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EXECUTIVE SUMMARY:

Universal Robina Corporation (URC) was founded in 1954 when Mr. John Gokongwei, Jr. established Universal Corn Products, Inc., a cornstarch manufacturing plant in Pasig. The Company is involved in a wide range of foodrelated businesses, including the manufacture and distribution of branded consumer foods, production of hogs and day-old chicks, manufacture of animal and fish feeds, glucose and veterinary compounds, flour milling, and sugar milling and refining. URC operates its food business through operating divisions and wholly-owned or majority-owned subsidiaries that are organized into three core business segments, namely, branded consumer foods, agro-industrial products and commodity food products. The Company is also engaged in consumer product-related packaging business through its packaging division, which is included in the branded consumer food segment, and through its subsidiary, CFC Clubhouse Property, Inc. The Company sells its branded food products primarily to supermarkets, as well as directly to top wholesalers, large convenience stores, large scale trading companies and regional distributors, which in turn sell its products to other small retailers and down line markets. Moreover, the products are distributed to approximately 120,000 outlets in the Philippines and sold through URC's direct sales force and regional distributors. The attached report analyses the financial condition of the company in the years ended September 30, 2012 and 2011. During the year ended September of 2012, sales at Universal Robina were 71.20 billion Philippine Pesos (US$1.75
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billion). This is an increase of 6.0% versus 2011, when the company's sales were 67.17 billion Philippine Pesos. This was the fifth consecutive year of sales increases at Universal Robina (and since 2007, sales have increased a total of 89%). Sales of Branded saw an increase of 11.3% in 2012, from 50.56 billion Philippine Pesos to 56.26 billion Philippine Pesos. Not all segments of Universal Robina experienced an increase in sales in 2012: sales of Commodity fell 20.5% to 7.57 billion Philippine Pesos. The company improved its financial condition in 2012. Due to the product innovation the company was able to sustain its financial growth. Also its strategic expansion to the international market contributed to the healthy cash generation of the company.

FINANCIAL ANALYSIS ON UNIVERSAL ROBINA CORPORATION :

PURPOSE OF FINANCIAL ANALYSIS:


The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions. Financial statements should be understandable, relevant, reliable and comparable. Reported assets, liabilities, equity, income and expenses are directly related to an organization's financial position. Financial statements are intended to be understandable by readers who have "a reasonable knowledge of business and economic activities and accounting and who are willing to study the information diligently. Financial statements may be used by users for different purposes: Owners and managers require financial statements to make important business decisions that affect its continued operations. Financial analysis is then performed on these statements to provide management with a more detailed understanding of the figures. These statements are also used as part of management's annual report to the stockholders. Employees also need these reports in making collective

bargaining agreements (CBA) with the management, in the case of labor unions or for individuals in discussing their compensation, promotion and rankings.

FINANCIAL ANALYSIS ON UNIVERSAL ROBINA CORPORATION :

Prospective investors make use of financial statements to assess the viability of investing in a business. Financial analyses are often used by investors and are prepared by professionals (financial analysts), thus providing them with the basis for making investment decisions. Financial institutions (banks and other lending companies) use them to decide whether to grant a company with fresh working capital or extend debt securities (such as a long-term bank loan or debentures) to finance expansion and other significant expenditures.

FINANCIAL ANALYSIS ON UNIVERSAL ROBINA CORPORATION :

COMPANY PROFILE:

COMPANY HISTORY:
Universal Robina Corporation (URC) is one of the largest branded food product companies in the Philippines, with the distinction of being called the countrys first Philippine multinational, and has a growing presence in other Asian markets.

Universal Robina Corporation (URC) traced its beginnings all the way back to 1954. John Gokongwei, Jr. was doing very well then as a trader/importer. He had learned the trade when his father died before the war, and had worked hard through the war and postwar years to prosper. However, while he thrived, he took a long hard look at his company, and correctly predicted that trading would remain a low-margin business. On the other hand, a successful manufacturer controlling its own production and distribution would command more profitable margins. Mr. John decided to construct a corn milling plant to produce glucose and cornstarch, Universal Corn Products (UCP), the first building block of the company that would become URC. For a time, business was good. However, Mr. John was still looking ahead, working with an eye towards the future. While the business was doing very well, it
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was producing essentially a commodity, which a customer could easily access elsewhere. To stay ahead in the game, Mr. John had to diversify by producing and marketing his own branded consumer foods, similar to the multinational companies in the Philippines like Nestle and Procter & Gamble. In a sense, he wanted to put up the first local MNC, borne out of their best practices. Thus, in 1961, Consolidated Food Corporation was born. Their first home run product was Blend 45, the first locally-manufactured coffee blend, dubbed as the Pinoy coffee. This became the largest-selling coffee brand in the market, even beating market leaders Caf Puro and Nescafe. After coffee came chocolates. Nips, a panned chocolate similar to M&Ms, were a staple of Filipino childhood. In 1963, Robina Farms started operations, beginning with poultry products. This was also the beginning of the vertical integration of the Gokongwei businesses, as the farms would be able to purchase feeds from UCP in the future. Later that decade, Robichem Laboratories would be put up, to cater to the veterinary needs of the farms businesses. Robina Farms expanded as it entered the hogs business in the latter part of the 70s. 1966 saw the establishment of Universal Robina Corporation, which pioneered the savory snacks industry in the Philippines through its Chiz Curls, Chippy, and Potato Chips, under the Jack n Jill brand. Other snack products would follow over the years, as the company successfully introduced market

