will not have a significant impact on the separate financial statements of the
entities in the Group.

Philippine Interpretation IFRIC 20, Stripping Costs in the Production Phase of a Surface Mine
This interpretation applies to waste removal costs (“stripping costs”) that are incurred in
surface mining activity during the production phase of the mine (“production stripping costs”).
The interpretation addresses the accounting for the benefit from the stripping activity.. This
interpretation is not relevant to the Group, thus, do not have any impact on the Group’s
financial position or performance.
-6-
Improvements to PFRSs
These sets of improvements are effective for annual periods beginning on or after January 1, 2013.
The Group adopted these standards as of April 1, 2013.

PFRS 1, First-time Adoption of PFRS - Borrowing Costs
This improvement clarifies that an entity that stopped applying PFRS in the past and chooses,
or is required, to apply PFRS, has the option to re-apply PFRS 1. If PFRS 1 is not re-applied,
an entity must retrospectively restate its financial statements as if it had never stopped
applying PFRS. The amendment does not apply to the Group as the Group is not a first-time
adopter of PFRS.

PAS 1, Presentation of Financial Statements - Clarification of the requirements for
comparative information
This improvement clarifies the difference between voluntary additional comparative
information and the minimum required comparative information. Generally, the minimum
required comparative information is the previous period. The amendment affects disclosures
only and have no impact on the Group’s financial position and performance.

PAS 16, Property, Plant and Equipment - Classification of servicing equipment
This improvement clarifies that major spare parts and servicing equipment that meet the
definition of property, plant and equipment are not inventory. The amendment has no impact
on the Group’s financial position and performance.

PAS 32, Financial Instruments: Presentation - Tax effect of distribution to holders of equity
instruments
This improvement clarifies that income taxes arising from distributions to equity holders are
accounted for in accordance with PAS 12, Income Taxes.The amendment has no impact on the
Group’s financial position and performance.

PAS 34, Interim Financial Reporting - Interim financial reporting and segment information
for total assets and liabilities
The amendment aligns the disclosure requirements for total segment assets with total segment
liabilities in interim financial statements. This clarification also ensures that interim
disclosures are aligned with annual disclosures. The amendment has no impact on the
Group’s financial position and performance.
New Accounting Standards, Interpretations and Amendments to Existing Standards
Effective Subsequent to June 30, 2013
The Group will adopt the following revised standards and interpretations and amendments to existing
standards enumerated below when these become effective. Except as otherwise indicated, the Group
does not expect the adoption of these revised standards, interpretations and amendments to PFRS to
have a significant impact on the consolidated financial statements.
Effective in 2014

PAS 32, Financial Instruments: Presentation - Offsetting Financial Assets and Financial
Liabilities (Amendments)
-7The amendments clarify the meaning of “currently has a legally enforceable right to set-off”
and also clarify the application of the PAS 32 offsetting criteria to settlement systems (such as
central clearing house systems) which apply gross settlement mechanisms that are not
simultaneous. The amendments affect presentation only and have no impact on the Group’s
financial position or performance.
Effective in 2015

PFRS 9, Financial Instruments: Classification and Measurement
PFRS 9, as issued, reflects the first phase on the replacement of PAS 39 and applies to the
classification and measurement of financial assets and liabilities as defined in PAS 39,
Financial Instruments: Recognition and Measurement. Work on impairment of financial
instruments and hedge accounting is still ongoing, with a view to replacing PAS 39 in its
entirety. PFRS 9 requires all financial assets to be measured at fair value at initial recognition.
A debt financial asset may, if the fair value option (FVO) is not invoked, be subsequently
measured at amortized cost if it is held within a business model that has the objective to hold
the assets to collect the contractual cash flows and its contractual terms give rise, on specified
dates, to cash flows that are solely payments of principal and interest on the principal
outstanding. All other debt instruments are subsequently measured at fair value through profit
or loss. All equity financial assets are measured at fair value either through OCI or profit or
loss. Equity financial assets held for trading must be measured at fair value through profit or
loss. For FVO liabilities, the amount of change in the fair value of a liability that is
attributable to changes in credit risk must be presented in OCI. The remainder of the change
in fair value is presented in profit or loss, unless presentation of the fair value change in
respect of the liability’s credit risk in OCI would create or enlarge an accounting mismatch in
profit or loss. All other PAS 39 classification and measurement requirements for financial
liabilities have been carried forward into PFRS 9, including the embedded derivative
separation rules and the criteria for using the FVO. The adoption of the first phase of PFRS 9
will have an effect on the classification and measurement of the Group’s financial assets, but
will potentially have no impact on the classification and measurement of financial liabilities.
Deferred Effectivity

Philippine Interpretation IFRIC 15, Agreements for the Construction of Real Estate
This interpretation covers accounting for revenue and associated expenses by entities that
undertake the construction of real estate directly or through subcontractors. The interpretation
requires that revenue on construction of real estate be recognized only upon completion,
except when such contract qualifies as construction contract to be accounted for under
PAS 11, Construction Contracts, or involves rendering of services in which case revenue is
recognized based on stage of completion. Contracts involving provision of services with the
construction materials and where the risks and reward of ownership are transferred to the
buyer on a continuous basis will also be accounted for based on stage of completion. The
Philippine SEC and the FRSC have deferred the effectivity of this interpretation until the final
Revenue standard is issued by the International Accounting Standards Board (IASB) and an
evaluation of the requirements of the final Revenue standard against the practices of the
Philippine real estate industry is completed. This interpretation is not relevant to the Group,
thus, will not have any impact on Group’s financial position or performance.
-8-
Summary of Significant Accounting Policies
Business Combination Involving Entities under Common Control
Where there are business combinations in which all the combining entities within the Group are
ultimately controlled by the same ultimate parent before and after the business combination and
that the control is not transitory (“business combinations under common control”), the Group may
account such business combinations under the acquisition method of accounting or pooling of
interests method, if the transaction was deemed to have substance from the perspective of the
reporting entity. In determining whether the business combination has substance, factors such as
the underlying purpose of the business combination and the involvement of parties other than the
combining entities such as the noncontrolling interest, shall be considered.
In cases where the business combination has no substance, the Group shall account for the
transaction similar to a pooling of interests. The assets and liabilities of the acquired entities and
that of the Group are reflected at their carrying values. The difference in the amount recognized
and the fair value of the consideration given, is accounted for as an equity transaction, i.e., as
either a contribution or distribution of equity. Further, when a subsidiary is disposed in a common
control transaction, the difference in the amount recognized and the fair value consideration
received, is also accounted for as an equity transaction. The Group recorded the difference as an
excess of consideration over carrying amount of disposed subsidiary and presented as a separate
component of equity in the combined balance sheets.
Comparatives shall be restated to include balances and transactions as if the entities had been
acquired at the beginning of the earliest period presented as if the companies had always been
combined.
Business Combination and Goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisitionis
measured as the aggregate of the consideration transferred, measured at acquisition date fairvalue
and the amount of any non-controlling interest in the acquiree. For each businesscombination, the
acquirer measures the non-controlling interest in the acquiree either at fair valueor at the
proportionate share in the acquiree’s identifiable net assets.
Acquisition costs incurred are expensed and included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed
forappropriate classification and designation in accordance with the contractual terms,
economiccircumstances and pertinent conditions as at the acquisition date. This includes the
separation ofembedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, the fair value of the acquirer’s previously
heldequity interest in the acquiree is remeasured to fair value at the acquisition date through profit
orloss. Any contingent consideration to be transferred by the acquirer will be recognized at
fairvalue at the acquisition date. Subsequent changes to the fair value of the contingent
considerationwhich is deemed to be an asset or liability, will be recognized in accordance with
PAS 39 either inprofit or loss or as a change to other comprehensive income. If the contingent
consideration isclassified as equity, it should not be remeasured until it is finally settled within
equity
Basis of Consolidation
The interim condensed consolidated financial statements include the financial statements of STI
Holdings, STI ESG and its subsidiaries as atJune 30, 2013 and March 31, 2013. In assessing
-9-
control, the existence and effect of potential voting rights that are currently exercisable or
convertible are taken into account. Control is also achieved when the Parent Company has the
power to govern the financial and operating policies of an entity so as to obtain benefits from its
activities. The financial statements of subsidiaries are consolidated from the date on which the
Parent Company obtains control, and continue to be consolidated until the date such control
ceases.
Control over the operations and assets and liabilities of the entity may exist even in cases where
the Parent Company owns little or none of the entity’s equity, such as when the substance of the
relationship between the Parent Company and that entity indicates that the entity is controlled by
the parent company. The interim condensed consolidated financial statements include the
accounts of STI College Kalookan, Inc. (STI-Kalookan) and STI College of Novaliches, Inc. (STINovaliches), which are both non-stock corporations but wherein STI ESG has control by virtue of
management contracts.
Losses within a subsidiary are attributed to the non-controlling interest even if that results in a
deficit balance. A change in the ownership interest of a subsidiary, without a loss of control, is
accounted for as an equity transaction. If the Parent Company loses control over a subsidiary, it:







