1. business and industrial
2. company
3. annual report

COVER SHEET
PHILIPPINE SEVEN CORPORATION
(Company’s Full Name)
7th Floor, The Columbia Tower
Ortigas Avenue, Mandaluyong City
(Company’s Address: No. Street City/Town/Province)
705-52-00
(Company’s Telephone Number)
December 31
Every 2nd Tuesday of June of each year
(Fiscal Year Ending)
(Month & Day)
(Annual Meeting)
FIRST QUARTERLY REPORT
(SEC FORM 17-Q)
(FORM TYPE)
May 13, 2005
(Date)
(Amendment Designation if Applicable)
__________________________________________
(Secondary License Type, if any)
_________________
LCU
__________________
Cashier
_________________
DTU
108476
S.E.C. Reg. No.
___________________
Central Receiving Unit
_________________
File Number
_________________
Document I.D.
REPUBLIC OF THE PHILIPPINES)
____________________________) S.S.
CERTIFICATION
I, EVELYN S. ENRIQUEZ, of legal age, Filipino citizen and with office address at 7th
Floor, The Columbia Tower, Ortigas Avenue, Mandaluyong City, after having been duly sworn
to in accordance with law, hereby depose and certify that:
1. I am the Corporate Secretary of PHILIPPINE SEVEN CORPORATION (the “Corporation”), a
corporation duly organized and existing under and by virtue of the laws of the Philippines
and with principal office at 7th Floor, The Columbia Tower, Ortigas Avenue, Mandaluyong
City, Philippines;
2.
The basic and material data in the 1st Quarterly Report as of March 31, 2005 of the
Corporation contained in the diskette and hard copies are one and the same.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ th day of May 2005 at
Mandaluyong City, Philippines.
EVELYN S. ENRIQUEZ
Corporate Secretary
SUBSCRIBED AND SWORN, to before me this ___ th day of May 2005 at the City of
__________________ Philippines, affiant exhibited to me her Community Tax Certificate No.
15977741 issued on January 16, 2005 at Mandaluyong City.
Doc. No. ______;
Page No. ______;
Book No. ______;
Series of 2005.
NOTARY PUBLIC
SECURITIES AND EXCHANGE COMMISSION
FORM 17-Q
QUARTERLY REPORT PURSUANT TO SECTION 17 OF THE SECURITIES
REGULATION CODE AND SRC RULE 17(2)(b) THEREUNDER
1. For the quarterly period ended March 31, 2005
2. Commission identification number
3. BIR Tax Identification No :
040-000-390-189
4. Exact name of registrant as specified in its charter :
PHILIPPINE SEVEN CORPORATION
5. Country of incorporation :
PHILIPPINES
6. Industry Classification Code:
(S
(SEC Use Only)
7. Address of registrant’s principal office : 7TH Floor, The Columbia Tower
Ortigas Avenue, Mandaluyong City
1501
(632) 705-52-00
8. Telephone number :
9. Former name, former address and former fiscal year, if changed since last report
10. Securities registered pursuant to Section 8 and 12 of the Code, or Sections 4 and 8 of the
RSA
No. of Shares of Common Stock
237,252,000
-0-
Shares Outstanding - Common :
Warrants
11. Are any or all of the securities listed on the Stock Exchange?
Yes [ X ]
No [ ]
Stock Exchange:
Philippine Stock Exchange
Class/es of Securities listed
-
Common
12. Indicate by check mark whether the registrant:
a. has filed all reports required to be filed by Section 17 of the Code and SRC Rule 17
thereunder or Sections 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections
26 and 141 of the Corporation Code of the Philippines, during the preceding twelve (12)
months (or for such shorter period the registrant was required to file such reports)
Yes [ X ]
No [ ]
b. Has been subject of such filing requirements for the past 90 days.
Yes [ X ]
No [ ]
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Please refer to the attached.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
Please refer to the attached
PART II - OTHER INFORMATION
N/A
Pursuant to the requirement of the Securities Regulation Code, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Registrant:
PHILIPPINE SEVEN CORPORATION
Signature and Title:
JOSE VICTOR P. PATERNO
President
Date: May 13, 2005
Signature and Title:
TSUNG-YU LIN
Chief Financial Officer/Treasurer
Date May 13, 2005
May 13, 2005
SECURITIES AND EXCHANGE COMMISSION
SEC Building
EDSA, Quezon City
Gentlemen:
In connection with the financial statements of Philippine Seven Corporation as of March 31,
2005, which will be submitted to the Philippine Stock Exchange (PSE), we confirm to the best of
our knowledge and belief, the following:
1. We are responsible for the fair presentation of the financial statements in conformity with
the generally accepted accounting principles.
2. There have been no:
a. Irregularities involving management or employees who have significant roles in the
system or internal accounting control.
b. Irregularities involving other employees that could have a material effect on financial
statements.
c. Communication from regulatory agencies concerning non-compliance with or
deficiencies in, financial reporting practices that could have a material effect on the
financial statements.
3. There are no:
a. Violations or possible violations of laws or regulations whose effects should be
considered for disclosure in the financial statements or as a basis for recording a loss
contingency.
b. Other material liabilities or gain or loss contingencies that are required to be accrued or
disclosed.
4. The accounting records underlying the financial statements accurately and fairly reflect the
transactions of the company.
5. The company has satisfactory title to all owned assets, and there are no liens or
encumbrances on such assets nor has any asset been pledged.
6. Provision has been made for any material loss to be sustained.
7. We have complied with all respects of contractual agreements that would have a material
effect on the financial statements in the event of con-compliance.
TSUNG-YU LIN
Chief Financial Officer/Treasurer
STATEMENT OF MANAGEMENT’S RESPONSIBILITY
FOR FINANCIAL STATEMENTS
The management of Philippine Seven Corporation is responsible for all information and
representations contained in the consolidated unaudited financial statements for the quarter
ended March 31, 2005. The financial statements have been prepared in conformity with
generally accepted accounting principles and reflect amounts that are based on the best
estimates and informed judgment with an appropriate consideration to materiality.
In this regard, management maintains a system of accounting and reporting which provides for
the necessary internal controls to ensure that transactions are properly authorized and
recorded, assets are safeguarded against unauthorized use or disposition and liabilities are
recognized.
VICENTE T. PATERNO
Chairman of the Board
JOSE VICTOR P. PATERNO
President
TSUNG-YU LIN
Chief Financial Officer/Treasurer
FIRST QUARTER 2005
Management Discussion and Analysis of Financial Condition and
Results of Operations
Philippine Seven Corporation (PSC) has grown unabated even as the country has gone from
crisis to crisis. During the period, a store was opened in University of Batangas and 5
underperforming stores were closed bringing the total operating stores to 253, 25% higher
versus first quarter of 2004, 202.
PSC shall continue to protect it’s lead in the C-Store Industry. The company has identified 48
potential store sites and is targeting a total of 275 operating stores by year end, this being one
of the company’s key performance indicators (KPI).
February 4, 2005, the company entered into a 15 year lease of a 12,300 sq.m. warehouse to be
constructed on a 1.85 hectare land located in Manggahan, Pasig City. Servic Trading and
Hauling Corporation, which owns the said land agreed to construct a build-to-suit warehouse for
PSC. In lieu of this, the company paid P20 million rental deposit.
This strategic decision is in anticipation of the expiry of lease contract with Keynet Warehouse
on November 30, 2005. The new warehouse is expected to be turned over to PSC by October
this year.
SALES, REVENUES AND GROSS MARGINS
Total revenue from merchandise sold for the first quarter grew by 29.3% year-on year, to
P1.045 billion. Average sales per store per month increased by 4.3%, while mature stores’
growth rate is 5.4%. Average customer count increased by 3% versus the same period last
year. Average sales per store and average customer count are other key performance
indicators of the company.
Yearly, stores sales would scale-up during holiday season. A growth in sales was registered in
March due to holy week, last year it fell on April. This contributed 17% increase in average sales
per day compared to 30% increase last year.:
Year on year growth in sales is driven primarily by reduced out of stock situations, product
launches and continuous improvement of product assortment across all stores.
Top categories with increases were cigarettes, bottled water, energy drinks, postmix, fastfood
and slurpee. On the other hand, top categories with declines were non foods, toys, novelty
items, frozen foods, delicacies, juices and dairy products.
Products in the services category, which form part of the company’s operating income, are
prepaid phone cards and internet cards. Commission income from this category declined by
6.7% compared to prior year quarter. Proliferation of retailers and various launches of unlimited
calls and texts by telecom industry, attributed to the decline. To temper the down trend, the
company will soon launch other services such as Bills Payment and G-Cash Out.
Gross Profit, another KPI, edged up by 29.3% to P329.2 million versus prior year quarter,
P254.7 million. Gross profit rate to sales remained at 31.5%.
EXPENSES
Total operating expenses were up by 23.7%, to P369.9 million. Expenses accounted for 35.4%
of total sales in 2005 and 37.0% in 2004.
Major expenses came from store operations which is 51.3% of the total operating expenses.
Under store operations, employee related expenses per store per month decreased by 4.9%
due to conversion of 7 company-operated stores to Service Agreement (SA) operated stores,
bringing the total number of SA to 44 as of end of first quarter. On the other hand, electricity per
store, per month increased by 25.7% compared to prior year quarter. Significant increase in
electricity was due to P0.98 hike per kilowatt hour, which was implemented last quarter of 2004.
Selling expenses per store per month decreased by 10% versus prior year quarter. There were
savings on rental expenses, with an average of 7.7% per store, per month. This is primarily due
to rent reductions extended by our lessors. On the contrary, depreciation and amortization on
properties and equipments increased by 0.8% per store, per month versus last year.
General and administrative expenses were reduced from 8% of sales in 2004 to 7.8% of sales
in 2005.
Interest Expenses on loans increased by 118% versus prior year quarter. It reached P9.0 million
in 2005 versus P4.1 million in 2004. Proceeds from loans in 2004, which were borrowed during
the 2nd quarter, were used to acquire Bingo Stores and to pay other maturing loans during the
year.
First quarter of 2005 resulted to a net loss of P28.8 million, 12.9% higher than prior year quarter
net loss. This is primarily due to higher interest expense and lower other income this quarter
versus same period last year.
No significant element of the company’s income arose from sources other than the company’s
continuing operations.
FINANCIAL CONDITION
Net cash used in operating activities for the year was P7.72 million,. During the quarter, net
payments to trade suppliers reached P98.7 million. Purchases in March 2005 increased in
anticipation of the holy week season.
Net cash used in investing activities decreased from P88 million in 2004 to P45.8 million in
2005. There were 8 stores opened in the prior year quarter compared to only 1 store this year.
In 2005, aside from the store that opened, there were acquisitions of store equipments
amounting to P32.2 million.
