MGI CFS1214 - MaxsGroupConso PDF

Max’s Group, Inc. (formerly Pancake House, Inc.
) and
Subsidiaries
Consolidated Financial Statements

December 31, 2014
(With Comparative Figures for 2013 and 2012)
With independent auditor’s report provided by
REYES TACANDONG & CO.

FIRM PRINCIPLES. WISE SOLUTIONS.
COVER SHEET
for
AUDITED FINANCIAL STATEMENTS
SEC Registration Number
A 2 0 0 0 - 0 3 0 0 8
Company Name
M A X ‘ S G R O U P , I N C . ( f o r m e r l y P a n c a
k e H o u s e , I n c . ) A N D S U B S I D I A R I E S
Principal Office (No./Street/Barangay/City/Town) Province)
P a n c a k e H o u s e C e n t e r , 2 2 5 9 P a s o n g
T a m o E x t e n s i o n , M a k a t i C i t y
Form Type Department requiring the report Secondary License Type, If Applicable
A A C F S C R MD Not Applicable
COMPANY INFORMATION
Company’s Email Address Company’s Telephone Number/s Mobile Number
compliance@maxschicken.com. 784-9000 –
ph
Annual Meeting Fiscal Year

No. of Stockholders Month/Day Month/Day
82 Any day in June December 31
CONTACT PERSON INFORMATION

The designated contact person MUST be an Officer of the Corporation
Name of Contact Person Email Address Telephone Number/s Mobile Number

Ms. Rebecca R. Arago rrarago@maxsgroupinc.com 784-9000 –
Contact Person’s Address

11F Ecoplaza Building, 2305 Chino Roces Avenue Ext., Makati City
Note: In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be reported to the
Commission within thirty (30) calendar days from the occurrence thereof with information and complete contact details of the new contact
person designated.
26th Floor Citibank Tower
8741 Paseo de Roxas
Makati City 1226 Philippines
www.reyestacandong.com
Phone: +632 982 9100
Fax : +632 982 9111
BOA/PRC Accreditation No. 4782
November 12, 2012, valid until December 31, 2015
SEC Accreditation No. 0207-FR-1 (Group A)
September 6, 2013, valid until September 5, 2016
INDEPENDENT AUDITOR’S REPORT
The Stockholders and the Board of Directors

Max’s Group, Inc. and Subsidiaries
Pancake House Center
2259 Pasong Tamo Ext.
Makati City
Report on the Consolidated Financial Statements
We have audited the accompanying consolidated financial statements of Max’s Group, Inc. (formerly
Pancake House, Inc.) and Subsidiaries, which comprise the consolidated statement of financial position
as at December 31, 2014, and the consolidated statement of income, consolidated statement of
comprehensive income, consolidated statement of changes in equity and consolidated statement of
cash flows for year then ended, and a summary of significant accounting policies and other explanatory
information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with Philippine Financial Reporting Standards, and for such internal control
as management determines is necessary to enable the preparation of consolidated financial statements
that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our
audit. We conducted our audit in accordance with Philippine Standards on Auditing. Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the consolidated financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
-2-
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the
financial position of Max’s Group, Inc. (formerly Pancake House, Inc.) and subsidiaries as at
December 31, 2014, and their financial performance and their cash flows for the year then ended in
accordance with Philippine Financial Reporting Standards.
Other Matter
The consolidated financial statements of Max’s Group, Inc. (formerly Pancake House, Inc.) and
Subsidiaries as at and for the years ended December 31, 2013 and 2012 were audited by another
auditor whose report dated April 14, 2014, expressed an unmodified opinion on those statements.
BELINDA B. FERNANDO
Partner
CPA Certificate No. 81207
Tax Identification No. 102-086-538-000
BOA Accreditation No. 4782; Valid until December 31, 2015
SEC Accreditation No. 1022-AR-1 Group A
Valid until October 2, 2016
BIR Accreditation No. 08-005144-4-2013
Valid until November 26, 2016
PTR No. 4748325
Issued January 5, 2015, Makati City
March 27, 2015

Makati City, Metro Manila
8741 Paseo de Roxas
Phone: +632 982 9100
Fax : +632 982 9111
REPORT OF INDEPENDENT AUDITOR

TO ACCOMPANY FINANCIAL STATEMENTS FOR FILING WITH THE
SECURITIES AND EXCHANGE COMMISSION

Makati City
We have audited the accompanying consolidated financial statements of Max’s Group, Inc. (formerly
Pancake House, Inc.) and Subsidiaries (the Group) as at and for the year ended December 31, 2014,
on which we have rendered our report dated March 27, 2015.
In compliance with Securities Regulations Code Rule 68, as amended, we are stating that the
Company has 81 stockholders owning one hundred (100) or more shares each.
BELINDA B. FERNANDO
Partner
PTR No. 4748325
March 27, 2015

MAX’S GROUP, INC. (FORMERLY PANCAKE HOUSE, INC.) AND
SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 2014
(With Comparative Figures for 2013)
(Amounts in Thousands)
Note 2014 2013
ASSETS
Current Assets
Cash P
=956,522 =P341,682
Trade and other receivables 8 677,559 441,848
Inventories 9 364,286 96,883
Prepaid expenses and other current assets 10 363,473 70,708
Total Current Assets 2,361,840 951,121
Noncurrent Assets
Property and equipment 11 1,712,220 470,410
Intangible assets 12 4,125,644 1,207,987
Investment properties 11 433,046 –
Net retirement plan assets 24 462,153 5,060
Net deferred income tax assets 26 196,605 110,391
Security deposits on lease contracts 28 320,567 139,944
Other noncurrent assets 13 289,119 85,011
Total Noncurrent Assets 7,539,354 2,018,803
P
=9,901,194 =2,969,924
P
LIABILITIES AND EQUITY
Current Liabilities
Trade and other payables 14 P
=2,191,442 =P695,403
Loans payable 15 2,085,486 304,500
Current portion of long-term debt 16 73,697 785,876
Current portion of mortgage payable 17 8,165 7,859
Income tax payable 37,939 28,162
Total Current Liabilities 4,396,729 1,821,800
-2-
Note 2014 2013
Noncurrent Liabilities
Long-term debt 16 P
=1,212,790 =–
P
Mortgage payable 17 – 1,500
Net retirement liabilities 24 101,887 62,971
Accrued rent payable 28 37,328 31,633
Net deferred income tax liabilities 26 103,291
Provision for share in equity in net losses of a joint
venture 13 6,741 26,591
Other noncurrent liabilities 9,557 –
Total Noncurrent Liabilities 1,471,594 122,695
Equity
Capital stock 19 1,087,082 237,795
Additional paid-in capital 19 5,353,289 176,806
Retained earnings 19 114,102 401,680
Notes for conversion to equity 18 – 120,386
Other comprehensive income (loss) 32,350 (12,114)
6,586,823 924,553
Shares held by subsidiaries 19 (2,610,013) –
Noncontrolling interests 56,061 100,876
Total Equity 4,032,871 1,025,429
P
=9,901,194 =2,969,924
P
See accompanying Notes to Consolidated Financial Statements.

SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2014
[Amounts in Thousands, except for earnings (loss) per share]
2014* 2013 2012

Max’s Group, Inc.
(formerly Pancake
House, Inc.) Max's Entities Eliminating Combined
Note (1 year) (2 months) Entries Amounts
REVENUES
Restaurant sales P
=3,243,904 P
=947,406 P
=– P
=4,191,310 =3,103,219
P =2,831,596
P
Commissary sales 322,145 211,656 (15,758) 518,043 503,473 467,107
Franchise and royalty fees 28 127,871 28,574 – 156,445 144,859 131,997
3,693,920 1,187,636 (15,758) 4,865,798 3,751,551 3,430,700
COSTS OF SALES 21 3,099,347 862,903 (15,758) 3,946,492 3,067,219 2,799,748
GROSS PROFIT 594,573 324,733 – 919,306 684,332 630,952
GENERAL AND ADMINISTRATIVE EXPENSES 22 (498,800) (213,883) – (712,683) (436,762) (399,329)
SALES AND MARKETING EXPENSES (172,575) (30,646) – (203,221) (131,386) (62,885)
FINANCE COSTS 15 (39,499) (25,254) – (64,753) (62,580) (61,331)
SHARE IN EQUITY IN NET LOSSES OF JOINT

VENTURES 13 – – – – (12,043) (10,124)
OTHER INCOME 25 133,418 1,342,364 (1,307,527) 168,255 100,972 113,157
INCOME (LOSS) BEFORE CORPORATE

REORGANIZATION COSTS 17,117 1,397,314 (1,307,527) 106,904 142,533 210,470
CORPORATE REORGANIZATION COSTS 6 (177,412) – – (177,412) – –
INCOME BEFORE INCOME TAX (160,295) 1,397,314 (1,307,527) (70,508) 142,533 210,470
PROVISION FOR (BENEFIT FROM) INCOME TAX 26

Current 40,560 13,796 – 54,356 97,763 86,897
Deferred (57,983) (677) – (58,660) (34,504) (26,045)
(17,423) 13,119 – (4,304) 63,259 60,852
NET INCOME (LOSS) (P

=142,872) P
=1,384,195 (P
=1,307,527) (P
=66,204) =79,274
P =149,618
P
NET INCOME (LOSS) ATTRIBUTABLE TO:

Equity holders of the Parent Company (P
=117,667) P
=1,384,195 (P
=1,307,527) (P
=40,999) =105,597
P =151,418
P
Noncontrolling interests (25,205) – – (25,205) (26,324) (1,800)
(P
=142,872) P
=1,384,195 (1,307,527) (P
=66,204) =79,274
P =149,618
P
Earnings (loss) Per Share Attributable to the

Equity Holders of the Parent Company
Basic 27 (P
=0.05) =P0.21 =P0.30
Diluted (P
=0.05) =0.21
P =0.29
P
* As discussed in Note 6, the Max’s Entities (Max’s) became subsidiaries of Max’s Group, Inc. (MGI) effective November 2014. The 2014
consolidated statement of income includes the whole year results of operations of MGI and the two months results of operations of
Max’s in 2014 in accordance with PFRS 3, Business Combinations. Had the business combination occurred at the beginning of year, the
proforma combined whole year results of operations of MGI and Max’s is presented in Note 6.
SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Note 2014 2013 2012
NET INCOME (LOSS) (P

=66,202) =79,274
P =149,618
P
OTHER COMPREHENSIVE INCOME

Item to be reclassified to profit or loss
Income (loss) from exchange differences on
translation of foreign operations 5,057 (3,553) 1,466
Item not to be reclassified to profit or loss
Actuarial gains (losses) on retirement benefit
plan 24 54,020 15,694 (1,134)
Income tax effect (16,206) (4,708) 340
42,871 7,433 672
TOTAL COMPREHENSIVE INCOME (LOSS) (P

=23,331) =86,707
P =150,290
P
TOTAL COMPREHENSIVE INCOME (LOSS)

ATTRIBUTABLE TO:
Equity holders of the Parent Company P
=14,504 =112,648
P =152,100
P
Noncontrolling interests (37,835) (25,941) (1,810)
(P
=23,331) =86,707
P =150,290
P
See accompanying Notes to Consolidated Financial Statements

SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Note 2014 2013 2012
CAPITAL STOCK 19
Balance at beginning of year P
=237,795 =237,795
P =237,795
P
Conversion of notes to equity 21,416 – –
Issuance of shares 568,660 – –
Stock dividends 259,211 – –
1,087,082 237,795 237,795
ADDITIONAL PAID-IN CAPITAL 19

Balance at beginning of year 176,806 176,806 176,806
Conversion of notes to equity 110,856 – –
Share swap transaction 3,434,844 – –
Issuance of new shares 426,784 – –
Sale on follow-on offering 1,204,029
Balance at end of year 5,353,289 176,806 176,806
NOTES FOR CONVERSION TO EQUITY 18
Conversion of notes to equity (120,386) – –
Balance at end of year – 120,386 120,386
RETAINED EARNINGS
Balance at beginning year 401,680 365,139 248,653
Net income (loss) (28,367) 105,597 151,418
Stock dividends (259,211) – –
Cash dividends – (69,056) (34,932)
Balance at end year 114,102 401,680 365,139
OTHER COMPREHENSIVE INCOME (LOSS)

To be reclassified to profit or loss when realized
- Cumulative translation adjustments
Balance at beginning of year (6,650) (3,097) (4,563)
Income (loss) from exchange differences on
translation of foreign operations 5,057 (3,553) 1,466
Balance at end of year (1,593) (6,650) (3,097)
(Forward)
-2-
Note 2014 2013 2012

Not to be reclassified to profit or loss -
Remeasurement adjustments on net
retirement liabilities, net of deferred tax
Balance at beginning of year (P
=5,464) (P
=16,068) (P
=15,284)
Remeasurement of net retirement liabilities
and net retirement plan assets, net of
deferred tax 39,407 10,604 (784)
Balance at end of year 33,943 (5,464) (16,068)
32,350 (12,114) (19,165)
6,586,823 924,553 880,961
SHARES HELD BY SUBSIDIARIES - at cost 19

Acquisition of Parent Company shares by the
10 Max’s Entities (4,093,766) – –
Sale on follow-on offering 1,483,753 – –
(2,610,013) – –
NONCONTROLLING INTERESTS
Effect of disposal on investment of subsidiaries (315) – –
Total comprehensive income (37,835) (25,941) (1,810)
Movements in noncontrolling interests (6,665) (17,546) (1,619)
Balance at end of year 56,061 100,876 144,363
P
=4,032,871 =1,025,429
P =1,025,324
P

SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Note 2014 2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES

Income (loss) before income tax (P
=70,506) =142,533
P =210,470
P
Adjustments for:
Depreciation and amortization 11 270,845 203,113 166,180
Provision for impairment losses 8 150,610 4 47
Finance costs 15 64,753 62,580 61,331
Amortization of intangible assets 12 39,786 36,270 31,717
Gain from disposal of subsidiaries 7 (13,001) – –
Interest income 25 (1,297) (1,069) (3,636)
Share in equity in net losses of joint
ventures 10 – 12,043 10,124
Gain on remeasurement of convertible
notes 18 – (1,069) (3,817)
Gain on disposal of property and equipment 11 – (1,268) (493)
Operating income before working capital
changes 441,190 453,137 471,923
Decrease (increase) in:
Trade and other receivables (193,332) (69,310) (4,412)
Inventories (23,395) (3,882) 4,567
Due from related parties 570,798 – –
Net retirement plan assets (454,202) – –
Prepaid expenses and other current assets (17,073) 46,578 (38,975)
Increase (decrease) in:
Trade and other payables 462,935 77,313 67,494
Net retirement liabilities (10,284) 17,808 14,655
Accrued rent payable 5,595 (7,261) 8,397
Other current liabilities (12,538) – –
Net cash generated from operations 769,694 514,383 523,649
Interest received 1,297 1,069 3,636
Interest paid (53,210) (96,043) (76,063)
Income taxes paid (56,036) (63,298) (57,878)
Net cash flows provided by operating activities 661,745 356,111 393,344
(Forward)
-2-
Note 2014 2013 2012
CASH FLOWS FROM INVESTING ACTIVITIES

Acquisitions of:
Property and equipment 11 (P
=356,163) (P
=259,338) (P
=239,779)
Intangible assets 12 (12,617) (7,340) (12,794)
Investment properties 104 – –
Subsidiaries, net of cash acquired 208,458 – (88,238)
Decrease (increase) in:
Security deposits on lease contracts (123,392) (43,577) (29,850)
Other noncurrent assets 118,214 10,487 2,890
Net cash flows used in investing activities (165,396) (299,768) (367,771)
CASH FLOWS FROM FINANCING ACTIVITIES

Cash dividends paid 19 – (69,056) (34,932)
Net proceeds from (payments of):
Loans payable (3,356,304) (1,500) (20,010)
Long-term debt 334,383 (4,000) (4,000)
Mortgage payable (1,195) 5,557 2,082
Convertible notes – (1,049) (1,571)
Net proceeds from issuance of shares 3,153,726 – –
Decrease in noncurrent liabilities (5,481)
Returns to noncontrolling interests (6,639) (17,163) (2,385)
Net cash flows provided by (used in) financing
activities 118,490 (87,211) (60,816)
NET INCREASE (DECREASE) IN CASH 614,840 (30,868) (35,242)
CASH AT BEGINNING OF YEAR 341,682 372,550 407,792
CASH AT END OF YEAR P

=956,522 =341,682
P =372,550
P
NONCASH FINANCIAL INFORMATION

Share swap 19 P
=3,975,336 =P– =P–
Stock dividends 19 259,211 – –
Conversion of notes to equity 18 (120,386) – –
P
=4,114,161 =–
P =–
P

SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(With Comparative Information for 2013 and 2012)
1. Corporate Information
MAX’S GROUP, INC. (formerly Pancake House, Inc.; the Parent Company) was incorporated in the
Philippines and registered with the Securities and Exchange Commission (SEC) on March 1, 2000.
Its shares are publicly traded in the Philippine Stock Exchange. The Parent Company and its
subsidiaries (collectively referred to as “the Group”) are primarily engaged in the business of
catering foods and establishing, operating and maintaining restaurants, coffee shops,
refreshments parlors and cocktail lounges.
The Group operates under the trade names “Max’s”, “Pancake House,” “Yellow Cab”, “Krispy
Kreme”, “Jamba Juice”, “Max’s Corner Bakeshop”, “Dencio’s”, ”Teriyaki Boy”, “Singkit”, “Sizzlin’
Steak”, “Le Coeur de France”, “The Chicken Rice Shop”, “Kabisera ni Dencio’s”, “Maple” and
“Meranti”.
On December 20, 2013, Pancake House Holdings, Inc. (PHHI), the previous ultimate parent
company, agreed to sell to the 10 companies which belong to the Max’s Group (Max’s Entities)
all of its shares in the Parent Company at a price of P
=15 per share. The 10 Max’s Entities also
made a tender offer to the minority shareholders of the Parent Company at a price of P =15 a
share and completed their acquisition of 233,160,200 shares or 89.95% of the Parent Company’s
outstanding shares on February 24, 2014.
On June 30, 2014, the Board of Directors (BOD) of the Parent Company authorized its acquisition
of all the issued and outstanding shares of stock of 20 Max’s Entities. Included in the Max’s
Entities are the 10 companies which previously acquired 89.95% combined stake in the Parent
Company and its subsidiaries. On November 7, 2014, the SEC issued the certificate of approval of
the valuation of approximately P =4.0 billion in exchange for the subscription of 540,491,344
shares of the Parent Company. The exchange is accounted for as a business combination in
accordance with Philippine Financial Reporting Standards (PFRS) 3, with the Parent Company as
the acquirer, the 20 Max’s Entities as acquirees, and November 7, 2014 as the acquisition date
(see Note 8).
On July 31, 2014, the SEC approved the application for the increase in authorized capital stock of
the Parent Company from 400,000 shares with a par value of P =1.0 a share to 1,400,000,000
shares with the same par value. On August 8, 2014, the SEC approved the declaration of stock
dividends of 259,210,840 shares out of the increase.
In December 2014, the Parent Company made a follow-on offering of 28,168,998 new shares and
169,014,100 shares held by subsidiaries to the public. Shares held by subsidiaries pertain to the
shares of 10 Max’s entities. The Parent Company recognized additional paid-in capital related to
new shares amounting to P =471.8 million arising from the excess of the proceeds over par value of
the shares sold. Total cost incurred in the follow-on offering transaction amounted to
=364.3 million. Of the total amount P
P =7.0 million was charged to profit or loss and P
=357.3 million
was recorded as reduction to additional paid-in capital.
-2-
The 20 Max’s Entities consist of Max’s Makati, Inc., Max’s Kitchen, Inc., Max’s SM Marikina, Inc.,
Max’s Ermita, Inc., Chicken’s R Us, Inc., Max’s Circle, Inc., Max’s Baclaran, Inc., Max’s Bakeshop,
Inc., Max’s Food Services, Inc., Max’s Express Restaurants, Inc., Square Top, Inc., No Bia, Inc.,
Max’s Franchising, Inc., Ad Circles, Inc., Alpha (Global) Max Group Limited, The Real American
Doughnut Company, Inc., Fresh Healthy Juice Boosters, Inc., MGOC Holdings, Inc., RooM
Ventures Corp. and Trota Gimenez Realty Corporation.
On August 22, 2014, the SEC approved the change in the Parent Company name to “MAX’S
GROUP, INC.”.
The registered office address of the Parent Company is Pancake House Center, 2259 Pasong
Tamo Extension, Makati City. On January 22, 2015, the BOD approved the change in the Parent
Company’s principal place of business to 11F Ecoplaza Building, Pasong Tamo Ext., Makati City.
Amendment of the Articles of Incorporation for the change in registered office address is
currently ongoing.
The Board of Directors (BOD) has delegated the authority to the President and the Chief Financial
Officer to approve and authorize for issue the accompanying consolidated financial statements of
the Group as at and for the year ended December 31, 2014 (with comparative figures for 2013
and 2012). The accompanying consolidated financial statements of the Group as at and for the
year ended December 31, 2014 (with comparative figures for 2013 and 2012) were approved and
authorized for issue by the President and Chief Financial Officer on March 27, 2015.
2. Basis of Preparation and Statement of Compliance
The consolidated financial statements of the Group have been prepared under the historical cost
basis. The consolidated financial statements are presented in Philippine Peso, which is the
Group’s functional and presentation currency. All values are rounded to the nearest thousands
except when otherwise indicated.
The consolidated financial statements have been prepared in accordance with Philippine
Financial Reporting Standards (PFRS) issued and approved by the Philippine Financial Reporting
Standards Council (FRSC) and adopted by the SEC, including SEC pronouncements. PFRS includes
PFRS, Philippine Accounting Standards (PAS), and Philippine Interpretation from International
Financial Reporting Interpretations Committee (IFRIC).
3. Summary of Changes in Accounting Policies
Adoption of New and Amended PFRS