Derecognizes the assets (including goodwill) and liabilities of the subsidiary;
Derecognizes the carrying amount of any non-controlling interest;
Derecognizes the unrealized other comprehensive income deferred in equity;
Recognizes the fair value of the consideration received;
Recognizes the fair value of any investment retained;
Recognizes any surplus or deficit in profit or loss; and
Reclassifies the Parent Company’s share of components previously recognized in other
comprehensive income to profit or loss or retained earnings, as appropriate.
As at June 30, 2013 and March 31, 2013, subsidiaries of STI Holdings include:
STI ESG
iAcademy
STI College Tuguegarao, Inc. (STI-Tuguegarao)
STI-Kalookan(a)
STI-Novaliches(a)
STI College of Dagupan, Inc. (STI-Dagupan)
STI College Taft, Inc. (STI-Taft)
De Los Santos - STI College
STI College Quezon Avenue, Inc. (STI-QA)(b)
(a)
(b)
Principal Activities
Educational Institution
Educational Institution
Educational Institution
Educational Institution
Educational Institution
Educational Institution
Educational Institution
Educational Institution
Educational Institution
Effective Percentage
of Ownership
Direct
Indirect
99
–
–
100
–
100
–
100
–
100
–
77
–
75
–
52
–
52
A subsidiary of STI ESG through a management contract
A wholly owned subsidiary of De Los Santos - STI College
As at June 30, 2013, STI ESG’s request for confirmatory ruling on the tax-free merger from the
BIR is still pending.
Accounting Policies of Subsidiaries. The financial statements of subsidiaries are prepared using
uniform accounting policies for like transactions and other events in similar circumstances.
- 10 -
Transactions and Balances Eliminated on Consolidation. All significant intra-group balances,
transactions, income and expenses and profits and losses resulting from intra-group transactions
are eliminated in full.
Non-Controlling Interests. Non-controlling interests represent the portion of profit or loss and net
assets in the subsidiaries not held by the Parent Company and are presented in the profit or loss
and within equity in the consolidated statement of financial position, separate from equity
attributable to equity holders of the Parent Company.
3. Business Combinations
a.
Business Combination Involving Entities under Common Control
As discussed in Note 1, as a result of the Share Swap, the original shareholders of STI ESG
owned approximately 84% of STI Holdings while STI Holdings owned approximately 96% of
STI ESG (including its 3% shareholding in STI ESG prior to Share Swap) immediately after
the Share Swap.
Management of the Group assessed that this transaction is a business combination involving
entities under common control since STI Holdings and STI ESG are under common control of
a shareholder (the “Controlling Shareholder”). Business combinations involving entities
under common control are excluded from the scope of PFRS 3, Business Combinations.
Management has elected to adopt the pooling of interests method when preparing the
consolidated financial information in accordance with the guidance provided by the Philippine
Interpretations Committee on its Q&A No. 2011-02 “PFRS 3.2 - Common Control Business
Combinations”.
Under the pooling of interests method:

The assets and liabilities of the combining entities are reflected at their carrying amounts;

No adjustments are made to reflect fair values, or recognize any new assets or liabilities at
the date of the combination. The only adjustments would be to harmonize accounting
policies between the combining entities;

No ‘new’ goodwill is recognized as a result of the combination;

Any difference between the consideration transferred and the net assets acquired is
reflected within equity under “Other equity reserve”;

The income statement in the year of acquisition reflects the results of the combining
entities for the full year, irrespective of when the combination took place; and

