TR Paper Products Inc. ERCA Ref No.

948-0051-2024 February 15, 2024 Page 1 of 19

EVALUATION ANDWITH
NO DEALINGS RECOMMENDATION
SUBSIDIARIES/AFFILIATES
FOR CREDIT
ACCOMMODATION
1 year from
NEW EXPIRY
ERCA REF NO. 948-0051-2024 month-end of
DATE:
948 – CBD-Makati III approval date
BRANCH/OFFICE CREDIT APPLICATION TYPE: New
Philippines KYC Rating: Normal B NEXT REVIEW 1 year from
DATE: month-end of
approval date
COUNTRY OF RISK ORIGINAL
EXPIRY DATE: New

DATE PREPARED: _February 15, 2024_

BORROWER’S NAME: GROUP NAME: N/A

TR PAPER PRODUCTS INC. BORROWER SINCE: DEPOSITOR SINCE: YEARS IN BUSINESS:
New2016 New2016 52
ADDRESS: AGRI/AGRA: FIRM SIZE:
STERLING INDUSTRIAL PARK, IBA No 05_Large-Scale Industries (Assets range from
MEYCAUAYAN, BULACAN, BULACAN 100,000,001 and above)
NATURE OF BUSINESS: 046425 Wholesale of ECONOMIC ACTIVITY E_000700 Wholesale and Retail Trade; Repair of
paper and paper products CODE: Motor Vehicles, Motorcycles and Personal and
Household Goods Services
PRINCIPAL OFFICERS: DOSRI TYPE: N/A RPT: No
Tiong Rosario : President/Chairman PREVIOUS CURRENT PROPOSED
Nony Rosario : Treasurer APPROVED
Ronnie Navea : Corporate Secretary RISK RATING 4 N/A 4
ACCOUN STRATEGY Maintain N/A Maintain
Source: GIS as of July 31, 2023 CLASSIFICATION Pass
LOAN PURPOSE:
 WCL: To finance gapping of receivables
 LCTR: For importation of inventories
 DBPL: For liquidity purposes
 PSRL: To hedge the company’s FX position

I. PROPOSAL(S)
ITEM FACILITY DESCRIPTION AND TERMS OF FACILITY EXISTING O/S BALANCE PROPOSED
NO. TYPE (P 000) (P 000) (P 000)
1 OL Reestablishment of Omnibus Line for P120MM. -0- -0- 120,000

1.1 LCTRL DESCRIPTION: Letter of Credit and Trust Receipt Line (no sublimit) -0- -0- (120,000)

TERMS:
 For Domestic/Foreign Sight/Usance/Cash LC/Non-LC
(DP/DA/DR/OA/AP);
 Commission of 1/16 of 1% for the 1 st 60 days and for every month
thereafter.
 Interest rate based on prevailing FTP benchmark rate plus 1.00% spread
grossed up for 5% GRT (for PHP TR's) or 10% on-shore tax (for USD
TR's).
 Interest to be re-priced every 1M/3M/6M & collected every month in
arrears;
 PHP TR Tenor: Max of 180 days, inclusive of usance period; ;
 USD TR Tenor: Max of 30 days but still allow max.1580-day PHP TR
booking after reclassification / redenomination, inclusive of usance period;
LC extension allowed; SG (SSB/AWB) allowed for delayed documents;
MD exempt;
 Allow Non-LC booking to TR; Allow release of orig docs prior to TR
booking subject to submission of signed TR & draft;
 Reclassification/redenomination of USD TR to PHP TR on or before the
30th day from booking date allowed.
 Allow acceptance of The Mercantile Insurance Co., Inc. / Allied Bankers
Insurance Corporation or issued by 3rd party FIP/MIP. If not, any of the top
10 non-life insurance companies based on assets or net worth.
 Allow 30-day leeway on submission of marine insurance policy & cover
note/O.R. From LC opening date, provided with insurance coverage letter. .
 Allow use of previous day's rate for the computation of charges for LC
Opening and TR Booking transactions.
 Any interest rate and fee deviation subject to Combank approving
guidelines.
Allow acceptance of scanned copy of AMT and APFx with one signatory for
TR Paper Products Inc. ERCA Ref No. 948-0051-2024 February 15, 2024 Page 2 of 19

non-LC transactions. Original and completely signed copy of these documents

will be submitted 5 days after the transaction.
1.2 WCL DESCRIPTION: Working Capital Line (no sublimit) -0- -0- (120,000)

TERMS: Available via Peso PN with tenor from 1-180 days. Interest rate based
on 1M/3M/6M FTP + 1.00% spread grossed up for GRT. Interest reviewable and
payable every 30 days in arrears. Any interest deviation will be subject to
existing ComBank approving guidelines. Allow full term
booking/renewal/extensions beyond line expiry provided availment is made
within the validity period of the line.

2 DBPL DESCRIPTION: ReeEstablishment of Domestic Bills Purchased Line for -0- -0- 20,000
P20MM

TERMS:
 For local and regional clearing checks
 Allow BP of own checks provided checks are confirmed
 Allow interbranch BP at any branch, waive inter-branch charges
 BP charges waived except for returned checks.
 Prevailing lending rate to be collected for returned checks only.
3 CORP DESCRIPTION: ReeEstablishment of Corporate Fleet Facility in the -0- -0- 15,000
FLEET amount of P15MM

TERMS:
 Per Policy (Approved under IOL dtd Sept 5, 2023 re: Amendments to
Metrobank Car Loan Policies and EXCOM approved IOL dtd. Sept. 5,
2023 on Car Fleet Financing Guideline).
4 PSRL DESCRIPTION: ReeEstablishment of Pre-settlement risk line -0- -0- 2010,000

TERMS:
• via short-term contracts not exceeding 180 days;
• Exceeding of availment against the line shall be based on the outstanding
contract’s face value and its corresponding pre-settlement risk (PSR) factor
depending on the tenor, per bank policy.
II. EXISTING FACILITITES OF THIS BORROWER
ITEM FACILITY DESCRIPTION EXISTING O/S BALANCE PROPOSED
NO. TYPE (P 000) (P 000) (P 000)
TOTAL THIS BORROWER -0- -0- 1675,000
SUMMARY OF TOTALS
A. TOTAL RELATED ACCOUNTS -0- -0- -0-
B. TOTAL BORROWER AND RELATED ACCOUNTS (I, II & III) -0- -0- 1675,000
C. TOTAL SUBSIDIARIES/AFFILIATES -0- -0- -0-
D. GRAND TOTAL - MBTC GROUP (B + C) -0- -0- 1675,000
E. TOTAL RISK (includes new/additional proposals for related accounts) 1675,000

ACTION OF APPROVING AUTHORITY APPROVAL CONDITIONS

COMMITTEE MEMBER COMMENTS

NAME COMMENTS DATE

IV. PURPOSE AND SOURCE OF REPAYMENT

DETAILS OF FINANCING REQUIREMENTS
WCL: To finance gapping of receivables
LCTR: For importation of inventories
DBPL: For liquidity purposes
PSRL: To hedge the company’s FX position

Computed WCR based on 2022 AFS

Computed WCR: P179MM
Available bank lines: P472MM
Utilization: P138MM CIR dated (LCTRL only)
Based on WCR:77%
Based on total bank lines: 2289%

