Академический Документы
Профессиональный Документы
Культура Документы
The management for Grace Corporation is responsible for all information and representations contained
in the statements of financial position as at December 31, 2011 and 2010, and the statements of
comprehensive income, statements of changes in equity and statements of cash flows for each of the two
years in the period ended December 31, 2011, and the summary of significant accounting policies and other
explanatory notes. The consolidated financial statements have been prepared in accordance with Philippine
Financial Reporting Standards and reflect amounts that are based on the best estimates and informed
judgment of management with an appropriate consideration to materiality.
In this regard, management maintains a system of accounting and reporting which provides the necessary
internal controls to ensure that transactions are properly authorized and recorded, assets are safeguarded
against unauthorized use or disposition and liabilities are recognized. The management likewise discloses
to the Company’s Audit Committee and to its external auditor:
(i) all significant deficiencies in the design or operation of internal controls that could adversely affect its
ability to record, process, and report financial data;
(iii) any fraud that involves management or other employees who exercise significant roles in internal
controls.
It is assumed that the Board of Directors reviewed the financial statements before such statements are
approved and submitted to the stockholders of the Company.
The independent auditors appointed by the Board of Directors and stockholders, had audited the
financial statements of the Company in accordance with Philippine Standards on Auditing and has
expressed their opinion on the fairness of presentation upon completion of such audit, in their report to
the stockholders and Board of Directors dated October 4, 2014.
Alfredo Cacho
Chairman
Joselito T. Peron
Corporate Secretary
INDEPENDENT AUDITORS’
REPORT The Stockholders and the
Board of Directors Grace Corporation
12 Ninoy Aquino Avenue
Parañaque City, Philippines
Auditors’ Responsibility
We believe that the audit evidence we have obtained and the report of other auditors
are sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, based on our audits and the report of the other auditors, the financial
statements is present fairly, in all material respects, the financial position of Grace
Corporation as at December 31, 2011 and 2010. The financial statements for 2011 and 2010
in the period ended December 31, 2011 are in accordance with Philippine Financial Reporting
Standards.
Statement of Financial Position
Shareholders' Equity
Ordinary Share Capital 70,000,000.00 45,000,000.00
Subscribed Ordinary Share Capital 5,000,000.00 -
Subscription Receivable (2,125,000.00) -
Premium in excess of Par 5,250,000.00 3,500,000.00
Retained Earnings 3,477,161.18 2,459,404.00
Total Shareholders' Equity 81,602,161.18 50,959,404.00
Statement of Comprehensive Income
2011 2010
Income
Net Sales 111,210,966.40 53,439,000.00
Other Income 1,951,430.33 110,000.00
113,162,396.74 53,549,000.00
Expenses
Costs of Sales 56,091,844.91 34,785,500.00
General and Admin
Expense 37,884,905.00 11,779,500.00
Distribution Expense 2,783,520.00 1,150,000.00
Interest
Expense 114,830.00 445,500.00
Other
Expenses 1,891,438.00 70,000.00
98,766,537.91 48,230,500.00
Income Before Tax 14,395,858.83 5,318,500.00
Income Tax Expense 4,318,757.65 1,595,400.00
Net Income 10,077,101.18 3,723,100.00
Other Comprehensive Income -
Total Comprehensive Income 10,077,101.18 3,723,100.00
EPS 13.44 8.27
Statement of Changes in Equity
Subscribed
Ordinary Share Ordinary Share Subscription Share Premium Retained Earnings Total
Capital Capital Receivable
OCI - - - - - -
Grace Corporation was incorporated in the Philippines and registered with the Securities and Exchange
Commission
(SEC) on May 10, 2009 under Registration No.
1007000.
Its primary purpose is to engage in, operate, conduct, carry on and maintain the business of importing,
exporting, buying, selling, handling and otherwise dealing in, all kinds of office, school and printing supplies
and all kinds of office machinery and equipment as well as general commission business on the said products.
The company’s principal place of business is located at 12 Ninoy Aquino Avenue., Parañaque City,
Philippines.