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leaders like Jack 'n Jill Pretzels (pretzels), Piattos (fabricated potato chips), and Maxx (hard candy). The coming decades saw more acquisitions and expansion. In the early 1970s, the Gokongwei family entered the commodities business through the formation of Continental Milling Corporation, for flour milling and production. The late 1980s brought the acquisition of three sugar mills and refineries, under URC Sugar. These two businesses provided stable cash flows, and allowed for further vertical integration in the supply chain, to help URC weather any volatility in the cyclical commodities markets. In line with this strategy, the late 1990s saw the entry of URC into the plastics business, through URC Packaging. As the businesses became more diversified, the companies were slowly integrated in order to streamline operations and minimize costs. In 2005, the present structure of the group was completed. All the different companies are now organized under Universal Robina Corporation, divided into three focused groups: the Branded Consumer Foods Group, composed of BCFG Domestic (including packaging) and URC International, for the production and sale of snacks, beverage, and grocery products,

the Agro-Industrial Group, composed of Universal Corn Products, Robina Farms, and Robichem, for the production and sale of animal feeds, day-old chicks, hogs, and veterinary medicine,

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and the Commodity Foods Group, with the Sugar and Flour divisions, for the production of flour and sugar, and for sugar milling and refining services. URC is a core subsidiary of JG Summit Holdings, Inc. (JGSHI) which is one of

the largest business conglomerates listed in the Philippine Stock Exchange. URC owned the Philippine Basketball Association franchise Great Taste Coffee Makers which played from the inaugural 1975 season to 1992 when the company sold the team to Sta. Lucia Realty. The Coffee Makers won 6 PBA championships.

BOARD OF DIRECTORS:
John L. Gokongwei, Jr. founded URC in 1954 and has been the Chairman Emeritus of URC effective January 1, 2002. He had been Chairman of the Board until his retirement and resignation from this position effective December 31, 2001. He continues to be a member of URCs Board and is the Chairman Emeritus of JG Summit and certain of its subsidiaries. He also continues to be a member of the Executive Committee of JG Summit. He is currently the Chairman of the Gokongwei Brothers Foundation, Inc., Deputy Chairman and Director of United Industrial Corporation, Ltd. and Singapore Land, Ltd., and a director of JG Summit Capital Markets Corporation, Digital Telecommunications Phils., Inc., Oriental Petroleum and Minerals Corporation, First Private Power Corporation and Bauang Private Power Corporation. He is also a non-executive director of A. Soriano Corporation and Philex Mining Corporation. Mr. Gokongwei received a
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Masters degree in Business Administration from De La Salle University and attended the Advanced Management Program at Harvard Business School. James L. Go is the Chairman and Chief Executive Officer of URC. He had been President and Chief Executive Officer and was elected to his current position effective January 1, 2002 upon the resignation of Mr. John Gokongwei, Jr. as Chairman. He is also the Chairman and Chief Executive Officer of JG Summit and as such, he heads the Executive Committee of JG Summit. He is currently the Chairman and Chief Executive Officer of Robinsons Land Corporation (RLC), JG Summit Petrochemical Corporation, Manila Midtown Hotels and Land Corporation, Litton Mills, Inc., CFC Corporation, Universal Robina Sugar Milling Corporation, Southern Negros Development Corporation, Robinsons, Inc., and Oriental Petroleum and Minerals Corporation (OPMC). He is also the President and a Trustee of the Gokongwei Brothers Foundation, Inc. and a director and Vice Chairman of Digital Telecommunications Phils., Inc. He is also a director of First Private Power Corporation, Bauang Private Power Corporation, OPMC, Cebu Air, Inc., Panay Electric Co., United Industrial Corp., Ltd., Singapore Land, Ltd., Marina Center Holdings, Inc. and JG Summit Capital Markets Corporation. He received a Bachelor of Science degree and a Master of Science degree in Chemical Engineering from the Massachusetts Institute of Technology. Mr. James L. Go joined URC in 1964. Lance Y. Gokongwei is the President and Chief Operating Officer of URC. He had been Executive Vice President and was elected President and Chief

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Operating Officer effective January 1, 2002. He is the President and Chief Operating Officer of JG Summit Holdings, Inc. and JG Summit Petrochemical Corporation and the Vice Chairman and Deputy Chief Executive Officer of Robinsons Land Corporation and Litton Mills, Inc. He is also the President and Chief Executive Officer of Cebu Air, Inc. and Digital Telecommunications Phils., Inc., Chairman of Robinsons Savings Bank, President of Digital Information Technology Services, Inc., Vice Chairman of JG Summit Capital Markets Corporation, and a director of OPMC, United Industrial Corporation, Ltd., and Singapore Land, Ltd. He is also trustee, secretary and treasurer of Gokongwei Brothers Foundation, Inc. He received a Bachelor of Science degree in Economics and a Bachelor of Science degree in Applied Science from the University of Pennsylvania. Mr. Lance Y. Gokongwei joined URC in 1988. Patrick Henry C. Go is a director and Vice President of URC. He is also a director of JG Summit Holdings, Inc., RLC, CFC Corporation, JG Cement Corporation, Robinsons Savings Bank and JG Summit Petrochemical

Corporation where he is also Deputy Chief Operating Officer. He is a trustee of the Gokongwei Brothers Foundation, Inc. He received a Bachelor of Science degree in Management from the Ateneo de Manila University and attended the General Manager Program at Harvard Business School. Frederick D. Go has been a director of URC since June 2001. He is the President and Chief Operating Officer of RLC. He is an alternate director of United Industrial Corporation and Singapore Land Limited. He also serves as a

