Document 6524704

COVER SHEET
4 4 0 9
SEC Registration Number
2 G O
G R O U P ,
( F o r m e r l y
A T S
( A T S C ) ,
I N C .
C o n s o l i d a t e d
I n c . )
(Company’s Full Name)
1 2 T H
U. N.
F L OO R
T I M E S
A V E.
CO R N E R
E R M I T A
MA N I L A
P L A Z A
T A F T
B U I L D I N G
A V E.
(Business Address: No. Street City/Town/Province)
JEREMIAS E. CRUZABRA
(02) 528-7412 / (02) 528-7540
(Contract Person)
(Company Telephone Number)
1 2
3 1
2 0 - I S
0 6
1 0
Month
Day
(Form Type)
Month
Day
(Fiscal Year)
(Annual Meeting)
Preliminary Information
Statement
(Secondary License Type, If Applicable)
N/A
Corporation Finance
Department
Dept. Requiring this Doc.
Amended Articles Number/Section
Total Amount of Borrowings
1,952
Total No. of Stockholders
Domestic
Foreign
To be accomplished by SEC Personnel concerned
File Number
LCU
Document ID
Cashier
STAMPS
Remarks: Please use BLACK ink for scanning purposes.
1
SECURITIES AND EXCHANGE COMMISSION
SEC FORM 20-IS
INFORMATION STATEMENT PURSUANT TO SECTION 20
OF THE SECURITIES REGULATION CODE
1.
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Definitive Information Statement
2.
2GO Group, Inc.
(formerly: ATS Consolidated (ATSC), Inc.)______
Name of the Registrant as specified in its charter
3.
PHILIPPINES
Province, country or other jurisdiction of incorporation or organization
4.
SEC Identification Number _____4409________
5.
BIR Tax Identification Code ___000-313-401___
6.
12 Floor, Times Plaza Building U.N. Ave. corner Taft Avenue, Ermita, Manila
Address of principal office
Postal Code 1000
7.
(02) 528-7540 and (02) 528-7412
Registrant’s telephone numbers, including area code
8.
10 June 2013 at 4:30 PM, The HUB @ Kilometer Zero, Rizal Park, Ermita, Manila, Philippines
1000
Date, time and place of the meeting of security holders
9.
Approximate date on which the Information Statement is first to be sent or given to security holders
May 20, 2013
10.
Securities registered pursuant to Sections 8 and 12 of the Code or Sections 4 and 8 of the RSA
(information on number of shares and amount of debt is applicable only to corporate registrants):
th
Title of Each Class
Number of Shares of Common Stock
Outstanding or Amount of Debt Outstanding
Common Stock
11.
2,446,136,400
Are any or all of registrant's securities listed in a Stock Exchange?
YES [X] NO [ ]
If yes, disclose the name of such Stock Exchange and the class of securities therein:
Philippine Stock Exchange - Common Stock
2
(Formerly: ATS Consolidated (ATSC), Inc.)
NOTICE OF THE ANNUAL MEETING OF THE STOCKHOLDERS
Dear Stockholder:
This is to inform you that 2GO Group, Inc. (the "Company") will hold its Annual Stockholders’ Meeting on
10 June 2013, at 4:30 p.m., at the The HUB @ Kilometer Zero, Rizal Park, Ermita, Manila. The agenda for
the meeting is as follows:
1.
2.
3.
4.
5.
6.
Opening Prayer
Call to Order
Certification of Notice
Determination and Declaration of Quorum
Approval of Minutes of the Annual Stockholders’ Meeting held on 31 May 2012
Approval of the Resolution of the Board of Directors dated 27 March 2013 to amend
its Articles of Incorporation to Decrease its Authorized Capital Stock by
P4,564,330.00; and the Retirement of 4,564,330 Redeemable Preferred Shares;
7. Approval and Ratification of all Acts and Resolutions of the Board of Directors and
Management for the period covering 31 May 2012 to 20 May 2013
8. Annual Report for the year ending 31 December 2012
9. Election of the Members of the Board of Directors
10. Other Matters
11. Adjournment
Only stockholders of record in the books of the Company at the close of business on 06 May 2013 will be
entitled to vote at said stockholders’ meeting.
12 April 2013, Manila, Philippines.
AMADO R. SANTIAGO III
Corporate Secretary
========================
We are not soliciting your proxy. However, if you will not be able to attend the meeting but would like to be represented
thereat, you may accomplish the enclosed proxy form and submit the same on or before 24 May 2013 to the Office of the
Corporate Secretary at the G/F Ortigas Bldg., Ortigas Avenue, Pasig City 1605. Validation of proxies shall be held 31 May
2013 at 9:00 a.m. at the Office of the Corporate Secretary.
3
PROXY
The undersigned stockholder of 2GO GROUP, INC. (the “Company”) hereby appoints
__________________________ or in his absence, the Chairman of the meeting, as attorney and proxy, with
power of substitution, to present and vote all shares registered in his/her/its name as proxy of the
undersigned stockholder, at the Annual Meeting of Stockholders of the Company on 10 June 2013 and at
any of the adjournments thereof for the purpose of acting on the following matters:
1.
Approval of minutes of previous meetings.
Yes
2.
Abstain
Approval of annual report.
Yes
3.
No
4.
No
Abstain
Election of Board of Directors
Vote for all nominees listed below:
Francis C. Chua (Independent)
Sulficio O. Tagud, Jr.
Jeremias E. Cruzabra
Raul Ch. Rabe (Independent)
Monico V. Jacob (Independent)
Nelson T. Yap
Mark E. Williams
Geoffrey M. Seeto
Patrick Ip
Approval of the amendment to the Seventh
Article of the Articles of Incorporation to
Decrease Authorized Capital Stock by
P4,564,330.00 and the Retirement of
4,564,330 Redeemable Preferred Shares of
the Company.
Yes
5.
Abstain
Ratification of all Acts and Resolutions of the
to Board of Directors and Management.
Yes
7.
No
No
Abstain
At their discretion, the proxies named above are
authorized to vote upon such other matters as
may properly come before the meeting.
Yes
No
Abstain
Withhold authority for all nominees listed
above.
Withhold authority to vote for the nominees
below:
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
___________________________________
PRINTED NAME OF STOCKHOLDER
___________________________________
SIGNATURE OF STOCKHOLDER/
AUTHORIZED SIGNATORY
___________________________________
DATE
THE PROXY SHOULD BE RECEIVED BY THE CORPORATE SECRETARY ON OR BEFORE 24 MAY
2013, THE DEADLINE FOR SUBMISSION OF PROXIES.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER AS DIRECTED
HEREIN BY THE STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
THE ELECTION OF ALL NOMINEES AND FOR THE APPROVAL OF THE MATTERS STATED ABOVE
AND FOR SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING IN THE
MANNER DESCRIBED IN THE INFORMATION STATEMENT AND/OR AS RECOMMENDED BY
MANAGEMENT OR THE BOARD OF DIRECTORS.
A STOCKHOLDER GIVING A PROXY HAS THE POWER TO REVOKE IT AT ANY TIME BEFORE THE
RIGHT GRANTED IS EXERCISED. A PROXY IS ALSO CONSIDERED REVOKED IF THE
STOCKHOLDER ATTENDS THE MEETING IN PERSON AND EXPRESSED HIS INTENTION TO VOTE IN
PERSON.
4
PART I
INFORMATION REQUIRED IN INFORMATION STATEMENT
A. GENERAL INFORMATION
Item 1. Date, time and place of meeting of security holders
Date of meeting
Time of meeting
Place of meeting
:
:
:
10 June 2013
4:30 P.M.
The HUB @ Kilometer Zero
Rizal Park, Ermita, Manila
Approximate date of mailing of this
Statement
:
20 May 2013
Registrant’s Mailing Address
:
12 Floor, Times Plaza Bldg. UN Ave. corner
Taft Ave. Ermita, Manila
th
Item 2. Dissenters’ Right of Appraisal
Under the Corporation Code, a dissenting stockholder shall have the right of appraisal or the right to demand
payment of the fair value of his shares in the following instances:
a.
b.
c.
d.
any amendment to the articles of incorporation which has the effect of changing or restricting the
rights of any stockholder or class of shares, or of authorizing preferences in any respect superior to
those of outstanding shares of any class, or of extending or shortening the term of corporate
existence;
sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially all of the
corporate property and assets;
merger or consolidation;
investment in another corporation, business or for any purpose other than the primary purpose for
which the corporation was organized.
In the foregoing cases, any stockholder who wishes to exercise his appraisal right must have voted against the
proposed corporate action, made a written demand on the corporation within thirty (30) days after the date on
which the vote was taken for payment of the fair value of his shares as well as complied with all other requirements
provided under Title X of the Corporation Code. Failure to make the demand within such period or comply with the
requirements provided under Title X of the Corporation Code shall be deemed a waiver of the appraisal right. If the
proposed corporate action is implemented or effected, the corporation shall pay to such stockholder, upon
surrender of the certificate or certificates of stock representing his shares, the fair value thereof as of the day prior
to the date on which the vote was taken, excluding any appreciation or depreciation in anticipation of such
corporate action.
If within a period of sixty (60) days from the date the corporate action was approved by the stockholders, the
withdrawing stockholder and the corporation cannot agree on the fair value of the shares, it shall be determined
and appraised by three (3) disinterested persons, one of whom shall be named by the stockholder, another by the
corporation, and the third by the two thus chosen. The findings of the majority of the appraisers shall be final, and
their award shall be paid by the corporation within thirty (30) days after such award is made. No payment shall be
made to any dissenting stockholder unless the corporation has unrestricted retained earnings in its books to cover
such payment. Upon payment by the corporation of the agreed or awarded price, the stockholder shall forthwith
transfer his shares to the corporation.
No proposed corporate action among the agenda for the stockholders’ meeting to be held on 10 June 2013 may
give rise to a possible exercise by stockholders of their appraisal right.
Item 3.