Majority of the company’s commitments for capital expenditures for the year are for new stores
construction and renovations plus acquisition of POS machines. Funds for these expenditures
are expected to come from the anticipated increase in revenues/cash flows and from additional
borrowings if the need for such may arise. Austerity measures had also been put in place for the
company to maximize the use of its resources.
Net cash used in financing activities was P2.5 million. Proceeds from loans in 2005 reached
P30 million. P23.5M was used to pay other maturing loans and P9 million was used to pay
interest charges.
Overall cash and cash equivalents at the end of 1st quarter of 2005 decreased by P55.9 million,
that is from P265.3 million at the beginning of the year to P209.4 million at the end of the
quarter.
Total current assets decreased by P90.2 million from P708.3 million at the beginning of the
year. Cash and cash equivalents decreased by P55.9 million and merchandise inventory
decreased by P31.8 million.
Total current liabilities decreased by P53.1 million, that is from P883.1 million at the beginning of
the year to P829.9 million at the end of the quarter. This is primarily due to decrease in trade
payables by P98.7 million, and increase in loans payable and non trade payables by P6.5
million and P39.4 million respectively.
Current ratio stood at 0.74 to1. There are no known trends or events of uncertainties that may
have a material impact on the company’s liquidity.
Property and Equipment, net of accumulated depreciation decreased by P5.4million from the
beginning of the year. This is accounted as follows, P32.2 million for property and equipment
acquisitions, P4.7 million for asset disposals and P32.8 million for depreciation.
Stockholders’ equity during the year accounted for 38.06% of total assets. Debt to equity ratio is
1.62 to 1, from 1.63 to 1 at the beginning of 2005.
Jose Victor Paterno
President
PHILIPPINE SEVEN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2005 AND DECEMBER 31,2004
AND FOR EACH OF THE TWO PERIODS
ENDED MARCH 31, 2005
PHILIPPINE SEVEN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2005 AND DECMBER 31,2004
Notes
March 2005
Dec 2004
2,
2, 3
2, 4
5
P 209,374,649
92,902,181
271,379,132
44,424,888
618,080,850
P 265,321,750
107,413,986
303,199,945
32,338,578
708,274,259
2, 7
2, 6
2, 8, 20f
632,025,674
80,987,635
221,133,152
934,146,461
P1,552,227,311
637,377,805
84,919,323
203,563,512
925,860,640
P1,634,134,899
P 373,976,133
220,500,000
94,420,823
23,036,914
118,013,430
829,947,300
P 472,698,270
214,000,000
90,874,399
22,656,462
82,830,902
883,060,033
125,500,000
955,447,300
6,000,000
125,500,000
1,008,560,033
6,000,000
A S S E T S
CURRENT ASSETS
Cash and cash equivalents
Receivables, net
Inventories
Prepayments and other current assets
Total current assets
NON-CURRENT ASSETS
Property and equipment, net
Deferred income tax assets
Other assets, net
Total non-current assets
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Trade accounts payable
Loans payable
Accrued expenses
Income tax payable
Other current liabilities
Total current liabilities
NON-CURRENT LIABILITIES
Loans payable
Total liabilities
OTHER OUTSIDE INTEREST
STOCKHOLDERS’ EQUITY
Capital stock
Additional paid-in capital
Retained earnings
Treasury stock
Total stockholders’ equity
Total liabilities and stockholders’
equity
9
10
2, 6
11
9
2, 12
13, 14
237,938,250
293,525,037
62,239,970
(2,923,246)
590,780,011
P1,552,227,311
(See accompanying notes to consolidated financial statements)
237,938,250
293,525,037
91,034,825
(2,923,24
619,574,866
P1,634,134,899
PHILIPPINE SEVEN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2005, 2004 AND DECEMBER 2004
Notes
CAPITAL STOCK
ADDITIONAL PAID-IN CAPITAL,
net of excess of cost over
issue price of treasury shares
13, 14
13
RETAINED EARNINGS
Beginning
Net income (loss) for the
year
End
TREASURY STOCK
Balance at December 31
2, 13, 14
MARCH 2005
MARCH 2004
DEC 2004
P237,938,250
P237,938,250
P237,938,250
293,525,037
293,525,037
293,525,037
91,034,825
91,034,825
93,491,559
(28,794,855)
(25,501,884)
(2,456,734)
62,239,970
65,532,941
91,034,825
593,703,257
(2,923,246)
596,996,228
(2,923,246)
622,498,112
(2,923,246)
P594,072,982
P619,574,866
P590,780,011
(See accompanying notes to consolidated financial statements)
PHILIPPINE SEVEN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2005, 2004 AND DECEMBER 2004
REVENUE FROM MERCHANDISE SOLD
COST OF MERCHANDISE SOLD
Notes
MARCH 2005
MARCH 2004
2004
2
P1,045,244,200
P808,080,645
P3,941,921,897
716,040,863
329,203,337
553,392,618
254,688,027
2,708,335,765
1,233,586,132
24,580,818
25,895,705
159,578,629
98,744,462
189,895,734
81,296,106
369,936,302
87,928,781
146,140,202
392,309,722
676,661,839
271,561,404
1,340,532,965
2, 9, 17
(16,152,147)
(8,157,737)
(18,385,082)
(3,131,592)
52,631,796
(23,832,807)
2, 8
(24,309,883)
4,312,140
(21,516,674)
3,854,770
28,798,989
30,687,210
2, 12
(28,622,024)
(172,830)
(25,371,444)
(130,440)
P
(25,501,884)
(1,888,221)
(568,513)
2, 15,
20
GROSS PROFIT
OTHER OPERATING INCOME, net
OPERATING EXPENSES
Selling
Store operations
General and administrative
INCOME (LOSS) FROM
OPERATIONS
FINANCE COSTS, net
INCOME (LOSS) BEFORE
PROVISION FOR INCOME TAX
PROVISION FOR INCOME TAX
NET INCOME (LOSS) BEFORE
OTHER OUTSIDE INTEREST
OTHER OUTSIDE INTEREST
NET INCOME (LOSS) FOR THE
YEAR
EARNINGS (LOSS) PER SHARE BASIC AND DILUTED
2, 16,
20
2, 15
7, 20
7, 18, 20
(28,794,854)
64,899,831
298,968,814
P
2, 19
(2,456,734)
P
(0.12)
P
(0.1
(See accompanying notes to consolidated financial statements)
(0.01)
PHILIPPINE SEVEN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31,2005 AND 2004
Notes
March 2005
March 2004
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) before provision for income tax
P (24,309,883) P (21,516,674)
Adjustments for:
Depreciation and amortization
7, 15
32,833,496
27,161,044
Amortization of computer software
8, 15
746,865
647,241
Amortization of goodwill
8, 15
Loss on retirement of equipment and
write off of leasehold improvements
16
4,720,330
136,418
Other outside interest
Other outside interest’s share in net income
(172,830)
(130,440)
Provision for doubtful accounts
15
Write-off of other assets
Interest expense
17
8,954,462
4,111,535
Interest income
17
(796,725)
(979,943)
Operating income before working
capital changes
21,975,715
9,429,181
Changes in working capital:
Receivables
14,511,805
(71,658,655)
Inventories
31,820,813
6,231,658
Prepayments and other current assets
(12,086,311)
(7,973,866)
Trade accounts payable
(98,722,137)
21,984,221
Accrued expenses
3,546,424
9,446,026
Other current liabilities
35,182,528
60,124,768
Cash generated from operations
(3,771,163)
27,538,333
Income taxes paid
(3,931,689)
(3,330,801)
(7,702,852)
24,252,532
Net cash from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment
7
(32,201,694)
(86,451,105)
Proceeds from sale of property and equipment
Other assets
(14,384,818)
(2,564,880)
Interest received
796,725
979,943
(45,789,787)
(88,036,043)
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Net Proceeds from loans payable
6,500,000
14,845,236
Interest paid
(8,954,462)
(4,066,535)
(2,454,462)
10,778,701
Net cash from financing activities
NET INCREASE (DECREASE) IN CASH
FOR THE YEAR
(55,947,101)
(53,004,810)
CASH
January 1
265,321,750
273,072,264
P 209,374,649 P 220,022,454
March 31
(See accompanying notes to consolidated financial statements)
PHILIPPINE SEVEN CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2005 AND 2004
AND FOR EACH OF THE THREE MONTHS
IN THE PERIOD ENDED MARCH 31, 2005
Note 1 - Organization and operations
Philippine Seven Corporation (the “Parent Company”) was incorporated in the
Philippines and registered with the Securities and Exchange Commission (SEC) on
November 29, 1982. The Parent Company and its subsidiaries (the “Group”) are
primarily engaged in the business of retailing, merchandising, buying, selling,
marketing, importing, exporting, franchising, acquiring, holding, distributing,
warehousing, trading, exchanging or otherwise dealing in all kinds of grocery items,
dry goods, food or foodstuffs, beverages, drinks and all kinds of consumer needs or
requirements and in connection therewith, operating or maintaining warehouses,
storages, delivery vehicles and similar or incidental facilities. The Group is also
engaged in the management, development, sale, exchange, and holding for
investment or otherwise of real estate of all kinds, including buildings, houses
apartments and other structures.
The Parent Company is controlled by President Chain Store (Labuan) Holdings, Ltd.
(an investment holding company incorporated in Malaysia) which owns 56.59% of the
Parent Company’s outstanding shares. The remaining 43.41% of the shares are
widely held. The ultimate parent of the Group is President Chain Store Corporation
(PCSC) (incorporated in Taiwan, Republic of China).
The Parent Company has its principal office at the 7th Floor, The Columbia Tower,
Ortigas Avenue, Mandaluyong City. Including its subsidiaries, it has 1,000 and 989
regular employees as of March 31, 2005 and December 31,2004, respectively.
Note 2 - Significant accounting policies
The principal accounting policies and practices adopted by the Group in the preparation of the
consolidated financial statements are set out below:
Basis of preparation
The consolidated financial statements have been prepared in accordance with generally
accepted accounting principles in the Philippines (GAAP) under the historical cost convention.
The preparation of the consolidated financial statements in conformity with generally accepted
accounting principles in the Philippines requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the consolidated financial statements and the reported amounts of revenues and
expenses during the reporting period. Although these estimates are based on management’s
best knowledge of current events and actions, actual results may ultimately differ from those
estimates.
Basis of consolidation
The consolidated financial statements include the accounts of Philippine Seven
Corporation and the following subsidiaries:
Convenience Distribution Inc. (CDI)
Store Sites Holding, Inc. (SSHI)
Country of
incorporation
Philippines
Philippines
Percentage of
ownership
(Common and Preferred)
100
40
Subsidiaries, which are those entities in which the Parent Company has an interest of more
than one half of the voting rights or otherwise has power to govern the financial and operating
policies through interlocking directorships such that substantial benefits from the subsidiaries’
activities flow to the Parent Company, are consolidated. SSHI is controlled by the Parent
Company. The remaining 60% of the total shares is owned by Philippine Seven Corporation Employees Retirement Plan through its trustee, BPI-Asset Management and Trust Group (BPIAMTG).
