A Conflict Of Interest Policy For The Board - 1618 Words

Ethel Carew 12/06/14 Recommendation of Issues and Topics to address when establishing a Conflict of Interest Policy for the Board. As a tax exempt organization the presence and enforcement of a Conflict of Interest1 in a Board will: A) Protect the Healthcare System’s interest in transactions or arrangements that may also benefit a director’s private interest. B) Ensure that the Board can make decisions in an objective manner without undue influence by persons with a private interest. c) Help protect its Tax exempt status as the Board operates in a manner consistent with their charitable purpose, properly oversee the activities of its directors, and pays no more than reasonable compensation to affiliated physicians and other highly†¦show more content†¦For this board, that will be translated to mean 16 or more Directors. Identifying Disqualified Persons Based on the Treasury Regulations  §4958 which defines disqualified persons as including (1) board members, (2) presidents, chief executive officers or chief operating officers, (3) treasurers and chief financial officers, and (4) those others who facts and circumstances tend to show have substantial influence over the affairs of an organization, it may seem that The Healthcare system’s CEO,COO’s, some affiliated Physicians and Directors with significant contributions would be classified as Disqualified persons. This being the case, â€Å"Self-dealing,† or related-party transaction violations, pose the greatest risk of personal liability for directors. The Conflict of Interest Policy provisions in regards to self-dealing should be clear and broadly disseminated to all directors about the importance of potential conflicts disclosure. Declaration of Interest The policy should also include how the board members disclose their personal and financial interests and how they should deal with gifts or other incentives made to them in the course of their role on the Board. All Board Directors can declare all material facts or Financial Interests1 concerning the existence and nature of a potential Conflict of Interest and the relationship of any ‘Interested Director’. This can be done when they first join the board and at the beginning of each BoardShow MoreRelatedBoard Conflict At The Crescent City Nursing Center1279 Words   |  6 PagesBoard Conflict Case Study 7-1 The conflict between Paul Blackman and the board of directors at the Crescent City Nursing Center is a situation common in many healthcare establishments across the nation. Blackman, hired as the chief executive officer (CEO), has been tasked to improve the financial situation of the nursing center while balancing resources and maintaining a staff loyal to the organization’s goals, not just one individual within the organization (Goldsmith, 2011). The perception ofRead MoreCompensation Approval Policies : A Voting Member Of The Governing Board1184 Words   |  5 PagesSection 5. Compensation Approval Policies A voting member of the governing board who receives compensation, directly or indirectly, from the corporation for services is precluded from voting on matters pertaining to that member s compensation. A voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the corporation for services is precluded from voting on matters pertaining to that member s compensation. NoRead MoreEthical Issues Of The Ottawa Hospital Board1518 Words   |  7 Pagesis to present information, resources and a framework upon which board members can fully develop policies and procedures as they increase their awareness and recognition of ethical issues, risk of ethical conflicts, and put into practice ethical decision-making as it applies to and aligns with the mission, vision and values of The Ottawa Hospital (Appendix1)1. The objective is to provide guidelines, ethical tools and resources. Board members can work with and build upon these to develop an ethicsRead MoreThe Challenges And Issues Facing Schools1225 Words   |  5 Pagestendency towards school board members seeking to advance personal interests and agendas on the board’s decisions which has enhanced the instances of conflicts of interest and controversial issues in many schools. The distinction between the roles and responsibilities of the board members from those of the superintendent has become blurred, making it essential that superintendents make decisions that enable them survive in their roles. According to the California School Boards Association, CSBA, (2013)Read MoreEssay On Governance920 Words   |  4 Pageson the main functions a board is meant to perform. A more outdated concept classifies boards as merely an oversight entity. However, as policy and law-makers and regulators demand higher board involvement and accountability, boards are pushed into performing more active roles, including, â€Å"policy setting and review, employee supervision, and overall management of the organization† (Hopkins et al., 2015, p. 58). To meet these rising expectations in governance, nonprofit boards are forced to change andRead MoreBreadtalk Group Limited vs Old Chang Kee Company Analysis Essay1273 Words   |  6 Pagesimproves. Firstly, under principle 1under board matters(breadtalk annual 2010 report,pg 32), despite directors are being appointed to the board by a formal letter of appoinment indicating the amount of time required and scope of duties, some directors espicial ly new directors are not clearly aware of discharging their duties. Board members needs more update and initaitive to gain better understanding of the group business operations and policies. Thus board members are encouraged to attend