The accounting policies adopted are consistent with those of the previous financial years, except
for the adoption of the following new and amended PFRS and Philippine Interpretation from
IFRIC which the Group adopted effective January 1, 2014:
 Amendments to PAS 32, Financial Instruments: Recognition - Offsetting Financial Assets and
Financial Liabilities ─ The amendments address inconsistencies in current practice when
applying the offsetting criteria in PAS 32. The amendments clarify (1) the meaning of
‘currently has a legally enforceable right of set-off’; and (2) that some gross settlement
systems may be considered equivalent to net settlement.
-3-
 Amendments to PAS 36, Impairment of Assets - Recoverable Amount Disclosures for Non-
Financial Assets – These amendments remove the unintended consequences of PFRS 13, Fair
Value Measurement, on the disclosures required under PAS 36. In addition, these
amendments require disclosure of the recoverable amounts for the assets or (cash
generating units (CGU) for which impairment loss has been recognized or reversed during the
period. The amendments affect disclosures only and have no impact on the Group’s financial
position or performance.
 Amendments to PFRS 10, Consolidated Financial Statements, PFRS 12, Disclosure of Interests
in Other Entities and PAS 27, Separate Financial Statements - Investment Entities ─ These
provide an exception to the consolidation requirement for entities that meet the definition
of an investment entity under PFRS 10. The exception to consolidation requires investment
entities to account for subsidiaries at fair value through profit or loss.
The adoption of the foregoing new and amended PFRS did not have any material effect on the
consolidated financial statements. Additional disclosures have been included in the notes to
consolidated financial statements, as applicable.
New and Amended PFRS Not Yet Adopted

Relevant new and amended PFRS which are not yet effective for the year ended December 31,
2014 and have not been applied in preparing the financial statements are summarized below.
Effective for annual periods beginning on or after July 1, 2014:
 Amendments to PAS 19, Employee Benefits - Defined Benefit Plans: Employee Contributions ─
The amendments apply to contributions from employees or third parties to defined benefit
plans. Contributions that are set out in the formal terms of the plan shall be accounted for as
reductions to current service costs if they are linked to service or as part of the
remeasurements of the net defined benefit asset or liability if they are not linked to service.
Contributions that are discretionary shall be accounted for as reductions of current service
cost upon payment of these contributions to the plans.
 Amendments to PAS 24, Related Party Disclosures - Key Management Personnel ─ The
amendments clarify that an entity is a related party of the reporting entity if the said entity,
or any member of a group for which it is a part of, provides key management personnel
services to the reporting entity or to the parent company of the reporting entity. The
amendments also clarify that a reporting entity that obtains management personnel services
from another entity (also referred to as management entity) is not required to disclose the
compensation paid or payable by the management entity to its employees or directors. The
reporting entity is required to disclose the amounts incurred for the key management
personnel services provided by a separate management entity.
 Amendments to PAS 38, Intangible Assets - Revaluation Method - Proportionate Restatement

of Accumulated Amortization ─ The amendments clarify that, upon revaluation of an
intangible asset, the carrying amount of the asset shall be adjusted to the revalued amount,
and the asset shall be treated in one of the following ways: (a) the gross carrying amount is
adjusted in a manner that is consistent with the revaluation of the carrying amount of the
asset. The accumulated amortization at the date of revaluation is adjusted to equal the
difference between the gross carrying amount and the carrying amount of the asset after
taking into account any accumulated impairment losses; or (b) the accumulated amortization
is eliminated against the gross carrying amount of the asset.
-4-
The amendments also clarify that the amount of the adjustment of the accumulated
amortization should form part of the increase or decrease in the carrying amount accounted
for in accordance with PAS 38.
 Amendment to PAS 40, Investment Property - Classifying Property as Investment Property or

Owner-Occupied Property – The amendment clarifies that determining whether a specific
transaction meets the definition of both a business combination and investment property
requires the separate application of PAS 40 and PFRS 3, Business Combination.
 Amendments to PFRS 3, Business Combinations - Contingent Consideration and Scope

Exception for Joint Ventures – The amendments require that the contingent consideration
that is classified as an asset or liability is measured at fair value at each reporting date and
changes in fair value are recognized in profit or loss, including contingent considerations that
are classified as financial instrument.
The amendments also clarifies that the accounting for the formation of a joint arrangement
in the financial statements of the joint arrangement itself is excluded in the scope of PFRS 3.
 Amendments to PFRS 8, Operating Segments - Aggregation of Operating Segments and

Reconciliation of the Total of the Reportable Segments’ Assets to the Entity’s Assets – The
amendments require entities to disclose the judgment made by management in aggregating
two or more operating segments. This disclosure should include a brief description of the
operating segments that have been aggregated in this way and the economic indicators that
have been assessed in determining that the aggregated operating segments share similar
economic characteristics. The amendments also clarify that an entity shall provide
reconciliations of the total of the reportable segments’ assets to the entity’s assets if such
amounts are regularly provided to the chief operating decision maker.
 Amendments to PFRS 13, Fair Value Measurement - Short-term Receivables and Payables ─
The amendments clarify that short-term receivables and payables with no stated interest
rates can be measured at invoice amounts when the effect of discounting is immaterial.
This also clarifies that the scope of the portfolio exception includes all contracts accounted
for within the scope of PAS 39, Financial Instruments: Recognition and Measurement or
PFRS 9, Financial Instruments, regardless of whether they meet the definition of financial
assets or financial liabilities.
Effective for annual periods beginning on or after January 1, 2015:
 PFRS 9, Financial Instruments: Classification and Measurement ─ This standard is the first
phase in replacing PAS 39 and applies to classification and measurement of financial assets as
defined in PAS 39.
Effective for annual periods beginning on or after January 1, 2016:
 PFRS 14, Regulatory Deferral Accounts ─ This standard specifies the financial reporting
requirements for regulatory deferral account balances that arise when an entity provides
goods or services to customers at a price or rate that is subject to rate regulation.
Under prevailing circumstances, the adoption of the foregoing new and amended PFRS is not
expected to have any material effect on the consolidated financial statements. Additional
disclosures will be included in the consolidated financial statements, as applicable.
-5-
4. Summary of Significant Accounting Policies
Basis of Consolidation
The consolidated financial statements of the Group comprise the financial statements of the
Parent Company and its subsidiaries. Control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee. Specifically, the Group controls an investee if
and only if the Group has:
 Power over the investee (i.e. existing rights that give it the current ability to direct the
relevant activities of the investee);
 Exposure, or rights, to variable returns from its involvement with the investee; and
 The ability to use its power over the investee to affect its returns.
When the Group has less than majority of the voting or similar rights of an investee, the Group
considers all relevant facts and circumstances in assessing whether it has power over an
investee, including:
 The contractual arrangement with the other vote holders of the investee;
 Rights arising from other contractual arrangement; and
 The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control. Consolidation of a
subsidiary begins when the Group obtains control over the subsidiary and ceases when the
Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated statement of income
from the date the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the
equity holders of the Parent Company and to the noncontrolling interests, even if this results in
the noncontrolling interests having a deficit balance.
Noncontrolling interests represent the portion of net results and net assets not held by the
Group. These are presented in the consolidated statement of financial position within equity,
apart from equity attributable to equity holders of the Parent Company and are separately
disclosed in the consolidated statement of income and consolidated statement of comprehensive
income. Noncontrolling interests consist of the amount of those interests at the date of original
business combination and the noncontrolling interests’ share on changes in equity since the date
of the business combination.
The financial statements of the subsidiaries are prepared for the same reporting year as the
Parent Company. Consolidated financial statements are prepared using uniform accounting
policies for like transactions and other events in similar circumstances. Intercompany balances
and transactions, including intercompany profits and losses, are eliminated.
A change in the ownership interest of a subsidiary, without loss of control, is accounted for as an
equity transaction. If the Group loses control over a subsidiary, it:
 Derecognizes the assets (including goodwill) and liabilities of the subsidiary

 Derecognizes the carrying amount of any noncontrolling interests
-6-
 Derecognizes the cumulative translation differences recorded in equity

 Recognizes the fair value of the consideration received
 Recognizes the fair value of any investment retained
 Recognizes surplus or deficit in profit or loss
 Reclassifies the parent’s share of component previously recognized in OCI to profit or loss or
retained earnings, as appropriate, as would be required if the Group had directly disposed of
the related assets or liabilities.
The consolidated financial statements include the accounts of the Parent Company and the
following subsidiaries:
Percentage of
Nature of Effective Ownership
Company Name Business 2014 2013 2012
Boulangerie Francaise, Inc. (BFI) Restaurant 100 100 100
YCPC Subic, Inc. (formerly DFSI Subic, Inc.) Restaurant 100 100 100
[a]
Golden B.E.R.R.D. Grill, Inc. Restaurant 100 100 100
Holding
Pancake House International, Inc. (PHII) Company 100 100 100
Teriyaki Boy International - Inc. Franchising 100 100 100
Yellow Cab Food Co. International - Inc. Franchising 100 100 100
Pancake House, International
Malaysia Sdn Bhd (PHIM) Restaurant 100 100 100
Holding
[a]
Pancake House Ventures, Inc. (PHVI) Company 100 100 100
Yellow Cab Food Corporation (YCFC) Restaurant 100 100 100
YCPI Pizza Venture, Inc. Restaurant 55 55 55
PHI Culinary Arts and Food Services
[c]
Institute, Inc. (PHICAFSI) Culinary School – 100 100
Hospitality School Management
[c]
Group, Inc. (HSMGI) Management – 60 60
International School for Culinary
Arts and Hotel Management
[c]
Quezon City, Inc. Culinary School – 60 60
88 Just Asian, Inc. (88JAI) Restaurant 80 80 80
Teriyaki Boy Group, Inc. (TBGI) Restaurant 70 70 70
[b]
TBGI-Trinoma, Inc. Restaurant 42 42 42
[b]
TBGI-Marilao, Inc. Restaurant 36 36 36
[b]
TBOY-MS, Inc. Restaurant 35 35 35
[b]
TBGI-Tagaytay, Inc. (TBGI Tagaytay) Restaurant 28 28 28
[b]
CRP Philippines, Inc. Restaurant 50 50 50
[c]
Always Happy Greenhills, Inc. Restaurant – 60 60
Always Happy BGC, Inc. Restaurant 51 51 51
[c]
Happy Partners, Inc. Restaurant – 51 51
PCK-LFI, Inc. Restaurant 70 70 70
[a]
PCK-AMC, Inc. Restaurant 60 60 60
PCK-Boracay, Inc. Restaurant 60 60 60
PCK-MTB, Inc. Restaurant 60 60 60
PCK-N3, Inc. Restaurant 51 51 51
PCK Bel-Air, Inc. Restaurant 51 51 51
[b]
PCK-MSC, Inc. Restaurant 50 50 50
PCKPolo, Inc. Restaurant 70 70 70
PCK-Palawan, Inc. Restaurant 60 60 60
DFSI One-Nakpil, Inc. Restaurant 60 60 60
-7-
Percentage of
Nature of Effective Ownership
Company Name Business 2014 2013 2012
Subsidiaries effective November 7, 2014 (see Note 6):

RooM Ventures Corp. Real Estate 100 – –
No Bia, Inc. Commissary 100 – –
Investment
MGOC Holdings, Inc. Holding 100 – –
Max’s SM Marikina, Inc. Restaurant 100 – –
Chicken’s R Us, Inc. Restaurant 100 – –
The Real American Doughnut Company, Inc. Bakery 100 – –
Max’s Franchising, Inc. Franchising 100 – –
Trota Gimenez Realty Corporation Real Estate 100 – –
Alpha (Global) Max Group Limited (Alpha Max) Franchising 100 – –
Max’s Baclaran, Inc. Restaurant 100 – –
Max’s Kitchen, Inc. Restaurant 100 – –
Advertising
Ad Circles, Inc. Support 100 – –
Square Top, Inc. Commissary 100 – –
Fresh Healthy Juice Boosters, Inc. Restaurant 100 – –
Max’s Bakeshop, Inc. Bakery 100 – –
Max’s Circle, Inc. Restaurant 100 – –
Max’s Ermita, Inc. Restaurant 100 – –
Max’s Express Restaurants, Inc. Restaurant 100 – –
Max’s Food Services, Inc. Restaurant 100 – –
Max’s Makati, Inc. Restaurant 100 – –
[a]
Dormant companies as at December 31, 2014 and 2013.
[b]
Although the Group owns not more than 50% of the voting power of these companies, it is able to govern the financial and
operating policies of the companies by virtue of an agreement with the other investors of such entities. Consequently, the Group
consolidates its investment in these companies.
[c]
Not included in the consolidation in 2014.
All of the subsidiaries are incorporated and operating in the Philippines, except for PHII, Teriyaki
Boy International - Inc., Yellow Cab Food Co. International - Inc. which are incorporated in British
Virgin Islands, Pancake House, International Malaysia Sdn Bhd (PHIM), a company incorporated
and operating in Malaysia and Alpha Max which is incorporated in Hongkong.
Business Combinations and Goodwill

Business combinations are accounted for using the acquisition method. The cost of an
acquisition is measured as the aggregate of the consideration transferred, measured at
acquisition date fair value, and the amount of any noncontrolling interest in the acquiree. For
each business combination, the acquirer measures the noncontrolling interest in the acquiree
pertaining to instruments that represent present ownership interests and entitle the holders to a
proportionate share of the net assets in the event of liquidation either at fair value or at the
proportionate share of the acquiree’s identifiable net assets. All other components of
noncontrolling interest are measured at fair value unless another measurement basis is required
by PFRS. Acquisition-related costs incurred are expensed and included in general and
administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition date. This includes the separation
of embedded derivatives in host contracts by the acquiree, if any.
-8-
If the business combination is achieved in stages, any previously held interest is remeasured at its
acquisition date fair value and any resulting gain and loss is recognized in the consolidated
statement of income. It is then considered in the determination of goodwill.
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at
the acquisition date. Subsequent changes to the fair value of the contingent consideration which
is deemed to be an asset or liability will be recognized in accordance with PAS 39 either in
consolidated statement of income or as a change to other comprehensive income. If the
contingent consideration is not within the scope of PAS 39, it is measured in accordance with
appropriate PFRS. Contingent consideration that is classified as equity, is not remeasured until it
is finally settled and accounted for within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration
transferred and the amount recognized for noncontrolling interest, and any previous interest
held, over the net fair value of the identifiable assets acquired and liabilities assumed. If the fair
value of the net assets acquired is in excess of the aggregate consideration transferred, the
Group reassesses whether it has correctly identified all of the assets acquired and all of the
liabilities assumed and reviews the procedure used to measure the amounts to be recognized at
the acquisition date. If the reassessment still results in an excess of the fair value of net assets
acquired over the aggregate consideration transferred, then gain is recognized in consolidated
statement of income.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Group’s CGU that are expected to benefit from the
combination, irrespective of whether other assets or liabilities of the acquiree are assigned to
those units.
Where goodwill forms part of a CGU and part of the operation within CGU unit is disposed of, the
goodwill associated with the operation disposed of is included in the carrying amount of the
operation when determining the gain or loss on disposal of the operation. Goodwill disposed of
in this circumstance is measured based on the relative values of the operation disposed of and
the portion of the CGU retained.
If necessary information, such as fair value of assets and liabilities acquired, is not available by
the end of the reporting period in which the business combination occurs, provisional amounts
are used for a period not exceeding one year from the date of acquisition or the measurement
period. During this period, provisional amounts recognized for a business combination may be
retrospectively adjusted if relevant information has been obtained or becomes available.
Financial Instruments
Financial instruments are recognized in the consolidated statement of financial position when
the Group becomes a party to the contractual provisions of the instruments. The Group
determines the classification of its financial instruments on initial recognition and, where allowed
and appropriate, re-evaluates this designation at each reporting date.
All regular way purchases and sales of financial assets are recognized on the settlement date.
Regular way purchases or sales are purchases or sales of financial assets that require delivery of
assets within the period generally established by regulation or convention in the marketplace.
-9-
Financial instruments are recognized initially at fair value of the consideration given (in the case
of an asset) or received (in the case of a liability). Except for financial instruments at fair value
through profit or loss (FVPL), the initial measurement of all financial instruments includes
transaction costs. Financial assets under PAS 39, Financial Instruments Recognition and
Measurement, are categorized as either financial assets at FVPL, loans and receivables, held to
maturity (HTM) investments or available-for-sale (AFS) financial assets. Also under PAS 39,
financial liabilities are categorized as FVPL or other financial liabilities.
Financial instruments are classified as liabilities or equity in accordance with the substance of
the contractual arrangement. Interests, dividends, gains and losses relating to a financial
instrument or a component that is a financial liability, are reported as expense or income.
Distributions to holders of financial instruments classified as equity are charged directly to
equity, net of any related income tax benefits.
Financial Assets
As at December 31, 2014 and 2013, the Group does not have any financial assets at FVPL, HTM
investments and AFS financial assets. The Group’s financial assets are of the nature of loans and
receivables.
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They are not entered into with the intention of
immediate or short-term resale and are not classified as financial assets held for trading,
designated as AFS financial assets or designated at FVPL.
Classified under this category are the Group’s cash, trade and other receivables, due from related
parties and noncurrent receivables included under “Other noncurrent assets” which arise
primarily from restaurant and commissary sales, franchise fees and royalty fees.
Loans and receivables are classified as current assets when these are expected to be realized
within twelve months after the reporting date or within the normal operating cycle, whichever is
longer.
Loans and receivables are recognized initially at fair value, which normally pertains to the billable
amount. After initial measurement, loans and receivables are subsequently measured at
amortized cost using the effective interest rate method, less allowance for impairment losses.
Amortized cost is calculated by taking into account any discount or premium on acquisition and
fees that are an integral part of the effective interest rate. The amortization, if any, is included in
“Interest income” account in the consolidated statement of income. The losses arising from
impairment of loans and receivables are recognized in the consolidated statement of income.
The level of allowance for probable losses is evaluated by management on the basis of factors
that affect the collectibility of accounts.
Financial Liabilities
As at December 31, 2014 and 2013, the Group does not have any financial liabilities at FVPL. The
Group’s financial liabilities consist of other financial liabilities.
Issued financial liabilities or their components, which are not designated at FVPL are categorized
as other financial liabilities, where the substance of the contractual arrangement results in the
Group having an obligation either to deliver cash or another financial asset to the holder, or to
satisfy the obligation other than by the exchange of a fixed amount of cash or another financial
asset for a fixed number of own equity shares. The components of issued financial liabilities that
contain both liability and equity elements are accounted for separately, with the equity
- 10 -
component being assigned the residual amount after deducting from the instrument as a whole
the amount separately determined as the fair value of the liability component on the date of
issue. After initial measurement, other financial liabilities are subsequently measured at
amortized cost using the effective interest rate method. Amortized cost is calculated by taking
into account any discount or premium on the issue and fees that are an integral part of the
effective interest rate which is recognized in the consolidated statement of income.
This accounting policy applies primarily to the Group’s trade and other payables, loans payable,
long-term debt, mortgage payable and debt component of convertible notes.
Other financial liabilities are classified as current liabilities when these are expected to be settled
within twelve months from the reporting date or the Group does not have an unconditional right
to defer settlement for at least twelve months from the reporting date.
Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either:
 In the principal market for the asset or liability, or

 In the absence of a principal market, in the most advantageous market for the asset or
liability.
The principal or the most advantageous market must be accessible to the Group.
The fair value of an asset or a liability is measured using the assumptions that market
participants would use when pricing the asset or liability, assuming that market participants act
in their best economic interest.
A fair value measurement of nonfinancial asset takes into account a market participant’s ability
to generate economic benefits by using the asset in its highest and best use or by selling it to
another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of not observable inputs.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial
statements are categorized within the fair value hierarchy, described as follows, based on the
lowest level input that is significant to the fair value measurement as a whole:
 Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
 Level 2 - Valuation techniques for which the lowest level input that is significant to the fair
value measurement is directly or indirectly observable; and
 Level 3 - Valuation techniques for which the lowest level input that is significant to the fair
value measurement is not observable.
- 11 -
For assets and liabilities that are recognized in the consolidated financial statements on a
recurring basis, the Group determines whether transfers have occurred between Levels in the
hierarchy by re-assessing categorization (based on the lowest level input that is significant to the
fair value measurement as a whole) at the end of each reporting date.
For the purpose of fair value disclosures, the Group has determined classes of assets and
liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level
of the fair value hierarchy as explained above.
As at December 31, 2014 and 2013, the Group does not have financial instruments measured at
fair value.
“Day 1” Difference
Where the transaction price in a nonactive market is different from the fair value of other
observable current market transactions in the same instrument or based on a valuation
technique whose variables include only data from observable market, the Group recognizes the
difference between the transaction price and fair value (a “Day 1” difference) in the consolidated
statement of income unless it qualifies for recognition as some other types of assets. In cases
where use is made of data which is not observable, the difference between the transaction price
and model value is only recognized in the consolidated statement of income when the inputs
become observable or when the instrument is derecognized. For each transaction, the Group
determines the appropriate method of recognizing the “Day 1” difference amount.
Offsetting Financial Instruments

Financial assets and financial liabilities are offset and the net amount is reported in the
consolidated statement of financial position if, and only if:
1. there is a currently enforceable legal right to offset the recognized amounts; and
2. there is an intention to settle on a net basis, or to realize the asset and settle the liability
simultaneously.
Impairment of Financial Assets Carried at Amortized Cost