Trading Assets vs. Trading Liabilities

Trading Assets
AR – P52MM
Inv – P314MM
Total – P366MM

Trading Liabilities
AP – P163MM
TR Paper Products Inc. ERCA Ref No. 948-0051-2024 February 15, 2024 Page 3 of 19

Bank Debt –P172MM per AFS 2022

Total – P335MM

I. Computed WCR based on Recasted FS 2023

AR Days 100
Inventory Days 90
Days Payable 30
CCC 160

COGS P532MM
WCR [CCC/COGS) *365] P233MM

Computed WCR: P200MM

Available bank lines: P472MM
Utilization: P158MM based on CIR dated 2/3/2024 (LCTRL only)
Based on WCR: 68.81%
Based on total bank lines: 22.89%

II. Projected WCR (based on revenue growth of 5%)

In Php 20243
AR Days 10031
Inventory Days 90201
Days Payable 30104
CCC 128160
P
577,188,579559M
COGS M
P245MM204,635,6
WCR [CCC/COGS) *365] 38

Computed WCR: P200MM

Available bank lines: P472MM
Utilization: P158MM based on CIR dated 2/3/2024 (LCTRL only)
Based on WCR: 64.49%
Based on total bank lines: 22.89%

SOURCE OF REPAYMENTS
Primary: Cashflow from operations. Based on recasted FS 2023, revenue climbed to P634.27MM from P604.07MM in 2022 due to improved
demand along with net income of P61.68MM from P59.06MM. The current ratio remained acceptable at 1.95x from 1.69x in 2022. Furthermore, the
debt-to-equity ratio decreased to 0.83x compared to 1.08x in 2022. Additionally, the DSCR stood 11.38x in 2023 from 11.46x in 2022. EBITDA
increased to P70.82MM in 2023 from P67.95MM in 2022. In 2024, revenues to grow conservatively by 5%, reaching P665MM in 2024 due to
sustained demand stemming from the nationwide return to face-to-face classes. EBITDA is projected to reach P73.83MM in 2024.

Secondary: Continuing Surety Agreement of Sps. Tiong and Nony Rosario for P160MM. According to the client's disclosure, the Rosario couple
possesses a house and lot in Corinthians, Quezon City and two condominium units in Ortigas City. Additionally, they own four Toyota vehicles. The
credit standings of TR Paper Inc. (majority owned by the Rosario couple) and relevant parties, including their children, are deemed satisfactory.
Moreover, the company's credit dealings with BDO, SB, and EWB are reported as satisfactory in the latest Loandex report. Furthermore, inquiries
conducted by the CPD-ASD-IBS Review Team from Lexis Nexis and IDBS on January 31, 2024, found no matching records on TR Paper, Sps.
Rosario and their children.Primary:
Secondary: Continuing Surety Agreement of Sps. Tiong and Nony Rosario for P160MM. According to the client's disclosure, the Rosario couple
possesses a house and lot in Corinthians, Quezon City, multiple parcels of land in Laguna and Batangas City, and t condominium units in Ortigas City.
Additionally, they own four Toyota vehicles. The credit standings of TR Paper Inc. (majority owned by the Rosario couple) and relevant parties,
including their children, are deemed satisfactory. Moreover, the company's credit dealings with BDO, SB, and EWB are reported as satisfactory in the
latest Loandex report. Furthermore, inquiries conducted by the CPD-ASD-IBS Review Team from Lexis Nexis and IDBS on January 31, 2024, found
no matching records between the borrower and relevant parties.
CHANGES IN TERMS AND CONDITIONS FROM PRIOR APPROVAL
N/A
POLICY DEVIATIONS FOR APPROVAL
For Approval:
 Waiver on the submission of SALN and ITS of the surety.ureties
JUSTIFICATION FOR POLICY DEVIATIONS
In lieu of SALN, the surety has to submit an ITR.For Approval
 TR Paper Products Inc. is a remarketed account. Since 2016, the client has had approved credit facilities amounting to P1 65MM with MBTC. TR
Paper has demonstrated prudence in settling of its TR with MBTC during that time. However, it was not renewed due to non-utilization and
nonsubmission of renewal documents to Combank.

DOCUMENTATION DEVIATIONS FOR APPROVAL

N/A
JUSTIFICATION FOR DOCUMENTATION DEVIATIONS

OUTSTANDING DOCUMENTARY DEFICIENCIES

N/A
TR Paper Products Inc. ERCA Ref No. 948-0051-2024 February 15, 2024 Page 4 of 19

RM RECOMMENDATIONS
Recommending the reestablishment of the credit facilities in favor of TR Paper Products Inc. with proposed risk rating of 4M, based on the following
merits:

1. Financially sound condition. Based on recasted FS 2023, revenue climbed to P634.27MM from P604.07MM in 2022 due to improved
demand along with net income of P61.68MM from P59.06MM. The current ratio remained acceptable at 1.61x from 1.43x in 2022.
Furthermore, the debt-to-equity ratio decreased to 0.66x compared to 0.85x in 2021 Additionally, the DSCR stood 11.38x in 2023 from
11.46x in 2022. EBITDA increased to P70.82MM in 2023 from P67.95MM in 2022. In 2024, revenues to grow conservatively by 5%,
reaching P665MM in 2024 due to sustained demand stemming from the nationwide return to face-to-face classes. EBITDA is projected to
reach P73.83MM in 2024.
2. Profitable operations.
3.
Recasted FS Projected Year
Php 2021 2022 2023 2024
Revenue 552,917,182 604,069,680 634,273,164 665,986,822
Net Income 36,225,242 37,912,808 39,480,921 40,926,856
EBITDA 43,325,795 46,806,396 48,618,605 50,521,424
Debt Service Cover Ratio (x) 9.50 7.90 7.81 7.73

On recasted FS, revenues were retained from AFS (2021 & 2022). Moreover, FS, % of COGS, NIM and OPEX relative to sales were
benchmarked with other Combank borrowers engaged in paper converter industry. The cost of goods sold (COGS) in the recasted
financial statement is verified at 97.04% against the BIS report from DTI for 2022, with BIS reporting P492.56MM compared to the
recasted COGS of P507.42MM. Similarly, in the recasted financial statements for 2023, the COGS is validated at 94.66% against the
BIS report from DTI, with BIS reporting P504.35MM compared to the recasted COGS of P532.79MM.

Here's a benchmark table showing financial metrics with those of other Combank’s paper converter borrowers.