comprehensiveRead MoreBusiness Management Exam Essay1476 Words   |  6 Pagesthe same decisions as shareholders/owners, the conflict between shareholders and managers is identical to conflict arising when a principle hires an agent to take actions on the principal behalf, but these decisions are not profit maximizing for principals but are based on opportunistic (self-interest) behavior of agents. In public corporations we face an additional agency problem, in which top executives are not hired by shareholders but by a board of directors who is elected by, and not perfectRead MoreCorporate Ethics Essay1520 Words   |  7 Pages The board of directors is also highly influential to a corporation and should therefore also be held accountable for sup porting a corporation’s ethical code of conduct. The board of directors is responsible for looking out for the best interests of shareholders (Cross Miller, 2012). The board of directors was designed to monitor executives, however in practice this is not always the case (Cross Miller). Obviously this is monitoring is a necessary duty. A proposed change to ensure that theRead MoreCase Study : The s Removal860 Words   |  4 PagesRECOMMENDATIONS Mortenson had no prior experience serving on a board and lacked the knowledge and skills to effectively manage CAI as it grew. While a better suited president would set an example for the other members and staff, Mortenson took advantage of his position by accepting travel fees from event sponsors even though CAI was already paying his travel costs. He took money donated to CAI and spent it on personal items such as charter flights for family vacations, clothing, and internet downloadsRead MoreDo All Companies Have The Same Governance Requirements?1117 Words   |  5 Pagesrelationships between shareholders and directors – often the same person – change the nature of the governance task when compared to the listed sector. The key difference between closely held private boards and listed boards stems from the changed balance between agency risk and conflict of interest. The Corporate Governance Principles for ASX listed companies include the following three principles (numbers 3 to 5) viz:- 3. Safeguard integrity in corporate reporting. 4. Make timely and balanced

Understanding Poetry By Robert Penn Warren And Cleanth Brooks

As defined by Robert Penn Warren and Cleanth Brooks in his book ‘Understanding Poetry’ published in 1978, â€Å"poetry is a kind of saying. It is a kind that many people, until they become well acquainted with it, feel is rather peculiar and even useless. They feel this way for two reasons: the â€Å"way of saying† and the â€Å"nature of the said.† As for the way of saying, the strongly marked rhythms, the frequent appearance of rhyme, and the figurative language may seem odd and distracting; and as for the â€Å"nature of the said,† it generally contains neither a good, suspenseful story nor obviously useful information. Poetry, in short, may seem both unnatural and irrelevant. Yet poetry has existed from the time of the emergence of the human race from shadowy prehistory and has survived, in one form or another, in every society since that time. When we realize this, we may be inclined to consider the possibility that poetry only seems unnatural and irrelevant. We may even decide, on reflection, that it does spring from deep human impulses and does fulfill human needs. Probably its most obvious feature is its strongly marked rhythm. Rhythm is we know, the repetition of time of a perceptible pattern. Poetry, focuses on the feelings and attitudes in such a context, and not on the actions or ideas as such. Poetry is a response to, and an evaluation of our experience of the objective, bustling world and our ideas about it. â€Å"In the book, ‘A Poetry Handbook,’ written by Mary Oliver and

All About Triffles Essay Example For Students

All About Triffles Essay All about trifflesTriffes of fateOn the surface, Susan Glaspells play Trifles focuses on a wife murdering her oppressive husband.The husband is abusing his wife emotionally out on a lonely secluded farm isolated from society in the Midwest.Under the surface, the behaviors of Mrs. Hale, Mrs. Peters, and Mrs. Wright in Glaspells play to those of Clotho the Spinner, Lachesis the Disposer of Lots, and Atropos the Cutter of the Thread in Fate from Greek mythology(Meak86).Although Glaspell brings new meaning to the myth, the attention given to Mrs. Hales resowing the quilt, the change in Mrs. Peters perspective on law and justice, and the rope placed by Mrs. Wright around her husbands neck are part of the story of the Three Sisters who control the fate of men. Mrs. Hales behavior is similar to Clotho the Spinner, the sister who spins the thread of life.Mrs. Hale subtly suggests that Mrs. Wright is not the sole agent in the death of Mr. Wright (Meak86). Mrs. Hales reference to that event, when they was slipping the rope under his neck, (Glaspell568) showing a plural pronoun and a singular verbsuggests the involvement of more than one in a single outcome, and it suggests that the three women will be in conspiracy in the case controlling the outcome or the fate of all characters(Meak88). The information about the living condition of Wrights on the farm is supplied mainly by Mrs. Hale describes Mr. Wright as a hard man, and she describes how she remembersMrs. Wright when she was younger.She describes heras kind of like a bird.