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director of RLC, Big R Stores, Inc., Robinsons Convenience Stores, Inc., Robinsons Recreation Corporation, JG Summit Petrochemical Corporation, Robinsons Savings Bank, CFC Corporation, Robinsons Handyman, Inc., Robinsons Venture Corporation, Robinsons-Abenson Appliances Corporation, Cebu Light Industrial Park, Philippine Hotels Federation and Philippine Retailers Association. He received a Bachelor of Science degree in Management Engineering from the Ateneo de Manila University. Johnson Robert G. Go, Jr. was elected director of the Company on May 5, 2005. He is the President and Chief Operating Officer of Litton Mills, Inc. effective August 28, 2006, the textile manufacturing business of JG Summit. He is also a director of Robinsons Land Corporation, Robinsons Savings Bank and CFC Corporation. He is also the President of Robinsons Convenience Stores, Inc. He was elected director of JG Summit on August 18, 2005 and was elected trustee of the Gokongwei Brothers Foundation, Inc. on September 1, 2005. He received a Bachelor of Arts degree in Interdisciplinary Studies (Liberal Arts) from the Ateneo de Manila University. Robert G. Coyiuto, Jr. - director of URC. He is also an independent director of RLC. He is Chairman of Prudential Guarantee & Assurance, Inc., PGA Cars, Inc., and Nissan North Edsa, and Vice-Chairman of First Guarantee Life Assurance Company, Inc. He is also President and Chief Operating Officer of Oriental Petroleum and Minerals Corporation and President of PGA Sompo

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Japan Insurance, Inc. He is Chairman of Pioneer Tours Corporation and a director of Canon Marketing (Philippines) Inc. and Destiny Financial Plans.

Independent Directors:
Wilfrido E. Sanchez has been an independent director of URC since 1995. He is also an independent director of EEI Corporation, Kawasaki Motor Corp., NYK-TDG Maritime Academy and Rizal Commercial Banking Corporation. Mr. Sanchez is a director of Transnational Plans, Inc., Dolphin Ship Management, Inc., Adventure International Tours, Inc., Transnational Diversified Group, Inc., Transnational Diversified Corporation, Magellan Capital Holdings Corporation, Center for Leadership & Change, Inc., House of Investment, Inc., Omico Corporation, Amon Trading Corporation, Grepalife Asset Management

Corporation, Grepalife Fixed Income Corporation, and JVR Foundation. Pascual Guerzon was elected as an independent director of URC on September 20, 2007. He is currently the Principal of Dean Guerzon & Associates (Business Development). He is the Founding Dean of De La Salle Graduate School of Business. He was also the former President of the Management Association of the Philippines Agribusiness and Countryside Development Foundation and the Management Association of the Philippines Foundation, MBA Director of the Ateneo de Manila Graduate School of Business, Director of Leverage International Consultants, Dep. Director of Asean Chambers of Commerce and Industry and Section Chief of the Board of Investments. Mr.

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Guerzon is a holder of an MBA in Finance from the University of the Philippines and a Ph.D. (N.D.) in Management from the University of Santo Tomas. Senior Officers: Cornelio S. Mapa Executive Vice President, URC BCFG Philippines Patrick O. Ng Executive Vice President, URC International Eugenie M.L. Villena Senior Vice President Chief Financial Officer BJ M. Sebastian Senior Vice President Chief Strategist Constante T. Santos Senior Vice President Corporate Controller Nicasio L. Lim Senior Vice President Corporate Human Resources Geraldo N. Florencio First Vice President - Controller Ester T. Ang Vice President - Treasurer Rosalinda F. Rivera Corporate Secretary

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DIVISIONS UNDER URC:

Universal Robina Corporation has three main business lines: The Branded Consumer Foods Group is the largest business and the key driver of growth and profitability. It is composed of the Philippine, international and packaging businesses. In the Philippine BCFG, our main divisions are Snack Foods, Beverages, Grocery (which include the joint ventures Nissin-URC and Hunts URC), Exports, and Packaging. Our international investments are in Thailand, Indonesia, Malaysia/Singapore, China/HK, and Vietnam.

The Agro-Industrial Group is composed of hog and poultry farms, branded feeds, and animal health products.

The Commodity Foods Group has both flour and sugar.


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The latter two groups provide URC with consistent cashflows and, in the case of commodities, consistent supply of raw materials for the Branded Consumer Foods Group. U R C VI S ION To be the best Philippine food and beverage conglomerate with a powerful presence throughout the ASEAN region and China, carrying a wide portfolio of strong brands, equipped with efficient systems and high-quality people. TO TA L U RC VA LUES 1. Passion to Win 2. Dynamism 3. Integrity 4. Courage Passion to Win We build organizational capability by being entrepreneurial and proactive, driven by a sense of urgency and purpose. We continuously challenge ourselves to deliver world-class brands and consistently rally our people to strive for excellence. Drive for Results: Effectively and speedily executes plans and programs. Exhibits perseverance and tenacity. Achieves quantifiable and measurable results.

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Identifies areas for improvement and takes necessary steps to implement those changes.

Entrepreneurial Mindset: Knowledgeable on the nature of the business and displays a sense of ownership by continuously finding ways to improve processes. Makes certain that all resources are properly utilized to achieve desired results.

Initiative Able to initiate and do efficient follow-through on projects to guarantee success. Exhausts available means to smoothly implement difficult initiatives.

Dynamism We cultivate a culture of innovation and productive working relationships. We continuously find ways to improve organizational and people capabilities to meet constantly changing consumer needs. Innovation Able to create and modify systems and processes to address the constantly changing needs of both internal and external customers. Can effectively translate creative ideas into tangible projects and workable solutions.

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Collaboration Can work well in a team by complementing strengths and weaknesses of team leader or members. Comfortable to take on different roles depending on the nature of engagement.

Strategic Agility Can effectively cope with structural and physical changes. Uses rigorous logic and methods to solve difficult problems with effective solutions. Able to handle multiple tasks. Can comfortably handle risk and uncertainty.

Integrity We are guided by transparency, ethics and fairness. We build the business with honor and are committed to good governance. Our processes and products meet the highest standards. We are credible in our dealings with both internal and external stakeholders. Principle-driven Abides by social, professional & business ethics & organization values. Able to manage sensitive information and strategies.

Personal Integration Actively works to continuously improve himself/herself. Works to deploy strengths and compensates for weaknesses and limits to support organizational objectives.

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Quality Orientation Ensures that integrity of processes is preserved. Strictly adheres to quality standards to delight both internal and external customers.

