w OQ» a e ROYAL CARGO, INC. (Formerly Royal Cargo Combined Logistics, Inc.) » PARENT COMPANY STATEMENTS OF FINANCIAL Pg - iw ww December 31 2014 203 ASSETS Current Assets Cash (Note 5) #76,672.863, 99,247,475 ‘Trade and other receivables - net (Note 6) 942,340,435 519,883,081, ‘Advances to related parties (Note 21) 131,780,285 71437.308 Prepayments and other cunent assets (Note 7 139,219,451 138,815,077, Total Current Assets 1340,013,034 829,383,841 Noncurrent Assets ‘Available-for-sale (APS) investments - net (Note 8) 5,350,000 5,328,929 Investments in subsidiaries - net (Note 9) 94,797,383 85,859,061 Property and equipment - net (Note 10) 730,630,768 647,101,524 Deferred income tax assets = net (Note 23) 54,294,446 88,195,045 (Other noncurrent assets - net (Note 11) 70,791,760 45,534,868 Total Noneurrent Assets 955,804,357 872,089,427 ‘TOTAL ASSETS ¥2,295,817,391__P1,701, 433,268 LIABILITIES AND EQUITY Current Liabilities Trade and other payables (Note 12) 454,275,658 278,903,879 ‘Advances from related parties (Note 21) 318,941,826 238,572,051 Loans payable (Note 13) 423,021,920 99,646,560 Current portion of: Long-term debt (Note 13) 14,639,990 53,242,137 Long-term loans (Note 13) 38,966,508 30)315,632 Obligations under finance lease (Note 22) 8,362,353 22,177474 Income tax payable 2,887,717 11,953,012 Total Current Liabilities T3U1,096272 754,810,745 Noncurrent Liabilities Longsterm debt - net of current portion (Note 13) 12,880,000 69,710,297 Long-term loans - net of currést portion (Note 13) 44,491,007 112,910,390 ons under finance lease - net of current portion (Note 22) 442,345 8,004,515 Retirement benefits liability (Note 19) $8,414,204 54,132,724 Deferred income (Note 14) - 37,259,630 Dividends payable (Note 20) = 11,061,763 ‘otal Noncurrent Liabilitie’ 120,327,556, 293,169,519 Total Liabilities 431,423,828 1,077,080,264 Equity Capital stock (Notes 1 and 20) 0 350,000,000 ‘Additional paid-in capital E 4890 104,890 Remeasurement gain on retirement benefits liabilt 1,453 13,171,137 ‘Unrealized valuation gain on AFS investments (Note 8) 1fio,s46 1469.75, Retained earnings 16374 258,707,202 ‘Total Equi Soar 64,395,563 623,453,008 Wied ‘TQTAL LIABILITIES AND EQUITY 2,295,817,391__P,701,433,268 ‘See accompanying Notes to Parent Company Financial Statementsiy a a oO Q i te iw is ROYAL CARGO, INC. (Formerly Royal Cargo Combined Logistics, Inc.) PARENT COMPANY STATEMENTS OF COMPREHENSIVE INCOME Years Ended December 31 2014 2013 SERVICE REVENUE P2,898,483,218 P1,876,043,289 GOST OF SERVICES (Note 15) (2.243,777,614) _(1,424,610,750) GROSS PROFIT 654,705,604 451,432,539 GENERAL AND ADMINISTRATIVE EXPENSES (Note 16) (285,980,073) (162,731,082) OTHER INCOME (CHARGES) Provision for impairment losses oo: Investments in subsidiaries (Note 9) (24,898,543) = ‘Advances to related parties (Note 21) (2,534,192) (02,745,818) Interest expense (Notes 13, 19 and 22) 22,590,589) (29,481,077) Gain on sale of property and equipment (Note 10) 3,075,383, $01,842 Foreign exchange gains - net 2,298,985 237,086 Interest income (Notes 5, 6 and 11) 423,109 247,330 Recovery of impairment losses on trade receivables 170,000 958,319 Dividend income (Note 9) - 7,110,000 [Loss on acquisition of Lima Logistics Services, Inc. (LSI) = 4,593,910) Others - net = 853.236 (Waseem) _ (115,913,022) INCOME BEFORE INCOME TAX 354,669,684 171,788,435 PROVISION FOR (BENEFIT FROM) INCOME TAX (Note 23) Current 70,307,192 90,735,936 Deferred 