(Glaspell571)She establishes the connection of Mr. Wrightss Involvement in the physical death of the canary and spiritual death of his wife.The way the men joke about the womens concern about Mrs. Wrights intention to qui lt or just knot the quilt evokes a defensive remark from Mrs. Hale in which she hints that it is unwise to tempt fate; she asserts, I dont see as its anything to laugh about (Glaspell571).Finally, by just pulling out a stitch or two thats not sewed very good and replacing it with her own stitching (Glaspell571), Mrs., Hale symbolically claims her position as the person who spins the thread of life. The second member of the Three Sisters, Lachesis the Disposer of Lots, is personified by Mrs. Peters(Meak87).The importance of the thread spun by Mrs. Hale depends on the actions and reactions of Mrs. Peters.To claim her position as the member of the Fates responsible for assigning destiny, she must look at things further.Her objectivity is displayed in her assertion that the law is the law and her view on physical evidence as she tells Mrs. Hale not touch anything (Ben-Zvi158).The sight of the dead canary and the recognition that somebodywrungits neck marks Mrs. Peterss waking up to realize that Mrs. Wright is guilty. The discovery of the dead bird makes Mrs. Peters think about her childhood memories of rage toward the boy who took a hatchet and brutally killed her kitten.In her mind, the kitten, Mrs. Wright, and the bird become enmeshed.Mrs. Peters realizes that the dead bird will be used to ..stereotype Mrs. Wright as a mad woman who over reacts to her husbands behavior.At this po int, Mrs. Peters emerges from the shadow of her role as the sheriffs wife and becomes married to the law.Her new concept of law subjectively favors justice over procedure(Ben-Zvi161).She claims her position as the sister who dispenses that lots in life when she moves to hide the bird and denies the men something to make a story about (Glaspell573). .u08866a172109965993679f017d8b0ab2 , .u08866a172109965993679f017d8b0ab2 .postImageUrl , .u08866a172109965993679f017d8b0ab2 .centered-text-area { min-height: 80px; position: relative; } .u08866a172109965993679f017d8b0ab2 , .u08866a172109965993679f017d8b0ab2:hover , .u08866a172109965993679f017d8b0ab2:visited , .u08866a172109965993679f017d8b0ab2:active { border:0!important; } .u08866a172109965993679f017d8b0ab2 .clearfix:after { content: ""; display: table; clear: both; } .u08866a172109965993679f017d8b0ab2 { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .u08866a172109965993679f017d8b0ab2:active , .u08866a172109965993679f017d8b0ab2:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .u08866a172109965993679f017d8b0ab2 .centered-text-area { width: 100%; position: relative ; } .u08866a172109965993679f017d8b0ab2 .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .u08866a172109965993679f017d8b0ab2 .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .u08866a172109965993679f017d8b0ab2 .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .u08866a172109965993679f017d8b0ab2:hover .ctaButton { background-color: #34495E!important; } .u08866a172109965993679f017d8b0ab2 .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .u08866a172109965993679f017d8b0ab2 .u08866a172109965993679f017d8b0ab2-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .u08866a172109965993679f017d8b0ab2:after { content: ""; display: block; clear: both; } READ: Dialectical Journals- Things Fall Apart EssayMrs. Wright is representing Atropos the Cutter of the Thread.Symbolically, Mrs. Wright is first linked to Atropos in Mr. Hales description of her rocking back and forth is similar to the motion made by cutting with scissors(Ben-Zvi160).The connection to Atropos is further established when Mrs. Peters discovers the dead bird in Mrs. Wrights sewing box and exclaims, Why, this isnt her scissors (Glaspell571). Ironically, the dead canary takes the place of the scissors: The death of the bird is directly tied to the fate of Mr. Wright.Mr. Hale relates that in his questioning of Mrs. Wright, she admits that her husband died of a rope round his neck, but doesnt know how it happened because she didnt wake up; she is a sound sleeper (Glaspell565).Mrs. Wright denies personal involvement in the death of her husband, yet she acknowledges that he died while she slept beside him in the bed.Mrs. Wright says, I was on the inside (Glaspell565).Although she may be referring to her routine inside position of sleep behind her husband in the bed placed along the wall, Mrs. Wrights statement suggests a movement from the outside being her individual consciousness to the inside being the collective consciousness of the Fates.Her involvement with the rope of death is the equivalent of severing the thread of life.She did not spin the thread, nor did she assign the lot: she merely contributed a part to the whole, and that collective whole becomes greater than the sum of its parts.For this reason, Mrs. Wright is correct in denying individual knowledge or responsibility in the death of her husband(Ben-Zvi161). In Trifles, Mrs. Hale weaves the story or describes the circumstances, Mrs. Petersweighs the evidence and determines the direction of justice, and Mrs. Wright carries out the verdict; although the procedure is somewhat reversed, the stories are still the same.Susan Glaspells use of the Fates, or the Three Sisters, does not weaken her dramatization of women who are oppressed by men(Mustazza492).Although some believe that the power of the Three Sisters rivals that of Zeus, Glaspell reminds her audience that, regardless of myth or twentieth-century law, it still takes three women to equal one man(Mustazza495). Works CitedBen-Zvi, Linda: Murder, she wrote the genesis of Susan Glaspells Trifle:Theatre Journal May 92 44: 141-162Glaspell, Susan: Trifles Literature and Society 563-574 Meak, Phyllis: Trifles in Greek mythology: The Explicator Winter97 52: 88-90Mustazza, Leonard: Generich translation and thematic shift in Susan Glaspells Trifles and A jury of her peers.: Studies in Short Ficti on Fall89 26: 489-96

