Title of Each Class
|
Name
of Each Exchange
on Which Registered
|
|
American
Depositary Shares, each representing ten Ordinary Shares, without par
value
|
New
York Stock Exchange
|
|
Ordinary
Shares, without par value
|
New
York Stock Exchange
(for
listing purposes only)
|
|
U.S.
GAAP __
|
International
Financial Reporting Standards as issued by the International Accounting
Standards Board __
|
Other
X
|
●
|
International,
national and local general economic and market conditions, inflation and
interest rate movements;
|
|
●
|
The
overall size and growth of the Mexican and Brazilian pharmaceutical
markets;
|
|
●
|
The
level of competition among distributors, suppliers and sellers of
pharmaceuticals;
|
|
●
|
Fluctuations
and difficulty in forecasting operating results;
|
|
●
|
Our
ability to integrate acquisitions and expansion into new businesses,
including the retail pharmacy business;
|
|
●
|
Dependence
on suppliers and clients;
|
|
●
|
General
risks associated with doing business in Mexico and Brazil, including
political and economic instability and changes in government regulations;
and
|
|
●
|
Other
factors referenced in this annual
report.
|
Identity
of Directors, Senior Management and
Advisers
|
Offer
Statistics and Expected Timetable
|
Key
Information
|
(a)
|
Selected
Financial Data
|
Year ended
December 31,
|
2004
|
2005
|
2006
|
2007
|
2008
|
2008 (1)
|
||||||||||||||||||
(in
thousands of Pesos and U.S. Dollars, except share and per share
data)
|
||||||||||||||||||||||||
Income
Statement
|
||||||||||||||||||||||||
Mexican
FRS:
|
||||||||||||||||||||||||
Net
sales
|
22,949,403 | 23,615,926 | 24,486,493 | 25,259,662 | 28,400,059 | 2,053,140 | ||||||||||||||||||
Gross
profit
|
2,362,542 | 2,436,935 | 2,420,076 | 2,484,257 | 3,065,588 | 221,622 | ||||||||||||||||||
Operating
expenses
|
1,472,464 | 1,470,392 | 1,365,941 | 1,424,852 | 2,104,883 | 152,169 | ||||||||||||||||||
Operating
income, net
|
890,078 | 966,543 | 1,054,135 | 1,059,405 | 960,705 | 69,453 | ||||||||||||||||||
Comprehensive
cost of financing, net
|
17,621 | (1,693 | ) | (4,351 | ) | 17,848 | 181,118 | 13,094 | ||||||||||||||||
Other
income (2)
|
55,671 | 42,303 | 46,331 | 51,756 | 58,189 | 4,207 | ||||||||||||||||||
Income
before taxes and employee profit sharing
|
928,128 | 1,010,539 | 1,155,095 | 1,093,313 | 897,567 | 64,888 | ||||||||||||||||||
Net
income
|
723,854 | 786,226 | 916,563 | 905,087 | 595,118 | 43,023 | ||||||||||||||||||
Net
income per Ordinary Share (3)
|
2.63 | 2.96 | 3.45 | 3.41 | 2.24 | 0.16 | ||||||||||||||||||
Weighted
average Ordinary Shares outstanding (in thousands) (3)
|
265,419 | 265,419 | 265,419 | 265,419 | 265,419 | 265,419 | ||||||||||||||||||
U.S. GAAP
(4):
|
||||||||||||||||||||||||
Net
sales
|
22,949,403 | 23,615,926 | 24,486,493 | 25,259,662 | 28,400,059 | 2,053,140 | ||||||||||||||||||
Gross
profit
|
2,362,542 | 2,436,935 | 2,420,076 | 2,484,257 | 3,065,588 | 221,622 | ||||||||||||||||||
Operating
income
|
890,078 | 966,543 | 1,054,135 | 1,059,405 | 963,648 | 69,666 | ||||||||||||||||||
Income
before taxes and employee profit sharing
|
928,128 | 1,009,708 | 1,155,095 | 1,093,313 | 897,567 | 64,888 | ||||||||||||||||||
Net
income (4)
|
723,854 | 751,235 | 951,554 | 890,164 | 598,061 | 43,236 | ||||||||||||||||||
Net
income per Ordinary share (3)
|
2.72 | 2.83 | 3.59 | 3.35 | 2.25 | 0.16 | ||||||||||||||||||
Weighted
average Ordinary Shares outstanding (in thousands) (3)
|
265,419 | 265,419 | 265,419 | 265,419 | 265,419 | 265,419 | ||||||||||||||||||
Balance
Sheet Data
|
||||||||||||||||||||||||
Mexican
FRS:
|
||||||||||||||||||||||||
Property
and equipment, net
|
1,193,551 | 1,150,099 | 1,198,242 | 1,269,821 | 1,404,985 | 101,571 | ||||||||||||||||||
Total
assets
|
10,181,835 | 10,616,144 | 10,778,971 | 12,039,715 | 14,647,532 | 1,058,921 | ||||||||||||||||||
Short-term
debt
|
- | - | 17,044 | - | 271,824 | 19,650 | ||||||||||||||||||
Long-term
debt
|
- | - | - | - | 1,053,000 | 76,125 | ||||||||||||||||||
Capital
stock
|
1,123,729 | 1,123,764 | 1,123,764 | 1,123,764 | 1,123,764 | 81,241 | ||||||||||||||||||
Total
stockholders’ equity (4)
|
4,499,262 | 4,981,795 | 5,544,017 | 6,092,720 | 6,609,761 | 477,844 | ||||||||||||||||||
U.S. GAAP
(4):
|
||||||||||||||||||||||||
Property
and equipment, net
|
1,193,551 | 1,150,099 | 1,198,242 | 1,269,821 | 1,404,985 | 101,571 | ||||||||||||||||||
Total
assets
|
10,181,835 | 10,616,144 | 10,778,971 | 12,039,715 | 14,647,532 | 1,058,921 | ||||||||||||||||||
Short-term
debt
|
- | - | 17,044 | - | 271,824 | 19,650 | ||||||||||||||||||
Long-term
debt
|
- | - | - | - | 1,053,000 | 76,125 | ||||||||||||||||||
Capital
stock
|
1,123,729 | 1,123,764 | 1,123,764 | 1,123,764 | 1,123,764 | 81,241 | ||||||||||||||||||
Total
stockholders’ equity (4)
|
4,526,330 | 4,973,731 | 5,570,945 | 6,091,437 | 6,586,925 | 476,192 |
(b)
|
Dividends
|
●
|
the
resolution by our shareholders in light of our results, financial
condition, cash requirements, future prospects and other factors deemed
relevant by our shareholders for this purpose;
|
||
●
|
the
extent to which we receive cash dividends, advances and other payments
from our subsidiaries. We are a holding company with no
significant operating assets other than the ones we own through our
subsidiaries. Given the fact that we receive substantially all
of our operating income from our subsidiaries, our ability to meet our
financial obligations, including the payment of dividends, depends
significantly on the dividend payments we receive from our subsidiaries;
and
|
||
●
|
the
extent to which we have cash available for distribution after funding our
working capital needs, capital expenditures and
investments.
|
(c)
|
Exchange
Rate Information
|
Exchange
Rate(1)
|
||||||||||||||||
Year ended December 31,
|
High
|
Low
|
Average(2)
|
Period
End
|
||||||||||||
2004
|
Ps. | 11.64 | Ps. | 10.81 | Ps. | 11.30 | Ps. | 11.15 | ||||||||
2005
|
11.41 | 10.41 | 10.89 | 10.63 | ||||||||||||
2006
|
11.49 | 10.44 | 10.91 | 10.81 | ||||||||||||
2007
|
11.27 | 10.67 | 10.93 | 10.92 | ||||||||||||
2008
|
13.94 | 9.92 | 11.14 | 13.83 | ||||||||||||
Month ended
|
||||||||||||||||
December
31,
2008
|
Ps. | 13.83 | Ps. | 13.09 | Ps. | 13.42 | Ps. | 13.83 | ||||||||
January
30,
2009
|
14.33 | 13.33 | 14.33 | 13.88 | ||||||||||||
February
28,
2009
|
15.09 | 14.09 | 15.09 | 14.61 | ||||||||||||
March
31,
2009
|
15.41 | 14.02 | 14.65 | 14.21 | ||||||||||||
April
30,
2009
|
13.89 | 13.05 | 13.80 | 13.39 | ||||||||||||
May
31,
2009
|
13.82 | 12.88 | 13.19 | 13.18 | ||||||||||||
Through
June 15,
2009
|
13.64 | 13.16 | 13.38 | 13.43 | ||||||||||||
● |
inflation
can adversely affect consumer purchasing power, thereby adversely
affecting consumer demand for the products we sell and/or distribute;
and
|
|
● |
to
the extent that inflation exceeds price increases, our prices and revenues
will be adversely affected in “real”
terms.
|
Information
on the Company
|
Economic
Interest
(Direct or indirect)
(2)
|
||||||||||
Name of Subsidiary
(1)
|
2007
|
2008
|
||||||||
Casa
Saba, S.A. de C.V.(3)
|
(Casa
Saba)
|
99.9%
|
99.9%
|
|||||||
Distribuidora
Casa Saba, S.A. de C.V. (4)
|
(Dicasa)
|
99.9%
|
99.9%
|
|||||||
Publicaciones
Citem, S.A. de C.V. (5)
|
(Citem)
|
99.9%
|
|
99.9%
|
||||||
Transportes
Marproa, S.A. de C.V. (6)
|
(Marproa)
|
99.9%
|
99.9%
|
|||||||
Farmacias
ABC de México, S.A. de C.V. (7)
|
(Farmacias
ABC)
|
99.9%
|
99.9%
|
|||||||
Centennial,
S.A. de C.V. (8)
|
(Centennial)
|
99.9%
|
99.9%
|
|||||||
Daltem
Provee Norte, S.A. de C.V. (9)
|
(Distribuidora
Solis)
|
99.9%
|
99.9%
|
|||||||
Drogueros,
S.A. de C.V. (10)
|
(Drogueros)
|
99.9%
|
99.9%
|
|||||||
Farmacias
Solis Hospitalarias y Oncologicas, S.A. de C.V. (currently
known as Farmacias Provee de Especialidades, S.A. de C.V.)
(11)
|
(Farmacias
Solis)
|
99.9%
|
99.9%
|
|||||||
Grupo
Mexatar, S.A. de C.V. (12)
|
(Mexatar)
|
99.9%
|
99.9%
|
|||||||
Inmuebles
Visosil, S.A. de C.V. (13)
|
(Visosil)
|
99.9%
|
99.9%
|
|||||||
Servicios
Corporativos Saba, S.A. de C.V. (14)
|
(Servicios
Corporativos Saba)
|
99.9%
|
99.9%
|
|||||||
Other
companies (real estate and service companies) (15)
|
99.9%
|
99.9%
|
||||||||
Drogasmil
Medicamentos e Perfumaria S.A. (currently known as
CSB Drogarias, S.A) (16)
|
(Drogasmil)
|
-
|
100.0%
|
|||||||
Controladora
de Clínicas Ambulatorias y de Rehabilitación, S.A. de C.V.
