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

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26.5 Advances to and from Related Parties
Certain subsidiaries of the Group grants to and obtains unsecured, noninterest-bearing cash
advances from related parties owned by the Parent Company’s majority stockholders for
working capital requirements and other purposes. The outstanding balances arising from
these transactions amounting to P21.6 million and P11.6 million as of December 31, 2012
and P128.5 million and P107.5 million as of December 31, 2011 are presented as Advances to
Related Parties and Advances from Related Parties, respectively, in the consolidated
statements of financial position.
In 2012, the Advances to Related Parties had net repayments of P106.3 million while
Advances from Related Parties had net repayments of P95.9 million.
No impairment losses were recognized on the Advances to Related Parties as management
has assessed that the total amounts is fully collectible.
26.6 Transactions with STL
SVC earns commission from sales of STL, a company owned by SGI’s majority stockholders,
to customers in the Philippines. Commission revenue amounted to P1.7 million in 2012,
P2.5 million in 2011 and P5.6 million in 2010 is presented as part of Rendering of Services in
the consolidated statements of income. SVC also advances funds to STL to pay foreign
suppliers. The outstanding receivable from STL amounted to P1.7 million and P1.1 million
as of December 31, 2012 and 2011, respectively, and is shown as part of Trade receivables
under the Trade and Other Receivables account in the consolidated statements of financial
position (see Note 7).
SVC also collects the receivables related to the sales of STL which are payable immediately
upon receipt. Total collections made in behalf of STL in 2012 and 2011 amounted to
P19.6 million and P0.2 million, respectively. Total obligations arising from this transaction as
of December 31, 2012 and 2011 amounting to P18.8 million and P2.3 million, respectively, is
presented as part of Non-trade payables under the Trade and Other Payables account in the
consolidated statements of financial position (see Note 16).
SVC also purchases materials and inventories from a foreign supplier, the payment of which
is being made by STL on behalf of the Company. Total advances received related to this
transaction amounted to P0.02 million in 2012 and P3.1 million in 2011. Outstanding
balance arising from this transaction amounting to P3.1 million as of December 31, 2012 and
2011 is presented as part of Trade and Other Payables account in the consolidated statements
of financial position (see Note 16).
My Solid purchases mobile phones from STL. Total purchases amounted to P2.8 billion in
2012, P2.6 billion in 2011 and P898.3 million in 2010 and are presented as part of
Cost of Sales in the consolidated statements of income (see Note 18.1). Outstanding
liabilities relating to these purchases amounted to P121.1 million as of December 31, 2012
and P219.4 million as of December 31, 2011 and is shown as part of Trade payables under
the Trade and Other Payables account in the consolidated statements of financial position
(see Note 16).
My Solid also made advance payments to STL for its future purchase of mobile phones. The
outstanding advances amount to P210.8 million and P219.4 million as of December 31, 2012
and 2011 respectively, and is presented as part of Advances to supplier under Trade and
Other Receivables account in the consolidated statements of financial position (see Note 7).