PSPC 17Q_Sept2017

SEC Number: CS201000985

File Number: ____________

PHOENIX SEMICONDUCTOR

PHILIPPINES CORP. __________________________________

(Company‟s Full Name)

Panday Pira Avenue, corner Creekside Road,

Clark Freeport Zone, Pampanga, Philippines

__________________________________

(Company Address)

(045) 499-1741 / (045) 499-1742

__________________________________

(Telephone Numbers)

September 30, 2014

__________________________________

(Quarter Ending)

SEC Form 17-Q Quarterly Report

__________________________________

(Form Type)

__________________________________

(Amendments)

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 September 30, 2014

2. Commission Identification Number CS201000985

3. BIR Tax Identification No. 007-582-936

4. Exact name of issuer as specified in its charter:

PHOENIX SEMICONDUCTOR PHILIPPINES CORP.

5. Province, country or other jurisdiction of incorporation or organization: Pampanga, Philippines

6. Industry Classification Code: (SEC Use Only)

7. Address of issuer's principal office and postal code

Panday Pira Avenue corner Creekside Road, Clark Freeport Zone, Pampanga 2009

8. Issuer's telephone number, including area code: (045) 499-1822

9. Former name, former address and former fiscal year, if changed since last report: n/a

10.Securities registered pursuant to Sections 8 and 12 of the Code, or Sections 4 and 8 of the RSA

Title of each Class Number of shares issued and outstanding

Common Shares 2,165,024,111*

*Number of shares issued and outstanding after December 1, 2014 listing date

11. Are any or all of the securities listed on a Stock Exchange?

Yes [ x ] No [ ]

Stock Exchange: Philippine Stock Exchange

Securities Listed: Common Shares

12. Indicate by check mark whether the registrant:

(a) has filed all reports required to be filed by Section 17 of the Code and SRC Rule 17 thereunder or

Sections 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of the

Corporation Code of the Philippines, during the preceding twelve (12) months (or for such

shorter period the registrant was required to file such reports)

Yes [ x ] No [ ]

(b) has been subject to such filing requirements for the past ninety (90) days.

Yes [ x ] No [ ]

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Unaudited Interim Statements of Financial Position as of September 30, 2014, with Comparative

Audited Figures as of December 31, 2013

Unaudited Interim Statements of Comprehensive Income for the Three Months Ended September 30,

2014 and September 30, 2013, and for the Nine Months Ended September 30, 2014 and September

30, 2013

Unaudited Interim Statements of Changes in Equity for the Nine Months Ended September 30, 2014

September 30, 2013

Unaudited Interim Statements of Cash Flows for the Nine Months Ended September 30, 2014 and

September 30, 2013

Notes to Unaudited Interim Financial Statements

Supplementary Schedules (please see attached schedules)

Schedule I: Reconciliation of Retained Earnings

Schedule II: Schedule of Effective Standards and Interpretations

Schedule III: Conglomerate Map

Schedule IV: Financial Soundness Indicators

Aging of Trade Accounts Receivables (please refer to attached “Annex A”)

Item 2. Management‟s Discussion and Analysis of Financial Position and Results of Operations

Material changes (+/- 5% or more) in the Company‟s financial statements

Key Performance Indicators

Other Disclosures

PART II - OTHER INFORMATION

SIGNATURES

COVER SHEET

C S 2 0 1 0 0 0 9 8 5

SEC Registration Number

P H O E N I X S E M I C O N D U C T O R P H I L I P P I N E S

C O R P .

(Company‟s Full Name)

P a n d a y P i r a A v e n u e , c o r n e r C r e e k s

S i d e R o a d , C l a r k F r e e p o r t Z o n e , P a

m p a n g a

(Business Address: No. Street City/Town/Province)

Mr. Kyuho Han (045) 499-1741 (Contact Person) (Company Telephone Number)

1 2 3 1 1 7 - Q

Month Day (Form Type) Month Day (Fiscal Year) (Annual Meeting)

(Secondary License Type, If Applicable)

Dept. Requiring this Doc. Amended Articles Number/Section

Total Amount of Borrowings

8

Total No. of Stockholders Domestic Foreign

To be accomplished by SEC Personnel concerned

File Number LCU

Document ID Cashier

S T A M P S

Remarks: Please use BLACK ink for scanning purposes.

Part I. Financial Information

Item 1. Financial Statements

Phoenix Semiconductor Philippines Corp. Unaudited Interim Condensed Financial Statements

As of September 30, 2014

(With Comparative Audited Figures as of December 31, 2013)

And for the nine-month periods ended September 30, 2014 and 2013


INTERIM STATEMENT OF FINANCIAL POSITION September 30, 2014

(With Comparative Audited Figures as of December 31, 2013)

(In U.S. Dollars)

September 30,

2014

(Unaudited)

December 31,

2013

(Audited)

ASSETS

Current Assets

Cash and cash equivalents (Notes 4 and 18) $27,454,367 $23,105,776

Trade and other receivables (Notes 5 and 18) 20,866,051 21,141,915

Inventories (Note 6) 13,474,328 11,587,418

Prepayments and other current assets (Note 7) 13,421,290 854,679

Derivative financial asset (Note 9) 47,900 130,804

Total Current Assets $75,263,936 56,820,592

Noncurrent Assets

Property, plant and equipment (Note 8) 108,931,244 114,954,193

Derivative financial asset (Note 9) 83,824 320,243

Other noncurrent assets (Note 7) 8,731,631 17,091,912

Total Noncurrent Assets 117,746,699 132,366,348

$193,010,635 $189,186,940

LIABILITIES AND EQUITY

Current Liabilities

Accounts payable and accrued expenses (Notes 10, 12 and 18) $22,881,303 $16,016,239

Interest payable (Note 11) 761,210 901,566

Income tax payable 385,314 447,406

Current portion of loans payable (Notes 11 and 18) 20,750,000 20,750,000

Total Current Liabilities 44,777,827 38,115,211

Noncurrent Liabilities

Loans payable - net of current portion (Notes 11 and 18) 64,890,101 80,291,487

Retirement liability 142,622 106,014

Deferred income tax liability - net (Note 19) 91,735 39,523

Other noncurrent liability 119,630 −

Total Noncurrent Liabilities 65,244,088 80,437,024

Total Liabilities 110,021,915 118,552,235

Equity

Capital stock 44,999,980 44,999,980

Retained earnings 37,988,740 25,634,725

Total Equity 82,988,720 70,634,705

$193,010,635 $189,186,940

See accompanying Notes to Interim Condensed Financial Statements.


INTERIM STATEMENTS OF COMPREHENSIVE INCOME (In U.S. Dollars)

Three Months Ended

September 30

Nine Months Ended

September 30

2014

(Unaudited)

2013

(Unaudited)

2014

(Unaudited)

2013

(Unaudited)

REVENUE

Sales $60,988,335 $57,593,000 $170,312,778 $153,547,546

Warehousing 190,171 173,280 587,419 583,107

Others 111,586 26,854 242,388 172,156

61,290,092 57,793,134 171,142,585 154,302,809

COST OF GOODS SOLD

Raw materials used (Notes 6 and 12) 41,400,036 37,897,607 111,170,679 98,513,834

Depreciation (Note 8) 4,397,593 4,492,396 13,556,542 13,325,042

Direct labor 1,132,171 1,182,809 3,297,220 3,399,665

Changes in work-in-process and finished

goods inventories (Note 6) (798,844) 191,726 (831,955) 199,201

Other manufacturing costs (Note 13) 7,659,589 6,924,197 22,466,062 19,784,426

53,790,545 50,688,735 149,658,548 135,222,168

GROSS PROFIT 7,499,547 7,104,399 21,484,037 19,080,641

General and Administrative

Expenses (Note 14) 1,114,201 874,040 2,933,876 2,727,958

OPERATING INCOME 6,385,346 6,230,359 18,550,161 16,352,683

Finance Cost (Note 15) (1,374,734) (1,809,707) (4,096,616) (6,607,252)

Other Income (Note 15) 300,345 84,186 689,496 221,438

Other Expenses (Note 15) (586,643) (55,775) (628,108) (357,599)

INCOME BEFORE INCOME TAX 4,724,314 4,449,063 14,514,933 9,609,270

PROVISION FOR INCOME

TAX (Note 19) 536,876 418,046 1,160,918 1,342,073

NET INCOME 4,187,438 4,031,017 13,354,015 8,267,197

OTHER COMPREHENSIVE INCOME − − − −

TOTAL COMPREHENSIVE INCOME $4,187,438 $4,031,017 $13,354,015 $8,267,197

EARNINGS PER SHARE (Note 21)

Basic/diluted $0.0021 $0.0020 $0.0067 $0.0041



INTERIM STATEMENTS OF CHANGES IN EQUITY For the nine months ended September 30, 2014 and 2013

(In U.S. Dollars)

Capital Stock

Retained

Earnings Total

Shares Amount

Balances at January 1, 2014 2,002,644,109 $44,999,980 $25,634,725 $70,634,705

Issuance of shares 2

Net income/total

comprehensive income − − 13,354,015 13,354,015

Cash Dividends (1,000,000) (1,000,000)

Balances at

September 30, 2014

(Unaudited) 2,002,644,111 $44,999,980 $37,988,740 $82,988,720

Balances at January 1, 2013 2,002,644,109 $44,999,980 $12,041,310 $57,041,290

Net income/total comprehensive

income – – 8,267,197 8,267,197

Balances at

September 30, 2013

(Unaudited) 2,002,644,109 $44,999,980 $20,308,507 $65,308,487



INTERIM STATEMENTS OF CASH FLOWS

For the nine months ended September 30, 2014 and 2013

(In U.S. Dollars)

