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

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- 67 - 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).
- 68 - 26.4 Granting of Loans SMFI grants business and other loans to its related parties at an interest rate of 7.5% to 9.0% in 2012 and 7.5% to 8.0% in 2011. Total interests earned from these loans amounted to P6.3 million in 2012, P7.6 million in 2011 and P10.2 million in 2010, and is presented as part of Interest Income under the Revenues account in the consolidated statements of income. The outstanding receivables from these business loans are shown as part of Loans Receivables under the Trade and Other Receivables account in the consolidated statements of financial position (see Note 7). The outstanding receivables from business loans as of December 31, 2012 and 2011 are as follows: 2012 2011 Avid P 27,000,000 P 37,121,075 AA Export and Import Corp. (AA Export) 8,304,380 9,720,117 AA Marine Development Corp. (AA Marine) 8,329,955 9,761,015 Philippine Prawn, Inc. (PPI) 7,975,288 9,340,951 Baybayan Farm, Inc. (BFI) 7,975,288 9,340,951 Kawayan Farm, Inc. (KFI) 7,975,288 9,340,951 P 67,560,199 P 84,625,060 The business loans to AA Export, AA Marine, PPI, BFI and KFI were originally repayable with a lump sum payment in January 2009 of the outstanding principal balance as of December 31, 2008. On January 12, 2009, SMFI’s BOD approved the extension of the payment term of the business loan for an additional period of seven years until December 31, 2015. Also, on August 23, 2012, SMFI’s BOD approved the suspension of the payment of amortization for the principal amount of these loans. Total principal repayments received on the loans amounted to P4.0 million in 2011. There was no principal repayment on these loans in 2012. The business loan pertaining to AA Export is secured by its own shares of stock which are owned by a related party. In a prior year, the SMFI granted unsecured business loan to Avid with the original principal loan amounting to P80.0 million. Principal repayment to this loan amounted of P10.1 million, P2.8 million and P6.0 million were made in 2012, 2011 and 2010, respectively. This loan is payable on demand. Total interests earned from these loans is presented as part of the Interest Income on Loans and Receivables account in the consolidated statements of income. Section 9 (d) of RA No. 8556 states that the total credit that a financing Company may extend to any person, company, corporation or firm shall not exceed 30% of its net worth. Since the net worth of the Company decreased in 2011, the balance of business loan extended to Avid as of December 31, 2011 exceeded thirty percent (30%) of the company’s net worth which is not in accordance with Section 9 (d) of RA No. 8556. In 2012, the Company has not extended credits to any debtor which exceeded such threshold.
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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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SOLID GROUP INC. AND SUBSIDIARIES C
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SOLID GROUP INC. AND SUBSIDIARIES N
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- 3 - (b) Mergers of Certain Subsid
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- 5 - 2.2 Adoption of New and Amend
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- 7 - (iii) Consolidation Standards
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- 9 - (vii) PAS 32 (Amendment), Fin
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- 11 - (c) PAS 32 (Amendment), Fina
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- 13 - 2.5 Financial Assets Financi
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- 15 - Non-compounding interest and
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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
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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 174 and 175: - 65 - 24. EQUITY 24.1 Capital Stoc
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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
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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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