STI Education Systems Holdings Inc.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

FOR THE YEARS ENDED MARCH 31, 2014 AND 2013
(Amount in Philippine Pesos)

Horizontal Analysis Vertical Analysis

2014 2013 Increase (Decrease) Percentage of change 2014 2013
ASSETS

CURRENT ASSETS
Cash and cash equivalents 35,234,629,567.00 24,040,194,994.00 11,194,434,573.00 46.57% 35.39% 68.25%
Trade and other receivables - net 13,902,568,185.00 3,025,554,060.00 10,877,014,125.00 359.50% 13.96% 8.59%
Financial assets at fair value through profit or loss 1,040,340,021.00 0.00 1,040,340,021.00 0.00% 1.04% 0.00%
Inventories - net 15,287,019,458.00 3,526,529,441.00 11,760,490,017.00 333.49% 15.35% 10.01%
Prepayments and other current assets 634,606,527.00 195,019,245.00 439,587,282.00 225.41% 0.64% 0.55%

Total Current Assets 66,099,163,758.00 30,787,297,740.00 35,311,866,018.00 114.70% 66.39% 87.40%

NON-CURRENT ASSETS
Investment in joint venture 3,743,256,791.00 0.00 3,743,256,791.00 0.00% 3.76% 0.00%
Property, plant and equipment - net 11,467,808,296.00 3,751,319,910.00 7,716,488,386.00 205.70% 11.52% 10.65%
Intangible assets - net 17,871,224,140.00 329,058,362.00 17,542,165,778.00 5331.02% 17.95% 0.93%
Deferred tax assets 0.00 32,235,360.00 (32,235,360.00) -100.00% 0.00% 0.09%
Other non-current assets - net 377,098,482.00 325,450,808.00 51,647,674.00 15.87% 0.38% 0.92%

Total Non-current Assets 33,459,387,709.00 4,438,064,440.00 29,021,323,269.00 653.92% 33.61% 12.60%

TOTAL ASSETS 99,558,551,467.00 35,225,362,180.00 64,333,189,287.00 182.63% 100.00% 100.00%

LIABILITIES AND EQUITY

CURRENT LIABILITIES
 Interest-bearing loans and borrowings 23,827,219,465.00 0.00 23,827,219,465.00 0.00% 23.93% 0.00%
Trade and other payables 19,643,818,731.00 3,671,850,463.00 15,971,968,268.00 434.98% 19.73% 10.42%
Financial liabilities at fair value through profit or loss 233,751,463.00 38,631,143.00 195,120,320.00 505.09% 0.23% 0.11%
Income tax payable 569,582,757.00 538,586,438.00 30,996,319.00 5.76% 0.57% 1.53%
Deposit for future stock subscription 5,750,000.00 0.00 5,750,000.00 0.00% 0.01% 0.00%

Total Current Liabilities 44,280,122,416.00 4,249,068,044.00 40,031,054,372.00 942.11% 44.48% 12.06%

NON-CURRENT LIABILITIES
Equity-linked debt securities 5,253,911,638.00 0.00 5,253,911,638.00 0.00% 5.28% 0.00%
Accrued interest payable 19,528,767.00 0.00 19,528,767.00 0.00% 0.02% 0.00%
Provisions 919,469,601.00 0.00 919,469,601.00 0.00% 0.92% 0.00%
Deferred tax liabilities - net 2,051,427,187.00 0.00 2,051,427,187.00 0.00% 2.06% 0.00%
Retirement benefit obligation 1,132,094,607.00 87,780,322.00 1,044,314,285.00 1189.69% 1.14% 0.25%

Total Non-current Liabilities 9,376,431,800.00 87,780,322.00 9,288,651,478.00 10581.70% 9.42% 0.25%

Total liabilities 53,656,554,216.00 4,336,848,366.00 49,319,705,850.00 1137.22% 53.89% 12.31%

EQUITY
Capital Stock 16,120,000,000.00 15,000,000,000.00 1,120,000,000.00 7.47% 16.19% 42.58%
Additional paid-in capital 22,348,856,023.00 11,155,461,023.00 11,193,395,000.00 100.34% 22.45% 31.67%
Accumulated translation adjustments (685,584,783.00) 134,457,168.00 (820,041,951.00) -609.89% -0.69% 0.38%
Revaluation reserves (310,304,679.00) (26,249,891.00) (284,054,788.00) 1082.12% -0.31% -0.07%
Retained earnings 8,429,030,690.00 4,624,845,514.00 3,804,185,176.00 82.26% 8.47% 13.13%