Basis of Preparation
The accompanying consolidated financial statements of the Group have been prepared on a historical cost
basis, except for financial assets at fair value through profit or loss (FVPL). The financial statements are
presented in Philippine Peso (P=).
Statement of Compliance
The consolidated financial statements of the Grace Corporation have been prepared in compliance with
Philippine
Financial Reporting Standards (PFRS).
Effective 2012
Effective 2015
PFRS 9, Financial Instruments: Classification and Measurement
PFRS 9, as issued in 2010, reflects the first phase of the work on the replacement of PAS 39 and applies
to classification and measurement of financial assets and financial liabilities as defined in PAS 39. The
Standard is effective for annual periods beginning on or after January 1, 2013. In subsequent phases, hedge
accounting and derecognition will be addressed. The completion of this project is expected in 2011. The adoption
of the first phase
of PFRS 9 will have an effect on the classification and measurement of the Group’s financial assets. The Group will
quantify the effect in conjunction with the other phases, when issued, to present a more comprehensive picture.
Short-term Investments
Short-term investments are short-term placements with maturities of more than three months but less than one
year from the date of acquisition. These earn interest at the respective short-term investment rates.
Financial Instruments
Date of recognition
The Group recognizes a financial asset or a financial liability in the consolidated statement of financial position
when it becomes a party to the contractual provisions of the instrument. Purchases or sales of financial assets that
require delivery of assets within the time frame established by regulation or convention in the marketplace are
recognized on the settlement date.
The Group determines the classification of its financial instruments at initial recognition and, where allowed and
appropriate, re-evaluates such designation at every reporting date. Financial instruments are classified as
liability or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and
losses relating to a financial instrument or a component that is a financial liability, are reported as expense or
income. Distributions to holders of financial instruments classified as equity are charged directly to equity, net
of any related income tax benefits.
For all other financial instruments not listed in an active market, the fair value is determined by using
appropriate valuation methodologies. Valuation methodologies include net present value techniques,
comparison to similar instruments for which market observable prices exist, option pricing models, and other
relevant valuation models.
Inventories
Inventories are carried at the lower of cost and net realizable value (NRV).
Prepaid Expenses
Prepaid expenses are carried at cost less the amortized portion. These typically comprise prepayments
for commissions, marketing fees, advertising and promotions, taxes and licenses, rentals and insurance.
Property and Equipment
Property and equipment, except for land, are carried at cost less accumulated depreciation and amortization and any
impairment in value. Land is carried at cost less any impairment in value. The initial cost of property and equipment
consists of its construction cost or purchase price and any directly attributable costs of bringing the property
and equipment to its working condition and location for its intended use.
Equity
When the shares are sold at premium, the difference between the proceeds at the par value is credited to “Additional
paid-in capital” account. Direct costs incurred related to equity issuance are chargeable to “Additional paid-in
capital” account. If additional paid-in capital is not sufficient, the excess is charged against retained earnings. When
the
Group issues more than one class of stock, a separate account is maintained for each class of stock and the number
of shares issued.
declared.
Own equity instruments which are reacquired (treasury shares) are recognized at cost and deducted from equity.
No gain or loss is recognized in the consolidated statement of income on the purchase, sale, issue or cancellation
of the Group’s own equity instruments. Any difference between the carrying amount and the consideration, if
reissued, is recognized in additional paid-in capital. Voting rights related to treasury shares are nullified for the
Group and no dividends are allocated to them respectively. When the shares are retired, the capital stock account
is reduced by its par value and the excess of cost over par value upon retirement is debited to additional paid-in
capital to the extent of the specific or average additional paid-in capital when the shares were issued and to
retained earnings for the remaining balance.
Revenue
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and
the revenue can be reliably measured.
Expenses
Direct operating expenses and general and administrative expenses, except for lease agreements, are recognized
as they are incurred.
Contingencies
Contingent liabilities are not recognized in the consolidated financial statements. These are disclosed unless the
possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are not
recognized in the consolidated financial statements but disclosed when an inflow of economic benefits is
probable.