(17)
|
(Controladora
de Clinicas Ambulatorias)
|
-
|
50.005%
|
|||||||
Resonancia
Sports Clinic, S.A. de C.V. (18)
|
-
|
50.0014%
|
||||||||
Servicios
Corporativos Sports Clinic, S.A. de C.V. (19)
|
-
|
50.0014%
|
||||||||
Tampico
Sports Clinic Ambulatorias, S.A. de C.V. (20)
|
-
|
50.001%
|
||||||||
Casa
Saba Brasil Holdings Ltda. (21)
|
(Casa
Saba Brasil)
|
-
|
100.0%
|
Year ended December
31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
(Millions
of Mexican Pesos)
|
||||||||||||
Distribution
fleet
|
Ps. | 48.1 | Ps. | 38.9 | Ps. | 36.4 | ||||||
Technology
and computer
equipment
|
83.8 | 41.2 | 30.7 | |||||||||
Other
general capital
expenditures
|
34.1 | 39.8 | 63.7 | |||||||||
Total
capital expenditures (1)
|
Ps. | 166.0 | Ps. | 119.9 | Ps. | 130.8 |
● |
5,100
pharmaceutical products;
|
|
● |
5,000
health and beauty products;
|
|
● |
700
general merchandise and other products, such as food and toiletries;
and
|
|
● |
4,000
publications.
|
● |
more
than 13,900 pharmacies owned by private individuals;
|
|
● |
approximately
5,000 privately-owned pharmacy chains and over 550 government
pharmacies;
|
|
● |
approximately
2,600 regional and national supermarkets;
|
|
● |
approximately
350 racks and 200 nationwide agents;
|
|
● |
over
100 department stores; and
|
|
● |
approximately
400 major wholesalers and more than 4,000 convenience
stores.
|
Year
Ended December 31,
|
|||||||||||||
2006
|
2007
|
2008
|
|||||||||||
Private
Pharmaceuticals(1)(2)(3)
|
83.8 | % | 84.2 | % | 84.9 | % | |||||||
Government
Pharmaceuticals
|
3.5 | % | 3.1 | % | 3.6 | % | |||||||
HBCG/Other
Products
|
9.1 | % | 9.0 | % | 8.9 | % | |||||||
Publications
|
3.6 | % | 3.7 | % | 2.6 | % | |||||||
Total
|
100.0 | % | 100.0 | % | 100.0 | % |
● |
Maintaining
continuous contact with clients and suppliers to enhance the supply chains
in which we participate;
|
|
● |
Analyzing
the efficiency of our existing distribution centers and implementing IT
solutions that will increase our operational
efficiency;
|
|
● |
Offering
our clients both value-added and internet solutions for facilitating
commercial decisions and promoting higher sales;
|
|
● |
Adapting
to changes in our business environment and entering the retail pharmacy
business;
|
|
● |
Entering
new businesses to diversify and increase our participation in the health
sector;
|
|
● |
Continuing
to focus on internal savings and operating efficiencies programs that will
maximize our operations’ profitability; and
|
|
● |
Maintaining
a favorable capital
structure.
|
● |
Had
commercial operations with almost all of the clients and suppliers of the
private pharmaceutical market in Mexico;
|
|
● |
Implemented
state-of-the-art technology, including, a new BaaN system, which we
believe will enable us to improve our purchasing and inventory management
practices;
|
|
● |
Opened
a new distribution center with a more advanced design that we believe will
enable us to offer a better level of service to our clients located in
this region at a lower cost;
|
|
● |
Strengthened
our retail pharmacy operations in Mexico by acquiring additional
pharmacies and incorporating them under our Farmacias ABC
brand;
|
|
● |
Acquired
Drogasmil, a company that sells pharmaceutical products and is based in
Río de Janeiro, Brazil.
|
|
● |
Acquired
50.1% of Controladora de Clinicas Ambulatorias, a company that operates
two short-stay clinics that provide medical, surgical and rehabilitation
services and we are in the process of building another clinic in Tampico,
Tamaulipas in the northeast part of Mexico;
|
|
● |
Offer
value-added services to our clients such as targeted publications, special
discount programs and an electronic procurement portal that helps
facilitate purchasing for our clients; and
|
|
● |
Reviewed
and, in some cases, changed the commercial terms of several of our clients
and suppliers and, when required, discontinued unprofitable
operations.
|
|
Year Ended December
31,(1)
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Sales
in millions(2)
|
$ | US9,582.8 | $ | US10,283.5 | $ | US10,127.0 | ||||||
Sales
in millions of units(3)
|
983.6 | 986.5 | 932.7 | |||||||||
Average
unit price(3)
|
$ | US9.74 | $ | US10.31 | $ | US10.86 | ||||||
Growth
in average unit price
|
7.4 | % | 6.7 | % | 5.4 | % |
● |
“ISSSTE”
– The Instituto de
Seguridad y Servicios Sociales para los Trabajadores del Estado,
the health and social security institution for Mexican federal government
employees;
|
|
● |
“PEMEX”
– The hospitals and pharmacies operated by Petróleos Mexicanos,
the Mexican national oil company and one of the largest employers in
Mexico.
|
|
● |
“IMSS”
– The hospitals and pharmacies of the Instituto Mexicano del Seguro
Social, the health and social security institution for Mexican
employees of private companies; and
|
|
● |
“State
Health Institutions” – The hospitals, clinics and pharmacies of each of
the States of Mexico. The government employees of the States of
Mexico have the right to go to these institutions for their healthcare
needs.
|
● |
Mexsana
talcum powders from Schering Plough (since 1999);
|
|
● |
Brunswick
Sea Food products (since 1994);
|
|
● |
Lipovitan
energizing beverage (since 2002);
|
|
● |
The
Sensual Tea (since 2004);
|
|
● |
Mustela
products (since 2007);
|
|
● |
Costalitos,
trash bags (since 2007);
|
|
● |
Planet
Pop, microwavable popcorn and other snack foods (since
2007)
|
● |
Intermex,
a company owned by Televisa, which primarily distributes its own
publications;
|
|
● |
Codyplirsa,
which primarily distributes popular magazines nationwide;
and
|
|
● |
DIMSA,
which distributes primarily English-language
publications.
|
Credit
terms
|
Days
|
Pharmacies
|
35
|
Supermarkets
and local wholesalers
|
47
|
Government
|
50
|
Publications
to wholesalers
|
60
|
Publications
to retailers (1)
|
60
|
Distribution
Center Name
|
Location
(City, State)
|
||
1.
|
Taxqueña
|
Mexico
City, Federal District
|
|
2.
|
Chihuahua
|
Chihuahua,
Chihuahua
|
|
3.
|
Coatzacoalcos
|
Coatzacoalcos,
Veracruz
|
|
4.
|
Culiacán
|
Culiacán,
Sinaloa
|
|
5.
|
Guadalajara
|
Guadalajara,
Jalisco
|
|
6.
|
Hermosillo
|
Hermosillo,
Sonora
|
|
7.
|
Juárez
|
Ciudad
Juárez, Chihuahua
|
|
8.
|
La
Laguna
|
Gómez
Palacio, Durango
|
|
9.
|
León
|
León,
Guanajuato
|
|
10.
|
Centennial
|
Tlalnepantla,
Mexico
|
|
11.
|
Monterrey
|
Monterrey,
Nuevo León
|
|
12.
|
Peninsular
|
Mérida,
Yucatán
|
|
13.
|
Citem
|
Tlalnepantla,
Mexico
|
|
14.
|
Reynosa
|
Reynosa,
Tamaulipas
|
|
15.
|
Tampico
|
Tampico,
Tamaulipas
|
|
16.
|
Tijuana
|
Tijuana,
Baja California
|
|
17.
|
Tláhuac
|
Mexico
City, Federal District
|
|
18.
|
Tuxtla
|
Tuxtla
Gutiérrez, Chiapas
|
|
19.
|
Vallejo
|
Mexico
City, Federal District
|
|
20.
|
Veracruz
|
Veracruz,
Veracruz
|
|
21.
|
Daltem
Norte
|
Monterrey,
Nuevo León
|
|
22.
|
Daltem
Nacional
|
Mexico
City, Federal
District
|
Brand
|
Location
|
Number
of Pharmacies
|
Farmacias
ABC
|
Guadalajara,
Jalisco
|
50
|
Farmacias
ABC
|
States
of Guanajuato, Michoacán, Coahuila and Jalisco (other than
Guadalajara)
|
69
|
Farmacias
ABC
|
Mexico
City and State of Mexico
|
29
|
Farmacias
Provee de Especialidades
|
Monterrey,
Nuevo León
|
6
|
Farmacias
Provee de Especialidades
|
Saltillo
and Torreón,
Coahuila
|
2
|
Farmacias
Provee de Especialidades
|
Chihuahua,
Chihuahua
|
1
|
Farmacias
Provee de Especialidades
|
Hermosillo,
Sonora
|
1
|
Drogasmil
|
Río
de Janeiro
|
89
|
Drogasmil
|
São
Paulo
|
13
|
Operating
and Financial Review and Prospects
|
Year
Ended December 31,
|
|||||||||||||
2006
|
2007
|
2008
|
|||||||||||
Total
Mexican Private Pharmaceuticals Market:
|
|||||||||||||
Real Unit Price
Increases
|
5.2 | % | 3.2 | % | 0.3 | % | |||||||
Growth in
Units
|
(2.6 | )% | 1.2 | % | (4.7 | )% | |||||||
Grupo
Casa Saba Private Pharmaceutical Products:
|
|||||||||||||
Real Unit Price
Increases
|
11.4 | % | 2.8 | % | 4.7 | % | |||||||
Growth in
Units
|
(5.9 | )% | 1.5 | % | (2.2 | )% | |||||||
Market
Share of Grupo Casa Saba(1):
|
23.1 | % | 23.1 | % | 23.7 | % | |||||||
Inflation(2)
|
4.1 | % | 3.8 | % | 6.5 | % |
Year
Ended December 31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Millions
of Pesos
|
||||||||||||
Pharmaceuticals:
|
||||||||||||
Private sector (1)(2) | Ps. | 20,506.3 | Ps. | 21,269.6 | Ps. | 24,094.9 | ||||||
%
Growth
|
4.8 | % | 3.7 | % | 13.3 | % | ||||||
Government
|
845.5 | 780.5 | 1,034.8 | |||||||||
%
Growth
|
(4.0 | )% | (7.7 | )% | 32.6 | % | ||||||
Health,
Beauty, Consumer Goods, General Merchandise and Other
Products
|
2,231.3 | 2,281.0 | 2,521.1 | |||||||||
%
Growth
|
(3.5 | )% | 2.2 | % | 10.5 | % | ||||||
Publications
|
903.4 | 928.6 | 749.2 | |||||||||
%
Growth
|
5.3 | % | 2.8 | % | (19.2 | )% | ||||||
Total
|
Ps.
|
24,486.5 |
Ps.