Interest of Certain Persons in or Opposition to Matters to be Acted Upon
No director or officer of the Company at any time since the beginning of the last fiscal year or any nominee for
election as a director of the Company or any associate of any of the foregoing persons has any substantial
interest, direct or indirect, by security holdings or otherwise, in any matter to be acted upon in the stockholders’
meeting other than their re-election to their respective positions.
5
No director has informed the Company in writing that he intends to oppose any action to be taken by the
Company at the meeting.
B. CONTROL & COMPENSATION INFORMATION
Item 4. Voting Securities and Principal Holders Thereof
(1)
The Registrant has 2,446,136,400 outstanding common shares as of 31 March 2013. Each common share
shall be entitled to one vote with respect to all matters to be taken up during the annual stockholders’
meeting.
Further, as of 31 March 2013, the Registrant has no outstanding redeemable preferred shares as a result of
the mandatory redemption, through the facilities of the Philippine Stock Exchange, of its outstanding
4,560,417 redeemable preferred shares on 06 December 2012.
Accordingly, during the annual stockholders’ meeting, holders of common shares shall each be entitled to
one vote with respect to the amendment of the Articles of Incorporation to decrease the authorized capital
stock of the Corporation by P4,564,330.00 or the par value corresponding to the 4,564,330 authorized
redeemable preferred shares of the Company so that these shares may be retired.
(2) The record date for determining stockholders entitled to notice and to vote during the annual stockholders
meeting and also to this information statement is 06 May 2013.
(3) At each election for directors, every common stockholder shall have the right to vote, in person or by proxy,
the number of shares owned by him for as many persons as there are directors to be elected, or to cumulate
his vote by giving one candidate as many votes as the number of such directors multiplied by the number of
shares shall equal, or by distributing such votes on the same principle among any number of candidates.
(4) Security ownership of certain record and beneficial owners and management.
Security ownership of certain record and beneficial owners of five per centum (5%) or more of the
outstanding capital stock of the Registrant as of 31 March 2013:
Title of
Class
Common
Name and Address of Record
Owner and Relationship with 2GO
1. Negros Navigation Co., Inc.
Pier 2, North Harbor, Manila
(PARENT COMPANY)
Name of Beneficial Owner and
Relationship with Record
Owner
Negros Navigation Co., Inc.
Authorized Representative:
Mr. Sulficio O. Tagud, Jr.
President and CEO
Citizenship
No. of
Shares Held
Percent of
Class
Filipino
2,160,141,995
88.31%
Negros Navigation Co., Inc. (NENACO) is one of the oldest domestic shipping companies in the Philippines. It
was organized and registered with the Securities and Exchange Commission (SEC) on 26 July 1932 for the
purpose of transporting passengers and cargoes at various ports of call in the Philippines. NENACO is 59.59%
owned by KGLI-NM Holdings, Inc. and 39.88% by China-ASEAN Marine B.V.
6
Security Ownership of Management – Record and Beneficial Owners as of 31 March 2013:
Title of
Class
Common
Common
Common
Common
Common
Common
Common
Common
Common
Name of Record/Beneficial
Owner and Position
Citizenship
Francis C. Chua
Chairman of the Board,
Independent Director
Filipino
Sulficio O. Tagud, Jr.
President and CEO
Filipino
Jeremias E. Cruzabra
CFO, Treasurer, CIO
Filipino
Raul Ch. Rabe
Independent Director
Filipino
Monico V. Jacob
Independent Director
Nelson T. Yap
Director
Mark E. Williams
Director
Filipino
Geoffrey M. Seeto
Director
Patrick Ip
Director
TOTAL
Filipino
American
Australian
Chinese
Amount and nature of ownership
(Indicate record and/or beneficial)
1,000 – “direct”
9,000 – “indirect”
Record Owner: PCD Nominee
Corporation (Filipino)
1,000 – “indirect”
Record Owner: PCD Nominee
Corporation (Filipino)
1,000 – “indirect”
Record Owner: PCD Nominee
Corporation (Filipino)
1,000 – “indirect”
Record Owner: PCD Nominee
Corporation (Filipino)
1 – “direct”
Beneficial Owner: NENACO
1 – “direct”
Beneficial Owner: NENACO
1,000 – “indirect”
Record Owner: PCD Nominee
Corporation (Non-Filipino)
1 – “direct”
Beneficial Owner: NENACO
1 – “direct”
Beneficial Owner: NENACO
1,004 ”direct”;
13,000 “indirect”
Percent
of Class
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
Security Ownership of the Directors and Officers in the Registrant as a Group: Common is 14,004 shares;
Preferred – none.
Voting trust holders of 5% or More
No person holds more than five per centum (5%) of a class under a voting trust agreement or similar
arrangement.
Changes in Control
On 28 December 2010, NENACO purchased the shareholdings of Aboitiz Equity Ventures, Inc. (AEV) in 2GO
comprising 1,889,489,607 common shares at a purchase price of approximately PhP3.55 billion and the
shareholdings of Aboitiz & Company, Inc. (ACO) in 2GO comprising 390,322,384 common shares at a purchase
price of approximately PhP734 million.
In February 2011, as a result of the mandatory Tender Offer, NENACO purchased an additional 120,330,004
common shares in 2GO.
On 21 December 2012, NENACO caused the sale of 240,000,000 common shares of stock that NENACO holds
in 2GO, at a price of P1.65 per share, to unrelated third parties. Thus, reducing NENACO's ownership in 2GO
from 98.12% to 88.31% of the total outstanding common shares of the Company.
7
Item 5. Directors and Executive Officers
Board of Directors, Including Independent Directors and Executive Officers
The names, ages, citizenship, position and offices held or will hold, and brief description of business experience
during the past 5 years (except those years stated otherwise) and other directorships held in reporting companies,
including name of each company, of all directors and executive officers are as follows:
DIRECTORS
Mr. Francis C. Chua, 62 years old, Filipino, has served as Chairman of the Board since July 2011 and as an
Independent Director of 2GO since January 2011. He is also the Chairman of the Board Audit and Corporate
Governance Committees. Mr. Chua also sits as the Chairman of the Board of NENACO since July 2011. His other
current positions include Honorary Consulate General of the Republic of Peru in Manila; President and Eminent
Adviser of the Philippine Chamber of Commerce and Industry; Chairman of the Philippine Chamber of Commerce
and Industry Foundation, CLMC Group of Companies, and Green Army Philippines Network Foundation; President
of DongFeng Automotive, Inc. and Philippine Satellite Corporation; Director of Philippine Stock Exchange, National
Grid Corporation of the Philippines, Bank of Commerce, Basic Energy, and Overseas Chinese University; and
Trustee of Xavier School Educational Trust Fund, and Adamson University. He graduated with a Bachelor of
Science degree in Industrial Engineering from the University of the Philippines.
Mr. Sulficio O. Tagud, Jr., 62 years old, Filipino, has served as the President and Chief Executive Officer and a
Director of 2GO since December 2010. Mr. Tagud is also the Chairman of the Compensation, Remuneration and
Nomination Committee of the Company. Prior to this, he has served as Chairman of the Board of the Company
from October 2004 up to July 2011, as Chairman and CEO of C&P Homes, Inc., as President of ML &H Corp.,
Capital Securities One, Inc. and Bonifacio Land Corporation. He was also a Director of Bonifacio Development
Corp. and Public Estates Authority and PEA Tollways. Further, current positions of Mr. Tagud include the
following: Chairman and President of KGLI-NM Holdings, Inc. since July 2008; President, Chief Executive Officer
and a Director of NENACO since 2004; Chairman & CEO of Negros Holdings & Management Corporation since
December 2006; and Chairman of the Philippine Liner Shipping Association. He graduated Class Valedictorian with
a Bachelor of Science degree in Business Administration, major in Economics (Magna Cum Laude) at Xavier
University, Cagayan De Oro City. He also completed his Masters in Industrial Economics at the Center for
Research and Communication in Manila, and Masters in Business Administration at the Ateneo de Manila
University. He also completed Real Estate Development Program at the Urban Land Institute at Washington, D.C.,
U.S.A.
Mr. Jeremias E. Cruzabra, 46 years old, Filipino, has served as Director since December 2010, Treasurer and
Chief Finance Officer since June 2011, and Corporate Information Officer since December 2011 of 2GO. He has
served also as the Chief Finance Officer of NENACO since April 2004; Chief Finance Officer and Board Director of
KGLI-NM Holdings, Inc. since July 2008; Vice-President and Chief Finance Officer/Treasurer of Negros Holdings &
Management Corporation since December 2006; Court-Appointed Receiver of Selegna Holdings Corporation since
November 2006; Chief Finance Officer (and later Trustee) of Sapphire Securities, Inc. (owned by the Brunei
Investment Agency) from 1997 to 1999. In 1999, he co-founded Business Sense, Inc. (BSI), a business-consulting
firm that specializes in strategy formulation and productivity improvement. BSI is affiliated with INPACT AsiaPacific, an international network of public accounting firms. He started his career with SGV & Co. (a member
company of Ernst & Young) from 1988 to 1992. After SGV, Mr. Cruzabra held managerial/executive positions in
several subsidiaries of Metro Pacific Corporation from 1992 to 1997. Mr. Cruzabra, who is a Certified Public
Accountant, graduated with a Bachelor of Science degree in Commerce, major in Accounting (Magna Cum Laude).
He completed his Masters in Business Administration at Murdoch University in Perth, Western Australia. Mr.
Cruzabra is also a Certified Securities Representative in the Philippine Stock Exchange.
Amb. Raul Ch. Rabe, 72 years old, Filipino, has been an Independent Director of 2GO since December 2010.
He is also the Chairman of the Risk Management Committee. He also served as an Independent Director of
NENACO since December 2010; Independent Director of KGLI-NM Holdings, Inc. since July 2008; Director of
Bancommerce Investment Corporation since 2007; Director of Vivant Corporation since 2002; Director of Bank of
Commerce since 2001; Corporate Secretary of Manila Economic and Cultural Office since 2001, and Of Counsel
for Rodrigo, Berenguer and Guno Law Offices since 1999. He graduated with a Bachelor of Arts degree at the
University of Santo Tomas, and Bachelor of Laws degree from the Ateneo de Manila Law School and a member
of the Philippine Bar since 1965. He also completed the Colombo Plan Scholarship on Diplomacy at the
Australian Institute of Foreign Service in Canberra, Australia.