Comparatives are presented as if the entities had always been combined only for the
period that the entities were under common control.
Common control transactions are viewed from the perspective of the ultimate parent or the
Controlling Shareholder. Since STI Holdings and STI ESG were not under common control
from the start, a predecessor entity should be identified. In this case, despite the legal form of
the transaction (i.e. STI Holdings acquires STI ESG common shares through Share Swap), the
- 11 -
predecessor entity is STI ESG since it was controlled by the Controlling Shareholder prior to
STI Holdings. The Controlling Shareholder only acquired STI Holdings in March 2010.
The business combination resulted in certain changes to the STI Holdings’ previously reported
financial statements. The comparative figures for the June 30, 2012 interimconsolidated
statements of comprehensive income were adjusted (or “restated”) to present the comparative
figures as if the entities had always been combined only for the period that the entities were
under common control.Consolidated statement of comprehensive income balances of the
Group for the three months ended June 30, 2012 is presented as follows:
Revenues and other income
Cost and expenses
Net income attributable to Equity Holders of the
Parent Company
Total comprehensive incomeattributable to
Equity Holders of the Parent Company
*As restated for the effects of adoption of PAS 19R
STI Holdings
(Unaudited)
=4,849,623
P
823,474
STI ESG
(As restated –
Unaudited)*
=437,209,428
P
310,587,161
Eliminations/
Adjustments
(Unaudited)
(P
=1,828,802)
Consolidated
Balances
(Unaudited)
=440,230,249
P
311,410,635
4,026,149
130,613,223
(7,120,648)
127,518,724
4,034,449
190,662,354
(9,553,562)
185,143,241
4. Seasonality of Operations
The Group’s business is linked to the academic cycle. The academic cycle which is one academic
year starts in the month of June and ends in the month of March. The revenue of the Group which
is mainly from tuition and other school fees is recognized as income over the corresponding
academic year to which they pertain. Accordingly, revenue is expected to be lower during the first
quarter of the fiscal year as compared to the other quarters if the number of enrollees remains
constant. This information is provided to allow for a proper appreciation of the results of
operations of the Group.
5. Segment Information
The following table shows the reconciliation of the interim consolidated EBITDA to interim
consolidated net income for the three months ended June 30, 2013 and 2012:
Unaudited
Consolidated EBITDA
Depreciation and amortization
Interest expense
Provision for income tax
Consolidated net income
2013
238,167,496
(37,501,615)
(349,481)
(15,043,714)
185,272,686
2012
(As restated see Note 2)
180,674,615
(34,883,505)
(16,971,496)
1,784,150
130,603,764
- 12 -
The following tables present revenue and income information regarding geographical segments for the three monthsended June 30, 2013 and2012:
June 30, 2013 (Unaudited)
Metro Manila Northern Luzon
Southern Luzon
Visayas
Mindanao
Total
Eliminations/
Adjustments
Consolidated
Revenues
External revenue
Intersegment revenue
P
= 253,037,855
29,097,048
P
= 14,862,254
-
P
= 51,053,609
-
P
= 4,545,346
P
= 10,545,820
P
= 334,044,883
29,097,048
(P
= 3,600,000)
(29,097,048)
P
= 330,444,884
–
Total Revenues
P
= 282,134,903
P
= 14,862,254
P
= 51,053,609
P
= 4,545,346
P
= 10,545,820
P
= 363,141,931
(P
= 32,697,048)
P
= 330,444,884
Income before other income and income tax
Equity in net gains of associates and interests in joint ventures
P
= 27,704,465
199,588,455
P
= 2,137,043
-
P
= 15,543,239
-
(P
= 2,421,672)
-
(P
= 3,361,754)
-
P
= 39,601,321
199,588,455
P
=-
P
= 39,601,321
199,588,455
Interest income
Interest expense
Other income (loss)
2,868,047
(349,481)
(41,503,007)
24,156
-
55,303
3,125
18,033
-
4,994
4,000
2,970,533
(349,481)
(41,495,882)
1,454
-
2,971,987
(349,481)
(41,495,882))
Results
Provision for income tax
Net Income
(15,043,714)
-
-
-
-
(15,043,714)
-
(15,043,714)
P
= 173,264,765
P
= 2,161,199
P
= 15,601,667
(P
= 2,403,639)
(P
= 3,352,760)
P
= 185,271,232
1,454
P
= 185,272,686
P
= 238,167,496
June 30, 2012
(Unaudited, As restated - see Note 3)
Metro Manila
Northern Luzon
Southern Luzon
Visayas
Mindanao
Revenues
External revenue
Total Eliminations/ Adjustments
=248,717,004
P
=16,303,355
P
=37,174,977
P
=4,839,010
P
=13,391,121
P
=320,425,467
P
Intersegment revenue
Total Revenues
63,088,031
=311,805,035
P
=16,303,355
P
=37,174,977
P
=4,839,010
P
=13,391,121
P
63,088,031
=383,513,498
P
=–
P
(63,088,031)
(P
=63,088,031)
Consolidated
=320,425,467
P
–
=320,425,467
P
- 13 -
Results
Income before other income and income tax
Equity in net losses of associates and interests in joint ventures
Interest income
Interest expense
Other income
Benefit from (provision for) income tax
Net Income
=154,373,655
P
113,121,075
6,248,989
(15,013,729)
41,954,192
1,784,150
=302,468,332
P
=827,663
P
65,212
(874,986)
=17,889
P
=17,134,117
P
11,824
=17,145,941
P
=1,846,902
P
4,947
=1,851,849
P
=176,066
P
10,747
=186,813
P
=174,358,403
P
113,121,075
6,341,719
(15,888,715)
41,954,192
1,784,150
=321,670,824
P
(P
=148,372,075)
(1,828,802)
(1,082,781)
(39,783,402)
(P
=191,067,060)
P25,986,328
=
111,292,273
6,341,719
(16,971,496)
2,170,790
1,784,150
=130,603,764
P
=180,674,615
P
EBITDA
The following tables present certain assets and liabilities information regarding geographical segments as of June 30, 2013 and March 31, 2013:
June 30, 2013 (Unaudited)
Metro Manila Northern Luzon
Assets and Liabilities
Segment assets(a)
Investments in and advances to associates and joint ventures
Goodwill
Deferred tax assets
Total Assets
Segment liabilities(b)
Pension liabilities
Obligations under finance lease
Total Liabilities
P
= 4,922,599,221
16,396,861,551
8.080,027
P
= 21,327,540,799
P
= 152,781,245
986,424
17,004,946
P
= 170,772,615
P
= 78,821,177
P
= 78,821,177
P
= 48,291,332
3,271,765
P
= 51,563,097
Other Segment Information
Capital expenditure Property and equipment
Depreciation and amortization
Noncash expenses other than depreciation and amortization
(a)
(b)
Segment assets exclude goodwill, investments in and advances to associates and joint ventures and deferred tax assets.
Segment liabilities exclude short-term loans, pension liabilities and obligations under finance lease.
Southern Luzon
P
= 343,211,138
1,313,080
P
= 344,524,218
P
= 151,684,365
14,801,135
P
= 166,485,500
Visayas
Mindanao
Total
Eliminations/
Adjustments
P
= 59,339,823
124,751
P
= 59,464,574
P
= 108,725,463 P
= 5,512,696,822
(P
= 60,625,886)
16,396,861,551 (14,332,600,992)
200,258,249
1,506,474
11,024,332
P
= 110,231,937 P
= 21,920,582,705 (P
= 14,192,968,629)
P
= 12,901,767
1,756,916
P
= 14,658,683
P
= 48,465,413
5,218,706
P
= 53,684,119
P
= 414,124,122
26,034,946
17,004,946
P
= 457,164,014
(P
= 65,257,734)
(P
= 65,257,734)
Consolidated
P
= 5,452,070,936
2,064,260,559
200,258,249
11,024,332
P
= 7,727,614,076
P
= 348,866,388
26,034,946
17,004,946
P
= 391,906,280
P
= 230,814,148
37,501,613
5,185,745
- 14 March 31, 2013 (Audited)
Assets and Liabilities
Segment assets(a)
Investments in and advances to associates and joint ventures
Goodwill
Deferred tax assets
Total Assets
Segment liabilities(b)
Pension liabilities
Obligations under finance lease
Total Liabilities
Northern Luzon
Southern Luzon
Visayas
Mindanao
Total
=20,721,112,618
P
879,468,601
–
9,265,102
=21,609,846,321
P
=53,378,214
P
–
–
259,189
=53,637,403
P
=254,742,544
P
–
–
1,313,080
=256,055,624
P
=51,950,808
P
–
–
124,751
=52,075,559
P
=85,465,639
P
–
–
–
=85,465,639
P
=21,166,649,823
P
879,468,601
–
10,962,122
=22,057,080,546
P
(P
=15,769,230,816)
2,025,850,775
200,258,253
–
(P
=13,543,121,788)
=5,397,419,007
P
2,905,319,376
200,258,253
10,962,122
=8,513,958,758
P
=334,329,529
P
23,061,832
13,339,807
=370,731,168
P
=25,442,403
P
–
=25,442,403
P
=66,682,255
P
–
=66,682,255
P
=3,174,829
P
–
=3,174,829
P
=20,537,146
P
–
=20,537,146
P
=450,166,162
P
23,061,832
13,339,807
=486,567,801
P
(P
=118,030,878)
–
–
(P
=118,030,878)
=332,135,284
P
23,061,832
13,339,807
=368,536,923
P
Other Segment Information
Capital expenditure Property and equipment
Depreciation and amortization
Noncash expenses other than depreciation and amortization
(a)
(b)
Eliminations/
Adjustments
Metro Manila
Segment assets exclude goodwill, investments in and advances to associates and joint ventures and deferred tax assets.
Segment liabilities exclude short-term loans, pension liabilities and obligations under finance lease.
Consolidated
=1,539,623,771
P
156,430,778
58,779,699
- 15 -
6. Cash and Cash Equivalents
This account consists of the following:
Cash on hand and in banks
Cash equivalents
June 30,
March 31,
2013
2013
(Unaudited)
(Audited)
P
=277,449,780 P
=209,549,974
1,026,001,540 1,279,901,935
P
=1,303,451,320 P
=1,489,451,909
June 30,
2012
(Unaudited)
P
=202,695,903
349,566,071
P
=552,261,974
Cash in banks earns interest at their respective bank deposit rates. Cash equivalents are short-term
investments which are made for varying periods of up to three months, depending on the
immediate cash requirements of the Group, and earn interest at their respective short-term
investment rates.
Interest earned from cash in banks and cash equivalents amounted to P
=2.0 million and
=5.3 million for the three months ended June 30, 2013 and 2012, respectively.
P
7. Receivables
This account consistsof:
Tuition and other school fees
Educational services
Current portion of advances to associates,joint
ventures and other related parties
(see Note 13)
Advances to officers and employees (see Note
13)
Rent and other related receivables (see Note
13)
Others
Less allowance for doubtful accounts
June 30,
2013
(Unaudited)
P
=127,736,333
49,476,261
March 31,
2013
(Audited)
P
=159,127,235
48,276,130
4,735,618
11,419,489
23,573,076
22,592,828
12,431,395
40,443,571
258,396,254
(57,594,157)
P
=200,802,097
12,970,554
54,202,769
308,589,005
(57,815,801)
P
=250,773,204
- 16 -
8. Property and Equipment
The rollforward analysis of this account follows:
June 30, 2013 (Unaudited)
Land
Buildings
Office
and School
Equipment
Office