CBD CBD CBD CBD CBD CBD Average

Lending Center Makati III Makati I Greenhills Makati IV Caloocan II Binondo III percentage
TR Paper Triplex excluding
Products Purity Datrima Enterprises Star Paper Van Hawk TR Paper
Borrower Inc. Paper Packaging Inc. Corporation Paper
Recasted AFS Reconstructed AFS Inhouse FS Recasted
Source FS 2023 2022 2023 2022 2022 FS 2022
Revenues P604MM P968MM P2.4Bn P1.62Bn P1.42Bn P900MM
COGS 85% 88% 80% 75% 78% 90% 82.14%
GPM 15% 12% 20% 25% 12% 10% 15.86%
OPM 6.00% 3.14% 10% to 15% 17% 11% 6% to 7% 9.48%
NIM 7.90% 1.60% 5-6% 9.61% 7.78% 4.20% 5.80%
AR days 100 9 150 120 150 70 100
Inventory days 90 307 90 240 180 255 214
Days Payable 30 14 75 38 15 0 28
CCC 160 302 165 322 315 325 286
Assets P499.85MM P797MM P1.48Bn P2.72Bn P1.48Bn P562MM
D/E (x) 0.83 3.32 0.26 1.31 0.03 1.09

The recasted FS was supported by benchmarks with other Combank borrowers engaged in paper converter industry

Financially Sound Position. Operations were profitable with topline increased to P604 million in 2022 from P552 million in 2021, while
the bottom line slightly lower at P16.46MM from P16.59MM. Furthermore, current ratio remained acceptable at 1.20x in 2021-2022.
Nevertheless, the debt-to-equity ratio declined to 3.12x in 2022 from 3.45x in 2021. Additionally, the current ratio remained acceptable at
1.17x from 1.15x in 2021. Furthermore, DE ratio settled at 2.68x in 2022 from 3.18x in 2021. Moreover, DSCR stood at 2.47x in 2022 from
2.97x in 2021. EDITDA stood at P14.79MM in 2022 from P13.54MM in 2021.

4. Established market presence since 1972 (52 years). TR Paper Products Inc. began its journey as a sole proprietorship known as "TR
Mercantile" in 1972. It later became officially registered with the Securities and Exchange Commission on November 11, 1994.

5. TR Paper Products Inc. is a remarketed account. Since 2016, the client has had approved credit facilities amounting to P165MM with
MBTC. TR Paper has demonstrated prudence in settling of its P16.09MM TR with MBTC in 2017. However, it was not renewed due to
non-utilization and nonsubmission of renewal documents to Combank.

6. TR Paper maintains a favorable credit standing with multiple banks, as indicated by the Loandex report dated February 4, 2023.
Furthermore, inquiries conducted by the CPD-ASD-IBS Review Team from Lexis Nexis and IDBS on January 31, 2024, found no matching
records on TR Paper, Sps. Rosario and their children.
TR Paper maintains a favorable credit standing with multiple banks, as indicated by the Loandex report dated February 4, 2023. This
positive assessment extends to the company's key officers and pertinent individuals, including their children.

7. The company is managed by a competent and professional team to ensure continued success and profitable operations. The
corporation has endured four significant calamities throughout its history: the 1997 Asian financial crisis, the destruction of its primary
factory in 2012, the inundation of another facility in 2014, and the COVID-19 pandemic in 2020. Tiong and Nonie Rosario played pivotal
roles in navigating these crises and subsequently incorporated their children into the family-operated enterprise. Timothy now assumes the
role of Head of Marketing, while Tristan has ascended to the position of Head of Operations, and Terence oversees Inventory management.
 TR Paper Products Inc. ERCA Ref No. 948-0051-2024 February 15, 2024 Page 5 of 19

Additionally, both offspring have obtained degrees from esteemed universities. Importantly, there have been no adverse media reports
detailing conflicts or disputes among the business owners.
8.

CRG RECOMMENDATION

COMMENTS OF SENIOR
RECOMMEDING APPROVAL CREDIT GROUP
REVIEWER

RM: CRO MIGUEL PAOLO F. REYES

AMINODING B. BENITO
CHRISTOPHER
Division Head: Division Head: RALPH PAUL R. BULATAO
MIKEE R. DE LEON
RYAN P. ___ AQUINO
Center Head:
JOHN PAUL V. TAN

Sub-Group Head:
JUAN PLACIDO T. MAPA JR. III

Group Head: CHRISTOPHER HECTOR L. REYES Group Head: CHARLOTTE T. BILONGILOT

V. SUMMARY OF SECURITY / SUPPORT

ITEM MITIGANT REGISTERED TITLE APPRAISED/ LOAN VALUE REGISTERED APPRAISED
NO. TYPE OWNER NUMBER MARKET AMOUNT BY/DATE
VALUE
TR Paper Products Inc. ERCA Ref No. 948-0051-2024 February 15, 2024 Page 6 of 19

A. ON HAND / EXISTING LOT

TOTAL
B. TO BE OBTAINED
ITEM MITIGANT REGISTERED TITLE APPRAISED/ LOAN VALUE REGISTERED APPRAISED
NO. TYPE OWNER NUMBER MARKET VALUE AMOUNT BY/DATE

ITEM MITIGANT TYPE SURETY NAME AMOUNT

NO
C. CONTINUING SURETYSHIP ON HAND / EXISTING
N.A
D. CONTINUING SURETYSHIP TO BE OBTAINED
1 CS Sps. Nony Rosario & Tiong Rosario PHP 1675,000,000
DESCRIPTION: Continuing Surety Agreement to be executed by Sps. Nony Rosario & Tiong Rosario for P1675MM.
CS/ GUARANTOR EVALUATION: According to the client's disclosure, the Rosario couple owns a house and lot in Corinthians, Quezon
City, several parcels of land in Laguna and Batangas City, (P300,000 to P320,000 per sq.m). along with two condominium units in Ortigas
City. Additionally, they possess four Toyota vehicles.

VI. BANK CHECKING – BORROWER

Current Bank Checking as of 02/03/2024
BANK LINE LINE AMOUNT OUTSTANDING SECURITY EXP REMARKS
PNB OL 150,000 -0- JSS Satisfactory
DBPL 5,000 -0- JSS Satisfactory
SBC DL USD110 -0- JSS Satisfactory
DL USD 1,375 -0- JSS Satisfactory
OL 100,000 -0- JSS Satisfactory
DBPL 10,000 -0- JSS Satisfactory
PHP119,334 JSS Satisfactory
BDO OL 150,000
PHP22.68 TR
DBPL 15,000 -0- JSS Satisfactory
EWB OL 150,000 $16.34 TR JSS Satisfactory
DBPL 10,000 JSS Satisfactory
PHP 610,000 PHP 135,674 JSS
TOTALS Short Tern
USD 1,485 PHP22.68(contigent)
Satisfactory credit dealings with TR Paper Inc. and relevant parties including children of the Sps. Rosario
BANK CHECKING -
major stockholders. The company’s credit dealings with BDO, SB and EWB remained satisfactory based on
OTHER RELEVANT
the latest Loandex. In addition, Lexis Nexis and IDBS inquiries dated January 31, 2024, conducted by the
INFORMATION
CPD-ASD-IBS Review Team indicated no reflected match between the borrower and relevant parties.
Previous Bank Checking as of: New Account
BANK LINE LINE AMOUNT OUTSTANDING SECURITY EXP REMARKS
Short Tern
TOTALS
Term

VII. ACCOUNT PROFITABILITY – BORROWER

LEAD BANK BDO
MBTC RANKING 5th
ACCOUNT STATEGY Grow
PRIOR REVIEW PERIOD UNDER COMMITMENT
COVERED PERIOD (in PHP) REVIEW NEXT PERIOD
12-31-2022 12-31-2023 12-31-2024
TOTAL REVENUES NEW NEW 203,932.54457,014.55
% ATTAINMENT OF COMMITMENT N/A N/A
FUNDS BASED REVENUE
NON-FUNDS BASED REVENUE
RORA 1.474%1.20%
ROFE
RAROC
EXPECTED LOSS
ECONOMIC PROFIT
WALLET SHARE – CORPORATE FINANCE
11,833,333.3338,055,5
LOAN ADB
55.56
CORPORATE NOTES/BONDS/EQUITY ISSUED
FINANCIAL LEASES
WALLET SHARE – CASH MANAGEMENT
LOW-COST DEPOSIT ADB 5,000,000.00
HIGH-COST DEPOSIT ADB
PLACEMENTS
TR Paper Products Inc. ERCA Ref No. 948-0051-2024 February 15, 2024 Page 7 of 19