Courage We seize opportunities in building long-term, sustainable businesses. We make tough people and business decisions to ensure competitive advantage. Visioning Able to provide long-term direction, inspiration and momentum. Maximizes utilization of available and possible resources. Displays a clear sense of purpose.

Organizational Interface Able to interface with both top line and down line to execute effectively tasks at hand. Ensures that policies are adhered to at all levels. Able to relay information objectively and clearly, whether oral or written.

Standing Alone Able to operate with minimum supervision and achieve results autonomously.

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UNIVERSAL ROBINA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


SEPTEMBER 30 2012 ASSETS: Current Assets Cash and cash equivalents
Financial assets at fair value through profit or loss

2011

2010

5,345,833,397 10,812,402,265 4,797,876,621 7,461,032,915 9,759,334,152 1,057,007,658 454,142,702 39,687,629,710

4,546,881,527 5,511,551,122 10,652,071,697 7,419,824,815 9,724,784,656 911,265,129 651,357,138 39,417,736,084

4,459,254,984 10,022,605,224 6,748,394,466 6,550,949,865 7,888,923,770 846,876,801 908,713,064 37,425,718,174

Available-for-sale investments Receivables Inventories Biological assets Other current assets Total Current Assets Noncurrent Assets Property, plant and equipment Intangible assets Biological assets Investment in a joint venture Investment properties Deferred tax assets Net Pension Assets Other noncurrent assets Total Noncurrent Assets TOTAL ASSETS: LIABILITIES AND EQUITY: Current Liabilities Accounts payable and other accrued liabilities Current portion of long-term debt Short-term debt Trust receipts and acceptances payable Income tax payable Total Current Liabilities
FORWARD

27,918,634,454 1,273,627,776 428,961,591 96,139,053 64,491,512 91,907,509 425,923,637 30,299,685,532 69,987,315,242

26,423,220,738 1,463,851,176 459,053,688 89,966,944 68,149,307 98,507,804 353,198,160 28,955,947,817 68,373,683,901

25,312,012,092 1,641,227,640 448,700,235 89,497,240 71,807,094 28,258,903 70,030,200 272,049,168 27,933,582,572 65,359,300,746

7,586,842,126 8,588,536,884 3,464,360,214 428,184,136 20,067,923,360

7,270,818,277 8,205,763,578 5,749,632,635 1,448,156,283 408,699,778 23,083,070,551

6,513,309,554 7,401,385 5,111,859,534 363,718,685 11,996,289,158

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SEPTEMBER 30 2012 Noncurrent Liabilities Long-term debt - net of current portion Deferred tax liabilities Net pension liability Total Noncurrent Liabilities Total Liabilities Equity Equity attributable to equity holders of the parent Paid-up capital Retained earnings Other comprehensive income Equity reserve Treasury shares Equity attributable to non-controlling interests Total Equity TOTAL LIABILITIES AND EQUITY 19,056,685,251 32,956,735,052 793,452,103 (5,556,531,939) (670,386,034) 46,579,954,433 36,597,171 46,616,551,604 69,987,315,242 13,455,557,370 29,137,859,147 581,744,696 (2,414,026,153) 40,761,135,060 1,265,376,434 42,026,511,494 68,373,683,901 13,455,557,370 28418631895 1161870260 -2091912018 40,944,147,507 894093502 41,838,241,009 65,359,300,746 2,990,455,926 301,320,823 11,063,529 3,302,840,278 23,370,763,638 3,002,447,146 237,004,193 24,650,517 3,264,101,856 26,347,172,407 11,218,947,385 305,823,194 11,524,770,579 23,521,059,737 2011 2010

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UNIVERSAL ROBINA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION HORIZONTAL ANALYSIS
SEPTEMBER 30 2012 ASSETS: Current Assets Cash and cash equivalents
Financial assets at fair value through profit or loss

INCREASE(DECREASE) AMOUNT %

2011

5,345,833,397 10,812,402,265 4,797,876,621 7,461,032,915 9,759,334,152 1,057,007,658 454,142,702 39,687,629,710

4,546,881,527 5,511,551,122 10,652,071,697 7,419,824,815 9,724,784,656 911,265,129 651,357,138 39,417,736,084

798,951,870 5,300,851,143 (5,854,195,076) 41,208,100 34,549,496 145,742,529 (197,214,436) 269,893,626

17.57% 96.18% -54.96% 0.56% 0.36% 15.99% -30.28% 0.68%

Available-for-sale investments Receivables Inventories Biological assets Other current assets Total Current Assets Noncurrent Assets Property, plant and equipment Intangible assets Biological assets Investment in a joint venture Investment properties Deferred tax assets Net Pension Assets Other noncurrent assets Total Noncurrent Assets TOTAL ASSETS: LIABILITIES AND EQUITY: Current Liabilities Accounts payable and other accrued liabilities Current portion of long-term debt Short-term debt Trust receipts and acceptances payable Income tax payable Total Current Liabilities

27,918,634,454 1,273,627,776 428,961,591 96,139,053 64,491,512 91,907,509 425,923,637 30,299,685,532 69,987,315,242

26,423,220,738 1,463,851,176 459,053,688 89,966,944 68,149,307 98,507,804 353,198,160 28,955,947,817 68,373,683,901

1,495,413,716 (190,223,400) (30,092,097) 6,172,109 (3,657,795) (6,600,295) 72,725,477 1,343,737,715 1,613,631,341

5.66% -12.99% -6.56% 6.86% -5.37% -6.70% 20.59% 4.64% 2.36%

7,586,842,126 8,588,536,884 3,464,360,214 428,184,136 20,067,923,360

7,270,818,277 8,205,763,578 5,749,632,635 1,448,156,283 408,699,778 23,083,070,551

316,023,849 2,838,904,249 2,016,203,931 19,484,358 (3,015,147,191)

4.35% 49.38% 139.23% 4.77% -13.06%

FINANCIAL ANALYSIS ON UNIVERSAL ROBINA CORPORATION :

