PBE 2011 Annual Report - Philippine Business for the Environment

PBE 2011
Annual Report
About PBE
Vision
An economically developed, yet
environmentally healthy, Philippines
where business and industry act
responsibly to protect the
environment for the present and
future generations, through the
pursuit of sustainable development
programs.
Mission
To help industry address its
environmental concerns and
environmental responsibilities.
PBE is committed to the principle of
sustainable development where
economic growth is balanced with
environmental responsibility. It
believes that the business
community has a unique and
important role to play to ensure
sustainability of resources on which it
depends. Thus, business, together
with the government and the public,
has a corporate responsibility to
protect the environment.
1
PBE takes pride in counting some of the largest and
most environmentally progressive companies as
members. They are trailblazers, leading the way for
sustainable development in the country.
Membership
Charter Members
Regular Members
Ayala Land, Inc.
Ayala Corporation
Banco De Oro
BPI Foundation
C. Alcantara & Sons, Inc.
Chevron Philippines
Chevron Geothermal Phils. Holdings, Inc.
Coca-cola Foundation, Inc.
Development Bank of the Philippines
First Philippine Holdings Corporation
Globe Telecommunications, Inc.
Holcim Phils., Inc.
Inchem Environmental, Inc.
Jollibee Foods Corporation
Kraft Foods (Philippines), Inc.
Land Bank of the Philippines
Nestle Philippines, Inc.
Petron Corporation
Philex Mining
Philippines Associated Smelting and
Refining Corp.
Philippine Sugar Millers Association
PHINMA
Pilipinas Shell Petroleum Corporation
San Miguel Corporation
Sagittarius Mines, Inc.
SGV Group of Companies
Smart Communications, Inc.
SM Prime Holdings Corp.
TeaM Energy Corporation
TeaM Energy Foundation
Trans Asia Oil & Energy Development Corp.
Unilever Philippines, Inc.
Aeronox Technology Corporation
AMKOR Technology Philippines, Inc.
APO Cement Corporation (CEMEX)
Bayer CropScience
Beacon Environmental Management
Systems
Dole-Stanfilco
First Carbon Solutions
Ford Group Phils.
GMA Network, Inc.
Intercontinental Manila Hotel
L.A. Ducut and Company, Inc.
Manila Water Company, Inc.
Maynilad Water Services, Inc.
Pacific Paint (Boysen) Philipines, Inc.
Palafox Associates
Philippine Long Distance Telephone Co.
Philips Group of Companies
Plantersbank
Rizal Commercial Banking Corporation
Shangri-la Hotels
Sofitel Philippine Plaza Manila
United Pulp and Paper Co. Inc.
Fifty-four companies comprise the PBE, of
which thirty two are charter members and
twenty two are regular members.
The new additions in 2011 thus far are three
regular members: (1) Intercontinental Hotel, (2)
Planters Bank, and (3) Pacific Paints (Boysen).
Philex Mining Corporation joined as the 30th
Charter Member.
2
PBE members come from a myriad of fields, ranging
from energy to food, from mining to banking, from
restaurants to some of the largest conglomerates in
the country.
Membership
3
Board of Trustees
PBE boasts of some of the most
respected and talented industry and
business leaders, ably leading the
organization to new heights.
Honorary Chair
Washington Z. Sycip
Founder, SGV Group of Companies
Edgar O. Chua
Chairman, Pilipinas Shell
Editha I. Alcantara
Corazon PB. Claudio
Roland Van Wijnen
Elpidio L. Ibañez
Dr. Ben Malayang III
Cesar A. Virata
President & CEO, C. Alcantara & Sons
President, Earth Institute Asia, Inc.
COO, Holcim Phils
President & COO, First Phil. Holdings Corp
President, Silliman University
Vice – Chairman, Rizal Commercial banking
Corporation
Vice President for Corporate Affairs,
Unilever Philippines, Inc.
Founder and Managing Partner, Palafox
Associates
President, Asahi Glass, Philippines
Chairman and CEO, Nestle Philippines, Inc.
Chairman
Trustees
Ramon Gil “Chito” Macapagal
Felino “Jun” A. Palafox Jr.
Renato R. Ermita
John Martin Miller
Resignations:
 Howard Belton resigned as President following his relocation in May to the UK for personal reasons.
 Bebet Gozun likewise tendered her resignation following her appointment by Malacañang as Presidential
Assistant on Climate Change which prohibits her from holding any other office.
 Ramon Picornell, Jr’s term ended in 2011 and requests not to be re-elected for the next term as he retires
from Roxas Holdings, Inc. and Central Azucarera Don Pedro Inc. effective December 31, 2011.
Programs
|Achievements
Business Climate Action Summit
One hundred seventy-two delegates from eighty
companies convened in the Intercontinental Hotel on
March 29 to look into actions they can do in light of
climate change.
