now corporation annual shareholders meeting (financial report)

NOW CORPORATION Shareholder’s Meeting

June 05, 2014

NOW CORP. Building 2244 Espana Boulevard

Sampaloc, Manila

Philippines

High Value Created. High Value Delivered.

• Financial Presentation

Audited December 31,

2013 and 2012


NOW CORPORATION

COMPARATIVE CONSOLIDATED INCOME STATEMENT

For the year Ending December 31, 2013 and 2012

Audited Audited Increase/(Decrease)

2013 2012 Amount %

REVENUES

Service Revenues

a.) Software Licenses 24,321,700 20,048,270 4,273,429 21%

b.) IT Resource Management 34,858,020 19,032,850 15,825,170 83%

c.) IT Products and services 14,626,494 4,768,635 9,857,860 207%

Management Fee 5,040,000 5,040,000 - 0%

Interest 471,820 1,124,934 (653,114) -58%

Total Revenues 79,318,034 50,014,689 29,303,345 59%

DIRECT COST

Cost of Software licenses 24,171,863 14,944,341 9,227,522 62%

Cost of IT Resource Management 26,547,845 14,220,595 12,327,250 87%

Cost of IT Products and Services 20,133,485 8,123,819 12,009,666 148%

Total Cost of Services 70,853,193 37,288,755 33,564,438 90%

Gross Margin

Software licenses 149,837 5,103,929 (4,954,093) -97%

IT Resource Management 8,310,175 4,812,255 3,497,920 73%

IT Products & Services (5,506,991) (3,355,184) (2,151,806) 64%

Management fees 5,040,000 5,040,000 - 0%

Interest / others 471,820 1,124,934 (653,114) -58%

Total Gross Margin 8,464,841 12,725,934 (4,261,093) -33%

Gross Margin % 11% 25%


NOW CORPORATION



Audited Audited Increase/(Decrease)

2013 2012 Amount %

General and Admin Expenses

Outside Services 25,517,320 56,202,154 (30,684,834) -55%

Salaries and other employees benefits 796,159 916,544 (120,385) -13%

Advertising and promotion 1,228,900 4,614,624 (3,385,724) -73%

Rental 3,444,057 3,690,910 (246,853) -7%

Taxes and licenses 727,802 460,506 267,296 58%

Professional fees 3,912,100 5,321,818 (1,409,718) -26%

Transportation and travel 1,448,133 6,386,036 (4,937,903) -77%

Light and water 4,055,322 3,758,867 296,455 8%

Repairs and maintenance 171,508 349,653 (178,145) -51%

Communications 5,265,685 7,400,707 (2,135,022) -29%

Representation expense 1,469,591 3,101,913 (1,632,322) -53%

Office supplies 347,884 891,168 (543,284) -61%

Dues and subscription 533,430 1,084,446 (551,016) -51%

Training and development 22,625 705,731 (683,106) -97%

Directors' fee 39,000 37,725 1,275 3%

Fuel and oil 213,226 (213,226) -100%

Insurance 609,567 407,283 202,284 50%

Commission 607,101 (607,101) -100%

Equity in net losses of associates 3,076,725 (3,076,725) -100%

Impairment loss 3,821,332 (3,821,332) -100%

Provision for doubtful account 888,958 1,094,698 (205,740) -19%

Others 456,439 520,777 (64,338) -12%

TOTAL EXPENSE 50,934,480 104,663,944 (53,729,464) -51%

Net Income from Operations (EBITDA) (42,941,459) (93,062,944) 50,121,485 -54%

Less: Depreciation 6,147,237 6,952,885 (805,648) (0.12)

Net Income before Interest (EBIT) (49,088,696) (100,015,829) 50,927,133 -51%

Add:(Deduct)

Interest Expense (38,369,677) (38,785,247) 415,570 -1%

Forex Gains (Losses) (218,203) (230,396) 12,193 -5%

Other Income 471,820 1,124,934 (653,114) -58%

Net Income before Tax (87,204,756) (137,906,538) 50,701,782 -37%

Less: Provision for Income Tax 28,816 202,565 (173,749) -86%

Provision for Final Tax 479 937 (458) -49%

NET INCOME AFTER TAX (87,234,051) (138,110,040) 50,875,989 -37%

High Value Created. High Value Delivered. NOW CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

Projected Audited Increase/(Decrease)