Nine Months Ended September 30

2014

(Unaudited)

2013

(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES

Income before income tax $14,514,933 $9,609,270

Adjustments for:

Depreciation (Note 8) 14,103,149 13,720,322

Interest expense (Note 15) 3,303,880 4,004,450

Unrealized foreign currency exchange loss - net 279,463 383,768

Amortization of intangible assets (Note 7) 91,850 87,863

Interest income (Note 15) (349,550) (115,104)

Fair value loss - derivative (Note 15) 319,323 1,865,734

Loss (gain) on disposal of property, plant and equipment (33,905) 3,200

Operating income before changes in operating assets and liabilities 32,229,143 29,559,503

Changes in operating assets and liabilities:

Decrease (increase) in:

Trade and other receivables 329,097 (1,290,326)

Inventories (1,886,910) (854,318)

Prepayments and other current assets 88,204 316,938

Increase (decrease) in:

Accounts payable and accrued expenses 2,614,101 (2,377,074)

Retirement liability 38,268 79,510

Other long-term liability 119,630 −

Net cash generated from operations 33,531,533 25,434,233

Interest paid (3,283,122) (3,770,670)

Interest received (Note 4) 102,695 115,104

Income taxes paid (1,167,652) (793,216)

Net cash provided by operating activities 29,183,454 20,985,451

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisitions of property, plant and equipment (Notes 8 and 20) (4,373,350) (3,448,800)

Proceeds from disposal of property, plant and equipment (Note 8) 416,177 −

Increase in nontrade receivable from CDC and other noncurrent assets (4,329,631) (10,857,702)

Net cash used in investing activities (8,286,804) (14,306,502)

CASH FLOWS FROM FINANCING ACTIVITIES

Payments of bank loans (15,562,500) (34,187,500)

Dividends paid (1,000,000) −

Proceeds from bank loan − 28,525,074

Net cash used in financing activities (16,562,500) (5,662,426)

EFFECT OF EXCHANGE RATE CHANGES ON CASH

AND CASH EQUIVALENTS 14,441 (32,895)

NET INCREASE IN CASH AND CASH EQUIVALENTS 4,348,591 983,628

CASH AND CASH EQUIVALENTS AT JANUARY 1 23,105,776 25,736,114

CASH AND CASH EQUIVALENTS AT SEPTEMBER 30 (Note

4) $27,454,367 $26,719,742



NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS

1. Corporate Information

Phoenix Semiconductor Philippines Corp. (the Company), a subsidiary of STS Semiconductor &

Telecommunications Co., Ltd (the Parent Company), was incorporated in the Philippines on January 27,

2010.

The primary purpose of the Company is the construction, ownership and operation of a plant for the

manufacture, assembly, test and warehousing of semiconductor and memory devices and applications and

related products, as well as the performance of related or incidental activities thereto. The Company

started its commercial operation in February 2011.

The registered office address of the Company is Panday Pira Avenue, Corner Creekside, Clark Freeport

Zone, Pampanga.

The interim condensed financial statements were approved and authorized for issuance by the Board of

Directors on December 18, 2014.

2. Summary of Significant Accounting Policies

Basis of Preparation

The accompanying interim condensed financial statements of the Company have been prepared in

accordance with Philippine Accounting Standard (PAS) 34, Interim Financial Reporting. The interim

condensed financial statements do not include all of the information and disclosures required in the annual

financial statements, and should be read in conjunction with the Company‟s annual financial statements as

at December 31, 2013.

Changes in Accounting Policies and Disclosures

The accounting policies adopted in the preparation of interim condensed financial statements are

consistent with those followed in the preparation of the Company‟s annual financial statements for the

year ended December 31, 2013, except for the adoption of new standards and interpretations effective as of

January 1, 2014. Except as otherwise indicated, these new, revised and amended standards and

interpretations did not have any impact on the accounting policies, financial position or performance of the

Company.

PAS 36, Impairment of Assets - Recoverable Amount Disclosures for Non-Financial Assets (Amendments)

These amendments remove the unintended consequences of Philippine Financial Reporting Standards

(PFRS) 13 on the disclosures required under PAS 36. In addition, these amendments require disclosure of

the recoverable amounts for the assets or cash-generating units (CGUs) for which impairment loss has

been recognized or reversed during the period.

PAS 39, Financial Instruments: Recognition and Measurement - Novation of Derivatives and

Continuation of Hedge Accounting (Amendments)

These amendments provide relief from discontinuing hedge accounting when novation of a derivative

designated as a hedging instrument meets certain criteria. The Company has not novated its derivatives

during the current period. However, these amendments would be considered for future novations.

PAS 32, Financial Instruments: Presentation - Offsetting Financial Assets and Financial Liabilities

(Amendments)

The 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 Company‟s financial position or performance.

Investment Entities (Amendments to PFRS 10, PFRS 12 and PAS 27)

This provides an exception to the consolidation requirement for entities that meet the definition of an

investment entity under PFRS 10. The exception to consolidation requires investment entities to account

for subsidiaries at fair value through profit or loss. It is not expected that this amendment would be

relevant to the Company since none of the entities in the Company would qualify to be an investment

entity under PFRS 10.

Philippine Interpretation IFRIC 21, Levies (IFRIC 21)

IFRIC 21 clarifies that an entity recognizes a liability for a levy when the activity that triggers payment, as

identified by the relevant legislation, occurs. For a levy that is triggered upon reaching a minimum

threshold, the interpretation clarifies that no liability should be anticipated before the specified minimum

threshold is reached.

The Company has not early adopted any other standard, interpretation or amendment that has been issued

but is not yet effective.

3. Significant Accounting Judgments and Estimates

Judgments

In the process of applying the Company‟s accounting policies, management has made the following

judgments, apart from those involving estimations, which has the most significant effect on the amounts

recognized in the financial statements:

Recognition of receivable from Clark Development Corporation (CDC)

Pursuant to Executive Order No. 856 (Expanding the Coverage of Executive Order No. 666, Series of

2007, In Support of the Power Requirement of Clark Freeport Zone) dated January 2010 signed by the

then President of the Philippines Gloria Macapagal-Arroyo, the Philippine Government agreed to provide

electricity to the Company at a discounted or subsidized rate, in line with the Philippine Government‟s

thrust to support power-intensive industries with substantial investments in recognition of the

corresponding benefit of their investments to the economy. Subsequently, in March 2010, the Company

entered into a lease agreement with CDC that, among others, further embodied the grant of incentives to

the Company as a foreign locator in the Clark Freeport Zone, including the power subsidy.

The grant of the power subsidy to the Company has not been implemented yet, which resulted in the

accumulation of unpaid electricity charges. To address the then power disconnection threats against the

Company and its adverse impact on the business of the Company, the Company was constrained to pay for

its power consumptions from 2011 to date at commercial rate, inclusive of the amount corresponding to

the subsidized portion of the Company‟s electricity charges. The payments do not constitute waiver of the

Company‟s existing rights under the law and the March 2010 lease agreement with CDC and were made

on the understanding that the Company will be able to claim reimbursement of the advances/payments

covering the power subsidy.

In a letter dated December 2, 2013, CDC informed the Company that the National Government has

included in its 2014 National Budget an amount for the power subsidy of the Company. The amount will

prioritize the reimbursement of the Company‟s power subsidy advances for year 2014, while the remaining

amount will be for the reimbursement of advances made for previous years (i.e., 2011, 2012 and 2013).

The advances that will not be paid from the 2014 National Budget will be requested for inclusion in the

2015 and 2016 National Budgets. With these developments, the Company assessed that the Government

will fulfill its power subsidy commitment and has accordingly recognized the fair value of the receivable

from CDC corresponding to the amount of the power subsidy advances.

In another letter dated April 3, 2014, CDC advised the inclusion of the amount for the power subsidy in

the 2014 National Budget as part of the unprogrammed funds that will be released when the revenue

collections of the Government exceed the original revenue targets submitted by the President of the

Philippines to Congress.

Recently, the Supreme Court (SC) promulgated the Disbursement Acceleration Program (DAP) case (in

Araullo, et al., v. Aquino, et al., GR. Nos. 209287 /209135/ 209136/ 209155/ 209164/ 209260/ 209442/

209517/ 209569, July 1, 2014) which included a ruling and statements relating to the disbursement of the

unprogrammed funds. The SC declared void the use of the unprogrammed funds from the General

Appropriations Act (GAAs) of 2011, 2012 and 2013 for the DAP despite the absence of a certification by

the National Treasurer that the revenue collections exceeded the revenue targets for noncompliance with

the conditions provided in the GAAs. The Company and its legal counsel believe that the ruling in the

DAP case did not impose an additional legal requirement for the collectibility of the power subsidy

receivable and that it merely clarifies the condition for the release of unprogrammed funds and the effect

of noncompliance with that condition .

In July 2014, CDC advised that the Department of Budget and Management (DBM), through the

Philippine Economic Zone Authority (PEZA), requested for the documents supporting the Company‟s

claims on the power subsidy. The Company submitted these documents on July 21, 2014 through CDC.

Based on recent developments, management assessed that there are no changes in the recognition and

estimated timing of collection of receivable from CDC.

The carrying amount of receivable recognized under „Prepaid and other current assets‟ and „Other

noncurrent assets‟ amounted to $18.55 million and $14.28 million as of September 30, 2014 and

December 31, 2013, respectively (see Note 7).

