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

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SOLID GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012, 2011 AND 2010 (Amounts in Philippine Pesos) 1. CORPORATE INFORMATION 1.1 Company Background Solid Group Inc. (SGI or the Parent Company) was registered with the Philippine Securities and Exchange Commission (SEC) on October 16, 1933. The Parent Company currently conducts business as an investment holding company. On September 4, 1996, SGI listed its shares in the Philippine Stock Exchange (PSE). The Parent Company holds ownership interests in the following subsidiaries (the Parent Company and the Subsidiaries are collectively referred to as “the Group”): Percentage of Ownership Subsidiaries 2012 2011 2010 Notes Nature of Business Brilliant Reach Limited (BRL) 100 100 100 (a) Investment company Kita Corporation (Kita) 100 100 100 Real estate and manufacturing of injected plastics Solid Broadband Corporation (SBC) 100 100 100 Broadband, cable and satellite services, sale of mobile phones and LCD televisions Solid Group Technologies Corporation (SGTC) 100 100 100 Trading of prefabricated modular house and office units Precos, Inc. (Precos) 100 100 100 (c) Real estate Solid Electronics Corporation (SE Corp.) 100 100 100 Repair services for audio and video products and mobile phones Solid Corporation (SC) - 100 100 (k) Real estate Solid Manila Corporation (SMC) 100 100 100 (k) Real estate Casa Bocobo Hotel, Inc. (CBHI) 100 100 100 (e) Real estate Solid Manila Finance, Inc. (SMFI) 100 100 100 Financing Solid Video Corporation (SVC) 100 100 100 Trading of professional audio and video equipment Zen Towers Corporation (ZTC) 100 100 100 Real estate Phil-Nanning Consortium, Inc. (PNCI) 100 100 100 (c), (g) Real estate Mytel Mobility Solutions, Inc. (Mytel) - 100 100 (j), (m) Sale of mobile phones My Solid Technologies & Devices Corporation (My Solid) 100 100 100 (i), (m) Sale of mobile phones Omni Logistics Corporation (OLC) - 100 100 (l) Logistics and assembly of consumer electronics products Omni Solid Services, Inc. (OSSI) [formerly Solid Laguna Corporation (SLC)] 100 100 100 (l) Logistics and assembly of consumer electronics products Skyworld Corporation (Skyworld) 75 75 75 (c), (e) Investment holding company Interstar Holdings Company, Inc. (Interstar) 73 73 73 (b), (c) Investment holding company Fil-Dragon Real Estate Development, Ltd. (Fil-Dragon) 51 51 51 (h) Real estate Starworld Corporation (Starworld) 50 50 50 (e), (f) Real estate Laguna International Industrial Park, Inc. (LIIP) 50 50 50 (b), (d) Real estate
- 2 - Notes: (a) (b) (c) (d) (e) (f) (g) (h) Incorporated and domiciled in the British Virgin Islands Indirectly owned through SC Pre-operating or non-operating LIIP is 22.5% owned by SC and 37.5% owned by Interstar Indirectly owned through SMC Starworld is 20% owned by SMC and 40% owned by Skyworld Indirectly owned through Precos Indirectly owned through PNCI; incorporated and domiciled in the People’s Republic of China (PRC) (i) Incorporated in 2009 and started commercial operations in January 2010 (j) Acquired in 2010 (k) Merged; with SMC as the surviving company, effective January 1, 2012 (l) Merged; with SLC as the surviving company, effective January 1, 2012. On March 19, 2012, the Securities and Exchange Commission (SEC) approved the change in corporate name of SLC to OSSI. (m) Merged; with My Solid as the surviving company, effective June 1, 2012 SBC holds a provisional authority, granted by the National Telecommunications Commission (NTC), to use its legislative franchise under Republic Act (RA) No. 9116, An Act Granting Solid Broadband Corporation a Franchise to Construct, Install, Establish, Operate and Maintain Telecommunications Systems throughout the Philippines (see Note 27.3). SMFI is subject to the rules and regulations provided under RA No.8556, The Financing Company Act of 1998. SGTC was incorporated to engage in the development and implementation of information and communications technology systems and applications. On February 22, 2011, the Board of Directors (BOD) and stockholders of SGTC approved the amendment of SGTC’s articles of incorporation to change the Company’s primary purpose. This amendment was approved by the SEC on March 22, 2011 and starting this date, SGTC’s primary purpose is to engage in, operate, conduct and maintain business of designing, manufacturing, installing, importing, exporting, marketing, distributing or otherwise dealing in at wholesale and retail prefabricated modular house and office units. 1.2 Status of Operations and Mergers (a) Sale of SBC’s Assets In a special meeting held on May 11, 2012, the BOD of SBC approved the sale, assignment, transfer and conveyance of the assets, contracts and licenses of SBC to a third party. The assets identified to be included in the sale are SBC’s property and equipment, a significant portion of its trade receivables and inventories, as well as contracts, permits and licenses that are used in carrying out its operations. Such sale transaction was consummated in 2012. Consequently, SBC’s ownership on the identified assets, related contracts and licenses directly attributable to the Company’s operations has been transferred to the third party (see Note 27.3).