Intercompany transactions, balances and unrealized losses are eliminated unless cost cannot
be recovered. Where necessary, accounting policies of subsidiaries have been changed to
ensure consistency with the policies adopted by the Parent Company.
Comparatives
(2)
Where necessary, comparative figures have been adjusted to conform with changes in
presentation in the current year.
New accounting standards effective in 2004
The Group adopted the following applicable Statements of Financial Accounting
Standards/International Accounting Standards (SFAS/IAS) effective January 1, 2004.
These new standards have been approved by the Accounting Standards Council
(ASC) of the Philippines.
•
SFAS 12/IAS 12, Income Taxes, which prescribes the accounting treatment of
income taxes and requires recognition of deferred tax liability for taxable temporary
differences and deferred tax asset for deductible temporary differences if it is
probable that a tax benefit will be realized. As required by the Standard, deferred
income taxes were reclassified and presented as non-current assets in the
consolidated balance sheets.
•
SFAS 17/IAS 17, Leases, which prescribes the accounting policies and disclosures
to apply to finance and operating leases.
Except for the reclassification of deferred income taxes as mentioned above, the
adoption of the new standards did not result in restatements of prior years’
consolidated financial statements nor did it have a material impact on the consolidated
financial statements. However, additional disclosures required by the new standards
have been included in consolidated financial statements, where applicable.
(3)
New Accounting Standards effective in 2005
The ASC approved the issuance of new and revised accounting standards which are
based on revised IAS and new International Financial Reporting Standards (IFRSs)
issued by the International Accounting Standards Board (IASB). These new standards
have been renamed Philippine Accounting Standards (PASs) to correspond to adopted
IASs while the Philippine Financial Reporting Standards (PFRSs) correspond to
adopted IFRSs. Other SFAS and SFAS/IAS not included in the enumeration below will
be renamed PASs once the consequential amendments due to improvements project
of the IASB/ASC are made. The new Standards are effective for annual periods
beginning on or after January 1, 2005.
The Group will adopt the following applicable revised and new accounting standards
effective January 1, 2005:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
PAS 1
PAS 2
PAS 8
PAS 10
PAS 16
PAS 17
PAS 19
PAS 21
PAS 24
PAS 27
PAS 28
PAS 32
PAS 33
PAS 36
PAS 38
PAS 39
Presentation of Financial Statements
Inventories
Accounting Policies, Changes in Accounting Estimates and Errors
Events after the Balance Sheet Date
Property, Plant and Equipment
Leases
Employee Benefits
The Effects of Changes in Foreign Exchange Rates
Related Party Disclosures
Consolidated and Separate Financial Statements
Investments in Associates
Financial Instruments: Disclosure and Presentation
Earnings per Share
Impairment of Assets
Intangible Assets
Financial Instruments: Recognition and Measurement
(4)
The impact of the adoption of PAS 21, 32, and 39 could not be reasonably estimated as of
December 31, 2004. Except for PAS 19, 36 and 38, the adoption of the other PASs mentioned
above is not expected to result in substantial changes to the Group’s accounting policies. In
summary:
•
PAS 1 - requires presentation of other outside interest in the consolidated
balance sheet within equity, separately from the Parent Company’s
stockholders’ equity
- requires that the criteria for classifying liabilities as current or non-current be
based solely on the conditions existing at the balance sheet date;
- prohibits the presentation of items of income and expenses as extraordinary
items; and
- requires disclosures of: (a) critical judgments made by management in applying
the accounting policies; and (b) those assumptions made by management that
are important in determining accounting estimates that could cause material
adjustment to the carrying amounts of assets and liabilities.
•
PAS 2 - eliminates last-in first-out as a valuation method for inventories.
•
PAS 8 - generally requires a retrospective/retroactive application of voluntary
changes in accounting policies and retrospective/retroactive restatement
to correct all material prior period errors (previously referred to as
fundamental errors).
•
PAS 10 - requires the disclosure of the date of the authorization for issue of the
financial statements and also prescribes the accounting and disclosures
related to adjusting and non-adjusting subsequent events.
•
PAS 16 - generally requires measurement of an item of property, plant and
equipment acquired in exchange for a monetary or non-monetary asset
at fair value.
•
PAS 17 - clarifies that land and building elements of a lease of land and building
need to be considered separately.
(5)
•
PAS 19 - covers a much broader scope and categorizes employee benefits as
follows: (a) short-term employee benefits; (b) post-employment benefits;
(c) other long-term benefits; and (d) termination benefits; and only allows
Projected Unit Credit Method to measure retirement obligations and
costs.
- upon adoption of the standard in 2005 and as permitted by PFRS 1, any
decrease in transitional retirement cost liability will be immediately
recognized. The impact of this adjustment alone, without considering the
other adjustments that may be necessary based on the entire PFRS 1, is
to increase retained earnings by P16,972,984, reduce current liabilities
by P24,960,271 and reduce deferred income tax assets by P7,987,287,
with retroactive effect on the earliest year presented in the financial
statements (Note 19).
•
PAS 21 - no longer permits capitalization of foreign exchange losses; upon
adoption in 2005, any undepreciated capitalized foreign exchange losses
will be adjusted against retained earnings and prior years’ consolidated
financial statements presented will be accordingly restated.
•
PAS 24 - expands the definition of related parties and the disclosure requirement
for related parties. In particular, the Standard requires disclosure of
compensation of key management personnel by benefit type.
•
PAS 27 - provides that consolidation, if required, is done regardless of the nature of
the entity. Thus, the requirement to consolidate controlled subsidiaries
applies to parents that are venture capital organizations, mutual funds, unit
trusts and similar entities; and
- requires that investments in subsidiaries, jointly controlled entities and
associates, when an entity elects to present separate financial statements, are to
be accounted for at cost or in accordance with PAS 39.
•
PAS 28 - requires that when financial statements of an associate used in applying
the equity method are prepared as of a reporting date that is different from
that of the investor, the difference must not be greater than three months;
and
- provides exemptions from application of the equity method similar to
those provided for certain parents not to prepare consolidated financial
statements. These exemptions include when the investor is also a
parent exempt in accordance with PAS 27 from preparing consolidated
(6)
financial statements, and when the investor, though not such a parent,
can satisfy the same type of conditions that exempt such parents.
•
PAS 32 - covers the disclosure and presentation of all financial instruments.
- requires more comprehensive disclosures about a company’s financial
instruments, whether recognized or unrecognized in the financial
statements.
•
PAS 33 - provides additional guidance and illustrative examples on complex matters
related to earnings per share.
•
PAS 36 - requires annual impairment test for goodwill acquired in a business
combination.
•
PAS 38 - removes the rebuttable presumption that intangible assets should have a
maximum life of 20 years. The Standard requires that an intangible asset
with a finite useful life be amortized on a systematic basis over its useful
life.
- requires that an intangible asset with an indefinite useful life not be
amortized but tested for impairment annually, and whenever there is an
indication that the intangible asset may be impaired.
•
PAS 39 - The requirements for presenting and disclosing information about
financial instruments are set out in PAS 32. PAS 39, on the other hand,
establishes principles for recognizing and measuring financial assets,
financial liabilities and some contracts to buy or sell non-financial items.
In particular, PAS 39 provides guidance on derecognition, when financial
assets and financial liabilities may be measured at fair value, how to
assess impairment, and how to determine fair value and hedge
accounting. The adoption of PAS 39 will result in a change in the
accounting policy relating to the classification of financial assets at fair
value through profit or loss. PAS 39, however, does not require
classification of financial assets at fair value through profit or loss of
previously recognized financial assets. PAS 39 requires simultaneous
adoption with PAS 32.
(7)
New Philippine Financial Reporting Standards (PFRS)
PFRS 1 First-time Adoption of PFRS
PFRS 1 applies when an entity adopts PFRS for the first time, by an explicit and
unreserved statement of compliance with PFRSs. In general, PFRS 1 requires an
entity adopting PFRS for the first time (a first-time adopter) to comply with each PFRS
that has come into effect at the reporting date for its first PFRS financial statements.
PRFS 1 requires that a first-time adopter prepare an opening PFRS balance sheet at
the date of transition to PFRSs (the beginning of the earliest period for which it
presents full comparative information under PFRS in its first PFRS financial
statements). PFRS 1 grants limited exemptions from these requirements in specified
areas where the cost of complying with them would likely exceed the benefits to users
of financial statements. PFRS 1 also prohibits retrospective application of PFRSs in
some areas, particularly where retrospective application would require judgments by
management about past conditions after the outcome of a particular transaction is
already known. Further, PFRS 1 requires disclosures that explain how the transition
from previous GAAP to PFRSs affected the entity’s reported financial position,
financial performance and cash flows. The impact of adoption of the Standard could
not be reasonably estimated as of December 31, 2004.
PFRS 2 Share-based Payment
The PFRS requires an entity to recognize share-based payment transactions in its
financial statements, including transactions with employees or other parties to be
settled in cash, other assets, or equity instruments of the entity. In particular, PFRS 2
requires an entity to reflect in its profit or loss and financial position the effects of
share-based payment transactions, including expenses associated with transactions in
which share options are granted to employees. Based on current circumstances, the
Group does not believe the effect of adoption of the Standard will be material.
(8)
PFRS 3 Business Combinations
This PFRS:
(a)
requires all business combinations within its scope to be accounted for by
applying the purchase method;
(b)
requires an acquirer to measure the cost of a business combination as
the aggregate of: the fair values, at the date of exchange, of assets given,
liabilities incurred or assumed, and equity instruments issued by the
acquirer, in exchange for control of the acquiree; plus any costs directly
attributable to the combination;
(c)
requires an acquirer to recognize separately, at the acquisition date, the
acquiree’s identifiable assets, liabilities and contingent liabilities subject to
certain criteria, regardless of whether they had been previously
recognized in the acquiree’s financial statements;
(d)
requires goodwill acquired in a business combination to be recognized by
the acquirer as an asset from the acquisition date, initially measured as
the excess of the cost of the business combination over the acquirer’s
interest in the net fair value of the acquiree’s identifiable assets, liabilities
and contingent liabilities recognized in accordance with (c) above;
(e)
prohibits the amortization of goodwill acquired in a business combination
and instead requires the goodwill to be tested for impairment annually, or
more frequently if events or changes in circumstances indicate that the
asset might be impaired, in accordance with PAS 36;
(f)
requires the acquirer to reassess the identification and measurement of
the acquiree’s identifiable assets, liabilities and contingent liabilities and
the measurement of the cost of the business combination if the acquirer’s
interest in the net fair value of the items recognized in accordance with (d)
above exceeds the cost of the combination. Any excess remaining after
that reassessment must be recognized by the acquirer immediately in
profit or loss.