8
Atty. Monico V. Jacob, 67 years old, Filipino, has served as an Independent Director of 2GO since December
2011. He also sits on the Board of NENACO as an Independent Member since December 2010. As a partner of
the Jacob & Jacob Law Firm, he has been involved in corporate recovery work including rehabilitation
receiverships and restructuring advisory in the following firms: The Uniwide Group of Companies, ASB Holdings,
Inc., RAMCAR Group of Companies, Atlantic Gulf and Pacific Company of Manila, Inc., Petrochemicals
Corporation of Asia-Pacific, All Asia Capital and Trust Corporation (now know as Advent Capital and Finance
Corporation), Nasipit Lumber Company, Inc. and NENACO. His current positions include: President and CEO of
Systems Technology Institute, Inc. (STI), Information and Communications Technology Academy, Inc., PhilPlans
First, Inc., Philhealthcare, Inc., Banclife Insurance Co. Inc., and JTH Davies Holdings, Inc.; Member of the Boards
of Jollibee Foods, Inc., Advent Capital and Finance Corp., Asian Life Financial Assurance, Asian Terminals, Inc.,
Mindanao Energy, Inc., Phoenix Petroleum Philippines, Inc., De los Santos – STI College, De los Santos – STI
Medical Center, Philippine Health Educators, Inc., Philippine Women's University, Unlad Resources Development
Corporation, and Anvaya Cove Beach and Nature Club; and Chairman of the Boards of Total Consolidated Asset
Mgmt, Inc., and Global Resource for Outsourced Workers, Inc. He received his Bachelor of Arts in Liberal Arts
from Ateneo de Naga and Bachelor of Laws from the Ateneo de Manila University.
Mr. Nelson T. Yap, 54 years old, Filipino, has served as Director of 2GO since December 2011. Mr. Yap has
over 30 years of professional experience in public accounting, financial management, treasury, analysis, controls,
accounting, budgeting, tax planning and management reporting with a multinational insurance company, a Hong
Kong regional headquarter overseeing operations in Netherlands Antilles, U.K., France, Australia, and the U.S.,
and with a listed BPO company. During the past 5 years, He has served as a Director of NENACO since
December 2011; Group Comptroller of Paxys, Inc., a publicly-listed BPO company, from 2006 to September 2011;
and as Treasurer/Comptroller of NGL Pacific Limited from 2005 to June 2006. Mr. Yap, a Certified Public
th
Accountant (15 Board placer), graduated with a Bachelor of Science degree in Commerce, major in Accounting
(Cum Laude) from the Xavier University, Cagayan De Oro City. He took his Masters in Business Administration
from Ateneo Graduate School of Business (no thesis) and further completed the same from Murdoch University in
Perth, Western Australia.
Mr. Mark E. Williams, 39 years old, American, has served as Director of 2GO since December 2010. He is also a
member of the Board Compensation, Remuneration and Nomination, and Board Audit and Corporate Governance
Committees. He currently sits as a Director of NENACO since December 2010; Investment Director of KGL
Investment Company, Damietta International Port Company, KGLI-NM Holdings, Inc. and Global Gateway
Development Corporation. Mr. Williams has extensive experience in the energy and logistics industries and worked
with Horizon Propane LLC in the capacity of Director of Financial Planning and Analysis and later as Vice President
of Finance and Assistant Treasurer. In 2004, Mr. Williams accepted a position as a Director at Cross Holdings
LLC, a privately held investment firm, where he led teams in all aspects of the deal process, from sourcing, to due
diligence and post acquisition management and operational restructuring of portfolio companies along with
assessing various real estate investment opportunities. Mr. Williams also lead a team charged with the outsourcing
of manufacturing of outdoor related products to manufacturers in China and advised a US based materials handling
company owned by the principals of Cross Holdings. He is a Certified Public Accountant and obtained his
Bachelor of Science degrees in Accounting, Business Administration, and Finance at the University of Akron in
Akron, Ohio, U.S.A. He completed his Juris Doctorate degree at Case Western Reserve University, Cleveland,
Ohio, U.S.A., and also obtained a Masters degree in Business Administration, concentration in Finance, from
Weatherhead School of Management of the same university.
Mr. Geoffrey M. Seeto, 43 years old, Australian, has been appointed as a Director of 2GO since October 2011.
Mr. Seeto is also a Member of the following Company Board Committees: (i) Compensation, Remuneration and
Nomination; (ii) Audit and Corporate Governance; and (iii) Risk Management. He is also a member of the Board
of NENACO since December 2010. He is the Head of Asia Infrastructure, Singapore with Babcock and Brown.
He led infrastructure investments including PPP transactions throughout Singapore, Thailand and other ASEAN
countries. Prior to Babcock and Brown, he spent 10 years with ABN Amro Bank in Singapore, the Netherlands
and Canada, also specializing in infrastructure investments, mergers and acquisitions. He received his Bachelor
of Economics Degree and Masters of Law from the University of Sydney, Australia.
Mr. Patrick Ip, 43 years old, Chinese, was appointed as Director of 2GO since October 2011. He currently sits as
a Member of the Board Risk Management and Board Audit and Corporate Governance Committees of 2GO. Mr. Ip
is also a Director of NENACO; Member of the Hong Kong Institute of Directors; and Head of Portfolio Supervision
Management for China-ASEAN Capital Advisory Company, the advisor to the China-ASEAN Investment
Cooperation Fund. Prior to this he was the Chief Financial Officer of the private equity arm of the French bank,
Natixis. There he was responsible for all private equity activities in Asia (ex India). Throughout his career he gained
substantial experience in auditing and financial transaction advisory, legal and compliance, litigation and arbitration
as well as hedge fund and alternative investment. Mr. Ip is a Chartered Financial Analyst, a Certified Public
9
Accountant (Hong Kong) and a Chartered Certified Accountant with PwC in London. He took his Bachelor of Laws
degree from the London University Law Schools and his Bachelor of Arts degree major in Accounting and Finance
from the Leeds University, UK.
EXECUTIVE OFFICERS
Mr. Fred S. Pajo, 58 years old, Filipino, is the Executive Vice-President and Chief Operating Officer of NENACO.
He concurrently handles the same function in 2GO Group, Inc. Further, Mr. Pajo has been with NENACO for more
than 30 years, holding various significant positions such as Branch Manager, Officer-in-Charge, Deputy Area
Head, Assistant Vice President for Freight Business and Vice President for Operations. He has served as VP Head
of Freight Business Division and President for Brisk Nautilus Dock Integrated Services, Inc., a wholly owned
subsidiary of the NENACO since 2005. Mr. Pajo also became the President of the NENACO in January 2007 and
2010. Further, he currently serves as Director of Hansa Meyer-ATS Projects, Inc., Hapag-Lloyd Philippines, Inc.
Mr. Pajo earned his degree in Bachelor of Science in Business Administration from the Ateneo de Cagayan –
Xavier University.
Mr. Jose Manuel L. Mapa, 46 years old, Filipino, is the Executive Vice-President – Freight Sales of NENACO
and 2GO Group. Mr. Mapa has been with NENACO for more than fourteen (14) years and his career progression
has indicated that he has made major contributions in the company’s operations. He started as an Executive
Assistant for Marketing and Special Projects, gradually moving up to be the AVP/Deputy Area Head-Negros
Occidental Area for NENACO, taking charge of the freight and passage business of the area and on to Vice
President / Head – National Freight Business, later on to Executive Vice President/Head – Passage Business. He
obtained his Master’s degree in Business Administration at the University of St. La Salle Graduate School, Bacolod
City. He also completed his Bachelor of Science degree in Agribusiness Management at the University of the
Philippines in Los Banos, Laguna where he received several awards including the University of the Philippines
President’s Award (National Award) for Outstanding Student, the UPLB University Council Award for Outstanding
Student, UPLB Outstanding Student Leader Award.
Mr. Wilmer A. Alfonso, 60 years old, Filipino, has served as Vice President for Ports Services since 2006. He
has been with 2GO Group since January 1971. He holds the following positions: Chairman of Attina Security
Services Inc., and Vestina Security Services Inc., President of North Harbor Tugs Corp., United South
Dockhandlers, Inc., Supersail Services Inc., Astir Engineering Works, Inc., J&A Services Corporation, Red.Dot
Corporation, Sun-Gold Forwarding Corporation and NN-ATS Logistics Management & Holdings Co., Inc. Mr.
Alfonso is a Certified Public Accountant. He graduated with a Bachelor of Science degree in Accounting from the
University of San Carlos.
Ms. Zenaida R. Cabral, 51 years old, Filipino, is the Executive Vice-President and Chief Corporate Services
Officer of NENACO and the Company. She joined NENACO in 2008, and has worked in all facets of Human
Resources and Organization Development field for over 20 years largely in a managerial/executive role with varied
experiences in different industries such as service, pharmaceutical, electronics, manufacturing, consultancy
services, manning and executive search, allowing her to distinctly excel in her career. One of her most remarkable
work stints was with Solid Electronics Corporation of the Solid Group which handles all the branches that carries
the “Sony” brand in the Philippines. Her remarkable contribution to the company for 10 years was significantly
acknowledged by Sony, Thailand when she was officially invited to share her HR expertise before the 50-member
management team of the region. Ms. Cabral graduated with a Bachelor of Arts degree major in Psychology. She
earned her masters degree units in Labor Management Relations from the University of the Philippines, School of
Labor and Industrial Relations and completed her Organization Development course from the Ateneo de Manila
University.