Meralco Financial Analysis Essay Example

Meralco Financial Analysis Essay INTRODUCTION MERALCO is the Philippines’ largest electric power distribution company, with franchise service area covering 9,337 square kilometres. It provides power to 4. 8 million customers in 31 cities and 80 municipalities, which include the whole of Metro Manila, the provinces of Rizal, Cavite and Bulacan, and parts of Pampanga, Batangas, Laguna and Quezon. Business establishments in the franchise area account for almost 46% of the country’s Gross Domestic Product or GDP. Through Clark Electric Distribution Corporation or CEDC, a 65%-subsidiary, it holds the power distribution franchise for Clark Special Economic Zone in Clark, Pampanga. CEDC franchise area covers 32 square kilometres and 1,611 customers. The Company is organized into three major operating segments, namely, power distribution, real state and contracts, services and others. In 2010, MERALCO PowerGen Corporation or MPG (formerly Asian Center for Energy Management), a wholly owned subsidiary, was reorganized as the Company’s vehicle for potential entry into power generation. COMPANY PROFILE MERALCO marches on to its 108th year of service in 2011. Consistently in the list of the Philippines’ top five corporations and cited among Asia’s finest, MERALCO today serves over 4. 8 million residential, commercial and industrial customers. It is strategically located to serve the country’s center of commerce and industry and its hub of government services and infrastructures. It services about 30 manufacturing economic zones, which also compete in the global market. Likewise, the Company caters to providers of outsourced business process, both domestic and international. MERALCO’s 9,337 sq. km. ranchise area overs 31 cities and 80 municipalities including Metro Manila, the entire provinces of Bulacan, Rizal and Cavite; parts of the provinces of Laguna, Quezon, Batangas and Pampanga. Electrification level in the franchise area is 99%. MISSION to provide our customers the best value in energy, products and services. VISSION to be a world-class company an d the service provider of choice. OBJECTIVES: To protect and enhance the interest of its stakeholders by committing itself to the following principles. 1. The Customers are its reason for being, and therefore, they should always be treated with dignity. We will write a custom essay sample on Meralco Financial Analysis specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Meralco Financial Analysis specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Meralco Financial Analysis specifically for you FOR ONLY $16.38 $13.9/page Hire Writer The Company must be fully responsive to their needs. The Company has the responsibility to: * Provide the customers with the highest quality products and services, consistent with their requirements and with international standards; * Treat the customers fairly, courteously and with integrity in all of its business transactions; * Act promptly on their immediate concerns and be receptive to their long-term needs and interest; and * Make every effort to ensure that the health, safety and general well-being of its customers are enhanced by its products and services. 2. The Employees are its most valued asset, and therefore, they should always be treated with dignity and with full consideration of their interest. The Company has the responsibility to: * Provide its employees with incentives and opportunities for professional growth and advancement; * Provide its employees with just and competitive compensation, and benefits that improve their living conditions and incentives * Guarantee fairness, equal treatment and opportunity and avoid discriminatory practices; and * Provide suitable and safe working conditions to protect employees from avoidable injury and illness in the workplace. . Its Investors are its principals, and therefore, the trust they have placed in the company must be honoured. The company has the responsibility to: * Apply professional and diligent management to ensure the financial viability of the company and maintain a fair and competitive return for its investors; and * Conserve and enhance its investors’ assets, and fulf il and safeguard their interest. 4. The Suppliers and Creditors are its business partners and, therefore, the relationship with them must be based on mutual respect and benefit. The company has the responsibility to: * Foster long-term stability, direct relation and continuous development with suppliers to attain quality, competitiveness, process efficiency and performance reliability; * Seek fairness, truthfulness, integrity and transparency in all of its business dealings with them; and * Seek encourage and prefer suppliers whose business practices respect human dignity and the environment. . The Competitors are its catalyst toward continuing service excellence and, therefore, the competition with them should be fair and honest, a basic requirement for national development in the distribution of products and services to the community. The Company has the responsibility to: * Promote behaviour that demonstrates mutual respect among competitors; and * Maintain the highest level of business ethics and integrity. . The Community is its business environment and the society it serves. The Company has the responsibility to: * Uphold and maintain at all times the highest standards of business ethics; * Fulfil with dedication and commitment its social responsibilities; * Undertake