The preparation of the accompanying consolidated financial statements in conformity with PFRS requires
management to make estimates and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. The estimates and assumptions used in the accompanying consolidated
financial statements are based upon management’s evaluation of relevant facts and circumstances as of the date
of the consolidated financial statements. Actual results could differ from such estimates.
Judgments
In the process of applying the Group’s accounting policies, management has made the following judgments,
apart from those involving estimations, which have the most significant effect on the amounts recognized in the
financial statements:
Note 4 – Cash
2011 2010
Accounts Receivable 10,302,420.00 5,850,000.00
Accounts Receivable - 2,800.00 6,400,000.00
Others for Bad
Allowance (515,121.00)
debts Receivable
Dividend 40,000.00
Notes Receivable 2,470,000.00 1,500,000.00
Accrued Interest Receivable 684,873.33 ____________
Trade & Other Receivable 12,984,972.33 13,750,000.00
Furniture
and Transportation Office
Land Building Fixtures Equipment Equipment Total
Cost
01 January,
2011 16,500,000.00 33,000,000.00 3,550,000.00 6,000,000.00 2,130,000.00 61,180,000.00
Disposals - - - - - -
31 December,
2011 16,500,000.00 53,000,000.00 3,550,000.00 6,000,000.00 2,130,000.00 81,180,000.00
Accumulated Depreciation
01 January,
2011 - 1,914,000.00 1,004,460.00 600,000.00 597,820.00 4,116,280.00
Disposals - - - - - -
31 December,
2011 - 4,626,436.33 1,644,460.00 1,200,000.00 1,018,820.00 8,489,716.33
Net Book
Value 16,500,000.00 48,373,563.67 1,905,540.00 4,800,000.00 1,111,180.007 2,690,283.67___
Note 9 – Trade and Other Payables
2010 2011
Authorized 1,000,000.00 1,000,000.00
Issued 450,000.00 700,000.00
Subscribed 50,000.00
Treasury - -
Outstanding 450,000.00 750,000.00
2010 2011
Ordinary Share Capital 45,000,000.00 70,000,000.00
Subscribed Ordinary Share Capital 5,000,000.00 -
Share Premium 3,500,000.00 5,250,000.00
Total Shareholders'
Contribution 48,500,000.00 82,375,000.00
Note 11 – Retained Earnings
2011 2010
Gross
Sales 113,123,050.00 54,539,000.00
Sales Discount (870,607.14) (300,000.00)
Sales Returns & Allowances (1,041,475.00) (800,000.00)
Net Sales 111,210,967.86 53,439,000.00
2011 2010
Gain on Sale of Securities 1,026,000.00
Interest Income 894,873.33 110,000.00
Dividend Income 40,000.00
Miscellaneous Income 1,704.00
1,962,577.33 110,000.00
2011 2010
Salaries Expense 24,022,840.00 7,000,000.00
Bonus Expense 2,542,117.73
Supplies Expense 1,411,862.00 108,000.00
Taxes and Licenses 980,000.00 900,000.00
SSS Premium Expense 1,270,500.00 270,500.00
HDMF Premiums Expense 1,100,000.00 100,000.00
Light, Water, Telephone 1,370,700.00 210,000.00
Professional Fee 350,000.00 -
Depreciation Expense - Bldg 2,712,436.33 1,650,000.00
Depreciation Expense - F&F 640,000.00 640,000.00
Depreciation Expense - OE 421,000.00 421,000.00
Insurance Expense 550,000.00 200,000.00
Bad Debts Expense 515,121.00 280,000.00
37,886,577.05 11,779,500.00
Note 15 – Distribution Expense
2011 2010
Gasoline Expense 1,146,000.00 100,000.00
Advertising Expense 820,520.00 318,000.00
Representation Expense 217,000.00 132,000.00
Depreciation Expense - TE 600,000.00 600,000.00
2,783,520.00 1,150,000.00
2011 2010
Miscellaneous Expense 410,438.00 70,000.00
Unrealized Loss on Securities 1,481,000.00
1,891,438.00 70,000.00