Mr. Stephen Rey R. Tagud, 33 years old, Filipino, is the Vice-President – Passage of NENACO and 2GO
Group. He has over nine (9) solid years of professional experience in sales, marketing, business operations,
international hospitality operations management, hotel sales, operations and destination management from Europe
and the USA and has handled several clients such as Hewlett Packard, LG, Unilever, Wells Fargo, Ford, and
Carlson Marketing Group. Mr. Tagud introduced significant innovations to the company such as the “Revenue
Management” concept where he spearheaded aggressive revenue management strategies that significantly
increased both passenger revenue and volume in a highly competitive transportation market. He also launched the
“NN Freight” brand to further bring the Freight business to the next level of service and efficiency. He further
launched other revenue-generating programs such as the “Suite Sweet Sale” and creative in-house merchandising
to boost sales of food & beverage items on-board the passenger vessels. He completed his undergraduate studies
from University of Nevada Las Vegas, USA where he graduated Cum Laude. He also earned his post-graduate
studies from the Swiss Hotel Management School “Les Roches” of Bulche, Switzerland and from the Universidad
10
Europa de Madrid with a degree of Master in Business Administration major in International Hospitality
Management, Finance & Marketing.
Atty. Amado R. Santiago III, 46 years old, Filipino, has served as the Corporate Secretary of 2GO since
December 2010. He is the Managing Partner of the Santiago & Santiago Law Offices and is engaged in the
general practice of law. He specializes in corporate litigation, which includes corporate rehabilitation proceedings
under the Securities and Exchange Commission Rules on Corporate Recovery, Interim Rules of Procedure on
Corporate Rehabilitation and the Rules of Procedure on Corporate Rehabilitation. He is also engaged in the
practice of taxation law. He received his Bachelor of Science degree in Management, major in Legal Management
(1988) from the Ateneo de Manila University. He graduated from the Ateneo de Manila School of Law in 1992 and
is a member of the Philippine Bar.
Atty. Manuel Eduardo C. Carlos, 37 years old, Filipino, has served as the Assistant Corporate Secretary since
December 2010. He is a Senior Associate Lawyer at Santiago & Santiago Law Offices. Under this law firm, he
specializes in corporate mergers and acquisitions and corporate housekeeping. He is also engaged in the practice
of taxation law. He acts as corporate counsel, director and/or corporate secretary/assistant corporate secretary of
various corporate clients. He received his Bachelor of Science degree in Management, major in Legal
Management (1997) from the Ateneo de Manila University. He graduated from the Ateneo de Manila School of Law
in 2002 and is a member of the Philippine Bar.
Nomination Committee and Nominees for Election as Members of the Board of Directors
The incumbent directors will be nominated as members of the Registrant’s Board of Directors for the ensuing year,
2013-2014.
Further, in compliance with the SEC Guidelines on the Nomination and Election of Independent Directors under
SRC Rule 38, the Company Board created on 26 February 2003 a Nomination Committee (which was consolidated
with the Compensation and Remuneration Committee in August 2009). As of 31 December 2012, the composition
of the Board Compensation, Remuneration and Nomination Committee is as follows:
Chairman:
Members:
Mr. Sulficio O. Tagud Jr.
Mr. Mark E. Williams
Mr. Patrick Ip
The Compensation, Remuneration and Nomination Committee promulgated the guidelines, which govern the
conduct of the nomination of the members of the Company Board. It had pre-screened and short listed all
candidates and came up with the following individuals as nominees for independent directors for the ensuing year
(2013-2014):
(1) Amb. Raul Ch. Rabe as nominated by Mr. Jeremias E. Cruzabra
(2) Mr. Francis C. Chua as nominated by Mr. Nelson T. Yap
(3) Atty. Monico V. Jacob as nominated by Mr. Jeremias E. Cruzabra
The nominating persons are not related to the nominees within the fourth degree of consanguinity.
Lastly, the Committee approved on 20 July 2005 the Company’s Amended By-Laws incorporating the procedures
for the nomination and election of Independent Directors under Rule 38 of the Securities Regulation Code, as the
same may be amended from time to time.
Period in Which Directors and Executive Officers Should Serve
The directors and executive officers should serve for a period of one (1) year and until the election and qualification
of their successors.
Terms of Office of a Director
The nine (9) directors shall be stockholders and shall be elected annually by the stockholders owning a majority of
the outstanding common shares of the Registrant for a term of one (1) year and shall serve until the election and
qualification of their successors.
11
Any vacancy in the board of directors other than removal or expiration of term may be filled by a majority vote of
the remaining members thereof at a meeting called for that purpose if they still constitute a quorum, and the
director or directors so chosen shall serve for the unexpired term.
Significant Employees
The Corporation considers the contribution of every employee important to the fulfillment of its goals.
Family Relationships
Stephen Rey R. Tagud is the son of Sulficio O. Tagud, Jr. and are, thus, related to each other within the fourth
degree of consanguinity.
Other than the one disclosed above, there are no other family relationships within the fourth degree of
consanguinity known to the Registrant.
Involvement in Certain Legal Proceedings
To the knowledge and/or information of 2GO, none of its nominees for election as directors, the present members
of its Board of Directors or its executive officers, underwriter or control person, is presently or during the last five
(5) years been involved in any legal proceeding in any court or government agency on the Philippines or elsewhere
which would put to question their ability and integrity to serve 2GO and its stockholders.
Further, with respect to its nominees for election as directors, the present members of its Board of Directors and its
executive officers, the Company is not aware that during the past five (5) years up to even date of: (a) any
bankruptcy petition filed by or against any business of which such person was a general partner or executive
officer either at the time of the bankruptcy or within two years prior to that time; (b) any conviction by final
judgment of such person in a criminal proceeding, excluding traffic violations and other minor offenses; (c) such
person being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, by any
court of competent jurisdiction, domestic or foreign, permanently or temporarily enjoining, barring, suspending or
otherwise limiting such person’s involvement in any type of business, securities, commodities or banking activities;
and (d) such person being found by a domestic or foreign court of competent jurisdiction (in a civil action), the
Commission or comparable foreign body, or a domestic or foreign exchange or other organized trading market or
self regulatory organization, to have violated a securities or commodities law or regulation and the judgment has
not been reversed, suspended, or vacated.
Certain Relationships and Related Transactions
In the ordinary course of business, the Registrant has transactions with subsidiaries, associates, and other related
companies consisting of ship management services, charter hire, management services, courier services,
purchases of steward supplies, availment of stevedoring, arrastre, trucking, rental and repair services. The
Registrant needs these services to complement its services to the freight and passage customers.
The identification of the related parties transacting business with the Registrant and how the transaction prices
were determined by the parties are discussed in Note 23 of the consolidated financial statements. The Registrant
will continue to engage the services of these related parties as long as it is economically beneficial to both parties.
The Corporation has no transaction during the last two years or proposed transaction to which it was or is to be a
party in which any of its directors, officers, or nominees for election as directors or any member of the immediate
family of any of the said persons had or is to have a direct or indirect material interest.
Resignation or Refusal to Stand for Re-election by Members of the Board of Directors
No Director has declined to stand for re-election to the board of directors since the date of the last annual meeting
of the Registrant because of a disagreement with the Registrant on matters relating to the Registrant’s operations,
policies and practices.
12
Item 6. Compensation of Directors and Executive Officers
The following table summarizes certain information regarding compensation paid or accrued during the last three
fiscal years and to be paid in the ensuing fiscal year to the Company Chief Executive Officer and each of the
Registrant four other most highly compensated executive officers:
SUMMARY OF COMPENSATION TABLE
Amounts in Thousands of Pesos (‘000s)
Year
Salary
Bonus
th
th
(13 and 14
Months Pay)
Other Annual
Compensation
3,454
1,048
3,531
-
4,202
1,137
-
3,710
-
Top Five (5) Highly Compensated Executives:
Sulficio O. Tagud Jr. – President and Chief Executive Officer
(2012 and 2013 only)
Jeremias E. Cruzabra – EVP-Chief Finance Officer, Treasurer and Corporate
Information Officer (2012 and 2013 only)
Zenaida R. Cabral – VP-Chief Corporate Services (2012 and 2013 only)
Stephen R. Tagud – VP-Passage (2012 and 2013 only)
Jose Manuel L. Mapa – EVP-Freight Sales (2012 and 2013 only)
Fred S. Pajo – EVP-Chief Operating Officer (2012 and 2013 only)
Lilian P. Cariaso – Chief Finance Officer, CIO and CRO (2011 only)
Evelyn L. Engel – Chief Executive Officer – Passage (2011 only)
Susan V. Valdez – Chief Executive Officer – Freight (2011 only)
Charity Joyce Marohombsar – VP Customer Care Management (2011 only)
All above named officers as a group
All officers and directors as group unnamed
2011 16,366
2012 12,570
Projected 12,570
2013
2011
25,213
2012
13,645
Projected
2013
13,645
On June 2011, Mr. Ramon G. Villordon Jr. was appointed as the Company’s President until his resignation on
December 2011 and on the same date, Mr. Sulficio O. Tagud Jr. was appointed by the Company’s Board of
Directors as the new President of 2GO.
Further, Ms. Evelyn L. Engel, Ms. Lilian P. Cariaso, Ms. Charity Joyce Marohombsar and Ms. Susan V. Valdez
have resigned from the Company effective 30 June, 31 July, 31 August and 10 September 2011, respectively.
The Company has no significant or special arrangements of any kind as regard to the compensation of all officers
and directors other than the funded, noncontributory tax-qualified retirement plans covering all regular employees.
Each director receives a monthly allowance of P80,000 except for the Chairman of the Board who receives
P120,000 a month. Further, a per diem of P30,000 is given to each Director and P45,000 for the Chairman for
every Board meeting attended. Such allowances and per diems are shared equally with NENACO whenever
board meetings of NENACO and the Company are held on the same day.
Starting 2012, the compensation of the company’s officers is shared proportionately with NENACO. The above
share of 2GO is equivalent to the 80% compensation of the officers.
Except for the regular company retirement plan, which by its very nature will be received by the officers
concerned only upon retirement from the Company, the above-mentioned directors and officers do not receive
any profit sharing nor any other compensation in the form of warrants, options, bonuses, etc.
Likewise, there are no standard arrangements that compensate directors directly or indirectly, for any services
provided to the Company either as director or as committee member or both or for any other special assignments.
Item 7. Independent Public Accountants
The accounting firm of SGV & Co. (SGV) has been 2GO's Independent Public Accountant since year 1977. This
is reckoned to be the approximate date based on the available records. Representatives of SGV will be present
during the annual meeting and will be given the opportunity to make a statement if they so desire. They are also
expected to respond to appropriate questions if needed.