Total Equity 45,901,997,251.00 30,888,513,814.00 15,013,483,437.00 48.61% 46.11% 87.69%

TOTAL LIABILITIES AND EQUITY 99,558,551,467.00 35,225,362,180.00 64,333,189,287.00 182.63% 100.00% 100.00%
 STI Education Systems Holdings Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED MARCH 31, 2014 AND 2013
(Amount in Philippine Pesos)

Horizontal Analysis Vertical Analysis

2014 2013 Increase (Decrease) % of change 2014

SALES 32,009,385,645.00 29,864,744,842.00 2,144,640,803.00 7.18% 100.00%

COST AND EXPENSES

Cost of goods sold 20,555,364,148.00 19,381,725,433.00 1,173,638,715.00 6.06% 64.22%
Selling and distribution expenses 2,505,981,850.00 2,097,852,769.00 408,129,081.00 19.45% 7.83%
General and administrative expenses 677,801,497.00 216,970,460.00 460,831,037.00 212.39% 2.12%
Other charges 161,880,966.00 263,092,696.00 (101,211,730.00) -38.47% 0.51%

23,901,028,461.00 21,959,641,358.00 1,941,387,103.00 8.84% 74.67%

PROFIT BEFORE TAX 8,108,357,184.00 7,905,103,484.00 203,253,700.00 2.57% 25.33%

TAX EXPENSE 1,904,172,008.00 2,074,293,503.00 (170,121,495.00) -8.20% 5.95%

NET PROFIT 6,204,185,176.00 5,830,809,981.00 373,375,195.00 6.40% 19.38%

OTHER COMPREHENSIVE INCOME (LOSS)

Item that will be reclassified subsequently
to profit or loss
Translation gain (loss) (820,041,951.00) 137,988,773.00 (958,030,724.00) -694.28% -2.56%
 Items that will not be reclassified subsequently
to profit or loss
Net actuarial loss on
retirement benefit obligation (358,625,137.00) (23,968,477.00) (334,656,660.00) 1396.24% -1.12%
Tax income on remeasurement of
retirement benefit obligation 70,563,930.00 7,190,543.00 63,373,387.00 881.34% 0.22%
(288,061,207.00) (16,777,934.00) (271,283,273.00) 1616.91% -0.90%

(1,108,103,158.00) 121,210,839.00 (1,229,313,997.00) -1014.19% -3.46%

TOTAL COMPREHENSIVE INCOME 5,096,082,018.00 5,952,020,820.00 (855,938,802.00) -14.38% 15.92%

Vertical Analysis
2013

100.00%

64.90%
7.02%
0.73%
0.88%

73.53%

26.47%

6.95%

19.52%

0.46%
-0.08%

0.02%
-0.06%

0.41%

19.93%
 STI Education Systems Holdings Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 2014 AND 2013
(Amount in Philippine Pesos)

