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

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For determination of the post-employment benefit obligation, the following actuarial
assumptions were used:
2012 2011 2010
Discount rates 4% - 6% 6% - 7% 8% - 9%
Expected rate of return on plan assets 5% 8% 6%
Expected rate of salary increases 9% 10% 9%
Assumptions regarding future mortality are based on published statistics and mortality tables.
The average remaining working life of employees before retirement at the age of
60 is 21 years for both males and females.
The overall expected long-term rate of return on assets is ranges from 6% to 8%. The
expected long-term rate of return is based on the portfolio as a whole and not on the sum of
the returns on individual asset categories. The return is based exclusively on historical
returns, without adjustments.
In 2011 and prior years, SBC maintained a wholly funded, tax-qualified, noncontributory
post-employment benefit plan that is being administered by a trustee covering all regular
full-time employees. As a result of the sale its business, SBC ceased operations immediately
thereafter and requested the release of the remaining balance in the trust fund account under
the multi-employer retirement plan. The retirement plan assets were withdrawn in 2012 since
all of the employees were terminated during such year. Accordingly, SBC’s plan assets had a
nil balance as of December 31, 2012.
23. TAXES
23.1 Registration with Economic Zone Authorities and Fil-Dragon Taxation
(a)
Registration with Clark Development Corporation (CDC)
Kita, a subsidiary, is registered with CDC under RA 7227, The Bases Conversion and
Development Act of 1992, as amended under RA 9400, An Act Amending RA 7227, as
Amended, Otherwise Known as the Bases Conversion and Development Act of 1992, and for Other
Purposes. As a registered business enterprise within the Clark Freeport Zone, Kita is
exempted from national and local taxes and is entitled to tax and duty free importation
of raw materials, equipment, household and personal items. In lieu of said taxes, Kita is
subject to a 5% preferential tax rate on its registered activities. However, the 30%
Regular Corporate Income Tax (RCIT) tax rate is applied to income coming from
sources other than Kita’s registered activities.
(b)
Registration with Philippine Economic Zone Authority (PEZA)
SMC is registered with the PEZA as an Ecozone Facilities Enterprise at the Laguna
International Industrial Park – Special Economic Zone (LIIP – SEZ). As an Ecozone
Facilities Enterprise, SMC shall lease its building in LIIP – SEZ to PEZA-registered
export enterprises located therein. SMC is subject to 5% tax on gross income earned
on such facilities in lieu of all national and local taxes.