Benpres Holdings and Subsidiaries
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SEC Number AS093004369 File Number BENPRES HOLDINGS CORPORATION AND SUBSIDIARIES (Company’s Full Name) 4th Floor, Benpres Building Meralco Avenue, Pasig City (Company’s Address) 631-3111 (Telephone Number) December 31 (Year Ending) (month & day) Annual Audited Consolidated Financial Statements Form Type Amendment Designation (If applicable) December 31, 2001 Period Ended Date (Secondary License Type and File Number) BENPRES HOLDINGS CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2001 AND 2000 AND FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2001 SGV & Co SyCip Gorres Velayo & Co Report of Independent Public Accountants 6760 Ayala Avenue 1226 Makati City Philippines Tel 632 891 0307 Fax 632 819 0872 www.sgv.com.ph The Stockholders and the Board of Directors Benpres Holdings Corporation 4th Floor, Benpres Building Meralco Avenue, Pasig City We have audited the accompanying consolidated balance sheets of Benpres Holdings Corporation and Subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of income, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the Philippines. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Benpres Holdings Corporation and Subsidiaries as of December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the Philippines. We have examined the pro forma adjustments reflecting the transaction described in Note 2 and the application of those adjustments to the historical amounts in the assembly of the accompanying pro forma consolidated balance sheets of Benpres Holdings Corporation and Subsidiaries as of December 31, 2001 and 2000 and the pro forma consolidated statements of income and cash flows for the years then ended. Such pro forma adjustments are based upon management’s assumptions that there will be a conversion of the Notes as described further in Note 2. Our examination included such procedures as we considered necessary in the circumstances. The objective of this pro forma financial information is to show what the significant effects on the historical financial information might have been had the transaction referred to in Note 2 occurred at an earlier date. However, the pro forma consolidated financial statements are not necessarily indicative of the results of operations or related effects on the financial position that would have been attained had the above mentioned transaction actually occurred earlier. - 2 - In our opinion, management’s assumptions provide a reasonable basis for presenting the significant effects directly attributable to the above mentioned transaction described in Note 2, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma column reflects the proper application of those adjustments to the historical financial statement amounts in the pro forma consolidated balance sheets as of December 31, 2001 and 2000, and the pro forma consolidated statements of income and cash flows for the years then ended. The accompanying consolidated financial statements have been prepared assuming that the Company will continue operating in the normal course. As discussed in Note 1, the Parent Company’s long-term direct obligations and additional liabilities that may arise from its guarantee and commitments are due for payment in 2002 and 2003. Management’s plans in regard to these matters are also described in Note 1. The ability of the Company to continue operating in the normal course depends on the success of its balance sheet management plan. As also discussed in Note 1, the Company has significant investments, advances and guarantee in Bayan Telecommunications Holdings Corporation (BayanTel). The ability of BayanTel to continue operating in the normal course and correspondingly, the recoverability of the Parent Company’s additional investments in BayanTel that may arise from the portion of the guarantee and commitments that have not been provided for, depend on the success of BayanTel’s debt restructuring plan and future operations. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. As explained in Note 5, the Parent Company has given retroactive effect to the change in accounting for foreign exchange losses. R. F. S. REYES Partner CPA Certificate No. 26815 PTR No. 6723088 January 2, 2002 Makati City March 22, 2002 SGV & Co SyCip Gorres Velayo & Co Report of Independent Public Accountants 6760 Ayala Avenue 1226 Makati City Philippines Tel 632 891 0307 Fax 632 819 0872 www.sgv.com.ph The Stockholders and the Board of Directors Benpres Holdings Corporation We have audited the accompanying consolidated balance sheets of Benpres Holdings Corporation and Subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of income, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the Philippines. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Benpres Holdings Corporation and Subsidiaries as of December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the Philippines. We have examined the pro forma adjustments reflecting the transaction described in Note 2 and the application of those adjustments to the historical amounts in the assembly of the accompanying pro forma consolidated balance sheets of Benpres Holdings Corporation and Subsidiaries as of December 31, 2001 and 2000 and the pro forma consolidated statements of income and cash flows for the years then ended. Such pro forma adjustments are based upon management’s assumptions that there will be a conversion of the Notes as described further in Note 2. Our examination included such procedures as we considered necessary in the circumstances. The objective of this pro forma financial information is to show what the significant effects on the historical financial information might have been had the transaction referred to in Note 2 occurred at an earlier date. However, the pro forma consolidated financial statements are not necessarily indicative of the results of operations or related effects on the financial position that would have been attained had the above mentioned transaction actually occurred earlier. - 2 - In our opinion, management’s assumptions provide a reasonable basis for presenting the significant effects directly attributable to the above mentioned transaction described in Note 2, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma column reflects the proper application of those adjustments to the historical financial statement amounts in the pro forma consolidated balance sheets as of December 31, 2001 and 2000, and the pro forma consolidated statements of income and cash flows for the years then ended. The accompanying consolidated financial statements have been prepared assuming that the Company will continue operating in the normal course. As discussed in Note 1, the Parent Company’s long-term direct obligations and additional liabilities that may arise from its guarantee and commitments are due for payment in 2002 and 2003. Management’s plans in regard to these matters are also described in Note 1. The ability of the Company to continue operating in the normal course depends on the success of its balance sheet management plan. As also discussed in Note 1, the Company has significant investments, advances