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

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- 49 - Information relating to significant loan transaction of the Group are as follows: (a) Loans of BRL The loans of BRL are secured by investment in cash surrender value of investment in life insurance (see Note 7). The loans were also secured by the outstanding investments in foreign currency-denominated bonds as of December 31, 2011 (see Notes 8 and 9). The loans bear interest at prevailing market rates per annum ranging from 2.0% to 2.3% in 2012 and 2011. Interest expense arising from these loans amounted to P6.0 million and P8.0 million in 2012 and 2011, respectively, and is presented as part of Finance Costs in the consolidated statements of income (see Note 21.2). In 2012, BRL extended the terms of various loans it obtained from Bank of Singapore. The loans are extended for one year up to June 30, 2013. (b) 2011 Loans of Fil-Dragon In 2011, Fil-Dragon obtained loans denominated in Chinese yuan renminbi from companies that are owned by Solid Company Limited (SCL), a shareholder owning 19% of the total shares of Fil-Dragon. Outstanding balance from the loan amounted to RMB54.4 million (P359.3 million) and RMB58.1 million (P404.1 million) as of December 31, 2012 and 2011, respectively. The loans bear interest at prevailing market rates per annum ranging from 6.0% to 10.0% in 2012 and 2011. Borrowing cost incurred in 2012 and 2011 relating to these loans amounted to RMB5.0 million (P32.9 million) and RMB1.5 million (P9.7 million) respectively, and are capitalized as part of Real Estate Inventories (see Notes 11 and 26.8). (c) 2009 Loans of Fil-Dragon In 2009, Fil-Dragon obtained a secured, two-year interest-bearing loan denominated in Chinese yuan renminbi from a local bank in the PRC amounting to RMB92.9 million (P615.7 million). The loans were secured by Fil-Dragon’s property development cost amounting to RMB15.2 million (P103.3 million) as of December 31, 2010. The loan was paid in full in 2011. Total borrowing costs incurred from these interest-bearing loans amounted RMB6.4 million (P43.2 million) in 2011 were capitalized as part of Real Estate Inventories at capitalization rates ranging from 6% to 10% (see Note 11). Further, certain related parties of the Group entered into a guarantee contract with the creditor bank whereby the related parties guarantee that the principal amount and related interests will be paid as the payments fall due (see Note 26.9). None of the companies under the Group, including the Parent Company, are included in the guarantee contract. The fair value of loans obtained approximates the carrying values since the interest rates are repriced at market rates at the end of the reporting period (see Note 30.1). As of December 31, 2012, the Group is not subjected to any covenants relating to the above loans.
- 50 - 16. TRADE AND OTHER PAYABLES This account consists of: Notes 2012 2011 Trade payables 26.6 P 335,534,348 P 304,917,931 Output VAT 48,843,309 37,328,219 Accrued dealers’ incentives 24,375,822 12,364,027 Collection due to STL 26.6 18,706,344 2,331,894 Unearned subscription income 18,143,581 9,167,511 Rental payable 17,671,797 17,354,928 Refundable deposits 17 16,181,595 24,769,241 Retention payable 16,061,269 4,872,185 Reserve for warranty costs 14,545,332 18,354,383 Accrued municipal taxes 14,357,151 8,673,969 Advances from customers 9,542,619 22,623,706 Deferred output VAT 1,505,635 3,032,367 Other accrued expenses 58,423,762 88,287,531 Other payables 35,010,087 38,355,081 P 628,902,651 P 592,432,973 Reserve for warranty costs pertains to amounts recognized by My Solid, SVC and SBC for expected warranty claims on products sold based on their past experience of the level of repairs and returns. In addition, provision for warranty claims also includes the amounts recognized by OSSI for expected warranty claims on consumer electronic products sold by a certain company owned by the Group’s majority stockholders. In 2012, SMC derecognized certain accrued expenses and other payables which were acquired by SMC from the merger with SC (see Note 1.2). Management believes that the possibility of cash outflows is remote since the purpose for which the liability was recognized no longer exists. The Gain on Derecognition of Liabilities amounting to P25.1 million is presented under Other Income Gains in the 2012 consolidated statement of income (see Note 19.2). In October 2011, the obligation to provide warranties was transferred by My Solid to Mytel when the latter was handed over the ownership of the brand and consequently became importer of the inventories from Mytel’s supplier. As a result, Mytel derecognized the outstanding balance of provision for warranty claims from previous year amounting to P10.8 million. The income arising from the derecognition of this liability is presented as part of Reversal of warranty provision under Other Operating Income in the 2011 consolidated statement of income (see Note 19.1). My Solid and Mytel have merged in 2012 (see Note 1.2). The changes in the Reserve for Warranty Costs account are as follows: Notes 2012 2011 Balance at beginning of year P 18,354,383 P 23,359,511 Additional provision for warranty claims during the year 20 41,465,997 45,072,286 Actual warranty claims during the year ( 36,118,916) ( 38,173,009 ) Reversals during the year 19.1 ( 9,156,132) ( 11,904,405 ) P 14,545,332 P 18,354,383
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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
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55 executive officers Susan L. Tan
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57 Common Lim, Elena S. 1,894 (dire
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59 2. The Company has no transactio
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62 SOLID GROUP, INC. INDEX TO FINAN
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64 INDEX TO EXHIBITS Form 17-A No.
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66 EXHIBIT 18 SUBSIDIARIES OF THE R
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- 2 - Notes 2012 2011 LIABILITIES A
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SOLID GROUP INC. AND SUBSIDIARIES C
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Page 112 and 113: - 3 - (b) Mergers of Certain Subsid
Page 114 and 115: - 5 - 2.2 Adoption of New and Amend
Page 116 and 117: - 7 - (iii) Consolidation Standards
Page 118 and 119: - 9 - (vii) PAS 32 (Amendment), Fin
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Page 124 and 125: - 15 - Non-compounding interest and
Page 126 and 127: - 17 - An item of property, plant a
Page 128 and 129: - 19 - If the business combination
Page 130 and 131: - 21 - (e) Sale of real estate - Re
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Page 138 and 139: - 29 - (d) Distinction Between Inve
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Page 142 and 143: - 33 - (d) (e) Distribution segment
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Page 146 and 147: - 37 - The net cash flows attributa
Page 148 and 149: - 39 - Other receivables consist pr
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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Page 162 and 163: - 53 - 19. OTHER INCOME 19.1 Other
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Page 166 and 167: - 57 - 22.2 Post-employment Benefit
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Page 170 and 171: - 61 - The reconciliation of tax on
Page 172 and 173: - 63 - The net deferred tax liabili
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Page 178 and 179: - 69 - 26.5 Advances to and from Re
Page 180 and 181: - 71 - 26.10 Key Management Personn
Page 182 and 183: - 73 - (d) Gain on Sale of Assets S
Page 184 and 185: - 75 - 28.9 Others As of December 3
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Page 188 and 189: - 79 - 30. CATEGORIES AND FAIR VALU
Page 191 and 192: Supplementary Schedules SOLID GROUP
Page 193 and 194: Solid Group Inc. and Subsidiaries S
Page 195 and 196: Solid Group Inc. and Subsidiaries S
Page 197 and 198: SOLID GROUP INC. Schedule I Reconci
Page 199 and 200: SOLID GROUP INC. AND SUBSIDIARIES S
Page 201 and 202: PAS 33 Earnings per Share a PAS 34
Page 203: Solid Group Inc. and Subsidiaries S
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SEC Form 17-A: Annual Report - the solid group inc website

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