ALHI - 17-A Consolidated Report - FINAL
ALHI - 17-A Consolidated Report - FINAL
ALHI - 17-A Consolidated Report - FINAL
C S 2 0 0 4 1 1 5 9 3
SEC Registration Number
A N C H O R L A N D H O L D I N G S , I N C .
1 1 t h F l o o r , L . V . L o c s i n B l d g . ,
6 7 5 2 A y a l a A v e . c o r M a k a t i A v e . ,
M a k a t i C i t y
1 2 3 1 1 7 - A 1 1 2 6
Mont Day Mont Day
h h
(Calendar Year) (Form Type) (Annual
Meeting)
SEC
Dept. Requiring this Doc. Amended Articles Number/Section
Document ID Cashier
STAMPS
Remarks: Please use BLACK ink for scanning purposes.
SECURITIES AND EXCHANGE COMMISSION
4. Exact name of issuer as specified in its charter: ANCHOR LAND HOLDINGS, INC.
7. 11th Floor, L.V. Locsin Bldg., 6752 Ayala Ave. cor Makati Ave., Makati City
Address of principal office Postal Code
9. Not applicable
Former name, former address, and former fiscal year, if changed since last report.
10. Securities registered pursuant to Sections 8 and 12 of the SRC, or Sec. 4 and 8 of the RSA
Yes [x] No [ ]
If yes, state the name of such stock exchange and the classes of securities listed therein:
(a) has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17.1 thereunder or
Section 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of The
Corporation Code of the Philippines during the preceding twelve (12) months (or for such
shorter period that the registrant was required to file such reports);
Yes [x] No [ ]
(b) has been subject to such filing requirements for the past ninety (90) days.
Yes [x] No [ ]
Page 2 of 54
13. Aggregate market value of the voting stock held by non-affiliates of the registrant as at
December 31, 2020:
Assumptions:
(a) Total number of shares held by non-affiliates as at December 31, 2020 261,343,209
14. Check whether the issuer has filed all documents and reports required to be filed by Section 17 of the
Code subsequent to the distribution of securities under a plan confirmed by a court or the Commission.
15. If any of the following documents are incorporated by reference, briefly describe them and identify the
part of SEC Form 17-A into which the document is incorporated:
None
Page 3 of 54
MANAGEMENT REPORT
Amidst a global pandemic that caused severe disruptions in the daily lives of people all over the world in
2020, Anchor Land Holdings, Inc. soldiered on to protect our shareholders by maintaining profitability
despite immense challenges.
Our net income was down 56.8% from the previous year’s Php814.27 million. This was mainly brought
about by lower real estate sales totalling =
P 2.13 billion, a decrease of Php2.61 billion from the 2019 sales of
=
P 4.73 billion as investors took a wait-and-see attitude and held on to their cash for possible emergencies.
Revenues were likewise impacted by government protocols to contain the pandemic, including restricting
people’s movement that prevented construction projects from timely completion as well as limiting
marketing and selling activities.
It was not only the real estate industry that was adversely affected by the restrictions but the entire
Philippine economy, with the 2020 GDP contracting by -9.6%, the lowest since the country started tracking
economic data in 1946 after World War II.
However, Anchor Land Holdings, Inc. is optimistic that the economic slowdown is temporary and that a
quick recovery is underway.
This optimism is borne by the fact that several vaccines have been rapidly developed and deployed by
major pharmaceutical companies around the world, which should enable the global economy to quickly
bounce back and people are able to return to normal lives.
And, while awaiting a return to the new normal, the Group has lined up at least five new projects for the
coming year in and around Manila’s Chinatown: One Legacy Grandsuites, Cornell Parksuites, One Financial
Center, Recto Logistics and Rosan Logistics.
Another source of optimism is the continuing improvement in our rental revenues, which in 2020 breached
the Php1 billion level to =
P 1.02 billion, an increase of 30.6% from the previous year’s =
P 782.99 million.
More significantly, rental income contributed 26.2% to the Group’s total consolidated revenue in 2020, and
its biggest source was The Centrium, our first office project consisting of two towers at the Entertainment
City District where office spaces are in high demand and thus command a huge premium.