Pricewaterhouse Coopers Financial Advisors, Inc.
discussed the results of the Climate Change and
Sustainability Survey and Sec. Lucille Sering, Vice Chair of
the Climate Change Commission, presented the the
proposed National Climate Change Action Plan and the
role of Business.
The eighty companies committed to implement climate
action as they were clustered into five focus areas: (1)
Sustainable energy, (2) Transport, (3) Agriculture and
forestry, (4) Urban greening, (5) Solid wastes.
5
Programs
|Achievements
Leadership of the PBE Trustees in the Business Climate
Imperative
Chairman Ed Chua, President Howard Belton
and Trustees Roland Van Wijnen and Bebet
Gozun are co-convenors of the Imperative who
helped in shaping the agenda for the business
sector, guide the work of the PBE Secretariat,
and lend advice to the business clusters. They
provided key messages and inputs during the
Summit.
Leo Alejandrino, Nonoy Ibañez and Cora
Claudio also participated in the March 29
Business Summit.
Trustees Howard Belton, Roland Van Wijnen
and Bebet Gozun met with Secretary Lucille
Sering, Vice Chair of the Climate Change
Commission, to discuss business-government
partnerships on climate action, on Feb 25 (pre –
Summit) and on May 17 (post – Summit)
Cora Claudio arranged for the orientation of
members of the Management Association of
the Philippines to the on-line Climate Change
and Sustainability Survey of the
Pricewaterhouse Coopers Financial Advisors
Inc., which was presented at the Summit
6
Programs
|Achievements
Green Business
Green Business through
Green Procurement Program
In partnership with the International
Green Purchasing Network (IGPN),
eighteen companies were taught
green purchasing criteria development
and in-house green procurement
designs. Replicable Seminar Modules
on Green Procurement were pilot
tested for two batches.
A special lecture on Green
Procurement and Green Products:
Trends in the Region by Dr. Ning Yu
was attended by 35 participants from
PBE member companies on January
26.
Case Studies
Three Company case studies on
Greening the Supply Chain
prepared for the Philippine
Business for Social Progress under
its Millenium Development Goals –
Business and Environment
Program, featuring Nestle
Phiilippines, Bayer Crop Science,
and National Panasonic.
Four Special Magazine Features
on Green Purchasing (Fourth
Quarter 2010, and First to Third
Quarter 2011.
7
Programs
|Achievements
Greener Business Asia Project: Greener
Business, Better Workplace for the Auto
Sector Supply Chain
In partnership with the International Labor
Organization (ILO), a training package for the
“greening” of the automotive sector supply chain was
developed. It consists of 1 core module and 5 deepening
modules on cleaner production, environmental management systems, energy
and resource efficiency, workplace cooperation, climate resilient workplace,
among others.
56 participants from 14 automotive companies attended the 3 full-day course
at the Technopark Hotel, Greenfield district, Sta. Rosa, Laguna on Dec 5 – 7.
8
Programs
|Achievements
Sharing Forum on Vision 2050
The World Business Council for Sustainable Development convened 31
participants from 18 companies and organizations on June 21 at the
Richmonde Hotel. This was a Post-business Climate Summit discussion on
pathways and opportunities to adopt/ achieve Vision 2050 for the Philippines.
It was also a venue to share the WBCSD Guide for Corporate Ecosystem
Valuation.
9
Programs
|Ongoing
Green Philippines Island of Sustainability
(GPIoS)
In partnership with the European Union, VSB, GrAT, AREC, ASSIST, ECCP, and
PCCI, PBE helped enable companies to adopt cleaner production, increase efficiency
and reduce harmful impacts to the environment.
GPIoS awarded 72 companies, including PBE, at the ECOSWITCH Awards Ceremony
at the Asian Institute of Management Conference Center in Makati on September
22, 2011.
Among the companies, 10 are PBE members:







Atlantic Coatings, Inc.
Ford Motors Philippines
Globe Telecommunications
GMA Network, Inc.
Manila Water Company, Inc.
Maynilad Water Services, Inc.
Philippine Long Distance Telephone
Company
 San Miguel Yamamura Packaging
Corporation – Metal Container Plant
(SMYPC-MCP)
 San Miguel Yamamura Packaging
Corporation – Canlubang PET and Caps
Plant (SMYPC-CPCP)
 United Pulp and Paper Co., Inc.
10
Programs
|Ongoing
Clean Fleet Management & Eco-safe
Driving
Clean Fleet Managememnt and
Eco-safe Driving trainings were
done to enable fleet managers
and drivers know the concept in
keeping their vehicles eco-friendly
and safe and driving techinques to
save fuel and reduce emissions.
With Government
In partnership with Honda, 244 personnel from 10 government agencies
including DOTC, LTO, MMDA, Malacanang, DOE, PNP, DENR, HOR, Senate,
among others, were trained.
