Empire Brandy FS

REPORT OF INDEPENDENT AUDITORS
The Management
Empire Brandy Refinery Corporation
012 The Enterprise Building
General Luna Avenue
Iloilo City
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of Empire Brandy Refinery

Corporation (“the Company”), which comprise the statements of financial position as at
December 31, 2015 and 2014, and the statements of comprehensive income,
statements of changes in equity and statements of cash flows for the years then ended,
and notes, comprising a summary of significant accounting policies and other
explanatory information.
In our opinion, the accompanying financial statements present fairly, in all material
respects, the financial position of the Company as at December 31, 2015 and 2014,
and its financial performance and its cash flows for the years then ended in accordance
with Philippine Financial Reporting Standards (PFRS).
Basis for Opinion
We conducted our audits in accordance with Philippine Standards on Auditing (PSA).

Our responsibilities under those standards are further described in the Auditors’
Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Company in accordance with the Code of Ethics for Professional
Accountants in the Philippines (Code of Ethics) together with the ethical requirements
that are relevant to our audits of the financial statements in the Philippines, and we
have fulfilled our other ethical responsibilities in accordance with these requirements
and the Code of Ethics. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with PFRS, and for such internal control as management
determines is necessary to enable the preparation of the financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the

Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial
reporting process.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or
error, and to issue an auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with PSA will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with PSA, we exercise professional judgment and

maintain professional skepticism throughout the audit. We also:
 Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
 Obtain an understanding of internal control relevant to the audit 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 Company’s internal control.
 Evaluate the appropriateness of accounting policies used and the reasonableness

of accounting estimates and related disclosures made by management.
 Conclude on the appropriateness of management’s use of the going concern basis

of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on
the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditors’ report to the
related disclosures in the financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditors’ report. However, future events or conditions may cause
the Company to cease to continue as a going concern.
 Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance and management regarding,

among other matters, the planned scope and timing of the audits and significant audit
findings, including any significant deficiencies in internal control that we identify during
our audits.
Report on the Supplementary Information Required Under Revenue Regulations

No. 15-2010 of the Bureau of Internal Revenue
Our audits were conducted for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary information in Note 21 to financial
statements is presented for purposes of filing with the Bureau of Internal Revenue and
2
is not a required part of the basic financial statements. Such supplementary information
is the responsibility of management. The supplementary information has been
subjected to the auditing procedures applied in our audits of the basic financial
statements. In our opinion, the supplementary information is fairly stated, in all material
respects in relation to the basic financial statements taken as a whole.
MERCEDES E. BENZ
Partner
CPA License No. 0164739
SEC Accreditation No. 1615-A (Group A),
October 17, 2014, valid until October 16, 2016
Tax Identification No. 428-902-113
BIR Accreditation No. 09-001890-113-2014,
March 6,2014, valid until March 5, 2016
PTR No. 5517999, January 4, 2016, Makati City
January 20, 2016
3
EMPIRE BRANDY REFINERY CORPORATION
(A subsidiary of Empire Conglomerate)
STATEMENT OF FINANCIAL POSITION
December 31, 2015 and 2014
(In Millions US $)
December 31
2015 2014
ASSETS
Current Assets
Cash and cash equivalents 350,092 353,585
Trade and other receivables 70,152 65,291
Inventories - net 35,000 35,500
Prepaid expenses and other current 2,000 3,000
assets
Total Current Assets 457,244 457,376
Noncurrent Assets
Property, plant and equipment - net 120,000 125,000
Investment property net 12,000 10,000
Security and utility deposits 20,000 19,200
Deferred Tax Assets 1,500 3,450
Other noncurrent assets - net 5,000 5,500
Total Noncurrent Assets 158,500 163,150
Total Assets 615,744 620,526
LIABILITIES AND SHAREHOLDERS’

EQUITY
Current Liabilities
Accounts payable and other current 145,098 142,000
liabilities
Income and other taxes payable 82,000 81,500
Total Current Liabilities 227,098 223,500
Non-current Liability
Accounts payable 200,320 198,500
Total Non-current Liabilities 200,320 198,500
Total Liabilities 427,418 422,000
Shareholders’ Equity
Share Capital (10,000,000 authorized 100,000 100,000
and subscribed shares, with par
value of Php10)
Retained Earnings 88,326 98,526
Total Shareholders’ Equity 188,326 198,526
Total Liabilities and Shareholder’s
Equity 615,744 620,526

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REPORT OF INDEPENDENT AUDITORS

Report on the Audit of the Financial Statements

We have audited the accompanying financial statements of Empire Brandy Refinery

Basis for Opinion

We conducted our audits in accordance with Philippine Standards on Auditing (PSA).

In preparing the financial statements, management is responsible for assessing the

As part of an audit in accordance with PSA, we exercise professional judgment and

 Obtain an understanding of internal control relevant to the audit in order to design

 Evaluate the appropriateness of accounting policies used and the reasonableness

 Conclude on the appropriateness of management’s use of the going concern basis

We communicate with those charged with governance and management regarding,

Report on the Supplementary Information Required Under Revenue Regulations

January 20, 2016

LIABILITIES AND SHAREHOLDERS’

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