Horizontal Analysis
2014 2013 Increase (Decrease) % of change

CASH FLOW FROM OPERATING ACTIVITIES

Profit before tax 8,108,357,184.00 7,905,103,484.00 203,253,700.00 2.57%
Adjustments for:
Depreciatiopn and amortization 374,555,576.00 312,760,208.00 61,795,368.00 19.76%
Interest income (241,455,589.00) (133,053,603.00) (108,401,986.00) 81.47%
Amortization of trademarks 102,872,668.00 102,334,204.00 538,464.00 0.53%
Interest expense 96,756,338.00 2,899,330.00 93,857,008.00 3237.20%
Share in net income of joint venture (39,534,826.00) 0.00 (39,534,826.00) 0.00%
Fair value losses (gains) on financial assets and financial
liabilities at fair value through profit or loss 36,111,750.00 212,020,646.00 (175,908,896.00) -82.97%
Provisions 12,411,409.00 0.00 12,411,409.00 0.00%
Impairement losses 7,875,358.00 6,159,219.00 1,716,139.00 27.86%
Loss (gain) on sale of property, plant and equipment (2,569,463.00) (1,534,684.00) (1,034,779.00) 67.43%
Operating profit before working capital changes 8,455,380,405.00 8,406,688,804.00 48,691,601.00 0.58%
Decrease (increase) in trade and other receivables (6,782,655,481.00) (1,044,801,252.00) (5,737,854,229.00) 549.18%
Decrease (increase) in financial instruments at
fair value through profit or losses (881,331,451.00) (2,711,523.00) (878,619,928.00) 32403.19%
Increase in inventories (1,041,818,041.00) (188,383,637.00) (853,434,404.00) 453.03%
Decrease (increase) in prepayments and other current assets (597,163,989.00) (320,743,498.00) (276,420,491.00) 86.18%
Decrease (increase) in other non-current assets 183,875,462.00 (182,318,700.00) 366,194,162.00 -200.85%
Increase (decrease) in trade and other payables 10,358,979,361.00 74,341,384.00 10,284,637,977.00 13834.34%
Increase in retirement benefit obligation 8,829,806.00 6,787,638.00 2,042,168.00 30.09%
 Cash generated from (used in) operations 9,704,096,072.00 6,748,859,216.00 2,955,236,856.00 43.79%
Cash paid for income taxes (1,741,201,096.00) (1,872,609,734.00) 131,408,638.00 -7.02%

Net Cash From (Used in) Operating Activities 7,962,894,976.00 4,876,249,482.00 3,086,645,494.00 63.30%

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of a subsidiary (30,272,934,983.00) (13,500,000,000.00) (16,772,934,983.00) 124.24%
Investment in joint venture (3,703,721,965.00) 0.00 (3,703,721,965.00) 0.00%
Acquisition of property, plant and equipment (2,027,740,563.00) (2,051,683,004.00) 23,942,441.00 -1.17%
Interest received 232,513,623.00 118,942,570.00 113,571,053.00 95.48%
Proceeds from sale of property, plant and equipment 3,459,020.00 3,063,295.00 395,725.00 12.92%
Acquisition of trademark 0.00 (16,153,914.00) 16,153,914.00 -100.00%

Net Cash Used in Investing Activities (35,768,424,868.00) (15,445,831,053.00) (20,322,593,815.00) 131.57%

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from new loans and borrowings 23,827,219,465.00 0.00 23,827,219,465.00 0.00%
Proceeds from additional capital subscription 12,313,395,000.00 33,655,461,023.00 (21,342,066,023.00) -63.41%
Proceeds from equity-linked debt securities 5,253,600,000.00 0.00 5,253,600,000.00 0.00%
Dividends paid (2,400,000,000.00) (3,702,134,051.00) 1,302,134,051.00 -35.17%
Proceeds from future stock subscription 5,750,000.00 0.00 5,750,000.00 0.00%

Net Cash From (Used in) Financing Activities 38,999,964,465.00 29,953,326,972.00 9,046,637,493.00 30.20%

NET INCREASE IN CASH AND

CASH EQUIVALENTS 11,194,434,573.00 19,383,745,401.00 (8,189,310,828.00) -42.25%

CASH AND CASH EQUIVALENTS

AT BEGINNING OF YEAR 24,040,194,994.00 4,656,449,593.00 19,383,745,401.00 416.28%

BEGINNING BALANCE OF CASH AND CASH

EQUIVALENTS OF NEW SUBSIDIARY 0.00 0.00 0.00 0.00%
CASH AND CASH EQUIVALENTS
AT END OF YEAR 35,234,629,567.00 24,040,194,994.00 11,194,434,573.00 46.57%
Vertical Analysis
2014 2013

23.01% 32.88%

1.06% 1.30%
-0.69% -0.55%
0.29% 0.43%
0.27% 0.01%
-0.11% 0.00%

0.10% 0.88%
0.04% 0.00%
0.02% 0.03%
-0.01% -0.01%
24.00% 34.97%
-19.25% -4.35%

-2.50% -0.01%
-2.96% -0.78%
-1.69% -1.33%
0.52% -0.76%
29.40% 0.31%
0.03% 0.03%
 27.54% 28.07%
-4.94% -7.79%