With Companies
Trainings were also conducted to 14 companies (10 PBE members).
In partnership with Shell, similar trainings were held for bus drivers and
operators.
11
Programs
|Pipeline
PBE continues to develop programs and projects to serve and engage its
members and to shape society for the better. It reinvents itself with the
signs of the times. The effects of climate change are already felt and PBE is
positioning itself to be a focal point for businesses to rally around in
helping the nation rise up despite the challenges at hand.
Some of the projects under development are:
 Web-based Learning for Solid Waste Management
 Policy Study on Fiscal Incentives for Business on their Carbon Reduction
Investments
 Upgrading of PBE website, more features and content
 I’M Blue Project to train 1 Million Eco-safe drivers
12
PBE as an organization, and the individuals
comprising it, is active in sharing and
promoting its vision and mission through
various media, organizations, and events.
Visibility
In Print
 Via Howard Belton’s commentary in the Manila Water Company’s 2010
Sustainability Report; and
 Lisa Antonio’s Partner Testimonial in the 2010 Coca Cola Foundation 2010
Sustainability Report
In the WEB
 Via the electronic Regional Network Newsletter of the World Business
Council for Sustainable Development (www.wbcsd.org)
13
Visibility
In Judging Panels
 The Philippine Chamber of Commerce and Industry Annual Excellence in
Economy and Ecology / E3 Awards for the Philippine Business Conference
(through Howard Belton); and
 The Holcim Journalism Awards for Sustainable Construction (through Grace
Favila).
In Special Events
 The Annual Convention of the Philippine Institute for Industrial Engineers in
Cebu (with Howard Belton as guest speaker);
 The UNEP – ESCAP Regional Forum on 3Rs In Jakarta and the WBCSD
Learning – by – Sharing Session on Thinking Globally/ Acting Locally, in
Montreaux (with Lisa Antonio as Facilitator);
 The Honda Fuel Efficiency Eco – Run and the Sunshine Television 2011 Auto
Rally Corporate Challenge (with Grace Favila as PBE representative).
 The Forum on Philippine Cities and Climate Change 2011 organized by the
Housing and Urban Development Coordinating Council, the Philippine
Institute of Environmental Planners and the United Nations Human
Settlements Programme (UN-HABITAT) (with Edgar Chua as speaker on ‘The
Role of the Private Sector in Climate Change Actions’)
 The GP3 Conference organized by the Philippine Center for Environmental
Protection & Sustainable Development, in SMX Convention Center (with PBE
as exhibitor)
 The Climate Change Consciousness week by the Climate Change
Commission, in SMX Convention Center. (with PBE as exhibitor)
In Boards and Technical Working Groups
 The ISO 2600 - Social Responsibility Phil. Working Group chaired by the
Department of Trade and industry;
 The Partnership for Clean Air, the Philippine Eco-labelling Board co – chaired
by the DTI and the Department of Environment and Natural Resources; and
 The WBCSD Training Advisory Council
14
5
6
3
4
19,080
2,753,176
207,791
3,395,779
50,454
3,345,325
3,395,779
2,753,176
2,753,176
Total
226,871
6,148,955
46,476
180,395
5,902,277
19,807
5,922,084
50,454
6,098,501
6,148,955
LIABILITIES AND FUND BALANCES
19,080
-
2,734,096
2,734,096
ASSETS
2011
Special fund
27,396
180,395
3,168,181
19,807
3,187,988
General fund
42,818
3,551,984
3,594,802
225,649
3,594,802
45,254
180,395
3,363,838
5,315
3,369,153
General fund
The notes on pages 1 to 15 are integral part of these financial statements.
Current liabilities
Accrued expenses and other payables
Fund balances
Total liabilities and fund balances
Non-current assets
Property and equipment, net
Other non-current assets
Total non-current assets
Total assets
Current assets
Cash and cash equivalents
Other receivables
Total current assets
Notes
Statements of Assets, Liabilities and Fund Balances
December 31, 2011 and 2010
(All amounts in Philippine Peso)
Philippine Business for the Environment, Inc.
(A non-stock, non-profit organization)
46,172
1,534,138
1,580,310
24,168
1,580,310
24,168
-
1,553,075
3,067
1,556,142
2010
Special fund
88,990
5,086,122
5,175,112
249,817
5,175,112
69,422
180,395
4,916,913
8,382
4,925,295
Total
-
41,959
(206,659)
-
1,219,038
-
1,219,038
-
(206,659)
-
52,535
(2,153,944)
1,219,038
(1,672,467)
(248,618)
(10,576)
3,372,982
Special fund
1,423,849
General fund
1,012,379
-
1,012,379
41,959
(10,576)
52,535
(3,826,411)
970,420
4,796,831
Total
(363,547)
-
(363,547)
30,563
(32,477)
63,040
(2,618,786)
(394,110)
2,224,676
General fund
The notes on pages 1 to 15 are integral part of these financial statements.