Despite the movement restrictions imposed by the government, we were able to continue construction
activities for The Centrium, Cosmo Suites and Admiral Hotel – all of which are expected to further grow our
recurring income stream upon full completion.
The asset growth was mainly due to increases in real estate for development and sale; properties and
equipment and investment properties; and other assets, including noncurrent portion, by =
P 264.36 million.
Meanwhile, construction and development costs related to the Group’s ongoing projects, particularly the
Centrium, Admiral Hotel, Central Link and Cosmo Suites, caused the increase in properties and equipment
and investment properties to a combined Php17.94 billion, up by = P 950.62 million from = P 16.99 billion
year-on-year.
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PART I - BUSINESS AND GENERAL INFORMATION
Item 1. Business
BUSINESS OVERVIEW
Anchor Land Holdings, Inc. (“ALHI” or the “Company”) was registered with the Philippine Securities and
Exchange Commission (“SEC” or the “Commission”) on July 29, 2004 with an authorized capital stock of
P10,000,000.00 divided into 100,000 common shares with a par value of P100.00.
The Company is the holding company of the ALHI Group (the “Group”) with principal business interest in
real estate organized to acquire by purchase, lease, donation, or otherwise, and to own, use, improve,
develop, subdivide, sell, mortgage, exchange, lease, and hold for investment, real estate of all kinds, whether
to improve, manage or otherwise dispose of buildings, houses, apartments, and other structures of
whatever kind, together with their appurtenances.
The Company traces its roots to Anchor Properties Corporation. Anchor Properties Corporation was
incorporated in July 15, 2003. It commenced commercial operations on April 30, 2004, simultaneously with
the start of the construction of its Lee Tower project.
The Company was founded by a group of entrepreneurs led by Mr. Stephen L. Keng and Mr. Steve Li. The
Company was primarily organized to engage in real estate development and marketing focusing initially in
high-end residential condominiums within the Manila area. It started business operations on
November 25, 2005.
On December 13, 2006, the board of directors and stockholders of the Company approved and authorized
the plan of merger of Anchor Properties Corporation, with the Company as the surviving entity.
Simultaneously with the approval of the Company’s merger with Anchor Properties Corporation, the
Company’s board of directors and stockholders also approved amendments to Company’s Articles as
follows: (a) reduction of the par value from P100.00 to P1.00 resulting in stock split and increase in
authorized capital stock from P10,000,000.00 to P1,000,000,000.00. Both companies are substantially
under common control and the merger of the two companies was done to consolidate their real estate
projects under one group.
On July 7, 2011, the board of directors and stockholders of the Company approved the amendment of the
Company’s Articles of Incorporation as follows: a) increase in authorized capital stock of the Company from
1,000,000,000 shares of common stock with par value of P1.00 per share to 2,300,000,000 shares of
common stock with par value of P1.00 per share; and b) increase in authorized capital stock of the Company
by creating 1,300,000,000 units of 8%, voting, preferred shares with par value of P1.00 per share.
On November 8, 2013, the Philippine SEC approved the increase of capital stock of ALHI from
P3,600,000,000.00 divided into 2,300,000,000 common shares and 1,300,000,000 preferred shares, both
with a par value of P1.00 each to P4,800,000,000.00 divided into 3,500,000,000 common shares and
1,300,000,000 preferred shares, both with a par value of P 1.00 per share.
Page 6 of 54
BUSINESS PLAN
Despite the severe impact of the coronavirus pandemic on the global and local economies in 2020, Anchor
Land Holdings, Inc., was able to weather the challenges and ended the year with a net income of
=
P 351.39 million, reflecting our strong financial position and sound business strategies.
We also learned valuable insights from emerging market trends that were further highlighted during the
pandemic, including a dramatic consumer shift to e-commerce which provides us the impetus to develop
more logistics centers to cater to this growing segment.
The lessons of 2020 made ALHI more determined than ever to continue our path towards full digitization
and to further embrace electronic technologies in all facets of our operations, especially towards digital
marketing and customer care that were started long before the pandemic hit the entire world.
The key for the Group, moving forward, is to further strengthen our resilience and our capability to rise
above unforeseen challenges by embracing more innovations and cutting-edge solutions, and to apply them
to both our property developments and corporate culture.
