Employee Benefits
The Company’s employee benefits are recognized and measured as follows:
(a) Defined Benefit Plan
Post-employment benefits are provided to employees through a defined benefit plan.
A defined benefit plan is a post-employment plan that defines an amount of post-employment benefit that an employee will receive on retirement, usually
dependent on one or more factors such as age, years of service and salary. The legal obligation for any benefits from this kind of post-employment benefit plan
remains with the Group, even if plan assets for funding the defined benefit plan have been acquired. Plan assets may include assets specifically designated to a
long-term benefit fund, as well as qualifying insurance policies. The Group’s post-employment defined benefit plan covers all regular full-time employees.
The liability recognized in the consolidated statement of financial position for post-employment benefit plans is the present value of the defined benefit obligation (DBO) at the end of the reporting period together with adjustments for unrecognized actuarial gains or losses. The DBO is calculated annually by independent actuaries using the projected unit credit method. The present value of the DBO is determined by discounting the estimated future cash outflows using a discount rate derived from the interest rates of a zero coupon government bonds as published by the Philippine Dealing & Exchange Corporation, that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related post-employment liability.
Remeasurements, comprising of actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions and the return on plan assets
(excluding amount included in net interest) are reflected immediately in the consolidated statement of financial position with a charge or credit recognized in other comprehensive income in the period in which they arise. Net interest is calculated by applying the discount rate at the beginning of the period, taking account of any changes in the net defined benefit liability or asset during the period as a result of contributions and benefit payments. Net interest is reported as part of Finance Costs or Finance Income account in the statement of profit or loss.
Past-service costs are recognized immediately in profit or loss in the period of a plan amendment.
(b) Defined Contribution Plans
A defined contribution plan is a post-employment plan under which the Group pays fixed contributions into an independent entity. The Group has no legal or constructive obligations to pay further contributions after payment of the fixed contribution. The contributions recognized in respect of defined contribution plans are expensed as they fall due. Liabilities and assets may be recognized if underpayment or prepayment has occurred and are included in current liabilities or current assets as they are normally of a short-term nature.
(c) Compensated Absences
Compensated absences are recognized for the number of paid leave days (including holiday entitlement) remaining at the end of the reporting period. They are included in Trade and Other Payables account in the consolidated statement of financial position at the undiscounted amount that the Group expects to pay as a result of the unused entitlement.
Related Party Relationship and Transactions
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. These parties include: (a) individuals owning, directly or indirectly through one or more intermediaries, control or are controlled by, or under common control with the Group; (b) associates; and (c) individuals owning directly or indirectly, an interest in the voting power of the Group that gives them significant influence over the Group and close members of the family of any such individual (2.20, Financial Statements and Independent Auditors’ Reports).
Except for the material related party transactions described in the notes to the financial statements of the Company for the years 2012, 2011 and 2010, there has been no material transaction during the last two years, nor is there any material transaction currently proposed, to which the Company was or is to be a party, in which any director or executive officer, any nominee for election as director, stockholder of more than ten percent.
| Related Party Transactions | Policies and Procedures |
| (1) Parent Company | Ensure that the transactions are entered on terms comparable to those available from unrelated third parties |
| (2) Joint Ventures | Ensure that the transactions are entered on terms comparable to those available from unrelated third parties |
| (3) Subsidiaries | Ensure that the transactions are entered on terms comparable to those available from unrelated third parties |
| (4) Entities Under Common Control | Ensure that the transactions are entered on terms comparable to those available from unrelated third parties |
| (5) Substantial Stockholders | Ensure that the transactions are entered on terms comparable to those available from unrelated third parties |
| (6) Officers including spouse/children/siblings/parents | Ensure that the transactions are entered on terms comparable to those available from unrelated third parties. Disclosure of relationship or association is required to be made before entering into transaction. No participation in the approval of the transaction. |
| (7) Directors including spouse/children/siblings/parents | Ensure that the transactions are entered on terms comparable to those available from unrelated third parties. Disclosure of relationship or association is required to be made before entering into transaction. No participation in the approval of the transaction. |
| (8) Interlocking director relationship of Board of Directors | Ensure that the transactions are entered on terms comparable to those available from unrelated third parties. Disclosure of relationship or association is required to be made before entering into transaction. No participation in the approval of the transaction. |
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Conflict of Interest
(a) Directors/Officers and 5% or more Shareholders – None.
Identify any actual or probable conflict of interest to which directors/officers/5% or more shareholders may be involved.
| Details of Conflict of Interest (Actual or Probable) | |
| Name of Director/s | N/A |
| Name of Officer/s | N/A |
| Name of Significant Shareholders | N/A |
(b) Mechanism
Describe the mechanism laid down to detect, determine and resolve any possible conflict of interest between the company and/or its group and their directors, officers and significant shareholders.
| Directors/Officers/Significant Shareholders | |
| Company | Independent Directors are required to submit a list of positions/other directorships to determine any conflict. Directors, officers and employees must voluntarily disclose any conflict prior to occurrence of the same. |
| Group | Independent Directors are required to submit a list of positions/other directorships to determine any conflict. Directors, officers and employees must voluntarily disclose any conflict prior to occurrence of the same. |
(c) Family, Commercial and Contractual Relations
Indicate, if applicable, any relation of a family, commercial, contractual or business nature that exists between the holders of significant equity (5% or more), to the extent that they are known to the company:
| Names of Related Significant Shareholders | Type of Relationship | Brief Description of the Relationship |
| None |
There has been no material transaction, nor is there any material transaction currently proposed, to which the Company was or is to be a party, in which any member of the immediate family (including spouse, parents, children, sibling and in-laws) of any such director or officer or stockholder of more than ten (10) percent of the Company’s voting shares had or is to have a direct and indirect material interest.
Indicate, if applicable, any relation of a commercial, contractual or business nature that exists between the holders of significant equity (5% or more) and the company:
| Names of Related Significant Shareholders | Type of Relationship | Brief Description of the Relationship |
| None |
The Company has no knowledge of persons holding more than five (5) percent of its voting securities under a voting trust or similar agreement.
Indicate any shareholder agreements that may impact on the control, ownership and strategic direction of the company:
| Name of Shareholders | % of Capital Stock affected (Parties) | Brief Description of the Transaction |
| None |
The Company has no knowledge of any arrangements among stockholders that may result in a change in control of the Company.
Capital Management Objectives, Policies and Procdures
The Group’s capital management objectives are to:
Ensure the Group’s ability to continue as a going concern; and, Provide an adequate return to shareholders in the future.
The Group also monitors capital on the basis of the carrying amount of equity as presented on the consolidated statements of financial position. It sets the amount of
capital in proportion to its overall financing structure, i.e., equity and financial liabilities.
The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.