The Group assesses at each reporting date whether there is objective evidence that a financial
asset or group of financial assets is impaired. A financial asset or a group of financial assets is
deemed to be impaired if, and only if, there is objective evidence of impairment as a result of
one or more events that has or have occurred after the initial recognition of the asset (an
incurred “loss event”) and that loss event has an impact on the estimated future cash flows of
the financial asset or the group of financial assets that can be reliably estimated.
Objective evidence of impairment may include indications that the borrower or a group of
borrowers is experiencing significant financial difficulty, default or delinquency in interest or
principal payments, the probability that they will enter bankruptcy or other financial
reorganization and where observable data indicate that there is measurable decrease in the
estimated future cash flows, such as changes in arrears or economic conditions that correlate
with defaults.
- 12 -
For loans and receivables carried at amortized cost, the Group first assesses whether an
objective evidence of impairment (such as the probability of insolvency or significant financial
difficulties of the debtor) exists individually for financial assets that are individually significant, or
collectively for financial assets that are not individually significant. If there is objective evidence
that an impairment loss has been incurred, the amount of loss is measured as the difference
between the asset’s carrying value and the present value of the estimated future cash flows
(excluding future credit losses that have not been incurred). If the Group determines that no
objective evidence of impairment exists for individually assessed financial asset, whether
significant or not, it includes the asset in a group of financial assets with similar credit risk
characteristics and collectively assesses for impairment. Those characteristics are relevant to the
estimation of future cash flows for groups of such assets by being indicative of the debtors’
ability to pay all amounts due according to the contractual terms of the assets being evaluated.
Assets that are individually assessed for impairment and for which an impairment loss is, or
continues to be recognized, are not included in a collective assessment for impairment.
The carrying value of the asset is reduced through the use of an allowance account and the
amount of loss is charged to the consolidated statement of income. If in case the receivable has
proven to have no realistic prospect of future recovery, any allowance provided for such
receivable is written off against the carrying value of the impaired receivable. Interest income
continues to be recognized based on the original effective interest rate of the asset. If, in a
subsequent year, the amount of the estimated impairment loss decreases because of an event
occurring after the impairment was recognized, the previously recognized impairment loss is
reduced by adjusting the allowance account. Any subsequent reversal of an impairment loss is
recognized in the consolidated statement of income to the extent that the carrying value of the
asset does not exceed its amortized cost at reversal date.
Derecognition of Financial Instruments
Financial Asset. A financial asset (or, where applicable a part of a financial asset or part of a
group of similar financial assets) is derecognized when:
1. the rights to receive cash flows from the asset have expired;
2. the Group retains the right to receive cash flows from the asset, but has assumed an
obligation to pay them in full without material delay to a third party under a “pass-through”
arrangement; or
3. the Group has transferred its rights to receive cash flows from the asset and either (a) has
transferred substantially all the risks and rewards of the asset, or (b) has neither transferred
nor retained all the risks and rewards of the asset but has transferred the control of the
asset.
Where the Group has transferred its rights to receive cash flows from an asset or has entered
into a pass-through arrangement, and has neither transferred nor retained substantially all the
risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the
extent of the Group’s continuing involvement in the asset. Continuing involvement that takes
the form of a guarantee over the transferred asset is measured at the lower of the original
carrying amount of the asset and the maximum amount of consideration that the Group could be
required to repay.
- 13 -
Financial Liability. A financial liability is derecognized when the obligation under the liability is
discharged or cancelled or has expired. Where an existing financial liability is replaced by
another from the same lender on substantially different terms, or the terms of an existing
liability are substantially modified, such an exchange or modification is treated as a
derecognition of the original liability and the recognition of a new liability, and the difference in
the respective carrying amounts of a financial liability extinguished or transferred to another
party and the consideration paid, including any noncash assets transferred or liabilities assumed
is recognized in the consolidated statement of income.
Inventories
Inventories consist of food and beverage, store and kitchen supplies and operating equipment
for sale. Inventories are valued at the lower of cost and net realizable value (NRV). Cost is
determined using the weighted average method. NRV of food and beverage is the estimated
selling price in the ordinary course of business less the estimated costs necessary to make the
sale. NRV of store and kitchen supplies and operating equipment for sale is the current
replacement cost. In determining NRV, the Group considers any adjustment necessary for
spoilage, breakage and obsolescence.
Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets include prepaid expenses, advances to suppliers and
creditable withholding taxes.
Prepaid Expenses. Prepaid expenses are carried at cost and are amortized on a straight-line basis
over the period of expected usage, which is equal to or less than twelve months or within the
normal operating cycle.
Advances to Suppliers. Advances to suppliers represent advance payments on goods or services

to be purchased in connection with the Group’s operations. These are charged as an expense in
the consolidated statement of income upon actual receipt of goods or services, which is normally
within twelve months or within the normal operating cycle.
Creditable Withholding Taxes (CWTs). CWTs represent the amount withheld by the Group’s
customers in relation to its restaurant and commissary sales. These are recognized upon
collection of the related sales and are utilized as tax credits against income tax due as allowed by
the Philippine taxation laws and regulations. CWTs are stated at their estimated NRV.
Property and Equipment

Property and equipment, except for land, is stated at cost less accumulated depreciation and
amortization and any allowance for impairment in value. Land is stated at cost less any
impairment loss.
The initial cost of property and equipment comprises its purchase price, including import duties
and nonrefundable purchase taxes and any directly attributable costs of bringing the property
and equipment to its working condition and location for its intended use. Expenditures incurred
after the property and equipment have been put into operations, such as repairs and
maintenance, are normally charged to expense in the period the costs are incurred. In situations
where it can be clearly demonstrated that the expenditures have resulted in an increase in the
future economic benefits expected to be obtained from the use of an item of property and
equipment beyond its originally assessed standard of performance, the expenditures are
capitalized as an additional cost of property and equipment.
- 14 -
Each part of an item of property and equipment with a cost that is significant in relation to the
total cost of the item is depreciated and amortized separately.
Depreciation and amortization is computed using the straight-line method over the estimated
useful lives of the assets.
The estimated useful lives of the assets are as follows:
Category Number of Years

Building 10-25
Leasehold improvements 5 or term of the lease,
whichever is shorter
Store and kitchen equipment 3-8
Furniture, fixtures and equipment 3-5
Transportation equipment 3-5
The estimated useful lives, depreciation and amortization methods are reviewed periodically to
ensure that the periods and methods of depreciation and amortization are consistent with the
expected pattern of economic benefits from items of property and equipment.
When assets are retired or otherwise disposed of, both the cost and related accumulated
depreciation and amortization are removed from the accounts and any resulting gain or loss is
recognized in the consolidated statement of income.
Fully depreciated and amortized assets are retained as property and equipment until these are
no longer in use.
Construction in-progress, included in property and equipment, is stated at cost. This includes
cost of construction and other direct costs. Construction in-progress is not depreciated until
such time as the relevant assets are completed and available for use.
Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of
intangible assets acquired in a business combination is the fair value as at the date of acquisition.
Following initial recognition, intangibles are carried at cost less any accumulated amortization
and any accumulated impairment losses. Internally generated intangibles, excluding brand
development costs, are not capitalized and expenditures is reflected in the consolidated
statement of income in the year the expenditure is incurred.
Trademarks. Trademarks are measured initially at cost. The cost of trademarks acquired in
business combinations is its fair value at the date of acquisition. Following initial recognition,
trademarks are carried at cost less accumulated amortization and any accumulated impairment
losses. The Group’s trademarks have a finite useful life of 20 years and are amortized over such
period using the straight-line method. The useful life and amortization method for trademarks
are reviewed at least at each reporting date. Changes in the expected useful life or the expected
pattern of consumption of future economic benefits embodied in the trademarks are accounted
for by changing the useful life and amortization method, as appropriate, and treated as a change
in accounting estimates. The amortization expense on trademarks is recognized in the
consolidated statement of income under the general and administrative expense category
consistent with its function.
- 15 -
Software License. Software license is measured initially at cost which is the amount of the
purchase consideration. Following initial recognition, software license is carried at cost less
accumulated amortization and any accumulated impairment losses. The Group’s software
license has a term of five years and is amortized over such period using the straight-line method.
The useful life and amortization method for software license are reviewed at least at each
reporting date. Changes in the expected useful life or the expected pattern of consumption of
future economic benefits embodied in the software is accounted for by changing the useful life
and amortization method, as appropriate, and treated as a change in accounting estimates. The
amortization expense on software is recognized in the consolidated statement of income under
general and administrative expense category consistent with its function.
Brand Development Costs. Brand development costs pertain to capitalized expenditures incurred
for the development of methods, materials and course curriculum and programs for use in the
operation of the Group. Brand development costs are measured on initial recognition at cost.
Following initial recognition, brand development costs are carried at cost less accumulated
amortization and any accumulated impairment losses. Amortization is recognized using straight-
line method and begins when the development is complete and available for use over the period
of expected future benefits, which is 20 years. During the period of development, the asset is
tested for impairment annually. The amortization expense on brand development costs is
recognized in the consolidated statement of income under the general and administrative
expense category consistent with its function.
Lease Rights. Lease rights are measured initially at cost which is the amount of the purchase
consideration. Following initial recognition, lease rights are carried at cost less accumulated
amortization and any accumulated impairment losses. The Group’s lease rights have a term of 5
years and are amortized over such period using the straight-line method. The useful life and
amortization method for lease rights are reviewed at least at each reporting date. Changes in
the expected useful life or the expected pattern of consumption of future economic benefits
embodied in the lease rights are accounted for by changing the useful life and amortization
method, as appropriate, and treated as a change in accounting estimates. The amortization
expense on lease right is recognized in the consolidated statement of income under the cost of
sales consistent with its function.
Investment Properties
Investment properties are measured initially at cost, including transaction costs. Subsequent to
initial recognition, investment properties are stated at fair value. Gains or losses arising from
changes in fair value of investment properties are included in profit or loss in the period in which
these arise.
The fair value of an investment property is the price at which the property could be exchanged
between knowledgeable, willing parties in an arm’s length transaction. Fair value specifically
excludes an estimated price inflated or deflated by special terms or circumstances such as typical
financing, sale and leaseback arrangements, special considerations or concessions granted by
anyone associated with the sale. The fair value of investment property should reflect market
conditions at the end of the reporting period.
Derecognition of an investment property will be triggered by a change in use or by sale or

disposal. Gain or loss arising on disposal is calculated as the difference between any disposal
proceeds and the carrying amount of the related asset, and is recognized in profit or loss.
- 16 -
Transfers are made to investment property when, and only when, there is change in use,
evidenced by cessation of owner-occupation or commencement of an operating lease to another
party. Transfers are made from investment property when, and only when, there is a change in
use, evidenced by commencement of owner-occupation or commencement of development with
a view to sell.
Other Nonfinancial Assets
Security Deposits on Lease Contracts and Utilities and Other Deposits. Security, utilities and other
deposits represent payment for security, utilities and other deposits made in relation to the lease
agreements entered into by the Group. These are carried at cost and will generally be applied as
lease payments toward the end of the lease terms.
Input Value-added Tax (VAT). Input VAT represents tax imposed on the Group by its suppliers
and contractors for the purchase of goods and services, as required under Philippine taxation
laws and regulations. The portion of input VAT that will be used to offset the Group’s current
VAT liabilities is presented as current asset in the consolidated statement of financial position.
Input VAT classified as noncurrent assets represent the unamortized portion of VAT imposed on
the Group for the acquisition of depreciable assets with an estimated useful life of at least one
year, which is required to be amortized over the life of the related asset or a maximum period of
60 months, whichever is shorter. Input VAT is stated at estimated NRV.
Investment in Joint Ventures

The Group has interests on the following jointly controlled entities:
• ICF-CCE, Inc., a jointly controlled entity with Far Eastern University (FEU), prior to 2014
• CRP Singapore Holdings Pte. Ltd., a jointly controlled entity with a foreign entity
The Group and the other party (the Venturers) have a contractual arrangement that establish
joint control over the economic activities of the joint venture. The agreement requires
unanimous agreement for financial and operating decisions between the venturers.
The Group’s investments in joint ventures are accounted for using the equity method based on
the percentage share of capitalization of the Group in accordance with the joint venture
agreement. Under the equity method, the investment is initially carried in the consolidated
statement of financial position at cost plus the Group’s share in post-acquisition changes in the
net assets of the joint venture, less any impairment in value. The consolidated statement of
income includes the Group’s share in the results of operations of the joint ventures. Where
there has been a change recognized directly in the equity of the joint ventures, the Group
recognizes its share of any changes and discloses this, when applicable, in the consolidated
statement of changes in equity.
Dividends received from the joint venture reduce the carrying amount of the investment. When
the Group’s share of losses in joint venture equals or exceeds its interest in the joint venture, the
recognition of further losses is discontinued except to the extent that the Group has incurred
obligations or made payments on behalf of the joint venture. Any excess of accumulated equity
in net losses over the cost of investment is recognized as a liability under “Provision for share in
equity in net losses of a joint venture” account in the consolidated statement of financial
position.
- 17 -
The reporting dates of the joint ventures and the Group are identical and the joint ventures’
accounting policies conform to those used by the Group for like transactions and events in
similar circumstances. Unrealized gains arising from transactions with the joint venture are
eliminated to the extent of the Group’s interest in the joint ventures against the related
investments. Unrealized losses are eliminated similarly but only to the extent that there is no
evidence of impairment in the asset transferred.
The Group ceases to use the equity method of accounting on the date from which it no longer
has joint control over, or significant influence in, the joint venture or when the interest becomes
held for sale.
Impairment of Nonfinancial Assets
Prepaid Expenses and Other Current Assets, Property and Equipment, Intangible Assets, Security
Deposits on Lease Contracts, Rental and Other Deposits and Input VAT
The Group assesses at each reporting date whether there is an indication that these nonfinancial
assets may be impaired. If any such indication exists, or when annual impairment testing for an
asset is required, the Group estimates these nonfinancial assets’ recoverable amount. An asset’s
recoverable amount is the higher of an asset’s or CGU’s fair value less costs to sell and its value in
use and is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or groups of assets. Where the carrying
amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and
is written down to its recoverable amount. In assessing value in use, the estimated future cash
flows are discounted to their present value using a discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. In determining fair
value less costs to sell, an appropriate valuation model is used. These calculations are
corroborated by valuation multiples or other available fair value indicators. Impairment losses
from continuing operations are recognized in the consolidated statement of income.
An assessment is made for these nonfinancial assets at each reporting date to determine
whether there is any indication that previously recognized impairment losses may no longer exist
or may have decreased. If such indication exists, the Group makes an estimate of recoverable
amount. Any previously recognized impairment loss is reversed only if there has been a change
in the estimates used to determine the asset’s recoverable amount since the last impairment loss
was recognized. If that is the case, the carrying amount of the asset is increased to its
recoverable amount. That increased amount cannot exceed the carrying amount that would
have been determined, net of depreciation and amortization, had no impairment loss been
recognized for the asset in prior years. Such reversal is recognized in the consolidated statement
of income.
Goodwill. Goodwill is tested for impairment annually and when circumstances indicate that the
carrying value may be impaired.
Impairment is determined for goodwill by assessing the recoverable amount of each CGU, to
which the goodwill relates. When the recoverable amount of the CGU is less than its carrying
amount, an impairment loss is recognized. Impairment losses relating to goodwill cannot be
reversed in future periods.
- 18 -
Investments in Joint Venture. After application of the equity method, the Group determines
whether it is necessary to recognize an additional impairment loss on the Group’s investment in
its joint ventures. The Group determines at each reporting date whether there is any objective
evidence that the interest in a joint venture is impaired. If this is the case, the Group calculates
the amount of impairment as the difference between the recoverable amount of the joint
venture and its carrying value and recognizes the amount in the “Share in equity in net losses of
joint ventures” in the consolidated statement of income.
Convertible Notes
Compound financial instruments issued by the Group comprise of convertible notes that can be
converted to capital stock at the option of the holder, and the number of shares to be issued
does not vary with changes in their fair value. The liability component of a compound financial
instrument is recognized initially at the fair value of a similar liability that does not have an equity
conversion option. The equity component is recognized initially at the difference between the
fair value of the compound financial instrument and the fair value of the liability component.
Any directly attributable transaction costs are allocated to the liability and equity components in
proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is

measured at amortized cost using the effective interest method. When there are changes in the
estimates of future cash flows on the liability component, the carrying amount is adjusted to
reflect the revised estimated cash flows. The revised carrying amount is calculated by computing
the present value of estimated future cash flows using the original effective interest rate. Such
adjustment to the carrying amount is recognized in the consolidated statement of income. The
equity component of a compound financial instrument is not remeasured subsequent to initial
recognition. Upon conversion, capital stock and any additional paid-in capital are recognized
while the equity component relating to the converted notes are derecognized.
Capital Stock and Additional Paid-in Capital

The Parent Company has issued capital stock that is classified as equity. Incremental costs
directly attributable to the issue of new capital stock are shown in equity as a deduction, net of
tax, from the proceeds. Additional paid-in capital represents the excess of the investors’ total
contribution over the stated par value of shares.
Retained Earnings
Retained earnings include accumulated profits attributable to the Parent Company’s
stockholders and reduced by dividends. Dividends are recognized as liabilities and deducted
from equity when they are declared. Dividends for the year that are approved after the
reporting date are dealt with as an event after the reporting date. Retained earnings may also
include effect of changes in accounting policy as may be required by the transitional provisions of
new and amended standards.
Shares Held by Subsidiaries

Shares of the Parent Company held by subsidiaries are carried at cost and are deducted from
equity. No gain or loss is recognized on the purchase, sale, issue or cancellation of the Parent
Company’s own equity instruments. When the shares are retired, the capital stock account is
reduced by its par value and the excess of cost over par value upon retirement is debited to
additional paid-in capital to the extent of the specific or average additional paid-in capital when
the shares were issued and to retained earnings for the remaining balance.
- 19 -
Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Group and the revenue can be reliably measured. The following specific recognition criteria must
also be met before revenue is recognized.
Restaurant Sales. Revenue is recognized when the related orders are served.
Commissary Sales. Revenue is recognized upon delivery of goods.
Franchise and Royalty Fees. Revenue is recognized under the accrual basis in accordance with
the terms of the franchise agreements.
Fees charged for the use of continuing rights granted in accordance with the franchise
agreement, or other services provided during the period of the franchise agreement, are
recognized as revenue as the services are provided or as the rights are used.
Service Income. Service and management fee is recognized when related services are rendered.
Delivery Income. Revenue is recognized when the related orders are delivered.
Rental Income. Rental income is recognized on a straight-line basis over the lease term.
Interest Income. Revenue is recognized as the interest accrues using the effective interest rate
method.
Other Income. Other income is recognized when earned.
Customer Loyalty Programme. The Group maintains a loyalty points program named “Orange
Card” which allows the customers to accumulate points when they purchase products in the
Group’s chain of restaurants. The points can then be redeemed for any food vouchers or
freebies accepted in the Group’s chain of restaurants, subject to a minimum number of points
being obtained. The consideration received is allocated between the products sold and points
issued, with the consideration allocated to the points being equal to their fair value. The fair
value of the points issued is deferred in “Deferred revenue” under “Trade and other payables”
account in the consolidated statement of financial position and recognized as revenue when the
points are redeemed.
Costs and Expenses Recognition

