## 2.3 Working Capital 

As at 31 December 2017, the working capital position of the Institute showed current assets of P315.59 million and current liabilities of P82.97 million resulting in a net current asset position of P232.62 million. 

## 3.0 Management Letter 

The following were some of the significant matters raised by the auditors and the management responses thereto: 

## 3.1 Debtors Management 

The auditors observed that the Institute’s trade receivables balance (gross trade receivable: P59 million as at year-end) was significantly high compared to revenue for the year (P83 million), which indicated delayed payments by customers. Management had performed an assessment of the balances and concluded that substantially all balances were recoverable. The assessment of recoverability was done at an individual customer basis as the nature of the customers was such that the credit profiles and associated risks were unique to each customer. The auditors own testing of the recoverability of year-end receivables indicated that the provisions carried were adequate. 

As at year-end, the auditors noted that the performing debtor balance within the credit period was P33.3 million and past due debtor balance was P26.8 million. 

## 3.2 Inventory Valuation 

The auditors noted that the finished goods inventory held by the Institute had increased by P14.8 million compared to prior year due to a significant decline in sales while production remained relatively the same as in the previous period. The decline in sales resulted in the company holding onto inventory, as its shelf life diminished, hence the need to provide P3.5 million against vaccines expiring in the near future with no good prospects of sales and the write-off of P1.5 million of expired vaccines. 

During the year, the auditors noted that a new multi-currency procurement module was implemented to move from manual receipting of goods. The auditors’ testing revealed that there were a significant number of entries proposed to correct exchange gains/losses that arose due to incorrect rates used upon receipt of goods as at the year-end. However, the 