13
In August 2009, the Board of Directors of 2GO approved the consolidation of its Audit Committee to the newly
created Audit and Corporate Governance Committee. The incumbent members of the said Committee are: Mr.
Francis C. Chua as chairperson, Messrs. Patrick Ip, Mark E. Williams and Geoffrey M. Seeto as members, and
Mr. Evan C. McBride as ex-officio member.
At its regular board meeting on April 23, 2009, the Board of Directors approved a resolution to delegate to the
Board of Directors the authority to appoint the Company’s external auditors. The stockholders ratified the same
resolution during its annual stockholders meeting.
Further, in compliance with the SEC guidelines on the rotation of external auditors under SRC Rule 68, Paragraph
3(b)(iv), 2GO has already adopted and incorporated the said guidelines in its Code of Corporate Governance.
Moreover, the Registrant will also adopt and observe the two-year cooling of period in the re-engagement of the
same signing partner or individual auditor in compliance with the provisions under SRC Rule 68, Paragraph
3(b)(ix).
Ms. Josephine H. Estomo has been assigned as the signing partner of 2GO starting fiscal year 2011. She
replaced Mr. Ladislao Z. Avila Jr., who had been the signing partner since fiscal year 2006, in compliance with the
five years rotation requirement under SRC Rule 68, Paragraph 3(b)(iv).
(1)
External Audit Fees and Services
Estimates for
December 31, 2013
Audit Fees
Audit-Related Fees
All Other Fees
P
TOTAL
P 1,500,000
1,500,000
Year ended
December 31, 2012
P
1,500,000
P 1,500,000
Year ended
December 31, 2011
P
1,300,000
P 1,300,000
Audit Fees
This represents professional fees for financial assurance services rendered for the Company’s Annual Financial
Statements, review and opinion for SEC Annual Report.
Audit-Related Fees
This represents professional fees for technology and security risk services rendered by the external auditor in
connection with the Audit on Company’s Annual Financial Statements.
All Other Fees
This represents fees for services rendered in reviewing and issuing opinion with regards to the Company’s annual
reportorial requirement with Maritime Industry Authority (MARINA).
Audit services provided to the Company by external auditor, SGV have been pre-approved by the Audit and
Corporate Governance Committee and recommended to the Board of Directors for approval. The Audit and
Corporate Governance Committee has reviewed the magnitude and nature of these services to ensure that they
are compatible with maintaining the independence of the external auditor.
(2) Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
There was no event in the past years where SGV and the Registrant had any disagreements with regard to any
matter relating to accounting principles or practices, financial statement disclosure or auditing scope or procedure.
14
C. OTHER MATTERS
Item 9. Action with Respect to Reports
The minutes of the last annual stockholders’ meeting held on 31 May 2012 and the Annual Report of
Management for the year ended 31 December 2012 will be submitted to the stockholders for their approval.
Item 10. Matters Not Required to be Submitted
All corporate actions to be taken up at the annual stockholders’ meeting on 23 May 2013 will be submitted to the
stockholders of the Registrant for their approval in accordance with the requirements of the Corporation Code.
Item 11. Amendment of Charter, By-laws or Other Documents
To be presented for the approval by stockholders representing at least two-thirds (2/3) of the outstanding capital
stock of the Registrant is the decrease in the authorized capital stock of the Corporation by P4,564,330.00 or the
par value corresponding to the 4,564,330 authorized redeemable preferred shares of the Company in connection
with the redemption of all outstanding redeemable preferred shares on 06 December 2012.
The retirement is in compliance with the Corporation Code and Section 3(2) of the Rules Governing Redeemable
and Treasury shares issued by the Securities and Exchange Commission dated April 26, 1982.
Item 12. Other Proposed Action
The following matters shall likewise be submitted, for ratification, to the stockholders representing at least a
majority of the outstanding voting capital stock of the Registrant:
a)
Ratification of all acts of the Board of Directors and Board Committee for the period covering 31 May
2012 through 20 May 2013 adopted primarily in the ordinary course of business (including those
which have been the subject of previous disclosures to the Securities and Exchange Commission
and the Philippine Stock Exchange during said period), such as:
i.
approvals for the acquisition, lease, charter, disposition of vessels as well as other personal
and/or real properties;
ii.
filing of legal proceedings and appointment of lawyers and/or attorneys-in-fact in connection
with legal proceedings (including amicable settlement proceedings) affecting the Registrant
and/or its assets;
iii.
approval for the availment of certain credit facilities;
iv.
approval for treasury matters related to opening and closing of accounts and bank
transactions, (including removal of/revisions to authorized bank signatories);
v.
authority to apply for local government permits and other necessary government licenses;
vi.
approval of the 2013 Budget;
vii.
general authority of the president to pass resolutions for day-to-day operations of the
company;
viii.
approval of the 2012 audited financial statements;
ix.
approval for the availment and/or renewal of credit facilities with BDO, Allied Bank,
Metrobank, China Bank, and Philippine Business Bank;
x.
Redemption of Redeemable Preferred Shares;
xi.
amendment of Articles of Incorporation to Decrease its Capital Stock;
xii.
renewal of Accreditation with Bureau of Customs, Philippine Ports Authority and other
government agencies and instrumentalities;
xiii.
closure of store outlets and lease of new store spaces;
xiv. closure and application for new utility services in various branches;
xv.
entering into and renewal of contracts with clients;
xvi. appointment of authorized representatives for BOI registration;
xvii. updating of registration of vessels;
xviii. bidding for services and execution of surety bonds therefor.
15
Item 13. Voting Procedures
As to each matter, which is to be submitted to a vote of security holders, furnish the following information:
(a)
Vote required for Approval
The affirmative vote of stockholders representing at least a majority of the outstanding voting
common shares of the Registrant is required for the approval and/or ratification:
i. Minutes of Previous Annual Stockholders’ Meeting;
ii. Management Annual Report for the preceding year;
iii. Election of the Board of Directors; and
iv. All Acts and Resolutions of the Board of Directors and Management since 31 May 2012.
The affirmative vote of common and preferred stockholders representing at least two-thirds
(2/3) of the outstanding capital stock of the Registrant is required for the approval of the
decrease in Authorized Capital Stock by P4,564,330.00 amending Article VII of the Articles of
Incorporation of the Company as it relates to the retirement of 4,564,330 Redeemable Preferred
Shares as a result of the mandatory redemption of all outstanding Redeemable Preferred
Shares last 06 December 2012.
(b)
Method by which Votes will be counted
At each meeting of the stockholders, every stockholder shall be entitled to vote in person or by
proxy, for each share of stock held by him, which has voting power upon the matter in question.
As provided in Section 7, Article II of the By-laws of the Registrant, except upon demand by any
stockholder, the votes upon any question before the meeting, except with respect to procedural
questions that shall be determined by the Chairman of the meeting, shall be by viva voce or
show of hand.
The method and manner of counting the votes of shareholders shall be in accordance with the
general provision of the Corporation Code of the Philippines. The counting of votes shall be
witnessed by representatives from the Company’s external auditor, SGV, stock and transfer
agent Securities Transfer Services, Inc. (STSI) and the Company’s Corporate Secretary.
16
SIGNATURE PAGE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this
report is true, complete and correct. This report is signed in the City of Manila on 12 April 2013.
Amado R. Santiago III
Corporate Secretary
17
MANAGEMENT REPORT
I.
CONSOLIDATED AUDITED FINANCIAL STATEMENTS
1
The Consolidated Audited Financial Statements for the year ended and as of December 31, 2012 are attached to
this report.
II.
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
There was no event in the past years where SGV and the Registrant had any disagreements with regard to any
matter relating to accounting principles or practices, financial statement disclosure or auditing scope or procedure.
III. MANAGEMENT’S DISCUSSION AND ANALYSIS
KEY PERFORMANCE INDICATORS (KPIs)
The following KPIs are used to evaluate the financial performance of 2GO Group and its subsidiaries. The
amounts are in millions of pesos except for the financial ratios.
a.
Revenues – 2GO Shipping revenues are mainly composed of freight and passage revenues and they are
recognized when the related services are rendered. Total Revenue for the full year ended December 31,
2012 is P13.7 billion.
b.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) - is calculated by adding back
interest expense, amortization and depreciation into income before income tax, excluding extraordinary gains
or losses. EBITDA for the full year 2012 is P1.1 billion.
c.
Income (Loss) before income tax (IBT) – is the earnings of the company before income (loss) tax expense.
The Loss Before Income Tax for full year 2012 is P135.1 million.
d.
Debt-to-equity ratio – is determined by dividing total liabilities over stockholders’ equity. 2GO Group debtto-equity ratio for the full year 2012 is 2.84:1.00. Total liabilities decreased by P530.1 Million and total equity
stood at P2.9 billion or 12% lower compared to 2011 due to net loss incurred for the full year of 2012.
e.
Current ratio – is measured by dividing total current assets by total current liabilities. The Company’s
current ratio as of December 31, 2012 is 0.88:1:00. Total current asset is P5.2 billion or 11% lower than 2011
mainly due to reduction in cash & cash equivalents, trade & other receivables and assets held for sale. Total
current liabilities amounted to P6.0 billion or 9% increased compared to 2011.
The following table shows comparative figures of the Top Five key performance indicators (KPI) for 2012 versus
2011 (amounts in millions except for the financial ratios) based on the consolidated financial statements of 2GO
and its subsidiaries:
Revenues
EBITDA (a)
IBT (b)
Debt-to-Equity Ratio (c)
Current Ratio (d)
Dec. 31, 2012 Dec. 31, 2011 Dec. 31, 2010
13,725
12,971
11,611
1,139
1,027
710
(135)
(821)
(1,535)
2.84:1.00
2.67:1.00
2.18:1.00
0.88:1.00
1.07:1.00
0.57:1.00
Note: The figures above are in P’MM except otherwise indicated.
a) Earnings before interest, taxes, depreciation and amortization (calculated by adding back interest expense
and amortization and depreciation into income before income tax, excluding extraordinary gains and
losses).
b) Income before income tax or loss before income tax
c) Total liabilities / total stockholders’ equity.
d) Total current assets / total current liabilities.