Costs and expenses are decreases in economic benefits during the accounting period in the form
of outflows or decrease of assets or incurrence of liabilities that result in decreases in equity,
other than those relating to distributions to equity participants.
Costs of Sales. Costs of sales, which mainly pertain to purchases of food and beverages, direct
labor and overhead directly attributable in the generation of sales, are generally recognized
when incurred.
General and Administrative. General and administrative expenses are generally recognized when
the services are used or the expenses arise.
- 20 -
Sales and Marketing. Sales and marketing expenses, which represent advertising and other
selling costs, are generally expensed as incurred.
Employee Benefits
Short-term Benefits. The Group recognizes a liability net of amounts already paid and an expense
for services rendered by employees during the accounting period. A liability is also recognized
for the amount expected to be paid under short-term cash bonus or profit sharing plans if the
Group has a present legal or constructive obligation to pay this amount as a result of past service
provided by the employee, and the obligation can be estimated reliably.
Short-term employee benefit liabilities are measured on an undiscounted basis and are expensed
as the related service is provided.
Retirement Benefits. The net defined benefit liability or asset is the aggregate of the present
value of the defined benefit obligation at the end of the reporting period reduced by the fair
value of plan assets, adjusted for any effect of limiting a net defined benefit asset to the asset
ceiling. The asset ceiling is the present value of any economic benefits available in the form of
refunds from the plan or reductions in future contributions to the plan.
The cost of providing benefits under the defined benefit plans is actuarially determined using the
projected unit credit method.
Defined benefit costs comprise the following:
 Service cost
 Net interest on the net defined benefit liability or asset
 Remeasurements of net defined benefit liability or asset.
Service costs which include current service costs, past service costs and gains or losses on
nonroutine settlements are recognized as expense in the consolidated statement of income.
Past service costs are recognized when plan amendment or curtailment occurs. These amounts
are calculated periodically by independent qualified actuaries.
Net interest on the net defined benefit liability or asset is the change during the period in the net
defined benefit liability or asset that arises from the passage of time which is determined by
applying the discount rate based on government bonds to the net defined benefit liability or
asset.
Net interest on the net defined benefit liability or asset is recognized as expense or income in the
consolidated statement of income.
Remeasurements comprising actuarial gains and losses, return on plan assets and any change in
the effect of the asset ceiling (excluding net interest on defined benefit liability) are recognized
immediately in other comprehensive income (OCI) in the period in which they arise.
Remeasurements are not reclassified to the consolidated statement of income in subsequent
periods.
- 21 -
Plan assets are assets that are held by a long-term employee benefit fund. Plan assets are not
available to the creditors of the Group, nor can they be paid directly to the Group. Fair value of
plan assets is based on market price information. When no market price is available, the fair
value of plan assets is estimated by discounting expected future cash flows using a discount rate
that reflects both the risk associated with the plan assets and the maturity or expected disposal
date of those assets (or, if they have no maturity, the expected period until the settlement of the
related obligations). If the fair value of the plan assets is higher than the present value of the
defined benefit obligation, the measurement of the resulting defined benefit asset is limited to
the present value of economic benefits available in the form of refunds from the plan or
reductions in future contributions to the plan.
The Group’s right to be reimbursed of some or all of the expenditure required to settle a defined
benefit obligation is recognized as a separate asset at fair value when and only when
reimbursement is virtually certain.
Operating Leases
Group as a Lessee. Operating leases represent those leases under which substantially all risks
and rewards of ownership of the leased assets remain with the lessors. Noncancellable
operating lease payments are recognized as expense in the consolidated statement of income on
a straight-line basis. The difference between the straight-line recognition basis and the actual
payments made in relation to the operating lease agreements are recognized under “Trade and
other payables” (if current) and “Accrued rent payable” (if noncurrent) accounts in the
consolidated statement of financial position.
Group as a Lessor. Leases where the Group does not transfer substantially all the risks and
benefits of ownership of the assets are classified as operating leases. Initial direct costs incurred
in negotiating operating leases are added to the carrying amount of the leased asset and
amortized over the lease term on the same basis as the rental income. Contingent rents are
recognized as revenue in the period in which they are earned. Operating lease receipts are
recognized as an income in the consolidated statement of income on a straight-line basis over
the lease term. The difference between the straight-line recognition basis and the actual
payments received in relation to the operating lease agreement is recognized under “Trade and
other receivables” (if current) and “Other noncurrent assets” (if noncurrent) accounts in the
consolidated statement of financial position.
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset
that necessarily takes a substantial period of time to get ready for its intended use or sale are
capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in
the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in
connection with the borrowing of funds.
- 22 -
Foreign Currency Translation

The functional currency of the entities of the Group is the Philippine peso except for PHII and its
subsidiaries and Alpha Max, with functional currency in the United States dollar ($). Each entity
in the Group determines its own functional currency and items included in the financial
statements of each entity are measured using that functional currency. Transactions in foreign
currencies are initially recorded using the prevailing exchange rate at the date of transaction.
Monetary assets and liabilities denominated in foreign currencies are restated at the functional
currency rate of exchange at the reporting date. All differences are taken to the consolidated
statement of income.
The assets and liabilities of PHII and Alpha Max are translated into Philippine Peso at the rate of
exchange ruling at the reporting date and income and expenses are translated to Philippine peso
at monthly average exchange rates. The exchange differences arising on the translation are
taken directly to other comprehensive income and presented as a separate component of equity
under the “Accumulated translation adjustment” account.
Income Taxes
Current Income Tax. Current income tax liabilities for the current and prior periods are measured
at the amount expected to be paid to the taxation authorities. The income tax rate and tax laws
used to compute the amount are those that are enacted or substantively enacted at the
reporting date.
Deferred Income Tax. Deferred income tax is provided, using the balance sheet liability method,
on all temporary differences at the reporting date between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognized for all taxable temporary differences, except:
• where the deferred income tax liability arises from the initial recognition of goodwill or of an
asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
• in respect of taxable temporary differences associated with investments in subsidiaries,

where the timing of the reversal of the temporary differences can be controlled and it is
probable that the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognized for all deductible temporary differences, carryforward
of unused tax credits from excess minimum corporate income tax (MCIT) and unused net
operating loss carryover (NOLCO) to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences and carryforward of unused tax
credits from excess MCIT and unused NOLCO can be utilized, except:
• where the deferred income tax asset relating to the deductible temporary difference arises
from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; and
- 23 -
• in respect of deductible temporary differences associated with investments in subsidiaries,

associates and interests in joint ventures, deferred income tax assets are recognized only to
the extent that it is probable that the temporary differences will reverse in the foreseeable
future and taxable profit will be available against which the temporary differences can be
utilized.
The carrying amount of deferred income tax assets is reviewed at each reporting date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available
to allow all or part of the deferred income tax assets to be utilized. Unrecognized deferred
income tax assets are reassessed at each reporting date and are recognized to the extent that it
has become probable that future taxable profit will allow the deferred income tax assets to be
recovered.
Deferred income tax assets and liabilities are measured at the tax rate that is expected to apply
to the period when the asset is realized or the liability is settled, based on tax rate (and tax laws)
that have been enacted or substantively enacted at the reporting date.
Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable
right exists to set off current income tax assets against current income tax liabilities and the
deferred income taxes relate to the same taxable entity and the same taxation authority.
Earnings Per Share (EPS) Attributable to the Equity Holders of the Parent
Basic EPS is computed by dividing net income for the year attributable to common shareholders
by the weighted average number of common shares outstanding during the year, with
retroactive adjustments for any stock dividends declared and stock split.
Diluted EPS is calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary shares. The Group’s
convertible notes are dilutive potential ordinary shares. In computing for the diluted EPS, the
convertible note is assumed to have been converted into ordinary shares, and the net income is
adjusted to eliminate the interest expense less the tax effect, if any.
Where the EPS effect of potential dilutive ordinary shares would be anti-dilutive, basic and
diluted EPS are stated at the same amount.
Operating Segments
The Group operates using its different trade names on which operating results are regularly
monitored by the chief operating decision maker (CODM) for the purpose of making decisions
about resource allocation and performance assessment. The CODM has been identified as the
Chief Executive Officer of the Group. However, as permitted by PFRS 8, Operating Segments, the
Group has aggregated these segments into a single operating segment to which it derives its
revenues and incurs expenses as these segments have the same economic characteristics and are
similar in the following respects:
a. the nature of products and services;

b. the nature of production processes;
c. the type or class of customer for the products and services; and
d. the methods used to distribute their products and services.
- 24 -
Related Parties
Parties are considered to be related if one party has the ability, directly or indirectly, to control
the other party or exercise significant influence over the other party in making financial and
operating decisions. Parties are also considered to be related if they are subject to common
control or common significant influence.
An entity is also considered as a related party if the entity is a post-employment benefit plan for
the benefit of employees of either the reporting entity or an entity related to the reporting
entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to
the reporting entity.
Provisions
Provisions, if any, are recognized when the Group has a present obligation (legal or constructive)
as a result of a past event, it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount
of the obligation. If the effect of the time value of money is material, provisions are determined
by discounting the expected future cash flows at a pretax rate that reflects current market
assessment of the time value of money and, where appropriate, the risks specific to the
liability. Where discounting is used, the increase in the provision due to the passage of time is
recognized as a finance cost.
Contingencies
Contingent liabilities are not recognized in the consolidated financial statements. These are
disclosed unless the possibility of an outflow of resources embodying economic benefits is
remote. Contingent assets are not recognized in the consolidated financial statements but
disclosed in the notes to consolidated financial statements when an inflow of economic benefits
is probable.
Events After the Reporting Date

Post year-end events that provide additional information about the Group’s position at the
reporting date (adjusting events) are reflected in the consolidated financial statements when
material. Post year-end events that are non-djusting events are disclosed in the notes to
consolidated financial statements when material.
5. Significant Judgments, Accounting Estimates and Assumptions
The preparation of consolidated financial statements require management to exercise

judgments, accounting estimates and assumptions that affect amounts reported in the
consolidated financial statements and related notes. The judgments and estimates used in the
consolidated financial statements are based upon management’s evaluation of relevant facts and
circumstances as of the date of the consolidated financial statements. Actual results could differ
from such estimates.
Judgments and estimates are continually evaluated and are based on historical experiences and
other factors, including expectations of future events that are believed to be reasonable under
the circumstances.
- 25 -
Judgments
In the process of applying the Group’s accounting policies, management has made the following
judgments, apart from those involving estimations, which have the most significant effect on the
amounts recognized in the consolidated financial statements.
Determining Functional Currency. The functional currency of the companies in the Group has
been determined to be the Philippine Peso except for certain subsidiaries and joint venture
whose functional currency are the US Dollar, Malaysian Ringgit and Singapore Dollar. The
Philippine Peso is the currency that mainly influences the sale of goods and services and the costs
of sales.
Determining Fair Values of Financial Instruments. Where the fair values of financial assets and
financial liabilities recognized in the consolidated statement of financial position cannot be
derived from active markets, they are determined using a variety of valuation techniques that
include the use of mathematical models. The Group uses judgments to select from variety of
valuation models and make assumptions regarding considerations of liquidity and model inputs
such as correlation and volatility for longer dated financial instruments. The input to these
models is taken from observable markets where possible, but where this is not feasible, a degree
of judgment is required in establishing fair value.
Establishing Control Over Investment in Subsidiaries. The Group determined that it has control
over its subsidiaries (see Note 4) by considering, among others, its power over the investee,
exposure or rights to variable returns from its involvement with the investee, and the ability to
use its power over the investee to affect its returns. The following were also considered:
 The contractual arrangement with the other vote holders of the investee
 Rights arising from other contractual agreements
 The Group’s voting rights and potential voting rights
Acquisition Accounting. The Group accounts for acquired businesses using the acquisition
method of accounting which requires that the assets acquired and the liabilities assumed be
recognized at the date of acquisition at their respective fair values.
The application of the acquisition method requires certain estimates and assumptions especially
concerning the determination of the fair values of acquired intangible assets and property and
equipment as well as liabilities assumed at the date of the acquisition. Moreover, the useful lives
of the acquired intangible assets and property and equipment have to be determined.
Accordingly, for significant acquisitions, the Group obtains assistance from valuation specialists.
The valuations are based on information available at the acquisition date.
Operating Lease Commitments - The Group as Lessee. The Group has entered into commercial
property leases on its restaurant premises and administrative office location. The Group has
determined that all the significant risks and benefits of ownership of these properties remain
with the lessors. Accordingly, these leases are accounted for as operating leases (see Note 28).
Operating Lease Commitments - The Group as a Lessor. The Group has entered into commercial
property sublease agreements. The Group has determined that all the significant risks and
benefits of ownership of the properties remain with the Group. Accordingly, the lease is
accounted for as an operating lease (see Note 28).
- 26 -
Operating Segments. Although each trade name represents a separate operating segment,
management has concluded that there is basis for aggregation into a single operating segment as
allowed under PFRS 8 due to their similar characteristics. This is evidenced by a consistent range
of gross margin across all brand outlets as well as uniformity in sales increase and trending for all
outlets, regardless of the brand name. Moreover, all trade names have the following business
characteristics:
(a) Similar nature of products/services offered and methods to distribute products and provide
services, that is, food service through casual dining experience;
(b) Similar nature of production processes through establishment of central commissary for the
Group that caters all brands for all store outlets;
(c) Similar class of target customers which are middle-class consumers; and
(d) Primary place of operations is in the Philippines.
Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at
the financial reporting date, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are discussed below.
Estimating Impairment of Receivables. Management reviews the age and status of these
receivables and identifies accounts that are to be provided with allowances on a continuous
basis. The Group maintains allowances for impairment losses at a level considered adequate to
provide for potential uncollectible receivables.
Allowance for impairment losses amounted to P =180.7 million as at December 31, 2014
(P
=22.1 million as at December 31, 2013) (see Note 8). Management believes that the allowance
is sufficient to cover receivable balances which are specifically identified to be doubtful of
collection. The aggregate carrying amounts of trade and other receivables and noncurrent
receivables (included under “Other noncurrent assets” account), net of allowance for impairment
losses, amounted to P =677.6 million and P =0.2 million as at December 31, 2014, respectively
(P
=441.8 million and P=4.9 million as at December 31, 2013, respectively) (see Notes 8 and 13).
Estimation of Allowance for Inventory Obsolescence. The Group estimates the allowance for
inventory losses related to store and kitchen supplies and operating equipment for sale
whenever the utility of these inventories becomes lower than cost due to damage, physical
deterioration or obsolescence. Due to the nature of the food and beverage inventories, the
Group conducts monthly inventory count and any resulting difference from quantities that are
currently recognized is charged to expense or related provision, as applicable. Inventories at cost
amounted to P =364.3 million as at December 31, 2014 (P =96.9 million as at December 31, 2013)
(see Note 9).
- 27 -
Estimating Impairment of Non-financial assets. The Group also assesses impairment on these
assets whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable. The factors that the Group considers important which could trigger an
impairment review include the following:
• Significant underperformance relative to expected historical or projected future operating

results;
• Significant changes in the manner of use of the acquired assets or the strategy for overall
business; and
• Significant negative industry or economic trends.
In determining the present value of estimated future cash flows expected to be generated from
the continued use of the assets, the Group is required to make judgments and estimates that can
materially affect the consolidated financial statements.
There were no impairment indicators noted on these assets as at December 31, 2014 and 2013.
The aggregate net book values of these assets amounted to P =3,340.1 million as at
December 31, 2014 (P
=742.9 million December 31, 2013) (see Notes 10, 11, 12, 13 and 28).
Estimating Impairment of Goodwill. The Group tests annually whether any impairment in
goodwill is to be recognized, in accordance with the related accounting policy in Note 4. The
recoverable amounts of CGUs have been determined based on value in use calculations which
require the use of estimates. Based on the impairment testing conducted, the recoverable
amounts of the CGUs as at December 31, 2014 and 2013 calculated based on value in use are
greater than the corresponding carrying values (including goodwill) of the CGUs as at the same
dates. The carrying amount of goodwill amounted to P =3,803.4 million as at December 31, 2014
(P
=889.5 million as at December 31, 2013) (see Note 12).
- 28 -
Estimating the Useful Lives of Property and Equipment and Intangible Assets. The Group reviews
annually the estimated useful lives of property and equipment and intangible assets based on
expected asset utilization as anchored on business plans and strategies that also consider
expected future technological developments and market behavior. The estimated useful lives
are reviewed periodically and are updated if expectations differ from previous estimates due to
physical wear and tear, technical or commercial obsolescence and legal or other limits on the use
of these assets. In addition, estimation of the useful lives is based on collective assessment of
industry practice, internal technical evaluation and experience with similar assets. It is possible
that future results of operations could be materially affected by changes in these estimates
brought about by changes in the factors mentioned. The amount and timing of recorded
expenses for any period would be affected by changes in these factors and circumstances.
The net book values of property and equipment amounted to P =1,712.2 million as at
December 31, 2014 (P =470.4 million as at December 31, 2013) (see Note 11). The net book values
of intangible assets amounted to P =4,125.6 million as at December 31, 2014 (P
=1,208.0 million as at
December 31, 2013) (see Note 12).
Estimating Debt Component of Convertible Notes. The determination of the debt component of
the convertible notes is based on the discounted amount of future cash flows of the interest
payments since the notes are mandatorily convertible into a fixed number of common shares
after the lapse of the term. Interest payments represent the higher of consolidated net income
or the dividends that the noteholders would have been entitled to as discussed in Note 18.
Effectively, the dividends on common shares would serve as the minimum interest on the note.
However, it is difficult to estimate these future dividends since there are no committed dividends
on the Parent Company’s common shares and a pattern or trend could not also be determined
based on prior years’ dividend payments. Consequently, the liability component was calculated
based on the consolidated forecasted net income. The liability component is adjusted at each
reporting date when there are significant changes in the consolidated forecasted net income
using the original effective interest rate at the date of inception of the convertible notes. Such
adjustment is recognized in the consolidated statement of income.
Accrued interest and current portion of debt component of convertible notes, presented as part
of “Trade and other payables” account, amounted to nil as at December 31, 2014 (P=11.9 million
as at December 31, 2013) (see Note 14).
Estimating Retirement Benefit Costs. The determination of the Group’s obligation and pension
cost is dependent on the selection of certain assumptions used by the actuaries in calculating
such amounts, which are described in Note 24 to the consolidated financial statements.
Retirement benefit costs amounted to P =21.3 million in 2014 (P =22.3 million in 2013 and
=18.7 million in 2012). Retirement plan asset amounted to P
P =462.2 million as at December 31,
2014 (P=5.1 million as at December 31, 2013) (see Note 24). Accrued retirement liability
amounted to P =101.9 million as at December 31, 2014 (P
=63.0 million as at December 31, 2013)
(see Note 24).
- 29 -
Estimating Realizability of Deferred Income Tax Assets. The Group reviews the carrying amounts
of deferred income tax assets at each reporting date and reduces the amounts to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the
deferred income tax assets to be utilized in the future. The amount of deferred income tax
assets that are recognized is based upon the likely timing and level of future taxable profits
together with future tax planning strategies to which the deferred income tax assets can be
utilized.
The Group has temporary differences, excess MCIT and unused NOLCO totaling to P =72.5 million
as at December 31, 2014 (P=90.5 million as at December 31, 2013), for which no deferred income
tax assets were recognized. The carrying values of deferred income tax assets amounted to
=182.0 million as at December 31, 2014 (P
P =113.8 million as at December 31, 2013) (see Note 26).
Estimating Contingencies. The estimate of probable costs for the resolution of possible claims
has been developed in consultation with the internal and external counsel handling the Group’s
defense in these matters and is based upon analysis of potential results. No provision for
probable losses arising from legal contingencies was recognized in the Group’s consolidated
financial statements as at December 31, 2014 and 2013 (see Note 32).
6. Business Combination
As discussed in Note 1, on November 7, 2014, the Group acquired 100% of the outstanding and
issued capital stock of the 20 Max’s Entities.
The following is a summary of provisional fair values of identifiable assets acquired and liabilities
assumed as at acquisition date:
Fair Value Recognized

on Acquisition
Assets:
Current assets =P1,253,575
Property and equipment 1,162,616
Investment properties 439,243
Other noncurrent assets 4,479,827
7,335,261
Liabilities:
Trade and other current payables 738,289
Borrowings 5,359,092
Other noncurrent liabilities 265,264
6,362,645
Total identifiable net assets acquired at fair value 972,616
Fair value of share consideration in exchange of the
shares of stock of the 20 Max’s Entities 3,975,336
Goodwill arising from acquisition =3,002,720
P
- 30 -
Goodwill recognized is a result of the expected synergies from combined operations of the
acquirees and the acquirer, intangible assets that do not qualify for separate recognition and
other factors.
The purchase price allocation has been prepared on a preliminary basis. The Parent Company is
still in the process of completing its accounting of the transaction and reasonable changes are
expected as additional information becomes available. This will be finalized in 2015 as allowed
by PFRS.
From the date of acquisition, the 20 Max’s Entities have contributed net revenues and net
income of P
=1,187.6 million and P=76.7 million, respectively to the Group. Had the acquisition
occurred as at the January 1, 2014, the combined revenues and net loss in for the year ended
December 31, 20 14 would have amounted to P =9,546.2 million and P
=56.0 million, respectively.
The 2014 pro-forma consolidated statement of income is as follows:
REVENUES
Restaurant sales =P8,020,938
Commissary sales 1,257,731
Franchise and royalty fees 267,492
9,546,161
Costs of sales 7,720,749
Gross profit 1,825,412
General and administrative expenses (1,371,002)
Sales and marketing expenses (405,470)
Finance costs (253,897)
Other income 355,809
Income before corporate reorganization costs 150,852
Corporate reorganization costs (177,412)
Loss before income tax 26,560
Provision for income tax 29,395
Net loss =55,955
P
Corporate Reorganization
This account consists of:
Impairment loss on receivables =145,507

P
Depreciation expense 24,789
Impairment of security deposits 7,116
=177,412
P
In 2014, the new management changes in business strategies resulted in, among others, the
identification of inefficiencies and identification of non-performing store operations.
Restructuring activities were initiated that lead to the closing or change in operating structure of
certain Company-owned and/or franchised stores. Accordingly, certain receivables and security
deposits on leases were determined to be impaired and the estimated useful lives of certain
fixed assets were changed.
- 31 -
7. Material Partly-Owned Subsidiary and Disposal of Subsidiaries
Material Partly-Owned Subsidiary
Below is the financial information of TBGI which have material noncontrolling interest as at
December 31, 2014 and 2013. The noncontrolling shareholder holds 30% equity interest.
Accumulated balance of material noncontrolling interest amounted to P

=92.4 million as at
December 31, 2014 (P
=116.0 million and P
=123.7 million as at December 31, 2013 and 2012,
respectively).
Income (loss) allocated to material noncontrolling interest in TBGI amounted to P

=20.0 million in
2014, (P
=8.1 million in 2013 and P
=5.7 million in 2012).
The summarized results of operation of TBGI is provided below. The information is based on the
amounts before intercompany elimination:
2014 2013 2012

Revenue P
=454,089 =P517,144 =P566,359
Cost of sales (442,316) (453,602) (472,072)
General and administrative expenses (100,972) (81,170) (69,845)
Sales and marketing expense (9,812) (16,842) (4,414)
Other income 3,918 3,561 4,606
Income (loss) before tax (95,093) (30,909) 24,634
Provision (benefit) for income tax (28,464) (3,944) 5,709
Net income (loss) (P
=66,629) (P
=26,965) =18,925
P
Attributable to noncontrolling interests (P

=19,989) (P
=8,089) =5,678
P
The summarized statement of financial position of TBGI follow:
2014 2013 2012