TOTAL DEPOSIT CREDITS NET OF ATA & LOAN

RELEASES
COLLECTION – TOTAL VALUE
DISBURSEMENT – TOTA VALUE
OTHERS – TOTAL VALUE
Wallet Share – TRADE
SBLC/BG/CLCUs
IMPORT LCs 10,000,000
DOMESTIC LCs
TRUST RECEIPTS
EXPORT LCs
Outward TT
INWARD TT
Wallet Share – TREASURY
FX SALES
FX PURCHASE
DERIVATIVES
WALLET SHARE – IN PLANT BANKING
PAYROLL
RETIREMENT FUNDS
CONSUMER LOANS
CREDIT CARDS
INSURANCE COVERAGE
VIII. ACCOUNT PROFITABILITY - GROUP
LEAD BANK N/A
MBTC RANKING N/A
ACCOUNT STATEGY N/A
PRIOR REVIEW PERIOD UNDER COMMITMENT
COVERED PERIOD REVIEW NEXT PERIOD
12-31-2022 12-31-2023 12-31-2024
TOTAL REVENUES
% ATTAINMENT OF COMMITMENT
FUNDS BASED REVENUE
NON-FUNDS BASED REVENUE
RORA
ROFE
RAROC
EXPECTED LOSS
ECONOMIC PROFIT
WALLET SHARE – CORPORATE FINANCE
LOAN ADB
CORPORATE NOTES/BONDS/EQUITY ISSUED
FINANCIAL LEASES
WALLET SHATE – CASH MANAGEMENT
LOW-COST DEPOSIT ADB
HIGH-COST DEPOSIT ADB
PLACEMENTS
TOTAL DEPOSIT CREDITS NET OF ATA & LOAN
RELEASES
COLLECTION – TOTAL VALUE
DISBURSEMENT – TOTAL VALUE
OTHERS – TOTAL VALUE
WALLET SHARE – TRADE
SBLC/BG/CLCUs
IMPORT LCs
DOMESTIC LCs
TRUST RECEIPTS
EXPORT LCs
Outward TT
INWARD TT
Wallet Share – TREASURY
FX SALES
FX PURCHASE
DERIVATIVES
WALLET SHARE – IN PLANT BANKING
PAYROLL

RETIREMENT FUNDS
CONSUMER LOANS
CREDIT CARDS
INSURAN
CE COVERAGE

IX. BASIC INFORMATION/REMARKS

1. BRIEF BACKGROUND OF BORROWER / COUNTERPARTY
TR Paper Products Inc. ERCA Ref No. 948-0051-2024 February 15, 2024 Page 8 of 19

COMPANY HISTORY
START OF OPERATION November 11, 1994
LINE OF BUSINESS TR Paper Inc. is one of the pioneer paper converters in the Philippines, with
warehouses located in Bulacan. The company specializes in paper converting, roll
slitting, rewinding, sheeting, and cutting. TR Paper Inc. has a total of 600,000
authorized shares, each valued at P100. Out of these, 420,000 shares have been
subscribed to, meaning that P42 million worth of shares have been fully paid for.
BRIEF HISTORY TR Paper Products Inc. began its journey as a sole proprietorship known as "TR
Mercantile" in 1972. It later became officially registered with the Securities and
Exchange Commission on November 11, 1994.
BUSINESS PLANS AND TIMEFRAMES The company also operates a 3.75-hectare paper converting plant and warehouse
complex in Meycauayan, Bulacan with full paper slitting, sheeting, cutting/trimming
facilities.
OTHER RELEVANT INFORMATION N/A
TR Paper Products Inc.
OWNERSHIP
NAME OF KEY SHAREHOLDERS
RELEVANT INFORMATION ON SHAREHOLDERS
FINANCIAL RESOURCES OF KEY OWNERS/
SHAREHOLDERS
OWNERSHIP RISKS AND MITIGANTS
PRINCIPAL OFFICERS
BACKGROUND AND EXPERIENCE
RELEVANT INFORMATION ON KEY
MANAGEMENT
BUSINESS AND RISK MANAGEMENT STRATEGIES
ERCA Ref No. 948-0051-2024 February 15, 2024 Page 9 of 19
Name Position Share
Tiong Rosario President 68.90%
Nony Rosario Treasurer 23.72%
Ronie Navea Corp. Sec.
Timothy Lim-Uy Rosario 1.85%
Tristan Lim-Uy Rosario 1.85%
Terence Lim-Uy Rosario 1.85%
Trixia Jade Lim-Uy Rosario 1.85%
Source: GIS as of July 31, 2023
 Tiong Rosario, Filipino, 77 years old, born on April 15, 1947 and married to
Nony Rosario. Retired formally from the family business.
 Nony Rosario, Filipino, 69 years old, born on November 20, 1955. Presently,
the head of Finance.
 Timothy Lim-Uy Rosario, Filipino, 41 years old, born on July 5, 1983.
Graduated BS Economics at Ateneo De Manila University and worked with
P&G for several years before joining TR Paper Inc. as Head of Marketing.
 Tristan Lim-Uy Rosario, Filipino, 42 years old, born on July 7, 1982. He
earned his bachelor’s degree at Ateneo De Manila University. He is the Head of
Operations.
 Terence Lim-Uy Rosario, Filipino, aged 36, born on June 11, 1986, is
responsible for overseeing the warehouse operations. He has completed his
education at Ateneo De Manila University.
 Trixia Jade Lim-Uy Rosario, Filipino, CPA. 37 years old, born on September
23, 1987.