Total comprehensive income (loss) for the year
Other comprehensive income
Excess (deficiency) of support over
expenses for the year
Interest income
Foreign exchange losses, net
3
10
8
Expenses
Other income (expense)
7
Support
Notes
2011
Statements of Total Comprehensive Income
For the years ended December 31, 2011 and 2010
(All amounts in Philippine Peso)
Philippine Business for the Environment, Inc.
(A non-stock, non-profit organization)
455,201
-
455,201
-
-
-
(1,271,649)
455,201
1,726,850
Special fund
2010
91,654
-
91,654
30,563
(32,477)
63,040
(3,890,435)
61,091
3,951,526
Total
Philippine Business for the Environment, Inc.
(A non-stock, non-profit organization)
Statements of Changes in Fund Balances
For the years ended December 31, 2011 and 2010
(All amounts in Philippine Peso)
General Fund
Special Fund
Total
3,374,418
1,620,050
4,994,468
Transfer of unrestricted special funds
541,113
(541,113)
-
Total transaction with owners
Comprehensive income (loss)
541,113
(541,113)
-
Fund balances at January 1, 2010
Transaction with owners
Excess (deficiency) of support over expenses for the year
(363,547)
455,201
91,654
-
-
-
(363,547)
455,201
91,654
Other comprehensive income
Total comprehensive income (loss) for the year
Fund balances at December 31, 2010
3,551,984
1,534,138
5,086,122
(206,659)
1,219,038
1,012,379
-
-
-
(206,659)
1,219,038
1,012,379
2,753,176
6,098,501
Comprehensive income (loss)
Excess (deficiency) of support over expenses for the year
Other comprehensive income
Total comprehensive income (loss) for the year
Fund balances at December 31, 2011
3,345,325
The notes on pages 1 to 15 are integral part of these financial statements.
3
5
3
10
8
8
3
Notes
1,181,021
1,553,075
2,734,096
1,092
(195,657)
3,363,838
3,168,181
(46,172)
1,181,021
7,636
(249,284)
-
3,067
(14,492)
52,535
52,535
5,088
1,224,126
1,219,038
(1,092)
17,858
(52,535)
(242,428)
(206,659)
Special fund
2011
4,916,913
5,902,277
1,092
985,364
-
52,535
52,535
(38,536)
931,737
(11,425)
(1,092)
22,946
(52,535)
981,698
1,012,379
Total
The notes on pages 1 to 15 are an integral part of these financial statements.
Cash flows from operating activities
Excess (deficiency) of support over expenses for the year
Adjustments for:
Unrealized foreign exchange loss
Depreciation
Direct write-off of other receivables
Interest income
Excess (deficiency) of support over expenses before
changes
workingassets
capitaland
components
changes
in in
operating
liabilities:
(Increase) decrease in other receivables
(Decrease) increase in accrued expenses and other
payables
Net cash from (used in) operating activities
Cash flows from investing activities
Acquisition of property and equipment
Interest received
Net cash from (used in) investing activities
Cash flows from financing activity
Transfer from special fund to general fund
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents
Beginning of the year
End of the year
General
fund
Statements of Cash Flows
For the years ended December 31, 2011 and 2010
(All amounts in Philippine Peso)
Philippine Business for the Environment, Inc.
(A non-stock, non-profit organization)
3,117,371
3,363,838
(2,055)
246,467
541,113
63,040
63,040
(26,141)
(355,631)
41,069
2,055
17,858
36,115
(63,040)
(370,559)
(363,547)
General
fund
1,622,072
1,553,075
(68,997)
(541,113)
(25,440)
(25,440)
43,651
497,556
(2,568)
1,272
456,473
455,201
Special fund
2010
4,739,443
4,916,913
(2,055)
177,470
-
(25,440)
63,040
37,600
17,510
141,925
38,501
2,055
19,130
36,115
(63,040)
85,914
91,654
Total
Philippine Business for the Environment, Inc.
(A non-stock, non-profit organization)
Notes to Financial Statements
As at and for the years ended December 31, 2011 and 2010
(In the Notes, all amounts in Philippine Peso unless stated otherwise)
Note 1 - Business information
1.1 General information
Philippine Business for the Environment, Inc. (the “Organization”) is a non-stock, non-profit
organization organized in the Philippines and registered with the Securities and Exchange Commission
(SEC) on January 15, 1992, primarily to promote ecologically sustainable industrial and agricultural
development, with the initiative of business and the active participation of communities, government
and
non-governmental organizations (NGO) through clean production that provides for human needs and
development without degrading the ecology. The operations of the Organization are financed by
contributions or donations of members as well as by incidental income derived from the pursuit of its
activities such as seminars, workshops, and subscriptions to the Business and Environment magazine.