Current assets P
=115,830 =P194,526 =P209,367
Noncurrent assets 276,294 258,707 258,636
Current liabilities (79,717) (64,582) (53,669)
Noncurrent liabilities (4,223) (2,085) (2,078)
Total equity P
=308,184 =386,566
P =412,256
P
Attributable to:
Equity holders of the parent P
=215,729 =P270,596 =P288,579
Noncontrolling interests 92,455 115,970 123,677
Summarized cash flow information of TBGI follows:
2014 2013 2012

Operating (P
=46,120) (P=2,979) =14,276
P
Investing (7,453) (26,113) (2,930)
Financing 58,526 3,254 (87,917)
Net increase (decrease) in cash P=4,953 (P
=25,838) (P
=76,571)
- 32 -
Disposal of Subsidiaries
a. PHICAFSI. On February 5, 2014, the BOD of the Parent Company approved the resolution to
subscribe to additional 750,000 shares, out of PHICAFSI’s authorized but unissued shares and
to apply the advances to PHICAFSI as full payment for the subscription. The BOD also
authorized the Parent Company to waive its pre-emptive rights over the issuance of PHICAFSI
of an additional P
=99.0 million worth of shares, each with a par value of P=1 in favor of PHHI
(which is currently in the process of changing its corporate name to exclude “Pancake
House”). It was resolved further that the Parent Company grants PHHI an irrevocable voting
proxy over the Parent Company’s shares and an option to purchase the Parent Company’s
shares in PHICAFSI at book value.
As at December 31, 2014, the Parent Company recognized receivable from disposal of
interest amounting to P =143.6 million, equivalent to the carrying value of net assets of
PHICAFSI (see Note 13).
b. AHGI and HPI. In October 2014, the Parent Company entered into a Share Purchase
Agreement to sell its 60% and 51% ownership interest with AHGI and HPI, respectively.
Consideration from the sale of AHGI and HPI shares and the corresponding gain on disposal
are as follows:
AHGI HPI
Carrying value of net assets (liabilities) (P
=1,565) =1,442
P
Total consideration 5,148 7,730
Gain on disposal =6,713
P =6,288
P
The related accounts of PHICAFSI as at February 5, 2014, AHGI and HPI as at October 31, 2014
have been excluded in the December 31, 2014 consolidated financial statements. The assets and
liabilities are summarized below:
PHICAFSI AHGI HPI

Current assets =88,206
P =P2,158 =10,365
P
Noncurrent assets 104,009 8,108 2,750
Current liabilities (200,667) (12,874) (9,720)
Noncurrent liabilities – – (568)
- 33 -
8. Trade and Other Receivables
2014 2013
Trade P
=372,991 =167,128
P
Nontrade 209,854 23,345
Officers and employees 45,167 15,605
Royalties 33,619 25,344
Credit card receivable 11,885 6,776
Receivable from:
Franchisees 73,946 73,805
Sale of asset group 52,922 52,922
Sale of property and equipment – 2,544
Due from ICF-CCE, Inc. – 45,371
Others 57,919 51,157
858,303 463,997
Less allowance for impairment losses 180,744 22,149
P
=677,559 =441,848
P
Trade receivables pertain to commissary sales billed to franchisees which are secured,
noninterest-bearing and are normally settled on 15-30 days’ terms. The franchisees provide
certain amount of deposits as guarantee on the receivable. These deposits are presented under
“Trade and other payables” account in the consolidated statement of financial position
(see Note 14). The deposits are applied against the overdue purchases of the franchisees.
Receivable from franchisees pertains to continuing franchise fees not yet remitted by its
franchisees.
Royalties pertain to the unremitted portion of the Group’s share in the net sales of its
franchisees.
Receivable from sale of asset group represents outstanding receivable from the sale, assignment
and transfer of the net assets attributable to certain entities and a portion of its property and
equipment relating to the company-owned outlets in 2010.
Other receivables primarily pertain to noninterest-bearing reimbursable costs incidental to the

operations of the franchised stores and are normally settled on a 30-60 days’ terms.
Allowance for impairment losses is attributable to the individual impairment of certain trade and
other receivables.
- 34 -
Movements of allowance for impairment loss are as follows:
Note 2014 2013

=22,149 =22,218
P
Effect of:
Business combination 6 12,692 –
Disposal of investments in subsidiaries 7 (73) –
Provisions 21 150,610 4
Write-off (4,634) –
Recoveries – (73)
Balance at end of year P
=180,744 =22,149
P
9. Inventories
This account consists of the following inventories which are carried at cost:
2014 2013
Food and beverage P
=312,415 =74,637
P
Store and kitchen supplies 51,871 20,347
Operating equipment for sale – 1,899
P
=364,286 =96,883
P
Cost of inventories recognized under costs of sales is as follows:
Note 2014 2013

Food and beverage 21 P
=1,672,205 =1,247,687
P
Store and kitchen supplies 21 42,946 65,265
P
=1,715,151 =1,312,952
P
10. Prepaid Expenses and Other Current Assets
Note 2014 2013

Prepaid expenses P
=112,478 =20,063
P
Receivable from disposal of investment
properties 20 99,869 –
Advances to suppliers 46,980 22,471
CWTs 37,436 18,208
Others 66,710 9,966
P
=363,473 =70,708
P
Prepaid expenses consist mainly of prepaid marketing expenses such as billboard rentals,
sponsorship and events that are amortized for one year or less.
Advances to suppliers pertain to advance payments for goods pending delivery.
Other current assets mainly include input VAT, unused supplies and advanced freight costs.
- 35 -
11. Property and Equipment and Investment Properties
Movements in the property and equipment follows:
2014
Store and Furniture,
Leasehold Kitchen Fixtures and Transportation Construction
Land Building Improvements Equipment Equipment Equipment In-Progress Total
Cost
Balances at beginning of year P
=– P
=– P
=774,501 P
=640,047 P
=131,363 P
=66,789 P
=8,510 P
=1,621,210
Effects of:
Business combination 137,303 80,618 1,379,889 800,167 478,727 184,064 132,928 3,193,696
Disposal of investment in
subsidiaries – – (11,044) (12,454) – – – (23,498)
Additions – – 167,203 78,275 25,413 18,113 67,159 356,163
Transfer – – 3,169 (2,120) – – (1,049) –
Disposals – – (61,257) (88,877) (19,863) (2,097) – (172,094)
Balances at end of year 137,303 80,618 2,252,461 1,415,038 615,640 266,869 207,548 4,975,477
Accumulated Depreciation and
Amortization
Balances at beginning of year – – 517,261 486,961 98,059 48,519 – 1,150,800
Effects of:
Business combination – 43,059 896,254 598,455 371,345 121,967 – 2,031,080
subsidiaries – – (4,920) (12,454) – – – (17,374)
Depreciation and amortization – 887 123,112 87,030 46,710 13,106 – 270,845
Disposals – – (61,257) (88,877) (19,863) (2,097) – (172,094)
Balances at end of year – 43,946 1,470,450 1,071,115 496,251 181,495 – 3,263,257
Net Book Values P
=137,303 P
=36,672 P
=782,011 P
=343,923 P
=119,389 P
=85,374 P
=207,548 P
=1,712,220
Cost of fully depreciated property and equipment that are still used in operations amounted to P
=658.9 million as at December 31, 2014 (P
=443.8 million as at
December 31, 2013).
- 36 -
2013
Furniture,
Leasehold Store and Kitchen Fixtures and Transportation Construction
Improvements Equipment Equipment Equipment In-Progress Total
Cost
Balances at beginning of year =683,779
P =571,431
P =107,209
P =56,265
P =5,063
P =1,423,747
P
Additions 119,319 89,941 26,013 15,326 8,739 259,338
Disposals (33,889) (21,325) (1,859) (4,802) – (61,875)
Reclassifications 5,292 – – – (5,292) –
Balances at end of year 774,501 640,047 131,363 66,789 8,510 1,621,210
Accumulated Depreciation and
Amortization
Balances at beginning of year 447,037 433,186 84,449 34,285 – 998,957
Depreciation and amortization 104,112 66,385 15,231 17,385 – 203,113
Disposals (33,888) (12,610) (1,621) (3,151) – (51,270)
Balances at end of year 517,261 486,961 98,059 48,519 – 1,150,800
Net Book Values =257,240
P =153,086
P =33,304
P =18,270
P =8,510
P =470,410
P
Movements in the investment properties for 2014 follow:
Building and Condominium

Land Improvements Units Total
Cost
Effect of consolidation =432,194
P =7,226
P =P32,368 =471,788
P
Disposals – – (26,430) (26,430)
Balances at end of year 432,194 7,226 5,938 445,358
Accumulated Depreciation and Amortization
Effect of consolidation – 5,748 26,797 32,545
Depreciation and amortization – 626 474 1,100
Disposals – – (21,333) (21,333)
Balances at end of year – 6,374 5,938 12,312
Net Book Values =432,194
P =852
P =–
P =433,046
P
- 37 -
12. Intangible Assets
2014 2013
Goodwill P
=3,803,391 =P889,522
Trademarks 270,656 298,394
Software license 27,415 12,040
Franchise fees 19,166 –
Lease rights 3,946 3,244
Brand development costs 1,070 4,787
P
=4,125,644 =1,207,987
P
Goodwill. Goodwill acquired through business combination has been attributed to the following
brands which are considered to be separate CGUs of the Group:
Note 2014 2013

Max’s 6 P
=3,002,720 =–
P
Yellow Cab 708,785 708,785
Pancake House 60,655 60,655
Le Coeur de France 31,231 31,231
Hospitality School Management Group, Inc. 7 – 88,851
P
=3,803,391 =889,522
P
As at December 31, 2014, the recoverable amount of each CGU calculated through value in use
exceeded the carrying amount of the CGU including goodwill. Value in use was derived using
cash flow projections based on financial budgets approved by senior management covering a
five-year period. Cash flows beyond the five-year period are extrapolated using a zero percent
growth rate. Discount rate applied to the cash flow projections in determining recoverable
amount is 10% and 12% in 2014 and 2013, respectively.
The calculations of value in use of goodwill are most sensitive to the following assumptions:
a. Discount rates - Discount rates were derived from the Group’s weighted average cost of
capital and reflect management’s estimate of risks within the CGUs. This is the benchmark
used by the management to assess operating performance and to evaluate future
investment proposals. In determining appropriate discount rates, regard has been given to
various market information, including, but not limited to, ten-year government bond yield,
bank lending rates and market risk premium and country risk premium.
b. Growth rate estimates - The long-term rate used to extrapolate the budget for the investee
companies excludes expansions and possible acquisitions in the future. Management also
recognizes the possibility of new entrants, which may have significant impact on existing
growth rate assumptions. Management however, believes that new entrants will not have a
significant adverse impact on the forecast included in the budget.
- 38 -
The rollforward of trademark, brand developments costs and lease rights are as follows:
2014
Brand
Development Franchise
Trademarks Software Costs Lease Rights Fees Total
Cost
=556,503 P
=20,134 P
=5,973 P
=7,128 P
=– P
=589,738
Effect of:
Business combination 1,027 32,754 3,701 – 26,846 64,328
subsidiaries – – – – (5,973) (5,973)
Additions – 7,500 2,875 2,242 – 12,617
Disposal – (692) (3,114) – – (3,806)
Balances at end of year 557,530 59,696 9,435 9,370 20,873 656,904
Accumulated Amortization
Balances at beginning of year 258,109 8,094 1,186 3,884 – 271,273
Effect of:
Business combination 322 16,661 1,480 – 8,885 27,348
subsidiaries – – (1,186) – – (1,186)
Amortization 28,443 8,041 1,151 1,114 1,037 39,786
Disposal – (515) – (2,054) – (2,569)
Balances at end of year 286,874 32,281 2,631 2,944 9,922 334,652
Net Book Value P
=270,656 P
=27,415 P
=6,804 P
=6,426 P
=10,951 P
=322,252
2013
Brand
Development
Trademarks Software Costs Lease Rights Total
Cost
Balances at beginning of year =556,503
P =12,794
P =5,973
P =7,128
P =582,398
P
Additions – 7,340 – – 7,340
Balances at end of year 556,503 20,134 5,973 7,128 589,738
Accumulated Amortization
Balances at beginning of year 233,034 1,835 887 2,458 238,214
Amortization 28,286 6,259 299 1,426 36,270
Translation adjustment (3,211) – – – (3,211)
Balances at end of year 258,109 8,094 1186 3,884 271,273
Net Book Value =298,394
P =12,040
P =4,787
P =3,244
P =318,465
P
13. Other Noncurrent Assets
Note 2014 2013

Receivable from disposal of interest 7 P
=143,571 =–
P
Utilities and other deposits 90,451 41,399
Deferred input VAT 50,730 20,438
HTM investment 4,204 4,000
Noncurrent receivables 163 4,909
P
=289,119 =85,011
P
Others mainly represent long-term portion of prepaid rent.

- 39 -
The Group had an investment in a joint venture through PHICAFSI representing 50% interest in
ICF-CCE, Inc. which was incorporated in May 2010. ICF-CCE, Inc. is engaged in the business of
operating a culinary skills training center and a restaurant for the practicum of its students. In
2014, the Group ceased to consolidate PHICAFSI and its subsidiaries’ financial position and
results of operations.
Investments in joint venture also includes investment in CRPS.
The aggregate movements in these investments are as follow:
Note 2014 2013

Acquisition cost
=6,469 =6,469
P
Effect of deconsolidation of ICF-CCE 6,200 –
Balance at beginning and end of year P
=269 =6,469
P
Accumulated equity in net losses
Balances at beginning of year (33,060) (23,685)
Share in equity in net losses – (12,043)
Translation adjustments 86 2,668
Effect of deconsolidation of ICF-CCE 7 25,964 –
Balances at end of year (7,010) (33,060)
Excess of share in equity net losses
over cost (P
=6,741) (P
=26,591)
The Group recognized the excess of share in equity net losses over cost as “Provision for share in
equity in net losses of a joint venture” in the consolidated statement of financial position as at
December 31, 2014 and 2013 in relation to its investment in ICF-CCE, Inc. The carrying amount of
the investment in CRPS presented as “Investment in a joint venture” under “Other noncurrent
assets” account amounted to nil as at December 31, 2014 and 2013.
14. Trade and Other Payables
2014 2013
Trade P
=1,196,009 =238,798
P
Nontrade 449,783 228,143
Accrued expenses 396,302 115,988
Service charges 18,801 19,217
Deposits 16,813 20,945
Contract retention 16,553 3,143
Output VAT 11,966 14,812
Rent payable 11,514 5,480
Deferred revenue 7,107 5,577
Accrued interest and current portion of debt
component of convertible notes – 11,886
Others 66,594 31,414
P
=2,191,442 =695,403
P
- 40 -
Trade payables are noninterest-bearing and generally on 30 to 60 day term.
Nontrade payable pertains mainly to the unpaid billings from contractors for construction of new
stores and for various renovation activities on existing stores, withholding taxes and SSS for
employees’ monthly contribution and unpaid billing from agencies for personnel requirement
that are contractual, among others.
Accrued expenses include Group purchases that are already received as at reporting date but
with pending documents, payroll and other benefits as at cut-off date that are not yet due for
payment and electricity and water expenses, among others.
Deposits include deposits on ingredients representing the amount received by the Group from its
franchisees as stipulated in the franchise agreement equivalent to 40% of the projected 15-day
food and beverage sales to cover for all the ingredients initially advanced by the Group for the
commencement of the franchise outlets’ commercial operations. These are carried at cost and
subject to a semi-annual review and is correspondingly adjusted based on the revised projected
monthly sales of the franchise outlet.
Other payables include withholding taxes payable, current portion of accrued rent payable and
PAG-IBIG premiums payable.
15. Loans Payable
2014 2013
Short-term loan P
=1,634,085 =304,500
P
Revolving promissory note 440,430 –
Others 10,971 –
P
=2,085,486 =304,500
P
Short-term Loans
The Group obtained Peso denominated short-term loans from several banks and from
stockholders to finance working capital requirements. The short-term loans from the banks bear
interest rates ranging from 3.0% to 4.5% in 2014 and 2013 and will mature during the succeeding
year.
On March 5, 2014, the Group availed of a P =923.0 million short-term loan from Banco De Oro.
The proceeds of the loan were used by the Group to prepay the outstanding balance of the
=800.0 million loan from Metropolitan Bank & Trust Company (MBTC and FMIC). The short-term
P
loan bears interest rate of 3.0% and will mature on March 5, 2015.
Revolving Promissory Note

The Group has revolving promissory notes from a local bank amounting to P =440.4 million as at
December 31, 2014. These notes are payable in six to 12 months and bear annual interest rates
ranging from 3.0% to 4.0%. The notes are guaranteed by affiliated companies.
- 41 -
Interest expense charged to profit or loss follows:
Note 2014 2013 2012

Loans payable P
=39.0 million =12.6 million
P =15.3 million
P
Long-term debt 16 25.3 million 43.2 million 44.2 million
Mortgage payable and convertible
notes 17 0.5 million 6.8 million 1.8 million
P
P =61.3 million
P
16. Long-term Debt
2014 2013
Long-term loan P
=1,274,110 =785,876
P
Finance lease liability 12,377 –
1,286,487 785,876
Current portion 73,697 785,876
Noncurrent portion P
=1,212,790 =–
P
On February 21, 2014, the Max’s Entities entered into a loan agreement for P
=4,274.1 million with
a creditor bank. The proceeds of the loan were used to acquire shares of stocks of the Parent
Company. The loan bears an interest rate based on the Philippine Daily System Treasury (PDST)
fixing benchmark rate plus a spread of 3.5% or annual fixed 5.5% interest, whichever is higher,
and will mature on January 21, 2021. The loan is secured by pledged shares, real estate mortgage
over certain parcels of land, chattel mortgage over certain vehicles, and a continuing surety of
the stockholders. On December 12, 2014, the Max’s Entities paid P =3,000.0 million of the loan
from the proceeds of the sale of AFS investment included on the follow-on offering of MGI
shares (see Note 1).
This loan contains restrictive covenants which include, among others, maintenance of certain
level of long-term debt-to-equity ratio and debt service coverage ratio based on the consolidated
financial statements of the Max’s Entities. The borrowing entities are also not allowed to
make/permit material change in their business, reacquire any of its outstanding shares by
purchase of redemption or donation, suspend or discontinue operations up to the branch level
for a period exceeding 30 consecutive days, whether voluntarily or involuntarily, create/incur any
new indebtedness, other than permitted indebtedness, create/incur to any lien with respect to
the property or assets of the borrowing entities and the individual obligors, except for the
properties stated in the agreement, sell, lease, transfer or dispose any or all properties and
assets other than in the ordinary course of business, assign, transfer or convey any right to
receive any of its income or revenues, and incur any capital expenditure or purchase additional
capital equipment or other fixed assets outside the ordinary course of business.
As at December 31, 2014, the Max’s Entities are in compliance with the debt covenants.
- 42 -
The loan is presented net of deferred transaction costs. A rollforward analysis of debt issue costs
is shown below:
; 2014
Balance at transaction date =19,500,002
P
Amortization (14,415,236)
Balance at end of year =5,084,766
P
On September 6, 2011, MGI availed of an P

=800.0 million loan from a Notes Facility Agreement
(NFA) with Metropolitan Bank & Trust Company (Treasury Department) as facility agent, paying
agent. The proceeds of which were used by the Parent Company to acquire 100% interest in
YCFC.
The loan has a five year maturity and bear fixed annual interest rates at 4.7368% and 6.2550%.
Under the NFA, MGI shall not permit its (i) Debt-to-Equity ratio at any time to exceed 2:1; (ii)
Debt Service Coverage Ratio as at December 31 not be less than 1.5; and (iii) Current Ratio at any
time not to be less than 1:1. Moreover, the Parent Company is prohibited from entering into
merger, spin-off, consolidation or reorganization (unless the Company is the surviving entity),
selling, transferring, conveying or otherwise disposing all or substantially all of its assets (unless
in the ordinary course of the business).
MGI was not able to comply with the foregoing debt covenants as at December 31, 2013.
Accordingly, the entire balance of long-term debt (net of unamortized deferred financing cost)
was presented as part of current liabilities in the consolidated statement of financial position as
at December 31, 2014 and 2013.
On March 10, 2014, MGI refinanced, and accordingly prepaid in full, the outstanding loan and
interest aggregating P
=801.1 million. The Group was able to obtain a waiver on the penalties
because of the prepayment.
Unamortized deferred financing cost reduced the carrying amount of long-term debt by
=6.1 million as at December 31, 2013. Total interest expense on long-term debt amounted to
P
=25.3 million in 2014 (P
P =43.2 million in 2013 and P
=44.2 million in 2012).
17. Mortgage Payable
This account represents financing loans from local commercial banks for the acquisition of
service vehicle for managerial and supervisory employees. The loans bear annual interest rates
ranging from and 15% to 17% in 2014, 2013 and 2012 and are payable in 24 to 36 equal monthly
installments from the date of the loan. The above loans are collateralized by a chattel mortgage
on the Group’s transportation equipment with a carrying amount of P=10.5 million and
=11.1 million as at December 31, 2014 and, 2013, respectively (see Note 11).
P
2014 2013
Current portion P
=8,165 =P7,859
Noncurrent portion – 1,500
P
=8,165 =9,359
P
- 43 -
Interest expense on mortgage payables amounted to P