According to the client's disclosure, the Rosario couple owns a house and lot in
Corinthians, Quezon City, several parcels of land in Laguna and Batangas City, along
with two condominium units in Ortigas City. Additionally, they possess four Toyota
vehicles.
Minimal. The keyman risk or succession risk for the business stems from its
founding by the Rosario couple. However, this risk is mitigated to some extent by the
fact thatas the couple has already trained and transferred their knowledge to their
children, three out of four of whom are actively engaged in managing sales,
purchasing, and inventory.
Name Position Share
Tiong Rosario President 68.90%
Nony Rosario Treasurer 23.72%
Ronie Navea Corp. Sec.
Source: GIS as of July 31, 2023
Tiong Rosario, aged 77, was born on April 15, 1947, and is married to Nony Rosario,
aged 69, born on November 20, 1955. They have four children, three of whom are
currently involved in the family business.
N/A
The demand for paper and paperboard is significantly influenced by economic
growth, fluctuations in school enrollment, and overall population growth. With the
resumption of face-to-face classes in 2022, it is expected that the demand for paper in
the Philippines will recover and eventually return to levels seen in 2019. In light of
this, TR Paper intends to take advantage of the return to in-person classes to ensure
profitability and manage its cost of goods sold (COGS) effectively. This will involve
leveraging its strong relationships with overseas suppliers to negotiate favorable
terms and maintain competitiveness in the market.
TR Paper Products Inc. ERCA Ref No. 948-0051-2024
PRINCIPAL OFFICERS
BACKGROUND AND EXPERIENCE
RELEVANT INFORMATION ON KEY
MANAGEMENT
BUSINESS AND RISK MANAGEMENT STRATEGIES
MANAGEMENT RISKS AND MITIGANTS
RISK INDUSTRY STRATEGY
INDUSTRY STRUCTURE
February 15, 2024 Page 10 of 19
Name Position Share
Tiong Rosario President 68.90%
Nony Rosario Treasurer 23.72%
Ronie Navea Corp. Sec.
Source: GIS as of July 31, 2023
Tiong Rosario, aged 77, was born on April 15, 1947, and is married to Nony Rosario,
aged 69, born on November 20, 1955. They have four children, three of whom are
currently involved in the family business.
N/A
Declining Demand for Paper Products: The rising adoption of digital alternatives
by businesses and consumers for communication, documentation, and transactions
may diminish the demand for paper products. This transition to digital channels and
electronic documentation has the potential to decrease sales volumes and revenues
for paper converter businesses.
Market Disruption and Increased Competition: Digitization allows for the entry
of new competitors, such as digital document management providers and online
platforms, into the market, challenging traditional paper businesses. These digital
competitors often offer innovative solutions, cost-effective alternatives, and
enhanced convenience, posing a significant competitive threat to paper-based
businesses.
Business Model Disruption and Adaptation: The digitization of business processes
and customer interactions disrupts traditional business models and revenue streams
for paper converter businesses. To remain competitive and relevant in the digital age,
paper businesses must innovate, diversify offerings, and explore new business
models, partnerships, and revenue sources aligned with digital transformation trends.
The company remains primarily owned and operated by a single family with
extensive business expertise and a successful track record in business management.
There have been no adverse media reports regarding conflicts or disputes among the
owners. Furthermore, management risk is minimized as the second generation is
actively involved in overseeing business operations. the company is overseen by
skilled professionals with diverse educational backgrounds from prestigious
institutions. Additionally, the company is overseen by skilled professionals with
diverse educational backgrounds from prestigious institutions. management risk is
minimized as the second generation is actively involved in overseeing business
operations.
Maintain
Amid the COVID-19 pandemic, demand for paper initially declined in 2020, causing
prices to drop by 2.6%. However, as the economy reopened, demand surged, leading to
a 9.7% price increase in 2021 and a further 12.8% increase in 2022 due to supply chain
disruptions and external factors like the war in Ukraine and rising production costs.
Despite ongoing inflation, consumer spending remained strong, sustaining demand for
paper products in 2023 with a 2.8% price increase. Looking ahead to 2024, continued
consumer spending is expected to keep demand high, with paper prices forecasted to
rise by 6.2%. Globally, paper and cardboard consumption exceeded 414.19 million
metric tons in 2022, showing significant growth compared to previous years, and is
projected to surpass 460 million metric tons by 2030.
Source: “Price of Paper” published on February 24, 2024 by IBIS World
Th Global Paper market is anticipated to rise at a considerable rate during the forecast
period, between 2023 and 2031. In 2022, the market is growing at a steady rate and with
the rising adoption of strategies by key players, the market is expected to rise over the
projected horizon.
Paper Market size is projected to reach Multimillion USD by 2029, In comparison to 2022,
at unexpected CAGR during 2022-2029.
Which regions are leading the Paper Market?
North America (United States, Canada and Mexico)
Europe (Germany, UK, France, Italy, Russia and Turkey etc.)
Asia-Pacific (China, Japan, Korea, India, Australia, Indonesia, Thailand, Philippines,
TR Paper Products Inc.
REGULATORY ISSUES
INDUSTRY RISKS AND MITIGANTS
TYPES OF PRODUCT SERVICES & %
CONTRIBUTION TO REVENUES
BRANDS
COMPETITORS, RANKING AND MARKET SHARE
ERCA Ref No. 948-0051-2024 February 15, 2024 Page 11 of 19
Malaysia and Vietnam)
South America (Brazil, Argentina, Columbia etc.)
Middle East and Africa (Saudi Arabia, UAE, Egypt, Nigeria and South Africa)
Source: https://www.linkedin.com/pulse/paper-market-size-growth-forecast-2031-360-
research-reports-ymisf/
Importation of products is governed by rules and regulations of Bureau of Customs.
BOCs stricter policy may result to delays in importation of raw materials such as
kraft paper.
Mitigant: The company sources 100% of its raw materials from different countries
such as Indonesia, China, and Vietnam. Furthermore, they uphold an inventory
equivalent to 2-3 months' worth of supplies.
Competition. There are many paper converters in the market, but TR Paper has been
a fixture in the industry since 1972. Over the years, it has cultivated strong ties with
its customers and solidified its place in the market. By leveraging its longstanding
client connections and commitment to delivering top-notch paper at competitive
rates, TR Paper is well-positioned to sustain its market position.
Demand. The demand for paper and paperboard is significantly influenced by
economic growth, fluctuations in school enrollment, and overall population growth.
With the resumption of face-to-face classes in 2022, it is expected that the demand
for paper in the Philippines will recover and eventually return to levels seen in 2019.
In light of this, TR Paper intends to take advantage of the return to in-person classes
to ensure profitability and manage its cost of goods sold (COGS) effectively. This
will involve leveraging its strong relationships with overseas suppliers to negotiate
favorable terms and maintain competitiveness in the market.
Commodity risk from changes in prices of raw materials. The company
diversifies its supplier base, checking rates with alternative suppliers in countries
such as India, China, and Vietnam, in response to escalating raw material costs.
Additionally, any substantial changes in raw material prices are transferred to clients.
Currently, the gross profit margin (GPM) stands at 16% of sales.
Business Model Disruption and Adaptation: The digitization of business processes
and customer interactions disrupts traditional business models and revenue streams
for paper converter businesses.
100% paper products
Generic – they only buy the rolled papers abroad and they cut the rolled papers to sell
to local companies who in turn market the papers as books, notebooks or just plain
bond papers and food packaging. Paper size is based on customers' needs.
Since 1972, TR Paper Products has been a part of the industry, building solid
relationships with its customers and cementing its position in the market.
Some famous paper converter companies in the Philippines include:
 Trust International Paper Corporation
 United Pulp and Paper Co., Inc.
 Philippine Paper Products Inc.
 Tan Uy Caktiong Paper Products
 Atlas Paper Mills Inc.
 Paperland Incorporated
 Bulacan Paper Mills, Inc.
 Metro Paper Industries, Inc.
 Natu'oil Services, Inc. - Paper Products Division
 PaperTech Inc.