36,653,320 ___ (41,981,736) 107,160,512 48,754,200 NET INCOME 247,509,172 123,034,235 OTHER COMPREHENSIVE INCOME (LOSS) Other comprehensive loss 10 be reclassified to profit or lass in subsequent periods, net of ax Unrealized valuation loss on AFS investments (Nate 8) (28,929) (95,000) Other comprehensive income (loss) not to be reclassified to profit or loss in subsequent periods, net of tax Remeasurement gein (loss) on retirement benefits liability (Note 19) (6,539,684) 8,341,262 (6,568,613) 8,246,362 ‘TOTAL COMPREHENSIVE INCOME 240,940,559 P131.280,497 ‘See accompanying Notes to Parent Company Financial SaterentsROYAL CARGO, INC. (Formerly Rayal Cargo Combined Logistics, Ine) PARENT COMPANY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013, araized Rewesturenent Valuation ‘Gain. on Reverie ‘Gain on Capital Sack Additional” Benefits Liable AFS Investments (Qe 20) Pi a Capa Note 19) (sie 8) ‘Balances af Decmber 58,3010 TEL SIOATL —W104890 AS08698 SGA Egan ellet ofthe erger with CLST = = ‘Destaaton of sock dividends (Note 20> s3,610,29 z = (Ca eins Note 20) = = = = 20,000.00) _ 20,000,000) Natincone : = = 334235 128.088.25, ier comprebensive income (ost) _— = = 8320 (5000) go9on9 12336291 ‘Toul eonprerive income (os) — = = M267 (3000) 17,124,264 135370. 326) Balances t December 31,2013 ‘o,pto;b00 Twa 73.7137 409,775 358,707.02 62353 04 ‘Desraton of stock dviaens (Voie 20) 350,000,000 = (2s0,g00 007 z Retineone = = 27 09,172 BaF SORT (Gtr comprehensive loss = tess s4i) oss "sea Pecensive incom 5) = (6 339,684) (Gasa9) a7 518,779 30,980 559 [Batances a December 31,2014 Pio, goo,p00 FIA SIO —_PS6N1,4SS__ FH, A446 —F25G16,374 FBGILI3 563Q id Q Q & Ww a ROYAL CARGO, INC. (Formerly Royal Cargo Combined Logistics, Inc.) PARENT COMPANY STATEMENTS OF CASH FLOWS Years Ended December 31 2014 2013 CASH FLOWS FROM OPERATING ACTIVITIES Income before ineome tax P354,669,684 ——_PI71,788,435 Adjustments for: Depreciation and arnortization (Notes 10, 11, 15, 16 and 18) 128,770,148 104,260,462 Provision for impairment losses on investments in subsidiaries (Note 9) 24,898,543 - Interest expense (Notes 13, 19 snd 22) 22,590,559 29,481.07 ‘Net movement in retrement benefits lability (Note 19) (7.270100) (1,187,200) Gain on sale of property and equipment (Note 10) (3.075.353) (501,842) Interest income (Notes 5, 6 and 11) (423,109) (247,330) Dividend income (Note 9) - 7,110,000) Loss on merger - 4,593,910 ‘Operating income before working capital changes $2097 301,077,512 Decrease (inerease) in: ‘Trade and other receivables (422,456,454) (41,791,936) Prepayments and other current assets (60,404,374) 29,122,196 Increase (decrease) in: ‘Trade and other payables 178,371,779 (10,459,528) Deferred income 97,259,630) 24,759,630 ‘Net cash generated from operations 185,412,285, 302,707,874 Interest received 423,109 247,330 Income taxes paid (73,572.487) (78,782'924) ‘Net cash flows from operating activities 106,262,915 224,172,240 (CASH FLOWS FROM INVESTING ACTIVITIES Additions to: Property and equipment (Note 10) @15450373) (136,719,668) Investments in subsidiaries (Note 9) (83,746,865) (10,762,645) Increase in other noncurrent assets (26,804,525) (6,607,136) Proceeds from sale of property and equipment T7182 1319353 ‘Additional cash received from merger - 1380,713 Dividends received = 7,110,000 Net cash flows used in investing activities (268,229,581) (144,279,403) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from