18
CONSOLIDATED INCOME STATEMENT
In P'MM
REVENUES
Freight – (Note 23)
Sale of goods
Passage - net
Service fees (Note 23)
Food and beverages
Others
COSTS AND EXPENSES (Note 25)
Operating
Cost of goods sold (Note 8)
Terminal
Overhead
OTHER INCOME (CHARGES)
Impairment loss on goodwill, property and equipment and
assets held for sale (Notes 10 and 14)
Equity in net earnings (losses) of associates (Note 12)
Interest and financing charges (Notes 26)
Others - net (Note 26)
INCOME (LOSS) BEFORE INTEGRATION COSTS
INTEGRATION COSTS (Note 27)
INCOME (LOSS) BEFORE INCOME TAX FROM CONTINUING OPERATIONS
PROVISION FOR (BENEFIT FROM)
INCOME TAX (Notes 29)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS
NET INCOME FROM DISCONTINUED OPERATIONS (Note 30)
NET INCOME (LOSS)
ATTRIBUTABLE TO:
Equity holders of the Parent Company:
Net income (loss) from continuing operations
Net income from discontinued operations
Net income (loss) for the period attributable to equity holders of the parent
Non-controlling interests:
Net income (loss) from continuing operations
Net income from discontinued operations
Net income for the period attributable to non-controlling interests
EARNINGS (LOSS) PER COMMON SHARE (Note 36)
Basic and diluted, for net income (loss) attributable to ordinary equity
holders of the parent
EARNINGS (LOSS) PER COMMON SHARE FOR CONTINUING OPERATIONS
(Note 36)
Basic and diluted, for net income (loss) from continuing operations
attributable to ordinary equity holders of the parent
Years Ended December 31
2012
6,329
2,439
2,128
1,841
376
611
13,725
2011
5,678
3,029
2,384
1,251
260
369
12,971
9,523
1,933
1,073
1,113
13,641
8,192
2,602
1,495
1,034
13,323
0
35
(401)
147
(219)
(135)
(135)
251
(386)
(386)
(397)
(397)
2010
'12 vs '11
5,326
651
2,566
(589)
2,179
(256)
1,064
590
160.60
116
316
243
11,611
754
7,093
2,207
1,474
1,476
12,250
1,330
(669)
(423)
79
318
% to Revenue
%
variance 2012 2011
11%
46%
44%
-19%
18%
23%
-11%
16%
18%
47%
13%
10%
45%
3%
2%
66%
4%
3%
6%
100% 100%
16%
-26%
-28%
8%
2%
63%
20%
12%
8%
103%
0%
0%
-3%
1%
-2%
-1%
0%
-1%
-2%
0%
-3%
2%
-3%
-5%
-1%
-6%
(224)
(15)
(408)
300
(346)
(698)
(123)
(821)
(779)
40
(229)
71
(897)
(1,536)
(1,536)
(195)
(626)
(626)
(421)
(1,114)
359
(755)
446
239
0
239
-229%
-38%
0%
-38%
2%
-3%
0%
-3%
-2%
-5%
0%
-5%
(634)
(634)
(1,114)
305
(809)
238
0
238
-37%
0%
-37%
-3%
0%
-3%
-5%
0%
-5%
2
0
2
239
19%
0%
19%
-38%
0%
0%
0%
-3%
0%
0%
0%
-5%
10
9
224 -100%
50
0%
7
-2%
(153) -51%
127
-37%
563
-81%
123 100%
686
-84%
69%
14%
8%
8%
99%
10
(386)
9
(626)
(0)
54
53
(755)
(0.16)
(0.26)
(0.33)
0.10
-38%
0%
0%
(0.16)
(0.26)
(0.46)
0.10
-38%
0%
0%
-
Two years after the integration with NENACO, the Group has shown significant improvements in its operations.
o
Consolidated net income before integration and financing charges almost turned 360 to P265.7 million from net
loss of P290.3 million in 2011. This can be attributed largely to realization of the synergies from the integration of
NN and 2GO operations.
Consolidated revenues jumped 6% to P13.7 billion in 2012 from P13.0 billion in 2011. The shipping business
accounted for 71% of the total revenues, while supply chain contributed 29% of total revenues. The freight
revenues swelled 10% or P556.0 million to P6.3 billion from P5.7 billion last year. Passage revenues, including
food and beverage, soared 6% to P2.8 billion from P2.6 billion in 2011. This can be attributed largely to vessel
fleet and route rationalization implemented by Management.
Revenues from the supply chain business decreased by 7% to P4.0 billion from P4.3 billion in 2011 mainly due to
the disengagement of some identified principals showing negative profitability. The lost revenues from
disengaged principals will eventually be replaced by revenues from new principals showing good profit margins.
19
Costs and expenses likewise increased, but to a lower extent than the revenues. Costs and expenses increased
by P318.3 million, or a 2% increase over the same period last year. This is mainly attributable to increase in fuel
prices for the full year mitigated by stringent cost management.
Earnings (Loss) per Share
Earnings (Loss) Per Share is computed by dividing Net Income (Loss) Attributable to Equity Holders of the Parent
over weighted average number of common shares outstanding for the year. Earnings (loss) per share for the full
year of 2012 stood at (P0.16)/share compared to (P0.26)/share last year.
Other changes (+/-5% or more) in the financial statement not covered in the above discussion
FY 2012 vs. FY 2011
Revenue
>47% or P590 million increase in service fees
>66% or P243 million increase in ’other’ revenues
>45% or P116 million increase in food and beverages
Costs & Expenses
>8% or P79 million increase in overhead costs
>28% or P423 million decrease in terminal costs
>26% or P669 million decrease in cost of goods sold
Other Income / (Charge)
>100% or P224 million decrease in Impairment loss on assets held for sale and property and equipment
>51% or P153 million decrease in Other items
CONSOLIDATED BALANCE SHEETS
31-Dec
2012
ASSETS
Current Assets
Cash and cash equivalents (Note 6)
Trade and other receivables (Note 7)
Inventories (Note 8)
Other current assets (Note 9)
Assets held for sale (Note 10)
Total Current Assets
Noncurrent Assets
Property and equipment - net (Notes 14 and 21)
Available-for-sale (AFS) investments (Note 11)
Investments in associates (Note 12)
Investment property (Note 15)
Software development costs - net (Note 16)
Deferred tax assets - net (Note 29)
Goodwill (Notes 5)
Other noncurrent assets (Note 17)
Total Noncurrent Assets
TOTAL ASSETS
2011
Amount
%
'12 vs '11 variance
% to Total
2012
2011
788
2,807
370
925
4,890
359
5,249
906
2,898
407
996
5,208
693
5,901
(118)
(91)
(156)
44
(318)
(333)
(652)
(13%)
(3%)
(38%)
4%
(6%)
100%
(11%)
7%
25%
3%
8%
44%
3%
47%
7%
24%
3%
8%
43%
6%
49%
4,576
9
120
10
11
794
250
197
5,966
11,215
4,651
9
100
10
14
964
250
233
6,231
12,132
(1,545)
(1)
20
1.00
(3)
(170)
(36)
(265)
(917)
(33%)
(7%)
20%
10%
(22%)
(18%)
0%
(15%)
(4%)
(8%)
41%
0%
1%
0%
0%
7%
2%
2%
53%
100%
38%
0%
1%
0%
0%
8%
2%
2%
51%
100%
(Forward)
20
LIABILITIES AND EQUITY
Current Liabilities
Loans payable (Note 18)
Trade and other payables (Notes 19 and 23)
Income tax payable
Redeemable preferred shares (Notes 22 and 24)
Current portions of:
Long-term debt - net (Note 20)
Obligations under finance lease (Notes 14 and 21)
Total Current Liabilities
Noncurrent Liabilities
Long-term debt-net of current portion (Note 20)
Obligations under finance lease - net of current portion (Notes 14 and 21)
Accrued retirement benefits (Note 28)
Other noncurrent liabilities
Total Noncurrent Liabilities
Total Liabilities
Equity
Attributable to the equity holders of the Parent Company:
Share capital (Note 24)
Additional paid-in capital
Acquisitions of non-controlling interests (Note 24)
Excess of cost over net asset value of investments (Note 24)
Unrealized gain on sale of available-for-sale investments (Note 11)
Share in cumulative translation adjustments of associates (Note 11)
Retained earnings (deficit) (Note 23)
Treasury shares (Note 23)
Non-controlling Interests
Total Equity
TOTAL LIABILITIES AND EQUITY
1,384
3,528
7
7
1,215
3,432
6
26
169
96
2
(19)
14%
3%
32%
(73%)
12%
31%
0%
0%
10%
28%
0%
0%
993
78
5,997
786
30
5,495
208
48
502
26%
158%
9%
9%
1%
53%
6%
0%
45%
2,185
45
59
9
2,298
8,296
3,178
92
52
8
3,331
8,826
(993)
(47)
7
1
(1,032)
(530)
(31%)
(51%)
13%
7%
(31%)
(6%)
19%
0%
1%
0%
20%
74%
26%
1%
0%
0%
27%
73%
2,485
911
6
(11)
0
5
(446)
(59)
2,891
28
2,920
11,215
2,485
911
6
(11)
0
5
(50)
(59)
3,288
19
3,306
12,132
0
0
0
0
0
0
(397)
0
(396)
10
(387)
(917)
0%
0%
0%
0%
42%
0%
798%
0%
(12%)
53%
(12%)
(8%)
22%
8%
0%
(0%)
0%
0%
(4%)
(1%)
26%
0%
26%
100%
20%
8%
0%
(0%)
0%
0%
(0%)
(0%)
27%
0%
27%
100%
The Group’s total assets as of December 31, 2012 stood at P11.2 billion, 8% lower than P12.1 billion as of
December 31, 2011.