Furniture
and Fixtures
Leasehold
Improvements
Transportation
Equipment
Computer
Equipment
and
Peripherals
Library
Holdings
Construction
In Progress
Total
Cost, Net of Accumulated Depreciation and
Amortization
Balance at beginning of year
Additions
Reclassification to expense
Reclassifications
Disposal
Depreciation and amortization
Balance at end of year
P
= 1,296,723,152
53,725,267
P
= 1,350,448,419
P
= 696,730,272
1,329,323
(10,178,744)
P
= 687,880,851
P
= 61,520,525
24,812,156
11,269,770
(6,710,678)
P
= 90,891,773
P
= 31,012,009
4,699,028
(3,239,587)
P
= 32,471,450
P
= 93,491,471
1,384,825
29,911
(7,585,636)
P
= 87,320,571
P
= 22,238,182
3,428,166
(2,533,718)
P
= 23,132,630
P
= 28,880,113
10,403,274
(5,079,886)
P
= 34,203,501
P
= 30,004,142
2,553,690
(11,269,770)
(1,546,289)
P
= 19,741,773
P
= 374,676,105
128,345,139
(2,000)
(29,911)
P
= 502,989,333
P
= 2,635.275971
230,680,868
(2,000)
(36,874,538)
P
= 2,829,080,301
At June 30, 2013:
Cost
Accumulated depreciation and amortization
Net carrying amount
P
= 1,350,448,419
P
= 1,350,448,419
P
= 929,473,094
(241,592,242)
P
= 687,880,852
P
= 285,007,932
(194,116,159)
P
= 90,891,773
P
= 125,587,439
(93,115,990)
P
= 32,471,449
P
= 335,087,298
(247,766,726)
P
= 87,320,572
P
= 68,955,702
(45,823,072)
P
= 23,132,630
P
= 305,709,095
(271,505,594)
P
= 34,203,501
P
= 84,484,880
(64,743,107)
P
= 19,741,773
P
= 502,989,333
P
= 502,989,333
P
= 3,987,743,192
(1,158,662,890)
P
= 2,829,080,302
March 31, 2013 (Audited)
Land
Buildings
Cost, Net of Accumulated Depreciation and
Amortization
Balance at beginning of year
Additions
Reclassification to other noncurrent assets
Reclassifications
Disposal
Depreciation and amortization
Balance at end of year
=648,949,537
P
1,035,636,448
(387,862,833)
–
–
–
=1,296,723,152
P
=489,952,915
P
113,903,997
–
132,120,932
–
(39,247,572)
=696,730,272
P
At March 31, 2013:
Cost
Accumulated depreciation and amortization
Net carrying amount
=1,296,723,152
P
–
=1,296,723,152
P
=927,986,992
P
231,256,720
=696,730,272
P
Office
and School
Equipment
Office
Furniture
and Fixtures
=84,054,171
P
5,571,344
–
–
–
(28,104,988)
=61,520,527
P
P26,551,149
=
16,164,912
–
–
–
(11,704,053)
=31,012,008
P
=262,656,033
P
201,135,506
=61,520,527
P
=122,600,237
P
91,588,229
=31,012,008
P
Leasehold
Improvements
=90,149,525
P
36,937,557
–
–
–
(33,595,611)
=93,491,471
P
=337,876,133
P
244,384,662
=93,491,471
P
Transportation
Equipment
=20,830,918
P
13,156,923
–
–
(1,172,501)
(10,577,156)
=22,238,184
P
=65,416,128
P
43,177,944
=22,238,184
P
Computer
Equipment
and
Peripherals
=35,817,767
P
17,829,902
–
–
–
(24,767,558)
=28,880,111
P
=308,398,041
P
279,517,930
=28,880,111
P
Library
Holdings
Construction
In Progress
Total
=15,802,480
P
20,660,316
–
–
–
(6,458,655)
=30,004,141
P
=132,120,932
P
374,676,105
–
(132,120,932)
–
–
=374,676,105
P
=1,544,229,394
P
1,634,537,504
(387,862,833)
–
(1,172,501)
(154,455,593)
=2,635,275,971
P
=82,171,080
P
52,166,939
=30,004,141
P
=374,676,105
P
–
=374,676,105
P
=3,778,503,901
P
1,143,227,930
=2,635,275,971
P
- 17 -
As at June 30, 2013, the construction in progress account includes costs incurred for the
construction of the school buildings and improvements located in Cainta, Rizal,Caloocan City,
Quezon City, Las Pinas City and Laguna and construction of the school buildings and
improvements located in Cainta, Rizal, Caloocan City as at March 31, 2013. As at June 30, 2013
and March 31, 2013, the related construction contracts amounted to P
=2,079.0million and P
=1,057.2
million, respectively, inclusive of materials, cost of labor and overhead and all other costs
necessary for the completion of the project as planned.
Total borrowing costs capitalized as part of property and equipment amounted to nil andP
=19.7
million as at June 30, 2013 and March 31, 2013, respectively. Average interest capitalization rates
are at 3.3% in 2013.
Certain transportation equipment were acquired under finance lease agreements. The net book
value of this equipment amounted to P
=12millionand P
=15.9 million as at June 30, 2013 and
March 31, 2013, respectively.
The cost of fully depreciated assets still being used by the Group amounted to P
=552.72 million and
=557.7million as at June 30, 2013 and March 31, 2013, respectively.
P
9. Investments in and Advances to Associates and Joint Ventures
The detailed carrying values of the Group’s investments in and advances to associates and joint
ventures are as follows:
Investments
Associates:
STI Investments
De Los Santos - General Hospital
STI-Accent
De Los Santos - STI Megaclinic
STI-Alabang
GROW
STI-Batangas
STI-Marikina
Synergia
Joint ventures:
PHEI
STI-PHNS
Allowance for impairment loss
P
=1,985,586,619
–
(20,166,002)
–
14,542,449
17,321,171
2,000,000
2,994,997
46,969
14,926,682
984,427
2,018,237,312
–
P
=2,018,237,312
Investments
Associates:
STI Investments
De Los Santos - General Hospital
STI-Accent
De Los Santos - STI Megaclinic
STI-Alabang
GROW
STI-Marikina
Synergia
=2,768,240,741
P
59,440,352
(20,166,002)
18,352,722
14,326,499
10,529,778
1,042,897
46,969
June 30, 2013(Unaudited)
Advances
Total
P
=–
–
27,423,762
24,545,505
216,000
143,571
712,169
–
–
P
=1,985,586,619
–
7,257,760
24,545,505
14,758,449
17,464,742
2,712,169
2,994,997
46,969
150,000
–
53,191,007
7,167,760
P
=46,023,247
15,076,682
984,427
2,071,428,319
7,167,760
P
=2,064,260,559
March 31, 2013 (Audited)
Advances
=–
P
–
27,333,762
24,396,410
216,000
143,572
–
–
Total
=2,768,240,741
P
59,440,352
7,167,760
42,749,132
14,542,499
10,673,350
1,042,897
46,969
- 18 -
Investments
Joint ventures:
PHEI
STI-PHNS
Allowance for impairment loss
6,999,009
984,427
2,859,797,392
–
=2,859,797,392
P
March 31, 2013 (Audited)
Advances
600,000
–
52,689,744
7,167,760
=45,521,984
P
Total
7,599,009
984,427
2,912,487,136
7,167,760
=2,905,319,376
P
Information about and major transactions of significant indirect associates are discussed below:
STI Investments. For the three months ended June 30, 2013 and 2012, the Group’s share in net
earnings of STI Investments amounted to P
=212.3 million and P
=112.3 million, respectively.
De Los Santos General Hospital and De Los Santos - STI Megaclinic. On December 21, 2012, De
Los Santos - STI College, De Los Santos General Hospital, STI ESG, the Delos Santos family (a
shareholder in De Los Santos - STI College, De Los Santos General Hospital and De Los Santos STI Megaclinic) and MPIC entered into an investment agreement, wherein MPIC shall invest in
De Los Santos General Hospital by subscribing to 401,942 new common shares or equivalent to
51% equity interest in De Los Santos General Hospital, subject to certain terms and conditions.
The terms and conditions include De Los Santos - STI College’s sale of its 42% ownership in De
Los Santos - STI Megaclinic to De Los Santos General Hospital, in exchange for De Los Santos STI College’s additional subscription of 29,399 new common shares or equivalent to 4% equity
interest in De Los Santos General Hospital.
On June 3, 2013, STI ESG executed a deed of pledge on all of its De Los Santos General Hospital
shares in favor of Neptune Stroika Holdings, Inc., a wholly owned subsidiary of MPIC, to cover
the indemnity obligations of STI ESG enumerated in its investment agreement with MPIC. The
completion of MPIC’s subscription transpired in June 2013, following the fulfillment of the
conditions specified in the agreement. As a result, De Los Santos - STI Megaclinic and De Los
Santos General Hospital ceased to be associates of the Group effective June 2013. The Group’s
effective percentage ownership in De Los Santos General Hospital was diluted to 10% and
accordingly, such investment was classified as an AFS financial asset.
10. Goodwill, Intangible and Other Noncurrent Assets
This account consists of:
Land (see Notes 8 and 13)
Goodwill
Deposits
Refundable deposits
Intangible assets
Advances to suppliers
Others
June 30,
2013
P
=387,862,833
200,258,253
60,000,000
32,463,743
12,088,365
5,453,670
6,202,687
P
=704,329,551
March 31,
2013
=387,862,833
P
200,258,253
–
31,962,268
10,385,895
5,314,902
6,216,426
=642,000,576
P
- 19 -
Land
On March 21, 2013, STI ESG’s BOD approved the transfer of the land to TechZone Philippines,
Inc. (TechZone), a related party (see Note 13), in exchange for condominium units to be
developed by TechZone. In April 2013, the said property was used as collateral for the loan of the
said related party. In August 2013, the Deed of Absolute Sale for the sale of the land was
executed between STI ESG and TechZone in accordance with the BOD approval. Title to the land
is now being transferred in favor of TechZone. Development of the condominium property is
likewise ongoing.
Deposits
The amount of P
=60 million represents down payment for the purchase of a university in Visayas.
This down payment is secured by a pledge on the shares of the sellers in the university in favor of
STI Holdings.
Intangible Assets
Intangible assets represents STI ESG’s new accounting software, which will be ready for use and
will be amortized based on its estimated useful life starting July 2013. This account also
represents the costs of various software licenses purchased by a subsidiary for use by its students.
11. Accounts Payable and Other Current Liabilities
This account consists of:
Accounts payable
Accrued expenses:
Rent
School-related expenses
Salaries, wages and benefits
Advertising and promotion
Contracted services
Utilities
Others
Dividends payable (see Note 11)
Unearned tuition and other
school fees
Withholding taxes payable
Others
June 30
(Unaudited)
P
=91,513,007
March 31,
(Audited)
=174,408,815
P
38,060,304
13,337,631
10,795,020
24,133,193
5,051,459
3,993,879
17,820,669
12,721,078
47,913,702
18,514,400
9,283,290
7,131,086
4,259,353
4,187,980
12,189,508
11,840,316
86,397,052
10,451,893
18,399,267
P
=332,674,452
5,342,406
8,115,060
17,499,904
=320,685,820
P
12. Equity
a. Common Stock
Details and movement in common stock follow:
June 30, 2013 (Unaudited)
March 31, 2013 (Audited)
Shares
Amount
Shares
Amount
10,000,000,000
P
= 5,000,000,000
10,000,000,000
=5,000,000,000
P
Common Stock - =
P0.50 par value per share
Authorized
- 20 -
March 31, 2013 (Audited)