4. Cash and Cash Equivalents

This account consists of:

September 30

2014

2014

(Unaudited)

2013

(Unaudited)

December 31,

2013

(Audited)

Cash on hand $9,267 $8,010 $22,822

Cash in banks 10,963,337 7,013,711 3,365,437

Time deposits 10,000,000 12,959,347 12,950,450

Debt service account 6,481,763 6,738,674 6,767,067

$27,454,367 $26,719,742 $23,105,776

Cash in banks earn interest at the prevailing bank deposit rates. For the nine months ended

September 30, 2014 and 2013, the Company earned 0.25% to 0.50% and 0.10% and 0.25% on Dollar

(USD) accounts, respectively. Time deposits are generally made on 30-day term and earned interest at

1.375% to 1.75% for PHP accounts and 0.875% to 1.50% for USD accounts for the nine months ended

September, 2014 and 2013, respectively.

Debt Service Account maintained with the BDO Unibank, Inc. - Trust and Investments Group (trustee) is

to be used solely for the next quarterly payment of interest, and principal due that is related to facility loan

granted by BDO Unibank, Inc. (BDO) to the Company.

Interest income from cash and cash equivalents recognized in profit or loss amounted to $28,105 and

$41,479 for the three months ended September 30, 2014 and 2013, respectively, and $102,695 and

$115,104 for the nine months ended September 30, 2014 and 2013, respectively.

5. Trade and Other Receivables


September 30,

2014

(Unaudited)

December 31,

2013

(Audited)

Trade accounts receivables $20,432,220 $19,858,783

Others 433,831 1,283,132

$20,866,051 $21,141,915

Trade receivables are non-interest bearing and are generally on an average 30-day term.

Other receivables include advances to employees, receivable from lease of machines, receivable from

customers and certain suppliers.

The carrying amount of all trade accounts receivable as of September 30, 2014 and December 31, 2013 are

pledged, through execution of Assignment Agreement, for the loan with BDO.

6. Inventories


September 30,

2014

(Unaudited)

December 31,

2013

(Audited)

At cost:

Raw materials $9,123,916 $8,489,808

Raw materials in transit 1,835,712 1,414,865

Work in process 2,125,586 1,510,329

Finished goods 389,114 172,416

$13,474,328 $11,587,418

The amount of inventories recognized as part of cost of goods sold during the period amounted to

$40,601,192 and $38,089,333 for the three months ended September 30, 2014 and 2013, and

$110,338,724 and $98,713,035 for the nine months ended September 30, 2014 and September 30, 2013,

respectively.

7. Prepayments and Other Current Assets/Other Noncurrent Assets

Prepayments and other current assets consist of:

September 30,

2014

(Unaudited)

December 31,

2013

(Audited)

Nontrade receivable from CDC $12,602,738 $−

Prepayments 323,344 167,824

Advances to suppliers 98,012 375,413

Refundable deposits 31,331 169,187

Advance rental − 78,789

Others 365,865 63,466

$13,421,290 $854,679

Other noncurrent assets consist of:

September 30,

2014

(Unaudited)

December 31,

2013

(Audited)

Nontrade receivable from CDC $5,946,751 $14,280,473

Refundable deposits 1,423,430 1,438,370

Other investment 990,877 969,662

Intangible assets 278,618 370,468

Loan receivable from employees 29,412 32,939

Others 62,543

$8,731,631 $17,091,912

Amortization of the intangible assets for the three months ended September 30, 2014 and 2013 amounted

to $29,110 and $33,632, while amortization for the nine months ended September 30, 2014 and 2013

amounted to $91,850 and $87,863 respectively.

8. Property, Plant and Equipment

The rollforward analysis of this account follows:

2014 (Nine Months)

(Unaudited)

Building and

Improvements Machinery

Transportation

Equipment

Production

Equipment

Furniture and

Other

Equipment

Construction

in Progress Total

Cost

Balances at January 1 $51,483,785 $77,664,851 $459,441 $10,378,871 $16,074,206 $2,436 $156,063,590

Acquisitions (Note 11) 70,838 2,627,652 − 583,285 5,285,505 − 8,567,280

Disposals − (630,545) (27,366) (66,306) (2,055) − (726,272)

Balances at September 30 51,554,623 79,661,958 432,075 10,895,850 21,357,656 2,436 163,904,598

Accumulated depreciation

Balances at January 1 3,730,537 23,583,843 260,684 4,864,879 8,669,454 − 41,109,397

Depreciation 966,163 8,372,994 66,176 1,593,008 3,104,808 − 14,103,149

Disposals − (217,474) (11,859) (8,470) (1,389) − (239,192)

Balances at September 30 4,696,700 31,739,363 315,001 6,449,417 11,772,873 − 54,973,354

Net book values $46,857,923 $47,922,595 $117,074 $4,446,433 $9,584,783 $2,436 $108,931,244

2013 (One Year)

(Audited)

Building and

Improvements Machinery

Transportation

Equipment

Production

Equipment

Furniture and

Other

Equipment

Construction

in Progress Total

Cost

Balances at January 1 $51,442,336 $75,790,512 $454,592 $9,877,079 $14,225,103 $88,741 $151,878,363

Acquisitions (Note 11) 41,449 1,874,350 4,849 503,493 1,967,267 – 4,391,408

Disposals – – – (1,697) (4,783) – (6,480)

Transfers – – – – – (86,305) (86,305)

Adjustments – (11) – (4) (113,381) – (113,396)

Balances at December 31 51,483,785 77,664,851 459,441 10,378,871 16,074,206 2,436 156,063,590

Accumulated depreciation

Balances at January 1 2,443,525 12,643,841 169,607 2,850,963 4,628,699 – 22,736,635

Depreciation 1,287,012 10,940,002 91,077 2,014,227 4,042,965 – 18,375,283

Disposals – – – (311) (2,210) – (2,521)

Balances at December 31 3,730,537 23,583,843 260,684 4,864,879 8,669,454 – 41,109,397

Net book values $47,753,248 $54,081,008 $198,757 $5,513,992 $7,404,752 $2,436 $114,954,193

The carrying amounts of all items of property, plant and equipment as of September 30, 2014 and

December 31, 2013 are subject to first ranking mortgage to secure the Company‟s loan with BDO.

9. Derivative Financial Asset

In 2011, the Company, as borrower, entered into a loan agreement with BDO with loan facility amounting

to $83,000,000. The Company made three (3) drawdowns and four (4) drawdowns totaling to

$30,000,000 and $53,000,000 in 2012 and 2011, respectively, fully utilizing the loan facility in 2012.

The Company may at its option prepay the loan with minimum amount of $5,000,000 anytime from the

date of drawdown. If the prepayment is made on interest payment date, no penalty shall be imposed.

Otherwise, the Company shall pay a penalty of one and a half per cent (1.50%) for each month and

fraction thereof.

The prepayment option derivative has been separated from loans payable and carried at fair value through

profit or loss.

The table below shows the movement in the fair value of derivative financial asset for the nine months

ended September 30, 2014 and for the year ended December 31, 2013:

September 30,

2014

(Nine Months)

(Unaudited)

December 31,

2013

(One Year)

(Audited)

Balance at beginning of period $451,047 $2,223,075

Fair value loss - derivative (see Note 14) (319,323) (1,772,028)

Balance at end of period $131,724 $451,047

The net fair value loss for the three months ended September 30, 2013 and for the nine months ended

September 30, 2013 amounted to $275,238 and $1,865,734, respectively (see Note 14).

The carrying value of the prepayment option derivative as of September 30, 2014 and December 31, 2013

is presented as follows:

September 30,

2014

(Unaudited)

December 31,

2013

(Audited)

Current portion $47,900 $130,804

Noncurrent portion 83,824 320,243

$131,724 $451,047

10. Accounts Payable and Accrued Expenses


September 30,

2014

(Unaudited)

December 31,

2013

(Audited)

Trade accounts payable

Related parties (Note 12) $12,222,957 $8,841,147

Third parties 8,694,278 5,439,048

20,917,235 14,280,195

Accrued expenses 1,613,870 1,439,285

Payable to government agencies 252,711 236,173

Others 97,487 60,586

$22,881,303 $16,016,239

11. Loans Payable

The carrying value of loans payable to BDO as of September 30, 2014 and December 31, 2013:

September 30,

2014

(Unaudited)

December 31,

2013

(Audited)

Current portion $20,750,000 $20,750,000

Noncurrent portion 64,890,101 80,291,487

$85,640,101 $101,041,487

Interest expense charged to profit or loss amounted to $1,052,501 and $1,324,764for the three months

ended September 30, 2014 and 2013, respectively, and $3,303,881 and $4,004,450 for the nine months

ended September 30, 2014 and 2013, respectively (Note 14). Interest payable as of September 30, 2014

and December 31, 2013 amounted to $761,210 and $901,566, respectively.