|
25,259.7 | Ps. | 28,400.0 | ||||||
Total %
Growth
|
3.7 | % | 3.2 | % | 12.4 | % |
Year
Ended December 31,
|
|||||||||||||
2006
|
2007
|
2008
|
|||||||||||
Pharmaceuticals:
|
|||||||||||||
Private
(1)(2)
|
83.8 | % | 84.2 | % | 84.9 | % | |||||||
Government
|
3.5 | % | 3.1 | % | 3.6 | % | |||||||
Health,
Beauty, Consumer Goods, General Merchandise and Other
Products
|
9.1 | % | 9.0 | % | 8.9 | % | |||||||
Publications
|
3.6 | % | 3.7 | % | 2.6 | % | |||||||
100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Cost
of
Sales
|
90.1 | % | 90.2 | % | 89.2 | % | |||||||
Gross
Profit
|
9.9 | % | 9.8 | % | 10.8 | % | |||||||
Operating
expenses:
|
|||||||||||||
Selling
expenses
|
2.2 | % | 2.4 | % | 3.2 | % | |||||||
Administrative
expenses
|
3.3 | % | 3.3 | % | 4.2 | % | |||||||
5.5 | % | 5.6 | % | 7.4 | % | ||||||||
Operating
income
|
4.3 | % | 4.2 | % | 3.4 | % | |||||||
Comprehensive
cost of financing, net
|
0.0 | % | 0.1 | % | 0.6 | % | |||||||
Other
income
|
0.2 | % | 0.2 | % | 0.2 | % | |||||||
Income
tax and employee profit sharing
|
1.0 | % | 0.7 | % | 1.1 | % | |||||||
Net
income
|
3.7 | % | 3.6 | % | 2.1 | % | |||||||
100.0 | % | 100.0 | % | 100.0 | % |
Contractual
Obligations
|
Payments
due by period
|
|||||||||||||||||||
(millions
of Pesos)
|
||||||||||||||||||||
Total
|
Less
than 1 year
|
1-3
years
|
3-5
years
|
More
than 5 years
|
||||||||||||||||
Long-Term
Debt (1)
|
Ps. | 1,053.0 | – | – | – | Ps. | 1,053.0 | |||||||||||||
Capital
Lease Obligations (2)
|
– | – | – | – | – | |||||||||||||||
Operating
Leases (3)
|
– | – | – | – | – | |||||||||||||||
Purchase
Obligations (4)
|
– | – | – | – | – | |||||||||||||||
Other
Long-Term Liabilities (deferred income tax and other liabilities)
reflected on our Balance Sheet under Mexican FRS (5)
|
680.7 | – | – | – | 680.7 | |||||||||||||||
Total
|
Ps. | 1,733.7 | Ps. | 1,733.7 |
(a)
|
Recently
Issued Accounting Pronouncements
|
Directors,
Senior Management and Employees
|
Directors
Name
and Date of Birth
|
Principal
Occupation
|
Business
Experience
|
First
Elected
|
|||
Manuel
Saba Ades
(11/03/67)
|
Chairman
of the Board
|
Director
– Xtra Inmuebles, S.A. de C.V. and of Grupo Casa Saba, S.A.B. de
C.V. Member of the Board of Grupo Xtra S.A., de C.V. and
of Ixe Grupo Financiero, S.A.B. de C.V.
|
February
2000
|
|||
Alberto
Saba Ades
(07/09/65)
|
Vice
Chairman of the Board
|
Director
– Xtra Inmuebles, S.A. de C.V.
Chairman
of the Board of Grupo Xtra, S.A. de C.V.
|
February
2000
|
|||
Gabriel
Saba D’jamus
(07/27/69)
|
Chief
Executive Officer
|
Executive
Director – Grupo Comercial Hotelera, S.A. de C.V. and Grupo Casa Saba,
S.A.B. de C.V.
|
February
2000
|
|||
Juan
Carlos Peralta del Río
(24/09/75)
|
Vice President
|
Vice President
- IUSA Footwear International S.A. de C.V
|
April
2008
|
|||
Pedro
Alejandro Sadurni Gómez
(10/8/59)
|
Chief Financial Officer | Former Chief Financial Officer of Administration – INMAS, S.A. de C.V. |
February
2000
|
|||
Julio
Madrazo García
(07/07/66)
|
Partner |
De
la Calle Madrazo Mancera, CMM and Director-Zimat Golin Harris
|
April 2009 | |||
Fernando
Chico Pardo
(02/15/52)
|
President |
President
of PROMECAP, S.C. and Grupo Aeropuerto del Sureste, S.A. de
C.V.
|
April 2009 | |||
Miguel
Alemán Magnani
(
04/25/66)
|
President | Grupo Alemán | April 2009 | |||
Gabriel
Alarcón Velázquez
(02/23/37)
|
Director |
Banco
de Comercio
|
April 2006 |
Name
and Date of Birth
|
Principal
Occupation
|
Business
Experience
|
First
Elected
|
|||
Iván Moguel Kuri
(01/31/63)
|
Tax
Adviser to Grupo Casa Saba, S.A.B. de C.V.
|
Partner
– Chevez, Ruiz, Zamarripa y Cia, S.C.
|
February
2000
|
● |
one
of our employees or managers;
|
|
● |
a
controlling shareholder;
|
|
● |
a
director, executive officer or relative of a controlling shareholder, or
entities controlled or managed by a controlling shareholder;
or
|
|
● |
a
significant client, supplier, debtor or creditor, or member of the board
of directors or executive officer of any of these
entities.
|
● |
supervise
our external auditors and analyze their report;
|
|
● |
analyze
and supervise the preparation of our financial
statements;
|
|
● |
inform
the Board of Directors of our internal controls and their
adequacy;
|
|
● |
request
reports of our Board of Directs and executive officers whenever it deems
appropriate;
|
|
● |
inform
the Board of any irregularities that it may encounter;
|
|
● |
receive
and analyze recommendations and observations made by the stockholders’
meetings;
|
|
● |
supervise
the activities of our Chief Executive Officer;
|
|
● |
provide
an annual report to the Board of Directors;
|
|
● |
provide
opinions to our Board of Directors;
|
|
● |
request
and obtain opinions from independent third parties; and
|
|
● |
assist
the Board in the preparation of annual reports and other reporting
obligations.
|
Name
and Date of
Birth
|
Current
Position
|
Business
Experience
|
First
Appointed
|
|||
Gabriel
Saba D’jamus
(07/27/69)
|
Chief
Executive Officer
|
Executive
Director – Grupo Comercial Hotelera, S.A. de C.V. and Grupo Casa Saba,
S.A.B. de C.V.
|
February
2000
|
|||
Pedro
Alejandro Sadurni Gomez
(10/08/59)
|
Chief
Financial Officer
|
Former
Chief Financial Officer of Administration – INMAS, S.A. de
C.V.
|
February
2000
|
|||
Héctor
Manzano de la Torre
(04/21/67)
|
Sales
Director
|
Former
Manager of Citem, S.A. de C.V.
|
September
1991
|
|||
Oscar
Gutiérrez Melgar
(17/04/67)
|
Purchasing
Director
|
Former
Manager of Drogueros, S.A. de C.V.
|
November
1985
|
|||
Jesus
Guerra de Luna
(05/29/61)
|
General
Counsel
|
Legal
Manager – Grupo Casa Autrey, S.A. de C.V.
|
June
1995
|
|||
Ricardo
Ríos Cárdenas
(02/01/55)
|
Human
Resources Director
|
Director
of Sales & Operations, Northern Region – Grupo Casa Saba, S.A.B. de
C.V.
|
March
2009
|
|||
Pedro
Canton y Figueroa
(08/05/49)
|
Sales
Director
|
Director
of National Warehouse Operations
|
December
2008
|
|||
Jorge
Luis García
(09/12/61)
|
Chief
Information Officer
|
Former
Manager – Grupo Casa Autrey, S.A. de C.V.
|
May
1992
|
Major
Shareholders and Related Party
Transactions
|
Name
|
Number
of Ordinary Shares Owned
|
Percentage
Stake
|
||||||
Trust
F-709 (1)
|
225,606,456 | 85.00 | % | |||||
Fernando
Chico Pardo
(2)
|
13,689,600 | 5.16 | % | |||||
Total
|
239,296,056 | 90.16 | % |
(1)
|
Manuel
Saba Ades and Alberto Saba Ades, both of whom are directors of the
Company, are the sole beneficial owners, on an equal basis, of the
Ordinary Shares held directly by Trust F-709. The trustee of
Trust F-709 is Ixe Banco, S.A. Institución de Banca Múltiple, Ixe Grupo
Financiero, Division Fiduciaria.
|
(2)
|
Mr.
Chico Pardo is an independent director of the Company and owns 6,078,600
Ordinary Shares and 761,100 ADRs.
|
Financial
Information
|
Offer
and Listing Details
|
US
Dollar per ADS(1)
|
||||||||
High
|
Low
|
|||||||
2004
|
U.S.$ | 14.99 | U.S.$ | 10.70 | ||||
2005
|
U.S.$ | 18.50 | U.S.$ | 14.75 | ||||
2006
|
U.S.$ | 26.15 | U.S.$ | 16.52 | ||||
2007
|
U.S.$ | 42.85 | U.S.$ | 26.10 | ||||
First
Quarter
|
35.24 | 26.10 | ||||||
Second
Quarter
|
34.58 | 29.75 | ||||||
Third
Quarter
|
42.85 | 30.41 | ||||||
Fourth
Quarter
|
39.99 | 35.30 |
2008
|
U.S.$ | 42.85 | U.S.$ | 26.10 | ||||
First
Quarter
|
39.00 | 32.00 | ||||||
Second
Quarter
|
37.25 | 31.95 | ||||||
Third
Quarter
|
35.36 | 28.00 | ||||||
Fourth
Quarter
|
28.33 | 17.61 | ||||||
2009
|
||||||||
First
Quarter
|
U.S.$ | 20.50 | U.S.$ | 11.23 | ||||
Month
|
||||||||
December
2008
|
U.S.$ | 23.25 | 17.61 | |||||
January
2009
|
20.50 | 17.08 | ||||||
February
2009
|
17.00 | 13.50 | ||||||
March
2009
|
15.00 | 11.23 | ||||||
April
2009
|
16.50 | 11.14 | ||||||
May
2009
|
17.00 | 14.55 | ||||||
June
2009
|
19.90 | 16.01 | ||||||
Pesos
per ordinary share (1)
|
||||||||
Year
|
High
|
Low
|
||||||
2004
|
Ps. | 16.60 | Ps. | 12.70 | ||||
2005
|
Ps. | 20.50 | Ps. | 16.70 | ||||
2006
|
Ps. | 26.15 | Ps. | 16.95 | ||||
2007
|
Ps. | 44.50 | Ps. | 28.80 | ||||
First
Quarter
|
37.40 | 28.80 | ||||||
Second
Quarter
|
36.50 | 34.00 | ||||||
Third
Quarter
|
44.50 | 36.21 | ||||||
Fourth
Quarter
|
42.90 | . 41.00 | ||||||
2008
|
Ps. | 44.50 | Ps. | 28.80 | ||||
First
Quarter
|
41.68 | 36.80 | ||||||
Second
Quarter
|
36.80 | 36.00 | ||||||
Third
Quarter
|
33.10 | 31.20 | ||||||
Fourth
Quarter
|
31.20 | 26.90 | ||||||
2009
|
||||||||
First
Quarter
|
Ps. | 26.60 | Ps. | 22.53 | ||||
Month
|
||||||||
December
2008
|
Ps. | 31.00 | Ps. | 27.50 | ||||
January
2009
|
26.60 | 26.50 | ||||||
February
2009
|
22.53 | 22.53 | ||||||
March
2009
|
- | - | ||||||
April
2009
|
17.50 | 16.40 | ||||||
May
2009
|
21.09 | 17.50 | ||||||
June
2009
|
25.80 | 22.00 |
Additional
Information
|
●
|
a
minimum number of years of operating
history;
|
●
|
a
minimum financial condition;
|
●
|
a
minimum number of shares to be publicly offered to public
investors;
|
●
|
a
minimum price for the securities to be
offered;
|
●
|
a
minimum of 15% of the capital stock placed among public
investors;
|
●
|
a
minimum of 200 holders of shares or of shares represented by ADRs, who are
deemed to be public investors under the General CNBV Rules, upon the
completion of the offering;
|
●
|
the
following distribution of the securities offered pursuant to an offering
in Mexico: (i) at least 50% of the total number of securities offered must
be placed among investors who acquire less than 5% of the total number of
securities offered; and (ii) no investor may acquire more than 40% of the
total number of securities offered;
and
|
●
|
complied
with certain corporate governance
requirements.