June 30, 2013 (Unaudited)
Issued and outstanding:
Balance at beginning of
Issuances (see Note 1)
Balance at end of year
year
Shares
Amount
Shares
Amount
9,904,806,924
-
P
= 4,952,403,462
-
1,103,000,000
8,801,806,924
=551,500,000
P
4,400,903,462
9,904,806,924
P
= 4,952,403,462
9,904,806,924
=4,952,403,462
P
In December 2011, the Parent Company issued 397,908,895 and 397,908,894 of its unissued
common shares to STI ESG and CMA, respectively, via a private placement for an aggregate
subscription amount of P
=477.5 million. Documentary stamp taxes paid relative to the
issuances of shares amounting to P
=2.0 million is presented as deduction from additional paidin capital.
The 795,817,789 private placement shares was approved for listing with the Philippine Stock
Exchange on September 28, 2012 subject to the fulfillment of certain conditions. On May 10,
2013, the SEC granted the Parent Company’s request for exemptive relief from the
requirements of the mandatory tender offer relative to the private placement transaction. On
June 27, 2013, the PSE advised the Parent Company to submit a duly executed lock-up
agreement to facilitate the listing of private placement shares.
On September 28, 2012, the Company issued 5,901,806,924 shares to STI ESG stockholders
in exchange for 907,970,294 STI ESG shares pursuant to the Share Swap transaction
(see Note 1).
On November 7, 2012, the Company issued 2,627,000,000 new shares relative to the Primary
Offering at P
=0.90 per share following its listing in the PSE. The transaction resulted to
increases in common stock and APIC of P
=1,313.5 million and P
=1,050.8 million, respectively.
On November 28, 2012, the Company issued the 273,000,000 Over-allotment Option shares to
UBS AG (see Note 1) resulting to recognition of common stock and APIC of P
=136.5 million
and P
=109.2 million, respectively.
Transaction costs incurred in connection with the issuance of shares, charged against APIC,
amounted to P
=118.5 million.
Set out below is the Company’s track record of registration of its securities:
Date of Approval
December 4, 2007*
November 25, 2011**
September 28, 2012***
November 7, 2012
November 28, 2012
Number of Shares
Authorized
Issued
1,103,000,000
307,182,211
1,103,000,000
10,000,000,000
10,000,000,000
10,000,000,000
795,817,789
5,901,806,924
2,627,000,000
273,000,000
Issue/
Offer Price
=0.50
P
0.60
2.22
0.90
0.90
*** Date when the registration statement covering such securities was rendered effective by the SEC.
*** Date when the Company filed SEC form 10-1(k) (Notice of Exempt Transaction) with the SEC in accordance with the Securities Regulation
Code and its Implementing Rules and Regulations
*** Date when the SEC approved the increase in authorized capital stock.
As of June 30, 2013 and March 31, 2013, the Company has a total number of shareholders on
record of 1,245and 1,243, respectively.
b. Cost of Shares Held by a Subsidiary
- 21 “Cost of shares held by a subsidiary” account includes 502,308,895 STI Holdings shares
owned by STI ESG as of June 30, 2013and March 31, 2013 amounting to P
=500.0 million
which is treated as treasury shares in the interim consolidated statements of financial position.
c. Other Comprehensive Income (Loss)
June 30, 2013
(Unaudited)
Share in associates’ unrealized MTM gain on AFS
financial assets
Unrealized MTM gain (loss) on AFS financial assets
Cumulative actuarial gain
Attributable to
Equity Holders
of the Parent
Company
Non-controlling
interests
Total
= 923,148,957
P
(140,032)
23,615,353
=946,624,278
P
=12,056,290
P
(9,417)
308,407
=12,355,280
P
=935,205,247
P
(149,449)
23,923,760
=958,979,558
P
March 31, 2013
(As restated - see Note 2)
Attributable to
Equity Holders
of the Parent
Non-controlling
Company
interests
Share in associates’ unrealized MTM gain on AFS
financial assets
Unrealized MTM loss on AFSfinancial assets
Cumulative actuarial gain
=1,905,291,022
P
(121,773)
23,615,353
=1,928,784,602
P
=24,882,689
P
(9,416)
308,407
=25,181,680
P
Total
=1,930,173,711
P
(131,189)
23,923,760
=1,953,966,282
P
d. Other Equity Reserve
“Other equity reserve” account consists of:
i.
Equity adjustment resulting from the Share Swap transaction (see Note 1). The
impact at acquisition date resulting from the Share Swap transaction amounted to
=1,718.5 million.
P
ii.
Parent Company’s equity adjustment for the excess of acquisition cost over the
carrying value of non-controlling interests in STI ESG, after redistribution of noncontrolling interests’ share in other comprehensive income to the equity holders of the
Parent Company, amounting to P
=68.9 million.
iii.
STI ESG’s other equity adjustment for the excess of acquisition cost over the carrying
value of its remaining non-controlling interests amounting to P
=27,278.
d. Retained Earnings
Consolidated retained earnings represent STI ESG’s retained earnings, net of amount
attributable to NCI, and STI Holdings’ accumulated earnings, net of dividends declared from
April 1, 2010, after the Controlling Shareholder’s acquisition of STI Holdings.
13. Related Party Transactions
- 22 -
Parties are considered to be related if one party has the ability to control the other party or exercise
significant influence over the other party in making financial and operating decisions. This
includes: (a) enterprises or individuals owning, directly or indirectly through one or more
intermediaries, control or are controlled by, or under common control; (b) associates; and
(c) enterprises or individuals owning, directly or indirectly, an interest in the voting power of the
company that gives them significant influence over the company, key management personnel,
including directors and officers of the Group and close members of the family of any such
enterprise or individual.
The following are the Group’s transactions with its related parties:
Outstanding Balance
Amount/Volume
Receivable (Payable)
June 30,
March 31,
June 30,
March 31,
2013
2013
2013
2013
(Unaudited)
(Audited)
(Unaudited)
(Audited)
Category
Terms
Conditions
Associates
GROW
Advances for various
expenses and
working capital
–
Current Advances for
various expenses and
working capital
Rental and related
charges
143,572
143,572
30 days upon receipt
of billings but no
intention to collect
within one year;
Noninterest-bearing
Unsecured;
30 days upon receipt
of billings but no
intention to collect
within one year;
Noninterest-bearing
Unsecured;
30 days upon receipt
of billings but no
intention to collect
within one year;
Noninterest-bearing
Unsecured;
no impairment
350,000
99,360
–
5,453,538
8,093,538
no impairment
STI Batangas
Advances for various
expenses and
working capital
De Los Santos - STI
Megaclinic
712,169
no impairment
- 23 -
Advances for various
expenses and working
capital
–
Current Advances for
various expenses and
working capital
24,545,505
34,743,437
Payable in 5 years;
bears 6.50% interest
Unsecured;
no impairment
280,611
Interest income
–
2,608,782
De Los Santos –
General Hospital
Current Advances for
various expenses and
working capital
–
3,344,524
–
Payable in 5 years;
bears 6.50% interest
Unsecured;
no impairment
STI-Alabang
Unsecured;
Advances for various
expenses and working
capital
–
216,000
216,000
30 days upon receipt
of billings;
Noninterest-bearing
27,333,762
30 days upon receipt
of billings but no
intention to collect
within one year;
Noninterest-bearing
no impairment
STI-Accent
Advances for various
expenses and working
capital
90,000
10,365,820
27,423,762
Unsecured;
with impairment
Joint Venture
PHEI
Unsecured;
Management fees
150,000
3,025,815
150,000
600,000
30 days upon receipt
of billings;
Noninterest-bearing
26,470,915
250,000,000
250,000,000
30 days upon receipt
of billings; Interestbearing
no impairment
Affiliates
Philippine Women’s
University (PWU)*
Principal
Interest
9,189,946
12,651,546
12,651,546
30 days upon receipt
of billings;
Noninterest-bearing
Secured;
no impairment
Secured;
no impairment
UNLAD Resources
Development
Corporation
(UNLAD)*
Current Advances for
various expenses and
working capital
Principal
224,858
198,000,000
198,000,000
198,000,000
30 days upon receipt
of billings; Interest-
Secured
- 24 bearing
Interest
3,536,389
3,327,389
3,327,389
30 days upon receipt
of billings;
Noninterest-bearing
no impairment
Secured;
no impairment
CMA**
Unsecured;
Advances for various
expenses and working
capital (Notes 7 and
12)
–
58,830
58,830
30 days upon receipt
of billings;
Noninterest-bearing
147,607
30 days upon receipt
of billings;
Noninterest-bearing
6,074
30 days upon receipt
of billings;
Noninterest-bearing
no impairment
no impairment
Comm & Sense,
Inc**.
Unsecured;
Rentals and related
charges
66,742
138,466
183,521
no impairment
Phil First
Condominium, Inc.
**
Unsecured;
Rentals and related
charges
80,704
-
6,074
no impairment
Phil First Insurance
Co., Inc. **
Unsecured;
Rentals and related
charges
37,128
Employee benefits
–
224,284
185,651
30 days upon receipt
of billings;
Noninterest-bearing
6,716,054
(407,670)
(407,670)
30 days upon receipt
of billings;
Noninterest-bearing
Unsecured
1,314,992
220,645
259,885
30 days upon receipt
of billings;
Noninterest-bearing
Unsecured; no
impairment
113,521
30 days upon receipt
of billings;
Noninterest-bearing
Unsecured; no
impairment
179,911
30 days upon receipt
of billings;
Noninterest-bearing
PhilCare**
Rentals and related
charges
921,830
Employee benefits
–
7,278,847
PhilPlans**
Rentals and related
charges
14,390
593,863
113,521
Banclife**
Unsecured;
Rentals and related
charges
20,535
359,863
76,325
no impairment
- 25 -
Employee benefits
–
142,660
Ventures Securities**
30 days upon receipt
of billings;
Noninterest-bearing
–
Internet charges
36,465
36,465
Unsecured; no
impairment
30 days upon receipt
of billings;
Noninterest-bearing
Unsecured; no
impairment
Liquidated within one
month; Noninterestbearing
Unsecured;
Classic Finance**
Availment of shortterm loan
Interest expense
160,000,000
–
2,442,736
–
Officers and
employees
Advances for various
expenses
2,959,681
38,694,691
22,592,828
23,573,076
no impairment
P
= 550,908,545
P
= 558,282,346
*Entities under common management