12. Related Party Transactions

The Company‟s transactions with the related parties follow:

As of and for the nine months ended September 30, 2014

(Unaudited)

Category Amount/volume

Outstanding

balance Nature, terms and conditions

Parent Company

Raw materials used $64,059,624 $− Purchases of raw materials

Property, plant and

equipment

6,273,240 − Purchases of property and

equipment

Direct labor 260,979 − Secondment fees for the salaries

and other charges

Other manufacturing costs 2,137,029 − Purchases of various

production-related items and

expenses

General and administrative

expenses

302,830 − Secondment fees for the salaries

and other charges

Finance cost 473,413 − Guarantee fee related to the

facility loan agreement

Other income 176,170 − Equipment lease rental

Accounts payable and

accrued expenses

− 12,225,957 Outstanding balance related to

above transactions; 20-day

non-interest bearing,

unsecured; to be settled in

cash

Prepaid and other current

assets

− 296,572 Returns of raw materials and

property and equipment and

50% of the IPO cost to be

shouldered by the Parent

Company; 30-day non-

interest bearing, unsecured

Trade and Other receivables − 239,419 Outstanding balance on

equipment lease rental

Bokwang Jeju Co., Ltd. -

affiliate

Other non-current assets

21,215 − Payment for transaction tax on

the purchase of membership

shares, fully paid by the

Company

Phoenix Semiconductor

Telecommunications

(Suzhou) Co., Ltd - affiliate

Other income − 38,580 Gain on sale of machinery

For the three months ended September 30, 2014

(Unaudited)


Outstanding


Parent Company


Property, plant and

equipment


equipment


and other charges

Other manufacturing costs 682,861 − Purchases of various

production-related items

and expenses


expenses


and other charges




Phoenix Semiconductor

Telecommunications

(Suzhou) Co., Ltd - affiliate

Other income 35,636 − Gain on sale of machinery

For the nine months ended September 30, 2013

(Unaudited)


Outstanding


Parent Company


Property, plant and

equipment


equipment


and other charges



and expenses


expenses


and other charges




For the three months ended September 30, 2013

(Unaudited)


Outstanding


Parent Company


Property, plant and

equipment

753,265 − Purchases of property and

Equipment


and other charges



and expenses


expenses


and other charges




As of December 31, 2013

(Audited)


Outstanding


Parent Company


accrued expenses

$−

$8,841,147

Outstanding balance related to

above transactions; 20-day

non-interest bearing,

unsecured; to be settled in

cash

Prepaid and other

current assets

−

373,574

Returns of raw materials and

property and equipment;

30-day non-interest bearing,

unsecured

Remuneration of key management personnel

Total remunerations of key management personnel consist of short term employee benefits amounting to

$1,133,663 and $1,142,443 for the three months ended September 30, 2014 and 2013, and $2,471,332 and

$2,533,185 for the nine months ended September 30, 2014 and 2013, respectively.

There are no agreements between the Company and any of its directors and key officers providing for

benefits upon termination of employment.

13. Other Manufacturing Costs

Other manufacturing costs consist of:

Three Months Ended

September 30 Nine Months Ended

September 30

2014

(Unaudited)

2013

(Unaudited)

2014

(Unaudited)

2013

(Unaudited)

Utilities $2,049,731 $2,072,320 $5,963,576 $5,902,478

Production consumables 1,521,170 1,506,463 4,976,545 4,325,241

Service fee 1,163,529 1,161,049 3,431,120 3,590,259

Spare parts, tools and jigs 1,190,639 569,517 3,166,757 1,529,545

Indirect labor (Note 16) 661,584 687,044 1,900,785 1,937,187

Repairs and maintenance 405,069 304,574 1,134,687 840,984

Insurance 105,237 107,716 392,235 376,159

Production supplies 97,169 61,118 233,210 157,480

Rent 65,269 66,476 195,016 207,492

Jigs and tools 72,016 64,736 128,125 103,418

Taxes and dues 46,784 59,946 107,373 114,889

Communications 25,773 24,589 71,998 78,020

Miscellaneous 255,619 238,649 764,635 621,274

$7,659,589 6,924,197 $22,466,062 $19,784,426

14. General and Administrative Expenses

General and administrative expenses consists of:

Three Months Ended


September 30

2014

(Unaudited)

2013

(Unaudited)

2014

(Unaudited)

2013

(Unaudited)

Salaries, wages and benefits (Note 16) $437,596 $378,203 $1,096,022 $1,105,099

Outside services 186,351 170,900 534,977 522,280

Depreciation (Note 8) 120,011 119,962 361,195 360,207

Professional fees 57,573 8,627 185,648 95,484

Taxes and licenses 125,337 16,944 154,292 47,172

Insurance 41,582 42,776 129,366 175,755

Repairs and maintenance 40,839 24,384 103,474 125,520

Entertainment, amusement and recreation 22,165 17,957 76,402 70,724

Supplies 14,792 20,906 55,955 73,291

Communications, light and water 16,458 14,987 50,110 46,507

Rent 21,860 10,930 46,033 25,533

Transportation and travel 7,620 7,745 22,139 23,606

Miscellaneous 22,017 39,719 118,263 56,780

$1,114,201 $874,040 $2,933,876 $2,727,958

15. Finance Cost/Other Income/Expense

Finance costs consist of:

Three Months Ended


September 30

2014

(Unaudited)

2013

(Unaudited)

2014

(Unaudited)

2013

(Unaudited)

Interest expense $1,052,500 $1,324,764 $3,303,880 $4,004,450

Guarantee fee 175,705 275,738 473,413 737,068

Fair value loss 146,529 209,205 319,323 1,865,734

$1,374,734 $1,809,707 $4,096,616 $6,607,252

Other income consists of:

Three Months Ended


September 30

2014

(Unaudited)

2013

(Unaudited)

2014

(Unaudited)

2013

(Unaudited)

Interest income $112,070 $41,479 $349,550 $115,104

Income from sale of scrap 36,113 17,015 100,908 55,628

Rental income 5,949 6,149 17,785 17,822

Miscellaneous 146,213 19,543 221,253 32,884

$300,345 $84,186 $689,496 $221,438

Other expense consists of:

Three Months Ended

September 30

Nine Months Ended

September 30

2014

(Unaudited)

2013

(Unaudited)

2014

(Unaudited)

2013

(Unaudited)

Foreign currency exchange loss - net $469,815 $30,099 $271,387 $250,807

Miscellaneous 116,828 25,676 356,721 106,792

$586,643 $55,775 $628,108 $357,599

16. Salaries and Employee Benefits

The details of salaries and employee benefits for the nine months ended September 30 follow:

Three Months Ended

September 30

Nine Months Ended

September 30

2014

(Unaudited)

2013

(Unaudited)

2014

(Unaudited)

2013

(Unaudited)

Salaries and wages $1,540,637 $1,535,097 $4,397,653 $4,443,157

Employee benefits 690,713 712,959 1,896,373 1,998,794

$2,231,350 $2,248,056 $6,294,026 $6,441,951

Salaries and wages and employee benefits included in cost of goods sold and general and administrative

expenses amounted to$1,793,754 and $437,596 for the three months ended September 30, 2014,

respectively, and $5,198,004 and $1,096,022, respectively, for the nine months ended September 30, 2014.

For the three months ended September 30, 2013, salaries and wages and employee benefits in cost of

goods sold and general and administrative expenses amounted to$1,869,853 and $378,203, respectively,

and $5,336,852 and $1,105,099, respectively, for the nine months ended September 30, 2013.

17. Fair Value Measurement

PFRS 13 requires disclosures relating to fair value measurements using a three-level fair value hierarchy.

The level within which the fair value measurement is categorized in its entirety is determined on the basis

of the lowest level input that is significant to the fair value measurement. Assessing the significance of a

particular input requires judgment, considering factors specific to the asset or liability.

The following table shows financial instruments recognized at fair value, categorized between those whose

fair value is based on:

Level 1: Quoted prices in active markets for identical assets or liabilities;

Level 2: Other techniques for which all inputs that have a significant effect on the recorded fair value

are observable, either directly or indirectly; and

Level 3: Techniques that use inputs that have a significant effect on the recorded fair value that are not

based on observable market data.

The Company‟s financial instruments comprise of cash and cash equivalents, trade and other receivables,

refundable deposits, accounts payable and accrued expenses. Due to the short term nature of these

accounts,

the carrying amount approximates fair value.

The „Derivative financial asset‟ amounting to $131,724 and $451,047 as of September 30, 2014 and

December 31, 2013, respectively, in the interim statements of financial position is the only financial

instrument carried at fair value and is classified under Level 3 in the fair value hierarchy. The fair value

of loans payable carried at amortized cost amounted to $86,202,812 and $98,193,447 as of

September 30, 2014 and December 31, 2013, respectively, is categorized under Level 3 in the fair value

hierarchy. There were no transfers between levels of the fair value hierarchy in 2014 and 2013.

The fair value of the Company‟s embedded derivative financial asset and loans payable which fair value is

disclosed, are measured using interest rate binomial tree method for valuing call, put and prepayment

options embedded in host debt contracts. The method incorporates various inputs such as the following:

a) USD yield curve

b) Volatility of USD interest rates based on historical data

c) Credit spread from most recent quotes from banks

Valuation is performed on a quarterly basis for internal reporting purposes and is performed by the

Company‟s own internal valuer. The Company decides whether the fair value can be determined reliably,

which valuation method should be applied and the assumptions made for unobservable inputs used in the

valuation methods. The Company further performs an analysis to determine if the change in fair value is

reasonable by comparing the change in fair value with relevant external resources.

As of September 30, 2014 and December 31, 2013, the Company used the volatility of 25.00% and credit

spread of 3.90% in the valuation which are considered as significant unobservable inputs. The 5.00%

increase in the volatility used in the valuation of derivative financial asset would result in increase in fair

value of $48,656 and $113,397; while the 5.00% decrease would result in decrease in fair value of $46,621

and $113,658 as of September 30, 2014 and December 31, 2013, respectively. The 1.00% increase in the

credit spread would result in increase in fair value of $6,699 and $91,662; while the decrease in credit

spread would decrease the fair value by $5,170 and $94,381 as of September 30, 2014 and

December 31, 2013, respectively.