|
●
|
a
minimum financial condition;
|
●
|
minimum
operating conditions, including a minimum number of
trades;
|
●
|
a
minimum trading price of its
securities;
|
●
|
a
minimum of 12% of the capital stock held by public
investors;
|
●
|
a
minimum of 100 holders of shares or of shares represented by ADRs who are
deemed to be public investors under the General CNBV Rules;
and
|
●
|
complied
with certain corporate governance
requirements.
|
●
|
the
entering into or termination of joint venture agreements or agreements
with key suppliers;
|
●
|
the
creation of new lines of businesses or
services;
|
●
|
significant
deviations in expected or projected operating
performance;
|
●
|
the
restructuring or payment of significant
indebtedness;
|
●
|
material
litigation or labor conflicts;
|
●
|
changes
in dividend policy;
|
●
|
the
commencement of any insolvency, suspension or bankruptcy
proceedings;
|
●
|
changes
in the directors; and
|
●
|
any
other event that may have a material adverse effect on the results,
financial condition or operations of the relevant
issuer.
|
●
|
if
the issuer does not adequately disclose a material event;
or
|
●
|
upon
price or volume volatility or changes in the offer or demand in respect of
the relevant securities, which are not consistent with the historic
performance of the securities and could not be explained solely by the
information made publicly available under the General CNBV
Rules.
|
●
|
their
identification as sociedad anónima
bursátil (a stock corporation with stock registered in the CNBV and
listed on the Mexican Stock Exchange) and a new set of corporate
governance requirements;
|
●
|
the
redefinition of the functions and structure of the Board of Directors,
including (i) the number of members of the Board of Directors, up to 21
with at least 25% of these being independent members, and (ii) the
independence status of the independent members of the Board of Directors
will be qualified at the shareholders’ meeting and the CNBV will have the
authority to challenge such
independence;
|
●
|
the
introduction of the general manager and senior management positions as a
means for the Board of Directors to conduct the
business;
|
●
|
a
clear definition of fiduciary duties for members of the Board of Directors
and its secretary, the chief executive officer and other executive
officers, including duty of care and duty of
loyalty;
|
●
|
the
increase of liability standards for members of the Board of Directors and
its secretary with respect to the operations and performance of the
company, including (i) the payment of damages and losses caused as result
of their lack of care or loyalty and (ii) criminal sanctions of up to ten
years for damages caused to the company as a result of certain illegal
acts involving willful misconducts. The liability actions may
be exercised by the company or by shareholders that represent 5% or more
of the capital stock of the
company;
|
●
|
the
inclusion of sanctions applicable to senior management, shareholders that
hold 10% or more of the capital stock of an issuer and external
auditors;
|
●
|
the
replacement of the statutory auditor by the audit committee, the corporate
governance committee and the external auditors, assigning to each of these
specific obligations of surveillance and corporate
governance;
|
●
|
the
attribution of independent status to all the members of the audit and
corporate governance committees, except in companies with controlling
shareholder(s) with 50% of the capital stock, such as the
company;
|
●
|
the
increase of functions and responsibilities of the audit committee,
including (i) the evaluation of the performance of the external auditors,
(ii) the review and discussion of the financial statements of the company
and advising the Board of Directors on the approval of such financial
statements; (iii) the surveillance of internal controls and internal audit
procedures of the company, (iv) the reception and analysis of
recommendations and observations made by the shareholders, members of the
Board of Directors and senior management, and the authority to take the
necessary actions, (v) the authority to call a shareholders meeting and
include the items to be discussed in the meeting’s agenda and (vi) the
surveillance of the performance of the general manager;
and
|
●
|
the
requirement that the shareholders’ meeting approve transactions that
represent 20% or more of the consolidated assets of the company within one
fiscal year; and the inclusion of a new set of rules to obtain
authorization from the CNBV to execute public
offerings.
|
●
|
to
be considered as Mexicans with respect to Ordinary Shares that they
acquire or hold as well as to the property, rights, concessions,
participations or interests owned by us or to the rights and obligations
derived from any agreements we have with the Mexican government;
and
|
●
|
not
to invoke the protection of their own governments. Failure to
comply is subject to a penalty of forfeiture of such a shareholder’s
capital interest in favor of
Mexico.
|
●
|
any
redemption shall be made on a pro-rata basis among all of our
shareholders;
|
●
|
to
the extent that a redemption is effected through a public tender offer on
the Mexican Stock Exchange, the shareholders’ resolution approving the
redemption may empower the Board of Directors to specify the number of
shares to be redeemed and appoint the related intermediary or purchase
agent; and
|
●
|
any
redeemed shares must be cancelled.
|
●
|
to
be considered as Mexicans with respect to the Ordinary Shares that they
acquire or hold, as well as to the property, rights, concessions,
participation or interests owned by us or to the rights and obligations
derived from any agreements we have with the Mexican government;
and
|
●
|
not
to invoke the protection of their own governments. If a holder
of our Ordinary Shares invokes the protection of its own government, the
holder’s Ordinary Shares will be forfeited to the Mexican
government.
|
●
|
The
Income Tax Law;
|
●
|
The
Federal Tax Code; and
|
●
|
The
Convention for the Avoidance of Double Taxation entered into and between
Mexico and the U.S., which we refer to as the Tax
Treaty.
|
●
|
Individuals
are residents of Mexico if they have established their home or habitual
abode in Mexico or, if they have established their principal place of
residence outside Mexico, if their core of vital interests (centro de intereses
vitales) is located in Mexico. Individuals’ core of
vital interests will be deemed to be located in Mexico if, among other
things,
|
●
|
at
least 50% of the individuals’ aggregate annual income derives from Mexican
sources, or
|
●
|
the
individuals’ principal center of professional activities is located in
Mexico;
|
●
|
Individuals
are residents of Mexico if they are state employees, regardless of the
location of the individuals’ core of vital interests;
and
|
●
|
Mexican
nationals who filed a change of tax residence to a country or jurisdiction
that does not have a comprehensive exchange of information agreement with
Mexico in which his/her income is subject to a preferred tax regime
pursuant to the provisions of the Mexican Income Tax Law, will be
considered Mexican residents for tax purposes during the year of filing of
the notice of such residence change and during the following three
years.
|
●
|
Unless
otherwise proven, a Mexican national is deemed a resident of Mexico for
tax purposes.
|
●
|
Legal
entities are residents of Mexico if they maintain their principal place of
business or their place of effective management in
Mexico.
|
●
|
If
non-residents of Mexico are deemed to have a permanent establishment in
Mexico for tax purposes, all income attributable to the permanent
establishment will be subject to Mexican taxes, in accordance with
applicable Mexican tax law.
|
●
|
Gain
on the sale of ADSs or Ordinary Shares by a non-resident holder will not
be subject to any Mexican tax if the transaction is carried out through
the Mexican Stock Exchange or other stock exchange or securities markets
approved by the Mexican Ministry of Finance and Public Credit. Such
exemption shall not apply to a person or group of persons that directly or
indirectly holds 10% or more of the shares, if in a period of 24 months,
such person sells 10% or more of the shares, through one transaction or
through more than one simultaneous or successive
transactions. In addition, such exemption will not apply to a
person or group of persons who control the issuing company and sell their
control through one or more transactions within a 24 month
period. Gain on sales or other dispositions of the Common
Shares made in other circumstances generally would be subject to Mexican
tax at a rate of 25% based on the total amount of the transaction or,
subject to certain requirements applicable to the seller, at a rate of
28%, of gains realized from the disposition, regardless of the nationality
or residence of the transferor, provided that the transferor is not a
resident of a country with a preferred or territorial tax
regime.
|
●
|
For
tender offers conducted on the Mexican Stock Exchange or other approved
stock exchanges or securities markets, non-resident holders who held the
Common Shares as of the date they were initially registered with the CNBV
may apply the above exemption to the extent
that:
|
●
|
five
uninterrupted years have elapsed since the initial public offering of the
Common Shares;
|
●
|
our
shares have a public float of at least 35% on the authorized stock
exchanges or markets on which they were initially
listed;
|
●
|
the
offer is for all shares representing our share capital and at the same
price for all shareholders; and
|
●
|
all
shareholders are permitted to accept more competitive offers than those
received prior to or during the tender offer period, without
penalty.
|
●
|
a
citizen or resident of the United
States;
|
●
|
a
corporation or other entity taxable as a corporation organized or created
in the United States or any political subdivision thereof, as the case may
be;
|
●
|
an
estate, the income of which is subject to U.S. federal income tax,
regardless of its source; or
|
●
|
a
trust, if a court within the United States is able to exercise primary
supervision over its administration and one or more United States persons
have the authority to control all substantial decisions of such
trust.
|
Quantitative
and Qualitative Disclosures about Market
Risk
|
Description
of Securities Other than Equity
Securities
|
Defaults,
Dividend Arrearages and
Delinquencies
|
Material
Modifications to the Rights of Security Holders and Use of
Proceeds
|
Controls
and Procedures
|
(a)
|
Disclosure
Controls and Procedures
|
(b)
|
Management’s
Report on Internal Control over Financial
Reporting
|
(c)
|
Attestation
Report of the Registered Public Accounting
Firm
|
(d)
|
Changes
to Internal Control over Financial Reporting and Remediation
Activities
|
[Reserved]
|
Audit
Committee Financial Expert
|
Code
of Ethics
|
Principal
Accountant Fees and Services
|
For
the year ended December 31,
|
|||||||
2007
|
2008
|
||||||
(Ps.
millions)
|
|||||||
Audit
Fees
|
Ps. | 4.9 | Ps. | 5.1 | |||
Audit-Related
Fees
|
2.5 | 2.6 | |||||
Tax
Fees
|
8.7 | 5.0 | |||||
Other
Fees
|
0.0 | 0.0 | |||||
Total
|
Ps. | 16.1 | Ps. | 12.7 |
Exemptions
from the Listing Standards for Audit
Committees
|
Purchases
of Equity Securities by the Issuer and Affiliated
Purchasers
|
Disclosure
of Disagreements or Reportable
Events
|
Corporate
Governance
|
NYSE
Standards
|
Our
Corporate Governance Practice
|
|
A
majority of the Board of Directors must be
independent. Exception for “controlled companies,” which would
include our Company if we were a U.S. issuer.
|
The
Mexican Securities Market Law requires that listed companies have at least
25% of independent directors. The 25% of the members of our
Board are independent under the Mexican Stock Exchange Law. Our
Board of Directors is not required to make a determination as to the
independence of our directors. The applicable definition of
independence, which differs in certain respects from the definition
applicable to U.S. issuers under the NYSE standard, prohibits, among other
relationships, an independent director from being an employee or officer
of the Company or an independent director from being a shareholder that
may have influence over the Company. It also prohibits certain
relationships between the Company and the independent director, entities
with which the independent director is associated and family members of
the independent director.
|
|
Non-management
directors must meet at executive sessions without
management.
|
Our
non-management directors are not required to meet in executive
sessions. Executive sessions are not recommended by the Mexican
Code of Enhanced Corporate Practices. Our Chief Executive
Officer is a member of our Board of Directors.
|
|
Nominating/corporate
governance committee of independent directors
required. Exception for “controlled companies,” which would
include our Company if we were a U.S. issuer.
|
We
are not required to have a nominating corporate governance committee, and
such committee is not recommended by the Mexican Code of Enhanced
Corporate Practices.