**Entities under common control
Outstanding receivables, before any allowance for impairment, and payables are summarized
below:
Current portion of advances to associates, joint ventures and
other related parties (see Note 7)
Advances to officers and employees (see Note 7)
Rent and other related receivables (see Note 7)
Advances to associates and joint ventures (see Note 9)
Noncurrent receivables
Accounts payable (see Note 11)
June 30,
2013
(Unaudited)
March 31,
2013
(Audited)
P
=4,375,618
23,573,076
6,197,580
53,191,006
463,978,935
(407,670)
P
=550,908,545
P
=11,419,489
22,592,828
8,009,020
52,689,744
463,978,935
(407,670)
P
=558,282,346
Other information on major transactions with related parties follows:
a.
Agreements with Philippine Women’s University (“PWU”), UNLAD Resources Development
Corporation (“UNLAD”) and anunrelated individual (“Individual”)
On May 17, 2012, the Individual, who’s a party to the Agreement with the Company, PWU
and UNLAD, assigned his rights, title and interest in the Agreement to Attenborough
Holdings Corporation (“AHC”). AHC thereby assumed the Individual’s obligation to grant a
loan to UNLAD in the principal amount of P
=224.0 million (the “AHC Loan to UNLAD”).
Pursuant to the agreement, the Company and AHC (collectively referred to as the “Lenders”)
agreed to lend UNLAD a principal amount of P
=422.0 million consisting of the Company’s
loan to UNLAD (“Loan to UNLAD”) and the AHC Loan to UNLAD. Accordingly, on June
8, 2012, the Company entered into an Omnibus Agreement with UNLAD and AHC
- 26 (“Omnibus Agreement”) which consisted of: (1) a prefatory agreement; (2) a loan agreement;
and (3) a real estate mortgage.
Under said loan agreement, the Lenders will extend a loan to UNLAD which is payable by
way of conversion into equity in UNLAD. Said conversion into equity in UNLAD must
enable: (a) the Company to acquire, together with the shares acquired by it as payment of the
Company's Loan to PWU, 40.0% of the issued and outstanding capital stock of UNLAD, as
discussed above; and (b) AHC to acquire 20.0% of UNLAD’s issued and outstanding capital
stock.
In June 2012, the Company extended the direct loan to PWU amounting to P
=26.5 million in
accordance with the Agreement, while in August and October 2012, the Company granted the
Loan to UNLAD amounting to P
=166.0 million and P
=32.0 million, respectively.
On March 25, 2013, the joint venture agreement and Omnibus Agreement have been amended
to discontinue imposition of interest on the Loan to PWU, Loan to UNLAD and AHC Loan to
UNLAD effective January 1, 2013.
As of June 30, 2013 and March 31, 2013, noncurrent receivables and accrued interest consist
of loans of P
=448.0 million and P
=16 million, respectively. Interest income for the three
months ended June 30, 2013 and 2012 amounted to nil and P
=4.8 million, respectively.
As of June 30, 2013 and March 31, 2013, the equity interest in UNLAD has not been assigned to
the Company in exchange for the receivables from PWU and the Loan to UNLAD. The said
receivables from PWU and the Loan to UNLAD are presented as “Noncurrent receivables” in the
consolidated statements of financial position.
Currently, the Company is working on the submission of all required documents to effect the
conversion of these receivables into equity. The Company has nominated its representatives
as directors/trustees and officers of PWU and UNLAD.
b.
Land held for Swap
STI ESG’s BOD approved on March 21, 2013 the transfer of the land to TechZone, a
company under common control with the Group, in exchange for condominium units to be
developed by TechZone. In April 2013, the said property was used as collateral for
TechZone’s loan,the proceeds of which will be used by TechZone to develop the property. In
August 2013, the Deed of Absolute Sale for the sale of the land was executed between STI
ESG and TechZone in accordance with the BOD approval. Title to the land is now being
transferred in favor of TechZone. Development of the condominium property is likewise
ongoing.
14. Basic and Diluted Earnings Per Share on Net Income Attributed to Equity Holders
of STI Holdings
The table below shows the summary of net income and weighted average number of common
shares outstanding used in the calculation of earnings per share for the three months ended June
30, 2013 and 2012:
- 27 -
Net income attributable to equity holders
of STI Holdings
Common shares outstanding
at beginning of period
Weighted average number of:
5,901,806,924 shares issued - Share Swap
(see Note 3)
Weighted average number of common shares
Basic and diluted earnings per share on net income attributed
to equity holders of STI Holdings
2013
(Three MonthsUnaudited)
2012
(Three MonthsUnaudited)
P
=206,023,152
=127,518,724
P
9,904,806,924
1,103,000,000
–
9,904,806,924
5,901,805,924
7,004,805,924
=0.018
P
P
= 0.021
The basic and diluted earnings per share are the same for the three months ended June 30, 2013
and 2012as there are no dilutive potential common shares.
15. Contingencies
There are no material changes in the contingent liabilities or contingent assets since the last annual
balance sheet date. Also, there are no material contingencies and any other events or transactions
during the period.
16. Financial Instruments
Set out below is a comparison by category of carrying amounts and fair values of all of the
Group’s financial instruments.
March 31, 2013 (Audited)
June 30, 2013 (Unaudited)
Financial Assets
Loans and receivables:
Cash and cash equivalents
Receivables*
Advances to associates and joint ventures (included as
part of “Investments in and advances to associates
and joint ventures” account)
Deposits (included as part of “Prepaid expenses and
other current assets” and “Goodwill, intangible
and other noncurrent assets” accounts)
AFS financial assets
Financial Liabilities
Other financial liabilities:
Short-term loans
Accounts payable and other current liabilities**
Carrying
Amount
Carrying
Amount
Fair Value
P
= 1,303,451,320
641,207,957
P
= 1,303,451,320
641,207,957
=1,489,451,909
P
692,164,311
=1,489,451,909
P
692,164,311
45,311,078
30,811,533
45,521,984
34,781,402
16,670,495
4,645,218
P
= 2,011,286,068
12,869,384
4,645,218
P
= 1,992,985,412
16,670,495
4,663,478
=2,248,472,177
P
12,869,384
4,663,478
=2,233,930,484
P
P
=–
P
=–
245,416,678
P
= 245,416,678
245,416,678
P
= 245,416,678
Fair Value
=–
P
=–
P
305,687,261
305,687,261
=305,687,261
P
=305,687,261
P
**Excluding advances to officers and employees amounting to P
=23,573,076,P
=22,592,828as of June 30, 2013 and March 31, 2013 and 2012, respectively.
** Excluding taxes payable, unearned tuition and school fees, subscriptions payable, SSS, Philhealth and Pag-ibig benefits payable amounting to P
=87,257,774 andP
=14,998,559as
at June 30, 2013 and March 31, 2013, respectively.
Fair Value of Financial Instruments
- 28 -
The following methods and assumptions were used to estimate the fair value of each class of
financial instrument for which it is practicable to estimate such value
Cash and Cash Equivalents, Receivables, Short-term Loans, Accounts Payable and Other Current
Liabilities. Due to the short-term nature of transactions, the fair values of these instruments,
except for noncurrent receivables, approximate the carrying value as of financial reporting date.
The carrying value of noncurrent receivable represents its fair value as the receivable earns
interest until settled.
Advances to Associates and Joint Ventures and Deposits. The fair value of these instruments is
estimated as the present value of all future cash flows using the applicable rates for similar type of
the instruments.
AFS Financial Assets. The fair values of publicly-traded instruments are determined by reference
to market bid quotes as of financial reporting date. Investments in unquoted equity securities for
which no reliable basis for fair value measurement is available are carried at cost, net of
impairment.
Fair Value Hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial
instruments by valuation technique:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair
value are observable, either directly or indirectly.
Level 3: Techniques which use inputs which have a significant effect on the recorded fair value
that are not based on observable market data.
As ofJune 30, 2013 and March 31, 2013, there were no other financial assets and liabilities other
than AFS financial assets which are measured at fair value determined in reference with quoted
prices in active market (Level 1 Hierarchy).
For the three months ended June 30, 2013 and 2012, there were no transfers between Level 1 and
2 fair value measurements, and no transfers into and out of Level 3 fair value measurements.
17. Notes to Interim Condensed Consolidated Statements of Cash Flows
Non-cash investing and financing activities pertain to the following:
a. Acquisitions of property and equipment under finance lease recorded under the “Property and
equipment” account amounting to nil andP
=1.4 million as of June 30, 2013 and 2012,
respectively.
b. Unpaid progress billing for construction in progress amounting to nil and P
=27.2 millionas at
June 30, 2013 and 2012, respectively.
- 29 -
STI EDUCATION SYSTEMS HOLDINGS, INC.
AGING OF ACCOUNTS RECEIVABLES
AS OF JUNE 30, 2013
(PHP '000)
TYPE OF
ACCOUNTS RECEIVABLE
TOTAL
1-30
Days
a) Current Receivables
200,802
126,150
b) Non-Current Receivables
463,979
31-60
Days
23,333
61-90
Days
18,856
Over 90
Days
32,463
463,979
664,781
ACCOUNTS RECEIVABLE
DESCRIPTION
NATURE / DESCRIPTION
COLLECTION PERIOD
a) Current Receivables
Tuition fees and receivables from school franchisees
Monthly
b) Non-Current Receivables
Related party transactions
Annex “B”
STI EDUCATION SYSTEMS HOLDINGS, INC.
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
INTRODUCTION
This discussion summarizes the significant factors affecting the operating results and
financial condition of STI Education Systems Holdings, Inc. and its subsidiaries
(hereafter collectively referred to as the “Group”) for the three months ended June
30, 2013 and 2012. The following discussion should be read in conjunction with the
attached financial statements of the Group as of and for the period ended June 30,
