SEC Form 17-A: Annual Report - the solid group inc website

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compose Metro Manila over its 2,400 strand miles of cable. The network is capable of delivering
these services to 500,000 homes and other destinations. The services include cable television,
Internet access and email services, virtual private networks; file transfers and downloads, video
and audio streaming and Voice over Internet Protocol (VOIP). On May 11, 2012, SBC sold its
wired and satellite assets, (See Agreements).
Dependency of the business upon a single or few customers
The Company is not dependent on any single or few customers. There are no major existing sales
contracts.
Service
The Company provides through its subsidiaries, after-sales service for all the consumer electronic
products it manufactures. As at December 31, 2012, it has 37 service centers throughout the
Philippines and 122 independent authorized service centers.
Related Party Transactions
The Company provides non-interest bearing cash advances to its subsidiaries for their working
capital requirements except for a loan granted to Solid Manila Finance Inc. Subsidiaries of the
Company generally depend on one another for supply of services and lease of properties. (See
Item 12- Certain Relationships and Related Transactions of form 17-A)
Principal Terms and Expiration Dates of all Licenses and Agreements
• Memorandum of Understanding with Sony Philippines, Inc. (Sony)
On July 1, 2003, Solid Electronics Corporation (SEC) entered into a Memorandum of
Understanding (MOU) with Sony for network support for Sony and Aiwa products. Under the
MOU, Sony authorized the Company to perform in-warranty and out-of warranty services to
customers in the Philippines for a fee calculated as a percentage of Sony’s annual sales.
In-warranty services shall be rendered free of charge to customers. The actual cost of
replacement parts related to in-warranty services shall be shouldered by Sony. Also, Sony agrees
to pay the Company network support fee equal to 1% of net sales for SONY products and 1% or
P50,000 per month whichever is higher for AIWA products. In the first quarter of 2009, SEC and
Sony agreed to lower the network support fees to be 0.45%. Effective April 2009, SEC and
Sony agreed that the network support fees shall be at a fixed rate of P1.25 million per month.
The Agreement is effective unless revoked by any of the parties.