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SOLID GROUP INC. April 30, 2013 THE
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12. Check whether the issuer: (a) h
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1 PART I. BUSINESS AND GENERAL INFO
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3 Solid Laguna Corporation (SLC) wa
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5 Status of any-publicly announced
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7 • Distributoship Agreement with
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9 Major Risks involved in the Busin
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11 reform. On August 13, 1997, Soli
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13 The above lease contracts are re
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15 The number of shareholders of re
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17 Item 6. Management’s Discussio
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19 2010 Revenue improved by 17% in
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21 broadband segment posted P267 mi
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23 Advances from related parties am
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25 Other operating income amounted
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27 Total assets reached P11,716 mil
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29 Cost of rentals amounted to P38
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31 Property, plant and equipment am
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33 thumb of 2 : 1 by achieving a cu
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35 vii. Causes for any Material Cha
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37 Principally due to additional co
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39 The decrease was mainly in relat
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41 Non-current trade and other rece
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43 Principally due to other compreh
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45 Increase was due to higher trade
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47 Cost of real estate sold - 37% d
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49 Mainly from higher commissions,
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51 The overall scope of the audit w
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53 Mr. Joseph Lim is the Founding C
Page 59 and 60: 55 executive officers Susan L. Tan
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Page 63 and 64: 59 2. The Company has no transactio
Page 67 and 68: 62 SOLID GROUP, INC. INDEX TO FINAN
Page 69 and 70: 64 INDEX TO EXHIBITS Form 17-A No.
Page 71: 66 EXHIBIT 18 SUBSIDIARIES OF THE R
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Page 116 and 117: - 7 - (iii) Consolidation Standards
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Page 146 and 147: - 37 - The net cash flows attributa
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Page 150 and 151: - 41 - A reconciliation of the carr
Page 152 and 153: - 43 - Borrowing costs incurred fro
Page 154 and 155: A reconciliation of the carrying am
Page 156 and 157: - 47 - The changes in the carrying
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- 51 - Other accrued expenses inclu
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- 53 - 19. OTHER INCOME 19.1 Other
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- 55 - These expenses are classifie
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- 57 - 22.2 Post-employment Benefit
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- 59 - For determination of the pos
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- 61 - The reconciliation of tax on
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- 63 - The net deferred tax liabili
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- 65 - 24. EQUITY 24.1 Capital Stoc
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- 67 - The Group’s outstanding re
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- 69 - 26.5 Advances to and from Re
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- 71 - 26.10 Key Management Personn
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- 73 - (d) Gain on Sale of Assets S
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- 75 - 28.9 Others As of December 3
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- 77 - The Group’s management con
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- 79 - 30. CATEGORIES AND FAIR VALU
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Supplementary Schedules SOLID GROUP
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Solid Group Inc. and Subsidiaries S
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SOLID GROUP INC. Schedule I Reconci
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SOLID GROUP INC. AND SUBSIDIARIES S
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PAS 33 Earnings per Share a PAS 34
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