=6.8 million in 2013
and P
18. Convertible Notes
This account pertains to convertible notes issued by the Parent Company in 2005 to Aureos
South East Asia Fund, LLC (ASEAF) and Planters Bank Venture Capital Corporation for SMEs
(PVCC) for the expansion of the Teriyaki Boy Brand. Under the original investment agreement
and amendments, the convertible notes were subject to the following, but not limited to,
significant terms:
a. Interest shall be the higher between the investors’ equity equivalent share in 50% of the
audited net income of the Parent Company and its subsidiaries or dividends earned by the
convertible notes had it been considered part of equity at the beginning of the year.
b. Conversion shall be as follows:
Equity Conversion
Interest Price
Original Investment Agreement - ASEAF and PVCC 20.6728% =4.56
P
Supplemental Investment Agreement - ASEAF and
AMF 8.2618% 6.50
The Parent Company bifurcated the debt component of the investments and the excess was
treated as notes for conversion to equity, a separate component within the equity section of the
consolidated statement of financial position. The debt component was initially recognized at the
present value of the future cash flows of the interest payments as determined in reference to
the Group’s forecasted consolidated net income. Subsequent to initial recognition, the debt
component is accreted to its maturity value using the effective interest rate method. The
effective interest rates used for the notes were 6.15% and 13.13% for the original and additional
investments, respectively.
In January 2014, the Group issued 21,415,385 common shares of the Group in exchange for the
convertible notes. As a result, the “Debt component of convertible notes” presented under
“Trade and other payable” account and the “Notes for conversion to equity” were derecognized
and the difference over the par value of the shares issued are included as “Additional paid-in
capital” in the consolidated statement of financial position.
Gain on remeasurement of the convertible notes, resulting from changes in the estimated cash
flows, amounted to nil in 2014 (P
Accretion charge amounted to nil in 2014 (P

=1.6 million in 2013 and P
=1.5 million in 2012). This
was presented as “Interest expense on the debt component of convertible notes” in the
consolidated statement of income.
- 44 -
19. Equity
The movements of the Group’s capital stock as at December 31, 2014 and December 31, 2013
follow:
2014 2013
Authorized capital stock - P
=1 1,400,000,000 400,000,000
Issued and outstanding
Balance at beginning of year 237,795,455 237,795,455
Issuance 568,660,342 –
Stock dividends 259,210,840 –
Conversion of notes to equity 21,415,385 –
Balance at end of year 1,087,082,022 237,795,455
Less shares held by subsidiaries 306,878,044 –
780,203,978 237,795,455
Capital Stock
On December 15, 2000, the Parent Company listed with the PSE its common shares, where it
offered 188,636,364 shares to the public at the issue price of P
=1.48 per share. Proceeds from
these issuances of new shares amounted to P
=279.2 million.
In January 2014, the Parent Company issued 21,415,385 common shares of the Parent Company
in exchange for convertible notes. The excess of the carrying amount of the convertible notes
amounting to P =132.3 million over the par value of the issued shares was recognized as additional
paid-in capital.
On June 30, 2014, the Board of Directors (BOD) of the Parent Company authorized its acquisition
of all the issued and outstanding shares of stock of 20 Max’s Entities. Included in the Max’s
Entities are the 10 companies which previously acquired 89.95% combined stake in the Parent
Company and its subsidiaries. On November 7, 2014, the SEC issued the certificate of approval of
the valuation of approximately P =4.0 billion in exchange for the subscription of 540,491,344
shares of the Parent Company. The exchange is accounted for as a business combination in
accordance with Philippine Financial Reporting Standards (PFRS) 3, with the Parent Company as
the acquirer, the 20 Max’s Entities as acquirees, and November 7, 2014 as the acquisition date
(see Note 8).
On July 31, 2014, the SEC approved the application for the increase in authorized capital stock of
the Parent Company from 400,000 shares with a par value of P =1.0 a share to 1,400,000,000
shares with the same par value. On August 8, 2014, the SEC approved the declaration of stock
dividends of 259,210,840 shares out of the increase.
In December 2014, the Parent Company made a follow-on offering of 28,168,998 new shares and
169,014,100 shares held by subsidiaries to the public. Shares held by subsidiaries pertain to the
shares of 10 Max’s entities. The Parent Company recognized additional paid-in capital related to
new shares amounting to P =471.8 million arising from the excess of the proceeds over par value
of the shares sold. Total cost incurred in the follow-on offering transaction amounted to
=364.3 million. Of the total amount P
P =7.0 million was charged to profit or loss and P
=357.3 million
was recorded as reduction to additional paid-in capital.
- 45 -
The Group has 82 stockholders as of December 31, 2014 (123 stockholders as of December 31,
2013).
Shares Held By Subsidiaries

Shares held by subsidiaries pertain to Parent Company shares of stock held by 10 Max’s entities
which were acquired on February 24, 2014. As at December 31, 2014 shares held by subsidiaries
amounted to P=2,610.0.
The movements of the shares held by subsidiaries as at December 31, 2014 are as follows:
Note No. of shares

Acquisition of Parent Company shares by the 10 Max’s Entities 233,160,189
Stock dividend 233,160,189
Effect of share swap 9,571,766
Sale on follow-on offering 1 (169,014,100)
Balance at end of year 306,878,044
As discussed in Note 1, 169,014,100 shares held by subsidiaries were sold during the follow-on
offering. Gain arising from such sale amounting to P=1,204.0 million pertains to the excess of
proceeds over the cost of the investments and direct transaction costs. Certain subsidiaries which
owned shares of other Max’s Entities exchanged such shares with MGI shares resulting to gain of
=103.5 million.
P The net gains on sale and exchange were eliminated in the preparation of
consolidated financial statements and recognized as additional paid-in capital under equity.
Retained Earnings
Following are the dividends declared and paid by the Parent Company:
Dividend
Dividend Type Date of Declaration Date of Record Date Paid Amount per Share
Cash June 28, 2013 July 12, 2013 July 31, 2013 P
=45,110 P
=0.19
Cash February 22, 2013 March 11, 2013 March 29, 2013 23,946 0.10
Cash May 31, 2012 June 15, 2012 June 29, 2012 34,932 0.15
Cash December 8, 2011 December 23, 2011 December 29, 2011 12,175 0.05
Cash May 27, 2011 June 15, 2011 June 30, 2011 21,568 0.09
On June 12, 2014, the Parent Company declared 100% stock dividend aggregating 259,210,840
common shares at par value.
- 46 -
20. Related Party Disclosures
The Group has transactions within and among the consolidated entities and related parties.
Parties are considered to be related if one party has the ability, directly or indirectly, to control
the other party or exercise significant influence over the other party in making financial and
operating decisions. Parties are also considered to be related if they are subject to common
control. Transactions between members of the Group and the related balances are eliminated at
consolidation and are no longer included in the disclosure.
(i) The Group has the following transactions with related parties:
Outstanding
Classification Year Transactions Balance Terms Condition
Entities under common control*
First Lucky Property Lease 2014 P
=– P
=– 30 days upon Secured
Corporation (FLPC) 2013 25,388 – 30 days upon Secured
Lapanday Properties Lease 2014 – – 30 days upon Secured
Philippines, Inc. (LPPI) 2013 3,876 – 30 days upon Secured
Macondray Plastics Purchases 2014 – – 30 days upon Unsecured
Products, Inc. 2013 3,444 358 30 days upon Unsecured
Macondray Philippine Co. Purchases 2014 – – 30 days upon Unsecured
2013 3,103 218 30 days upon Unsecured
Shares held by the Retirement
Plan
Retirement
Retirement Plan fund 2014 304,928 304,928
Stockholders Receivable 2014 99,869 99,869 On demand Unsecured
*As discussed in Note 1, the 10 Max’s Entities acquired 89.95% of the Parent Company’s shares, as a result of
change in ownership, the entities under common control in 2013 is no longer a related party in 2014.
Summary of operating lease agreement with related parties are as follows:
Related party Date Term Monthly rent Security deposit

September 1, P
=1.2 million subject
2007 5 years, renewable at the to 7% annual
FLCPC option of the lessee escalation rate P
=7.2 million
September 1, 3 years up to
2012 August 31, 2015 P
=1.6 million –
10 years, renewable upon the P
=238,567 subject to
written agreement of 7.5 % annual
LPPI contracting parties escalation rate P
=1.1 million
Shares held by the Retirement Plan pertain to own equity instruments held by the retirement
fund of the 10 Max’s entities amounting to P
=304.9 million.
(ii) Compensation of key management personnel are as follows:
2014 2013 2012

Salaries and other employee benefits P
=7,711 =33,687
P =36,863
P
Post-employment benefits 540 1,544 2,580
P
=8,251 =35,231
P =39,443
P
- 47 -
21. Costs of Sales
Note 2014 2013 2012

Food and beverage P
=1,672,205 =1,247,687
P =1,174,725
P
Salaries and wages 645,122 477,037 421,240
Rentals 509,796 360,338 328,754
Light and water 215,256 193,392 187,506
Supplies used 149,243 127,374 124,057
Fuel and oil 99,404 83,558 80,583
Employee’s benefits 92,277 79,081 90,781
Transportation and travel 80,940 52,531 39,482
Taxes and licenses 52,887 47,962 46,053
Security services 46,198 31,289 19,545
Supplies and equipment sold 42,946 65,265 48,416
Repairs and maintenance 17,378 50,772 43,169
Dues and subscription 12,637 16,328 16,575
Communications 9,746 12,498 8,806
Insurance 2,553 2,780 3,128
Amortization of intangible assets 23 1,959 3,330 1,426
Others 71,818 37,434 27,691
P
=3,946,492 =3,067,219
P =2,799,748
P
22. General and Administrative Expenses
Note 2014 2013 2012

Salaries and wages P
=116,034 =152,833
P =127,248
P
Employee's benefits 84,806 64,682 54,857
Professional fees 49,693 19,623 8,289
Transportation and travel 47,855 18,357 15,200
Repairs and maintenance 43,848 9,087 3,689
Light and water 41,811 16,453 13,451
Amortization of intangibles 23 37,827 32,939 30,291
Rentals 35,563 56,811 51,892
Taxes and licenses 30,767 4,392 6,805
Supplies 19,529 14,680 11,559
Royalties 17,411 – –
Communications 16,036 4,463 10,145
Input VAT on exempt sales 16,296 – –
Spoilage and wastages 14,468 – –
Representation and entertainment 13,041 6,757 2,176
Credit card charges 9,830 6,726 8,457
Share listing related expenses 6,958 – –
Provision for impairment losses 8 5,104 4 47
Insurance 4,622 1,213 1,045
Others 78,156 3,192 25,809
P
=712,683 =436,762
P =399,329
P
- 48 -
Others consist of subscription, research and development and other fees.
23. Nature of Expenses
Depreciation and amortization included in the consolidated statement of income are as follows:
Note 2014 2013 2012

Included in Costs of Sales: 21
Depreciation and amortization P
=224,127 =178,563
P =137,811
P
Amortization of intangible
assets 1,959 3,330 1,426
Included in General and
Administrative Expenses: 22
Depreciation and amortization 23,028 24,550 28,369
Amortization of intangible
assets 37,827 32,939 30,291
Included in corporate
reorganization costs: 7
Depreciation and amortization 24,789 – –
P
=311,730 =239,382
P =197,897
P
Personnel costs included in the consolidated statement of income are as follows:
Note 2014 2013 2012

Included in Costs of Sales: 21
Salaries and wages P
=645,122 =477,037
P =421,240
P
Employees’ benefits 92,277 79,081 90,781
Included in General and 22
Administrative Expenses:
Salaries and wages 116,034 152,833 127,248
Employees’ benefits 84,806 64,682 54,857
P
=938,239 =773,633
P =694,126
P
24. Retirement Benefits
The Group has a funded defined benefit pension plan covering substantially all of its employees,
which require contributions to be made to separately administered fund.
The following tables summarize the net retirement benefit cost recognized in the consolidated
statement of income and the funded status and the amounts recognized in the consolidated
statement of financial position and other information about the plan, based on the latest
actuarial valuation as at December 31, 2014.
- 49 -
Components of retirement benefit costs recognized in the consolidated statement of income are
as follows:
2014 2013 2012

Current service costs P
=24,213 =18,958
P =16,008
P
Net interest costs 3,558 3,382 2,647
Past service cost - curtailment (5,487) – –
Settlement (929) – –
P
=21,355 =22,340
P =18,655
P
Retirement benefit costs are included under employees’ benefits in the “General and
administrative expense” account in the consolidated statement of income.
Remeasurement effects recognized in the consolidated statement of comprehensive income are

as follows:
2014 2013 2012

Actuarial gains (losses) due to:
Experience adjustments P
=10,113 =19,599
P =P12,659
Changes in financial assumptions 112,988 (3,310) (15,016)
Demographic assumptions (336) – 1,410
Changes in the effect of asset ceiling (68,745) – –
Return on assets excluding amount included
in net interest cost – (595) (187)
P
=54,020 =15,694
P (P
=1,134)
Components of net retirement assets recognized in the consolidated statement of financial

position are as follows:
2014 2013 2012

Fair value of plan assets P
=1,094,743 =19,196
P =18,997
P
Effect of asset ceiling 411,514 – –
Present value of defined benefit obligation 221,076 14,136 13,293
P
=462,153 =5,060
P =5,704
P
Components of net retirement liabilities recognized in the consolidated statement of financial

position are as follows:
2014 2013
Present value of defined benefit obligation P
=145,574 =101,961
P
Fair value of plan assets 43,687 38,990
P
=101,887 =62,971
P
- 50 -
Changes in the present value of the defined benefit obligation are as follows:
2014 2013 2012

=116,097 =113,101
P =93,678
P
Effect of business combination 236,276 – –
Retirement benefit costs in consolidated
statement of income:
Current service costs 24,213 18,958 16,008
Interest costs 9,202 6,930 6,281
Past service cost - curtailment (5,487) – –
27,928 25,888 22,289
Remeasurement in other comprehensive
income:
Actuarial gain due to experience
adjustments (8,643) (19,599) (12,659)
Actuarial loss due to changes in financial
assumptions (1,806) 3,310 15,016
Actuarial gain due to changes in
demographic assumptions 336 – (1,410)
(10,113) (16,289) 947
Benefits paid (3,538) (6,604) (3,812)
Balances at end of year P
=366,650 =116,096
P =113,102
P
Changes in the fair value of plan assets are as follows:
2014 2013 2012

=58,186 =57,836
P =54,201
P
Effect of business combination 965,702 – –
Interest income 5,448 3,549 3,634
Actual contributions 2,000 4,000 4,000
Benefits paid (3,538) (6,604) (3,812)
Actual return excluding amount included
in net interest cost 110,632 (595) (187)
Balances at end of year P
=1,138,430 =58,186
P =57,836
P
Effect of business combination pertains to asset and liabilities acquired as a result of business
combination (see Note 6).
The major categories of plan assets as a percentage of the fair value of total plan assets are as
follows:
2014 2013 2012

Investment securities 92.8% 92.8% 91.8%
Cash in bank 5.9% 5.9% 6.6%
Receivables 1.3% 1.3% 1.6%
100% 100% 100.0%
The fair value of plan assets is equal to its carrying amount.

- 51 -
The Plan is being administered and managed by a Trustee bank. The Trustee is responsible for
the management, investment and reinvestment of the plan asset in accordance with the powers
granted.
The plan assets consist of the following:
• Cash in bank which includes regular savings and time deposits;
• Investments in securities include shares of the Parent Company, various security bonds from
Bangko Sentral ng Pilipinas and equity securities and debt instruments; and
• Receivables comprise of interest receivables from investment securities.
The overall expected rate of return on plan assets is determined based on the market prices
prevailing on that date, applicable to the period over which the obligation is to be settled.
The principal assumptions used in determining the defined benefit obligation are as follows:
2014 2013 2012

Discount rate 4.5%-5.0% 5.9%-6.2% 6.1%-6.2%
Salary increase rate 7.0% and 8.0% 5.0% and 8.0% 5.0% and 8.0%
The sensitivity analysis below has been determined based on reasonably possible changes of
each significant assumption on the defined benefit obligation as at December 31, 2014, assuming
if all other assumptions were held constant:
Increase (decrease) Effect on defined

in basic points benefit obligation
Discount rate 100 (P
=14,997)
(100) 28,737
Future salary increases 100 27,569
(100) (14,541)
The Group’s retirement plans are funded by the Parent Company and its subsidiaries. There is no
current plan to contribute to the retirement fund in 2015.
Maturity profile of the undiscounted benefit payments follows:
Plan Year Expected benefit payment

Less than one year 2,369
More than one year to five years 13,976
More than five years to 10 years 38,362
More than 10 years to 15 years 115,985
More than 15 years to 20 years 115,985
More than 20 years 1,582,542
The average duration of the defined benefit obligation is 11.1, 25.31 and 25.94 years as at
December 31, 2014, 2013 and 2012, respectively.
- 52 -
25. Other Income
This account consists of the following:
Note 2014 2013 2012

Delivery income P
=46,967 =32,391
P =27,338
P
Service income and management
fee 30,640 30,491 45,885
National advertising fee 28,055 7,205 6,499
Rental income 28 20,735 21,527 19,656
Gain on disposal of subsidiaries 7 13,001 – –
Call center charges 3,397 3,319 –
Interest income 1,297 1,069 3,636
Gain on remeasurement
of convertible notes 16 – 1,069 3,817
Others 24,163 3,901 6,326
P
=168,255 =100,972
P =113,157
P
Others consist mainly of sale of scrap materials and gain from sale of property and equipment.
As discussed in Note 19 to the consolidated financial statements, the net gains were eliminated
in the preparation of consolidated financial statements and recognized as additional paid-in
capital under equity.
26. Income Taxes
The current provision for income tax represents the Parent Company’s and certain subsidiaries’
regular income tax and MCIT. Final tax represents the Parent Company’s and certain
subsidiaries’ final tax on interest income and franchise and royalty fees.
The reconciliation of the provision for income tax computed at the statutory income tax rate to
the provision for income taxes shown in the consolidated statement of comprehensive income
follows:
2014 2013 2012

Provision for (benefit from) income tax
computed at the statutory income
tax rate (P
=21,152) =42,760
P =63,141
P
Tax effects of:
Expired NOLCO and MCIT 5,631 11,858 11,701
Amortization of trademark 1,907 1,907 1,907
Nondeductible expenses 521 373 33
Interest income subjected to final
tax (389) (16,760) (13,563)
Difference between OSD and
itemized deductions (1,482) – –
Change in unrecognized deferred
tax assets and others 10,660 23,121 (2,367)
(P
=4,304) =63,259
P =60,852
P
- 53 -
The components of the Group’s recognized deferred tax assets and liabilities represent the tax
effects of the following temporary differences:
2014 2013
Net Deferred Net Deferred Net Deferred Net Deferred
Tax Assets Tax Liabilities Tax Assets Tax Liabilities
Deferred tax assets on:
NOLCO P
=95,476 P
=1,331 P
=57,587 P
=–
Excess MCIT 17,890 2,633 14,425 –
Net retirement liabilities 16,760 – 17,372 –
Accrued rent payable 8,880 2,303 9,490 –
Allowance for impairment losses 52,726 995 6,684 –
Others 4,873 888 4,833 –
196,605 8,150 110,391 –
Deferred tax liabilities on:
Retirement benefit assets P
=– (P
=110,293) P
=– P
=–
Unamortized debt issue costs – (502) – –
Others – (646) – –
– (111,441) – –
Net deferred tax assets (liabilities) P
=196,605 (P
=103,291) P
=110,391 P
=–
No deferred income tax assets were recognized for the following temporary differences, unused
tax credits from excess MCIT and unused NOLCO of certain subsidiaries as it is not probable that
sufficient taxable profit will be available to allow the benefit of the deferred income tax assets to
be utilized in the future.
2014 2013
NOLCO P
=119,844 =86,274
P
Accrued retirement liability 540 162
Excess MCIT 3,928 3,928
Accrued rent payable 50 50
Allowance for impairment losses 1,673 87
P
=126,035 =90,501
P
As at December 31, 2014, the details of the Group’s NOLCO that can be claimed as deduction
from future taxable profit during the stated validity are as follows:
Year Incurred Amount Applied Expired Balance Expiry Date

2014 = 182,212
P =–
P =–
P =182,212
P 2017
2013 173,835 349 – 173,486 2016
2012 87,995 1,159 – 86,836 2015
2011 16,401 1,578 14,823 – 2014
=460,443
P =3,086
P =14,823
P =442,534
P
Details of MCIT are as follows:
Year Incurred Amount Applied Expired Balance Expiry Date

2014 =P10,863 =–
P =–
P =P10,863 2017
2013 6,962 – – 6,962 2016
2012 6,626 – – 6,626 2015
2011 4,765 3,581 1,184 – 2014
=29,216
P =3,581
P =1,184
P =24,451
P
- 54 -
27. Earnings Per Share
Basic/diluted earnings (loss) per share are computed as follows:
Note 2014 2013 2012

Net income (loss) attributable to the
equity holders of the Parent
Company: (P
=28,366) P
=105,598 P
=151,418
Divide by weighted average number
of common shares 557,920,032 497,006,295 497,006,295
Basic earnings (loss) per share (0.05) 0.21 0.30
Net income attributable to common equity
holders of the Parent Company
adjusted for the effect of convertible
notes:
Net income attributable to common
equity holders of the Parent
Company: (28,366) 105,598 151,418
Interest on convertible notes - net
of tax – 1,137 1,061
(28,366) 106,735 152,479
Divide by weighted average number
of common shares adjusted for the
effect of dilution:
Weighted average number of common
shares 557,920,032 497,006,295 497,006,295
Effect of conversion of convertible
notes – 21,415 21,415
557,920,032 518,421 518,421
Diluted earnings (loss)per share (P
=0.05) P
=0.21 P
=0.29
There have been no transactions involving common shares or potential common shares that
occurred subsequent to the reporting date.
28. Significant Contracts and Agreements
Franchise Agreements
The Group has granted its franchisees the right to adopt and use the restaurant system of several
brands in restaurant operations for a period and under the terms and conditions specified in the
franchise agreements. The agreements provide for an initial franchise fee payable upon
execution of the agreement and monthly royalty fees.
The following table presents the royalty fee rates and the aggregate amounts of royalty fees
recognized in each brand:
Royalty Fee Rates* 2014 2013 2012