|
|
Compensation
committee of independent directors required. Exception for
“controlled companies,” which would include our Company if we were a U.S.
issuer.
|
We
are not required to have a compensation committee, and currently we do not
have one.
|
|
Audit
committee satisfying the independence and other requirements of Rule 10A-3
under the Exchange Act and the NYSE independence
standards.
|
We
have a three member audit committee, which are independent under
applicable Mexican standards and for Rule 10A-3. Members of our
audit committee do not need to satisfy the NYSE independence standards
that are not required by Rule 10A-3. Our audit committee does
not have a written charter.
|
|
Equity
compensation plans require shareholder approval, subject to limited
exemptions.
|
Shareholder
approval is not required under Mexican law or our bylaws for the adoption
and amendment of an equity-compensation plan. However,
regulations of the Mexican Banking and Securities Commission require
shareholder approval under certain circumstances.
|
|
Corporate
governance guidelines and code of conduct and ethics required, with
disclosure of any waiver for directors or executive
officers.
|
The
practices for our Board of Directors, including committees and
compensation of directors, are described in this annual
report. We have adopted a code of ethics applicable to all of
our directors and executive officers, which is available at
http://www.casasaba.com.
|
NYSE Standards | Our Corporate Governance Practice | |
CEO
Certifications must certify to the NYSE each year that the CEO is not
aware of any violation by the Company of the NYSE corporate governance
listing standards. Additionally CEO’s must notify the NYSE in
writing if any executive officer becomes aware of any material
non-compliance with the new listing standards.
|
We
are required to disclose each year our degree of compliance with the Code
of Enhanced Corporate Governance Practices, and the truthfulness of such
disclosure must be certified by the Chairman of the Board of Directors;
however there is no such concept as a violation of the Code of Enhanced
Corporate Governance Practices since compliance with these is not
mandatory. Furthermore, other than the disclosure provided by
our CEO in this annual report, the CEO is not required to provide
notification of any non-compliance of which he may be aware
of.
|
Financial
Statements
|
Financial
Statements
|
Page
|
|
Index
to Consolidated Financial
Statements
|
F-1
|
Management’s
Report on Internal Control over Financial
Reporting
|
F-2
|
Report
of Independent Registered Public Accounting
Firm
|
F-3
|
Attestation
Report of the Registered Public Accounting
Firm
|
F-4
|
Consolidated
Balance Sheets as of December 31, 2007 and
2008
|
F-5
|
Consolidated
Statements of Income for each of the years ended
December
31, 2006, 2007 and
2008
|
F-6
|
Consolidated
Statements of Stockholders’ Equity for the years ended
December
31, 2006, 2007 and
2008
|
F-7
|
Consolidated
Statements of Changes in Financial Position for the
years
ended December 31, 2006, 2007 and
2008
|
F-8
|
Consolidated Cash Flow Statement for the year ended December 31, 2008 |
F-10
|
Notes
to the Consolidated Financial
Statements
|
F-11
|
Exhibits
|
Exhibit
Number
|
Description of Exhibits
|
|
1.1
|
Amended
and Restated Bylaws (English translation).*
|
|
8.1
|
List
of Subsidiaries of the Registrant.*
|
|
12.1
|
Certification
of the Principal Executive Officer of Grupo Casa Saba, S.A.B. de C.V.
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.*
|
|
12.2
|
Certification
of the Principal Financial Officer of Grupo Casa Saba, S.A.B. de C.V.
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.*
|
|
13.1
|
Certification
of the Principal Executive and Financial Officer of Grupo Casa Saba,
S.A.B. de C.V. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of
2002.*
|
Date: July 15, 2009 | GRUPO CASA SABA, S.A.B. DE C.V. | ||
|
By:
|
/s/ Gabriel Saba D’jamus | |
Name: Gabriel Saba D’jamus | |||
Title: Chief Executive Officer | |||
Consolidated
Financial Statements of Grupo Casa Saba, S.A.B. de C.V.
|
Page
|
By:
/s/ Gabriel Saba
D’jamus
|
By:
/s/ Alejandro
Sadurni Gomez
|
Name: Gabriel
Saba D’jamus
Title: Chief
Executive Officer
|
Name: Alejandro
Sadurni Gomez
Title: Chief
Financial Officer
|
2007
|
2008
|
Convenience
translation 2008
|
2007
|
2008
|
Convenience
translation 2008
|
||||||||||||||||||||
CURRENT
ASSETS:
|
CURRENT
LIABILITIES:
|
||||||||||||||||||||||||
Cash
and cash equivalents (Note 3.e)
|
Ps. | 684,312 | Ps. | 601,261 | $ | 43,467 |
Bank
loans (Note 8)
|
Ps. | Ps. | 271,824 | $ | 19,650 | |||||||||||||
Accounts
receivable, net (Notes 3.d, 3.g and 4)
|
4,796,267 | 5,920,314 | 428,000 |
Trade
accounts payable
|
5,178,161 | 5,881,486 | 425,193 | ||||||||||||||||||
Inventories,
net (Notes 3.d, 3.h and 5)
|
4,872,712 | 5,167,701 | 373,592 |
Other
payables and accrued liabilities
|
67,841 | 144,937 | 10,478 | ||||||||||||||||||
Prepaid
expenses
|
16,782 | 48,329 | 3,494 |
Employee
profit sharing (Notes 3.n and 12.e)
|
3,817 | 5,851 | 423 | ||||||||||||||||||
Total
current assets
|
10,370,073 | 11,737,605 | 848,553 |
Total
current liabilities
|
5,249,819 | 6,304,098 | 455,744 | ||||||||||||||||||
LONG
- TERM DEBT
|
1,053,000 | 76,125 | |||||||||||||||||||||||
RETIREMENT
PENSIONS, SENIORITY PREMIUM AND SEVERANCE BENEFITS (Note
3.m)
|
103,130 | 62,128 | 4,491 | ||||||||||||||||||||||
DEFERRED
INCOME TAX (Notes 3.n and 9)
|
593,849 | 498,687 | 36,052 | ||||||||||||||||||||||
DEFERRED
EMPLOYEE PROFIT SHARING
(Notes 3.n and 9)
|
197 | ||||||||||||||||||||||||
PROPERTY
AND EQUIPMENT, net (Notes
3.d, 3.i and 6)
|
1,269,821 | 1,404,985 | 101,571 |
OTHER
PAYABLES AND ACCRUED LONG-TERM
|
|||||||||||||||||||||
LIABILITIES
|
119,858 | 8,665 | |||||||||||||||||||||||
Total
liabilities
|
5,946,995 | 8,037,771 | 581,077 | ||||||||||||||||||||||
CONTINGENCIES
AND COMMITMENTS (Note 14)
|
|||||||||||||||||||||||||
STOCKHOLDERS’
EQUITY
|
|||||||||||||||||||||||||
Capital
stock (Note 11)
|
1,123,764 | 1,123,764 | 81,241 | ||||||||||||||||||||||
GOODWILL,
net (Note 3.j)
|
217,214 | 1,305,227 | 94,359 |
Premium
on stock sold
|
869,878 | 869,878 | 62,887 | ||||||||||||||||||
Reserve
for share repurchases (Note 11)
|
1,062,201 | 1,062,201 | 76,790 | ||||||||||||||||||||||
Retained
earnings
|
5,668,439 | 3,481,122 | 251,663 | ||||||||||||||||||||||
Deficit
on restatement (Note 3.d)
|
(2,571,740 | ) | |||||||||||||||||||||||
Accrued
deferred income tax on earnings
|
(40,695 | ) | |||||||||||||||||||||||
Additional
employee retirement liability (Note 3.m)
|
(19,127 | ) | |||||||||||||||||||||||
Translation
adjusment effect
|
72,796 | 5,263 | |||||||||||||||||||||||
OTHER
ASSETS, net
|
182,607 | 199,715 | 14,438 |
Total
stockholders’ equity
|
6,092,720 | 6,609,761 | 477,844 | ||||||||||||||||||
Total
assets
|
Ps. | 12,039,715 | Ps. | 14,647,532 | $ | 1,058,921 |
Total
liabilities and stockholders’ equity
|
Ps. | 12,039,715 | Ps. | 14,647,532 | $ | 1,058,921 |
Grupo
Casa Saba, S.A.B. de C.V. and Subsidiaries
|
||||||||||||||||
for
the years ended December 31, 2006, 2007 and
2008
|
||||||||||||||||
(Amounts stated in thousand Mexican pesos
(Ps.) - Note 3t)
|
||||||||||||||||
and
thousand of U.S. dollars ($))
|
||||||||||||||||
|
||||||||||||||||
2006
|
2007
|
2008
|
Convenience translation
2008 |
|||||||||||||
Net
sales (Note 3.r)
|
Ps. | 24,486,493 | Ps. | 25,259,662 | Ps. | 28,400,059 | $ | 2,053,140 | ||||||||
Cost
of sales
|
22,066,417 | 22,775,405 | 25,334,471 | 1,831,518 | ||||||||||||
Gross profit
|
2,420,076 | 2,484,257 | 3,065,588 | 221,622 | ||||||||||||
Operating
expenses
|
||||||||||||||||
Selling
|
548,927 | 594,300 | 905,435 | 65,457 | ||||||||||||
Administrative
|
817,014 | 830,552 | 1,199,448 | 86,712 | ||||||||||||
1,365,941 | 1,424,852 | 2,104,883 | 152,169 | |||||||||||||
Operating income
|
1,054,135 | 1,059,405 | 960,705 | 69,453 | ||||||||||||
Other
income, net
|
46,331 | 51,756 | 58,189 | 4,207 | ||||||||||||
Comprehensive
gain or loss on financing, net
|
||||||||||||||||
Interest income
|
(31,079 | ) | (16,625 | ) | (11,817 | ) | (854 | ) | ||||||||
Interest expense
|
10,608 | 11,156 | 190,303 | 13,758 | ||||||||||||
Exchange (gain) loss (Note 3.o)
|
(1,805 | ) | 1,884 | 2,632 | 190 | |||||||||||
Loss on monetary position (Note 3.d)
|
17,925 | 21,433 | ||||||||||||||
(4,351 | ) | 17,848 | 181,118 | 13,094 | ||||||||||||
Non-ordinary
item
|
(50,278 | ) | (59,791 | ) | (4,322 | ) | ||||||||||
Income before provisions
|
1,155,095 | 1,093,313 | 897,567 | 64,888 | ||||||||||||
Provisions
for income tax
|
238,532 | 188,226 | 302,449 | 21,865 | ||||||||||||
Net
income
|
Ps. | 916,563 | Ps. | 905,087 | Ps. | 595,118 | $ | 43,023 | ||||||||
Basic and diluted net income
|
||||||||||||||||
per share (Note 3.q)
|
Ps. | 3.453 | Ps. | 3.410 | Ps. | 2.242 | ||||||||||
Weighted average shares
|
||||||||||||||||
outstanding (in thousands)
|
265,419 | 265,419 | 265,419 | |||||||||||||
Accrued
|
Additional
|
|||||||||||||||||||||||||||||
Capital
stock
|
Reserve
for
|
deferred
|
employee
|
Translation
|
||||||||||||||||||||||||||
Premium
on
|
share
|
Retained
|
Deficit
on
|
income
tax
|
retirement
|
adjustment
|
||||||||||||||||||||||||
Historical
|
Restatement
|
stock
sold
|
repurchases
|
earnings
|
restatement
|
on
earnings
|
liability
|
effect
|
Total
|
|||||||||||||||||||||
Balances
as of January 1, 2006
|
Ps.