These companies are well-known for their contributions to the paper industry in the
Philippines and their expertise in converting raw paper materials into various finished
products.
Here's aBelow is the benchmark table showing financial metrics with those of other
Combank’s paper converter borrowers:
CBD CBD CBD CBD CBD CBD
Lending Caloocan Binondo
Center Makati III Makati I Greenhills Makati IV II III
TR Paper Triplex Star Paper Van
Products Purity Datrima Enterprise Corporatio Hawk
Borrower Inc. Paper Packaging s Inc. n Paper
Source Recasted AFS Reconstructed AFS Inhouse Recasted
TR Paper Products Inc. ERCA Ref No. 948-0051-2024 February 15, 2024 Page 12 of 19

FS 2022 FS
2022 2023 2022 2022 FS 2022
Revenues P604MM P968MM P2.4Bn P1.62Bn P1.42Bn P900MM
COGS 85% 88% 80% 75% 78% 90%
GPM 15% 12% 20% 25% 12% 10%
6.00% 6% to
OPM 3.14% 10% to 15% 17% 11% 7%
NIM 7.90% 1.60% 5-6% 9.61% 7.78% 4.20%
Assets P518MM P797MM P1.48Bn P2.72Bn P1.48Bn P562MM
D/E (x) 2.04 3.32 0.26 1.31 0.03 1.09

Assets

D/E
COMPETITIVE ADVANTAGE Throughout its five decades of operation, TR Paper has maintained its presence in the
market for several reasons:

1. Mr. and Mrs. Rosario boast over five decades of experience in the paper industry,
bringing extensive knowledge and expertise to their business endeavors.

2. The company operates a dedicated 3.75-hectare facility focused on converting

paper from rolls into custom-sized sheets, meticulously tailored to meet the exact
specifications required for various printing applications.

3. With a solid foundation, the company has nurtured strong and enduring
relationships with its clientele over time. These relationships are rooted in trust,
reliability, and a commitment to delivering quality service consistently.

PRODUCT RISKS AND MITIGANTS
TR Paper is exposed to risks from unfavorable foreign exchange fluctuations due to
its complete dependence on imported raw materials. The company's ability to
maintain profitability and sustain its operations is impacted by the timing of material
purchases relative to currency fluctuations, as well as factors such as supply
availability and competitive positioning within the industry. Nevertheless, TR Paper
has the option to mitigate this risk by passing any additional expenses incurred onto
customers, thereby providing a measure of financial protection.

PRODUCTION FACILITIES
MANUFACTURING FACILITIES Products are housed in TR Paper's two warehouses situated in Meycauayan, Bulacan.
These warehouses span areas of 20,000 square meters and 10,000 square meters
respectively, both situated within the Sterling Industrial Park.

MACHINERY Machineries
Slitter Machine 1
Sheeter Machine 8
Cutter Machine 3
Bale Machine 1
Grab lift 3
Forklift 3

PRODUCTION PROCESS The paper conversion process involves turning large rolls or sheets of paper into
smaller, usable forms. This includes receiving raw materials, preparing them as
needed, converting them through cutting, rewinding, and other processes, ensuring
quality control, packaging and labeling, storing and distributing product. This process
enables paper converters to produce a variety of paper products efficiently to meet
customer needs.

INSURANCE COVERAGE AND INSURER Facility being Insurance Provider Amount

Insured Insured
1. Warehouse # 1 Allied Bankers Insurance Corporation P100MM
2. Warehouse # 2 The Mercantile Insurance Co., Inc. P25MM
The Mercantile Insurance Co., Inc. &
3. Warehouse # 3 Allied Bankers Insurance Corporation P275MM

Expiry: June 30, 2025

PRODUCTION RISKS AND MITIGANTS N/A

LOGISTICS – WAREHOUSE AND DISTRIBUTION NETWORK
TRADING AREA Office address – PSE East Tower (owned, 140 sqm)
Business Address – Sterling Industrial Park, Meycauayan, Bulacan

SALES FORCE The company has a workforce of 45 employees, including warehouse staff
responsible for handling inventory and logistics, as well as office and sales personnel
managing administrative tasks and customer interactions.

WAREHOUSE FACILITIES Products are housed in TR Paper's two warehouses situated in Meycauayan, Bulacan.
TR Paper Products Inc.
DELIVERY FLEET
DELIVERY RISKS AND MITIGANTS
KEY INPUTS AND COST DRIVERS
KEY INPUTS / RAW MATERIALS
MAJOR SUPPLIERS
INVENTORY MANAGEMENT
INSURANCE OVER STOCKS
MANPOWER
SUPPLY & MANPOWER RISKS AND MITIGANTS
KEY REVENUE DRIVERS
DEMAND FOR PRODUCTS
ERCA Ref No. 948-0051-2024 February 15, 2024 Page 13 of 19
These warehouses span areas of 20,000 square meters and 10,000 square meters
respectively, both situated within the Sterling Industrial Park.
To facilitate logistics operations, the company possesses a diverse and well-
maintained delivery fleet, which is utilized for timely and efficient product
deliveries;
Trucks Count
1. 6-wheeler closed big van 5
2. 6-wheeler dropside 3
3. 6-wheeler closed small van 2
4. 4-wheeler dropside 3
5. 4-wheeler closed van 2
6. 6-wheeler forward 1
Total 16
No significant delivery risk was noted. The company's delivery service vehicles are
utilized to transport supplies, machinery, equipment, and raw materials from
warehouses to their respective destinations, ensuring efficient internal logistics and
operations
Paper
Top Suppliers
1. APP Philippines Inc.
2. Seminole International Corporation
3. Grandscale Int'l Trading Co. Ltd.
4. SGS Export and Import Corp.
5. JND International Corp.Chung Hwa Pulp Corporation
6. April Fine Paper Macao Commercial Offhsore Limited
7. Westrock MWV, LLC
8. Wilfried Heinzel AG
9. Okura Pulp & Paper (H.K.) Ltd.
10. Firgos (Malaysia) SDN. BHD.
11. International Paper & Sun (Hong Kong) trading Limited
12. Unicell Paper Pte Ltd.
13. Cascade (Asia) Limited
Note: Standard credit terms is 30 days, COD/Check payment.
Client maintains 2-3months of inventory depending on the opportunity on the
pricing.
According to the latest data from the DTI – Bureau of Import Services, the import
value of TR paper in 2022 amounted to $9.14 million, with raw materials gross mass
totaling 10,548 metric tons.
As of December 2023, total importation is at $9.17 million, with raw materials gross
mass totaling 6,076 metric tons.
Facility being Insured Insurance Provider Amount Insured
1. Warehouse # 1 Allied Bankers Insurance Corporation P100MM
2. Warehouse # 2 The Mercantile Insurance Co., Inc. P25MM
3. Warehouse # 3 The Mercantile Insurance Co., Inc. & P275MM
Allied Bankers Insurance Corporation
Expiry: June 30, 2025
The company has a workforce of 45 employees, including warehouse staff
responsible for handling inventory and logistics, as well as office and sales personnel
managing administrative tasks and customer interactions.
The industry has been witnessing a surge in prices of all types of paper, which are
attributed to a number of factors including the increase in basic price of the raw
materials for the paper industry. Consequently, the price of the finished paper has
witnessed a significant surge in recent times. Any fluctuations in the cost of raw
materials are typically passed on to customers gradually over time.
Current manpower fill rate is at 100%.
The demand for paper is expected to increase with the resumption of face-to-face
classes and the normalization of market conditions following the COVID-19
pandemic. Several factors contribute to this:
1. Educational Institutions Reopening
2. Resumption of onsite Office Operations
TR Paper Products Inc. ERCA Ref No. 948-0051-2024 February 15, 2024 Page 14 of 19

3. Economic Recovery
4. Consumer Behavior

Overall, the resumption of face-to-face classes and the normalization of market

conditions are expected to drive an increase in the demand for paper across various
sectors.
PRICING Pricing of the products depends on Market Price and PHP/USD exchange rates.
Disclosed GPM: 20% 16% based on benchmarks with other Combank paper
converter borrowers

MAJOR BUYERS The leading clients identified by TR Paper Inc.