activities that support and contribute to the economic and social development of the country; 7. Employ proactive measures and cooperate with the government and non-government institutions in activities to serve society towards a collective benefit. * Help the government in its efforts and programs in its efforts and programs towards raising investor confidence, developing the capital market, and ensuring high sustained economic growth through good corporate governance. Observe and comply at all times with the orders, rules and regulations of the government, its agencies and instrumentalities, in the pursuit of its utility objectives and other corporate endeavors; * Institutionalize sound environmental practices in collaboration with the concerned government agencies and encourage other corporations/organizations to support all programs for an effective environmental management system. SUBSIDIARIES AND AFFILIATES * Meralco Powergen Corporation (MPG) * Clark Electric Distribution Corporation (CEDC) * Radius Telecoms, Inc. * Meralco Financial Services Corporation (FINSERVE) Lighth ouse Overseas Insurance Limited (LOIL) * Meralco Energy, Inc. (MEI) * Rockwell Land Corporation (ROCKWELL) * Republic Surety and Insurance Company, Inc. (RSIC) CONSOLIDATED FINANCIAL STATEMENTS MANILA ELECTRIC COMPANY AND SUBSIDIARIES| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION| | | | | December 31 | | 2010 | 2009 | | (amounts in millions) | ASSETS| | | | | | Current Assets| | | Cash and Cash equivalents| Php 24,370. 00 | Php 17,068. 00 | Trade and other receivables net| 25,609. 00 | 21,600. 0 | Inventories at lower cost or net realizable value| 2,043. 00 | 1,857. 00 | Land and development costs at lower of cost or net realizable value| 1,708. 00 | 1,191. 00 | Other current assets| 2,027. 00 | 2,969. 00 | TOTAL CURRENT ASSETS| 55,757. 00 | 44,685. 00 | | | | Noncurrent Assets| | | Utility plant and others net| 101,009. 00 | 98,231. 0 | Construction in progress| 2,241. 00 | 3,627. 00 | Investments in associates and a joint venture| 321. 00 | 1,203. 00 | Investments properties net| 8,037. 00 | 8,021. 00 | Deferred pass through fuel costs| 1,222. 00 | 3,161. 00 | Deferred tax assets net| 42. 00 | 17. 00 | Other noncurrent assets net| 10,339. 0 | 13,184. 00 | TOTAL NONCURRENT ASSETS| 123,211. 00 | 127,444. 00 |   | Php 178,968. 00 | Php 172,129. 00 | | | | | | | LIABILITIES AND EQUITY| | | Current Liabilities| | | Notes Payable| Php 149. 00 | Php 513. 00 | Trade payables and accrued expenses| 31,138. 00 | 28,261. 00 | Income tax payable| 413. 00 | 133. 00 | Customers refund| 7,131. 0 | 9,147. 00 | Current portion of interest bearing long-term financial liabilities| 5,574. 00 | 4,069. 00 | TOTAL CURRENT LIABILITIES| 44,405. 00 | 42,123. 00 | | | | Noncurrent Liabilities| | | Interest-bearing long-term financial liabilities net of current portion| 15,498. 00 | 17,234. 00 | Customers deposits net of current portion| 23,761. 00 | 25,063. 0 | Deposits from pre-selling of condominium units| 741. 00 | 343. 00 | Deferred tax liabilities net| 3,322. 00 | 4 ,230. 00 | Long-term employee benefits| 9,547. 00 | 10,987. 00 | Provisions| 12,875. 00 | 7,492. 00 | Advances for construction net of current portion| 3,271. 00 | 2,989. 00 | Other noncurrent liabilities| 2,352. 0 | 522. 00 | TOTAL NONCURRENT LIABILITIES| 71,367. 00 | 68,860. 00 |   |   |   | TOTAL LIABILITIES| 115,772. 00 | 110,983. 00 | | | | Equity Attributable to Equity Holders of the Parent| | | Common Stock| 11,273. 00 | 11,273. 00 | Subscriptions receivable| (738. 00)| (960. 00)| Additional paid-in capital| 4,111. 0 | 4,112. 00 | Excess of Acquisition cost over carrying value of non-controlling interest acquired| (328. 00)| (328. 00)| Employee shared-based payment plan| 743. 00 | 569. 00 | Unrealized fair value gains on available-for-sale investments| 96. 00 | 71. 00 | Share in cumulative translation adjustment of a subsidiary and an associate| 12. 00 | 684. 0 | Retained earnings:| | | Appropriated| 6,000. 00 | 4,198. 00 | Unappropriated| 37,800. 00 | 37,750. 00 | Equ ity Attributable to Equity Holders of the Parent| 58,969. 00 | 57,369. 00 | | | | Non-controlling interests| 4,227. 00 | 3,777. 00 | TOTAL EQUITY| 63,196. 00 | 61,146. 00 | | | | | | | Php 178,968. 00 | Php 172,129. 00 | MANILA ELECTRIC COMPANY AND SUBSIDIARIES| CONSOLIDATED STATEMENTS OF INCOME| | | | | Years Ended December 31 | | 2010 | 2009 | | (amounts in millions, except per share data) | | | | REVENUES| | | Sale of electricity| 239,077. 00 | 178,686. 00 | Sale or real state| 3,375. 00 | 2,877. 00 | Sale of contracts, services and others| 3,009. 00 | 2,987. 00 |   | 245,461. 0 | 184,550. 00 | | | | | | | EXPENSES (INCOME)| | | Purchased power| 200,916. 00 | 150,928. 00 | Operations and maintenance| 15,711. 00 | 13,611. 00 | Depreciation and amortization| 6,219. 00 | 5,064. 00 | Provision for probable charges and expenses from claims| 5,750. 00 | 3,351. 00 | Cost of real estate sold| 2,640. 00 | 2,230. 0 | Interest and other financial income| (2,690. 00)| (4,246. 00)| Cost of services| 1,996. 00 | 1,803. 00 | Provision (reversal of provision) for probable losses from refund net| (1,632. 00)| (1,179. 00)| Interest and other financial charges | 493. 00 | 3,328. 00 | Equity in net earnings of associates and a joint venture| (283. 00)| (245. 0)| Accretion of present value impact on customers refund | 225. 00 | 555. 00 | Foreign exchange losses (gains) net| 51. 00 | (266. 00)| Taxes, fees and permits| 974. 00 | 421. 00 | Others| 654. 00 | 216. 00 |   | 231,024. 00 | 175,571. 00 | | | | INCOME BEFORE INCOME TAX| 14,437. 00 | ,979. 00 | | | | PROVISION FOR (BENEFIT FROM) INCOME TAX| | | Current| 5,233. 