The Organization, pursuant to Section 30 of the Tax Reform Act of 1997, is exempt from income tax on
the financial support it receives. The registration, however, does not apply to income derived from the
use of the Organization's properties, real or personal, or from any of its activities conducted for profit
regardless of the disposition made of such income.
On May 30, 2006, the Organization, having been duly accredited by the Philippine Council for NGO
Certification (PCNC), was registered with the Bureau of Internal Revenue (BIR) as a donee institution
in accordance with the provisions of Revenue Regulation (RR) No. 13-98 dated January 1, 1999.
Under its registration, the donation received by the Organization shall entitle the donor to full or
limited deduction pursuant to Sec. 34H-1 or 2 and exemption from donor's tax pursuant to Sec. 101A3 of the National Internal Revenue Code (NIRC) of 1997. The Certificate of Registration No. 0572006 shall be valid for 3 years from date of issuance on May 30, 2006 unless sooner revoked by the
BIR for violation of any provisions of RR No. 13-98 or upon withdrawal of the Certificate of
Accreditation by PCNC. The Organization acquired its re-accreditation with PCNC on April 12, 2010.
The Organization’s registered office address, which is also its principal place of office, is located at the
Ground Floor, Lower Level, Development Academy of the Philippines (DAP) Building, San Miguel
Avenue, Pasig City.
1
1.2
Approval of financial statements
These financial statements have been approved and authorized for issuance by Edgar O. Chua,
Chairman, on behalf of the Board of Trustees on August 1, 2012.
Note 2 - Summary of significant accounting policies
These financial statements of the Organization have been prepared in accordance with Philippine
Financial Reporting Standards for Small and Medium-sized Entities (PFRS for SMEs) issued by the
Financial Reporting Standards Council.
The principal accounting policies applied in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
2.1
Basis of preparation
For Philippine financial reporting purposes, PFRS for SMEs shall cover corporations that:
(a) Have total assets of between P3 million and P350 million or total liabilities between P3 million and
P250 million based on the entity’s audited financial statements in prior year;
(b) Are not required to file financial statements under Part II of the Securities Regulation Code (SRC)
Rule 68 (unlisted and non-public entities);
(c) Are not in the process of filing financial statements for the purpose of issuing any class of
instruments in a public market; and
(d) Are not holders of secondary licenses issued by regulatory agencies such as banks, investment
houses, finance companies, securities broker/dealers, mutual funds and pre-need companies.
The Organization continues to qualify as an SME based on its total assets as at December 31, 2011 and
2010.
The financial statements have been prepared under the historical cost convention.
The preparation of financial statements in conformity with the PFRS for SMEs requires the use of certain
critical accounting estimates. It also requires management to exercise its judgment in the process of
applying the group’s accounting policies. There are no areas involving a higher degree of judgment or
complexity, or areas where assumptions and estimates are significant to the financial statements.
2
2.2 Fund accounting
The financial transactions of the Organization are recorded and reported in accordance with the
principles of fund accounting to ensure the observance of limitations and restrictions placed on the use
of its available resources. Fund accounting classifies the Organization’s resources into fund groups
based on their nature and purpose.
The assets, liabilities and fund balances of the Organization are reported in two self-balancing fund
groups as follows:
General fund
General fund pertains to funds available for use in general operations and current activities of the
Organization consisting of membership fees, donations and contributions by members and business
enterprises in the Philippines.
Special fund
Special fund pertains to funds which is restricted for purposes specified by donors and grantors.
Unused fund of completed projects are returned to the donor or transferred to the general fund in the
absence of donor-imposed restriction.
2.3
Financial instruments
Classification
A financial instrument is a contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity. The Organization classifies its financial instruments
into basic financial instruments and complex financial instruments.
The Organization does not have complex financial instruments during and at the end of each
reporting period.
Financial assets and financial liabilities are included in current assets and current liabilities, except
for maturities longer than twelve (12) months after the reporting period, which are then classified as
non-current assets or non-current liabilities, respectively.
The Organization’s basic financial instruments include cash and cash equivalents, certain other
receivables, other non-current assets and certain accrued expenses and other payables.
Cash and cash equivalents consist of cash on hand, deposits held at call with banks and other shortterm highly liquid investments with original maturities of three months or less. Deposits held at call
with banks and short-term highly liquid investments earn interest at the prevailing bank deposit
rates.
Other receivables consist mainly of receivables from membership fees. Advances to employees subject to
liquidation are considered non-financial assets.
3
Other non-current assets consist mainly of refundable deposits to guarantee the faithful compliance of
the lessee of all the terms and conditions of the contract. Refundable deposits are non-interest bearing
and are assumed to approximate its fair value as the impact of discounting is not significant.
Certain accrued expenses and other payables consisting of utilities and other general and administrative
expenses are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers. Withholding taxes payable included in accrued expenses and other payables are
considered non-financial liabilities.