2013 2012 Amount %

ASSETS

Current Assets

Cash 9,655,786 1,467,152 8,188,634 558%

Trade and Other receivable 44,994,632 33,444,719 11,549,913 35%

Amounts owed by related parties 54,811,963 52,137,222 2,674,741 5%

Other current assets 5,599,515 5,749,482 (149,967) -3%

Total Current Assets 115,061,896 92,798,575 22,263,321 24%

Noncurrent Assets

Investment in shares of stocks 1,294,278,350 1,294,278,350 - 0%

Property and equipments 11,156,581 16,552,657 (5,396,076) -33%

Other non-current assets 24,367,873 24,485,434 (117,561) 0%

Total Noncurrent Assets 1,329,802,804 1,335,316,441 (5,513,637) 0%

Total ASSETS 1,444,864,700 1,428,115,016 16,749,684 1%

LIABILITIES AND EQUITY

Current Liabilities

Loans payable (Note 13) - 40,500,000 (40,500,000) -100%

Current portion of obligations under finance lease (Note 12)3,008,471 3,076,625 (68,154) -2%

Accounts payable and accrued expenses (Note 10)126,779,997 102,336,932 24,443,065 24%

Amount owed to related parties (Note 11)4,841,895 2,948,339 1,893,556 64%

Total Current Liabilities 134,630,363 148,861,896 (14,231,533) -10%

Non-current Liabilities

Loans payable (Note 13) 44,500,000 44,500,000 100%

Obligations under finance lease - net of current portion (Note 12)675,433 3,683,905 (3,008,472) -82%

Amount owed to related parties (Note 11)349,023,354 272,746,632 76,276,722 28%

Total Non-current Liabilities 394,198,787 276,430,537 117,768,250 43%

TOTAL LIABILITIES 528,829,150 425,292,433 103,536,717 24%

Equity

Common stock - P1 par value

Authorized - 1,320,000,000 shares

Issued - 1,317,278,350.00 shares 1,317,278,350 1,317,278,350 - 0%

Retained earnings (401,242,800) (314,455,767) (86,787,033) 28%

Total Equity 916,035,550 1,002,822,583 (86,787,033) -9%

TOTAL LIABILITIES AND EQUITY 1,444,864,700 1,428,115,016 16,749,684 1%


• 2014 Financial Performance

(Actual Jan.-May+June-Dec.

Projectio)


NOW CORPORATION



Actual Projected Audited Increase/(Decrease)

Jan-May. 2014 2014 2013 Amount %

REVENUES

Service Revenues

a.) Software Licenses 8,209,066 24,395,593 24,321,700 73,893 0%

b.) IT Resource Management 16,102,294 59,202,294 34,858,020 24,344,274 70%

c.) IT Products and services 3,696,839 26,686,126 14,626,494 12,059,632 82%

- Website Development 7,500,000 7,500,000

- Website Express.Biz 189,292 1,813,342 221,696 1,591,645 718%

- Software Collaboration 3,507,547 14,510,285 14,404,798 105,487 1%

- Cloud/on premise services - 2,862,500 - 2,862,500 100%

Management Fee 2,100,000 5,040,000 5,040,000 - 0%

Interest 2,305 730,822 471,820 259,002 55%

Total Revenues 30,110,503 116,054,835 79,318,034 36,736,801 46%

DIRECT COST

Cost of Software licenses 7,332,469 23,185,752 24,171,863 (986,111) -4%

Cost of IT Resource Management 11,883,137 41,500,137 26,547,845 14,952,292 56%

Cost of IT Products and Services 5,704,999 12,512,538 20,133,485 (7,620,947) -38%