availment of loans 323,376,545 24,744,858 Payment of loans (155,200,880) (148,915,908) Interest paid (20381,385) (26,173,925) Increase (decrease) in: ‘Advances from related parties 80,369,775 167,180,527 Obligations under finance lease 17,3673291) (01,983,712) Increase in advances to related parties (60,342,977) 162513,798) Payment of dividends (11,061,763) (20,000,000) ‘Net cash flows from (used in) financing activities 139,392,054 (67,661, 958) NET INCREASE IN CASH (22,574,612) 32230919 CASH AT BEGINNING OF YEAR 99,247,475 67,016,556 CASH ATEND OF YEAR (Not: 5 ¥ 76,672,863, 99,247,475. ‘Jee azcomparping Notes To Parent Company Fina esac | NMUUANANNMN APR 24 20@ ROYAL CARGO COMBINED LOGISTICS, INC. (Formerly Royal Cargo Combined Logistics, Inc.) NOTES TO PARENT COMPANY FINANCIAL STATEMENTS 1. Corporate Information and Status of Operations Corporate Inform: Royal Cargo, Inc., formerly Royal Cargo Combined Logistics, Inc. (the Parent Company) was incorporated and registered with the Philippine Securities and Exchange Commission (SEC) on July 2, 1997 primarily to engage in international freight forwarding, non-vessel operating common carrier, warehousing, hauling and rigging. On June 19, 2014, the SEC approved the amendment to the Parent Company's registered name from Royal Cargo Combined Logistics, Inc. to Royal Cargo, Inc., added the business purpose of domestic freight forwarding, and inoreased its authorized capital stock from three hundred fifty million pesos (P350,000,000) divided into 350,000,000 shares with par value of one peso (P1.00) per share to one billion two hundred million pesos (P1.200,000,000) divided into 1,200,000,000 shares with par value of one peso (#1.00) per share. The Parent Company also changed its registered office address from Royal Cargo Building, Sta. Agueda Avenue, Pascor Drive, Parafiaque City to Royal Cargo Bldg., No. 4 Sta. Agueda Avenue, Pascor Drive, Barangay Sto. Nifio, Parafiaque City, and the same was approved by SEC, Status of Operations On March 5, 2013, the BOD approved the plan of merger of the Parent Company with Lima Logistics Services, Inc. (LLSI), whercin the Parent Company will be the surviving entity acquiring all the rights, assets, privileges and properties of the latter. ‘The said merger was approved by the SEC and became effective on July 8, 2013, On December 16, 2013, the BOD and stockholders held a special meeting to re-organize the Parent Company and Iris Logistics, Inc. (ILI), a company under common control, through a merger in order for the latter's respective properties, rights, privileges, immunities, stock subscription, causes in action, title to all the real estate as well as al its liabilities and obligations shall be vested to the Parent Company as the surviving corporation who will take aver ILI and take charge of its business. The BOD and Stockholders of the Corporation have approved the proposed merger of the Parent Company with ILI in accordance with the pertinent provisions of Batas Pambansa Bilang 68, otherwise known as the Corporation Code of tho Philippines. ‘On July 23, 2014, the Parent Company and ILI executed the articles of merger and the same was approved by the SEC on March 2, 2015 pursuant to the provisions of Sections 76 to 80 of the Corporation Code of the Philippines. ‘The Parent Company's financial statements as at and for the years ended December 31, 2014 and 2013 were authorized for issue by the BOD on April 10, 2015.