Subsidiaries

1. San Miguel Brewery

2. Petron Corporation
3. Ginebra San Miguel
4. San Miguel Food and Beverages
5. San Miguel Yakamura Packaging
6. Magnolia
7. San Miguel Holding Corporation
8. San Miguel Properties
9. San Miguel Consolidated Power Corporation
10. San Miguel Equity Investment Inc. ETC.

International Operation

SMC Brewery

According to Rappler (2017) MANILA, Philippines (AP) — San Miguel Corporation's

(SMC) packaging unit expanded its presence in Australia with the acquisition of Portavin
Holdings Proprietary Limited, Australia's leading independent wine services supplier.

SMC announced on Monday, February 6, 2017, that its subsidiary San Miguel
Yamamura Packaging International Limited (SMYPIL) had purchased 100% of
Portavin's shares.

SMC Food and Beverages

San Miguel Corp. (SMC), a food and beverage conglomerate, has begun construction
on a non-alcoholic beverage plant in southern China, the company's sixth on the
mainland, which is anticipated to open in the third quarter of 2005.

San Miguel (Guangdong) Foods and Beverages Co. Ltd. will use locally sourced raw
ingredients to make high-quality beverages such as bottled water and fruit-based drinks.

SMC has two packaging companies, Zhaoqing San Miguel Glass Co. Ltd. and Foshan
San Miguel Packaging Co. Ltd., in addition to its brewing business. All of the company's
operations are focused in China's Pearl River Delta, with the exception of its brewery in
Baoding. SMC’s brewery in Hong Kong, the company’s first overseas venture, was
established in 1948. (Bakery&Snakcs, 2017)
International Offices

San Miguel Corporation produces some of the world's most popular beers. San Miguel's
manufacturing facilities have expanded to include Hong Kong, China, Indonesia,
Vietnam, Thailand, Malaysia, and Australia, and its goods are sold in more than 60
countries. (Wikipedia, 2021)

Products (San Miguel Corporation, 2021)

San Miguel Brewery

San Miguel is one of the largest producers of beer in the Philippines

1. Red Horse Beer

2. San Mig Light
3. San Miguel Flavored Beer
4. San Mig Zero
5. Gold Eagle Beer
6. San Miguel Super Dry
7. San Miguel Premium All malt beer

San Miguel Food and Beverages

San Miguel is comprised of leading food and companies in the Philippines.

1. Magnolia
2. Purefoods
3. B-MEG
4. Dari-Crème
5. Star
6. La Pacita
7. Kambal Pandesal

Broader Societal Analysis (Corporate Governance & CSR)

Corporate Governance

San Miguel Corporation (2021) is committed to the highest standards of corporate

governance. Good governance is key in effective decision making and in delivering on
corporate strategies that generate shareholder value and safeguard the long-term
interests of shareholders. As a responsible corporate citizen, the Company has in place
efficient policies and programs to ensure that we always do what is right when it comes
to conducting the everyday business of the Company.
Our Board of Directors, led by our Chairman, Mr. Eduardo M. Cojuangco, Jr., believes
in conducting our business affairs in a fair and transparent manner and in maintaining
the highest ethical standards in all the business dealings of the Company

SHAREHOLDER RIGHTS

The Company recognizes that the most cogent proof of good corporate governance is that
which is visible to the eyes of its investors. (San Miguel Corporation, 2021)

STAKE HOLDER RELATIONS

San Miguel Corporation exercises transparency when dealing with shareholders,

customers, employees, trade partners, creditors, and all other stakeholders. The
Company ensures that these transactions adhere to fair business practices in order to
establish long-term and mutually beneficial relationships. (San Miguel Corporation,
2021)

DISCLOSURE AND TRANSPARENCY

San Miguel Corporation adheres to a high level of standard in its corporate disclosure
and adopts transparency with respect to the Company’s financial condition and state of
corporate governance. (San Miguel Corporation, 2021)

Accountability and Audit

The Audit and Risk Oversight Committee has oversight functions with respect to the
external and internal auditors. The role and responsibilities of the Audit and Risk
Oversight Committee are clearly defined in the Company’s Manual on Corporate
Governance and the Audit and Risk Oversight Committee Charter. (San Miguel
Corporation, 2021)

Board Of Directors

Compliance with the principles of good corporate governance starts with the Board of
Directors of the Company. The board is responsible for overseeing business affairs and
the integrity of the company; determining the Company's mission, long-term strategy
and objectives; managing the company's risks by evaluating and ensuring the adequacy
of the company's internal controls and procedures. (San Miguel Corporation, 2021)

Management

Management is primarily responsible for the day-to-day operations and business of the
Company. The annual compensation of the Chairman/CEO and the top senior
executives of the company are set out in the Definitive Information Statement distributed
to shareholders. (San Miguel Corporation, 2021)
Employee Relations

Employees are provided an Employee Handbook and Code of Ethics which contain the
policies and guidelines for the duties and responsibilities of an employee of San Miguel
Corporation. (San Miguel Corporation, 2021)

Through internal newsletters and company e-mails all facilitated by the Human
Resources Department and the Corporate Affairs Office, employees are updated on
material developments within the organization.