Generally, PFRS 3 shall apply to the accounting for business combinations for which
the agreement date is on or after March 31, 2004. This PFRS shall also apply to the
accounting for:
(a)
goodwill arising from a business combination for which the agreement
date is on or after March 31, 2004; or
(b)
any excess of the acquirer’s interest in the net fair value of the acquiree’s
identifiable assets, liabilities and contingent liabilities over the cost of a
business combination for which the agreement date is on or after March
31, 2004.
(9)
The adoption of PFRS 3, PAS 36 and PAS 38 will result in a change in the accounting
policy for goodwill. Until December 31, 2004, goodwill is:
– Amortized on a straight-line basis over a period of 10 years; and
– Assessed for an indication of impairment at each balance sheet date.
In accordance with the provisions of PFRS 3:
– The Group will cease amortization of goodwill from January 1, 2005;
– Accumulated amortization as at December 31, 2004 amounting to P4,770,628
will be eliminated with a corresponding decrease in the cost of goodwill;
– From the year ended December 31, 2005 onwards, goodwill is tested annually
for impairment, as well as when there are indications of impairment.
Cash and cash equivalents
Cash and cash equivalents are carried in the consolidated balance sheet at cost. For
the purpose of the cash flow statement, cash and cash equivalents consist of cash on
hand, deposits held at call with banks and short-term highly liquid investments with
original maturities of three months or less from the date of acquisition.
Receivables
Receivables are carried at anticipated net realizable value. A provision is made for
doubtful accounts based on a review of all outstanding amounts at year-end and is
based on an objective evidence that the Group will not be able to collect all amounts
due according to the original terms of the receivables. Bad debts are written off
against related provision during the period in which they are identified.
Inventories
Inventories are stated at the lower of cost or net realizable value. The Parent
Company is using the retail method in measuring the cost of its store merchandise
inventory. Under this method, cost is determined using the average gross profit and is
reviewed on a regular basis to ensure that it approximates actual costs. Cost of
warehouse merchandise is determined using the first-in first-out method. Allowance
for slow-moving and obsolete inventories is set up if necessary, based on the review of
inventory movement and the current condition of each inventory item.
(10)
Property and equipment
Property and equipment, including leasehold improvements, are carried at cost less
accumulated depreciation and amortization. Cost of capital projects in progress are
accumulated in the accounts until these projects are completed upon which these are
classified to the appropriate property accounts.
Repairs and maintenance are charged to operations as incurred. The cost of major
renovations is included in the carrying amount of the asset when it is probable that future
economic benefits in excess of the originally assessed standard of performance of the existing
asset will flow to the Group. Major renovations are depreciated over the remaining useful lives
of the related assets.
Depreciation is computed using the straight-line method over the estimated useful lives
of the related assets. Leasehold improvements are amortized over the estimated
useful lives of the improvements or the term of the lease, whichever is shorter. The
following are the estimated useful lives of these assets:
Estimated useful life in years
Type of asset
Leasehold improvements
Store furniture and equipment
Buildings and improvements
Office furniture and equipment
Transportation equipment
Computer equipment
3 to 15
5 to 10
10 to 12
3 to 5
3 to 5
3
When assets are sold or otherwise disposed of, its cost and the related accumulated
depreciation are removed from the accounts and any resulting gain or loss is credited or
charged to operations.
Software and program costs
Software and program costs, which are not specifically identifiable and integral to a
specific computer hardware, are shown as part of other assets. These are carried at
cost, less amortization which is computed on a straight line method over their
estimated useful lives of five years.
(11)
Impairment of assets
Property and equipment and other non-current assets are reviewed for impairment
losses whenever events or changes in the circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognized for the amount by
which the carrying amount of the asset exceeds its recoverable amount which is the
higher of an asset’s net selling price and value in use. For the purpose of assessing
impairment, assets are grouped at the lowest level for which there are separately
identifiable cash flows (cash generating unit).
Deferred income tax
Deferred income tax is provided in full, using the balance sheet liability method, on
temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements, carry forward of unused tax losses (net
operating loss carryover or NOLCO) and unused tax credits (minimum corporate
income tax or MCIT) to the extent that it is probable that future, taxable income will be
available against which the temporary differences can be utilized. Currently enacted
tax rates are used on the determination of deferred income tax.
The Group reassesses at each balance sheet date the need to recognize a previously
unrecognized deferred income tax asset.
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the
businesses acquired. Goodwill included in other assets is amortized on a straight-line
basis over a period of ten years. Management determines the estimated useful life of
goodwill by considering factors such as existing market share, potential growth and
other factors inherent in the acquired product line.
Dividends
Dividends are recorded in the consolidated financial statements in the period in which
they are approved and declared by SSHI’s Board of Directors.
(12)
Revenue and expense recognition
Revenue from merchandise sold is recognized at the time the goods are delivered to
and accepted by the customers. Commission on services is recognized upon the sale
of consigned goods. Franchise income is recognized when earned. Rental income is
recognized on a straight-line basis over the period of the lease. Other income is
recognized when earned.
Cost and expenses are charged to operations when incurred.
Pension costs
Pension costs are actuarially determined using the Projected Unit Credit (PUC)
Method. This method reflects service rendered by employees to the date of valuation
and incorporates assumptions concerning employees’ projected salaries. The
unrecognized experience adjustments and past service costs are amortized over the
expected average remaining working lives of the covered employees.
Actuarial gains and losses arising from experience adjustments, changes in actuarial
assumptions and amendments to pension plans are charged or credited to income
over the average remaining service lives of the related employees.
Related party transactions and relationships
Related party relationships exist when one party has the ability to control, directly or
indirectly through one or more intermediaries, the other party or exercise significant
influence over the other party in making financial and operating decisions. Such
relationships also exist between and/or among entities which are under common
control with the reporting enterprise, or between and/or among the reporting
enterprises and their key management personnel, directors, or its stockholders.
Transactions between related parties are accounted for at arm’s length prices or on
terms similar to those offered to non-related entities in an economically comparable
market.
(13)
Foreign currency transactions and translations
Items included in the consolidated financial statements of the Group are measured using
the currency that best reflects the economic substance of the underlying events and
circumstances relevant to the Group (“the functional currency”). The financial
statements are presented in Philippine Peso, which is the functional currency of the
Group.
Foreign currency transactions are translated into the functional currency using the
exchange rates prevailing at the dates of the transactions. Outstanding foreign currency
denominated monetary assets and liabilities are translated at the exchange rates
prevailing at balance sheet dates. Foreign exchange gains or losses resulting from the
settlement of such transactions and from the translation of outstanding foreign currency
denominated monetary assets and liabilities are credited or charged to operations.
Leases
Leases where a significant portion of the risks and rewards of ownership are retained
by the lessor are classified as operating leases. Payments made under operating
leases are charged to the income statement on a straight-line basis over the period of
the lease. Contingent rents, including those based on a percentage of net sales, are
recognized once the contingency is resolved.
Provisions
Provisions are recognized when the Group has a present legal obligation or
constructive obligation as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation, and reliable estimate of the amount
can be made.
Basic earnings per share
Basic earnings per share is calculated by dividing the net income or loss for the year
attributable to common shareholders by the weighted average number of shares
outstanding during the year, excluding treasury shares. Diluted earnings per share is
calculated by dividing the net income or loss attributable to common shareholders by
the weighted average number of shares outstanding, excluding treasury shares and
adjusted for the effects of all dilutive potential common shares, if any. In both cases,
the effect of stock dividends, if any, is retroactively accounted for.
(14)
Treasury stock
Treasury stock is stated at acquisition cost.
Note 3 - Receivables
Receivables consist of:
March 2005
Dec 2004
Notes
Receivables from suppliers
Receivables from employees
Notes receivable
Receivables on subleased spaces
Insurance
Receivable from PCSC
Others
Less - allowance for doubtful accounts
9
20g
20e
P 80,310,987 P 97,746,284
5.2
5,551,202
2,600,000
4,800,000
3,402,336
3,377,882
1,377,519
1,325,929
7,605,102
2,229,030
100,518,522
115,030,327
7,616,341
7,616,341
P 92,902,181 P107,413,896
Note 4 - Inventories
Inventories consist of:
Store merchandise
Warehouse merchandise and others
March 2005
P138,158,369
133,220,763
P271,379,132
Dec 2004
P167,005,532
136,194,413
P303,199,945
(15)
Note 5 - Prepayments and other current assets
Prepayments and other current assets consist of:
March 2005
Dec 2004
P 10,832,252
9,234,763
5,004,231
1,981,123
367,696
17,004,823
P 44,424,888
P 15,349,889
8,798,574
4,868,548
1,725,454
367,696
1,228,417
P 32,338,578
Rent
Creditable withholding taxes
Advances for expenses
Supplies
Insurance
Others
Note 6 - Deferred income tax assets and liabilities; provision for income tax
The components of deferred income tax assets (liabilities) follow:
Minimum corporate income tax (MCIT)
Net operating loss carry over (NOLCO)
Accrued pension cost
Allowance for doubtful accounts
Unamortized past service cost
Advance rental
Unamortized capitalized interest
Unrealized foreign exchange gain
March 2005
Dec 2004
P 56,591,129 P 60,522,817
12,212,598
12,212,598
11,304,629
11,304,629
2,437,229
2,437,229
1,594,727
1,594,727
48,032
48,032
(3,200,491)
(3,200,491)
(218)
(218)
P 80,987,635 P 84,919,323
(16)
The Parent Company and CDI’s available NOLCO at December 31which can be
carried over as a deduction from gross income for the three succeeding taxable years
immediately following the year of such loss are as follows:
Taxable year
Expiration year
2004
2003
Parent
2001
2002
2004
2005
2003
2006
2007
P
37,676,181
P41,635,003
37,676,181
CDI
173,301
173,301
314,887
-
2004
P38,164,369
P79,484,485
In 2004, the Parent Company utilized in part its NOLCO from 2001 amounting to
P28,376,970. No deferred income tax asset is recognized for the Parent Company’s
remaining NOLCO from 2001 amounting to P13,258,033 which has already expired.
Realization of the future tax benefits related to the deferred income tax assets is
dependent on many factors, including the Group’s ability to generate future taxable
income within which the deferred income tax assets and liabilities are expected to be
recovered or settled. The Group has considered these factors in assessing the portion
of the deferred income tax assets which is likely to be realized and therefore recorded.