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SEPTEMBER 30 2012 Noncurrent Liabilities Long-term debt - net of current portion Deferred tax liabilities Net pension liability Total Noncurrent Liabilities Total Liabilities Equity Equity attributable to equity holders of the parent Paid-up capital Retained earnings Other comprehensive income Equity reserve Treasury shares Equity attributable to non-controlling interests Total Equity TOTAL LIABILITIES AND EQUITY 19,056,685,251 32,956,735,052 793,452,103 (5,556,531,939) (670,386,034) 46,579,954,433 36,597,171 46,616,551,604 69,987,315,242 13,455,557,370 29,137,859,147 581,744,696 (2,414,026,153) 40,761,135,060 1,265,376,434 42,026,511,494 68,373,683,901 2,990,455,926 301,320,823 11,063,529 3,302,840,278 23,370,763,638 3,002,447,146 237,004,193 24,650,517 3,264,101,856 26,347,172,407 2011

INCREASE(DECREASE) AMOUNT (11,991,220) 64,316,630 (13,586,988) 38,738,422 (2,976,408,769) % -0.40% 27.14% -55.12% 1.19% -11.30%

5,601,127,881 3,818,875,905 211,707,407 1,743,640,119 5,818,819,373 (1,228,779,263) 4,590,040,110 1,613,631,341

41.63% 13.11% 36.39% -72.23% 14.28% -97.11% 10.92% 2.36%

FINANCIAL ANALYSIS ON UNIVERSAL ROBINA CORPORATION :

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UNIVERSAL ROBINA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION FOR THE YEARS ENDED SEPTEMBER 30 VERTICAL ANALYSIS
2012 ASSETS: Current Assets Cash and cash equivalents
Financial assets at fair value through profit or loss

2011

5,345,833,397 10,812,402,265 4,797,876,621 7,461,032,915 9,759,334,152 1,057,007,658 454,142,702 39,687,629,710

7.64% 15.45% 6.86% 10.66% 13.94% 1.51% 0.65% 56.71%

4,546,881,527 5,511,551,122 10,652,071,697 7,419,824,815 9,724,784,656 911,265,129 651,357,138 39,417,736,084

6.65% 8.06% 15.58% 10.85% 14.22% 1.33% 0.95% 57.65%

Available-for-sale investments Receivables Inventories Biological assets Other current assets Total Current Assets Noncurrent Assets Property, plant and equipment Intangible assets Biological assets Investment in a joint venture Investment properties Deferred tax assets Net Pension Assets Other noncurrent assets Total Noncurrent Assets TOTAL ASSETS: LIABILITIES AND EQUITY: Current Liabilities Accounts payable and other accrued liabilities Current portion of long-term debt Short-term debt Trust receipts and acceptances payable Income tax payable Total Current Liabilities

27,918,634,454 1,273,627,776 428,961,591 96,139,053 64,491,512 91,907,509 425,923,637 30,299,685,532 69,987,315,242

39.89% 1.82% 0.61% 0.14% 0.09% 0.13% 0.61% 43.29% 100.00%

26,423,220,738 1,463,851,176 459,053,688 89,966,944 68,149,307 98,507,804 353,198,160 28,955,947,817 68,373,683,901

38.65% 2.14% 0.67% 0.13% 0.10% 0.14% 0.52% 42.35% 100.00%

7,586,842,126 8,588,536,884 3,464,360,214 428,184,136 20,067,923,360

10.84% 12.27% 4.95% 0.61% 28.67%

7,270,818,277 8,205,763,578 5,749,632,635 1,448,156,283 408,699,778 23,083,070,551

10.63% 12% 8.41% 2.12% 0.60% 33.76%

FINANCIAL ANALYSIS ON UNIVERSAL ROBINA CORPORATION :

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2012 Noncurrent Liabilities Long-term debt - net of current portion Deferred tax liabilities Net pension liability Total Noncurrent Liabilities Total Liabilities Equity Equity attributable to equity holders of the parent Paid-up capital Retained earnings Other comprehensive income Equity reserve Treasury shares Equity attributable to non-controlling interests Total Equity TOTAL LIABILITIES AND EQUITY 19,056,685,251 32,956,735,052 793,452,103 (5,556,531,939) (670,386,034) 46,579,954,433 36,597,171 46,616,551,604 69,987,315,242 2,990,455,926 301,320,823 11,063,529 3,302,840,278 23,370,763,638

% 4.27% 0.43% 0.02% 4.72% 33.39%

2011 3,002,447,146 237,004,193 24,650,517 3,264,101,856 26,347,172,407

% 4.39% 0.35% 0.04% 4.77% 38.53%

27.23% 47.09% 1.13% -7.94% -0.96% 66.55% 0.05% 66.61% 100.00%

13,455,557,370 29,137,859,147 581,744,696 (2,414,026,153) 40,761,135,060 1,265,376,434 42,026,511,494 68,373,683,901

19.68% 42.62% 0.85% 0.00% -3.53% 59.62% 1.85% 61.47% 100.00%

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UNIVERSAL ROBINA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME

YEARS ENDED SEPTEMBER 30 2012 SALE OF GOODS AND SERVICES COST OF SALES GROSS PROFIT Selling and distribution costs
General and administrative expenses

2011 67,167,630,481 50,645,273,658 16,522,356,823 (7,680,831,878) (1,952,777,324) 6,888,747,621

2010 57,719,996,079 41,113,405,237 16,606,590,842 (7,091,008,271) (1,837,374,186) 7,678,208,385

71,201,677,779 52,730,554,394 18,471,123,385 (8,696,876,368) (1,973,722,359) 7,800,524,658

OPERATING INCOME
Market valuation gain (loss) on financial assets at fair value through profit or loss

Finance revenue Finance costs Impairment losses Net foreign exchange losses
Equity in net income of a joint venture