18. Financial Risk Management Objectives and Policies

The Company has various financial assets such as cash and cash equivalents, trade and other receivables,

nontrade receivables and refundable deposits, which arise directly from normal operations.

The Company‟s principal financial liabilities consist of accounts payable and accrued expenses, interest

payable and loans payable. The main purpose of these financial liabilities, except loans payable, is to raise

working capital for the Company‟s operations. The main purpose of the loan payable is to finance the

construction of the Company‟s plant and administration office and purchase and installation of machinery

and equipment.

The main risks arising from the Company‟s financial instruments are market risk, credit risk and liquidity

risk. The management reviews the procedures and agrees policies for managing each of these risks as

summarized below:

Foreign currency risk

As of September 30, 2014 and December 31, 2013, the foreign-currency denominated financial assets and

financial liabilities in original currencies and their U.S. Dollar equivalents are as follows:

September 30, 2014

(Unaudited)

PHP JPY

Equivalents in

USD

Financial assets

Cash and cash equivalents P=11,340,155 JPY− $252,677

Loans and receivables:

Nontrade receivables from

CDC 832,501,127 − 18,549,489

Refundable deposits 63,142,881 − 1,406,927

Receivable from employees 1,320,000 − 29,412

Other receivables 2,532,313 − 56,424

P=910,836,476 JPY − $20,294,929

Financial liabilities


accrued expenses

Trade P=21,029,429 JPY22,789,500 $676,789

Accrued expenses 64,650,487 − 1,440,519

Others (nontrade) 3,640,042 − 81,106

89,319,958 22,789,500 2,198,414

P=821,516,518 (JPY22,789,500) $18,096,515

September 30, 2013

(Unaudited)

PHP JPY

Equivalents in

USD

Financial assets




CDC 395,819,655 − 9,090,943




508,055,438 − $11,668,706



accrued expenses

Trade 13,350,812 22,543,000 556,460


Others (nontrade) 2,303,889 − 52,914

117,806,157 22,543,000 2,955,526

P=390,249,281 (JPY22,543,000) $8,713,180

December 31, 2013

(Audited)

PHP JPY

Equivalents in

USD

Financial assets




CDC 634,052,985 − 14,280,473




735,847,722 − 16,573,154



accrued expenses

Trade 17,871,753 6,063,650 460,393


Others (nontrade) 2,494,064 − 56,173

80,431,868 6,063,650 1,825,713

P=655,415,854 (JPY6,063,650) $14,747,441

The following table demonstrates the sensitivity to a reasonably possible change in the U.S. Dollar-

Philippine Peso and U.S Dollar - Japan Yen exchange rates, with all variables held constant, of the

Company‟s income before income tax (due to changes in the fair value of monetary assets and liabilities)

for the nine months ended September 30, 2014 and 2013:

Increase/decreas

e in PHP rate

Effect on income

before income tax

2014 +1% ($183,047)

(Unaudited) -1% 183047

2013 +1% (89,630)

(Unaudited) -1% 89,630

Increase/decreas

e in JPY rate

Effect on income

before income tax

2014 +1% $2,082

(Unaudited) -1% (2,082)

2013 +1% 2,498

(Unaudited) -1% (2,498)

The sensitivity analysis has been prepared on the basis that the proportion of financial instruments in

foreign currencies is constant.

The exchange rate used to restate the Company‟s PHP-denominated assets and liabilities is P=44.88 to

$1.00 as of September 30, 2014 and P=44.40 to $1.00 as of December 31, 2013. For the Company‟s JPY-

denominated liabilities, the exchange rate used is JPY109.45 as of September 30, 2014 and JPY104.77 to

$1.00 as of December 31, 2013. There is no other impact on the Company‟s other comprehensive income

other than those already affecting the income before income tax.

Interest rate risk

The Company‟s exposure to the risk of changes in market interest rates relates primarily to the Company‟s

loans payable with BDO with floating interest rate.

The following table sets forth, for the period indicated, the sensitivity to reasonably changes in interest

rates with all other variables held constant for the nine months ended September 30, 2014 and 2013:

Changes in basis

points

Effect on income

before income tax

2014 +1% $589,440

(Unaudited) -1% (589,440)

2013 +1% 729,543

(Unaudited) -1% (729,543)

Credit Risk

Risk concentrations of the maximum exposure to credit risk

As of September 30, 2014 and December 31, 2013, receivables from Samsung, which specializes in digital

appliances and media, semiconductors, memory and system integration, amounted to $20,432,220 and

$19,858,783 respectively.

Credit quality per class of financial assets

The table below shows the credit quality of the Company‟s neither past due nor impaired loans and

receivables.

September 30, 2014

(Unaudited)

Neither past due nor impaired

High grade Standard grade Total

Cash in banks $27,454,100 $− $27,454,100


Trade and other receivables 20,432,220 433,831 20,866,051


Nontrade receivables from CDC 18,549,490 − 18,549,490

$67,890,571 $433,831 $68,324,402

December 31, 2013

(Audited)

Neither past due nor impaired

High grade Standard grade Total

Cash in banks $23,082,954 $− $23,082,954


Trade and other receivables 19,858,783 1,283,132 21,141,915


Nontrade receivables from CDC 14,280,473 − 14,280,473

$58,829,767 $1,283,132 $60,112,899

Liquidity Risk

The table below summarizes the maturity profile of the Company‟s financial assets and liabilities as of

September 30, 2014 and December 31, 2013 based on undiscounted cash flows:

September 30, 2014

(Unaudited)

On demand

Less than 3

months

3 to

12 months

More than

12 months Total

Financial assets

Cash and cash equivalents $10,972,604 $16,484,400 $− $− $27,457,004

Loans and receivables

Trade and other receivables − 20,432,220 433,831 − 20,866,051

Nontrade receivable from

CDC − − 12,821,030 6,068,531 18,889,561*

Refundable deposits − − 31,331 1,423,430 1,454,761

$10,972,604 $36,916,620 $13,286,192 $7,491,961 $68,667,377


Accounts payable and accrued

expenses**

Trade $− $20,917,235 $− $− $20,917,235

Accrued expenses − 1,358,840 255,030 − 1,613,870

Others − 93,106 4,381 − 97,487

Loans payable including interest − − 20,750,000 65,734,899 86,484,899

$− $22,369,181 $21,009,411 $65,734,899 $109,113,491

*Maturities are based on management’s assessment on the estimated timing of collection (see Note 3)

**Excluding statutory liabilities amounting to $252,711.

December 31, 2013

(Audited)

On demand

Less than 3

months

3 to

12 months

More than

12 months Total

Financial assets

Cash and cash equivalents $3,388,259 $19,786,407 $− $− $23,174,666

Loans and receivables

Trade and other receivables − 19,858,783 1,283,132 − 21,141,915

Nontrade receivable from

CDC − − − 14,862,542 14,862,542*

Refundable deposits − − 169,187 1,438,370 1,607,557

$3,388,259 $39,645,190 $1,452,319 $16,300,912 $60,786,680


Accounts payable and accrued

expenses**

Trade $− $14,280,195 $− $− $14,280,195

Accrued expenses − 1,431,094 8,191 − 1,439,285

Others − 56,171 4,415 − 60,586

Loans payable including interest − 6,523,836 19,278,243 89,311,554 115,113,633

$− $22,291,296 $19,290,849 $89,311,554 $130,893,699

*Maturities are based on management’s assessment on the estimated timing of collection (see Note 3)

**Excluding statutory liabilities amounting to $236,173

Capital management

There were no changes made in the objectives, policies or processes for managing capital for the nine

months ended September 30, 2014 and 2013.

The Company is not subject to externally imposed capital requirements.

19. Income Taxes

The Company‟s provision for income tax consists of:

Three Months Ended September

30

Nine Months Ended

September 30

2014

(Unaudited)

2013

(Unaudited)

2014

(Unaudited)

2013

(Unaudited)

RCIT at 30% $− $− $− $−

MCIT at 2% 702 − 3,507 −

Gross income tax at 5% 391,264 369,948 1,105,199 973,881

Current tax 391,966 369,948 1,108,706 973,881

Deferred tax 144,910 48,098 52,212 368,192

Provision for income tax $536,876 $418,046 $1,160,918 $1,342,073

The components of the Company‟s net deferred income tax assets and liabilities are as follows:

September 30,

2014

(Unaudited)

December 31,

2013

(Audited)

Deferred income tax assets:

Provision for interest expense $38,061 $45,078 Unamortized accretion of interest on nontrade

receivable from CDC

18,378

30,720

Provision for bonuses and other benefits 8,412 10,730

MCIT 3,507 −

Deferred income tax liability:

Effect of changes in foreign exchange rates on

nonmonetary assets

(160,093)

(126,051)

($91,735) ($39,523)

The table below shows the reconciliation between the provision for income tax at statutory tax rate to the

provision for income tax in the interim statements of comprehensive income:

Three Months Ended

September 30

Nine Months Ended

September 30

2014

(Unaudited)

2013

(Unaudited)

2014

(Unaudited)

2013

(Unaudited)

Income tax at statutory income tax

rate $1,417,294 $1,334,719 $4,354,480 $2,882,781

Additions to (reductions in) income

taxes resulting from:

Effect of income from CFZ

registered activities (1,071,727) (1,070,761) (3,144,798) (2,097,905)

Nontaxable income (43,397) (77,247) (92,582) (133,616)

Income subjected to final tax (8,432) (12,443) (30,809) (34,531)

Nondeductible expenses 102,830 198,456 40,585 357,562

Functional currency differences 140,308 45,322 34,042 367,782

Provision for income tax $536,876 $418,046 $1,160,918 $1,342,073

20. Notes to Cash Flow Statements

For the nine months ended September 30, 2014 and 2013, the Company acquired certain property and

equipment that remained unpaid as of balance sheet date amounting to $4,193,930 and $112,331

respectively.