Note 7 - Property and equipment
Details of property and equipment at March 31 consist of:
Leasehold
Improvements
Land
Transportation
Equipment
Office Furniture
and Equipment
Buildings and
Improvements
Store Furniture
and Equipment
Computer
Equipment
Construction In
Progress
Total
COST
JAN 01, 2005
39,866,864
374,702,787
348,873,835
110,413,634
142,944,090
11,511,516
58,486,830
1,020,000
ADDITIONS
-
5,269,131
23,132,867
-
2,672,213
-
2,044,819
(913,300)
32,205,730
DISPOSALS
-
(5,644,310)
(2,591,393)
-
(1,053,625)
-
(89,109)
-
(9,378,436)
RECLASSIFICATION
MARCH 31, 2005
1,087,819,556
-
-
-
-
-
-
(2,018)
-
(2,018)
39,866,864
374,327,609
369,415,309
110,413,634
144,562,677
11,511,516
60,440,523
106,700
1,110,644,832
450,441,751
ACCUMULATED DEPRECIATION
JAN 01, 2005
-
101,815,344
189,719,325
35,140,876
83,107,735
9,366,307
31,292,164
-
DEPRECIATION
-
14,450,449
9,072,344
1,240,625
4,153,218
261,879
3,654,981
-
32,833,496
DISPOSALS
-
(2,613,816)
(1,409,973)
-
(583,362)
-
(50,955)
-
(4,658,106)
(17)
RECLASSIFICATION
-
-
(441)
-
441
-
2,018
-
2,018
MARCH 31, 2005
-
113,651,976
197,381,255
36,381,501
86,678,031
9,628,186
34,898,208
-
478,619,158
MAR. 31, 2005
39,866,864
260,675,632
172,034,055
74,032,133
57,884,646
1,883,330
25,542,314
106,700
632,025,674
DEC. 31, 2004
39,866,864
272,887,443
159,154,510
75,272,758
59,836,355
2,145,209
27,194,666
1,020,000
637,377,805
NET BOOK VALUE
Depreciation and amortization charged to operations and to franchise follows:
Selling
General and administrative
Franchise
For the three months ended
March 2005
March 2004
P 25,636,923 P 20,368,039
P 91,799,291
6,558,762
637,811
P 32,833,496
25,165,833
1,643,473
P118,608,597
6,476,331
116,058
Dec 2004
P 26,960,428
Note 8 - Other assets, net
Other assets, net consist of:
March 2005
Dec 2004
P 65,408,264
P65,408,264
99,083,872
21,672,970
10,885,174
13,288,602
3,717,832
7,076,438
P221,133,152
78,587,421
21,066,787
14,170,930
13,288,602
4,464,697
6,576,811
P203,563,512
Note
2
Goodwill, net of amortization of P4,770,628
Deposits
Rental
Utilities
Suppliers
Notes receivable
Computer software, net
Investments, telephone rights and other assets
21f
Last March 22, 2004, the Parent Company purchased the leasehold rights and store
assets of Jollimart Philippines Corporation for a total consideration of P130 million.
The excess of the acquisition cost over the fair value of the assets acquired was
recorded as goodwill.
Notes receivable pertains to the long-term portion of a secured, interest-bearing
receivable from an armored car service provider for stolen collections (Note 3).
(18)
Computer software, net at March 31,2005 consist of:
Cost
January 1, 2005
Additions
March 31, 2005
Accumulated amortization
January 1, 2004
Amortization for the 1st Qtr
March 31, 2005
Net carrying values
March 31, 2005
December 31, 2004
P16,780,037
16,780,037
12,315,340
746,865
13,062,205
P 3,717,832
4,464,697
Note 9 - Loans payable
Current loans payable represent short-term borrowings from various local banks,
payable in lump sum in 2005 with annual interest rates ranging from 8.3% to 9.5%
(2003 - 8.4%).
The maturity and the effective interest rates of the non-current loans payable are as follows:
Effective
interest rate
11.7%
Between 1 and 2 years
Between 2 and 3 years
10.5% to 11%
March 2005
P 32,500,000
Dec 2004
P 32,500,000
93,000,000
93,000,000
P125,500,000
P125,500,000
The non-current loans payable are unsecured except for the P56 million loan guaranteed by
the Parent Company’s ultimate parent company, PCSC in Taiwan.
(19)
The Parent Company has the following undrawn borrowing facilities from local banks:
March 2005
Short-term loan facilities
P 55,000,000
20,000,000
Dec 2004
P 55,000,000
10,000,000
Mar 2005
Dec 2004
P 34,952,785
15,002,103
9,427,013
12,046,173
2,173,906
2,840,332
2,017,733
1,737,757
1,348,531
12,874,490
P 94,420,823
P 36,436,409
14,398,643
9,423,028
7,298,493
3,743,330
2,836,944
1,817,351
1,737,757
1,291,616
8,184,991
P 90,874,399
Long-term loan facilities
Note 10 - Accrued expenses
Accrued expenses consist of:
Note
Pension
Marketing
Utilities
Employee benefits
Security services
Interest and bank charges
Preventive maintenance
Rentals
Legal costs and employees’ council
Others
18
(20)
Note 11 - Other current liabilities
Other current liabilities consist of:
March 2005
Dec 2004
Notes
Deposits payable
Non-trade accounts payable
Withholding taxes payable
Royalty payable
Payable to PCSC
Retention payable
Output VAT
Dividends payable
Advance lease rentals
Payable to franchisees, net
Others
20a
20b
20g
20c
P38,210,616
57,408,640
12,426,206
2,418,950
898,084
172,830
537,999
5,940,105
P118,013,430
P36,081,319
18,048,708
9,562,386
5,899,610
2,001,434
574,560
150,100
10,512,785
P82,830,902
Note 12 - Other outside interest
Other interest represents the share of Philippine Seven Corporation - Employees
Retirement Plan (PSC - ERP) through its trustee, BPI-Asset Management and Trust
Group, in SSHI’s net assets pertaining to preferred shares. PSC - ERP is entitled to an
annual “Guaranteed Preferred Dividend” in the earnings of SSHI starting April 5, 2002,
the date when the 25% of the subscription on preferred shares have been paid, in
accordance with the Corporation Code.
The guaranteed annual dividends shall be calculated and paid in accordance with the
Shareholder’s Agreement dated November 16, 2000 which provides that the dividend shall be
determined by the Board of Directors of SSHI using the prevailing market conditions and other
relevant factors.
(21)
Note 13 - Capital stock; additional paid-in capital
Details of issued and outstanding capital stock at December 31, 2004 and 2003 follow:
No. of
Shares
Amount
Authorized - P1 par value
400,000,000
P400,000,000
Issued
237,938,250
686,250
P237,938,250
2,923,246
Less - treasury stock
237,252,000
Issued and outstanding
P237,252,000
The retained earnings is restricted for dividend declaration in the amount of
P2,923,246, representing the cost of shares held in treasury.
On January 9, 1998, the SEC approved the registration of the following:
a. The 237,938,250 common shares which consist of:
No. of shares
Outstanding common shares (include underlying
shares for the 122,882 warrant units)
Initial public offering
166,556,250
47,000,000
24,382,000
Private placement
237,938,250
On February 4, 1998, the Parent Company offered for sale 71,382,000 common
shares, consisting of 47,000,000 shares for public offering and 24,382,000 shares
for private placement both at an offer price of P4.40 per share. Net proceeds
generated from the offering amounted to about P288.3 million. The excess of cost
of common shares over the net proceeds amounting to P216.9 million was credited
to “additional paid-in capital”.
(22)
b. The 122,882 units 5-year warrants with attached 4% perpetual income bonds.
On June 13, 2000, the Board of Directors approved a resolution authorizing the
issuance of the Parent Company’s shares (“Optional Shares”) for the exercise of
the 122,882 warrants with attached 4% perpetual income bonds consisting of
18,432,300 common shares to be taken from unissued portion of the authorized
capital stock and 12,288,200 treasury shares or a total of 30,720,500 shares
pursuant to their registration with the SEC. Moreover, upon the actual exercise of
the warrants and purchase of the Optional Shares, the Parent Company was
authorized to list the 30,720,500 shares with the Philippine Stock Exchange (PSE).
During the period of September 15 to 25, 2000, all of the Parent Company’s
warrants were exercised and the corresponding shares of 30,720,500 were issued
at a price of P1.732 per share resulting in an additional paid-in capital of
P13,492,444. The excess of cost over re-issue price of treasury shares amounting
to P27,902,091 is presented as deduction against additional paid-in capital in the
statements of changes in stockholders’ equity. Consequently, on September 28,
2000, the Parent Company listed the 30,720,500 with the PSE and delisted the
corresponding 122,882 warrants.
On November 16, 2000, a total of 162,520,072 shares were tendered by the Parent
Company’s shareholders to PCSC of which 119,575,008 shares were purchased
by its assignee, President Chain Store (Labuan) Holdings, Ltd., a wholly-owned
investment holding company of PCSC incorporated in Malaysia, at the price of
P8.30 per share.
Note 14 - Employee stock purchase plan
The Parent Company has an Employee Stock Purchase Plan (ESPP) which allows all
full-time and regular employees, who have rendered at least two years of service to
the Parent Company as of December 31, 1996, to purchase the Parent Company’s
shares in the offering at a purchase price of P4.40 per share. Each eligible employee
can purchase a minimum of 1,000 shares and a maximum number of shares with a
purchase price equivalent to 1 ½ months basic salary or, in the case of a manager, up
to 3 months basic salary.
On the stock purchase date, the Parent Company granted interest-free loans to the
participants equivalent to the purchase price of the stock. The loans are collectible
over a period of 24 months and are secured by the purchased shares pledged in favor
of the Parent Company.
(23)
Under the provisions of the ESPP, the Parent Company has the right to vote the
pledged shares until full payment of the loan and the participants have the right to
receive all cash dividends, but stock dividends shall be held in escrow until full
payment of the loan.
In 1998, 997,000 shares were subscribed by the employees under the ESPP and the
unsold shares were taken by the lead underwriter as part of the offering to the public.
In 2001, 686,250 shares were withdrawn by the employees and returned to the Parent
Company and accounted for as treasury shares.