167,903
|
Ps.
955,861
|
Ps.
869,878
|
Ps.
1,062,201
|
Ps.
4,182,481
|
Ps.
(2,185,272
|
) |
Ps.
(40,695
|
) |
Ps.
(30,563
|
) |
Ps.
|
Ps.
4,981,794
|
|||||||||||||||||
Dividends
paid
|
(160,320 | ) | (160,320 | ) | ||||||||||||||||||||||||||
Comprehensive
income
|
916,563 | (196,507 | ) | 2,487 | 722,543 | |||||||||||||||||||||||||
Balances
as of December 31, 2006
|
167,903 | 955,861 | 869,878 | 1,062,201 | 4,938,724 | (2,381,779 | ) | (40,695 | ) | (28,076 | ) | 5,544,017 | ||||||||||||||||||
Dividends
paid
|
(175,372 | ) | (175,372 | ) | ||||||||||||||||||||||||||
Comprehensive
income
|
905,087 | (189,961 | ) | 8,949 | 724,075 | |||||||||||||||||||||||||
Balances
as of December 31, 2007
|
167,903 | 955,861 | 869,878 | 1,062,201 | 5,668,439 | (2,571,740 | ) | (40,695 | ) | (19,127 | ) | 6,092,720 | ||||||||||||||||||
Dividends
paid
|
(170,000 | ) | (170,000 | ) | ||||||||||||||||||||||||||
Transfer
to accumulated earnings
|
(2,612,435 | ) | 2,571,740 | 40,695 | ||||||||||||||||||||||||||
Comprehensive
income
|
595,118 | 19,127 |
72,796
|
687,041 | ||||||||||||||||||||||||||
Balances
as of December 31, 2008
|
Ps. 167,903 | Ps. 955,861 | Ps. 869,878 | Ps. 1,062,201 | Ps. 3,481,122 | Ps. | Ps. | Ps. |
Ps.
72,796
|
Ps. 6,609,761 |
Grupo
Casa Saba, S.A.B. de C.V. and Subsidiaries
|
||||||||
for
the years ended December 31, 2006 and
2007
|
||||||||
(Amounts
stated in thousand Mexican pesos (Ps.) - Note
3t)
|
||||||||
and
thousand of U.S. dollars ($))
|
||||||||
2006
|
2007
|
|||||||
Operating
activities:
|
||||||||
Net
income
|
Ps. | 916,563 | Ps. | 905,087 | ||||
Add
(less) - Non cash items:
|
||||||||
Depreciation
and amortization
|
76,407 | 86,019 | ||||||
Loss
on sale of property and equipment
|
7,588 | 14,020 | ||||||
Provision
for retirement pensions, seniority premium and severance
benefits
|
20,721 | 19,859 | ||||||
Deferred
income tax
|
(67,277 | ) | (126,331 | ) | ||||
Deferred
employee profit sharing
|
1,030 | (3,684 | ) | |||||
955,032 | 894,970 | |||||||
Changes
in assets and liabilities
|
||||||||
(Increase) decrease in: | ||||||||
Accounts
receivable
|
(107,174 | ) | (195,862 | ) | ||||
Inventories
|
(287,415 | ) | (1,095,721 | ) | ||||
Prepaid
expenses
|
(2,701 | ) | (2,550 | ) | ||||
Trade
accounts payable
|
(215,488 | ) | 1,042,267 | |||||
Other
payables and accrued liabilities
|
(24,694 | ) | (148,042 | ) | ||||
Employee
profit sharing
|
1,442 | (2,143 | ) | |||||
(636,030 | ) | (402,051 | ) | |||||
Net
cash provided by operating activities
|
319,002 | 492,919 | ||||||
Investing
activities:
|
||||||||
Additions
of property and equipment,
|
||||||||
net
of retirements
|
120,148 | 162,707 | ||||||
Increase
in other assets
|
59,285 | 49,275 | ||||||
Reserve
for retirement pensions, seniority premium
and severance
benefits
|
2,476 | 16,548 | ||||||
Net
cash used in investing activities
|
181,909 | 228,530 | ||||||
Financing
activities:
|
||||||||
Dividends
paid
|
(160,320 | ) | (175,372 | ) | ||||
Bank
loans, net of payments made
|
17,044 | (17,044 | ) | |||||
Deferred
income tax
|
(125,533 | ) | (27,071 | ) | ||||
Deferred
employee profit sharing
|
(120 | ) | (147 | ) | ||||
Net
cash used in financing activities
|
(268,929 | ) | (219,634 | ) |
2006
|
2007
|
|||||||
Net
(decrease) increase in cash and
cash equivalents
|
(131,836 | ) | 44,755 | |||||
Cash
and cash equivalents at beginning
of year
|
771,393 | 639,557 | ||||||
Cash
and cash equivalents at end of
year
|
Ps. | 639,557 | Ps. | 684,312 | ||||
Supplementary
information:
|
||||||||
Income tax and asset tax
paid
|
Ps. | 415,508 | Ps. | 355,121 | ||||
Employee profit sharing
paid
|
Ps. | 2,246 | Ps. | 991 | ||||
Interest paid
|
Ps. | 2,773 | Ps. | 3,598 |
Grupo
Casa Saba, S.A.B. de C.V. and Subsidiaries
|
||||||||
for
the year ended December 31,
2008
|
||||||||
(Amounts
stated in thousand Mexican pesos (Ps.) - Note
3t)
|
||||||||
and
thousand of U.S. dollars
($))
|
||||||||
|
||||||||
2008
|
Convenience translation
2008 |
|||||||
OPERATING
ACTIVITIES:
|
||||||||
Income
before tax on earnings
|
Ps. | 897,567 | $ | 64,888 | ||||
Items
relating to investing activities:
|
||||||||
Depreciation
and amortization
|
90,004 | 6,507 | ||||||
Interest
earned
|
(11,817 | ) | (854 | ) | ||||
Loss
on sale of property and equipment
|
5,152 | 372 | ||||||
Items
related to financing activities :
|
||||||||
Interest
expense
|
190,303 | 13,758 | ||||||
Subtotal
|
1,171,209 | 84,671 | ||||||
Accounts
receivable
|
(1,043,300 | ) | (75,424 | ) | ||||
Inventories
|
(49,021 | ) | (3,544 | ) | ||||
Prepaid
expenses
|
(20,726 | ) | (1,498 | ) | ||||
Trade
accounts payable
|
476,075 | 34,417 | ||||||
Other
payables and accrued liabilities
|
(88,701 | ) | (6,413 | ) | ||||
Employee
profit sharing
|
5,851 | 423 | ||||||
Taxes
payable
|
(397,611 | ) | (28,745 | ) | ||||
Deferred
employee profit sharing
|
(197 | ) | (14 | ) | ||||
Other
payables and accrued liabilities
|
207,963 | 15,034 | ||||||
Net
cash flow provided by operating activities
|
261,542 | 18,907 | ||||||
INVESTING
ACTIVITIES:
|
||||||||
Property
and equipment
|
(237,603 | ) | (17,177 | ) | ||||
Other
assets
|
(35,122 | ) | (2,539 | ) | ||||
Acquisition
of business
|
(739,957 | ) | (53,494 | ) | ||||
Interest
earned
|
11,817 | 854 | ||||||
Net
cash used in investing activities
|
(1,000,865 | ) | (72,356 | ) | ||||
FINANCING
ACTIVITIES:
|
||||||||
Bank
loans
|
1,053,000 | 76,125 | ||||||
Retirement
pensions, seniority premium and severance
benifits
|
(41,002 | ) | (2,964 | ) | ||||
Interest
paid
|
(185,726 | ) | (13,427 | ) | ||||
Dividends
paid
|
(170,000 | ) | (12,290 | ) | ||||
Net
cash flow provided by financing activities
|
656,272 | 47,444 | ||||||
Decrease
in cash and equivalents
|
(83,051 | ) | (6,005 | ) | ||||
Cash
and equivalents at beginning of year
|
684,312 | 49,472 | ||||||
Cash
and equivalents at end of year
|
Ps. | 601,261 | $ | 43,467 |
Economic
Interest
|
|||||||||
(Direct
or indirect)
|
|||||||||
2007
|
2008
|
||||||||
Domestic
subsidiaries:
|
|||||||||
Direct
interest
|
|||||||||
Casa
Saba, S.A de C.V.
|
(Casa
Saba)
|
99.9%
|
99.9%
|
||||||
Distribuidora
Casa Saba, S.A. de C.V.
|
(Dicasa)
|
99.9%
|
99.9%
|
||||||
Publicaciones
Citem, S.A. de C.V.
|
(Citem)
|
99.9%
|
99.9%
|
||||||
Transportes
Marproa, S.A. de C.V.
|
(Marproa)
|
99.9%
|
99.9%
|
||||||
Farmacias
ABC de México, S.A. de C.V.
|
(Farmacias
ABC)
|
99.9%
|
|||||||
Controladora
de Clínicas Ambulatorias y de
|
(Controladora
de Clínicas)
|
50.005%
|
|||||||
Rehabilitación,
S.A. de C.V.
|
|||||||||
Other
real estate and service companies (21 subsidiaries)
|
99.9%
|
99.9%
|
|||||||
Indirect
interest
|
|||||||||
Centennial,
S.A. de C.V.
|
(Centennial)
|
99.9%
|
99.9%
|
||||||
Distribuidora
Drogueros, S.A. de C.V.
|
(Didrosa)
|
99.9%
|
99.9%
|
||||||
Daltem
Provee Norte, S.A. de C.V.
|
(Daltem
Norte)
|
99.9%
|
99.9%
|
||||||
Drogueros,
S.A. de C.V.
|
(Drogueros)
|
99.9%
|
99.9%
|
||||||
Farmacias
Solis Hospitalarias y Oncologicas, S.A.
de C.V.
(now
Farmacias Provee de Especialidades,
S.A. de C.V.)
|
(Farmacias
Provee)
|
99.9%
|
99.9%
|
||||||
Grupo
Mexatar, S.A. de C.V.
|
(Mexatar)
|
99.9%
|
99.9%
|
||||||
Servicios
Corporativos Drogueros, S.A. de C.V.
|
(Secodro)
|
99.9%
|
99.9%
|
||||||
Inmuebles
Visosil, S.A. de C.V.
|
(Visosil)
|
99.9%
|
99.9%
|
||||||
Servicios
Corporativos Saba, S.A. de C.V.
|
(Secosa))
|
99.9%
|
99.9%
|
||||||
Resonancia
Sports Clinic, S.A. de C.V.
|
50.001%
|
||||||||
Servicios
Corporativos Sports Clinic, S.A. de C.V.
|
50.001%
|
||||||||
Tampico
Sports Clinic Ambulatorias, S.A. de C.V.
|
50.001%
|
Economic
Interest
|
|||||||||
(Direct
or indirect)
|
|||||||||
2007
|
2008
|
||||||||
Indirect
interest
|
|||||||||
Other
service companies (4 subsidiaries)
|
99.9%
|
99.9%
|
|||||||
Foreign
subsidiaries:
|
|||||||||
Casa
Saba Brasil Holdings Ltda. (*)
|
(Casa
Saba Brasil)
|
100.0%
|
|||||||
Drogasmil
Medicamentos e Perfumeria, S.A.