Total Cost of Services 24,920,605 77,198,427 70,853,193 6,345,234 9%

Gross Margin

Software licenses 876,596 1,209,841 149,837 1,060,004 707%

IT Resource Management 4,219,157 17,702,157 8,310,175 9,391,982 113%

IT Products & Services (2,008,160) 14,173,589 (5,506,991) 19,680,579 -357%

Management fees 2,100,000 5,040,000 5,040,000 - 0%

Interest / others 2,305 730,822 471,820 259,002 55%

Total Gross Margin 5,189,899 38,856,409 8,464,841 30,391,568 359%

Gross Margin % 17% 33% 11%



Jan-May. 2014 2014 2013 Amount %

General and Admin Expenses

Outside Services 7,343,732 12,467,650 25,517,320 (13,049,670) -51%

Salaries and other employees benefits 279,830 1,391,595 796,159 595,436 75%

Advertising and promotion 1,468,240 1,468,240 1,228,900 239,340 19%

Interest expense 472,122 1,014,901 38,369,677 (37,354,776) -97%

Rental 1,654,873 3,572,222 3,444,057 128,165 4%

Taxes and licenses 386,166 804,732 727,802 76,930 11%

Professional fees 740,472 1,020,472 3,912,100 (2,891,628) -74%

Transportation and travel 796,738 860,622 1,448,133 (587,511) -41%

Light and water 1,103,087 2,601,748 4,055,322 (1,453,574) -36%

Depreciation and amortizations 2,114,795 5,058,204 6,147,237 (1,089,033) -18%

Repairs and maintenance 162,055 162,055 171,508 (9,453) -6%

Communications 2,316,510 2,576,886 5,265,685 (2,688,799) -51%

Representation expense 1,148,355 1,204,355 1,469,591 (265,236) -18%

Office supplies 308,825 781,577 347,884 433,693 125%

Dues and subscription 291,969 325,334 533,430 (208,096) -39%

Training and development - - 22,625 (22,625) -100%

Directors' fee 15,000 60,000 39,000 21,000 54%

Fuel and oil 29,037 39,537 - 39,537

Insurance 107,075 488,579 609,567 (120,988) -20%

Commission 30,858 30,858 - 30,858

Provision for doubtful account - - 888,958 (888,958) -100%

Foreign exchange loss (8,021) (8,021) 218,203 (226,224) -104%

Others 191,942 191,942 456,439 (264,497) -58%

TOTAL OPEX 20,953,661 36,113,488 95,669,597 (59,556,109) -62%

INCOME (LOSS) BEFORE INCOME TAX (15,763,763) 2,742,921 (87,204,756) 89,947,677 -103%

PROVISION FOR INCOME TAX

Current:

Income 103,798 777,128 28,816 748,312 2597%

Final - - 479 (479) -100%

103,798 777,128 29,295 747,833 2553%

NET INCOME (LOSS) (15,867,561) 1,965,793 (87,234,051) 89,199,843 -102%


NOW CORPORATION

BALANCE SHEETS

AS OF DECEMBER 31, 2014 AND 2013


Jan-May. 2014 2014 2013 Amount %

ASSETS

Current Assets

Cash 69,360,793 75,659,692 9,655,786 66,003,906 684%

Trade and Other receivable 53,622,116 54,042,116 44,994,632 9,047,484 20%

Amounts owed by related parties 63,895,273 63,895,273 54,811,963 9,083,310 17%

Other current assets 6,201,756 6,201,756 5,599,515 602,241 11%

Total Current Assets 193,079,938 199,798,837 115,061,896 84,736,941 74%

Noncurrent Assets

Investment in shares of stocks 1,294,278,350 1,294,278,350 1,294,278,350 - 0%

Property and equipments 6,587,101 6,166,614 11,156,581 (4,989,967) -45%

Other non-current assets 24,299,635 24,299,635 24,367,873 (68,238) 0%

Total Noncurrent Assets 1,325,165,086 1,324,744,599 1,329,802,804 (5,058,205) 0%

Total ASSETS 1,518,245,024 1,524,543,436 1,444,864,700 79,678,736 6%


Current Liabilities

Current portion of obligations under finance lease (Note 12)2,763,290 2,763,290 3,008,471 (245,181) -8%

Accounts payable and accrued expenses (Note 10)164,642,011 165,616,634 126,779,997 38,836,637 31%

Amount owed to related parties (Note 11)4,860,253 4,860,253 4,841,895 18,358 0%

Total Current Liabilities 172,265,554 173,240,177 134,630,363 38,609,814 29%


Loans payable (Note 13) 44,500,000 44,500,000 44,500,000 - 100%

Obligations under finance lease - net of current portion (Note 12)- - 675,433 (675,433) -100%

Amount owed to related parties (Note 11)344,493,942 344,493,942 349,023,354 (4,529,412) -1%

Total Non-current Liabilities 388,993,942 388,993,942 394,198,787 (5,204,845) -1%