Note 15 - Cost of merchandise sold and operating expenses
Details of cost of merchandise sold and operating expenses follow:
Notes
Cost of merchandise sold
Changes in inventories
Operating expenses
Salaries and allowances
Communications, light and water
Rental
Outside services
Depreciation and amortization
Supplies
Inventory variation and
bad merchandise
Taxes and licenses
Royalties
Repairs and maintenance
Employee benefits
SSS, Medicare and Pag-ibig
contributions
Transportation and travel
Bank charges
Insurance
Amortization of goodwill
Meals
Representation and entertainment
Health insurance
Amortization of computer
software
For the three months ended
March 2005
March 2004
P 716,040,863
21b,
21f
2, 8
2
21a
2
2, 9
P 553,392,618
Dec 2004
P2,708,335,765
73,426,389
74,820,914
61,246,665
48,058,811
267,067,405
238,537,894
66,075,013
5,033,729
32,195,685
12,268,122
50,784,735
4,127,495
26,844,370
9,440,420
235,770,019
123,388,609
116,965,124
49,620,514
9,232,673
10,378,120
11,166,066
7,684,243
6,063,304
12,371,398
16,287,208
8,376,983
7,298,962
7,119,312
46,257,278
42,213,867
40,136,325
31,041,100
20,750,083
5,186,371
2,324,254
1,910,274
781,213
1,076,310
846,593
970,713
4,388,522
1,453,643
758,825
452,436
1,100,781
810,316
779,678
19,186,455
7,273,626
6,496,189
4,937,192
4,770,628
3,921,104
3,801,443
3,204,990
723,316
2,932,501
746,845
(24)
2, 9
Dues and subscription
Pension costs
Fringe benefits
Provisions for doubtful accounts
Others
Total Operating Expenses
Grand Total
2, 19
2
21d
644,531
101,325
47,003,595
369,936,302
P1,085,977,165
410,035
36,134,903
298,968,814
P 852,361,431
2,240,629
3,065,616
204,484
66,749,890
1,340,532,965
P4,048,868,730
(25)
Note 16 - Other operating income, net
Details of other operating income (costs) follow:
For the three months ended
Notes
Mar 2005
Mar 2004
Dec 2004
2, 21e
Commission on services
P 10,140,97
Rental income on subleased
spaces
Franchise fee, net
Loss on retirement of equipment
and
write off of leasehold
improvements
Dividend income
Others
P 10,867,68
P 43,575,945
8,192,453
3,691,754
6,255,89
2,164,26
27,159,424
20,454,500
(4,718,313
7,273,953
P24,580,818
(149,23
(14,935,10
83,323,86
P159,578,629
2, 21g
2, 21c, 21d
8
6,757,09
P 25,895,70
Other income mainly consists of actual promotional discounts and display allowances
granted by suppliers, and income from exclusivity agreements with the latter.
Note 17 - Finance Costs, net
Details of finance Costs,net follows:
Mar 2005
Mar 2004
Dec 2004
Notes
Interest expense
Interest income
2, 10
2
P(8,954,462)
P(4,111,535)
796,725
979,943
P (8,157,737) P (3,131,592)
P(26,289,819)
2,457,012
P 23,832,807
(26)
Note 18 - Pension plan
The Parent Company and CDI maintain a trusteed, non-contributory retirement plan covering
all their regular and full-time employees. Under the plan, the normal retirement age is 60
years old. Normal retirement benefit is equivalent to 15 times the final daily salary, cash
equivalent of 5 days and 1/12 of 13th month pay per year of credited service paid in lump-sum.
An employee who has reached the age of 50 and has at least 5 years of credited service may
retire with the Parent Company and CDI’s approval and be entitled to reduced benefits in
accordance with the provisions of the plan.
The latest actuarial valuation as of December 31, 2004 was obtained from an
independent actuary using the “projected unit credit” (PUC) method. Under the PUC
cost method, the annual normal cost for an individual member is determined as the
amount necessary to provide for the portion of the retirement benefit accruing during
the year. The principal actuarial assumptions used to determine retirement benefits
were a salary increase rate of 7% (2003 and prior years – 10%) and a return on plan
assets of 10.4%. Valuation is made every year to update the plan costs and adjust the
amounts of contributions.
Based on the latest actuarial valuations as of December 31, 2004, the actuarial value
of plan assets amounted to P10,478,737 while the estimated actuarial accrued liability
was P12,878,239. The actuarial gain, resulting from change in actuarial assumption
for salary increase rate, amounting to P24,960,271 is amortized over the average
remaining working lives of the employees in accordance with SFAS 24 - Retirement
Benefits Costs.
Pension costs charged to operating expenses amounted to P NIL,(2004 – P3,065,616)
Note 19 - Earnings (loss) per share
Earnings (loss) per share is computed as follows:
Note
Mar 2005
Mar 2004
Dec 2004
Net income (loss) for the year
available to common shares
Average number of
common shares
Per share
P (28,794,854) P
(25,501,884P (2,456,734)
14
237,252,000
P
(0.12)
237,252,000 237,252,000
P
(0.11) P
(0.01)
(27)
There are no dilutive potential common shares, therefore, the amounts reported for basic and
diluted earnings (loss) per share are the same.
Note 20 - Related party transactions; agreements
In the normal course of business, the Parent Company transacts with companies
which are considered related parties under SFAS No. 24/IAS 24 “Related Party
Disclosures”. Transactions with related parties are consummated at competitive
market rates as though the parties are unrelated. Settlement of outstanding related
party receivables and payables is generally made within 20 days from date of each
transaction.
Agreements
The Parent Company and its subsidiaries are parties to the following agreements:
Related parties
a. Parent Company’s licensing agreement with Seven Eleven Inc. (SEI), a related company
organized in Texas, U.S.A., which grants the Parent Company the exclusive right to use
the 7-Eleven System in the Philippines. In accordance with the agreement, the Parent
Company pays, among others, royalty fee to SEI based on a certain percentage of monthly
gross sales net of gross receipts tax (Note 16).
b. Rental of post-mix machines from PCSC whereby the Parent Company pays the
latter 1% of sales (as defined in the agreement) from the said machines in 2002
and 5% thereafter from January 1, 2003. Payments shall be made quarterly before
the 20th day of January, April, July and October. Total related rent expense for the
three months ended March 31, 2005 and March 31, 2004 amounted to P2,178,375
and P 1,451,408, respectively.
Third parties
c. Parent Company’s various store franchise agreements with third parties for the operation
of certain stores including lease of the store and equipment operated in a manner which
will enhance the 7-Eleven Image and pursuant to the 7-Eleven System provided for in item
(a) above. In consideration thereof, a franchise fee agreed upon by the parties shall be
paid to the Parent Company.
(28)
d. Parent Company’s service management agreements with third parties for the
management and operation of certain stores. In consideration thereof, the store operator
is entitled to a management fee based on a certain percentage of the store’s gross profit
and operating expenses as stipulated in the service management agreement.
e. Parent Company’s agreement with its phonecards suppliers effective January 1, 2000.
Under the arrangement, the Parent Company earns commission as the consignee of the
phonecard items based on a certain percentage of phonecard sales.
f. Parent Company’s various lease agreements with third parties relating to its store
operations. Certain agreements provide for the payment of rental expense based on
various schemes such as an agreed percentage of net sales for the month and fixed
monthly rate.
CDI leases the warehouse premises it presently occupies for a period of five years
commencing on December 1, 2000 and expiring on November 30, 2005.
Under the terms of the covering lease agreements, the Parent Company and CDI
are required to make advance deposits which are shown as part of “other assets,
net” in the consolidated balance sheets.
Rental expense for the three months ended March 31,2005, 2004 and year ended
December 31, 2004 under the above leases amounted to P 63,896,638,
P 49,333,327 and P217,620,217, respectively.
The future annual minimum rental commitments are as follows:
Not later than 1 year
Later than 1 year but not later than 5 years
Later than five years
P234,817,978
915,676,261
286,474,774
g. Parent Company’s various sublease agreements with third parties which provide for
lease rentals based on an agreed fixed monthly rate or as agreed upon by the
parties.
(29)
Note 21 - Contingencies
The Group is a defendant/respondent to various legal cases and assessments that are either
pending in courts or under protest, the outcomes of which are not presently determinable.
Management and its legal counsel believe that the liability, if any, that may result from the
outcome of these cases and investigation will not materially affect their financial position or
results of operations.
(30)
PHILIPPINE SEVEN CORPORATION
SCHEDULE A: PROPERTY PLANT & EQUIPMENT - COST
AS OF MARCH 31, 2005
JAN. 1,2005
Land
ADDITTIONS
DISPOSALS
RECLASSIFICATION
MARCH 31,2005
39,866,864
-
-
-
39,866,864
Leasehold Improvements
Store Furniture and
Equipment
374,702,787
5,269,131
(5,644,310)
-
374,327,609
348,873,835
23,132,867
(2,591,393)
-
369,415,309
Buildings and Improvements
Office furniture and
Equipments
110,413,634
-
-
-
110,413,634
142,944,090
2,672,213
(1,053,625)
-
144,562,677
Transportation Equipment
11,511,516
-
-
-
11,511,516
Computer Equipment
58,486,830
2,044,819
(89,109)
(2,017.68)
60,440,523
1,020,000
(913,300)
-
-
106,700
1,087,819,556
32,205,730
(9,378,436)
(2,017.68)
1,110,644,832
Construction In Progress
Total
PHILIPPINE SEVEN CORPORATION
SCHEDULE B: PROPERTY PLANT & EQUIPMENT - ACC. DEPRECIATION
AS OF MARCH 31, 2005
JAN. 1,2005
Land
Leasehold Improvements
Store Furniture and
Equipment
Buildings and Improvements
Office furniture and
Equipments
Transportation Equipment
Computer Equipment
Construction In Progress
Total
DEPRECIATION
DISPOSALS
RECLASSIFICATION
MARCH 31,2005
-
-
-
-
-
101,815,344
14,450,449
(2,613,816)
-
113,651,976
189,719,325
9,072,344
(1,409,973)
(441)
197,381,255
35,140,876
1,240,625
-
-
36,381,501
83,107,735
4,153,218
(583,362)
441
86,678,031
9,366,307
261,879
-
-
9,628,186
31,292,164
3,654,981
(50,955)
2,018
34,898,208
-
-
-
-
-
450,441,751
32,833,496
(4,658,106)
2,018
478,619,158
(2)
PHILIPPINE SEVEN CORPORATION
SCHEDULE C: RECEIVABLES
AS OF MARCH 31,2005
Name and Designation of Debtor
Receivable from Suppliers
Balance
December
31,2004
(Audited)
Deduction
(amounts
collected)
Addition
Balance
March 31, 2004
(Unaudited)
97,746,284 171,203,120 188,638,417
80,310,987
Receivable from Employees
5,551,202
1,868,166
2,196,790
5,222,578
Receivable from subleased
3,377,882
8,240,120
8,215,665
3,402,336
-
-
-
-
Notes Receivable
4,800,000
-
2,200,000
2,600,000
Insurance
1,325,929
90,910
39,320
1,377,519
-
-
-
-
2,229,030 188,593,749 183,217,677
7,605,102
115,030,327 369,996,065 384,507,869
100,518,523
Receivable from PCSC
Due from franchisee, net
Others
Less - allowance for doubtful
accounts
TOTAL
7,616,341
-
-
7,616,341
107,413,986 369,996,065 384,507,869
92,902,182
PHILIPPINE SEVEN CORPORATION
SCHEDULE D: OTHER ASSETS
AS OF MARCH 31,2005
Other Assets
Balance as of
December
2004
Charged to
cost and
Expenses
Additions
Refundable Deposit
78,587,421 21,071,781
Utilities
21,066,786
Charged
to Other
Accounts
Other changes
additions
(deductions)
Balance as of
March 2004
575,330
-
-
99,083,872
606,184
-
-
-
21,672,970
Suppliers
14,170,931 55,542,365
58,828,122
-
-
10,885,174
Notes Receivable
13,288,602
-
-
-
-
13,288,602
4,464,697
-
746,865
-
-
3,717,832
6,576,811
499,626
-
-
-
7,076,437
65,408,264
-
-
-
-
65,408,264
203,563,512 77,719,956
60,150,317
-
-
221,133,152
Computer software,net
Investment, telephone rights and other
assets
Others
Total
PHILIPPINE SEVEN CORPORATION
SCHEDULE E: RECEIVABLE FROM SUPPLIER
AS OF MARCH 31,2005
PAYEE
31.9 F. AIRCONDITIONING
March
1 - 90
91 - 180
181 360
OVER 360
Balance
DAYS
DAYS
DAYS
DAYS
TOTAL
668
-
668
668
4NM ENTERPRISES
-
-
-
-
A TUNG CHINGCO
-
-
-
-
5,139
-
5,139
5,139
ABS-CBN PUBLISHING INC.
