COVER SHEET P W 3 4 3 SEC Registration Number L T G R O U P , I N C . ( A S u b s i d i a r y o f T a n g e n t H o l d i n g s C o r p o r a t i o n ) A N D S U B S I D I A R I E S (Company‘s Full Name) 1 1 t h F l o o r U n i t 3 B e n c h T o w e r , 3 0 t h S t . c o r n e r R i z a l d r i v e C r e s c e n t P a r k W e s t 5 B o n i f a c i o G l o b a l C i t y T a g u i g C i t y (Business Address: No. Street City/Town/Province) Jose Gabriel D. Olives 808-1266 (Contact Person) (Company Telephone Number) 1 2 3 1 17-A 0 6 0 9 Month Day (Form Type) Month Day (Calendar Year) (Annual Meeting) (Secondary License Type, If Applicable) SEC Dept. Requiring this Doc. Amended /Section Total Amount of Borrowings 572 Total No. of Stockholders Domestic Foreign To be accomplished by SEC Personnel concerned File Number LCU Document ID Cashier S T A M P S Remarks: Please use BLACK ink for scanning purposes. SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-A ANNUAL REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SECTION 141 OF CORPORATION CODE OF THE PHILIPPINES 1. For the calendar year ended December 31, 2013 2. SEC Identification Number PW-343 3. BIR Tax Identification No. 121-145-650-000 4. Exact name of registrant as specified in its charter LT Group, Inc. 5. Philippines 6. (SEC Use Only) Province, Country or other jurisdiction of Industry Classification Code: incorporation or organization 7. 11th Floor Unit 3 Bench Tower, 30th St. corner Rizal drive Crescent Park West 5 Bonifacio Global City Taguig City 1634 Address of principal office Postal Code 8. (632) 808-1266 Registrant's telephone number, including area code 9. Tanduay Holdings, Inc., 7th Floor Allied Bank Center, 6754 Ayala Avenue Makati City 1200 Former name, former address, and former fiscal year, if changed since last report. 10. Securities registered pursuant to Sections 8 and 12 of the SRC, or 4 and 8 of the RSA Number of Shares of Common Stock Title of Each Class Outstanding and Amount of Debt Outstanding Common shares, P1.00 par value 10,821,388,889 11. Are any or all of these securities listed on a Stock Exchange? Yes [] No [ ] Philippine Stock Exchange Common Stock - 10,821,388,889 shares 2 12. Check whether the registrant: (a) has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17 thereunder or Section 11 of the Revised Securities Act (RSA) and RSA Rule 11(a)-1 thereunder and Sections 26 and 141 of The Corporation Code of the Philippines during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); Yes [] No [ ] (b) has been subject to such filing requirements for the past 90 days. Yes [] No [ ] 13. Aggregate market value of the voting stock held by non-affiliates of the registrant P=42,846,790,466 as of December 31, 2013 14. Not applicable DOCUMENTS INCORPORATED BY REFERENCE 3 PART I – BUSINESS AND GENERAL INFORMATION Item 1. Business Corporate History LT Group, Inc. (LTG) formerly known as Tanduay Holdings, Inc., (THI), was originally incorporated in the Philippines and registered with the Philippine Securities and Exchange Commission (SEC) on May 27, 1937 under the name ―The Manila Wine Merchants, Inc.‖. LTG‘s corporate life is 50 years from the date of incorporation and was extended for another 50 years from and after May 27, 1987. The Philippine SEC approved the change of name to ―Asian Pacific Equity Corporation‖ on September 22, 1995 and change of its primary purpose to that of a holding company. On July 30, 1999, the Company acquired Twin Ace Holdings Corp., now known as Tanduay Distillers, Inc. (TDI), a producer of distilled spirits, through a share swap with Tangent Holdings Corporation (Tangent). The share swap resulted in THI wholly owning TDI and Tangent increasing its ownership in THI to 97.0%. On August 24, 1999, the stockholders approved the increase in capital stock from One Billion Pesos to Five Billion Pesos with a par value of one peso per share. This was approved by the Securities and Exchange Commission on November 10, 1999 together with the change in LTG‘s corporate name from ―Asian Pacific Equity Corporation‖ to ―Tanduay Holdings, Inc.