Pancake House 9% P
P =69.6 million
P
Max’s 5% 28.5 million – –
Dencio’s 8%-9% 22.8 million 21.4 million 22.9 million
Teriyaki Boy 10% 14.3 million 17.8 million 25.4 million
Yellow Cab 3%-6% 15.0 million 19.4 million 14.1 million
*as a percentage of Net Sales of franchised store outlets
- 55 -
Operating Lease Agreements
Group as Lessee. The Group leases its restaurant and commissary premises and offices it
occupies with various lessors for periods ranging from 1 to 15 years, renewable upon mutual
agreement between the Group and its lessors. The lease agreements provide for a fixed rental
and/or a monthly rental based on a certain percentage of actual sales or minimum monthly gross
sales.
Security deposits on lease contracts amounted to P =320.6 million as at December 31, 2014
(P
=139.9 million as at December 31, 2013), which is equivalent to one to three months rental.
Rental expense charged to costs of sales and general and administrative expenses amounted to
P =204.6 million and P =417.1 million in 2013 and 2012, respectively)
(see Notes 20 and 21). Accrued rent payable amounted to P =37.3 million as at December 31, 2014
(P
=31.6 million as at December 31, 2013), which represents the straight-line adjustment on rent.
The future minimum rentals payable under these operating leases are as follows:
2014 2013 2012

Within one year P
=144,999 =155,716
P =134,473
P
More than one year bus less than five
years 269,462 273,699 266,830
More than five years 65,837 28,390 65,837
P
=480,298 =457,805
P =467,140
P
Group as Lessor. The Parent Company and YCFC entered into sublease agreements with third
parties for periods ranging from one to 10 years, renewable upon mutual agreement between
the Parent Company/YCFC and its lessees. The lease agreements provide for a fixed monthly
rental or monthly rentals subject to an annual escalation rate of 5% beginning on the second year
from the start of the lease period. Rental income attributable to the Group amounted to P =8.7 in
2014, (P=21.5 million and P=19.6 million in 2013 and 2012, respectively). Rent receivable arising
from straight-line adjustment amounted to P =1.1 million as at December 31, 2014 (P
=1.1 million as
at December 31, 2013).
29. Financial Instruments
Financial Risk Management Objectives and Policies

The Group’s financial instruments consist of cash, trade and other receivables, noncurrent
receivables (included under “Other noncurrent assets”), trade and other payables, loans payable,
mortgage payable, debt component of convertible notes and long-term debt.
The BOD is mainly responsible for the overall risk management approach and for the approval of
risk strategies and principles of the Group. It also has the overall responsibility for the
development of risk strategies, principles, frameworks, policies and limits. It establishes a forum
for discussion of the Group’s approach to risk issues in order to make relevant decisions.
- 56 -
The main risks arising from the use of financial instruments are liquidity risk, credit risk, foreign
currency risk and interest rate risk. The BOD reviews and approves the policies for managing
each of these risks which are summarized below.
Liquidity Risk. Liquidity risk is the risk that the Group will not be able to meet its financial
obligations as they fall due. The Group’s objectives to managing liquidity risk is to ensure, as far
as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions, without incurring unacceptable losses or risking adverse effect
to the Group’s credit standing.
The Group seeks to manage its liquid funds through cash planning on a weekly basis. The Group
uses historical figures and experiences and forecasts from its collections and disbursements. As
part of its liquidity risk management, the Group regularly evaluates its projected and actual cash
flows. It also continuously assesses conditions in the financial markets for opportunities to
pursue fund raising activities.
The Group’s objective is to maintain a balance between continuity of funding and flexibility
through the use of bank loans, loans from related parties, convertible notes and other long-term
debts. The Group considers its available funds and its liquidity in managing its long-term
financial requirements. It matches its projected cash flows to the projected amortization of
convertible notes. For its short-term funding, the Group’s policy is to ensure that there are
sufficient operating inflows to match repayments of loans payable.
As at December 31, 2014 and 2013, the financial assets held by the Group for liquidity purposes
consist of cash and trade and other receivables.
The table below summarizes the maturity profile of the Group’s financial liabilities as at
December 31, 2014 and 2013 based on contractual undiscounted payments.
2014
Less than 3 to 12 1 to 5
On demand 3 months months years Total
Trade and other payables* P
=813,544 P
=942,702 P
=306,352 P
=– P
=2,062,598
Loans payable – – 2,085,486 – 2,085,486
Mortgage payable – – – 8,165 8,165
Long-term debt – – 73,679 1,212,790 1,286,469
Others – – – 14,879 14,879
813,544 942,702 2,465,517 1,235,834 5,457,615
2013
Less than 3 to 12 1 to 5
On demand 3 months months years Total
Trade and other payables* =255,738
P =296,339
P =96,302
P =–
P =P648,379
Loans payable – – 304,500 – 304,500
Mortgage payable – – 7,859 1,500 9,359
Long-term debt – – 801,122 – 801,122
Debt component of convertible
notes – – 11,531 – 11,531
255,738 296,339 1,221,314 1,500 1,774,891
* Excluding statutory payables and taxes and current portion of debt component of convertible notes.
- 57 -
Credit Risk. Credit risk is the risk of financial loss to the Group if a customer or counterparty to a
financial instrument fails to meet its contractual obligations.
Concentrations arise when a number of counterparties are engaged in similar business activities,
or activities in the same geographic region, or have similar economic features that would cause
their ability to meet contractual obligations to be similarly affected by changes in economic,
political or other conditions. Concentrations indicate the relative sensitivity of the Group’s
performance to developments affecting a particular industry.
The Group has no significant concentrations of credit risk with any single counterparty or group
of counterparties having similar characteristics. Since the Group trades only on a cash or credit
card basis and with recognized third parties, there is no requirement for collateral. It is the
Group’s policy that all customers who wish to trade on credit terms are subject to credit
verification procedures. In addition, receivable balances are monitored on an ongoing basis with
the result that Group’s exposure to bad debts is not significant.
The Group’s exposure to credit risk on trade and other receivables arise from default of the
counterparty, with a maximum exposure equal to the carrying amounts of these receivables.
Credit risk from cash is mitigated by transacting only with reputable banks duly approved by
management.
The tables below summarize the aging analysis of the Group’s financial assets:
2014
Neither Past Impaired
Due nor Past due but not Impaired Financial
Total Impaired 30 days 30-60 days 60-90 days Over 90 days Assets
Cash with banks P
=848,497 P
=848,497 P
=– P
=– P
=– P
=– P
=–
Trade and other receivables:
Trade 372,991 152,186 30,484 8,156 9,358 46,599 126,208
Nontrade 209,854 85,624 17,151 4,589 5,265 52,102 45,123
Royalties 33,619 16,313 3,714 3,869 3,177 6,359 187
Officers and employees 45,167 29,792 932 1,589 4,234 7,688 932
Credit card receivable 11,885 11,885 – – – – –
Receivable from sale of
asset group 52,922 – – – – 52,922 –
Receivable from franchisees 73,946 35,882 8,170 8,511 6,988 13,987 408
Other receivables 57,919 25,280 4,078 3,752 5,570 11,353 7,886
Receivable from disposal of
interest 143,571 – – – – 143,571 –
Noncurrent receivables 163 163 – – – – –
P
=1,850,534 P
=1,205,623 P
=64,529 P
=30,466 P
=34,592 P
=334,581 P
=180,744
2013
Neither Past Impaired
Due nor Past due but not Impaired Financial
Total Impaired 30 days 30-60 days 60-90 days Over 90 days Assets
Cash with banks =341,682
P =341,682
P =–
P =–
P =–
P =–
P =–
P
Trade and other receivables:
Receivable from sale
of asset group 52,922 – – – – 52,922 –
Trade receivable 167,128 68,191 27,318 7,309 8,386 54,774 1,149
Due from ICF-CCE, Inc. 45,371 – – – – 45,371 –
Royalties 25,344 12,298 2,800 2,917 2,395 4,794 140
Officers and employees 15,605 10,293 322 549 1,463 2,656 321
Credit card receivable 6,776 6,776 – – – – –
Other receivables 150,851 65,841 10,621 9,773 14,508 29,569 20,538
Noncurrent receivables 4,927 4,927 – – – – –
=810,606
P =510,008
P =41,061
P =20,548
P =26,752
P =190,086
P =22,148
P
- 58 -
The Group has assessed the credit quality of its financial assets as follows:
• Cash is deposited in reputable banks, which have a low probability of insolvency;
• Trade and royalty receivables are generally settled on due dates based on historical
experience;
• Advances to officers and employees are either collected through salary deduction or secured
by cash bonds;
• Other receivables are generally settled several days after due date; and
• Noncurrent receivables are settled based on the contractual payments received on a

monthly basis.
Foreign Currency Risk. The Group’s policy is to maintain foreign currency exposure within
acceptable limits and within existing regulatory guidelines. The Group believes that its profile of
foreign currency exposure on its assets and liabilities is within conservative limits based on the
type of business and industry in which the Group is engaged. The Group’s exposure to foreign
currency exchange risk as at December 31, 2014 and 2013 pertains to the financial position and
performance of PHII and PHIM which were presented in $ and Malaysian Ringgit (MYR),
respectively.
The Group’s $-denominated and MYR-denominated financial assets and liabilities as at

December 31, 2014 and 2013 are considered immaterial in relation to the consolidated financial
statements. Thus, management believes that the Group’s exposure to foreign currency risk is
insignificant.
Interest Rate Risk. The Group’s exposure to market risk for changes in interest rates relates
primarily to its loans payable, long-term debt and mortgage payable. To manage this risk, the
Group determine the mix of its debt portfolio as a function of the level of current interest rates,
the required tenor of the loan and the general use of the proceeds of its fund raising activities.
The following table demonstrates the sensitivity to a reasonable possible change in interest
rates, with all other variables held constant, of the Group’s income before tax:
Increase
(decrease) in Effect on income
basis points before tax
December 31, 2014 +50 16,901
-50 (16,901)
December 31, 2013 50 5,491

-50 (5,491)
- 59 -
Fair Value Information and Categories of Financial Instruments

The carrying values and fair values of the Group’s financial assets and liabilities as at
December 31, 2014 and 2013 approximate their fair values.
The following methods and assumptions were used to estimate the fair value of each class of
financial instrument for which it is practicable to estimate such value:
Cash in Bank and Equivalents, Trade and Other Receivables, Trade and Other Payables, Loans
Payable and Mortgage Payable. The carrying amounts of cash in bank and equivalents, trade
and other receivables and trade and other payables, loans payable and mortgage payable
approximate their fair values due to their short-term maturities.
Noncurrent Receivables. The fair value of noncurrent receivables was based on the discounted
value of future cash flows using the applicable risk-free rates for similar types of accounts
adjusted for credit risk.
Debt Component of Convertible Notes. The fair value of the debt component of convertible notes
was based on the discounted value of future cash flows using the applicable rates ranging from
10.52% in 2014 and 6.15% in 2013.
Long-term Debt. The fair value of the long-term debt was based on the discounted value of
future cash flows using the applicable rate of 3.78% and 4.74% in 2014 and 2013, respectively.
30. Capital Management
The Group considers the equity attributable to the Parent Company presented in the
consolidated statement of financial position as its capital. The primary objective of the Group’s
capital management is to ensure that it maintains a strong credit rating and healthy capital ratios
in order to support its business and maximize shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in
economic conditions. To maintain or adjust the capital structure, the Group may adjust the
dividend payment to shareholders, return capital to stockholders or issue new shares. No
changes were made in the objectives, policies or processes in 2014 and 2013.
The Group monitors capital using the debt-to-equity ratio, which is total liabilities (excluding
equity in net loss over cost of investment in joint venture) divided by the total equity. The
Group’s policy is to maintain debt-to-equity ratio at a level not greater than 2:1. The Group
determines total debt as the sum of its liabilities.
- 60 -
Debt-to-equity ratios of the Group are as follows:
2014 2013
Total liabilities P
=5,868,323 =P1,944,495
Divide by total equity 4,032,871 1,025,429
Debt-to-equity ratio 1.46 1.90
31. Operating Segment Information
For management purposes, the Group is organized into operating segments based on trade
names. However, due to the similarity in the economic characteristics, such segments have been
aggregated into a single operating segment for external reporting purposes (see Note 7).
Restaurant sales, commissary sales and franchise and royalty fees reflected in the consolidated
statement of income are mainly from external customers and franchisees within the Philippines,
which is the Group’s domicile and primary place of operations. Additionally, the Group’s
noncurrent assets are also primarily acquired, located and used within the Philippines.
Restaurant sales are attributable to revenues from the general public, which are generated
through the Group’s store outlets. Commissary sales and franchise and royalty fees are derived
from various franchisees of the Group’s trade names. Consequently, the Group has no
concentrations of revenues from a single customer or franchisee for the in 2014, 2013 and 2012.
The Group’s international operations of the Pancake House brand (through PHII) are considered
to be immaterial in relation to the consolidated financial statements. Total assets and revenues
are 6.65% and 1.14% in 2014 and 4.12% and 0.02% in 2013, respectively, of the consolidated
assets and revenues of the Group.
- 61 -
32. Other Matters
a. Contingencies
The Parent Company and PHVI were named defendants in a civil case filed in October 2002
by Kenmor for the collection of a sum of money and damages.
On September 20, 2013, the Parent Company, PHVI and Kenmor Corporation have agreed to
amicably settle the case. On the same date, the Parent Company paid the agreed amount to
Kenmor Corporation to settle all of its claims.
b. Acquisition on Global Max Services Pte. Ltd (Global Max) and eMax’s, LLC, Colorado Ltd
(eMax)
On January 22, 2015, the BOD approved the Parent Company’s acquisition of eMax. eMax is
a duly registered entity in Colorado, USA, primarily engaged in the granting of franchises for
the development and operation of restaurants under the Max’s brand name within the North
American territory. eMax holds the franchise and intellectual property rights for Max’s
restaurants for North America. Such an acquisition will allow all shareholders of MGI to
benefit from the expected growth of the Max’s restaurant business in North America.
Moreover, on January 22, 2015, the BOD approved the Parent Company’s acquisition of
Global Max. Global Max is a duly registered entity in Singapore engaged in the business of
management consultancy services. This transaction will allow the Parent Company to
consolidate support services for both local and international operations translating to cost
efficiencies and operational synergies.
8741 Paseo de Roxas
Phone: +632 982 9100
Fax : +632 982 9111

ON SCHEDULE OF RETAINED EARNINGS AVAILABLE FOR DIVIDEND DECLARATION

Max’s Group, Inc.
Makati City
We have audited in accordance with Philippines Standards on Auditing, the basic consolidated financial
statements of Max’s Group, Inc. (formerly Pancake House, Inc.) and Subsidiaries (the Group) as at and for
the year ended December 31, 2014 and have issued our report thereon dated March 27, 2015. Our
audit was made for the purpose of forming an opinion on the basic consolidated financial statements
taken as a whole. The accompanying Schedule of Retained Earnings Available for Dividend Declaration
is the responsibility of the Group’s management. This schedule is presented for purposes of complying
with Securities Regulation Code Rule 68, as amended, and is not part of the basic consolidated financial
statements. This information has been subjected to the procedures applied in the audit of the basic
consolidated financial statements, including comparing such information directly to the underlying
accounting and other records used to prepare the basic consolidated financial statements or to the
basic consolidated financial statements themselves. In our opinion, the information is fairly stated in all
material respects in relation to the basic consolidated financial statements taken as a whole.
BELINDA B. FERNANDO
Partner
PTR No. 4748325
March 27, 2015

SUBSIDIARIES
RECONCILIATION OF RETAINED EARNINGS AVAILABLE FOR DIVIDEND DECLARATION
DECEMBER 31, 2014
Retained earnings at the beginning of year =421,463,062

P
Adjustment for:
Deferred tax assets as at December 31, 2013 (65,994,844)
Retained earnings, as adjusted to amount available for
dividend declaration, at beginning of year 355,468,218
Add: Net loss for the year (28,119,392)
Less: Stock dividends (259,210,840)
Movement in deferred tax assets (29,455,171) (288,666,011)
Retained earnings available for dividend declaration, at end of year P
=38,682,815
RECONCILIATION:
Retained earnings at end of year as shown in the financial statements =134,132,830
P
Less: Deferred tax assets as at end of year (95,450,015)
Retained earnings available for dividend declaration, at end of year P
=38,682,815
8741 Paseo de Roxas
Phone: +632 982 9100
Fax : +632 982 9111

ON SCHEDULE OF ADOPTION OF EFFECTIVE ACCOUNTING STANDARDS

Makati City
We have audited in accordance with Philippines Standards on Auditing, the basic consolidated financial
the year ended December 31, 2014 and have issued our report thereon dated March 27, 2015. Our
audit was made for the purpose of forming an opinion on the basic consolidated financial statements
taken as a whole. The accompanying Schedule of Adoption of Effective Accounting Standards and
Interpretations is the responsibility of the Group’s management. This schedule is presented for
purposes of complying with Securities Regulation Code Rule 68, as amended, and is not part of the basic
consolidated financial statements. This information has been subjected to the procedures applied in
the audit of the basic consolidated financial statements, including comparing such information directly
to the underlying accounting and other records used to prepare the basic consolidated financial
statements or to the basic consolidated financial statements themselves. In our opinion, the
information is fairly stated in all material respects in relation to the basic consolidated financial
statements taken as a whole.
BELINDA B. FERNANDO
Partner
PTR No. 4748325
March 27, 2015

SUBSIDIARIES
SUPPLEMENTARY SCHEDULE OF ADOPTION OF
EFFECTIVE ACCOUNTING STANDARDS AND INTERPRETATIONS
DECEMBER 31, 2014
Not Not
Title Adopted
Adopted Applicable
Framework for the Preparation and Presentation of Financial
Statements

Conceptual Framework Phase A: Objectives and qualitative
characteristics
PFRSs Practice Statement Management Commentary 
Philippine Financial Reporting Standards (PFRSs)
Not Not
PFRS Title Adopted
Adopted Applicable
PFRS 1 First-time Adoption of Philippine Financial


(Revised) Reporting Standards
Amendments to PFRS 1 and PAS 27: Cost of an
Investment in a Subsidiary, Jointly Controlled 
Entity or Associate
Amendments to PFRS 1: Additional Exemptions

for First-time Adopters
Amendment to PFRS 1: Limited Exemption from

Comparative PFRS 7 Disclosures for First-time 
Adopters
Amendments to PFRS 1: Severe Hyperinflation

and Removal of Fixed Date for First-time 
Adopters
Amendments to PFRS 1: Government Loans 
Amendment to PFRS 1: Meaning of effective
PFRSs
PFRS 2 Share-based Payment 

Amendments to PFRS 2: Vesting Conditions and

Cancellations
Amendments to PFRS 2: Group Cash-settled


Share-based Payment Transactions
PFRS 3
Business Combinations 
(Revised)
Not Not
PFRS Title Adopted
Adopted Applicable
PFRS 4 Insurance Contracts 
Amendments to PAS 39 and PFRS 4: Financial


Guarantee Contracts
Non-current Assets Held for Sale and

PFRS 5 
Discontinued Operations
Exploration for and Evaluation of Mineral
PFRS 6 
Resources
PFRS 7 Financial Instruments: Disclosures 
Amendments to PAS 39 and PFRS 7:

Reclassification of Financial Assets
Reclassification of Financial Assets – Effective 
Date and Transition
Amendments to PFRS 7: Improving Disclosures 

about Financial Instruments
Amendments to PFRS 7: Disclosures – Transfers 
of Financial Assets
Amendments to PFRS 7: Disclosures – Offsetting 

Financial Assets and Financial Liabilities
Amendments to PFRS 7: Mandatory Effective 
Date of PFRS 9 and Transition Disclosures
PFRS 8 Operating Segments 
PFRS 9 Financial Instruments 
Amendments to PFRS 9: Mandatory Effective

Date of PFRS 9 and Transition Disclosures
PFRS 10 Consolidated Financial Statements 

Amendments to PFRS 10: Investment Entities 
PFRS 11 Joint Arrangements 
PFRS 12 Disclosure of Interests in Other Entities 
Amendments to PFRS 12: Investment Entities 
PFRS 13 Fair Value Measurement 
Amendment to PFRS 13: Short-term receivables

and payables
Philippine Accounting Standards (PASs)
Not Not
PAS Title Adopted
Adopted Applicable
PAS 1
Presentation of Financial Statements 
(Revised)
Amendment to PAS 1: Capital Disclosures 
Amendments to PAS 32 and PAS 1: Puttable

Financial Instruments and Obligations Arising on 
Liquidation
Amendments to PAS 1: Presentation of Items of


Other Comprehensive Income
PAS 2 Inventories 
PAS 7 Statement of Cash Flows 
Accounting Policies, Changes in Accounting
PAS 8 
Estimates and Errors
PAS 10 Events after the Reporting Period 

PAS 11 Construction Contracts 
PAS 12 Income Taxes 
Amendment to PAS 12 – Deferred Tax: Recovery


of Underlying Assets
PAS 16 Property, Plant and Equipment 

PAS 17 Leases 
PAS 18 Revenue 
PAS 19
Employee Benefits 
(Amended)
Accounting for Government Grants and
PAS 20 
Disclosure of Government Assistance
The Effects of Changes in Foreign Exchange
PAS 21 
Rates
Amendment: Net Investment in a Foreign