21. Earnings per Share (EPS)

Basic and diluted EPS for the nine months ended September 30 were computed as follows:

Three Months Ended

September 30

Nine Months Ended

September 30

2014

(Unaudited)

2013

(Unaudited)

2014

(Unaudited)

2013

(Unaudited)

Net income for basic and diluted

EPS

$4,187,438

$4,034,097 $13,354,015 $8,267,197

Weighted average number of

shares outstanding for basic

and diluted EPS

2,002,644,111

2,002,644,109 2,002,644,110

2,002,644,10

9

Basic/diluted earnings per share $0.0021 $0.0020 $0.0067 $0.0041

As of September 30, 2014 and December 31, 2013, there were no outstanding dilutive potential shares.

22. Operating Segment

For management purposes, the Company is organized and managed as one business segment. The

Company‟s business is the manufacture, assembly, test and warehousing of semiconductor and memory

devices and applications and related products which accounted for the majority of the Company‟s total

revenue. Accordingly, the Company operates mainly in one reportable business and geographical

segment which is the Philippines.

23. Events After Reporting Period

On December 1, 2014, the Company listed its shares on the Philippine Stock Exchange. The Company

sold 162,380,000 primary common shares at an offer price of P= 3.15 per share while the selling

shareholders sold 162,380,000 secondary common shares at the offer price of P=3.15 per share.

Item 2. Management's Discussion and Analysis of Financial Position and Results of

Operations.

Business Overview

Phoenix Semiconductor Philippines Corp. (PSPC) was incorporated on January 27, 2010. It is engaged in the

construction, ownership and operation of a plant for the manufacture, assembly, test and warehousing of

semiconductor and memory devices and applications and related products, as well as the performance of

related or incidental activities thereto. PSPC provides turnkey solutions that include wafer back grinding,

assembly and packaging, final testing of semiconductor devices, and delivery and shipment to its customer.

PSPC is a technology-oriented enterprise whose vision is to strive to become the world‟s best semiconductor

company. It aims to achieve this vision through constant innovation in technology for manufacturing its

products and continuous improvement of its processes with focus on quality control, customer satisfaction and

cost competitiveness.

PSPC started its commercial operations in February 2011 and has since been awarded as one of the top

exporters within the Clark Freeport Zone

Financial Position

Phoenix Semiconductor Philippines Corp. balance sheet continues to be solid with total assets of US$193.01

million as of September 30, 2014. The Company remains liquid with current assets amounting to US$75.26

million as against its current obligations of US$44.78 million, resulting in current ratio of 1.68:1 as of

September 30, 2014.

Total receivable for the amount corresponding to the power subsidy amounting to US$18.55 million as of

September 30, 2014 represents the Company's advances to the electricity service provider covering the

Government's subsidy for its electricity charges. Out of the US$18.55 million, the Company expects to receive

collection from the receivable for the amount corresponding to the power subsidy amounting to US$12.60

million by the end of the first quarter of 2015, on the basis of CDC confirmation of the approval by the

Congress of the 2014 National Budget which includes the amount which, according to CDC, was intended for

payment of the power subsidy advanced by the Company.

The Company‟s total liabilities amounted to US$110.02 million as of September 30, 2014 from US$118.55

million as of December 31, 2013, resulting to a Debt-to-Equity Ratio of 1.33:1.

Non-current liabilities amounting to US$65.24 million as of September 30, 2014 is composed significantly of

loans payable to BDO Unibank, Inc. totaling US$64.89 million. These loans refer to the loan agreements

executed by the Company with BDO on March 23, 2011 and May 24, 2013.

Return on equity was at 16% for the nine months ended September 30, 2014.

Results of Operations for the Nine Months Ended September 30, 2014

Phoenix Semiconductor Philippines Corp. continued to deliver steady growth in the first nine months of 2014

as net income grew by 61.53% from US$8.27 million to US$13.35 million in the same period in 2013.

Revenues for the first nine months of 2014 reached US$171.14 million, 10.91% higher than the total revenue

earned during the same period in 2013. Revenues from sales increased by 10.92% from US$153.55 million for

the nine months ended September 30, 2013 to US$170.31 million for the same period in 2014 driven by the

increase in demand for memory modules.

Cost of sales which includes raw materials used, depreciation, direct labor and other manufacturing costs,

increased by 10.68% due to the 12.85% increase in raw materials used and 13.55% increase in other

manufacturing cost as a result in increase in demand for memory module.

General and administrative expenses, which consist of salaries, wages and benefits, outside services,

depreciation, professional fees, representation fees, communication and other admin-related expenses,

increased by 7.55%.

Finance cost for the nine months ended September 30, 2014 decreased by 38% from US$6.61 million in 2013

to US$4.10 million in 2014. Finance costs include interest expense, guarantee fee and fair value loss on

derivatives related to BDO Loan.

Other income for the period, which is composed of interest income, income from scrap, rental income and

miscellaneous income, increased by 211.37% from US$221K for the nine months ended September 30, 2013 to

US$689K for the same period in 2013. Other expenses, on the other hand, which included exchange rate loss

and other miscellaneous expenses, increased by 75.65% from US$358K in 2013 to US$628K in 2014.

Income before income tax improved by 51.05%, from US$9.61 million for the nine months ended September

30, 2013 to US$14.51 million for the same period in 2014.

Material Changes (+/- 5% or more) in the Company’s Financial Statements

Financial Position as at September 30, 2014 versus December 31, 2013

19% increase in cash and cash equivalents

Increase in cash and cash equivalents is attributable to the following: (a) cash flows from operating activities

amounting to US$29.18 million; (b) net cash used in investing activities amounting to US$4.33 million as a

result of the Company‟s advances to electricity provider covering the government subsidy for electricity

charges and US$4.37 million acquisition of property and equipment; and (c) US$16.56 million used for the

payment of bank loan and dividends.

16% increase in inventories

Increase in inventories was attributable to the increase in raw material and sub-material purchases for memory

module products and component products, respectively.

1470% increase in prepayments and other current assets

The significant increase in the account is significantly attributable to the reclassification from the non-current

to the current portion of the nontrade receivable from CDC representing the government power subsidy and the

additional advances made by the Company to electricity provider for the government subsidy portion in 2014,

which the Company expects to collect within the next twelve months.

71% decrease in derivative financial asset (current and noncurrent)

The decrease is due to lower valuation of embedded derivative asset on the BDO loan.

5% decrease in property, plant and equipment, net

Decrease in property, plant and equipment was mainly attributed to the 34% increase in accumulated

depreciation.

49% decrease in other non-current assets

Decrease in other non-current assets was attributed by the reclassification of the current portion of the nontrade

receivable from CDC representing the government power subsidy which the Company expects to collect by

first quarter of 2015.

43% increase in accounts payable and accrued expenses

Increase in accounts payable and accrued expenses was due to the increase of raw material purchases and

additional machinery and equipment purchased during the period.

16% decrease in interest payable

Decrease in interest payable was directly attributed to the decrease in principal loan balance resulting from

payments during the period.

14% decrease in income tax payable

The decrease in income tax payable was due to lower provision for income tax.

15% decrease in loans payable (current and noncurrent)

Decrease in loans payable was directly attributable to the principal repayments made during the period. Total

payments on loans for the nine months ended September 30, 2014 amounted to $15.56 million.

35% increase in retirement liability

Increase in retirement liability resulted from additional accrual recorded for the nine months ended September

30, 2014.

100% increase in other noncurrent liabilities

The increase was due to the recognition of rent payable in relation to the non-cancellable operating lease

agreement entered into with CDC covering the land for its plant and administration offices.

132% increase in deferred income tax liability - net

Increase in deferred income tax liability was due to the increase in foreign exchange differences on non-

monetary assets.

48% increase in retained earnings

Increase of retained earnings was due to the net income earned for the nine months ended September 30, 2014,

offset by the dividends paid during the period amounting to US$1.0 million.

Results of Operations for the Nine Months Ended September 30, 2014 Compared to the Nine Months Ended

September 30, 2013

11% increase in sales revenue

Increase in sales revenue was attributed to the increase in sales of higher density products such as servers and

modules.

41% increase in other revenue

Increase in other revenue was attributed to the increase in high value scrap sales.

11% increase in cost of sales

The increase is due to the increase in raw materials used in production and other manufacturing costs such as

production consumables and spare parts used in the production of higher density products in view of the

increase in sales.

13% increase in gross profit

Increase in gross profit resulted from the increase of sales revenue (product sales).

8% increase in general and administrative expenses

Increase in general and administrative expenses was directly attributable to professional fees and other fees

incurred in relation to the Company‟s initial public offering.

38% decrease in finance cost

The decrease in finance cost was due to the decrease interest expense on loans payable to BDO Unibank, Inc.

as well as the related guarantee fee consistent with the decrease in loans payable.

211% increase in other income

Increase was attributed to the increase in interest income from the accretion on nontrade receivable from CDC.