‖ Three Billion shares were issued by the Company for the acquisition in 1999 of Twin Ace Holdings Corp. now known as Tanduay Distillers, Inc. (TDI). An agreement to subscribe was executed between Tangent Holdings Corporation (THC), the sole shareholder of TDI, and LTG in exchange for 600,000,000 shares in TDI. This share swap resulted in LTG wholly owning TDI. On June 30, 2005, TDI acquired controlling interests in Asian Alcohol Corporation (AAC) and Absolut Distillers, Incorporated (ADI), formerly known as Absolut Chemicals, Inc. (ACI). AAC and ADI are domestic corporations registered with the Philippine Securities and Exchange Commission (SEC) which are the suppliers of TDI‘s alcohol requirements. In December 2006, TDI converted certain advances to AAC and ADI amounting to P=200 million and P185 million, respectively, into equity in the subsidiaries thereby resulting in the increase in ownership by TDI over AAC and ADI to 93% and 96% respectively. In October 2007, the Philippine SEC approved ADI‘s equity restructuring. On the other hand, the increase in authorized capital stock of AAC was approved on January 10, 2008. In June 2008, TDI bought additional shares in AAC amounting to P=150 million, which increased TDI‘s ownership from 93% to 95%. For purposes of consolidation as of December 31, 2011, TDI‘s ownership over AAC and ADI was 95% and 96% respectively. In December 2011, the Company undertook a capital raising exercise to complete the financing of the capital expenditure requirements of its subsidiary, TDI and the latter‘s subsidiaries, ADI and AAC and to improve operational efficiencies and rationalize operations. This involved a sale of 398,138,889 existing Company shares owned by THC at an offer price of P= 4.22 per share, for a total gross proceeds of P= 1,680.1 million which THC re-invested into the Company. On September 24, 2012, THI‘s stockholders approved the amendment in its Articles of Incorporation and By-Laws to reflect the change in its corporate name from ―Tanduay Holdings, Inc.‖ to ―LT Group, Inc.‖ which was approved by the Philippine SEC on September 28, 2012. The Company‘s primary purpose is to engage in the acquisition by purchase, exchange, assignment, gift or otherwise; and to hold, own and use for investment or otherwise; and to sell, assign, transfer, exchange, lease, let, develop, mortgage, enjoy and dispose of, any and all properties of every kind and description and wherever situated, as to and to the extent permitted by law. 4 After a series of restructuring activities in 2012 and 2013, LTG expanded and diversified its investments to include the beverages, tobacco, property development and banking businesses, all belonging to Mr. Lucio C. Tan and his family and assignees (collectively referred to as the ―Controlling Shareholders‖). As of December 31, 2013 and 2012, LTG is 74.36%-owned by its ultimate parent company, THC, which is also incorporated in the Philippines. The official business address of LTG is 11th Floor, Unit 3 Bench Tower, 30th St. Corner Rizal Drive Crescent Park West 5 Bonifacio Global City, Taguig City. The Company has interests in the following companies: Distilled Spirits—the Company conducts its distilled spirits business through its 100%- owned subsidiary TDI. TDI is the second-largest distilled spirits producer in the Philippines according to Nielsen Philippines, with an approximate 23.3% share of the Philippine spirits market in 2013. Beverage—the Company conducts its beverage business through its 99.9%-owned subsidiary, Asia Brewery, Inc. (ABI). ABI is one of the Philippines‘ leading producers of non-alcoholic and alcoholic beverages, such as energy drinks, beer, alcopop, bottled water and soymilk, and has leading market positions across four of these five main categories. ABI is also a major producer of packaging materials (including glass bottles). Tobacco—the Company conducts its tobacco business through its 99.6% ownership in Fortune Tobacco Corporation (FTC), which in turn owns 49.6% of PMFTC, a company formed in 2010 as a result of business combination between Philip Morris Philippines Manufacturing, Inc. (PMPMI) and FTC. PMFTC is the leading tobacco manufacturer and distributor in the Philippines with an estimated 79.3% market share by volume in the year 2013 and has a diversified portfolio of brands across all consumer segments, including Fortune, Hope, Marlboro and Philip Morris. Banking—the Company conducts its banking business through Philippine National Bank (PNB). PNB is a universal bank currently listed with the Philippine Stock Exchange (PSE). It recently merged with Allied Banking Corporation (Allied Bank) another universal bank listed in the PSE. After obtaining necessary regulatory approvals, the Company increased its indirect ownership to approximately 56.47% of the merged PNB and Allied Bank. PNB is the Philippines‘ fourth largest private commercial bank in terms of total assets, deposits and net loans and receivables in 2013.