1,548,491,547 1,229,729,268 (683,049,996) (197,874,576) (634,390,049) 31,172,102 52,624,725

(1,157,315,912) 1,191,241,808 (1,001,247,740) (167,210,935) (36,688,172) 25,469,633 (121,547,748)

2,007,094,315 1,222,064,699 (1,034,199,841) (442,888,794) (335,280,036) 26,194,500 (201,943,816)

Other income (expenses) INCOME BEFORE INCOME TAX PROVISION FOR INCOME TAX NET INCOME

9,147,227,679 989,341,422 8,157,886,257

5,621,448,555 613,894,698 5,007,553,857

8,919,249,412 780,999,818 8,138,249,594

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UNIVERSAL ROBINA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME HORIZONTAL ANALYSIS

YEARS ENDED SEPTEMBER 30 2012 SALE OF GOODS AND SERVICES COST OF SALES 71,201,677,779 52,730,554,394 2011 67,167,630,481 50,645,273,658

INCREASE(DECREASE) AMOUNT 4,034,047,298 2,085,280,736 % 6.01% 4.12%

GROSS PROFIT Selling and distribution costs General and administrative expenses

18,471,123,385 (8,696,876,368) (1,973,722,359)

16,522,356,823 (7,680,831,878) (1,952,777,324)

1,948,766,562 (1,016,044,490) (20,945,035)

11.79% 13.23% 1.07%

OPERATING INCOME Market valuation gain (loss) on financial assets at fair value through profit or loss Finance revenue Finance costs Impairment losses Net foreign exchange losses Equity in net income of a joint venture Other income (expenses) INCOME BEFORE INCOME TAX PROVISION FOR INCOME TAX

7,800,524,658

6,888,747,621

911,777,037

13.24%

1,548,491,547 1,229,729,268 (683,049,996) (197,874,576) (634,390,049) 31,172,102 52,624,725

(1,157,315,912) 1,191,241,808 (1,001,247,740) (167,210,935) (36,688,172) 25,469,633 (121,547,748)

2,705,807,459 38,487,460 318,197,744 (30,663,641) (597,701,877) 5,702,469 174,172,473

-233.80% 3.23% -31.78% 18.34% 1629.14% 22.39% -143.30%

9,147,227,679 989,341,422

5,621,448,555 613,894,698

3,525,779,124 375,446,724

62.72% 61.16%

NET INCOME

8,157,886,257

5,007,553,857

3,150,332,400

62.91%

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UNIVERSAL ROBINA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME VERTICAL ANALYSIS FOR THE YEARS ENDED SEPTEMBER 30

2012 SALE OF GOODS AND SERVICES COST OF SALES 71,201,677,779 52,730,554,394

% 100.00% 74.06%

2011 67,167,630,481 50,645,273,658

% 100.00% 75.40%

GROSS PROFIT Selling and distribution costs General and administrative expenses

18,471,123,385 (8,696,876,368) (1,973,722,359)

25.94% -12.21% -2.77%

16,522,356,823 (7,680,831,878) (1,952,777,324)

24.60% -11.44% -2.91%

OPERATING INCOME Market valuation gain (loss) on financial assets at fair value through profit or loss Finance revenue Finance costs Impairment losses Net foreign exchange losses Equity in net income of a joint venture Other income (expenses) INCOME BEFORE INCOME TAX PROVISION FOR INCOME TAX

7,800,524,658

10.96%

6,888,747,621

10.26%

1,548,491,547 1,229,729,268 (683,049,996) (197,874,576) (634,390,049) 31,172,102 52,624,725

2.17% 1.73% -0.96% -0.28% -0.89% 0.04% 0.07%

(1,157,315,912) 1,191,241,808 (1,001,247,740) (167,210,935) (36,688,172) 25,469,633 (121,547,748)

-1.72% 1.77% -1.49% -0.25% -0.05% 0.04% -0.18%

9,147,227,679 989,341,422

12.85% 1.39%

5,621,448,555 613,894,698

8.37% 0.91%

NET INCOME

8,157,886,257

11.46%

5,007,553,857

7.46%

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FINANCIAL ANALYSIS:
HORIZONTAL ANALYSIS: A closer look at the URC balance sheet reveals that there is 17.6% or P798.9 million increase in cash and cash equivalents from P4.55 billion P5.35 billion in 2012 was due to increase in cash in banks sourced from operating activities. While 12.9% decrease in available-for-sale investments was primarily due to maturity of certain bond investments, net of increase in market values and amortization of bond discount. The 30.3% decrease in other current assets was due to decline in input taxes. As a result, total current assets increased by 0.68% or P269 million from P39.42 billion in 2011 to P39.69 billion in 2012.

The 5.66% increase in property, plant and equipment was due to increase in capital expenditures as a result of companys expansion.

The 12.99% decrease in intangible assets was due to recognition of impairment loss on trademark of a foreign subsidiary. The 6.56% decrease in biological assets was due to increase in population of livestock, net of decline in market value of hogs. The 6.86% increase investment in a joint venture was due to higher net income of Hunt-URC, net of dividends received. The 5.37% decrease investment properties were due to depreciation recognized on the properties. The 20.6% increase in other non-current assets was due to increase in miscellaneous deposits, net of decline in deferred input tax.

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As a result, there is a 4.64% or P1.34 billion increase in non-current asset from P28.95billion in 2011 to P30.3billion in 2012.

Total assets registered 2.36 % growth or P1.61 billion from P68.27billion in 2011 to P69.99 billion in 2012.

As per the companys current liabilities, there is a significant 49.4% increase in short-term debt due to additional loan availments from foreign and local banks. Meanwhile, the 139.2% increase in trust receipts and acceptances payable due to increased utilization of existing trust receipt facilities.

Resulting total current liabilities decreased favorably by 13.06% or P3.01 billion from P23.08 billion in 2011 to P20.07 billion in 2012.