1. Able Printing Co. Inc.
1. Accurate Printing Inc.
2. Citiprint Inc.
3. Continuous Printing Corp.
4. Embu Integrated & Trading Corp.
5. Frontline Printing Corp.
6. Sterling Paper Prod. Ent. Inc.
7. The House Printers Corp.
8. Transprint Corp.
9. UYB Printing Corp.

Note: Standard credit term is up to 60 days.

SELLING RISKS AND MITIGANTS
The demand remains stable as the company's products serve diverse industries.
Additionally, with 52 years of operation, the company holds a significant market
share. Key customers such as Accurate Printing, Sterling Paper Products Ent. Inc.,
and The House Printers Corp., who are also borrowers of the bank, contribute to this
stability.

New entrants may find it challenging to compete with established companies in terms
of pricing and capital expenditure, particularly in supporting machinery and
equipment.

COLLECTION RISKS MITIGANTS There is minimal collection risk as the company has maintained longstanding
relationships with its customers, spanning over 20 years.

2. BRIEF FINANCIAL ASSESSMENT – HISTORICAL

FS PERIODS 2021-2022 audited by OO & Associates, SEC-Accredited Auditor
SALES GROWTH AFS 2022 reported a rise in revenue to P604.07MM from P552.92MM in the
preceding year due to improved demand, accompanied by a decline in net income to
P8.10MM from P8. 34MM.The decline in net profit was attributed to increased cost
of sales, which rose from 92.49% in 2021 to 94.10%. Simultaneously, there was a
rise in interest expenses from 0.82% to 0.98%. However, operational expenses
(OPEX) were effectively managed, decreasing from 6.55% in 2021 to 4.83%.

PROFITABILITY The net income margin (NIM) underwent a slight reduction, decreasing to 1.51% in
2022 from 1.61% in 2021. This was primarily due to an increase in interest expense
to 0.98% of sales in 2022 compared to 0.82% in 2021, as well as a higher cost of
sales, accounting for 94.10% of sales in 2022 versus 92.49% in 2021.

EXTRAORDINARY ITEMS No extraordinary items.

AR COLLECTIONS In 2022, there was a reduction in the accounts receivable (AR) days to 32 days from
37 days in 2021, accompanied by a decrease in accounts receivable to P52.37MM
from P55.18MM in the previous year.

INVENTORY TURNOVER The inventory level in 2022 amounted to P314.47MM, a decrease from P317.39MM
in 2021. Additionally, there was an improvement in inventory turnover, with
inventory days decreasing to 202 days from 227 days in 2021.

OTHER ASSETS In 2022, the total asset value was reported at P459.13MM, down from P464.59MM
in 2021. Among these assets, inventory constituted 68.49%, fixed assets made up
34.68%, accounts receivable comprised 11.41%, and other current assets represented
4.30%.

DAYS PAYABLE In 2022, the accounts payable (AP) days extended to 104 days from 76 days in 2021.
Concurrently, trade payables surged to P161.89MM in 2022 from P105.77MM in the
previous year.

NET OPERATING CASH FLOWS Additionally, EBITDA increased to P8.52MM in 2022 from P7.97MM in 2021.
TR Paper Products Inc. ERCA Ref No. 948-0051-2024 February 15, 2024 Page 15 of 19

LEVERAGE In 2022, the debt-to-equity (DE) ratio decreased to 3.10x from 3.43x in 2021.

NOCG INTEREST COVER RATIO The interest coverage ratio (ICSR) dropped to 2.87x in 2022 from 3.39x in 2021.

NOCG DEBT SERVICE COVER RATIO Similarly, the debt service coverage ratio (DSCR) declined to 1.44x in 2022 from
1.75x in 2021.
TR Paper Products Inc. ERCA Ref No. 948-0051-2024 February 15, 2024 Page 16 of 19

3. BRIEF FINANCIAL ASSESSMENT – FORECAST

FORECAST PERIOD 2022 2023-2024

SALES GROWTH Revenue growth is forecasted to be a conservative 5%, indicating it will reach
P634MM in 2023 and P665MM in 2024 due to sustained demand stemming from the
nationwide return to face-to-face classes. NIM is expected to settle at 9.72xin 2023
and 9.65x in 2024, in line with benchmarks observed among other Combank
borrowers in the paper converter industry.

Recasted FS Projected Years

Php’000 2021 2022 2023 2024
Revenue 552,917 604,069 634,273 665,986
Net Income 55,577 59,055 61,680 64,236

PROFITABILITY
CHANGE IN WORKING CAPITAL REQUIREMENT
The proportions of Cost of Goods Sold (84%), GPM (16%) and OPM (9.50%)
relative to Sales are in line with benchmarks observed among other Combank
borrowers in the paper converter industry.The percentage of Cost of Goods Sold
(COGS), Operating Expenses (OPEX), and Interest Expense to Sales will be
maintained at the same level as in the Audited Financial Statements (AFS) of 2022.
Additionally, the percentage of Other Income to Sales will also remain consistent with
the AFS of 2022.
Computed WCR based on 2022 AFS
DR – 31 days
DI – 201 days
DP – 104 days
CCC – 128 days
COS – P568MM
WCR = (CCC) 128 * (COGS) P511MM / 365D = P179MM

Projected WCR (based on revenue growth of 5%)

In Php 2023 2024
AR Days 31 31
Inventory Days 240 240
Days Payable 104 104
CCC 167 167
COGS P533MM P559MM
WCR [CCC/COGS) *365] P244MM P256MM
Projected WCR based on recast FS with based on 5% revenue growth

Utilization: P158MM based on CIR dated 2/3/2024 (LCTRL only)

Approved Bank Facilities: P690MM
Based on total bank lines: 22.89%

NET OPERATING CASH FLOWS EBITDA is forecasted to stay satisfactory, amounting to P70.82MM in 2023 and
P73.83MM in 2024.

LEVERAGE Leverage of the company is expected to improve 1.23x in 2023 and 1.02x in 2024 due
plowed back of income from operations and better NIM.Leverage of the company is
expected to improve in 2022 if the P64MM advances to shareholders are converted as
equity.

NOCG INTEREST COVER RATIO The Interest Service Coverage Ratio (ISCR) is expected to remain at an acceptable
level, ensuring sufficient coverage of interest expenses throughout the projected years
2023-2024.ISCR remain acceptable and enough to cover interest expense in projected
years 2023-2024.

NOCG DEBT SERVICE COVER RATIO The Debt Service Coverage Ratio (DSCR) is projected to be 11.38x in 2023 and
11.30x in 2024.The DSCR in 2023-2024

X. CREDIT INFORMATION
1. BRIEF CREDIT HISTORY
HISTORY OF DECLINED/DISAPPROVED/ No history of declined/ disapproved/ deferred proposals. TR Paper Products Inc. is a
DEFERRED PROPOSALS remarketed account. Since 2016, the client has had approved credit facilities
amounting to P165MM with MBTC. TR PaperTR Paper has demonstrated prudence
in settling of its TR with MBTC during that time. However, it was not renewed due to
non-utilization and nonsubmission of renewal documents to Combank.