TOTAL LIABILITIES 561,259,496 562,234,119 528,829,150 33,404,969 6%

Equity



Issued - 1,317,278,350.00 shares 1,317,278,350 1,317,278,350 1,317,278,350 - 0%

Retained earnings (360,292,823) (354,969,033) (401,242,800) 46,273,767 -12%

Total Equity 956,985,527 962,309,317 916,035,550 46,273,767 5%

TOTAL LIABILITIES AND EQUITY 1,518,245,024 1,524,543,436 1,444,864,700 79,678,736 6%


• 5-Yrs Financial Projection

2014-2018


NOW CORPORATION AND ITS SUBSIDIARIES

CONSOLIDATED INCOME STATEMENT

5-YR PROJECTIONS

2014 2015 2016 2017 2018 TOTAL

REVENUES

Service Revenues

a.) Software Licenses 24,395,593 27,087,661 29,915,086 35,898,103 39,487,913 156,784,356

b.) IT Resource Management 59,202,294 68,082,638 81,699,166 102,123,958 132,761,145 443,869,201

c.) IT Products and services 26,686,126 65,013,208 112,988,581 181,458,526 274,584,829 660,731,270

- Software Collaboration 14,510,285 16,596,516 21,186,445 32,627,126 50,245,773 135,166,145

- Website Express 1,813,342 16,416,692 48,802,136 96,831,400 158,839,056 322,702,626

- Website Develoment 7,500,000 20,000,000 25,000,000 25,000,000 25,000,000 102,500,000

- IT outsourcing -

- Cloud/on premise services 2,862,500 12,000,000 18,000,000 27,000,000 40,500,000 100,362,500

Management Fee 5,040,000 5,040,000 5,040,000 5,040,000 5,040,000 25,200,000

Interest 730,822 3,558,847 5,004,348 7,372,138 12,005,125 28,671,280

Total Revenues 116,054,835 168,782,354 234,647,181 331,892,725 463,879,013 1,315,256,108

DIRECT COST

Cost of Software licenses 23,185,752 25,901,077 28,491,184 31,055,391 32,918,714 141,552,119

Cost of IT Resource Management 41,500,137 41,500,137 41,500,137 41,500,137 41,500,137 207,500,686

Cost of IT Products and Services 12,512,538 11,915,270 12,599,240 13,115,220 13,631,200 63,773,468

Total Cost of Services 77,198,427 79,316,484 82,590,562 85,670,748 88,050,052 412,826,273

GROSS MARGIN

Software licenses 1,209,841 1,186,585 1,423,902 4,842,712 6,569,199 15,232,238

IT Resource Management 17,702,157 26,582,501 40,199,029 60,623,821 91,261,008 236,368,516

IT Products & Services 14,173,589 53,097,938 100,389,341 168,343,305 260,953,629 596,957,802

Management fees 5,040,000 5,040,000 5,040,000 5,040,000 5,040,000 25,200,000

Interest 730,822 3,558,847 5,004,348 7,372,138 12,005,125 28,671,280

Total Gross Margin 38,856,409 89,465,870 152,056,620 246,221,977 375,828,961 902,429,836

Gross Margin % 33% 53% 65% 74% 81% 69%


2014 2015 2016 2017 2018 TOTAL

GENERAL AND ADMINISTRATIVE EXPENSES

Outside Services 12,467,650 19,146,947 20,584,596 22,756,519 25,849,917 100,805,629

Salaries and other employees benefits 1,391,595 595,626 651,433 712,810 780,346 4,131,809

Advertising and promotion 1,468,240 10,000,000 12,500,000 15,625,000 19,531,250 59,124,490

Interest expense 1,014,901 1,014,901 1,014,901 1,014,901 1,014,901 5,074,503

Rental 3,572,222 1,892,025 2,070,154 2,322,350 2,670,557 12,527,307

Taxes and licenses 804,732 674,336 727,090 806,066 918,108 3,930,332

Professional fees 1,020,472 1,019,036 1,084,498 1,186,898 1,334,792 5,645,695

Transportation and travel 860,622 983,427 1,051,293 1,155,701 1,305,499 5,356,542

Light and water 2,601,748 2,757,853 3,006,059 3,366,786 3,871,804 15,604,251

Depreciation and amortizations 5,058,204 5,173,521 5,494,864 6,001,525 6,735,517 28,463,631

