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

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The Group’s outstanding receivables from and payables to related parties arising from the
transactions summarized in the preceding page are unsecured, noninterest-bearing, payable in
cash, unguaranteed, and due within 12 months from the end of the reporting period except
for the following:
Note Condition Term
Business loans 26.4 interest-bearing and secured long-term and
short-term
Granting of loans 26.7 interest-bearing short-term
Availment of loans 26.8 interest-bearing and secured short-term
None of the companies under the Group is a joint venture. The Parent Company is not
subject to joint control. Related parties that exercise significant influence over the Parent
Company are AA Commercial, Inc. and AV Value Holdings Corporation.
None of the Group’s outstanding receivables from related parties are impaired.
26.1 Sale of Goods and Rendering of Services
SBC’s broadband cable infrastructure is used by Destiny Cable, Inc. (DCI), a company that is
100% owned by SGI’s majority stockholders. SBC bills DCI based on fixed fee per
subscriber and based on the type of service rendered. The outstanding receivable arising
from these transactions amounted to P71.6 million as of December 31, 2011 (nil in 2012) and
is presented as part of Due from related parties under the Trade and Other Receivables
account in the consolidated statements of financial position (see Note 7). As of
December 31, 2012, however, SBC has sold a significant portion of its assets used in its
operations to a third party (see Note 27.3).
The Parent Company provides general management advisory services to CPD Access
Corporation (CPD), a company owned by SGI’s majority stockholders. In consideration for
such services, the Parent Company receives management fees on a monthly basis as
determined based on a management contract mutually agreed upon by both parties.
26.2 Purchase of Goods
SE Corp. purchases parts and supplies from CPD. Total purchases of goods amounting to
P87.6 million in 2012, P107.8 million in 2011 and P85.9 million in 2010 are recorded as part
of Cost of Services (see Note 18.1). The outstanding balance from the above transactions
amounted to net advances of P6.4 million and payable of P4.1 million as of
December 31, 2012 and 2011, respectively.
26.3 Lease of Real Property
SMC leases out certain land and buildings to Avid. Also, SE Corp. leases out its office space
to CPD and Avid. Income from these leases is shown as part of Rentals in the consolidated
statements of income. Uncollected billings, on the other hand, form part of the Trade and
Other Receivables account in the consolidated statements of financial position (see Note 7).