22.60% 20.28%

-85.92% -56.16%
-10.51% 0.00%
-5.75% -8.53%
0.66% 0.49%
0.01% 0.01%
0.00% -0.07%

-101.51% -64.25%

67.62% 0.00%
34.95% 140.00%
14.91% 0.00%
-6.81% -15.40%
0.02% 0.00%

110.69% 124.60%

31.77% 80.63%

68.23% 19.37%

0.00% 0.00%
100.00% 100.00%
Liquidity Ratios
1. Cash ratio = Cash + Short-term Marketable Securities
Current Liabilities

2014 =35,234,629,567 2013 =24,040,194,994

44,280,122,216 4,249,068,044
= 0.8 = 5.7

2. Current ratio = Current Assets___

Current Liabilities

2014 = 66,099,163,758 2013 =30,787,297,740

44,280,122,416 4,249,068,044
= 1.5 = 7.25

3. Quick Ratio = Current Assets-Inventory and Prepaid Expenses

Current Liabilities

2014 =66,099,163,758 - (15,287,019,458+634,606,527) 2013

44,280,122,416

= 1.13 =

4. Collection Period = 365 days________

Receivable Turnover

2014 =365_ 2013 =365__

3.79 3.53

= 96.31 = 103.45

Profitability Ratios

1. Return on Sales= Net income

Net sales
 2014 =5,096,082,018__ 2013 =5,952,020,820
32,099,385,645 29,864,744,842

= 0.16 = 0.20

2. Gross Profit Margin= Gross Profit__

Net Sales

2014 =11,454,021,497 2013 =10,483,019,409

32,099,385,645 29,864,744,842

= 0.36 = 0.35

3. Basic Earnings Power Ratio= _______EBIT________

Average Total Assets

2014 =________8,108,357,184_________ 2013 =______7,905,103,484________

(35,225,362,180+ 99,558,551,467)/2 (35,225,362,180+ 99,558,551,46

= 0.12 = 0.12

Solvency Ratios

1. Debt-to-Assets ratio= __Total Debt__

Total Assets

2014 =53,656,554,216 2013 =4,336,848,366

99,558,551,467 35,225,362,180

= 0.54 = 0.12

2. Debt-to-Equity Ratio = Total Debt________

Net Stockholders’ Eq.

2014 =53,656,554,216 2013 =4,336,848,366

45,901,997,251 30,888,513,814

= 1.17 = 0.14

3. Equity-to-Assets Ratio= Net Stockholders’ Eq.

Total Assets
 2014 =45,901,997,251 2013 =30,888,513,814
99,558,551,467 35,225,362,180

= 0.46 = 0.88

4. Equity Multiplier= Total Assets________

Net Stockholders’ Eq

2014 =99,558,551,467 2013 =35,225,362,180

45,901,997,251 30,888,513,814

= 2.17 = 1.14

5. Total Assets to Total Liab. Ratio = Total Assets_____

Total Liabilities

2014 =99,558,551,467 2013 =35,225,362,180

53,656,554,216 4,336,848,366

= 1.86 = 8.12

Cash Flow Ratio

1. Total Debt Coverage=____ Total Liabilities____

Cash From Operations

2014 =53,656,554,216 2013 =4,336,848,366

9,704,096,072 6,748,859,216

= 5.53 = 0.64

2. Cash Flow to Sales= Cash From Operation

Sales

2014 =9,704,096,072 2013 =6,748,859,216

32,099,385,645 29,864,744,842

= 0.30 = 0.23

3. Cash Flow Return on sale= Cash From Operations

Average Total Assets

2014 =_______9,704,096,072__________ 2013 =______6,748,859,216________

 (35,225,362,180+ 99,558,551,467)/2 (35,225,362,180+ 99,558,551,46

= 0.14 = 0.08

4. Cash Flow to Net Income= Cash From operations

Net Income

2014 =9,704,096,072 2013 =______6,748,859,216________

5,096,082,018 5,952,020,820

= 1.90 = 1.13

Growth Ratios

1. Dividend payout ratio= Dividend per share

Earnings Per share

2014 =.16__
0.41

= 0.40
 RATIO ANALYSIS

=30,787,297,740-(3,526,529,441+195,019,245)
4,249,068,044

6.37
____7,905,103,484_________
225,362,180+ 99,558,551,467)/2
____6,748,859,216________
225,362,180+ 99,558,551,467)/2

,859,216________