00 | 3,218. 00 | Deffered| (913. 00)| (595. 00)|   | 4,320. 00 | 2,623. 00 | | | | NET INCOME| Php 10,117. 00 | Php 6,356. 00 | MANILA ELECTRIC COMPANY AND SUBSIDIARIES| CONSOLIDATED STATEMENTS OF CASH FLOW| | | | | | | 2010| 2009| | | (Amounts in Millions)| CASH FLOW FROM OPERATING ACTIVITIES| Php 14,437. 0 | Php 8,979. 00 | Income before income tax| | | A djustments for:| | | | Depreciation and amortization| 6,219. 00 | 5,064. 00 | | Provision for probable charges and expenses from claims| 5,750. 00 | 3,351. 00 | | Interest and other financial income| (2,690. 00)| (4,246. 00)| | Interest and other financial charges| 493. 0 | 3,328. 00 | | Provision (reversal of provision) for probable losses from refund net| (1,632. 00)| (1,179. 00)| | Loss on disposal of utility plant and others net| 1,033. 00 | | | Provision for doubtful accounts, net of recoveries| 982. 00 | 886. 00 | | Cost of guaranteed service levels pay-out| 388. 00 | 216. 0 | | Loss from disposal of investment| | 46. 00 | | Equity in net earnings of associates and a joint venture| (283. 00)| (245. 00)| | Present value impact on customers refund| 225. 00 | 555. 00 | | Employee share-based payments| 174. 00 | 301. 00 | | Reversal of write-down of inventory to net realizable value| (3. 0)| (41. 00)| | Gain on disposal of investment property| (4. 00)| | | Donation of investm ent property| 2. 00 | |   | Foreign exchange loss (gain)| 51. 00 | (266. 00)| Operating income befor working capital changes| 25,412. 00 | 16,749. 00 | Decrease (increase) in:| | | | Trade and other receivables| (10. 0)| 15,601. 00 | | Inventories| (130. 00)| (168. 00)| | Land and development costs| (517. 00)| (531. 00)| | Deferred pass-through fuel costs| 1,939. 00 | 631. 00 | | Other current assets| 955. 00 | (1,854. 00)| Increase (decrease) in:| | | | Trade payables and accrued expenses| 41. 0 | 8,798. 00 | | Customers refund| (2,241. 00)| (2,889. 00)| | Customers deposits| 1,298. 00 | 2,913. 00 | | Deposits from pre-selling of condominium units| 398. 00 | 307. 00 | | Long-term employee benefits| (1,424. 00)| (1,555. 00)|   | Provisions| (140. 0)| (4,935. 00)| Net cash generated from operations| 25,311. 00 | 33,067. 00 | Income tax paid| (4,953. 00)| (3,797. 00)| Net cash flows generated from operating activities| 20,358. 00 | 29,270. 00 | CASH FLOW FROM INVESTING ACTIVITIE S| | | Additions to:| | | | Construction in progress| (5,769. 00)| (7,914. 0)| | Utility plant and others| (2,741. 00)| (187. 00)| | Intangibles| (300. 00)| (127. 00)| | Investments properties| (110. 00)| (662. 00)| Interest and other financial income received| 1,058. 00 | 1,332. 00 | Proceeds from:| | | | Return of investment| 752. 0 | | | Disposal of utility plant and others| 82. 00 | | | Disposal of investment property| 28. 00 | | | Settlement of deliverable currency forwards| 5. 00 | | Dividends received from associates| 96. 00 | 445. 00 | Dividends paid by subsidiaries attributable to non-controlling interests| (15. 00)| | Decrease (increase) in:| | | | Other noncurrent assets| 622. 0 | (1,657. 00)| | Other receivables| | | Net cash used in investing activities| (6,292. 00)| (8,770. 00)| CASH FLOW FROM FINANCING ACTIVITIES| | | Proceeds from:| | | | Interest-bearing long-term financial liabilities, net of issue costs| 10,528. 00 | 12,398. 00 | | Notes payable| 380. 00 | 2,93 6. 00 | | Collection of subscriptions receivable| 222. 0 | 445. 00 | Payments of:| | | | Interest-bearing long-term financial liabilities| (10,748. 00)| (8,295. 00)| | Dividends| (6,187. 00)| (2,820. 00)| | Interest and other financial charges| (2,044. 00)| (1,524. 00)| | Notes payable| (744. 00)| (12,251. 00)| | Stock transaction costs| (1. 0)| | Increase(decrease) in other noncurrent liabilities| 1,830. 00 | 277. 00 | Net cash flow used in financing activities| (6,764. 00)| (8,834. 00)| NET INCREASE IN CASH AND CASH EQUIVALENTS| 7,302. 00 | 11,666. 00 | CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR| 17,068. 00 | 5,402. 00 | CASH AND CASH EQUIVALENTS AT END OF YEAR| Php 24,370. 0 | Php 17,068. 00 | MANILA ELECTRIC COMPANY AND SUBSIDIARIES| RATIO ANALYSIS| | 2010| 2009| TEST OF LIQUIDITY| | | | | | A. Current Ratio =| Current Assets| | | Current Liabilities| | | | | =| 55757. 00 | 44685. 00 | | 44405. 00 | 17234. 00 | | | | =| 1. 26| 1. 06| | | | B. Acid-test Ratio =| Cash + Short -term investments +receivables (net)| | | Current Liabilities| | | | | =| 49979. 00 | 3048. 00 | | 44405. 00 | 17234. 00 | | | | =| 1. 13| 0. 18| | | | C. Receivables turnover =| Net credit sales| | | Average net receivables| | | | | =| 245461. 00 | 184550. 00 | | 36409. 00 | 36409. 00 | | | =| 6. 74| 5. 07| | | | Average Collection period =| 365 days| | | receivable turnover| | | | | =| 365 days| 365 days| | 6. 74| 5. 07| | | | =| 54. 15 days| 72. 01| | | | D. Inventory turnover =| COGS| | | Average inventory| | | | | =| 221263. 00 | 168572. 00 | | 2971. 50 | 2971. 50 | | | | =| 74. 46 times| 56. 73| TEST OF SOLVENCY| | | | | | A. Debt to total assets ratio =| total debt| | | total assets| | | | | =| 115772. 00 | 110,983. 00| | 178968. 00| 172,129. 00| | | | =| 0. 65| 0. 64| | | | B. Times interest earned =| Income before income taxes and interest expense| | | interest expense| | | | | =| 14,437. 0 | 8979. 00 | | 493. 00 | 3328. 00 | | | | =| 29. 28| 2. 70| | | | TEST OF PROFITABIL ITY| | | | | | A. Profit Margin =| Net income| | | Net sales| | | | | =| 10,117. 00 | 6356. 00 | | 245,461. 00| 184550. 00 | | | | =| 4%| 3%| | | | B. Asset Turnover =| Net Sales| | | Average assets| | | | | =| 245,461. 00 | | | 175,548. 50 | | | | | =| 1. 40| | | | | C. Return on assets =| Net Income| | | Average Assets| | | | | =| 10,117. 