As per the companys noncurrent liabilities, there is a 0.40% decrease in long-term debt due to settlement of matured bonds payable and long-term loans. The 27.14% increase in deferred income tax liabilities net due to decline in deferred tax assets on unrealized market loss on hogs valuation and recognition of deferred tax liability on unrealized foreign exchange gain. The 55.12% decrease in net pension liability due to contributions made to the retirement plan, net of accrual of pension expense.

Total non-current liabilities registered a 1.19% or P38.73 million increase from P3.26 billion in 2011 to P3.30 billion in 2012. Total liabilities decreased favorably by 11.30% or P2.98 billion from P26.35billion from 2011 to P23.37billion in 2012.

As per the URCs equity, the 41.63% increase in paid-up capital was due to re-issuance of Company shares held in treasury in excess of cost. The 13.11% increase in retained FINANCIAL ANALYSIS ON UNIVERSAL ROBINA CORPORATION : 29

earnings was due to net income during the year, net of dividends declared. The 36.39% increase in other comprehensive income can be attributed to increase in market values of bond and equity investments classified as available-for-sale, net of decline in cumulative translation adjustments as a result of appreciation in value of Philippine peso vis--vis US dollar. 100% increase in equity reserve was due to difference in the consideration paid against the carrying value of the acquired non-controlling interest in URC International. The 72.23% decrease in treasury shares can be attributed to reissuance of Company shares. 97.1% decrease in equity attributable to non-controlling interests was due to acquisition of the remaining 23% minority share in URC International, net of share in the net income of Nissin-URC.

Total equity resulted 10.92% or P4.59billion increase from P42.02 billion in 2011 to P46.62billion in 2012.

As per URC income statement, consolidated sale of goods and services of P71.202 billion for the fiscal year ended September 30, 2012, 6.01% sales growth over last year.

URCs cost of sales consists primarily of raw and packaging materials costs, manufacturing costs and direct labor costs. Cost of sales increased by P2.085 billion, or 4.12%, to P52.730 billion in fiscal 2012 from P50.645 billion recorded in fiscal 2011 due to increase in sales volume.

URCs gross profit for fiscal 2012 amounted to P18.471 billion, up by P1.949 billion or 11.79% from P6.522 billion reported in fiscal 2011.

URCs selling and distribution costs and general and administrative expenses consist primarily of compensation benefits, advertising and promotion costs, freight and other selling expenses, depreciation, repairs and maintenance expenses and other FINANCIAL ANALYSIS ON UNIVERSAL ROBINA CORPORATION : 30

administrative expenses. Selling and distribution costs, and general and administrative expenses rose by P1.037 billion or 10.76% to P10.671 billion in fiscal 2012 from P9.634 billion registered in fiscal 2011. As a result of the above factors, operating income increased by P 912million, or 13.24% to P7.801 billion in fiscal 2012 from P6.889 billion reported in fiscal 2011.

The 233.8% increase in market valuation gain on financial instruments at fair value through profit or loss of P1.548 billion was reported in fiscal 2012 against the P1.157 billion market valuation loss in fiscal 2011 due to significant recoveries in the market values of bond and equity investments according to annual report. URCs finance revenue consists of interest income from investments in financial instruments, money market placements, savings and dollar deposits and dividend income from investment in equity securities. Finance revenue increased by P38.47 million to P1.230 billion in fiscal 2012 from P1.191 billion in fiscal 2011 due to increased level of financial assets as per annual report.

URCs finance costs consist mainly of interest expense which decreased by P318 million or 31.78%, to P683 million in fiscal 2012 from P1.001 billion recorded in fiscal 2011 due to decline in level of financial debt resulting from settlement of long-term debt.

There is a 1,629.1 % increase in foreign exchange loss - net amounted to P634 million in fiscal 2012 from P37 million reported in fiscal 2011 due to higher unrealized foreign exchange loss on translation of foreign currency denominated accounts as a result of continuous appreciation of Philippine peso vis-a vis US dollar.

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Impairment loss of P198 million was reported in fiscal 2012, an increase of 18.34% from P167 million in fiscal 2011 due to higher impairment loss recognized on trademark this year against last year. Equity in net income of a joint venture amounted to P31 million in fiscal 2012 as against P25 million in fiscal 2011 due to higher net income of Hunt-Universal Robina Corporation this year against last year. Other income (expenses) - net consists of gain (loss) on sale of fixed assets and investments, amortization of bond issue costs, rental income, and miscellaneous income and expenses. Other income (expenses) - net of P53 million was reported in fiscal 2012 against the P122 million other expenses - net in fiscal 2011 due to loss on sale of net assets of the disposal group recognized last year.

The Company recognized provision for income tax of P989 million in fiscal 2012, 61.16% increase from P614 million in fiscal 2011 due to higher taxable income and recognition of deferred tax liabilities on unrealized foreign exchange gain.

URCs net income for fiscal 2012 amounted to P8.158 billion, higher by P3.150 billion or 62.91% from P5.008 billion in fiscal 2011, due to higher operating income and significant increase in market valuation gain on bond and equity holdings.

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VERTICAL ANALYSIS: URCs common size balance sheet reveals that the current assets in 2012 are 56.71% of total assets, 0.94% than 57.65% % in 2011. While the total non-current assets in 2012 are 43.29% of the total assets, 0.94% lower than to 42.35% in 2011.

On the other hand, current liabilities in 2012 are 28.67% of the total liabilities and equity, 5.09% significantly lower than 33.76% in 2011. Total non-current liabilities in 2012 are 4.72% of total liabilities and equity, 0.05% lower than 4.77% in 2011. Despite the 0.94% decrease in the total asset, the significant decrease in liabilities suggests of an improving working capital.

As per the URCs common size income statement, the cost of sales is maintained at about 75%. This means that no change in mark up on the goods sold was made during the two-year period. The increase in gross income was due mainly to the increase in sales volume and not to the change in the companys pricing policy.