Recognition and measurement
Financial assets and financial liabilities are recognized only when the Organization becomes a party to
the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at the transaction price and
subsequently measured at amortized cost using the effective interest method.
Derecognition
Financial assets are derecognized when the rights to receive cash flows have expired or the Company
has transferred substantially all the risks and rewards of ownership.
Financial liabilities are derecognized when the obligation is settled, discharged, cancelled or has
expired.
Impairment of financial assets
The Organization assesses at the end of each reporting period whether there is objective evidence of
impairment of any financial assets measured at amortized cost. Objective evidence that a financial
asset or group of financial assets is impaired includes observable data that come to the attention of
the holder of the asset about the following loss events:
-
Significant financial difficulty of a debtor;
It becomes probable that a debtor will enter bankruptcy or other financial reorganization; and
Observable data indicating that there has been a measurable decrease in the estimated future cash
flows from a group of financial assets since the initial recognition of those assets, even though the
decrease cannot yet be identified with the individual financial assets in the group, such as adverse
national or local economic conditions or adverse changes in industry condition.
If there is objective evidence of impairment, the Organization shall recognize an impairment loss in
the statement of total comprehensive income immediately. The amount of impairment loss is
measured as the difference between the asset’s carrying amount and the present value of estimated
future cash flows discounted at the financial asset’s original effective interest rate.
4
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognized (such as an
improvement in the debtor’s credit rating), the Organization shall reverse the previously recognized
impairment loss either directly in the statement of total comprehensive income or by adjusting the
allowance account. When a financial asset remains uncollectible after the Organization has exerted all
legal remedies, it is written-off against the allowance account. Subsequent recoveries of amounts
previously written-off are recognized in the statement of total comprehensive income within other
income.
2.4 Property and equipment
Property and equipment are recognized in the statement of financial position if it is probable that
future economic benefits associated with the item will flow to the Organization and the cost of the
item can be measured reliably.
Property and equipment are measured initially at cost. Cost includes the purchase price and other
expenditure that is directly attributable to bringing the asset to the location and condition necessary
for it to be capable of operating in the manner intended by management. Following the initial
recognition, property and equipment are carried at cost less accumulated depreciation and any
accumulated impairment loss.
All other repairs and maintenance are charged to profit or loss during the period in which they are
incurred.
Depreciation on assets is computed using the straight-line method to allocate their costs less their
residual values over the following estimated useful lives determined based on collective assessment of
practices for similar businesses and historical experience in the use of such assets:
Office equipment
Furniture and fixtures
5 years
5 years
The asset’s residual values, useful lives and depreciation methods are reviewed, and adjusted
prospectively if appropriate, if there is an indication of a significant change since the last reporting
period.
The Organization’s property and equipment are assessed at the end of each reporting period to
determine whether there are any indications that the assets are impaired. Where there is any
indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to
which the asset has been allocated) is tested for impairment. An impairment loss is recognized for the
amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows. Property and equipment are reviewed for possible reversal of the impairment
at the end of each reporting period.
5
An item of property and equipment is derecognized upon disposal or when no future economic
benefits are expected from its use or disposal at which time the cost and the related accumulated
depreciation are removed in the statement of financial position. Any gains and losses on disposals are
determined by comparing the proceeds with the carrying amount of the assets and are recognized in
the statement of total comprehensive income within other income or expense.
2.5 Support and expenses
2.5.1
Support
Revenues are measured at the fair value of the consideration received or receivable in the ordinary
course of the Organization’s activities. Revenue is recognized when it is probable that economic benefits
will flow to the Organization, these benefits can be measured reliably and specific criteria have been met
for each of the activities as described below.
(a)
Support derived primarily from donations, grants, contributions, sponsorships and seminar
fees are recognized when received.
(b)
Interest income on bank deposits and short-term placements, which is presented net of final
taxes paid or withheld, is recognized on a time proportion basis using the effective interest
method.
2.5.2
Expenses
Expenses are recognized when incurred and presented in the statement of total comprehensive income
according to their nature.
2.6 Short-term employee benefits
Wages, salaries, compensated absences and other non-monetary benefits are recognized in the period
the related services are rendered by the employees of the Organization. Short-term employee benefit
obligations are measured on an undiscounted basis.
2.7
Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases (net of any incentives received
from the lessor) are charged to the statement of total comprehensive income on a straight-line basis
over the period of the lease.
6
2.8
Foreign currency transactions and translations
2.8.1
Functional and presentation currency
Items included in the financial statements of the Branch are measured using the currency of the
primary economic environment in which the entity operates (‘the functional currency’). These
financial statements are presented in US dollar, which is the Branch’s functional and presentation
currency.
2.8.2
Transactions and balances
Foreign currency transactions are translated into Philippine Peso using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of
foreign currency transactions and from the translation at the year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognized in the statement of total
comprehensive income.