(now
CSB Drogarias, S. A.) (*)
|
(Drogasmil)
|
100.0%
|
|||||||
Associates:
|
|||||||||
Lomas
Sports Clinic Ambulatorias, S.A. de C.V.
|
36.2%
|
||||||||
WTC
Sports Clinic Ambulatorias, S.A. de C.V.
|
47.0%
|
Unaudited
amount
|
|||||
Current
assets
|
Ps.
|
298,411 | |||
Fixed
assets
|
21,806 | ||||
Other
assets
|
25,139 | ||||
Goodwill
|
162,670 | ||||
Total
assets
|
Ps.
|
508,026 | |||
Total
liabilities
|
Ps.
|
521,044 | |||
Stockholders’s
equity
|
(13,018 | ) | |||
Total
liabilities and stockholders’s equity
|
Ps.
|
508,026 |
December 31,
|
|||||||||||
2007
|
2008
|
||||||||||
Labor liability | |||||||||||
Accumulated
benefit obligation
|
Ps.
|
171,762 |
Ps.
|
158,300 | |||||||
Additional
benefit related to future
|
|||||||||||
compensation
increases
|
38,690 | 55,002 | |||||||||
Projected/defined
benefit obligation
|
210,452 | 213,302 | |||||||||
Fair
value of plan assets
|
90,240 | 79,163 | |||||||||
Funded
status
|
120,212 | 134,139 | |||||||||
Unrecognized
net transition obligation
|
(36,636 | ) | (28,468 | ) | |||||||
Negative
plan amendments
|
9,922 | 8,903 | |||||||||
Unrecognized
net loss
|
(42,634 | ) | (52,446 | ) | |||||||
Unfunded
accrued pension cost, seniority
premium
and
severance benefits to be recognized
|
50,864 | 62,128 | |||||||||
Additional
employee retirement liability
|
52,266 | ||||||||||
Net
present liability
|
Ps.
|
103,130 |
Ps.
|
62,128 | |||||||
Net
periodic cost
|
|||||||||||
Service
cost
|
Ps.
|
8,292 |
Ps.
|
11,051 | |||||||
Interest
cost
|
9,968 | 17,279 | |||||||||
Expected
return on plan assets
|
(4,996 | ) | (9,491 | ) | |||||||
Amortization
of unrecognized net transition obligation
|
5,027 | 8,168 | |||||||||
Amortization
of plan amendments
|
(880 | ) | (473 | ) | |||||||
Amortization
of unrecognized net loss
|
1,777 | ||||||||||
Other
|
671 | 6,643 | |||||||||
Net
periodic cost
|
Ps.
|
19,859 |
Ps.
|
33,177 | |||||||
Assumptions
(real rates)
|
|||||||||||
Discount
rate
|
5.0%
|
5.0%
|
|||||||||
Salary
increase rate
|
0.5%
|
0.5%
|
|||||||||
Return
on plan assets
|
6.0%
|
6.0%
|
December
31,
|
|||||||||||
2007
|
2008
|
||||||||||
Change
in projected benefit obligation
|
|||||||||||
Actual
projected benefit obligation at
|
|||||||||||
beginning
of year
|
Ps.
|
193,221 |
Ps.
|
210,452 | |||||||
Service
cost
|
8,583 | 11,193 | |||||||||
Interest
cost
|
10,316 | 17,302 | |||||||||
Plan
amendments
|
4,254 | 776 | |||||||||
Actuarial
loss
|
25,736 | (6,507 | ) | ||||||||
Benefits
paid
|
(15,037 | ) | (19,877 | ) | |||||||
Effect
on curtailment on benefit obligation
|
(3,311 | ) | (136 | ) | |||||||
Effect
on settlement on benefit obligation
|
(13,310 | ) | 97 | ||||||||
Projected
benefit obligation at end of year
|
Ps.
|
210,452 |
Ps.
|
213,300 | |||||||
Change
in plan assets
|
|||||||||||
Fair
value of plan assets at beginning of year
|
Ps.
|
89,011 |
Ps.
|
90,240 | |||||||
Actual
return on plan assets
|
25,998 | 2,393 | |||||||||
Employer
contributions
|
403 | ||||||||||
Benefits
paid
|
(13,044 | ) | (13,470 | ) | |||||||
Benefits
paid as result of settlement effect
|
(12,128 | ) | |||||||||
Fair
value of plan assets at end of year
|
Ps.
|
90,240 |
Ps.
|
79,163 | |||||||
Funded
status
|
Ps.
|
120,212 |
Ps.
|
134,138 | |||||||
Unrecognized
net transition obligation
|
(36,636 | ) | (23,559 | ) | |||||||
Negative
amendments (unrecognized prior service cost)
|
9,922 | 10,270 | |||||||||
Unrecognized
net loss
|
(42,632 | ) | (54,232 | ) | |||||||
Unrecognized
amortization
|
(4,601 | ) | |||||||||
Unfunded
accrued pension cost, seniority premium
and
severance benefits to be recognized
|
Ps.
|
50,866 |
Ps.
|
62,016 | |||||||
Amounts
recognized in the statement of
financial
position consist of:
|
|||||||||||
Unfunded
accrued pension cost, seniority premium
and
severance benefits to be recognized
|
Ps.
|
50,866 |
Ps.
|
62,016 | |||||||
Accrued
benefit liability
|
Ps.
|
52,266 |
Ps.
|
34,224 | |||||||
Intangible
asset
|
(33,139 | ) | (11,721 | ) | |||||||
Accumulated
other comprehensive income
|
(19,127 | ) | (22,503 | ) | |||||||
Net
amount recognized
|
Ps.
|
50,866 |
Ps.
|
62,016 |
Inflation
|
||
December
31
|
Annual
|
Accumulated
|
2008
|
6.5%
|
18.1%
|
2007
|
3.7%
|
11.6%
|
2006
|
4.1%
|
7.6%
|
2005
|
3.3%
|
3.3%
|
●
|
the
additional employee retirement liability, which amounted to Ps. 52,266 as
of December 31, 2007 and its offsetting entry in the balance sheet
(“intangible asset” in the
amount of Ps. 33,139 and “additional employee retirement liability” included in
stockholders’ equity in the amount of Ps. 19,127), were
eliminated.
|
●
|
the
unrecognized net transition obligation existing at December 31, 2007 can
be amortized in five years if the remaining useful years of service of
employees exceeds that period.
|
●
|
the
opening transition asset or obligation is not recognized, unless a new
defined fringe benefit plan is established. During 2008, the Companies did
not establish any new plan for such
item.
|
●
|
actuarial
gains or losses and prior services of benefits upon termination due to
causes other than restructuring are recognized in
income.
|
●
|
the
expense for employee profit sharing is recognized in the caption of “other
income and expenses”. Deferred employee profit sharing is determined by
applying the asset and liability method. The effect of the change in
methodology is recorded in retained
earnings.
|
2007
|
2008
|
||||||||||
Trade
receivables
|
Ps.
|
4,869,385 |
Ps.
|
5,628,079 | |||||||
Allowance
for doubtful accounts
|
(330,861 | ) | (405,999 | ) | |||||||
4,538,524 | 5,222,080 | ||||||||||
Other
receivables
|
149,142 | 374,012 | |||||||||
Related
parties
|
4,413 | 39,091 | |||||||||
Value
added tax recoverable
|
98,923 | 74,833 | |||||||||
Income
tax recoverable
|
3,779 | 138,278 | |||||||||
Other
taxes recoverable
|
1,486 | 72,020 | |||||||||
Ps.
|
4,796,267 |
Ps.
|
5,920,314 |
2007
|
2008
|
||||||||||
Pharmaceutical
products
|
Ps.
|
3,449,272 |
Ps.
|
3,935,784 | |||||||
Beauty
care products
|
524,624 | 577,122 | |||||||||
Books
and magazines
|
272,383 | 565,484 | |||||||||
Electric
appliances
|
3,207 | 3,230 | |||||||||
Groceries
|
96,317 | 33,996 | |||||||||
Other
|
13,942 | 17,425 | |||||||||
4,359,745 | 5,133,041 | ||||||||||
Estimate
for slow-moving inventory
|
(6,517 | ) | (6,517 | ) | |||||||
4,353,228 | 5,126,524 | ||||||||||
Merchandise-in-transit
|
519,484 | 41,177 | |||||||||
Ps.
|
4,872,712 |
Ps.
|
5,167,701 |
2007
|
2008
|
||||||||||||||||||||||
Total
|
Original
cost
|
Restatement
|
Total
|
||||||||||||||||||||
Buildings
|
Ps.
|
953,745 |
Ps.
|
335,879 |
Ps.
|
662,431 |
Ps.
|
998,310 | |||||||||||||||
Machinery
and equipment
|
142,359 | 121,314 | 63,553 | 184,867 | |||||||||||||||||||
Transportation
equipment
|
278,403 | 284,691 | 86,294 | 370,985 | |||||||||||||||||||
Office
equipment
|
182,030 | 106,053 | 117,220 | 223,273 | |||||||||||||||||||
Computer
equipment
|
376,025 | 243,562 | 181,828 | 425,390 | |||||||||||||||||||
1,932,562 | 1,091,499 | 1,111,326 | 2,202,825 | ||||||||||||||||||||
Less-accumulated
depreciation
|
(1,049,503 | ) | (448,778 | ) | (704,062 | ) | (1,152,840 | ) | |||||||||||||||
883,059 | 642,721 | 407,264 | 1,049,985 | ||||||||||||||||||||
Land
|
352,917 | 67,178 | 287,822 | 355,000 | |||||||||||||||||||
Construction-in-progress
|
33,845 | ||||||||||||||||||||||
Ps.
|
1,269,821 |
Ps.
|
709,899 |
Ps.
|
695,086 |
Ps.
|
1,404,985 |
Buildings
and improvements
|
2.10 | % | ||
Machinery
and equipment
|
6.09 | % | ||
Transportation
equipment
|
10.15 | % | ||
Furniture
and fixtures
|
6.50 | % | ||
Computer
equipment
|
11.15 | % |
2007
|
2008
|
||||||||||
Aeroxtra,
S.A. de C.V.
|
Ps.
|
2,000 |
Ps.
|
2,000 | |||||||
Xtra
Inmuebles, S.A. de C.V.
|
2,214 | 30 | |||||||||
Tenedora
Farmaceutica de Mexico, S.A. de C.V.
|
9,590 | ||||||||||
Tenedora
de Farmacias Morelianas, S.A. de C.V.
|
20,582 | ||||||||||
Grupo
Xtra, S.A. de C.V.
|
199 | 6,668 | |||||||||
Administradora
Inmas, S.A. de C.V.
|
221 | ||||||||||
Ps.
|
4,413 |
Ps.
|
39,091 |
Received
services
|
Interest
cost
|
|||||||||||
Aeroxtra,
S.A. de C.V.
|
Ps.
|
10,556 |
Ps.
|
|||||||||
Xtra
Inmuebles
|
4,792 | 162 | ||||||||||
Total
|
Ps. | 15,348 | Ps. | 162 |
Services
received
|
Interest
cost
|
Financing
granted
|
|||||||||||||||
Aeroxtra,
S.A. de C.V.
|
Ps.
|
9,874 |
Ps.
|
192 |
Ps.
|
||||||||||||
Xtra
Inmuebles, S.A. de C.V.
|
4,703 | ||||||||||||||||
Tenedora
Farmacéutica de México
|
9,590 | ||||||||||||||||
Tenedora
de Farmacias Morelianas
|
20,582 | ||||||||||||||||
Administradora
Inmas, S.A. de C.V.
|
549 | ||||||||||||||||
Total
|
Ps.
|
15,126 |
Ps.
|
192 |
Ps.
|
30,172 |
Short-term
|
Long-term
|
|||
Scotiabank
Inverlat, S.A.