76% increase in other expense

The significant increase in other expense is directly attributable to the accounted depreciation of the leased

assets to STS.

14% decrease in provision for income tax

Decrease in the account resulted from the decrease in deferred tax on foreign exchange differences on

nonmonetary asset

62% increase in net income

Increase in income before income tax is mainly due to the increase in gross profit and other income, as well as

the decrease in finance costs.

Other Disclosures

A. Any known trends or any known demands,

commitments, events or uncertainties that will result

to or that are reasonably likely to result in the

registrant‟s liquidity increasing or decreasing in any

material way

None.

B. Any events that will trigger direct or contingent

financial obligation that is material to the company,

including any default or acceleration of an obligation

None.

C. 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

None.

D. Any material commitments for capital expenditures,

the general purpose of such commitments, and the

expected sources of funds for such expenditures

should be described

None.

E. Any known trends, events or uncertainties that have

had or that are reasonably expected to have a material

favorable or unfavorable impact on net sales or

revenues or income from continuing operations

should be described

None.

F. Any significant elements of income or loss that did

not arise from the registrant's continuing operations

None.

G. Any seasonal aspects that had a material effect on the

financial condition or results of operations

None.

H. Material events subsequent to the end of the interim

period that have not been reflected in the financial

statements for the interim period

Listing of 162,380,000 primary common

shares and 162,380,000 secondary

common shares in the Philippine Stock

Exchange on December 1, 2014. Shares

are sold to the public at Php3.15 per

share. The Company raised gross

proceeds of Php 511.50 million from the

primary offer.

Key Performance Indicators

The Company‟s top five (5) key performance indicators are listed below:

Amounts in thousand US$, except ratios, and

where indicated

September 30,

2014

September 30, 2013 December 31, 2013

Debt to Equity Ratio¹ 1.33x 1.96x 1.68x

EBITDA² 32,807 30,025 -

EBITDA Margin³ 19.17% 19.46% -

Earnings per share⁴ 0.0067 0.0041 -

Return on Assets (ROA)⁵ 6.99% 4.29% -

Notes:

1. It is a measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity.

2. Earnings before interest, tax, depreciation and amortization

3. It shows earnings before interest, tax, depreciation and amortization (EBITDA) as a percentage of revenue.

4. It is computed by dividing net income of the Company by the weighted average number of common shares issued and

outstanding during the year, adjusted for any subsequent stock dividends declared.

5. It is the ratio of annual net income to average total assets of a business as of reporting date.

Supporting Computations: September 30, 2014 September 30, 2013

December 31,

2013

Debt to Equity Ratio

Total Liabilities 110,021,915 127,765,892 118,552,235

Total Equity 82,988,720 65,308,486 70,634,705

Debt to Equity Ratio 1.33 1.96 1.68

EBITDA (Net Income + finance cost + Income tax + Depreciation + Amortization)

Net Income After Tax 13,354,015 8,267,197

Finance Cost 4,096,616 6,607,252

Provision for income tax 1,160,918 1,342,073

Depreciation 14,103,149 13,720,322

Amortization of Intangibles 91,850 87,863

EBITDA 32,806,548 30,024,707

EBITDA Margin

(EBITDA/Sales)

EBITDA 32,806,548 30,024,707

Sales 171,142,585 154,302,809

EBITDA Margin 19.17% 19.46%

Earnings per share (Net Income/Weighted Average. Number of Shares)

Net Income 13,354,015 8,267,197

Wtd. Ave Outstanding Shares 2,002,644,110 2,002,644,109

EPS 0.0067 0.0041

Return on Assets (ROA) (Net Income/Average Total Assets)

Net Income 13,354,015 8,267,197

Total Assets, beg 189,186,940 192,410,125

Total Assets, end 193,010,635 193,074,377

Average Total Assets 191,098,788 192,742,251

Return on Assets (ROA) 6.99% 4.29%

PART II - OTHER INFORMATION

A. New project or investments in another line of

business or corporation

None.

B. Composition of Board of Directors

(as of September 30, 2014)

Mr. Byeongchun Lee - Chairman, President & CEO

Mr. Dongjoo Kim - Vice President & CFO

Mr. Kyuho Han - Director

Mr. Sanghoon Ha - Director

Mr. Seung Ug Lim - Director

Mr. Carlos R. Alindada - Director

Ms. Mary Delia Tomacruz - Director

C. Performance of the corporation or

result/progress of operations

Please see financial statements and management’s

discussion on results of operations.

D. Declaration of dividends None.

E. Contracts of merger, consolidation or joint

venture; contract of management, licensing,

marketing, distributorship, technical assistance or

similar agreements

None.

F. Offering of rights, granting of Stock Options and

corresponding plans therefore

None.

G. Acquisition of additional mining claims or other

capital assets or patents, formula, real estate

None.

H. Other information, material events or

happenings that may have affected or may affect

market price of security

None.

I. Transferring of assets, except in normal course of

business

None.

J. Other information not previously disclosed As disclosed in the Company’s prospectus, gross and

net proceeds from the primary offer were estimated at

Php511.50 million and Php466.91 million, respectively.

The Company received actual gross proceeds

amounting to Php511.50 million from the primary

offering of 162,380,000 shares on December 1, 2014,

and incurred Php43.83 million IPO-related expenses,

resulting to actual net proceeds of Php467.67 million.

Schedule I: Reconciliation of Retained Earnings


RECONCILIATION OF RETAINED EARNINGS AVAILABLE FOR DIVIDEND

DECLARATION (ANNEX 68-C)

September 30, 2014

Unappropriated Retained Earnings, as adjusted to available for

dividend distribution, beginning $ 25,634,725

Net Income during the period closed to Retained Earnings 13,354,015

Less:

Dividend declarations during the period (1,000,000)

TOTAL RETAINED EARNINGS AVAILABLE FOR DIVIDEND, END $ 37,988,740

Schedule II: Schedule of Effective Standards and Interpretations


SUPPLE MENTARY SCHEDULE OF ALL PHILIPPINE FINANCIAL REPORTING

STANDARDS (PFRSs) [which consist of PFRSs, Philippine Accounting Standards (PAS) and

Philippine Interpretations] effective as at

September 30, 2014

PHILIPPINE FINANCIAL REPORTING STANDARDS AND

INTERPRETATIONS

Effective as of September 30,2014

Adopted Not

Adopted

Not

Applicable

Framework for the Preparation and Presentation of Financial

Statements

Conceptual Framework Phase A: Objectives and qualitative

characteristics

PFRSs Practice Statement Management Commentary

Philippine Financial Reporting Standards

PFRS 1

(Revised)

First-time Adoption of Philippine Financial Reporting

Standards

Amendments to PFRS 1 and PAS 27: Cost of an

Investment in a Subsidiary, Jointly Controlled Entity or

Associate

Amendments to PFRS 1: Additional Exemptions for First-

time Adopters

Amendment to PFRS 1: Limited Exemption from

Comparative PFRS 7 Disclosures for First-time Adopters

Amendments to PFRS 1: Severe Hyperinflation and

Removal of Fixed Date for First-time Adopters

Amendments to PFRS 1: Government Loans

Amendments to PFRS 1: Borrowing Costs

Amendments to PFRS 1: Meaning of Effective PFRS

PFRS 2 Share-based Payment

Amendments to PFRS 2: Vesting Conditions and

Cancellations

Amendments to PFRS 2: Group Cash-settled Share-based

Payment Transactions

Amendments to PFRS 2: Definition of Vesting Condition

PFRS 3

(Revised)

Business Combinations

Amendment to PFRS 3: Accounting for Contingent

Considerations in a Business Combination

Amendment to PFRS 3: Scope Exceptions for Joint

Arrangements

PFRS 4 Insurance Contracts

Amendments to PAS 39 and PFRS 4: Financial Guarantee

Contracts

PFRS 5 Non-current Assets Held for Sale and Discontinued

Operations

PFRS 6 Exploration for and Evaluation of Mineral Resources


INTERPRETATIONS


Adopted Not

Adopted

Not

Applicable

PFRS 7 Financial Instruments: Disclosures

Amendments to PAS 39 and PFRS 7: Reclassification of

Financial Assets


Financial Assets - Effective Date and Transition

Amendments to PFRS 7: Improving Disclosures about

Financial Instruments

Amendments to PFRS 7: Disclosures - Transfers of

Financial Assets

Amendments to PFRS 7: Disclosures - Offsetting

Financial Assets and Financial Liabilities

Amendments to PFRS 7: Mandatory Effective Date of

PFRS 9 and Transition Disclosures

PFRS 8 Operating Segments

Amendments to PFRS 8: Aggregation of Operating

Segments and Reconciliation of the Total of the Reportable

Segments Assets to the Entity‟s Assets

PFRS 9** Financial Instruments

Amendments to PFRS 9: Mandatory Effective Date of

PFRS 9 and Transition Disclosures

PFRS 10 Consolidated Financial Statements

Amendments to PFRS 10: Investment Entities

PFRS 11 Joint Arrangements


PFRS 12 Disclosure of Interests in Other Entities


PFRS 13 Fair Value Measurement (2013 Version)

Amendment to PFRS 13: Short-term Receivables and

Payables

Amendment to PFRS 13: Portfolio Exception

Philippine Accounting Standards

PAS 1

(Revised)