Operation
PAS 23
Borrowing Costs 
(Revised)
PAS 24
Related Party Disclosures 
(Revised)
Accounting and Reporting by Retirement Benefit

PAS 26 
Plans
PAS 27
Separate Financial Statements 
(Amended)
Amendments to PAS 27: Investment Entities 

PAS 28
Investments in Associates and Joint Ventures 
(Amended)
Financial Reporting in Hyperinflationary

PAS 29 
Economies
Financial Instruments: Disclosure and
PAS 32 
Presentation
Amendments to PAS 32 and PAS 1: Puttable
Financial Instruments and Obligations Arising on 
Liquidation
Amendment to PAS 32: Classification of Rights


Issues
Amendments to PAS 32: Offsetting Financial

Assets and Financial Liabilities
PAS 33 Earnings per Share 

PAS 34 Interim Financial Reporting 
PAS 36 Impairment of Assets 

Amendments to PAS 36: Recoverable Amount

Disclosures for Non-Financial Assets
Provisions, Contingent Liabilities and Contingent

PAS 37 
Assets
PAS 38 Intangible Assets 
Financial Instruments: Recognition and
PAS 39 
Measurement
Amendments to PAS 39: Transition and Initial

Recognition of Financial Assets and Financial 
Liabilities
Amendments to PAS 39: Cash Flow Hedge

Accounting of Forecast Intragroup Transactions
Amendments to PAS 39: The Fair Value Option 

Amendments to PAS 39 and PFRS 4: Financial

Guarantee Contracts


Reclassification of Financial Assets
Reclassification of Financial Assets – Effective 
Date and Transition
Amendments to Philippine Interpretation IFRIC–

9 and PAS 39: Embedded Derivatives
Amendment to PAS 39: Eligible Hedged Items 
Amendments to PAS 39: Novation of Derivatives

and Continuation of Hedge Accounting
PAS 40 Investment Property 

PAS 41 Agriculture 
Philippine Interpretations
Not Not
Interpretations Title Adopted
Adopted Applicable
Changes in Existing Decommissioning,

IFRIC 1 
Restoration and Similar Liabilities
Members’ Share in Co-operative Entities and
IFRIC 2 
Similar Instruments
Determining Whether an Arrangement Contains

IFRIC 4 
a Lease
Rights to Interests arising from
IFRIC 5 Decommissioning, Restoration and 
Environmental Rehabilitation Funds
Liabilities arising from Participating in a Specific
IFRIC 6 Market – Waste Electrical and Electronic 
Equipment
Applying the Restatement Approach under PAS
IFRIC 7 29 Financial Reporting in Hyperinflationary 
Economies
IFRIC 8 Scope of PFRS 2 

IFRIC 9 Reassessment of Embedded Derivatives 
Amendments to Philippine Interpretation IFRIC–

9 and PAS 39: Embedded Derivatives
IFRIC 10 Interim Financial Reporting and Impairment 
IFRIC 12 Service Concession Arrangements 
IFRIC 13 Customer Loyalty Programmes 
The Limit on a Defined Benefit Asset, Minimum
IFRIC 14 
Funding Requirements and their Interaction
Amendments to Philippine Interpretations IFRIC-
14, Prepayments of a Minimum Funding 
Requirement
Hedges of a Net Investment in a Foreign
IFRIC 16 
Operation
IFRIC 17 Distributions of Non-cash Assets to Owners 

IFRIC 18 Transfers of Assets from Customers 
Not Not
Interpretations Title Adopted
Adopted Applicable
Extinguishing Financial Liabilities with Equity

IFRIC 19 
Instruments
Stripping Costs in the Production Phase of a
IFRIC 20 
Surface Mine
IFRIC 21 Levies 
SIC-7 Introduction of the Euro 
Government Assistance – No Specific Relation to

SIC-10 
Operating Activities
Jointly Controlled Entities – Non-Monetary
SIC-13 
Contributions by Venturers
SIC-15 Operating Leases – Incentives 
Income Taxes – Recovery of Revalued Non-
SIC-21 
Depreciable Assets
Income Taxes – Changes in the Tax Status of an

SIC-25 
Entity or its Shareholders
Evaluating the Substance of Transactions

SIC-27 
Involving the Legal Form of a Lease
SIC-29 Service Concession Arrangements: Disclosures 
Revenue – Barter Transactions Involving
SIC-31 
Advertising Services
SIC-32 Intangible Assets – Web Site Costs 
8741 Paseo de Roxas
Phone: +632 982 9100
Fax : +632 982 9111

ON SUPPLEMENTARY SCHEDULES

Makati City
We have audited in accordance with Philippine Standards on Auditing, the consolidated financial
the year ended December 31, 2014 included in this Form 17-A and have issued our report thereon
dated March 27, 2015. Our audit was made for the purpose of forming an opinion on the consolidated
financial statements taken as a whole. The schedules listed in the Index to Financial Statements and
Supplementary Schedules are the responsibility of the Group’s management. These schedules are
presented for purposes of complying with Securities Regulation Code Rule 68, as amended, and are not
part of the basic financial statements. These schedules have been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, fairly state in all material
respects the financial data required to be set forth therein in relation to the basic financial statements
taken as a whole.
BELINDA B. FERNANDO
Partner
PTR No. 4748325
March 27, 2015

SUBSIDIARIES
SEC SUPPLEMENTARY SCHEDULES AS REQUIRED BY PAR. 6 PART II OF
SRC RULE 68 AS AMENDED
DECEMBER 31, 2014
Table of Contents
Schedule Description Page
A Financial Assets 1
B Amounts Receivable from Directors, Officers, Employees, Related Parties,

and Principal Stockholders (Other than Related Parties) 2
C Amounts Receivable from Related Parties which are Eliminated during the
Consolidation of Financial Statements 3
D Intangible Assets - Other Assets 4
E Long-Term Debt 5
F Indebtedness to Related Parties 6
G Guarantees of Securities of Other Issuers N/A
H Capital Stock 7
SUBSIDIARIES
SCHEDULE A - FINANCIAL ASSETS
DECEMBER 31, 2014
Carrying
Description Value Fair Value
Cash on hand =108,025
P =108,025
P
Loans and receivables:
Cash in banks and cash equivalents 848,497 848,497
Trade and other receivables* 677,559 677,559
Receivable from disposal of interest 143,571 143,571
Noncurrent receivables 163 163
=1,669,790
P =1,669,790
P
*Net of allowance for impairment losses totaling to P

=180.7 million.
SUBSIDIARIES
SCHEDULE B - AMOUNTS RECEIVABLE FROM DIRECTORS, OFFICERS, EMPLOYEES, RELATED PARTIES and PRINCIPAL
STOCKHOLDERS (OTHER THAN RELATED PARTIES)
December 31, 2014
Deductions Ending Balance
Balance at Written Balance at end

Name and Designation of Debtor beginning of year Additions Collected off Current Noncurrent of year
Officers and employees P

=36,935 P
=116,517 (P
=94,464) P
=– P
=58,988 P
=– P
=58,988
P
=36,935 P
=116,517 (P
=94,464) P
=– P
=58,988 P
=– P
=58,988
SUBSIDIARIES
SCHEDULE C - AMOUNTS RECEIVABLE FROM RELATED PARTIES WHICH ARE ELIMINATED DURING THE CONSOLIDATION
OF FINANCIAL STATEMENTS
December 31, 2014

Balance at
beginning of Amounts Balance at
Related Party year Additions Collections Write off written off Current Noncurrent end of year
Chickens R Us, Inc =34,991
P =21,803
P =–
P =–
P =–
P =56,794
P =–
P =56,794
P
Max's Ermita Inc 66,047 11,558 – – – 77,605 – 77,605
Max's Express Restaurants, Inc 2,500 827 – – – 3,327 – 3,327
Max's Food Services, Inc 239 (186) – – – 54 – 54
Global Max's Servives Pte. LTD 2,399 9,740 – – – 12,139 – 12,139
Max's Franchising, Inc 4,860 5,376 – – – 10,237 – 10,237
Room Ventures Corp – 200 – – – 200 – 200
Trota, Gimenez Realty Corp. 7,556 7,750 – – – 15,305 – 15,305
Max's Kitchen, Inc 19,030 152,752 (91,496) – – 80,286 – 80,286
Max's Makati, Inc 75,915 314,171 (253,276) – – 136,810 – 136,810
Maxs' SM Marikina, Inc 2,775 9,121 (9,932) – – 1,965 – 1,965
Square Top, Inc 31,183 827,643 (803,021) – – 55,805 – 55,805
Max's Bakeshop, Inc – 33,267 – – – 33,267 – 33,267
Max's Circle, Inc 9,886 – (2,017) – – 7,870 – 7,870
The Real American Doughnut Company 2,089 143,779 – – – 145,869 – 145,869
Fresh Healthy Juice Boosters, Inc – – – – – – – –
88 Just Asian, Inc. 25,139 46,434 (69,420) – – 2,152 – 2,152
Always Happy BGC, Inc. 5,717 – (1,323) – – 4,394 – 4,394
Always Happy Greenhills, Inc. 1 – (2) – – (1) – (1)
Boulangerie Francaise, Inc. 40,684 7,808 (789) – – 47,703 – 47,703
Chicken's R Us, Inc. – 27,285 (57) – – 27,228 – 27,228
CRPPhilippines, Inc. 51,245 100 (51,345) – – – – –
DFSI–One Nakpil, Inc. 3,442 – (700) – – 2,742 – 2,742
DFSI–Subic, Inc. 15,335 – – – – 15,335 – 15,335
Golden BERRD Grill, Inc. (454) – (700) – – (1,154) – (1,154)
Happy Partners, Inc. (2,379) 10 (579) – – (2,948) – (2,948)
Max's Kitchen, Inc. – 45,419 – – – 45,419 – 45,419
Max's Bakeshop, Inc – 72,482 – – – 72,482 – 72,482
Max's Express Restaurants, Inc – 293 – – – 293 – 293
MGOC Holdings, Inc – 8,677 – – – 8,677 – 8,677
No Bia, Inc. – 33,242 – – – 33,242 – 33,242
Pancake House Products, Inc. 180 – (81) – – 98 – 98
Pancake House Ventures, Inc. 362 81 – – – 443 – 443
PCK Bel–Air, Inc. 7,799 404 (801) – – 7,401 – 7,401
PCK Boracay, Inc. 1,920 625 (1,825) – – 720 – 720
PCK MSC, Inc. 340 150 (38) – – 452 – 452
PCK MTB, Inc. 531 6,417 (6,437) – – 511 – 511
PCK–AMC, Inc. 94 – (31) – – 64 – 64
PCK–LFI, Inc. 377 490 (442) – – 425 – 425
PCK–N3, Inc. 305 459 (86) – – 678 – 678
PCK–Palawan, Inc. 23 5,169 (5,192) – – – – –
PCKPolo, Inc. 401 500 (901) – – – – –
PHI International – BVI 69,213 30,313 (86) – – 99,440 – 99,440
PHI International – Malaysia 68,338 – (30,208) – – 38,130 – 38,130
Room Ventures, Corp – 821 – – – 821 – 821
Square Top Inc. – 15,537 – – – 15,537 – 15,537
TBGI–Tagaytay, Inc. – – – – – – – –
Teriyaki Boy Group, Inc. (84,431) 101,822 (40,451) – – (23,060) – (23,060)
Trota, Gimenez Realty Corp – 8,208 – – – 8,208 – 8,208
The Real American Doughnut Co. Inc – 93,807 – – – 93,807 – 93,807
Yellow Cab Food Corporation 1,527 186,102 (116,131) – – 71,498 – 71,498
P
=465,179 P
=2,230,459 (P
=1,487,368) P
=– P
=– P
=1,208,270 P
=– P
=1,208,270
SUBSIDIARIES
SCHEDULE D: INTANGIBLE ASSETS – OTHER ASSETS
DECEMBER 31, 2014
Other changes
Beginning Additions at Charged to additions
Description balance cost Amortization other accounts (deductions) Ending balance
Trademarks =298,394
P =–
P =28,443
P =–
P =705
P =270,656
P
Software 12,040 7,499 8,041 – 15,918 27,416
Brand development cost 4,787 2,875 1,151 – 293 6,804
Lease rights 3,244 2,242 1,114 – 2,054 6,426
Franchise fees – – 1,037 – 11,988 10,951
Goodwill 889,522 3,002,720 – – (88,851) 3,803,391
=1,207,987
P =3,015,336
P =39,786
P =–
P (P
=57,894) =4,125,644
P
SUBSIDIARIES
SCHEDULE E - LONG-TERM BORROWINGS
DECEMBER 31, 2014
Amount shown under “Current Amount shown under “Long-

portion of long-term borrowings” term borrowings” account in the
account in the consolidated statement consolidated statement of financial
Title of issue and type of obligation of financial position position
Loans payable =2,307,288
P =–
P
Long-term debt 73,697 990,988
Mortgage payable 8,165 –
=2,389,150
P =990,988
P
Details are discussed in Notes 15, 16 and 17 to consolidated financial statements.

SUBSIDIARIES
SCHEDULE F – RECEIVABLE FROM (PAYABLE TO) RELATED PARTIES
December 31, 2014
Balance at Balance at end

Related Party beginning of year Additions Collections Write Off Current Noncurrent of year
WERCO Holdings =–
P =50,043
P =–
P =–
P =50,043
P =–
P P=50,043
Various Stockholders 41,174 29,683 – – 70,856 – 70,856
88 Just Asian, Inc. 4,984 556 (1,161) – 4,379 – 4,379
Always Happy BGC, Inc. 3,496 13,816 (16,301) – 1,011 – 1,011
Always Happy Greenhills, Inc. 12,311 18,188 (16,827) – 13,672 – 13,672
Boulangerie Francaise, Inc. 5,684 38,380 (20,673) – 23,392 – 23,392
CRPPhilippines, Inc. 37,932 17,854 (15,022) (19,930) 20,834 – 20,834
DFSI–One Nakpil, Inc. 8,406 63,737 (51,449) – 20,694 – 20,694
DFSI–Subic, Inc. – 57 (37) – 20 – 20
Happy Partners, Inc. 6,717 38,871 (34,816) – 10,772 – 10,772
Pancake House Products, Inc. – 25 (11) – 13 – 13
Pancake House Ventures, Inc. – 40 (11) – 29 – 29
PCK Bel–Air, Inc. 10,364 41,041 (44,645) – 6,760 – 6,760
PCK Boracay, Inc. 1,208 10,171 (10,089) – 1,290 – 1,290
PCK MSC, Inc. 3,459 11,929 (11,334) – 4,054 – 4,054
PCK MTB, Inc. 5,852 16,839 (21,483) – 1,208 – 1,208
PCK–AMC, Inc. 31 25 (11) – 44 – 44
PCK–LFI, Inc. 3,532 19,787 (22,946) – 373 – 373
PCK–N3, Inc. 5,593 22,378 (24,241) – 3,730 – 3,730
PCK–Palawan, Inc. 8,601 21,648 (12,655) (8,765) 8,829 – 8,829
PCKPolo, Inc. 11,989 38,595 (23,948) (13,318) 13,318 – 13,318
PHI International – BVI 8,794 2,987 (155) – 11,625 – 11,625
PHI International – Malaysia 21 23 – – 44 – 44
TBGI–Marilao, Inc. – 92 (75) – 17 – 17
TBGI–Tagaytay, Inc. – 109 (46) – 63 – 63
TBGI–Trinoma, Inc. – 140 (48) – 92 – 92
TBOY–MS, Inc. – 92 (75) – 17 – 17
Teriyaki Boy Group, Inc. 28,784 73,654 (78,772) – 23,665 – 23,665
FreshHealthy Juice Boosters, Inc. – 1,121 (584) – 538 – 538
Global Maxs Services PTE ROHQ – 42,376 (42,484) – (108) – (108)
Max's Franchising, Inc. – 2,684 (3,285) – (600) – (600)
Max's Ermita, Inc. – 274 (403) – (130) – (130)
Max's Baclaran, Inc. – 8 (8) – – – –
Max's Bakeshop, Inc. – 4 (4) – (0) – (0)
No Bia, Inc. – 12,283 – – 12,283 – 12,283
Ad Circles – 100 (191) – (91) – (91)
TRADCI – 140 (157) – (17) – (17)
Yellow Cab Food Corporation 6,037 158,885 (165,435) – (512) – (512)
P
=256,143 P
=748,635 (P
=619,381) (P
=42,013) P
=343,383 =–
P P
=343,383
SUBSIDIARIES
SCHEDULE H – CAPITAL STOCKHOLDER
December 31, 2014
Number of shares held by
Number of shares issued Number of shares

and outstanding as shown reserved for options, Directors,
Number of shares under the statement of warrants, conversion officers and
Title of Issue authorized financial position caption & other rights Related parties employees Public
Common shares 1,400,000,000 780,203,980 – 341,677,966 196,025,536 242,500,478

MAX’S GROUP, INC.(FORMERLY PANCAKE HOUSE, INC.) AND
SUBSIDIARIES
(FORMERLY PANCAKE HOUSE, INC. AND SUBSIDIARIES)
FINANCIAL RATIOS
DECEMBER 31, 2014
Below is a schedule showing financial soundness indicators in the years 2014, 2013 and 2012.
2014 2013 2012
Current/Liquidity Ratio 0.54:1 0.52:1 1.01:1

Current assets P
=2,361,840 =P951,121 =P955,381
Current liabilities 4,396,729 1,821,800 946,005
Solvency Ratio 0.03:1 0.15:1 0.17:1

Net income (loss) before depreciation 204,642 282,386 315,797
Total liabilities 5,868,323 1,944,495 1,864,157
Debt-to-equity Ratio 1.46:1 1.90:1 1.82:1

Total liabilities 5,868,323 1,944,495 1,864,157
Total equity 4,032,871 1,025,430 1,025,325
Asset-to-equity Ratio 2.46:1 2.90:1 2.82:1

Total assets 9,901,194 2,969,924 2,889,482
Total equity 4,032,871 1,025,429 1,025,325
Interest rate coverage Ratio (0.09):1 3.28:1 4.43:1

Pretax income (loss) before interest (5,753) 205,113 271,800
Interest expense 64,753 62,580 61,331
Profitability Ratio (0.02):1 0.08:1 0.15:1

Net income (loss) (66,202) 79,274 149,617
Total equity 4,032,871 1,025,430 1,025,325
SUBSIDIARIES
MAP SHOWING THE RELATIONSHIP BETWEEN AND AMONG THE GROUP
DECEMBER 31, 2014

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Max’s Group, Inc. (formerly Pancake House, Inc.

Consolidated Financial Statements

With independent auditor’s report provided by

REYES TACANDONG & CO.

SEC Registration Number

Principal Office (No./Street/Barangay/City/Town) Province)

Annual Meeting Fiscal Year

82 Any day in June December 31

CONTACT PERSON INFORMATION

Name of Contact Person Email Address Telephone Number/s Mobile Number

Contact Person’s Address

INDEPENDENT AUDITOR’S REPORT

The Stockholders and the Board of Directors

Report on the Consolidated Financial Statements

Management’s Responsibility for the Consolidated Financial Statements

REYES TACANDONG & CO.

March 27, 2015

REPORT OF INDEPENDENT AUDITOR

The Stockholders and the Board of Directors

REYES TACANDONG & CO.

March 27, 2015

Note 2014 2013

LIABILITIES AND EQUITY

Note 2014 2013

See accompanying Notes to Consolidated Financial Statements.

2014* 2013 2012

COSTS OF SALES 21 3,099,347 862,903 (15,758) 3,946,492 3,067,219 2,799,748

GROSS PROFIT 594,573 324,733 – 919,306 684,332 630,952

GENERAL AND ADMINISTRATIVE EXPENSES 22 (498,800) (213,883) – (712,683) (436,762) (399,329)

SALES AND MARKETING EXPENSES (172,575) (30,646) – (203,221) (131,386) (62,885)

FINANCE COSTS 15 (39,499) (25,254) – (64,753) (62,580) (61,331)

SHARE IN EQUITY IN NET LOSSES OF JOINT

OTHER INCOME 25 133,418 1,342,364 (1,307,527) 168,255 100,972 113,157

INCOME (LOSS) BEFORE CORPORATE

CORPORATE REORGANIZATION COSTS 6 (177,412) – – (177,412) – –

PROVISION FOR (BENEFIT FROM) INCOME TAX 26

NET INCOME (LOSS) (P

NET INCOME (LOSS) ATTRIBUTABLE TO:

Earnings (loss) Per Share Attributable to the

See accompanying Notes to Consolidated Financial Statements.

Note 2014 2013 2012

NET INCOME (LOSS) (P

OTHER COMPREHENSIVE INCOME

TOTAL COMPREHENSIVE INCOME (LOSS) (P

TOTAL COMPREHENSIVE INCOME (LOSS)

See accompanying Notes to Consolidated Financial Statements

Note 2014 2013 2012

ADDITIONAL PAID-IN CAPITAL 19

OTHER COMPREHENSIVE INCOME (LOSS)

Note 2014 2013 2012

6,586,823 924,553 880,961

SHARES HELD BY SUBSIDIARIES - at cost 19

See accompanying Notes to Consolidated Financial Statements.

Note 2014 2013 2012

CASH FLOWS FROM OPERATING ACTIVITIES

Note 2014 2013 2012

CASH FLOWS FROM INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

NET INCREASE (DECREASE) IN CASH 614,840 (30,868) (35,242)

CASH AT BEGINNING OF YEAR 341,682 372,550 407,792

CASH AT END OF YEAR P

NONCASH FINANCIAL INFORMATION