The bulk of the difference came from current assets, which at the start of the year stood at P5.9 billion, went
down to P5.2 billion as of December 31, 2012. Trade and other receivables decreased by 3% or P91.4 million
while assets held for sale decreased by P333.4 million mainly due to the sale of two (2) freighter vessels, namely
2GO1 and 2GO2 during the year. The sale of vessels is part of management’s vessel fleet and route
rationalization program. Management endeavored to reduce vessel capacity to mitigate inefficient assets that
cause enormous expenses in repairs and maintenance and drydocking. Cash and cash equivalents likewise
decreased by P118.4 million largely due to vessel drydocking and major repairs coupled with the debt service of
loans and long-term debt. On the other hand, inventories decreased by P37.4 million or 9%.
Property and equipment decreased by P75.5 million to P4.6 billion from P4.7 billion in 2011 mainly on account of
the depreciation and amortization recognized during the year and the disposals of a real property and two
aircrafts for cash proceeds of P93.3 million and P3.0 million, respectively.
Total liabilities amounted to P8.3 billion as of December 31, 2012 from P8.8 billion the previous year. In 2012, the
Company paid P800.0 million of its long-term debt plus interest and financing charges amounting to P378.0
million. On October 25, 2012, the BOD of 2GO approved the redemption of the remaining preferred shares
amounting to P25.9 million at a price of P6.00 per share. As of December 31, 2012, the unredeemed RPS
amounted to P6.9 million.
Total equity stood at P2.9 billion at the end of the year, 12% lower compared to P3.3 billion as of December 31,
2011.
21
CONSOLIDATED CASHFLOW STATEMENTS
in P'MM
Net cash flows from operating activities
Net cash flows used in investing activities
Net cash flows from financing activities
EFFECTS OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Years Ended December 31
2012
2011
2010
1,382
(524)
600
(432)
286
(3,391)
(1,070)
340
2,500
2
(118)
0
102
0
(291)
The Group ended the year with a net decrease in cash of P118.4 million. The bulk portion of its cash was used
for vessel drydocking and major repairs coupled with the debt service of loans, finance leases and long-term debt.
Other Information
Other material events and uncertainties known to management that would address the past and would have an
impact on 2GO’s future operations are discussed below.
i.
Total fuel/lubes expense is a major component of 2GO’s total costs and expenses. 2GO is constantly
looking for ways to reduce fuel consumption to lessen the impact of the increasing fuel prices on the
bottom line.
ii.
Except as disclosed in the management discussion and notes to the financial statements, there are no
other known events that will trigger direct or contingent financial obligation that is material to 2GO,
including any default or acceleration of an obligation. There are also no other known trends, events or
uncertainties that have had or that are reasonably expected to have a material favorable or unfavorable
impact on revenues or income from operations.
iii.
All significant elements of income or loss from continuing operations are already discussed in the
management discussion and notes to financial statements. Likewise any significant elements of income
or loss that did not arise from 2GO continuing operations are disclosed either in the management
discussion or notes to financial statements.
iv.
There is no material off-balance sheet transaction, arrangement, obligation, and other relationships of
2GO with unconsolidated entities or other persons created during the reporting period.
v.
Seasonal aspects of the business are considered in 2GO’s financial forecast.
vi.
2GO does not expect any liquidity or cash problem within the next twelve months. Capital expenditures
are funded through cash generated from operations and additional borrowings.
Company Outlook
Having successfully hurdled most of the major integration targets for 2011 and 2012, and having completed a
major clean-up of the company, Management is confident that in the ensuing years, it will fully realize the fruits of
the integration. 2GO, as part of the NENACO Group, is implementing certain strategies and action plans to
achieve positive results on the financial performance, financial condition and cash flows for 2013. Among others,
these are:
1. Continued fleet and route rationalization for the Shipping business and implementation of more
aggressive sales and marketing strategies for the Supply Chain group.
2. Comprehensive review and implementation of cost saving initiatives, including that of the One Port
Project and the maximization of the takeover of the ship management.
3. Implementation of a more robust management reporting systems to closely monitor the financial results
and operating performance of the business units and ensure that they are all working to attain the
revenue and collection targets and the savings from cost containment measures.
4. Restructuring of the long-term debt with counter party bank that will ensure that the company’s available
cash will be used mainly to cover its operating activities so that all targeted results will be met by the
company.
22
IV.
BRIEF DESCRIPTION OF THE GENERAL NATURE AND SCOPE OF THE BUSINESS OF THE
REGISTRANT AND ITS SUBSIDIARIES
2GO was formed and organized in May 26, 1949 under the corporate name William Lines, Inc. It is majority
owned by NENACO, one of the oldest domestic shipping companies in the Philippines.
On various dates in 2011, the SEC approved the application of the Company and its subsidiaries to amend their
Articles of Incorporation and By-laws, which include, among others, the change in their corporate names to ATS
Consolidated (ATSC), Inc. (formerly Aboitiz Transport System (ATSC) Corporation), ATS Express, Inc. (formerly
Aboitiz One, Inc.), and ATS Distribution, Inc. (formerly Aboitiz One Distribution, Inc.)
.
Further, to create a unified identity for the Company and its brand structure, in February and March 2012, the
Registrant and its subsidiaries amended its Articles of Incorporation and By-Laws to further change its corporate
name to 2GO Group, Inc. (formerly ATS Consolidated (ATSC), Inc.), 2GO Express, Inc. (formerly ATS Express,
Inc.), and 2GO Logistics, Inc. (formerly ATS Distribution, Inc.).
The Company is engaged in the movement of people operating under brand names ‘SuperFerry’, ‘SuperCat’, and
‘Cebu Ferries’ and in the movement of cargos operating under the brand name ‘2GO’.
However, with the change in the Company’s corporate name to “2GO Group, Inc.”, the Company and its
subsidiaries started the standardization of its brands on the latter part of 2011 and implemented the following
brand structure:
The Company adopted the stronger brand “2GO” as its flagship brand for its various businesses. Going forward,
the Company will function with three core business units, as follows:
2GO Freight —this unit will continue to handle commercial and personal shipping needs including household
goods, auto rolling cargo shipping, containerized shipping, break bulk & LCL consolidation, freight refrigerated
vans, and ISO tank shipments.
2GO Travel — integrating the country’s leading passenger ships and fast ferries, Negros Navigation, SuperFerry,
SuperCat, and Cebu Ferries, this unit offers the biggest fleet and the widest choice of route linking Luzon,
Visayas, and Mindanao, through land and sea multimodal transport linkages.
2GO Supply Chain —this unit leverages on the Company’s more than 100 years of expertise in Logistics,
Distribution, Warehousing, and Inventory Management.
With the change in company name and brand structure, the Company further secured the approval of the
Maritime Industry and Authority as to the change of the names of the vessels in the latter part of 2012, to wit:
OLD Vessel Names
MV “Superferry 1”
MV “Superferry 2”
MV “Superferry 5”
MV “Superferry 12”
MV “Superferry 20”
MV “Superferry 21”
MV “Cebu Ferry 1”
MV “Cebu Ferry 2”
MV “Cebu Ferry 3”
MV “Supercat 22”
NEW Vessel Names
MV “Sta. Rita De Casia”
MV “St. Thomas Aquinas”
MV “St. Joan of Arc”
MV “St. Pope John Paul II”
MV “St. Gregory the Great”
MV “St. Leo the Great”
MV “St. Augustine of Hippo”
MV “St. Anthony de Padua”
MV “St. Ignatius of Loyola”
MV “St. Nuriel”
23
MV “Supercat
MV “Supercat
MV “Supercat
MV “Supercat
23”
25”
30”
32”
MV “St.
MV “St.
MV “St.
MV “St.
Uriel”
Sealthiel”
Jhudiel”
Braquiel”
All these changes reflect an important redirection for 2GO i.e. towards becoming a world-class transport, logistics,
and supply chain company.
Significant Subsidiaries of 2GO
1. 2GO Express, Inc.
2GO Express (formerly ATS Express, Inc.; formerly Aboitiz One, Inc.) was incorporated on July 20, 1978. It is
100% owned by 2GO. It is in the business of offering supply chain solutions in accordance with customers’
needs. 2GO Express’ operation is supported by a logistical backbone which comprises delivery vans,
motorcycles, trucks and vans, refrigerated trucks and vans, prime movers and trailers. The company has more
than 237 retail outlets and agents at various strategic locations nationwide, providing customers easy access and
convenience.
Through 2GO Express’ subsidiaries, it offers a whole range of 2GO supply chain solutions. Supply chain
solutions include warehousing services, transport and logistics, sales and merchandising and trade marketing.
Subsidiaries
Hapag-Lloyd Philippines, Inc. (HLP)
HLP was incorporated on April 23, 1992. It is 85% owned by 2GO Express.
It is in the business of acting as an agent of Hapag-Lloyd AG, a global shipping container line engaged in
global door-to-door container transport. Hapag-Lloyd AG provides global shipping services to major
trade lanes such as Europe, Asia, North America, Canada, the Middle East and the South American
East Coast.
Hansa Meyer-ATS Projects, Inc. (HATS)
HATS, formerly Aboitiz Projects TS Corporation, was incorporated on August 5, 1996. It is 50% owned
by 2GO Express.
It is in the business of project cargo transportation and management, which involves the haulage and
transportation of heavy and bulk-sized equipment such as those used in mining, power plants and
telecommunication infrastructure.
It is a joint venture between 2GO Express and Hansa Meyer Global Transport Pte. Ltd., a transportation
company headquartered in Germany specializing in project transport logistics and engineering project
management consultancy.
2GO Logistics, Inc.
2GO Logistics (formerly ATS Distribution, Inc.; formerly Aboitiz One Distribution, Inc.) was incorporated
on January 10, 2008. It is 100% owned by 2GO Express.
It is in business of providing complete supply chain management. As of December 31, 2012, it has three
(3) state-of-the-art warehouses, namely Edan warehouse – 6,500 pallet positions
Elisco 1 warehouse – 30,148 pallet positions
Elisco 2 warehouse – 24,000 pallet positions
ScanAsia Overseas, Inc. (SOI)
SOI was incorporated on September 13, 1985. The 100%-purchase of SOI in June 2008 completes
2GO’s portfolio for a total supply chain solutions provider.