Note 3 - Cash and cash equivalents
Cash and cash equivalents at December 31 consist of:
General fund
2011
Special fund
Total
178,847
2,989,334
3,168,181
2,734,096
2,734,096
2,912,943
2,989,334
5,902,277
General fund
2010
Special fund
Total
418,170
2,945,668
3,363,838
1,553,075
1,553,075
1,971,245
2,945,668
4,916,913
Cash on hand and deposits
in banks
Short-term placements
Cash on hand and deposits
in banks
Short-term placements
The effective interest rates on short-term placements range from 1.75% to 2.38% per annum for the
years ended December 31, 2011 and 2010. These deposits are maintained in various local banks with
an average maturity of 30 to 91 days (2010 - 30 to 90 days).
Interest income earned from cash and cash equivalents for the years ended December 31, 2011 and
2010 amounted to P52,535 and P63,040, respectively.
7
Note 4 – Other receivables
Other receivables at December 31 consist of:
Receivables from membership fees
Advances to employees
Advances to employees
General fund
9,943
9,864
19,807
2011
Special fund
-
Total
9,943
9,864
19,807
General fund
5,315
2010
Special fund
3,067
Total
8,382
8
Note 5 - Property and equipment, net
The details and movements of property and equipment as at and for the years ended December 31 are
as follow:
At January 1, 2010
Cost
Accumulated depreciation
Carrying value
Year ended December 31, 2010
Opening net carrying value
Additions
Disposals
Cost
Accumulated depreciation
Depreciation (Note 8)
Closing net carrying value
At December 31, 2010
Cost
Accumulated depreciation
Net carrying value
Year ended December 31, 2011
Opening net carrying value
Additions
Depreciation (Note 8)
Closing net carrying value
At December 31, 2011
Cost
Accumulated depreciation
Net carrying value
9
Office
equipment
Furniture and
fixtures
Total
644,473
(581,361)
63,112
133,815
(133,815)
-
778,288
(715,176)
63,112
63,112
25,440
-
63,112
25,440
(337,945)
337,945
(19,130)
69,422
(42,035)
42,035
-
(379,980)
379,980
(19,130)
69,422
331,968
(262,546)
69,422
91,780
(91,780)
-
423,748
(354,326)
69,422
69,422
(22,946)
46,476
-
69,422
(22,946)
46,476
331,968
(285,492)
46,476
91,780
(91,780)
-
423,748
(377,272)
46,476
Note 6 - Other non-current assets
Other non-current assets at December 31 consist of:
Note
9
Rent deposit
Security deposit for library materials
Others
2011
118,800
43,976
17,619
180,395
2010
118,800
43,976
17,619
180,395
Note 7 - Support
The components of support for the years ended December 31 are as follows:
Grants
Sponsorships
Annual dues
Seminar fees
Donations
Miscellaneous
General fund
405,000
390,000
323,436
285,000
20,413
1,423,849
2011
Special fund
3,372,982
3,372,982
Grants
Seminar fees
Donations
Annual dues
Sponsorships
Miscellaneous
General fund
1,046,616
460,500
360,000
304,531
53,029
2,224,676
2010
Special fund
1,726,850
1,726,850
10
Total
3,372,982
405,000
390,000
323,436
285,000
20,413
4,796,831
Total
1,726,850
1,046,616
460,500
360,000
304,531
53,029
3,951,526
Note 8 - Expenses
The components of expenses for the years ended December 31 are as follows:
Notes
Personnel cost
Professional fees
Training and other related
expenses
Rent
Transportation
Publication and printing
Communication
Utilities
Supplies
Promotions
Depreciation
Taxes and licenses
Miscellaneous
2011
Special fund
621,550
638,053
Total
1,201,156
885,625
68,272
287,844
136,911
25,368
85,534
91,168
25,117
23,722
17,858
12,296
71,199
1,672,467
491,899
146,131
40,173
131,400
16,545
41,946
5,088
21,159
2,153,944
560,171
433,975
177,084
156,768
102,079
91,168
67,063
23,722
22,946
12,296
92,358
3,826,411
General fund
704,342
753,811
131,527
367,250
127,400
2010
Special fund
463,946
89,778
296,855
60,617
166,350
Total
1,168,288
843,589
428,382
427,867
293,750
85,689
119,003
102,753
23,055
94,348
2,580
74,210
180,037
119,003
105,333
97,265
36,115
17,858
12,806
137,177
2,618,786
1,272
21,693
1,271,649
36,115
19,130
12,806
158,870
3,890,435
9
5
Notes
Personnel cost
Professional fees
Transportation
Rent
Publication and printing
Training and other related
expenses
Utilities
Communication
Supplies
Direct write-off of other
receivables
Depreciation
Taxes and licenses
Miscellaneous
General fund
579,606
247,572
9
5
11
Note 9 - Operating lease agreement
The Organization has an existing operating lease agreement with the Development Academy of the
Philippines (DAP) for the lease of its current office space with an initial term of one year subject to
renewal annually. The agreement provides for payment of security deposits included in other noncurrent assets amounting to P118,800 at December 31, 2011 and 2010 (Note 6).