HISTORY OF RESTURCTURING/DELAYS IN None

PAYMENT/EXTENSION OF PAYMENT DATE
CREDIT HISTORY- OTHER RELEVANT None
INFORMATION
2. HISTORICAL ACCOUNT BEHAVIOUR 1-12 MONTHS PRIOR 13-24 MONTHS PRIOR
INCIDENT OF TOD(S) None None
REASON FOR TOD(S)
TR Paper Products Inc. ERCA Ref No. 948-0051-2024 February 15, 2024 Page 17 of 19

INCIDENCES OF DELAYED PAYMENTS N/A, new account N/A, new account

REASON FOR DELAYED PAYMENTS
HIGHEST TOTAL OUTSTANDING N/A, new account N/A, new account
LOWESRT TOTAL OUTSTANDING N/A, new account N/A, new account
OUTSTANDING DOCUMENT DEFICIENCIES & N/A, new account N/A, new account
AGING
3. TRADE CHECKING – BUYER TOP 10
DATE OF TRADE CHECKING February 5, 2024
TOTAL AVERAGE MONTHLY VOLUME Not disclosed.
TOTAL AVERAGE MONTHLY VALUE P5MM to P10MM
AVERAGE CREDIT TERMS The customer checking conducted by MBTC-Credit Investigation Dept. last Feb. 5,
2024 showed the following;
 The House Printers Gap*
Length of dealings: since 2009
Credit Terms: 120 days
Experience: Satisfactory
 Transprint Corp.*
Length of dealings: More than 5 years
Credit Terms: 120 days
Experience: Satisfactory
 House Of Sera Printing and Trading Corp.
Length of dealings: More than 10 years
Credit Terms: 90 days
Experience: Satisfactory
 Sonicprint Inc.
Length of dealings: More than 10 years
Credit Terms: 120 days
Experience: Satisfactory

Note: *Metrobank Corporate borrower

FINDINGS None
DETAILS OF NEGATIVE FINDINGS None
OTHER RELEVANT INFORMATION None
4. TRADE CHECKING – SUPPLIER TOP 10
DATE OF TRADE CHECKING Feb. 28, 2024
TOTAL AVERAGE MONTHLY VOLUME Top Suppliers
1. APP Philippines Inc.
2. Seminole International Corporation
3. Grandscale Int'l Trading Co. Ltd.
4. SGS Export and Import Corp.
5. JND International Corp.Chung Hwa Pulp Corporation
6. April Fine Paper Macao Commercial Offhsore Limited
7. Westrock MWV, LLC
8. Wilfried Heinzel AG
9. Okura Pulp & Paper (H.K.) Ltd.
10. Firgos (Malaysia) SDN. BHD.
11. International Paper & Sun (Hong Kong) trading Limited
12. Unicell Paper Pte Ltd.
13. Cascade (Asia) Limited

The supplier checking conducted by MBTC-Credit Investigation Dept. last Feb. 5,

2024 showed the following;
 Grandscale Global Co. Ltd
Length of Dealings: around 10-15 years
Ave. Volume per month: $500 USD
Credit terms: 30 days
Experience: Satisfactory

 Seminole International Corp.

Length of Dealings: more than 50 years
Ave. Volume per month: $100-$300 USD
Credit terms: 60 days
Experience: Satisfactory

 JND International Corp.*

Length of Dealings: 30 years
Ave. Volume per month: $150 USD
Credit terms: COD
Experience: Satisfactory
Note: *Metrobank Corporate borrower

TOTAL AVERAGE MONTHLY VALUE N/A100-500 USD

AVERAGE CREDIT TERMS 30-60 days
TR Paper Products Inc.
FINDINGS
DETAILS OF NEGATIVE FINDINGS
OTHER RELEVANT INFORMATION
5. NEGATIVE FINDINGS
SOURCE
OTHER SOURCES
FINDINGS ON
VERIFICATION
DETAILS OF NEGATIVE FINDINGS(S)
6. KEY RISK AREA,
KEY RISK AREA
MITIGATING FACTORS
KEY RISKS TRIGGERS
MONITORING STRATEGY
ERCA Ref No. 948-0051-2024 February 15, 2024 Page 18 of 19
None N/A
None N/A
According to the latest data from the DTI – Bureau of Import Services, the import
value of TR paper in 2022 amounted to $9.14 million, with raw materials gross mass
totaling 10,548 metric tons. The COGS in recasted FS is 97.04% validated based on
BIS report from DTI. (BIS: P492.56MM in 2022 vs. P507.42MM recasted COGS in
2022).
In 2023, total importation is at $9.17 million (P504.35MM), with raw materials gross
mass totaling 6,076 metric tons.
No adverse findings on TR Paper Products Inc., major owners and key officers per
IDBS inquiries dated 1.30.24.
Internal Data Bank System (IDBS), BAP and Lexis Nexis
N/A
Satisfactory credit dealings with TR Paper Inc. and relevant parties including children
of the Sps. Rosario. major stockholders. The company’s credit dealings with BDO,
SB and EWB remained satisfactory based on the latest Loandex. Furthermore,
inquiries conducted by the CPD-ASD-IBS Review Team from Lexis Nexis and IDBS
on January 31, 2024, found no matching records on TR Paper, Sps. Rosario and their
children.In addition, Lexis Nexis and IDBS inquiries dated January 31, 2024,
conducted by the CPD-ASD-IBS Review Team indicated no reflected match between
the borrower and relevant parties.
No negative findings.
a. Declining Demand for Paper ProductsCompetition
b. Commodity RiskRegulatory Risk
c.
d. Risk of Fluctuation
a. There are many paper converters in the market, but TR Paper has been a
fixture in the industry since 1972. Over the years, it has cultivated strong ties
with its customers and solidified its place in the market. By leveraging its
longstanding client connections and commitment to delivering top-notch
paper at competitive rates, TR Paper is well-positioned to sustain its market
positionThe company offers value-added services such as customization,
design services, or consulting to differentiate from competitors. TR Paper
has to strengthen customer relationships and focus on customer retention
efforts to maintain market share and secure recurring business even during
periods of declining demand.
b.
c. Minimal. The company diversifies its supplier base, checking rates with
alternative suppliers in countries such as India, China, and Vietnam, in
response to escalating raw material costs. Additionally, any substantial
changes in raw material prices are transferred to clients. Currently, the gross
profit margin (GPM) stands at 16% of sales.Regulatory risks refer to the
potential impact of changes in laws, regulations, or government policies on
businesses. These risks can range from compliance issues to financial
penalties and reputational damage. TR Paper has to implement robust
compliance management systems to help them stay informed about relevant
laws and regulations, track changes, and ensure adherence to legal
requirements. Furthermore, the company has to establish effective
government relations strategies to build constructive relationships with
regulatory authorities.
d.
e. TR Paper is exposed to risks from unfavorable foreign exchange fluctuations
due to its complete dependence on imported raw materials. Nevertheless, TR
Paper has the option to mitigate this risk by passing any additional expenses
incurred onto customers, thereby providing a measure of financial
protection.
Supply and price of raw materials.
 Request quarterly CIR to determine wallet share versus other banks and
monitor debt levels.
 Continuously offer competitive rates and charges both for loans and FX
transactions.
 Periodic coordination with the client for dollar purchases and non-LC
transactions.
TR Paper Products Inc. ERCA Ref No. 948-0051-2024 February 15, 2024 Page 19 of 19