Presentation of Financial Statements

Amendment to PAS 1: Capital Disclosures

Amendments to PAS 32 and PAS 1: Puttable Financial

Instruments and Obligations Arising on Liquidation

Amendments to PAS 1: Presentation of Items of Other

Comprehensive Income

Amendments to PAS 1: Clarification of the Requirements

for Comparative Presentation

PAS 2 Inventories

PAS 7 Statement of Cash Flows

PAS 8 Accounting Policies, Changes in Accounting Estimates

and Errors


INTERPRETATIONS


Adopted Not

Adopted

Not

Applicable

PAS 10 Events after the Reporting Period

PAS 11 Construction Contracts

PAS 12 Income Taxes

Amendment to PAS 12 - Deferred Tax: Recovery of

Underlying Assets

PAS 16 Property, Plant and Equipment

Amendment to PAS 16: Classification of Servicing

Equipment

Amendment to PAS 16: Revaluation Method –

Proportionate Restatement of Accumulated Depreciation

PAS 17 Leases

PAS 18 Revenue

PAS 19

(Amended)

Employee Benefits

Amendments to PAS 19: Defined Benefit Plans: Employee

Contributions

PAS 20 Accounting for Government Grants and Disclosure of

Government Assistance

PAS 21 The Effects of Changes in Foreign Exchange Rates

Amendment: Net Investment in a Foreign Operation

PAS 23

(Revised)

Borrowing Costs

PAS 24

(Revised)

Related Party Disclosures

Amendments to PAS 24: Key Management Personnel

PAS 26 Accounting and Reporting by Retirement Benefit Plans

PAS 27

(Amended)

Separate Financial Statements

Amendments to PAS 27: Investment Entities

PAS 28

(Amended)

Investments in Associates and Joint Ventures

PAS 29 Financial Reporting in Hyperinflationary Economies

PAS 32 Financial Instruments: Disclosure and Presentation

Amendments to PAS 32 and PAS 1: Puttable Financial

Instruments and Obligations Arising on Liquidation

Amendment to PAS 32: Classification of Rights Issues

Amendments to PAS 32: Offsetting Financial Assets and

Financial Liabilities

PAS 33 Earnings per Share

PAS 34 Interim Financial Reporting

Amendment to PAS 34: Interim Financial Reporting and

Segment Information for Total Assets and Liabilities

PAS 36 Impairment of Assets

Amendments to PAS 36: Recoverable Amount Disclosures

for Non-Financial Assets

PAS 37 Provisions, Contingent Liabilities and Contingent Assets


INTERPRETATIONS


Adopted Not

Adopted

Not

Applicable

PAS 38 Intangible Assets

Amendments to PAS 38: Revaluation Method –

Proportionate Restatement of Accumulated Amortization

PAS 39 Financial Instruments: Recognition and Measurement

Amendments to PAS 39: Transition and Initial

Recognition of Financial Assets and Financial Liabilities

Amendments to PAS 39: Cash Flow Hedge Accounting of

Forecast Intragroup Transactions

Amendments to PAS 39: The Fair Value Option

Amendments to PAS 39 and PFRS 4: Financial Guarantee

Contracts


Financial Assets


Financial Assets – Effective Date and Transition

Amendments to Philippine Interpretation IFRIC–9 and

PAS 39: Embedded Derivatives

Amendment to PAS 39: Eligible Hedged Items

Amendment to PAS 39: Novation of Derivatives and

Continuation of Hedge Accounting

PAS 40 Investment Property

Amendment to PAS 40: Investment Property

PAS 41 Agriculture

Philippine Interpretations

IFRIC 1 Changes in Existing Decommissioning, Restoration and

Similar Liabilities

IFRIC 2 Members' Share in Co-operative Entities and Similar

Instruments

IFRIC 4 Determining Whether an Arrangement Contains a Lease

IFRIC 5 Rights to Interests arising from Decommissioning,

Restoration and Environmental Rehabilitation Funds

IFRIC 6 Liabilities arising from Participating in a Specific Market

- Waste Electrical and Electronic Equipment

IFRIC 7 Applying the Restatement Approach under PAS 29

Financial Reporting in Hyperinflationary Economies

IFRIC 8 Scope of PFRS 2

IFRIC 9 Reassessment of Embedded Derivatives

Amendments to Philippine Interpretation IFRIC–9 and

PAS 39: Embedded Derivatives

IFRIC 10 Interim Financial Reporting and Impairment

IFRIC 11 PFRS 2- Group and Treasury Share Transactions

IFRIC 12 Service Concession Arrangements

IFRIC 13 Customer Loyalty Programmes


INTERPRETATIONS


Adopted Not

Adopted

Not

Applicable

IFRIC 14 The Limit on a Defined Benefit Asset, Minimum Funding

Requirements and their Interaction

Amendments to Philippine Interpretations IFRIC- 14,

Prepayments of a Minimum Funding Requirement

IFRIC 15 Agreements for the Construction of Real Estate

IFRIC 16 Hedges of a Net Investment in a Foreign Operation

IFRIC 17 Distributions of Non-cash Assets to Owners

IFRIC 18 Transfers of Assets from Customers

IFRIC 19 Extinguishing Financial Liabilities with Equity

Instruments

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

IFRIC 21 Levies

SIC-7 Introduction of the Euro

SIC-10 Government Assistance - No Specific Relation to

Operating Activities

SIC-12 Consolidation - Special Purpose Entities

SIC-13 Amendment to SIC - 12: Scope of SIC 12

Jointly Controlled Entities - Non-Monetary Contributions

by Venturers

SIC-15 Operating Leases - Incentives

SIC-25 Income Taxes - Changes in the Tax Status of an Entity or

its Shareholders

SIC-27 Evaluating the Substance of Transactions Involving the

Legal Form of a Lease

SIC-29 Service Concession Arrangements: Disclosures.

SIC-31 Revenue - Barter Transactions Involving Advertising

Services

SIC-32 Intangible Assets - Web Site Costs

Schedule III: Conglomerate Map

Schedule IV: Financial Soundness Indicators

September

30, 2014

September 30,

2013

December 31,

2013

1. Current/Liquidity Ratios

a. Current Ratio 1.68 2.69 1.49

b. Quick Ratio 1.08 2.08 1.16

2. Debt Equity Ratio 1.33 1.96 1.68

3. Asset to Equity Ratio 2.33 2.96 2.68

4. Interest Rate Coverage Ratio 8.69 6.33

5. Profitability ratios

a. Net Income Margin 7.80% 5.36%

b. Return on Assets 6.99% 4.29%

c. Return on Equity 17.39% 13.51%

Computations:

092014 092013 122013

1. Current/Liquidity Ratios

a. Current Ratio (Current Assets/Current liabilities)

Current Assets 75,263,936 71,978,180 56,820,592

Current Liabilities 44,777,827 26,713,385 38,115,211

Current Ratio 1.68 2.69 1.49

b. Quick Ratio (CCE + Trade and Other Receivables)/Current Liabilities)

Cash and Cash Equivalents 27,454,367 26,719,742 23,105,776

Trade and Other Receivables 20,866,051 28,898,985 21,141,915

Total 48,320,418 55,618,727 44,247,691

Current Liabilities 44,777,827 26,713,385 38,115,211

Quick Ratio 1.08 2.08 1.16

2. Debt Equity Ratio (Total liabilities/SHE)

Total liabilities 110,021,915 127,765,892 118,552,235

Stockholder's Equity 82,988,720 65,308,486 70,634,705

Debt Equity Ratio 1.33 1.96 1.68

3. Asset to Equity Ratio (Total Assets/SHE)

Total Assets 193,010,635 193,074,377 189,186,940

Stockholder's Equity 82,988,720 65,308,486 70,634,705

Asset to Equity Ratio 2.33 2.96 2.68

4. Interest Rate Coverage Ratio (EBITDA/Interest Expense)

September

30, 2014

September 30,

2013

Net Income After Tax 13,354,015 8,267,197

Finance Cost 4,096,616 6,607,252

Provision for income tax 1,160,918 1,342,073

Depreciation 14,103,149 13,720,322

Amortization of Intangibles 91,850 87,863

EBITDA 32,806,548 30,024,707

Interest Expense* 3,777,293 4,741,518

Interest Rate Coverage Ratio 8.69 6.33

*This includes interest expense and guarantee fee (see Note 15)

5. Profitability ratios

a. Net Income Margin (Net Income/Revenue)

Net Income 13,354,015 8,267,197

Revenue 171,142,585 154,302,809

Net Income Margin 7.80% 5.36%

b. Return on Assets (Net Income/Total Assets)

Net Income 13,354,015 8,267,197

Total Assets, beg 189,186,940 192,410,125

Total Assets, end 193,010,635 193,074,377

Average Total Assets 191,098,788 192,742,251

Return on Assets 6.99% 4.29%

c. Return on Equity (Net Income/Ave Shareholder's Equity)

Net Income 13,354,015 8,267,197

Shareholders Equity, beginning 70,634,705 57,041,290

Shareholders Equity, end 82,988,720 65,308,486

Average Shareholder's Equity 76,811,713 61,174,888

Return on Equity 17.39% 13.51%

“ANNEX A”


Aging of Trade Accounts Receivables

AS OF SEPTEMBER 30, 2014

Date Customer Currency Source Functional 0 to 30 days

31 to

60

days

61 to 90

days

Over 90

days

9/30/2014 Samsung Electronics Co., Ltd. USD 20,432,220 20,432,220 20,432,220 − − −

Total Trade Accounts Receivable (see Notes to FS Item 5) 20,432,220 20,432,220 20,432,220 − − −

PSPC 17Q_Sept2017

Documents

Transcript of PSPC 17Q_Sept2017