|
||||
Credit
agreement used to finance the acquisition of stock issued and outstanding
representing the capital stock of the company referred to in Note 1e)
above. Under the terms of the agreement, the Company is only required to
make monthly interest-only payments at the variable Equilibrium Interbank
Interest Rate (EIIR) plus certain percentage points. The credit facility
is not due until May 2015, at which point the principal balance is due in
full.
|
Ps.
|
Ps. 1,053,000
|
Borrowings
2008
|
Long-term
|
|
May
|
Ps.
|
670,000
|
August
|
136,000
|
|
September
|
107,000
|
|
November
|
140,000
|
|
Ps.
|
1,053,000
|
The
agreement sets forth affirmative and negative covenants, in effect during
the term of the credit facility,
which
the Company and its subsidiaries are in compliance with at December 31,
2008.
|
Short-term
|
Long-term
|
||
Other
foreign financing institutions
|
|||
Casa Saba Brasil obtained various unsecured loans in various amounts. The proceeds from these loans were used for working capital. These loans bore variable interest at prevailing market rates. The borrowings were as follows: |
267,245
|
Banking
Institution
(R$)
|
Opening | Due date | Amount in Brazilian reals | |
Banco
Real S/A
|
Dec-08
|
Dec-09
|
2,250
|
|
Banco
Brasileiro de DescontoS/A
|
Nov-08
|
Nov-09
|
926
|
|
Banco
Brasileiro de Desconto S/A
|
Dec-08
|
Feb-09
|
1,342
|
|
Banco
Safra S/A
|
Dec-08
|
Feb-09
|
8,018
|
Banking
Institution
(R$)
|
Opening | Due date | Amount in Brazilian reals | |
União
de Bancos Brasileiros S/A
|
4,224
|
|||
Banco
Brasileiro de Desconto S/A
|
Dec-08
|
Feb-09
|
1,490
|
|
Banco
Brasileiro de Desconto S/A
|
Dec-08
|
Feb-09
|
3
|
|
União
de Bancos Brasileiros S/A
|
Dec-08
|
Mar-09
|
2,026
|
|
Banco
Real S/A
|
Sep-08
|
Mar-09
|
4,053
|
|
Banco
Itaú S/A
|
Dec-08
|
Mar-09
|
9,496
|
|
Banco
Citibank S/A
|
Dec-08
|
Mar-09
|
629
|
|
Banco
Citibank S/A
|
Jun-08
|
May-09
|
5,094
|
|
Banco
Brasileiro de Desconto S/A
|
Dec-08
|
Mar-09
|
5,071
|
|
Banco
Safra S/A
|
Dec-08
|
Feb-09
|
790
|
|
Brazilian
reals
|
45,412
|
|||
Equivalent
Mexican pesos
|
Ps. 267,245
|
Interest
payable
|
4,579
|
||
Total |
Ps. 271,824
|
Ps. 1,053,000 |
Banking
institution
|
Amount
|
||||
Banco
Nacional de Mexico, S.A.
|
Ps.
|
300,000 | |||
Banco
Santander Mexicano, S.A.
|
380,000 | ||||
Scotiabank
Inverlat, S.A.
|
50,000 | ||||
Ps.
|
730,000 |
2007
|
2008 | |||||||||||||
Cumulative
inventory
|
Ps.
|
2,072,978 |
Ps.
|
1,576,131 | ||||||||||
Allowance
for doubtful accounts and estimate for slow-moving
inventory
|
(319,127 | ) | (394,808 | ) | ||||||||||
Property
and equipment
|
435,622 | 493,291 | ||||||||||||
Other
|
251,531 | 290,384 | ||||||||||||
Subtotal
|
2,441,004 | 1,964,998 | ||||||||||||
Tax
loss carryforwards
|
(14,525 | ) | (8,558 | ) | ||||||||||
Controlled
subsidiaries’s tax loss carryforward
generated
before the consolidation tax
|
(305,588 | ) | (175,415 | ) | ||||||||||
2,120,891 | 1,781,025 | |||||||||||||
Income
tax rate
|
28 | % | 28 | % | ||||||||||
Deferred
income tax liability
|
Ps.
|
593,849 |
Ps.
|
498,687 |
2006
|
2007
|
2008
|
||||||||||
Income
before taxes on earnings
|
Ps.
|
1,155,095 |
Ps.
|
1,093,313
|
Ps.
|
897,567 | ||||||
Temporary
and permanent items, net
|
110,608 | 226,608 | 250,858 | |||||||||
1,265,703 | 1,319,921 | 1,148,425 | ||||||||||
Income
tax rate
|
29%
|
28% |
28%
|
|||||||||
Income
tax due
|
Ps.
|
367,054 |
Ps.
|
Ps. 369,578
|
Ps.
|
321,559 |
2006
|
2007
|
2008
|
||||||||||
Income
tax due
|
Ps.
|
367,054 |
Ps.
|
369,578 |
Ps.
|
321,559 | ||||||
Deferred
income tax
|
(67,277 | ) | (126,331 | ) | (95,162 | ) | ||||||
IETU
due
|
76,052 | |||||||||||
Asset
tax
|
1,677 | |||||||||||
Recovery
of asset tax paid in prior years
|
(61,245 | ) | (56,698 | ) | ||||||||
Ps.
|
238,532 |
Ps.
|
188,226 |
Ps.
|
302,449 | |||||||
Effective
income tax rate
|
26% |
|
22% | 25% |
2007
|
2008
|
|||||
Assets:
|
||||||
Current
assets
|
Ps. | 32,680 | Ps. | 458,399 | ||
Long-term
assets
|
1,155,276 | |||||
32,680 | 1,613,675 | |||||
Liabilities:
|
||||||
Current
liabilities
|
42,221 | 540,951 | ||||
Long-term
liabilities
|
119,858 | |||||
42,221 | 660,809 | |||||
(Borrowing)
lending position, net
|
Ps. | (9,541 | ) | Ps. | 952,866 |
Currency
|
2007
|
2008
|
||||
Closing
|
Issue
|
Closing
|
Issue
|
|||
U.S.
dollar
|
Ps.
10.90
|
Ps.10.48
|
Ps. 13.77
|
Ps. 13.14
|
||
Brazilian
real
|
Ps. 5.88
|
Ps. 6.12
|
Number
of
|
Par
value
|
||||||||||||
shares
|
2007
|
2008
|
|||||||||||
Fixed
capital shares without retirement rights
|
265,149,080 | Ps. |
167,730
|
Ps. |
167,730
|
||||||||
Variable
capital shares
|
270,280 | 173 | 173 | ||||||||||
Historical
capital stock
|
265,419,360 | Ps. |
167,903
|
Ps. |
167,903
|
||||||||
Restated
capital stock
|
Ps. |
1,123,764
|
Ps. |
1,123,764
|
Millions
of Mexican pesos
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Pharmaceutical
products
|
Ps. | 21,352 | Ps. | 22,050 | Ps. | 24,313 | ||||||
Health
and beauty aids/other products
|
1,995 | 2,119 | 3,120 | |||||||||
Entertainment
products
|
904 | 929 | 749 | |||||||||
Food/non-perishable
products
|
235 | 162 | 218 | |||||||||
Total
|
Ps. | 24,486 | Ps. | 25,260 | Ps. | 28,400 |
CONSTANT
MEXICAN PESOS
|
||||||||||||||||
MEXICAN
GAAP
|
U.S.
GAAP
|
|||||||||||||||
2007
|
2008
|
2007
|
2008
|
|||||||||||||
Current
|
Ps. | Ps. | Ps. | (22,994 | ) | Ps. | (22,317 | ) | ||||||||
Noncurrent
|
593,849 | 498,687 | 616,843 | 521,004 | ||||||||||||
Ps. | 593,849 | Ps. | 498,687 | Ps. | 593,849 | Ps. | 498,687 |
Thousands
of Mexican pesos (Ps.) and thousands of U.S. dollars
($),except per share |
||||||||||||||||
Convenience | ||||||||||||||||
Year
|
translation
|
|||||||||||||||
2006
|
2007
|
2008
|
2008
|
|||||||||||||
Net
income under Mexican
FRS
|
Ps. | 916,563 | Ps. | 905,087 | Ps. | 595,118 | $ | 43,023 | ||||||||
Additional
employee retirement liability (Note 3m)
|
30,563 | (12,060 | ) | 2,200 | 159 | |||||||||||
|
||||||||||||||||
Unrecognized
net transition obligation (Note 3m)
|
4,428 | (2,863 | ) | 743 | 54 | |||||||||||
34,991
|
(14,923 | ) | 2,943 | 213 | ||||||||||||
Net
income under U.S. GAAP
|
Ps. | 951,554 | Ps. | 890,164 | Ps. | 598,061 | $ | 43,236 | ||||||||
Weighted
average common shares outstanding (thousands)
|
265,419 | 265,419 | 265,419 | |||||||||||||
Basic
and diluted earnings per share under U.S. GAAP
|
Ps. | 3.59 | Ps. | 3.35 | Ps. | 2.25 |
STOCKHOLDERS’
EQUITY
|
Convenience
translation
|
|||||||||||||||
2006
|
2007
|
2008
|
2008
|
|||||||||||||
Stockholders’
equity under Mexican FRS
|
Ps. | 5,544,017 | Ps. | 6,092,720 | Ps. | 6,609,761 | $ | 477,843 | ||||||||
Additional
employee retirement liability
|
(25,348 | ) | (47,644 | ) | (3,445 | ) | ||||||||||
Unrecognized
net transition obligation
|
(2,863 | ) | (2,120 | ) | (153 | ) | ||||||||||
Amortization
of goodwill
|
26,928 | 26,928 | 26,928 | 1,947 | ||||||||||||
26,928 | (1,283 | ) | (22,836 | ) | (1,651 | ) | ||||||||||
Stockholders’
equity under U.S. GAAP
|
Ps. | 5,570,945 | Ps. | 6,091,437 | Ps. | 6,586,925 | $ | 476,192 | ||||||||
Changes
in stockholders’ equity under U.S. GAAP
|
Convenience
translation
|
|||||||||||||||
2006
|
2007
|
2008
|
2008
|
|||||||||||||
Stockholders’
equity under U.S. GAAP as of beginning of the year
|
Ps. | 4,973,731 | Ps. | 5,570,945 | Ps. | 6,091,437 | $ | 440,371 | ||||||||
Comprehensive
income under U.S. GAAP
|
757,534 | 695,864 | 665,488 | 48,111 | ||||||||||||
Dividends
paid
|
(160,320 | ) | (175,372 | ) | (170,000 | ) | (12,290 | ) | ||||||||
Stockholders’
equity under U.S. GAAP at year end
|
Ps. | 5,570,945 | Ps. | 6,091,437 | Ps. | 6,586,925 | $ | 476,192 | ||||||||
Comprehensive
income under U.S. GAAP
|
Convenience
translation
|
|||||||||||||||
2006
|
2007
|
2008
|
2008
|
|||||||||||||
Net
income under U.S. GAAP
|
Ps. | 951,554 | Ps. | 890,164 | Ps. | 598,061 | $ | 43,236 | ||||||||
Deficit
on restatement
|
(196,507 | ) | (189,961 | ) | ||||||||||||
Additional
employee retirement liability
|
2,487 | (4,339 | ) | (5,369 | ) | (388 | ) | |||||||||
Accumulated
effect on translation
|
72,796 | 5,263 | ||||||||||||||
Comprehensive
income under U.S. GAAP
|
Ps. | 757,534 | Ps. | 695,864 | Ps. | 665,488 | $ | 48,111 |