00 | | | 175,548. 50 | | | | | =| 6%| | | | | D. Return on common stockholders equity =| Net income| | | Average common stockholders equity| | | | =| 10,117. 00 | | | 11,273. 00 | | | | | =| 90%| | | | | E. Earnings per share =| Net Income| | | Weighted average common shares outstanding| | | | | =| 10,117. 00 | | | 1,127. 00 | | | | | =| 8. 98| | | | | F. Price-earnings ratio =| Market price per share of stock| | | earnings per share| | | | | =| 10| | | 8. 62| | | | | =| 1. 16| | | | | G. Pay-out Ratio =| Cash Dividends| | | Net income| | | | | =| 7,834. 00 | | | 10,117. 00 | | | | | =| 77. 43| | ANALYSIS HORIZONTAL AND VERTICAL ANALYSIS REVENUES For the year end December 31, 2010 MERALCO procured a Php245, 461 million revenues, 33. 0% higher than previous year revenues worth Php184, 550 million. Sales from the three major operating segments increased during the year 2010 with the power distribution as the top performing operating segments. Php178,686 million sales from electricity was a 96. 82% of Php184,550 million. EXPENSES Expenses for the year 2010 amounted to Php231,024 million was increased by Php55,453 million or 31. 58% due to higher purchased power that was increased by 33. 12%. In support to this, purchased power got 86. 97% of the total Php231,024 worth of expenses. NET INCOME Php10,117 million net worth of income of 2010 was 59. 7% higher than 2009 it’s because of the higher sales of electricity for the year 2010. Eventhough the net income for the year 2010 is just a 4. 12% of the total sales the company still achieved its higher net income compare to 2009. CURRENT ASSETS As of December 31, 2010, the Com pany’s consolidated cash and cash equivalents amounted to Php24,370 million, Php7,302 million or 42. 78% higher compared with the balance of Php17,068 million of December 31, 2009. In addition, cash and cash equivalents achieved 13. 62% of its Php178,968 million total assets. This is due to a higher average collection period from 29 days to 24 days. Other increase in current assets may be due to higher sales for the year 2010. CURRENT LIABILITIES Current liabilities had increased by 5. 42% or Php2,282 million by the year ended December 31, 2010 with trade payables and accrued expenses having the highest increase worth Php2,877 million, achieving 20. 52% of its total liabilities. Decreases in the current liabilities was due to payments of some payables and some customer’s refund. NONCURRENT ASSETS Most of the noncurrent assets had decreased by the year 2010, this is due completion of major electric projects and due to consumption of fuel gas. NONCURRENT LIABILITIES A total of Php4,789 million increase in noncurrent liabilities of the company may due to issuance of long term obligations that could result in an increase in working capital. This increase was due to pre-termination of some loan deposits received from units sold on instalment contracts. EQUITY The employee shared-based payment plan had increased by 31% as of December 31, 2010. This is due to recognition of the provisions of PFRS2, â€Å"Shared-based Payments† related to Employee Stock Puchase Plan. And a decrease of 98. 5% of the share in cumulative translation adjustment of a subsidiary and an associate was resulted from the return of capital related to the Company’s investment in FPPC. RATIO ANALYSIS CURRENT RATIO A total of Php55,757 million worth of current assets definitely means a capability of the Company to pay its current liabilities worth Php44,045. This means a 1. 26 current ratio is an indicator of a slightly strong financial position . ACID-TEST RATIO A 1. 13:1 acid-test ratio of the company simply portrays that its most liquid assets can settle its current liabilities. RECEIVABLE TURNOVER The Company can collect its receivables 6. 74 times in a year with an average of 54. 15 days or less than two months collection period. This situation is favourable to the company’s present position. INVENTORY TURNOVER As inventory is being concern, the company is efficient in managing its inventories. A 74. 46 times inventory turnover is a proof of the latter statement. It is not too high nor too low indicating a better liquidity. DEBT TO TOTAL ASSET RATIO More than half of the company’s assets are financed through the company’s debts. This is proven by a 0. 65 ratio of debt to total asset. TIMES INTEREST EARNED Since the earnings of the company, Php14,437, is higher than its total interest expense, Php493, the company has the capability to settle its debts. Getting a 30. 28 ratio means that the company is able to meet its interest obligations because its earnings is significantly greater than its annual interest obligations. PROFIT MARGIN Compare to 2009 profit margin of 3%, the company got 4% profit margin which indicates that the revenue earned, Php245, 461million by the company was effectively converted into actual profit, Php10,117 million, despite of Php231, 024 total expenses . ASSET TURNOVER The 1. 4 asset turnover ratio of 2010 is relatively higher than 2009 meaning despite of Php178,968 million total assets the company still gained a total revenue of Php245,461 million with a total net profit of Php10,117 million meaning the company is efficiently utilizing its assets to produce a favourable profit. RETURN ON ASSETS The company has a total 6% return on assets of 2010 which is 2% higher than 4% return on assets of 2009 indicates that the company can make an intelligent choice on how to spend its money on new assets. RETURN ON COMMON STOCKHOLDER’S EQUITY A 6% increase in return on common stockholder’s equity simply indicates that the company is generating profits on its common stock investment meaning it is generating an income for the benefit of common stockholders. EARNINGS PER SHARE With an 8. 