-
-
-
-
ABSOLUTE SALES CORPORATION
-
-
-
-
ACS MANUFACTURING CORPORATION
-
-
-
-
ADP Industries Corporation
-
-
-
-
2,179
-
2,179
2,179
2,416,745
-
2,416,745
2,416,745
-
-
-
-
1,000
-
1,000
1,000
-
-
-
-
11,342
11,342
3,131
-
3,131
3,131
Andresons International
(71,200)
-
(71,200)
(71,200)
Arlees Bread House Inc.
12,300
-
12,300
12,300
ARMIS CAKES & PASTRIES
19,618
-
19,618
19,618
Arnotts Phils. Inc.
-
-
-
-
ASB Industrial Sales
-
-
-
-
118,480
-
118,480
118,480
-
-
-
-
1,500
-
1,500
1,500
(50,000)
-
(50,000)
(50,000)
AVRAM PUBLICATIONS & DISTRIBUTION, INC.
29,705
-
29,705
29,705
AZITSOROG
88,973
-
88,973
88,973
BASIC DISTRIBUTORS, INC.
71,309
-
71,309
71,309
Beauty Lines Trading International
(1,256)
-
(1,256)
(1,256)
ABENSON SALES CORPORATION
ADROIT MARKETING
ADVANTAGE PRODUCTS CORP.
Algo Enterprises Inc.
ALL OVER CORPORATION
Alternative Beverages Distribution Corporation
Amazing Twosome
AMERICAN GROCERS CORPORATION
ASIA BREWERY INC., BUDWEISER
Asia/Pacific Circulation Exponents Inc.
ASIAN IMEX ENTERPRISES
Asset Marketing Corporation
11,342
(2)
BEEHIVE GENERAL MERCHANDISE
1,933
-
1,933
1,933
-
-
-
-
16,600
-
16,600
16,600
418
11
-
418
3,274
-
3,274
3,274
65,146
-
65,146
65,146
-
-
-
-
20,000
-
20,000
20,000
(300,000)
-
(300,000)
(300,000)
61,563
-
61,563
61,563
5,200
-
5,200
5,200
BOON ENTERPRISES CO.
533
-
533
533
BRAND-AID
961
Beljar Traders Inc.
Belman Laboratories Inc.
BENBY ENTERPRISES
BESUTO FOOD CORPORATION
BIG "E" FOOD PRODUCTS
BIZ ASIA TRADING INC
Blue Lanes Trading
Body Needs & Basics Inc.
BONHEUR MARKETING CORPORATION
BON'S VARIETY PRODUCTS
BREAD CONNECTION, INC.
407
961
58,197
-
-
-
British American Tobacco
20,100
BUSINESS PEOPLE, INC.
961
58,197
58,197
-
-
-
20,100
20,100
51,881
-
51,881
51,881
570
-
-
570
California Manufacturing Company Lipton
-
-
-
-
Camellia Food Manufacturing
-
-
-
-
Canasia Traders, Inc.
-
-
-
-
65
-
65
65
18,162
45,930
217,026
217,026
BREWMASTER INT'L
CALBAYOG REALTY
CARLO PUBLISHING HOUSE INC.
CDO Foodsphere Inc.
CENTENNIAL GAMING CORP.
45,930
-
570
27,768
217,026
-
Conveniece Distribution Inc.
-
-
Century Canning Corporation
-
-
-
-
1,283
-
1,283
1,283
Charyn Food Manufacturing Corp.
-
-
-
-
Cherry Hills Food Company
-
-
-
-
1,020
836.00
29,000
-
29,000
29,000
3,000
-
3,000
3,000
11,057
-
11,057
11,057
CHAMIAN COMMERCIAL
CITIBANK
Classic Red Enterprise
Classic Umbrella Industries Inc
C-LITE TRADING AND MFG.
-
-
184.03
1,020
(3)
Coca Cola Bottlers Phils. Inc.
1,660,315
-
1,660,315
1,660,315
Colgate Palmolive Phils. Inc.
-
-
-
-
Columbia International Food Products Inc.
-
-
-
-
2,393
-
2,393
2,393
Comark International Corp.
-
-
-
-
Commonwealth Food Inc.
-
-
-
-
Consolidated Dairy & Frozen Food Corp.
-
-
-
-
65,000
-
65,000
65,000
COOL ICE TRADING
-
-
-
-
Colgate Palmolive Phils. Inc.
-
-
-
-
169,382
-
169,382
169,382
168
-
168
168
-
-
-
-
22,471
-
22,471
22,471
-
-
-
-
5,208
-
5,208
5,208
Columbus Seafoods Corporation
Convoy Marketing Corporation
COSMOS BOTTLING CORPORATION
CPR MARKETING, INC.
Creative Bakers Company Inc.
CREATIVE SOURCE, INC.
Croley Food Manufacturing Corporation
CROLEY FOOD MFG.
CUISON BUILDERS
DALE STARR ENTERPRISES
19,348
-
8,958
-
-
139,723
20,478
50,000
Detpak Packaging philippines Inc.
10,390
19,348
-
-
-
139,723
-
50,000
50,000
-
-
-
-
DIAGEM PACKAGING SYSTEM
-
-
-
-
Diageo Philippines Inc.
-
-
-
-
5,239
-
5,239
5,239
761
-
761
761
26,333
-
26,333
26,333
DSS TRADING
-
-
-
-
Durex International Marketing Inc..
-
-
-
-
EAC MARKETING SERVICES
606
-
606
606
East Valley Enterprises, Inc.
-
-
-
-
24,678
-
24,678
24,678
ECCO FOOD CORPORATION
-
-
-
-
ED-LUS GEN MERCHANDISE
42,703
-
42,703
42,703
Del Monte Philippines Inc.
Dental - B
DKT INTERNATIONAL, INC.
Dole Philippines Inc.
DPL MERCHANDISING
EASTERN TELECOM PHILS.
119,245
(4)
EMERALD HEADWAY DISTRIBUTORS, INC.
12,580
-
12,580
12,580
-
-
-
-
5,885
132
-
5,885
80,203
-
80,203
80,203
4,597
-
4,597
4,597
-
-
-
-
50,000
-
50,000
50,000
4,017
-
4,017
4,017
Filstar Distribution Corporation
-
-
-
-
FIRST CHOICE FOOD CORPORATION
-
-
-
-
10,000
-
10,000
10,000
FIRST SHERIDAN CORP.
210
-
210
210
FITRITE INCORPORATED
114
-
114
114
2,000
-
2,000
2,000
FOOD FABRICATORS INC.
-
-
-
-
FOODSERIES
-
-
-
-
9,217
-
9,217
9,217
Foxhound Trading
-
-
-
-
FRAMARON (H. RAMOS)
-
-
-
-
Fry & pop food Inc.
-
-
-
-
Future Trade Intl. Inc.
-
-
-
-
3,456
-
3,456
3,456
300,000
-
300,000
300,000
-
-
-
-
13,791,636
4,634,348
3,124,351
13,791,636
108,913
-
108,913
108,913
-
-
-
-
13,313
-
13,313
13,313
-
-
-
-
GETZ BROS. PHILIPPINES INC.
2,927
-
2,927
2,927
GILBERT EMERSON MARKETING CORP.
1,350
-
1,350
1,350
247,500
-
247,500
247,500
208
-
208
208
EMERGING CHANNELS INC.
ENAV LOGISTICS
EPOCH TROPICAL FRUITS CORP.
EVEREADY BATTERY CO. PHILS., INC.
Federated Distributors Inc.
Felcro
FILIA FOODS INC.,
First Enterprises
FIVE BEARS CORP.
FOODWORLD MFG. CORP.
GALLERY MARKETING CORPORATION
Gandour
Gardenia Bakeries Phils.
Gate Distribution Enterprise Inc.
GDM INTERNAT'L & GOLDEN RICH
General Milling Corporation
GENIE FOOD CORP.
Geo Foods Corporation
GLOBE TELECOM
GMAT CREDIT COOPERATIVE
5,753
6,032,632
305
(5)
GNP Trading Corporation
-
-
-
-
326
-
326
326
GOLDEN LOAF INC.
4,962
-
4,962
4,962
GOMICO TRADING
6,330
-
6,330
6,330
57,307
-
57,307
57,307
-
-
-
-
1,000
-
1,000
1,000
Grand Dragon Enterprises
-
-
-
-
Green Cross Incorporated
-
-
-
-
6,255
-
6,255
6,255
H & Y MKTG. PHIL. INC.
69,370
-
69,370
69,370
HAITSAN COMMERCIAL
30,042
-
30,042
30,042
310,443
-
310,443
310,443
-
-
-
-
167,199
-
167,199
167,199
-
-
60,185
-
60,185
60,185
-
-
-
-
31,798
-
31,798
31,798
INTERTRADE REALTY & DEV. CORP.
1,968
-
1,968
1,968
JACKPOT PUBLICATION
3,746
-
3,746
3,746
334,812
-
334,812
334,812
JAKA DIST. INC.
0
-
-
-
JANISSA BUSINESS VENTURES
-
-
-
-
JDH-Kraft Foods Inc.
-
-
-
-
14,188
-
-
14,188
Johnson & Johnson Philippines Inc.
-
-
-
-
JOLLYANT
-
-
-
-
JO-NAS INT'L PHIL.
35,406
-
35,406
35,406
JPLIM DESIGN AND CRAFTS
98,898
-
98,898
98,898
-
-
-
-
338
-
338
338
14,362
-
14,362
14,362
GOLD FISH RESOURCES INC.
GOODWAY INTERNATIONAL TRADING CORP.
GRAND CLASSIC
GRAND CLASSIC CORPORATION
GYMBOREE MARKETING INT'L, INC.
HEARTY PLUS ENTERPRISES
HIDDEN SPRING
HONAI FOODS
HONDA CARS
HOPE SUPER STATIONERY
Ideal Macaroni & Spaghetti Factory
IMGAME
JAID ENTERPRISES
JERON TRAVEL
JT International Philippines Inc.
KAT TRADING CORPORATION
KEANSBURG MARKETING
14,188
(6)
KIMBERLY CLARK PHILS.