Career advancement and developments are also provided by the Company through
numerous training programs and seminars. The Company has also initiated activities
centered on the safety, health and welfare of its employees. Benefits and privileges
accruing to all regular employees are similarly discussed in the Employee Handbook.
(San Miguel Corporation, 2021)

Code of Ethics

The Company’s Code of Ethics sets out the fundamental standards of conduct and
values consistent with the principles of good governance and business practices that
shall guide and define the actions and decisions of the directors, officers, and
employees of the company. The principles and standards prescribed in the Code of
Ethics apply to all directors, senior managers, and employees of the Company. (San
Miguel Corporation, 2021)

Compliance Monitoring

The Compliance Officer, Atty. Virgilio S. Jacinto, is responsible for monitoring

compliance by the Company with the provisions and requirements of good corporate
governance. (San Miguel Corporation, 2021)

Corporate Social Responsibilities

The environmental program of San Miguel Foundation Inc. covers the protection of land,
water, and air. On a smaller scale, the Foundation conducts tree-planting projects on
areas identified by different San Miguel Corporation (SMC) plants. Tree-planting
projects are usually scheduled to coincide with plant celebrations .

1. Corporate Technical Services-Environmental Management Group (CTS-EMG)

has been conducting stack emission sampling in SMC-owned plants throughout
the country since 1999 even before the promulgation of the Philippine
Government’s Clean Air Act (RA 8749) in 2001. The sampling measures the
 quality of the fl ue gas emission of fuel combustion from boilers, furnaces, and
power generator sets using the fully automated Napp-Baldwin Isokinetic sampler.
Its fl ue gas analyzer, Testo350, a high-tech instrument, is also used to obtain
quick results in air emission quality measurement. (San Miguel Corporation,
2021)
2. Task Force Hangin is responsible for helping plants comply with the Clean Air
Act. The word “hangin” means “air”. The Task Force is composed of
representatives from CTS-EMG, CTS-Engineering, Corporate Planning and
Development, and Corporate Purchasing Unit. It is tasked to pinpoint the best
available fuel and control technology for the plants’ fuel burning equipment. It
conducted numerous studies and came up with recommendations to utilize low
sulfur fuel oil (LSFO) and scrubbers as the most efficient options for solving the
problem, and maintain the level of sulfur content in its fuel to about 0.7%S. It also
studied the range of fuel cost that determines when LSFO fuel is advantageous
to use versus scrubbers, and when a plant needs to shift from LSFO to
scrubbers. . (San Miguel Corporation, 2021)
3. SMC’s breweries in Mandaue, Davao and Polo, and Distileria Bago, Inc. treat
their wastewater employing the anaerobic biological process. A by-product of this
process is biogas, which contains methane gas. The simple molecular structure
of methane gas makes it the cleanest gas in use today. The gas is recovered by
the breweries and used as fuel for their boiler units. A total of 25,940,173. (San
Miguel Corporation, 2021)
4. SMC’s Polo Brewery pioneered the anti-smoke belching campaign within its
premises by requiring all vehicles entering the plant to submit a certificate of
compliance (COC). This initiative by a private company preceded the much
lauded Project Blue Sky of the Department of Environment and Natural
Resources’ Clean Air Campaign launched in 1994. Now more than 120
companies are implementing the “no COC, no entry” policy in their facilities,
including SMC’s Mandaue and San Fernando Breweries. The project is
spearheaded by the Center for Corporate Citizenship of the Philippine Business
for Social Progress. (San Miguel Corporation, 2021)
5. CTS-EMG organizes the quarterly Environmental Forum, which started in 1998.
The forum is designed for SMC staff responsible for pollution management and
control, particularly the Pollution Control Officer. Its purpose is to broaden
knowledge of environmental laws, technology updates, waste management, and
operation of waste treatment facilities. (San Miguel Corporation, 2021)
6. Disaster management this project includes relief distribution to calamity stricken
areas and rehabilitation activities such as provision of livelihood projects and
repairs of school buildings and day care centers. (San Miguel Corporation, 2021)
 FINANCIAL ANALISYS
Financial Ratios

Financial Ratio analysis is a powerful tool that used in evaluating the overall
financial condition and performance of an organization. In this paper, financial ratios
are used to pinpoint the strength and weaknesses of the company.