24
It is in the business of sales, marketing, warehousing and transportation of temperature-controlled and
ambient food products to its customers in the Philippines. It is the Philippines’ premier chilled distributor
carrying approximately 80% of the products in the chiller section in any supermarket today. SOI has
nationwide coverage for both retail and foodservice segments. SOI is considered as brand builders vs.
regular trading companies.
Kerry ATS Logistics, Inc. (KALI)
KALI was incorporated in March 30, 2009. It is 62.5% owned by 2GO Express thru KLN Logistics
Holdings Philippines, Inc.
It is in the business that aims to offer innovative, cost effective and reliable services on international air
and sea freight and cargo forwarding, cargo consolidation, as a project cargo and break bulk agent,
warehousing and distribution, trucking and door-to-door delivery. With the global clout of KLN and the
domestic dominance of 2GO, KALI is poised to provide better service to its clients.
WRR Trucking Corporation (WTC)
WTC was incorporated on March 25, 2008. It is 100% owned by 2GO Express.
It is in the business of providing and engaging in the business of transportation, hauling or forwarding of
cargo, freight, merchandise, chassis, goods and other articles within the lawful commerce of men by
means of trucks, automobiles, container vans and rail and to do such other acts and things to transact all
business directly or indirectly incidental or conducive to the prosecution of such business.
2. The Supercat Fast Ferry Corporation
SFFC was incorporated on June 20, 2001. It is 100% owned by 2GO.
It is in the business of providing fast craft passenger services under the “Supercat” brand name. At present,
SFFC operates eight (8) fast craft vessels with a total gross weight of 1,813 tons and a total passage capacity of
2,305 passengers. Its vessels service the ports of Cebu, Ormoc, Tagbilaran, Bacolod, Iloilo, Batangas and
Calapan.
3. NN-ATS Logistics Management & Holding Co., Inc.
NALMHCI was organized and incorporated on November 22, 2011. It is a wholly-owned subsidiary of 2GO. The
purpose of NALMHCI is primarily to act as managing agents, local agents or representatives of (i) subsidiaries
and affiliates engaged in logistics activities, (ii) corporations, (iii) partnerships, (iv) agencies, (v) associations, (vi)
enterprises, (vii) establishments, (viii) institutions, private or governmental, domestic or foreign, except the
management of funds, portfolios, or other similar assets of the managed entities; and to undertake, organize,
form, promote, develop or establish businesses, and all forms of enterprises, whether here or abroad, as are
necessary, suitable, or convenient to be undertaken, organized, formed, promoted, developed or established to
carry out, directly or indirectly, the purposes and interests or to enhance the businesses or to render more
valuable or profitable any of its rights, properties, interests or enterprises.
NALMHCI is the holding company of the following companies with its percentage ownership:
Company Name
(1)
J & A Services Corporation
(1, 2)
Red.Dot Corporation
(3)
Super Terminal, Inc.
Supersail Services, Inc.
North Harbor Tugs Corporation
Sun-Gold Forwarding Corporation
(1)
(2)
(3)
Acronym
J&A
RDC
STI
SSI
NHTC
SFC
% Ownership
80.0
80.0
50.0
100.0
58.9
51.0
The Company directly owns the remaining 20% ownership in J&A and RDC
RDC was incorporated on October 3, 2009 and started its commercial operations on
February 1, 2010
NALMHCI has control over STI since it has the power to cast the majority of votes at the
BOD’s meeting and the power to govern the financial and reporting policies of STI
25
4. Special Container and Value Added Services, Inc.
SCVASI was formed and organized on March 8, 2012. It is a wholly-owned subsidiary of the registrant. It has a
primary purpose of engaging in domestic and/or international business of transporting any and all kinds of goods
and cargoes, by sea, air and land, functioning as non-vessel operating common carrier, engaging in cargo
forwarding including acting as cargo consolidator and break-bulk agent, and courier for mails, letters, pouches,
other cargoes and personal effects of any and all kinds, types and nature.
Vessel Fleet
As of December 31, 2012, 2GO and its subsidiaries has a total fleet of 19 operating vessels, of which 13 are
company-owned ships. The fleet consists of 6 fast crafts, 10 RoRo/Pax vessels (of which 3 vessels are on vessel
lease agreement with its parent company, NENACO), and 3 freighters (all of which are on vessel lease
agreement with NENACO). The Company’s operating vessel fleet has a combined Gross Registered Tonnage of
approximately 122,297 metric tons, total passenger capacity of approximately 16,348 passengers and aggregate
cargo capacity of approximately 1,944 twenty-foot equivalent units (TEUs).
During the course of the year 2012, 2GO and its subsidiaries sold 2 freighter vessels and laid-up 1 fast craft and 2
RoRo/Pax vessels, as part of management’s vessel fleet and route rationalization program. Management
endeavored to reduce vessel capacity to mitigate inefficient assets that cause enormous expenses in repairs and
maintenance.
Currently, 2GO operates 7 RoRo/Pax vessels calling on Manila as their homeport. These vessels are larger
coastwise vessels that sail from Luzon to Visayas and Mindanao. Further, 2GO operates 3 medium-sized
vessels, formerly called the Cebu Ferries, 2 of which have Batangas as their homeport, plying on the BatangasCaticlan route, while 1 vessel retained its homeport in Cebu. The 6 fast craft passenger vessels, on the other
hand, are smaller fast crafts that ply on short distances. The Company also operates 3 freighter vessels to fully
complement its freight business.
Land, Buildings and Warehouses
The Company owns several pieces of land and a number of buildings and warehouses. These are used in the
normal course of business. For details of their locations, please refer to Exhibit III.
Ports of call
The Company’s extensive presence throughout the country is carried out through its branch operations and
agency networks. Major ports are primarily located in Bacolod, Batangas, Butuan, Cagayan de Oro, Calapan,
Caticlan, Cebu, Cotabato, Davao, Dipolog, Dumaguete, General Santos, Iligan, Iloilo, Jagna, Manila, Ormoc,
Ozamis, Puerto Princesa, Surigao, Tagbilaran, and Zamboanga.
Market Share
As of December 31, 2012, 2GO continues to dominate the Philippine Sea Travel with 96% market share in the
passage service, specifically in ports that they serve, owing to the addition of the Batangas-Caticlan route to the
market base. Freight market share is estimated at 31%.
Legal Proceedings
There are certain legal cases filed against 2GO and its subsidiaries in the normal course of business.
Management and its legal counsel believe that they have substantial legal and factual bases for their position and
are of the opinion that losses arising from these cases, if any, will not have a material adverse impact on the
consolidated financial statements
V.
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Names and Business Background of the registrant’s directors and executive officers are discussed in the
information statement on page nos. 8-11.
26
VI. MARKET PRICE OF AND DIVIDENDS ON REGISTRANT’S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
A. Market Information
The Common Stock of the Corporation is listed at the Philippine Stock Exchange. As of latest market date,
March 26, 2013, the market price of the Company’s common stock is P1.67 per share.
Below is the range of high and low bid information for the Company’s common equity for each quarter within the
last two fiscal years and any subsequent interim period:
B.
High
Low
2013
First Quarter
P
= 2.00
P
= 1.67
2012
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
P
= 4.72
2.94
1.96
2.85
P
= 1.33
1.75
1.69
1.62
P
= 1.95
1.94
1.90
1.48
P
= 1.77
1.61
1.20
1.33
2011
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Stockholders
The number of common shareholders of record as of March 31, 2013 was 1,952. The top 20 common
stockholders as of March 31, 2013 are as follows:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Name
Negros Navigation Co., Inc.
R A L Holdings and Equities Corporation
BIVI Realty Development Corporation
East Asian BBB Realty Inc.
PCD Nominee Corporation (Filipino)
Union Properties, Inc.
Abacus Securities Corporation
Santiago Tanchan III
Constantine Tanchan
PCD Nominee Corporation (Foreign)
Harrison Abella Ong
Fast Cargo Transport Corp.
Philips Multiemployer Retirement Plan
Ramon Rivero
Prudential Guarantee & Ass Inc.
AMA Rural Bank or Mandaluyong, Inc.
Alexander J. Tanchan
Quality Investments & Sec Corp
Elizabeth Chiu
Ramon R. Rivero
No. of Shares Held
2,160,141,991
119,000,000
80,000,000
41,000,000
19,509,328
1,578,125
1,530,000
1,262,500
1,262,500
1,144,426
890,062
744,875
631,250
600,000
458,287
441,875
430,260
416,625
378,750
320,000
% to total
88.308%
4.865%
3.270%
1.676%
0.798%
0.065%
0.063%
0.052%
0.052%
0.047%
0.036%
0.030%
0.026%
0.025%
0.019%
0.018%
0.018%
0.017%
0.015%
0.013%
As of March 31, 2013, the total number of shares owned by the public is equivalent to 285,296,991 shares or
equivalent to 11.66%.
C.
Dividends Declaration
On December 01, 2010, the Board approved the declaration of a special cash dividend equivalent to P0.15 per
share to all 2GO stockholders of record as of December 15, 2010. The special cash dividend represents the
27
sales proceeds of the Aboitiz Jebsen companies net of taxes and other related costs. Dividends were paid on
January 12, 2011.
Further, there were no dividends declared during the years 2011 and 2012.
VII.
CORPORATE GOVERNANCE
In compliance with SEC Memorandum Circular No. 5, Series of 2013, the Company undertakes to make available
its Annual Corporate Governance Report on or before May 30, 2013.
VIII.
NAME AND ADDRESS – REQUEST FOR SEC FORM 17-A ANNUAL REPORT
Any Stockholder, upon request, will be provided with a copy of the Company’s Annual Report in SEC Form 17-A
without charge. The name and address of the person whom such written request is to be directed is as follows:
JEREMIAS E. CRUZABRA
CORPORATE INFORMATION OFFICER
2GO GROUP, INC.
12/F TIMES PLAZA BUILDING
U.N. COR TAFT AVE., ERMITA, MANILA
This Information Statement and the Annual Report in SEC Form 17-A will be posted at 2GO’s website:
http://www.2go.com.ph
28