26,489
-
KIMSON METAL INDUSTRIES
11,389
-
-
26,489
26,489
-
11,389
-
-
-
17,663
-
17,663
17,663
5,000
-
5,000
5,000
-
-
-
-
16,023
-
16,023
16,023
4,805
-
4,805
4,805
11,411
-
11,411
11,411
-
-
-
-
25,000
-
25,000
25,000
-
-
-
-
185
-
185
185
1,864
-
1,864
1,864
Leslie Corporation
50,000
-
50,000
50,000
LFD GENCON
14,632
LINK IMPORT EXPORT ENT., INC
(9,464)
King Koa Corp.
KING'S DIMSUM
KISLAP PUBLISHING INC.
LA FLOR DE LA ISABELA, INC.
LA PACITA BAKERY
LA TONDENA DISTILLERS INC.
LABATT ASIA INCORPORATED
Lam Hua Paper Product
Lamoiyan
Lebenz Enterprises
LE-DA BAKESHOP
LEO LITE MARKETING INTERNATIONAL, INC.
8,579
2,810
14,632
14,632
(9,464)
(9,464)
LIWAYWAY MARKETING CORPORATION
-
-
-
-
LSK General Wax and Candle Commercial
-
-
-
-
(75,000)
-
(75,000)
(75,000)
10,200
-
-
10,200
M. V. FOODS INDUSTRIES
1,007
-
1,007
1,007
M.Y. SAN BISCUITS INC.
3,334
-
3,334
3,334
-
-
-
-
MAGNOLIA
4,913
-
4,913
4,913
MAINTENANCE TECHNOLOGIES
7,287
818
7,287
Marby Food Ventures Corporation
5,348
-
5,348
5,348
Marketline Dist. Corp.
-
-
-
-
Marketreach Distributors Inc.
-
-
-
-
Marrbont Mercantile
-
-
-
-
958
-
958
958
200,000
-
200,000
200,000
-
-
-
-
LTE Philippines Incorporatd
LUZON GLASS
MACROPACK MARKETING
MARTA MARKETING CORPORATION
MASTERFOOD PHILS., INC.
McKenzie Distribution Company Inc.
10,200
1,200
5,269
(7)
Mega Market Incorporation
-
-
-
-
MELY'S PURE CHOCOLATE
2,153
-
2,153
2,153
Metro Biscuit Corporation
-
-
-
-
METRO PAPER INDUSTRY
-
-
-
-
3,981
-
3,981
3,981
22,583
-
22,583
22,583
MICROSEP
4,200
-
4,200
4,200
MISTER FOOD PRODUCTS
1,185
-
1,185
1,185
Monde Nissin Corp.
-
-
-
-
M'Sakay Printing Press
-
-
-
-
1,837
-
1,837
1,837
-
-
-
-
(3,717)
-
(3,717)
(3,717)
(48,870)
-
(48,870)
(48,870)
909
-
909
909
-
-
-
-
154
-
154
154
-
-
-
-
500
-
500
500
-
-
-
-
OMF LITERATURE
1,263
-
1,263
1,263
ON-SITE BUILDERS
1,000
-
-
-
-
-
1,256
-
1,256
1,256
Pacific Meat Company inc.
-
-
-
-
PACIFICAR PLASTIC PRODUCT
-
-
-
-
Palmafil Trading Co.
-
-
-
-
12,002
-
12,002
12,002
-
-
-
-
5,072
-
5,072
5,072
11,003,646
-
3,646
11,003,646
Perfect Circle Industrial Supply Company
-
-
-
-
PHIL. BEVERAGE PARTNERS
-
-
-
-
METRO TRADE, INCORPORATED
METROLAB INDUSTRIES, INC.
MULTI-LINK IMPORT EXPORT
NEETON TRADING
Nestle Phils.
New Zealand Milk Phils.
NEWBORN FOOD PRODUCTS, INC.
NG MERCHANDISE
NUGGET FOOD CORP.
Nutri-licious Marketing Corporation
NUTRITIVE SNACK FOOD INC. (NSF)
NUTRITIVO INC.
One Day Express Delivery, Inc
OVERLAND MARKETING
PAPER LINE AND GRAPHICS
Papertech Inc.
PDPC
Pepsi Cola Products Phils. Inc.
500
11,000,000
500
1,000
(8)
Philand Industries, Inc.
-
-
-
-
925,875
-
925,875
925,875
1,950
-
1,950
1,950
PHILIPPINE LONG DISTANCE TELEPHONE
63,491
-
63,491
63,491
Philusa Corporation
(5,000)
-
(5,000)
(5,000)
-
-
-
-
442,800
-
442,800
442,800
-
-
-
-
26
-
26
26
45,357
-
45,357
45,357
2,000
-
2,000
2,000
200,000
-
200,000
200,000
21,978,000
-
21,978,000
-
21,978,000
-
-
-
-
-
17,775
-
17,775
17,775
550
-
550
550
Republic Chemical Industries Inc.
-
-
-
-
Resourceful International Marketing, Inc.
-
-
-
-
3,312
-
3,312
3,312
63,667
-
63,667
63,667
399,708
-
399,708
399,708
-
-
-
-
1,200
-
1,200
1,200
Rodzon Marketing Corporation
-
-
-
-
ROGEMSON
-
-
-
-
Rothschild Research Corporation
-
-
-
-
445
-
445
445
2,655
-
-
2,655
131,326
-
131,326
131,326
-
-
-
-
22,799
-
-
22,799
262,845
-
262,845
262,845
2,015
-
2,015
2,015
PHILIP MORRIS
PHILIPPINE DAIRY PRODUCTS, CORP.
PINAKAMASARAP CORPORATION
Precious Pages Corporation
Premiere Wines and Spirits
PRESTIGE UMBRELLA
PRIME ALLIANCE MARKETING CORP.
PROCTOR GAMBLE/COLGATE PALMOLIVE
PROJUICE SYSTEMS DISTRIBUTION
Purefoods Hormel Company Inc.
Qualiguard Security
QUANTUM FOODS
Quantum Foods Inc.
RFM CORPORATION
RFM PRESIDENT ENTERPRISES CORP
RICHMARSH INDUSTRIAL TRADE CORP
Right Goods Philippines Inc.
RODMAC ENTERPRISES
RS LYRIC SALES CORPORATION
RJ Robles Technology Builders
S POINT PRODUCTS, INC.
Sabrosa Foods Inc.
SAFETY CONSTRUCTION
San Miguel Corporation
SANCANCO CANNING CORP.
1,200
5,750
1,455
17,049
(9)
Sanitary Care Products Asia Inc.
-
-
-
-
SCA Hygiene Product Corp.
-
-
-
-
159
-
159
159
440,617
-
440,617
440,617
1,547
-
1,547
1,547
56,465
-
56,465
56,465
-
-
-
-
31,245
-
31,245
31,245
770
-
770
770
468,329
299,959
52,253
468,328.55
3,495
-
3,495
3,495
75,000
-
75,000
75,000
45
-
45
45
ST. PEREGRINE
5,130
-
STARCREST ASIA CORPORATION
1,500
-
1,500
1,500
STATELINE
1,733
-
1,733
1,733
-
-
-
-
131,975
-
131,975
131,975
1,688
-
1,688
1,688
-
-
-
-
503
-
503
503
2,000
-
2,000
2,000
56,488
-
56,488
56,488
798
798
-
798
-
-
-
-
500,000
-
500,000
500,000
19,734
-
19,734
19,734
-
-
-
-
71,200
-
71,200
71,200
-
-
-
-
(10,000)
-
(10,000)
(10,000)
2,196
-
2,196
2,196
645
-
645
645
Scanasia Overseas, Inc
S-CHILD MARKETING
SERGS PRODUCTS, INC.
SHANG LI PLASTIC CORPORATION
Sharmila Inc.
SMACKERS BAKESHOP
SOCIETY PUBLISHING INCORPORATED
SODEXHO PASS
SOUTH ASIA FOOD INC.
Splash
ST. ESSENCE MFG.,CO. INC.,
STEAM SHOP
STERLING PAPER PRODUCTS
STERLING TRANSTRADE CORP.
STORE SITES HOLDING INC.
STYLES & CLASSICS PHIL., INC.
SUGARLAND
SUMMIT PUBLISHING CO. INC.
Superdough Food & Catering
Sweetie Shoppe Inc.
SYSU INTERNATIONAL
TEOPE COMMERCIAL
TGC Officemates
THE ANDRESONS GROUP, INC.
THE BAMBOO OVEN
The First Enterprises.
THE FOOD PEOPLE, INC.
TOBI MARKETING, INC.
79,687
36,430
5,130
5,130
(10)
Traditional Food Corp.
-
-
500
-
1,342
1,342
TVP Dental B
(50,000)
-
Unilever Philippines Inc.
106,552
23,394
Uni-President Foods Corporation
110,933
-
110,933
110,933
814
-
814
814
26,860
-
-
26,860
-
-
-
-
13,342
-
13,342
13,342
-
-
-
-
VAYAO WAX MANUFACTURING, INC.
59,572
-
59,572
59,572
VIRGINIA FOOD INC.
33,673
-
33,673
33,673
-
-
-
-
674
-
674
674
-
-
-
-
1,861
-
1,861
1,861
27,273
-
27,273
27,273
405
-
405
405
7,873
-
3,379
7,873
23,986
-
23,986
23,986
8,814
-
8,814
8,814
57,019
-
57,019
57,019
130,833
-
130,833
130,833
Wrigleys Phil
50,000
-
50,000
50,000
YOUNGSTROT TRADING
13,225
-
13,225
13,225
7,472
-
7,472
7,472
Zest - O Corporation
799,485
799,485
-
799,485
ZUELLIG PHILS. INC.
35,573
-
35,573
35,573
Adjustment/Accrual/AVD (to be reclass nxt month)
19,968,875
4,333,333
15,635,542
Grand Total
80,310,986
10,125,458
54,990,047
TRANS-OVERSEAS
Tridel Technologies
UNITED LABORATORIES INC.
UNIVERSAL ADVERTISING
Universal Canning Incorporated
Universal Robina Corporation
VARIDEL SALES CORP.
Viva Video Inc.
VLADIMIR CHICHARON & SNACKS
Wade Inc.
WATERS UNLIMITED
WATSON WYATT PHIL., INC.
WELLA PHILIPPINES. INC.
WELLTUNED ENGINEERING SERVICES
WELUP TRADE
WHISTLES INCORPORATED
WILMINGTON IMEX, INC.
WORLDWIDE FOODS & WINES, INC.
YS COMMERCIAL ENTERPRISES, INC.
LESS: ALLOWANCE FOR DOUBTFUL ACCOUNTS
500
-
-
-
500
1,342
(50,000)
83,158
106,552
26,860
414
(50,000)
4,080
19,968,875
150,259
15,045,223
7,616,341
80,310,986
7,616,341
NET RECEIVABLE FROM SUPPLIERS
(11)
72,694,645
72,694,645
(12)