Liquidity Ratio

2020 2019

Current Assets 672,411 641,144

Current Ratio= =1.60 =1.46
Current Liabilitites 419,384 439,617

Cash+ Accounts Receivable 471,578 422,945

Quick Ratio= =1.12 =0.96
Current Liabilities 419,384 439,617

Current Assets 672,411 641,144

Net WorkingCapital 253,027 201527
Current Liabilities −419,384 −439,617

The current ratio is a liquidity ratio that measures a company's ability to pay

short-term obligations or those due within one year. It tells investors and analysts
how a company can maximize the current assets on its balance sheet to satisfy its
current debt and other payables . The higher the current ratio, the more capable
the company is of paying their obligations. The SMC reported improving
current ratio from 1.46 in 2019 to 1.60 in 2020. This shows that the company
can service short-term liabilities with its current assets.
 On the other hand, Net Working Capital measures a company`s efficiency
and its short-term financial health. Positive working capital means that the
company current is able to pay its short-term liabilities. Negative Net Working
Capital means that the company currently unable to meet its short-term
liabilities with its current assets (cash, accounts receivable and inventory) in
2020 San Miguel Corporations net working capital stood at Php201,
527Millions.

Profitability Ratios

Gross Profit Margin is a financial metric used to assess a firm`s financial

wealth by revealing the proportion of money left over from revenues after
accounting for the cost of goods sold. Gross profit margin serves the source for
paying additional expenses and future savings. SMC`s gross profit margin is
computed by dividing Gross profit by the Sales. GPM improved from 19.76% in
2019 to 20.16% in 2020.

2020 2019

Gross Profit 149,348 201,687

Gross Profit Margin= x 100 x 100=20.16 % x 100=19.76 %
Sales 725,797 1,020,502

Operating Profit 19441 59696

Operating Propit Margin x 100 x 100=2.68 % x 100=5.84%
Sales 725,797 1,020,502

Net Income 21,879 48574

Net Profit Margin x 100 x 100=3.01 % x 100=4.76 %
Revenue 725,797 1,020,502

Net Income 21,879 48,574

Return of Assets x 100 x 100=1.14 % x 100=2.67 %
Total Assets 1,912,207 1,817,734
 Net Income 21,879 48,574
Return on Equity x 100 x 100=3.33 % x 100=8.46 %
Total Equity 655,088 574,395

SMC`s Operating margin (The operating margin represents how efficiently a

company is able to generate profit through its core operations. Operating margin
measures how much profit a company makes on a dollar of sales after paying
for variable costs of production, such as wages and raw materials, but before
paying interest or tax.) also improved in 2020, rising from 19.76% by 2019 to
20.16%.

The company`s net profit margin decrease from 5.84% to 2.68% the
reason is the sales of 2019 in higher than the sales of 2020 it`s because of the
pandemic that the world are facing right now.

Return of the Assets measures how the company uses its capital
resources to generate Although the San Miguel Corporations ROA is deemed
low at 1.53%. It seems that the company are not moving their assets to generate
more income.

It shows that the amount of net income returned as percentage of

shareholders equity. ROE measures the company profitability by revealing how
much profit company generates with the money of shareholders have invested.

Leverage Ratios

2020 2019

Total Liabilities 1257119 1243339

Debt ¿ Equity Ratio= =0.66 =0.68
Total Stockholder s Equity 1,912,207 1,817,734

Total Liabilities 1257119 1243339

Debt ¿ Equity Ratio= =0.66 =0.68
Total Assets 1,912,207 1,817,734

A leverage ratio is any kind of financial ratio that indicates the level of debt incurred by a
business entity against several other accounts in its balance sheet, income statement, or cash
flow statement.  These ratios provide an indication of how the company’s assets and business
operations are financed (using debt or equity). The leverage ratio of San Miguel Corporation is
less than one which means it the
 Debt ratio. Compares assets to debt, and is calculated as total debt divided by total
assets. A high ratio indicates that the bulk of asset purchases are being funded with debt.
Conversely, this means that a business is operating with minimal levels of equity.

Debt to equity ratio. Compares equity to debt, and is calculated as total debt divided by
total equity. A high ratio indicates that the business owners may not be providing sufficient
equity to fund a business.

Assets Quality and Efficiency Ratios

2020 2019

Net Sales 725,797 1,020,502

AssetsTurnover Ratio= =0.38 =0.56
Average total Assets 1,912,207 1,817,734

Accounts Receivable

Net Sales P 725,797 1,020,502

Turnover Ratio= =5.86 =7.48
Accounts Recceivable 124,369 136,488

Accounts Payable

Cost Of Sales 576,449 818,815

Turnover Ratio= =2.0 =2.21
Accounts Payable 319123 370830

SMC`s assets turnover ratio is at 0.38% in 2020 which is measure of corporation`s

efficiencies on using its assets on generating sales or revenue. Assets turnover ratio indicates
pricing strategy: corporations with low profit margins tend to have high assets turnover, while
those with high profit margins have low assets turnover.

Receivables turnovers ratio measures a corporation’s effectiveness in extending credit

as well as collecting debts. San Miguel Corporations` AR turnover is at 5.86 slightly lower than
2019 that have 7.48. Accounts payable turnover Ratio liquidity measures used to quantify the
rate at which a company pays off its suppliers. SMC`s AP turnover ratio is 2.0 which means they
pay their debt twice a year.