62 earnings per share which is higher than the 2009 EPS, 5. 74, the company is getting a higher earnings, meaning a strong financial position. PRICE-EARNINGS RATIO The 1. 16 price-earnings mean that investors are ready to pay 10 times earnings. The company has a chance in getting numerous investors. PAY-OUT RATIO A 77. 3% of the total Php7834 can be paid back to shareholders. Investors will increase its confidence to the company. CONCLUSION MERALCO is the Philippines’ largest electric power distribution company, with franchise service area covering 9,337 square kilometers. It provides power to 4. 8 million customers in 31 cities and 80 municipalities, which include the whole of Metro Manila, the provinces of Rizal, Cavite and B ulacan, and parts of Pampanga, Batangas, Laguna and Quezon. Business establishments in the franchise area account for almost 46% of the country’s Gross Domestic Product or GDP. The Company registered consolidated revenues for the year ended December 31, 2010 amounted to P=245,461 million, 33% higher compared with the P=184,550 million for the same period last year. Sales from all operating segments increased during the year with the highest registered by power distribution. The increase in electricity spending is attributable to (i) increased number of customers across all customer classes, (ii) growth in various industries as restocking activities resume after the global economic crisis, (iii) unusually warmer temperature during the first half of the year and, (iv) election spendings. Sales from electricity amounted to P=239,077 million, an increase of P=60,391 million, or 34%, from P=178,686 million for the year ended December 31, 2009. Consolidated costs and expenses amounted to P=231,024 million for the year ended December 31,2010, P=55,453 million higher than the P=175,571 million last year, primarily due to higher purchased power costs, increased provision for doubtful accounts, accrual for compensation and employee benefits. The 2010 consolidated full year results reflect higher recurring net income compared with 2009 mainly as a result of increased volume of energy sold. Revenues generated from power distribution amounted to P=239,164 million for the year ended December 31, 2010, higher by 34% compared with P=178,752 million in 2009. Pass-through charges increased by P=48,442 million, or 33% to P=195,435 million compared with P=146,993 million in 2009, as a result of higher average generation charge during the year, partially offset by the decrease in the average recoverable system loss charge to P=11,567 million from P=16,108 million. Costs and expenses of the power distribution segment increased by P=55,211 million, or 32%, to P=225,905 million in 2010 compared with P=170,694 million in 2009. For the year ended December 31, 2010, purchased power costs amounted to P=200,916 million, an increase of 33% from P=150,928 million in 2009 brought about by the higher electricity consumption particularly from the industrial customers and increased in average purchased power cost per kWh. Operations and maintenance expense increased by P=2,100 million, or 15%, to P=15,711 million for the year ended December 31, 2010 compared with P=13,611 million for the year ended December 31, 2009 brought about by the increases in salaries and wages and provision for doubtful accounts. MERALCO’s liquidity increased as the current and quick ratio rose in 2010. On the other hand, the company’s collection of receivables had dropped down from 72 days of 2009 to 54 days of 2010. This means the company is having a good turnover when it comes to it receivables. in this connection, the company achieved the 74. 46 times of inventory turnover that resulted to a higher sales. 0. 65 debt to total asset ratio and 30. 28 times interest earned proved that the company is solvent and able to meet its interest obligations. Revenue earned was effectively converted into actual profit despite of a higher total cost of expenses still the company gained a 59% increase in net income. As far as asset is concern, the company is efficiently utilizing its asset that resulted to a favourable profit. And because of the increase, we can say that the company is profitable and this could gain the trust of shareholders and may attract investors. RECOMMENDATION MERALCO’s total performance could be the basis of prospective investors to invest and it could be the reason why present stockholders will continue to do business with the company. A favourable increase in sales as well as the increase in net income may not be an indicator of a total good performance of a company. The management should still preserve its good turnover on assets and inventories to preserve its stockholders and the legacy that MERALCO had started ever since. The company should sustain its good performance since it’s the number one electricity supplier here in the Philippines. The service should be enhanced and be improved as well. Customer’s refund should be minimized as well as the receivables. The company should think of a better way of reducing refunds and receivables without sacrificing it’s service and trust of the customers. Assets should continue to increase and be utilized in the right manner. Acquiring of assets should be done in the right time so that the company will not suffer in paying its unwanted debts. Continuous improvement and innovation when it comes to service is highly recommended for the company to hold its present position in the market. MERALCO should continue to give light and power to the entire archipelago.