Repairs and maintenance 162,055 522,887 573,884 647,316 749,826 2,655,969

Communications 2,576,886 2,707,149 2,886,927 3,165,851 3,567,361 14,904,174

Representation expense 1,204,355 1,260,981 1,342,894 1,470,671 1,655,006 6,933,908

Office supplies 781,577 620,961 663,216 728,403 822,025 3,616,182

Dues and subscription 325,334 454,289 485,109 532,616 600,800 2,398,149

Training and development - 175,842 195,185 222,511 260,338 853,876

Directors' fee 60,000 61,800 65,508 71,404 79,972 338,684

Fuel and oil 39,537 130,011 141,523 158,358 182,011 651,441

Insurance 488,579 517,894 564,505 632,245 727,082 2,930,305

Commission 30,858 240,647 264,198 300,134 352,345 1,188,183

Provision for doubtful account - 174,286 291,195 587,320 1,223,101 2,275,901

Foreign exchange loss (8,021) - - - - (8,021)

Others 191,942 56,125 59,775 65,459 73,652 446,954

TOTAL OPEX 36,113,488 50,180,546 55,718,805 63,530,842 74,306,209 279,849,891

INCOME (LOSS) BEFORE INCOME TAX 2,742,921 39,285,324 96,337,815 182,691,134 301,522,752 622,579,945

PROVISION FOR INCOME TAX

Current:

Income 777,128 11,785,597 28,901,344 54,807,340 90,456,825 186,728,235

Final - - - - -

777,128 11,785,597 28,901,344 54,807,340 90,456,825 186,728,235

NET INCOME (LOSS) 1,965,793 27,499,727 67,436,470 127,883,794 211,065,926 435,851,709


NOW CORPORATION AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

5-YR PROJECTIONS

2014 2015 2016 2017 2018

ASSETS

Current Assets

Cash 75,659,692 129,433,161 203,552,676 296,665,352 541,822,942

Trade and Other receivable 54,042,116 59,082,116 64,122,116 69,162,116 74,202,116

Amounts owed by related parties 63,895,273 63,895,273 63,895,273 63,895,273 63,895,273

Other current assets 6,201,756 6,201,756 6,201,756 6,201,756 6,201,756

Total Current Assets 199,798,837 258,612,306 337,771,821 435,924,497 686,122,087

Noncurrent Assets

Investment in shares of stocks 1,294,278,350 1,294,278,350 1,294,278,350 1,294,278,350 1,294,278,350

Property and equipments 6,166,614 1,140,770 (3,925,074) (4,016,120) (4,016,120)

Other non-current assets 24,299,635 24,299,635 24,299,635 24,299,635 24,299,635

Total Noncurrent Assets 1,324,744,599 1,319,718,755 1,314,652,911 1,314,561,865 1,314,561,865

Total ASSETS 1,524,543,436 1,578,331,061 1,652,424,732 1,750,486,362 2,000,683,953


Current Liabilities

Current portion of obligations under finance lease (Note 12)2,763,290 2,763,290 - - -

Accounts payable and accrued expenses (Note 10)165,616,634 211,670,362 182,983,051 109,397,047 57,066,426

Amount owed to related parties (Note 11) 4,860,253 4,860,253 4,860,253 4,860,253 4,860,253

Total Current Liabilities 173,240,177 219,293,905 187,843,304 114,257,300 61,926,679


Loans payable (Note 13) 44,500,000

Obligations under finance lease - net of current portion (Note 12)- - - - -

Amount owed to related parties (Note 11)344,493,942 344,733,942 344,733,942 344,733,942 344,733,942

Total Non-current Liabilities 388,993,942 344,733,942 344,733,942 344,733,942 344,733,942

TOTAL LIABILITIES 562,234,119 564,027,847 532,577,246 458,991,242 406,660,621

Equity



Issued - 1,317,278,350.00 shares 1,317,278,350 1,317,278,350 1,317,278,350 1,317,278,350 1,317,278,350

Retained earnings (354,969,033) (302,975,136) (197,430,864) (25,783,230) 276,744,982

Total Equity 962,309,317 1,014,303,214 1,119,847,486 1,291,495,120 1,594,023,332

TOTAL LIABILITIES AND EQUITY 1,524,543,436 1,578,331,061 1,652,424,732 1,750,486,362 2,000,683,953


Thank You

now corporation annual shareholders meeting (financial report)

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