Rent expense arising from the foregoing lease agreement charged to operations in the statement of total
comprehensive income amountsto P433,975 (2010 - P427,867) (Note 8).
Note 10 - Foreign currency denominated monetary assets
The Organization’s foreign currency US dollar denominated monetary assets as at December 31
pertain to cash in banks and short-term placements as presented below:
2011
US$ 25,384
43.93
1,115,119
Cash in banks and short-term placements
Year-end exchange rate per unit of US dollar
Peso equivalent
2010
US$ 6,882
43.89
302,051
Net foreign exchange (loss) gain for the years ended December 31 consists of:
2011
(11,668)
1,092
(10,576)
Realized foreign exchange loss
Unrealized foreign exchange gain (loss)
2010
(30,422)
(2,055)
(32,477)
The closing rate used by the Organization approximates the exchange rate prevailing at December 31
set by the Philippine Dealing and Exchange Corporation.
12
Note 11 - Supplementary information required by the Bureau of Internal Revenue (BIR)
The following information is presented for purposes of filing with the BIR and is not a required part of
the basis financial statements.
(a) Supplementary information required by Revenue Regulation (RR) No. 15-2010
On December 28, 2010, RR No. 15-2010 became effective and amended certain provisions of RR No.
21-2002 prescribing the manner of compliance with any documentary and/or procedural
requirements in connection with the preparation and submission of financial statements and income
tax returns. Section 2 of RR No. 21-2002 was further amended to include in the Notes to Financial
Statements information on taxes, duties and license fees paid or accrued during the year in addition
to what is mandated by Philippine Financial Reporting Standards.
Below is the additional information required by RR No. 15-2010 that is relevant to the Organization.
(a)
All other local and national taxes
All other local and national taxes paid for the years ended December 31 follow:
2011
10,040
841
605
510
300
12,296
Mayor’s permit
Fire safety inspection fee
Barangay clearance
Community tax
BIR registration fee
The above local and national taxes are presented as taxes and licenses in the statement of total
comprehensive income (Note 8).
13
2010
10,040
856
900
510
500
12,806
(b)
Withholding taxes
Withholding taxes accrued and paid as at and for the years ended December 31 follow:
2011
Paid
177,720
84,317
262,037
Withholding tax on compensation
Expanded withholding tax
Accrued
12,278
11,519
23,797
Total
189,998
95,836
285,834
Accrued
12,203
9,042
21,245
Total
168,319
56,021
224,340
2010
Paid
156,116
46,979
203,095
Withholding tax on compensation
Expanded withholding tax
Expanded withholding tax arise from rental payments on lease of the Organization’s current office
space as specifically provided in the terms of the lease agreement.
(c)
Tax assessment
The Organization did not receive any final assessment notice during the reporting period.
(d)
Tax cases
The Organization does not have any outstanding tax cases under preliminary investigation, litigation
and/or prosecution in courts or bodies outside the BIR as at December 31, 2011 and 2010.
14
(b) Supplementary information required by Revenue Regulation (RR) No. 19-2011
RR No. 19-2011 prescribes the new BIR forms that should be used for income tax filing covering and
starting with the calendar year 2011 and modifies Revenue Memorandum Circular No. 57-2011. In the
Guidelines and Instructions Section of the new BIR Form 1702 (version November 2011), a required
attachment to the income tax returns is an Account Information Form and/or Financial Statements
that include in the Notes to Financial Statements schedules of receipts and expenses, non-operating
and taxable other income, taxes and licenses and other information prescribed to be disclosed in the
Notes to the Financial statements.
The schedule required by RR 19-2011 that are relevant to the Organization for the year ended
December 31, 2011 follow:
(i)
Support and expenses
The Organization’s support and expenses which are exempt from income tax is the same as shown in
the statement of total comprehensive income pursuant to Section 30 of the Tax Reform Act of 1997 as
discussed in Note 1.
(ii)
Non-operating and taxable income
The Organization has no non-operating and taxable income for the years-ended December 31, 2011.
(iii)
Taxes and licenses
The details of the Organization’s taxes and licenses are presented in section (a) of this note.
(iv)
Other information
All other information prescribed to be disclosed by the BIR has been included in this note.
15
Philippine
Business for the
Environment
Fifth Floor, DAP Building, Ortigas Center, Pasig City 1601, Philippines
Tel. No.: (632)635-3670
Email: [email protected]
Visit: www.thepbe.org, www.facebook.com/thepbe