2013. All necessary adjustments have been made to present fairly the financial
position, results of operations, and cash flows of the Group as of June 30, 2013, and
for all the other periods presented.
I.
RESULTS OF OPERATIONS
a. Three months ended June 30, 2013 vs. three months ended June 30,
2012
For the three months ended June 30, 2013, the Group generated gross
revenues of P330.4 million, earned a net income of P185.3 million and
registered a total comprehensive loss of P809.7 million. As compared to
the same period last year, this represents P10.0 million increase in total
revenues and P54.7 million increase in net income. Total comprehensive
income resulted to a loss of P809.7 million from an income of P190.7
million for the same period last year as a result of a decrease in an
associate’s unrealized mark-to-market gain on available for sale (AFS)
financial assets. The decrease in the associate’s unrealized mark-to-market
gain resulted from: (1) the sale by the associate of some of the AFS assets;
and (2) a decline in the market value of the remaining AFS assets from the
previous quarter. Other comprehensive income pertains substantially to
the Group’s share in associates’ unrealized mark-to-market loss on
available-for-sale financial assets.
The 3% increase in gross revenues resulted mainly from the 4% increase in
the number of students of STI Education Services Group, Inc. (STI ESG)
and its subsidiaries from 68,363 last year to 71,195 students this year.
Tuition and other school fees improved by 11% due also to the tuition fee
increase of 7% for new students and 5% for old students.
1
Cost of educational services decreased by 7% as a result of the decrease in
faculty salaries and other direct expenses. The drop in the faculty salary
cost resulted from the decrease in the number of faculty members in the
programs with declining enrollment, notably the nursing program, in
which faculty members generally have high salaries.
Interest expense went down remarkably by 98% or P16.6 million since all
bank loans have been fully paid. The P0.3 million interest expense
recorded in 2013 were only for those obligations under finance lease of
equipment.
Equity in net gains of associates and joint ventures increased by 79% or
P88.3 million due to realized gain on sale of bonds and equities held by an
associate.
II.
FINANCIAL CONDITION
The Group’s total assets as at June 30, 2013 amounted to P7,727.6 million,
9% lower than the amount as at March 31, 2013. The decrease was mainly
due to the decline in the market value of financial assets held by an
associate.
Cash and cash equivalents declined by P186.0 million or 12% from
P1,489.5 million to P1,303.5 million as at March 31, 2013 and June 30, 2013,
respectively. The decrease is due to the continuing disbursements for the
construction of schools as part of the Group’s expansion program and the
deposit made for the planned acquisition of a university. Property and
equipment increased by 7%mainly due to the ongoing construction of
buildings for STI ORCA, STI Cubao and STI Caloocan and the purchase of
furniture and equipment for STI ORCA. This is in line with the planned
expansion of the existing facilities of STI owned schools. Investments in
associates and joint ventures decreased by 29% due to the decline in
market value of financial assets of an associate.
Total liabilities increased by 6% or P23.4 million mainly due to increase in
payables related to construction of school facilities.
Debt-to-equity ratio stood at 0.05:1.00 as at June 30, 2013, there being no
bank loans outstanding. The Group uses internally-generated funds and
the proceeds from the follow-on offering to pay for the acquisition and/or
construction of schools.
III.
KEY PERFORMANCE INDICATORS (KPIs)
The top five key performance indicators of the Group include tests of
profitability, liquidity and solvency. Profitability refers to the Group’s
2
earning capacity and ability to earn income for its stockholders. This is
measured by profitability ratios analyzing margins and returns. Liquidity
refers to the Group’s ability to pay its short-term liabilities as and when
they fall due. Solvency refers to the Group’s ability to pay all its debts as
and when they fall due, whether such liabilities are current or non-current.
As of June
30, 2013
As of June
30, 2012
Discussion
Return on Net income for the
quarter attributable to
equity
equity holders of the
Parent company
divided by average
equity attributable to
equity holders of the
Parent company for
the given quarters
3%
4%
Gross
profit
margin
70%
66%
Net income
attributable to equity
holders of the Parent
Company for the
three-month period
increased 62% from
P127.5 million in
2012 to P206.0
million in 2013.
Meanwhile equity
attributable to equity
holders of the parent
company increased
at a faster rate at
126% due to the
additional shares
issued arising from
the follow-on
offering and the new
shares issued
resulting from the
share-for-share swap
between the
shareholders of STI
ESG and STI
Holdings
Increase in gross
profit margin
resulted mainly from
the increase in the
number of students
of STI ESG and its
subsidiaries from
KPI
Manner of Calculation
Gross profit divided
by total revenues
3
68,363 last year to
71,195 students this
year resulting to
increased revenues
from tuition and
other school fees.
Direct costs were also
reduced.
As of June
30, 2013
As of
March 31,
2013
Current
ratio
Current assets divided
byCurrent liabilities
4.47:1.00
5.46:1.00
The substantial
decrease in current
ratio on June 30, 2013
is due to the
payments made for
acquisition of
property and
equipment in
accordance with the
expansion plan.
Quick ratio
Current assets less
inventories and
prepayments divided
by Current liabilities
4.25:1.00
5.24:1.00
0.05:1.00
0.04:1.00
Decrease in cash of
P186.7 million due to
the acquisition of
property and
equipment related to
expansion plans.
The company
remained debt free
for the period.
Income is recognized
during the three
month period thus
the favorable debt to
equity ratio.
Debt to
Total liabilities divided
equity ratio by Total equity
IV.
MATERIAL CHANGES IN BALANCE SHEET ACCOUNTS
Decrease in Cash and cash equivalents by P186.0 million or 12% was due
to the deposit made relative to the planned acquisition of a university in
4
the Visayas and acquisition of a property intended for STI Batangas. In
addition, there are continuing disbursements for the purchase of furniture
and equipment for STI ORCA along with the completion of the building
thereat. Further, there is ongoing construction in sites intended for STI
Caloocan, STI Cubao and STI Las Piñas.
Current receivables declined by P50.0 million or 20%primarily due to the
collection of receivables from students at the end of the school year.
Inventories increased slightly by 2% due to the buildup of inventories in
preparation for the expected increase in the number of students.
Prepayments increased by 15% to P43.1 million due to substantial
increases in VAT input taxes arising from disbursements related to the
purchase of uniforms, school supplies and various items for sale in
preparation to the opening of classes. Significant amount of VAT input
taxes also arose from disbursements related to various renovations and
repairs in other STI owned schools. .
Property and equipment rose by 7% or P193.8 million due to the purchase
of furniture and equipment for STI ORCA, construction costs incurred for
STI ORCA and Caloocan, and improvement of various facilities.
Investments in and advances to associates and joint ventures decreased by
29% mainly due to the decline in the market value of investments in bonds
and equities held by an associate.
Availabe for sale financial assets increased by P28.6 million due to
reclassification of investments in Delos-STI Megaclinic, Inc. (Megaclinic)
and Delos Santos General Hospital, Inc. (the Hospital) from Investments in
and advances to associates and joint ventures account as a result of the
Investment Agreement entered into with Metro Pacific Investments
Corporation (MPIC) which was finalized in June 2013. The infusion of
equity of MPIC in the Hospital resulted to a dilution of the ownership of
the group to 10%, thus the reclassification. The Investment Agreement
also stated that shareholdings of Delos Santos-STI College(DLS-STI
Collge) in Megaclinic would be swapped with shares in the Hospital.
Noncurrent assets increased byP62.3 million or 10% due to the deposit
made relative to the planned acquisition of a university in the Visayas and
the purchase of computer licenses for schools.
Accounts payable and other current liabilities increased by P12.0 million
or 4% due to the increase in unearned revenues relative to collected tuition
and other school fees which will be recognized as income up to the end of
the semester. The increase was also caused by outstanding bills for
5
advertising expenses seasonally incurred in the first quarter of the fiscal
year. The increases were partially offset by lower payables for various
expenses, like rent.
Current and noncurrent portion of obligations under finance lease
decreased by 18% and 12%, respectively, mainly due to payment of
monthly amortizations. These obligations pertain mostly to company
vehicles and computer equipment purchased under finance lease
arrangements.
Income tax payable increased to P11.2 million from P5.0 million last March
31 reflecting the substantial increase in taxable income as tuition fees
collected in advance are taxable in full upon receipt.
Pension liabilities increased by P3.0 million or 13%, as a result of the
adoption of the accounting standard, Revised PAS 19, Employee Benefits,
that removes the corridor mechanism and amended the concept of
expected returns on plan assets. The Group recognized the impact
retroactively based on actuarial valuation.
Unrealized mark-to-market gains or losses on available-for-sale financial
assets, including the Group’s share in its associates’ unrealized mark-tomarket gains or losses on their available-for-sale financial assets decreased
by net amount of P982 million. This represents a decline in the gains