Moreover, the operating expenses are kept at around 15%. As a result, operating income increased by 0.70%.

Other income and finance charges increased 1.89% mainly due to the 2.17 % increase market valuation gain on financial instruments at fair value through profit or loss.

As a result the income before income tax increased 4.48% from 8.37% in 2011 to 12.85% in 2012.

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Provision for income tax favorably increased by 0.48% from 0.91% in 2011 to 1.39% in 2012.

As a result, net income favorably rose 4% from 7.46% in 2011 to 11.46% in 2012.

FINANCIAL RATIO ANALYSIS:

LIQUIDITY RATIOS

2012

2011

Current Ratio

1.98:1

1.71:1

Acid Test Ratio

1.18:1

0.90:1

Receivables Turnover

10 times

10 times

Average Age of Receivables

38 days

38 days

Inventory Turnover

5 times

6 times

Average Age of Inventory

68 days

64 days

URCs financial position remains healthy with strong cash levels. The Company has a current ratio of 1.98:1 as of September 30, 2012 higher than the 1.71:1 as of September 30, 2011. Acid test ratio also improved by 0.28% in 2012 from 0.90:1 in 2011 to 1.18:1 in 2011. The companys receivable turnover was maintained at 10 turnovers. The company was able to collect its receivables in 38 days. On the other hand, Inventory

FINANCIAL ANALYSIS ON UNIVERSAL ROBINA CORPORATION :

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turnover slightly decreased. Likewise the average age of inventory, was extended for 4 days from 64 days to 68 days.

SOLVENCY RATIOS

2012

2011

Times Interest Earned

12 times

7 times

Debt to Total Asset Ratio

33%

39%

URCs Solvency Ratios improved by 2012. Times interest earned improved tremendously by 5 times from 7 times in 2011 to 12 times in 2012. This means that the company may be able to pay all its expenses including interest expense and still have enough left for net income. Furthermore, the companys debt to total asset ratio favorably decreased by 6% from 39% in 2011 to 33% in 2012. The decrease in debt ratio indicates that the total assets provided by the creditors decreased. The owners equity was able to fu nd its assets.

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PROFITABILITY RATIOS

2012

2011

Profit Margin

11%

7%

Asset Turnover

1.03

1.00

Return on Assets

12%

7%

Return on common stockholders equity

18%

12%

Earnings Per Share

3.69

2.25

Price-Earnings Ratio

22.72:1

21.33:1

Pay-out Ratio

48%

78%

URCs overall profitability improved in 2012. The companys profit margin increased by 4% from 7% in 2011 to 12% in 2012, Asset turnover slightly improved by 0.03% from 1.00 in 2011 to 1.03 in 2012. Return on assets improved by 5% from 7% in 2011 to 12% in 2012. This indicates that the company was able to manage its assets efficiently than 2011. Return on common stockholders equity favorably increased by 6% from12% in 2011 to 18% on 2012. Earnings per share increased by 64% or 1.44 from 2.25 in 2011 to 3.69 in 2012. On the other hand, price-earnings ratio increased by 6.52% or 1.39 from 21. 33:1 in 2011 to 22.72:1 in 2012. The companys payout ratio decreased by 30% from 78% in 2011 to 48% in 2012.

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CONCLUSION:

Universal Robina Corporation operates its food business through operating divisions and wholly-owned or majority owned subsidiaries that are organized into three core business segments: branded consumer foods, agro-industrial products and commodity food products. The Company has a strong brand portfolio created and supported through continuous product innovation, extensive marketing and experienced management. Its brands are household names in the Philippines and a growing number of consumers across Asia are purchasing the Companys branded consumer food products.

The companys overall financial condition improved in 2012. The companys liquidity ratios reveal that the company was able to meet its short term obligations as per the 16% or 0.27 increase in its current ratio.

The companys solvency also improved in 2012. URCs Times interest earned improved tremendously by 5 times from 7 times in 2011 to 12 times in 2012. Furthermore, the companys debt to total asset ratio favorably decreased by 6% from 39% in 2011 to 33% in 2012.

The companys overall profitability improved in 2012. . It is evident in the companys 4% increase in profit margin from 7% in 2011 to 12% in 2012.

The strong growth in the companys full year profit was driven by its domestic branded consumer food group (BCFG), which more than offset the weak performance of the commodity food group. The company is also benefiting from its successful expansion internationally.

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RECOMMENDATION:

Universal Robina Corporation (URC) is a consumer food, animal feed and agricultural product manufacturing company. The company undertakes manufacturing and distribution of branded consumer foods, hogs and day-old chicks, animal and fish feeds, glucose and veterinary compounds as well as it operates flour milling, sugar milling and refining and makes plastic film for packaging consumer products. It also offers coffee, flour, feed, meat, bakery, beverages, biscuits, candy, chocolate, noodles, and easy-to-drink products. The company operates in Philippines, China, Thailand, Malaysia, Vietnam, Singapore, Hong Kong and Indonesia internationally.

Cost of sales slightly increased due to increase in sales. It would be highly beneficial if the company would monitor and manage this efficiently. By tapering this down, the company may be able to increase its profits.

The stronger pesos effect on the export industry is evident in the 1,629.1 % increase in foreign exchange loss in 2012. It is highly recommended that the company would consider its effect on the companys net income. By prioritizing the domestic market and by strategically managing the export business, the losses may be reduced. The sales in Thailand contracted in 2012; this was largely due to the floods experienced near the end of 2011. Due to the floods in late 2011, spending on consumer staples is higher than on discretionary products. It is highly recommended that the company to launch other products such as confectionaries and to increase its budget in adverting and marketing.

Through its market leadership and commitment to excellence the company is expected to play in the ASEAN growth story. FINANCIAL ANALYSIS ON UNIVERSAL ROBINA CORPORATION : 39

FINANCIAL RATIO COMPUTATIONS

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