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

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thumb of 2 : 1 by achieving a current ratio of 3.14:1 in 2012 from 2.47:1 in 2011 and 2.81:1 in
2010.
The Company will continue to maintain its strong financial condition in the future. Although its low
debt load provides the company with substantial debt capacity to borrow funds to finance future
projects/investments, management has set a limit on financial borrowings to a maximum gearing of
50% of equity.
The results of operations of the Group for the year ended December 31, 2012 was a net income of
P1,241.6 million from P430.3 million in 2011 and P226.70 million in 2010, translating to earnings
per share of P0.68, P0.24 and P0.13 in 2012, 2011 and 2010, respectively. The broadband asset sale
contributed a one-time gain on sale of assets of P267 and gain on reversal of asset impairment of P437
million. Moreover, the improved earnings was achieved by strong revenue growth and earnings of the
digital products of the distribution business segment and also of the investing and financing business
segment in 2012.
The Group expects its consolidated operations to continue to be profitable in the future as robust
growth is projected in its distribution business segment as new products and models are introduced
and as brand equity continues to grow. This strategic direction is consistent with the Company’s
conscious effort to continue leveraging on its historical core competence in consumer electronics and
similar products. The number of mobile phone users in the country has more than doubled in just a
few years and is expected to further increase in the years to come. The Company will capitalize on
the rising demand of mobile phone and continue to deliver mobile phones of high quality and
competitive prices and continue to grow my|phone market share. It has partnered with a mobile and
web application development company which will exclusively develop Filipino-made applications to
its roster of mobile phones to support its commitment to deliver and redefine consumer expectations
from the fast-phased mobile revolution. Moreover, its real estate business segment will continue to
be a significant value driver in the future and, with constant revenue streams, provide a significant
hedge against possible downturns in the other business segments. The construction of Tower 2 of the
condominium project was competed in 2012 and already started providing revenues in 2012. The
Company expects Tower 2 to improve sales in 2013. In May 2011, the Company launched the
My|House brand and sold prefabricated modular houses, using the modular building technology of
Yahgee Modular House Co., Ltd. of China. On its third year, the Company expects sales to hit the
P100 million mark. In 2012, the Company started its pilot project of modular residential housing units
in Tandang Sora, Quezon City called My|Rainbow Place, a low-rise condominium project using the
same modular insulated steel housing technology. The project aims to provide affordable modern
urban housing for the working-class Filipinos. Although the project had minor setbacks in 2012, it is
expected to proceed in May 2013 and to be completed within the year. The Company also started the
renovation of Solid House Building in 2012 with projected capital expenditures of about P300 million.
It started development of a Business Hotel and Event Center consisting of 157 rooms to be named
Green Sun Hotel and expects to generate revenues in 2014.
i.
Known Trends or Demands, Commitments, Events or Uncertainties that will impact Liquidity.
The Company is not aware of any known trends, demands, commitments, events or uncertainties
that will materially impact on its liquidity.
ii.
Events that will trigger Direct or Contingent Financial Obligation that is material to the
Company, including any default or acceleration of an obligation.
As discussed in Notes of the financial statements under Contingencies, certain subsidiaries of the
Company are involved in litigation or proceedings, the outcome of which could individually or