earlier reported as of March 31, 2013 by an associate as a result of: (1) the
realization of gains on some of the AFS assets; and (2) a decrease in market
values of the remaining assets from the previous quarter.
Retained earnings increased due to the net income earned during the
period.
V.
MATERIAL CHANGES IN INCOME STATEMENT ACCOUNTS
The increase in total revenues of P10.0 million or 3% from last year is due
to the 4% increase in the number of students of STI ESG and its
subsidiaries from 68,363 to 71,195 students resulting in higher revenues
from tuition and other school fees.
Tuition and other school fees increased by P24.7 million to P252.4 million ,
or by 11%, from last year’s P227.7 million, reflective of the increase in
number of students. In addition, STI ESG’s enrollment mix was more
favorable in 2013 than in 2012, as enrollment leaned more towards STI
Network’s four-year programs than the two-year programs. Ratio in 2013
was 75% four-year programs and 25% two-year programs, as compared to
70% and 30%, respectively, in 2012. The four-year programs charge higher
6
tuition and bring in more revenue per student. Further, there are increases
of 5% and 7% in tuition fees for the old and new students, respectively
Revenues from educational services also increased by P2.7 million or 7%
to P42.8 million this year.
Other income went down by P15.4 million or 68% due to various one-time
adjustments recognized last year by virtue of the merger of schools with
the parent company.
Sale of educational materials and supplies decreased by 8%. Classes last
year started early than this year and thus more sales were recorded during
the cut-off period.
Cost of educational services decreased by 7% from P89.0 million last year
to P83.0 million for the same period this year as a result of the decrease in
the faculty salaries and other direct expenses. The drop in the faculty
salaries resulted from the decrease in the number of faculty members in
the programs with declining enrollment, notably the nursing program, in
which faculty members generally have high salaries.
Cost of educational materials and supplies sold decreased by 10% from
P19.8 million to P17.8 million due to the change in product mix of items
sold.
General and administrative expenses slightly increased by P4.4 million or
2% from P185.6 million last year to P190.1 million this year, mainly due to
increase in salaries and wages of P5.9 million or 11% from last year’s P54.4
million as vacant plantilla positions were filled up. Higher retirement cost
was recorded compared to last year due to the adoption of the accounting
standard, Revised PAS 19 - Employee Benefits. The effect was recognized
retroactively using the valuation provided by the group’s actuary.
Depreciation costs also increased due to the recognition of depreciation of
the new building in STI Fairview. Professional fees increased by P3.4
million substantially resulting from the costs of legal and financial due
diligence work on the acquisition of a university in the Visayas. The
increases in costs were offset by the decline in rent expense.
Equity in net gains of associates and joint ventures increased by P88.3
million due to the gains realized on the sale of equities and bonds held by
an associate.
Interest expense decreased from P17.0 million last year to P0.3 million this
year. The bank loans were fully paid towards the end of 2012. The
interest expense of P0.3 million pertain to obligations under finance lease
covering various computer and transportation equipment.
7
Rental income decreased by P0.7 million as facilities originally being
leased out were utilized as school premises.
Interest income went down by P3.4 million due mainly to discontinued
imposition of interest on the loans to Philippine Women’s Univeristy
(PWU) and Unlad Resources Development Corporation (UNLAD).
Dividend income decreased by 8% due to the disposal of available-for-sale
financial assets which generated dividend income in 2012.
Loss on deemed sale amounting to P36.3 million represents the amount
deemed lost due to the dilution of the group’s ownership in the Hospital
from 33% to 10%.
Loss on swap in the amount of P 6.7 million pertains to the exchange of
shares of Megaclinic with the shares in the Hospital both held by DLS-STI
College, set as a condition in the Investment Agreement with MPIC.
Provision for income tax increased as a result of the increase in taxable
income.
Other comprehensive income decreased by P1055.0 million due to the
decline in the gains earlier reflected as unrealized mark-to-market
gain/loss on March 31, 2013.
VI.
FINANCIAL RISK DISCLOSURE
The Group’s present activities expose it to liquidity risk, credit risk,
interest rate risk and equity price risk.
Liquidity risk – Liquidity risk relates to the possibility that the Group
might not be able to settle its obligations/commitments as they fall due.
To cover its financing requirements, the Group uses internally-generated
funds and avails of various bank loans. On November 7, 2012 the
Company received the proceeds from its follow on offering. The usage of
funds is in line with the plan as approved by the SEC and the PSE. There
are still unutilized funds as of June 30, 2013, which funds are invested in
short-term bank deposits that provide flexibility of withdrawing the funds
anytime. The Group regularly evaluates available financial products and
monitors market conditions for opportunities to enhance yields at
acceptable risk levels.
Credit risk – Credit risk is the risk that the Group will incur a loss arising
from students, franchisees or counterparties that fail to discharge their
contractual obligations. The Group manages and controls credit risk by
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setting limits on the amount of risk that the Group is willing to accept for
individual counterparties and by monitoring expenses in relation to such
limits.
It is STI ESG’s policy to require students to pay all their tuition and other
incidental fees before they can get their report cards and other credentials.
Receivable balances are monitored such that exposure to bad debts is
minimal.
STI Holdings’ loan exposure to UNLAD and PWU are secured by real
estate mortgages which minimize the credit risk to these institutions.
VII.
AGREEMENTS/COMMITMENTS AND CONTINGENCIES/OTHER
MATTERS
a. There are no changes in accounting estimates used in the preparation
of unaudited interim condensed consolidated reports for the current
and prior financial period.
b. Except for STI Holdings’ commitments under the JVA with PWU,
UNLAD and Attenborough Holdings Corporation (AHC) and under
the Shareholders’ Agreement governing the aforementioned parties’
relationship as shareholders of the joint venture company, there are no
material off-balance sheet transactions, arrangements, obligations
(including contingent obligations), and other relationships of the
company with unconsolidated entities or other persons created during
the reporting period.
c. There are no material events and uncertainties known to management
that would address the past and would have an impact on future
operations of the Group.
d. There are no known trends, demands, commitments, events of
uncertainties that will have an impact on the Group’s liquidity except
for the contingencies and commitments enumerated in Note 16 of the
Notes to Interim Condensed Consolidated Financial Information
attached as Annex “A”.
e. Except for the conditions set forth in the accession made by STI
Holdings to the JVA and Shareholders’ Agreement between PWU,
Unlad, AHC and Mr. Eusebio H. Tanco, there are no other events that
will trigger direct or contingent financial obligations that is material to
the Group, including any default or acceleration of an obligation.
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f. As of June 30, 2013, STI ESG has purchased land in Ortigas-Cainta,
Caloocan, Cubao and Las Pinas. Construction of school facilities in
Ortigas-Cainta, Caloocan and Cubao are on-going. Source of funds for
the capital expenditures is the follow-on offering of STI Holdings.
g. On June 3, 2013, STI ESG executed a deed of pledge on all of its shares
in Delos Santos General Hospital in favor of Neptune Stroika Holdings,
Inc., a wholly owned subsidiary of MPIC to cover the indemnity
obligations of STI ESG enumerated in the Investment Agreement with
MPIC.
h. There are no known trends, events or uncertainties that have had or
that are reasonably expected to have a material favorable or
unfavorable impact on net sales/revenues/income from continuing
operations.
i. There are no significant elements of income or loss that did not arise
from the Group’s continuing operations.
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STI EDUCATION SYSTEMS HOLDINGS, INC.
FINANCIAL RATIOS
Key Performance
Indicator
As of and for
the three
months ended
June 30, 2013
As of and for
the three
months
ended June
30, 2012
4.47:1.00
0.52:1.00
4.25:1.00
0.48:1.00
3.68:1.00
0.32:1.00
Total liabilities divided by
Total equity
0.05:1.00
0.48:1.00
Total assets divided by
Total equity
1.05:1.00
1.48:1.00
574.18:1.00
8.59:1.00
Manner of Calculation
LIQUIDITY RATIOS
Current ratio
Current assets divided by
Current liabilities
Quick ratio
Cash ratio
Current assets less
inventories and
prepayments divided by
Current liabilities
Cash and cash equivalents
divided by Current
liabilities
SOLVENCY RATIOS
Debt to equity ratio
Asset to equity ratio
Interest coverage ratio
Earnings before interest
and taxes divided by
interest expenses of the
same period
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PROFITABILITY
RATIOS
Return on equity
Net income for the quarter
attributable to equity
holders of the Parent
company divided by
average equity
attributable to equity
holders of the Parent
company
3%
4%
Return on assets
Net income for the quarter
divided by Total assets
3%
2%
Net profit margin
Net income for the quarter
divided by Total revenues
56%
41%
Gross profit margin
Gross profit for the
quarter divided by total
revenues
70%
66%
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