This means that current and future projects will see the incorporation of more intelligent and environment-
friendly building designs that will enable our customers to live and do business in absolute comfort and
safety without sacrificing aesthetics and productivity.
These modern and intelligent building features are already standard in our developments, but we shall
endeavor to further maximize their use and potential applications so that our projects will all be “future-
ready”.
In terms of marketing and customer support, we continuously pursue innovations such as the creation of
virtual project site tours that will bring real-life images to our customers, rendered in such vivid details
that makes the visitors feel as if they are in actually in the units they plan to purchase.
We have likewise adopted the use of video conferencing facilities and applications for our sales personnel,
both for training and reporting purposes. This eliminates the need for actual long-distance travel especially
as the Group pursues the development of more projects across the archipelago.
Customers shall also have the option to talk with our sales and marketing personnel anytime, anywhere to
discuss project development updates, payment options. This greatly benefits our overseas clients especially
during times of restricted and limited travel.
One of our long-standing business principles to guarantee resilience and risk reduction has been the
diversification of our project offerings.
From the luxury residential condominiums that have become our trademark since we started in Binondo,
we have expanded to logistics centers, office developments, co-living spaces, as well as hotels and tourist
facilities all over the country.
Many of these newer developments create more recurring rental flow for the Group, thus insulating us
further from fluctuations in the residential-commercial market.
Our success in this endeavor is reflected by the upward trend in Anchor Land’s rental income through the
past five years so that, in 2020, we broke through the Php1 billion mark in this revenue category.
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Our 2020 rental income received a huge boost from the opening of the Centrium, our first office project
which has been a LEED Pre-Certified Gold 12-story development consisting of two towers to meet the
growing demand for such spaces at the Entertainment City District.
Construction is also in full swing for our first public-private partnership or PPP endeavor, the Central Link,
which is a Php4 billion joint venture with the Parañaque City Government that commenced in 2019.
The Central Link boasts of three purpose-specific buildings: A satellite office tower for the host city
government, a corporate office tower and a co-living tower. They are all designed to create more jobs as
well as to bring government services closer to the Bay City.
Outside of Metro Manila, our 202 Peaklane project in the heart of Davao City continues to rise. This 28-
story, two-tower development is a perfect vehicle for property investments because of its strategic location
and top-notch amenities.
In terms of market share, we continue our niche developments that include reshaping and revitalizing
Manila’s Chinatown district – a prime example of how well-conceived development concepts can help uplift
and usher an entire community into the future.
Our Chinatown portfolio continues to grow by the day, thanks to our deep understanding and intimate
knowledge of the community where Anchor Land is already considered part of the family.
This is evidenced by our ongoing projects in the district like Anchor Grandsuites, 8 Alonzo Parksuites, and
Juan Luna Logistics Center which have been warmly received just like our previous offerings.
Another fertile field for bold and audacious development plans is the Manila Bay Area where Anchor Land
has helped create a pulsing, vibrant business and entertainment hub that has become one of the most
dynamic and fastest growing in the country.
Ongoing developments such as The Centrium at the Bay City within the jurisdiction of Parañaque, together
with Cosmo Suites and Kanlaon Tower in Pasay City, are designed to boost and complement the booming
BPO and KPO industries in this strategic commercial and leisure center.
Along Roxas Boulevard, we have ongoing projects like the Admiral Grandsuites and the Admiral Hotel
Manila MGallery boutique hotel to further strengthen Anchor Land’s position in the Bay Area.
To ensure sustained growth and availability of inventory, Anchor Land has at least 12 new projects planned
for launching in the near future, including five that will be started in 2021.
These developments range from residential and office developments to logistics centers and hotel and
tourism establishments in accordance with the Group’s goal of continuous diversification.
In Chinatown, we intend to further expand our footprint by launching at least four new projects in 2021,
namely: One Financial Center, One Legacy Grandsuites, Cornell Parksuites and Rosan Logistics.
Our fifth offering for 2021, Recto Logistics, will be located in the adjacent Sta. Cruz district across the 168
Mall.
One Legacy Grandsuites and Cornell Parksuites will continue catering to the ever-growing residential
market in Binondo while One Financial Center will be our first office building in the district to meet strong
pent-up demand.
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Rosan Logistics and Recto Logistics, for their part, will provide businessmen with increasing storage and
logistics facilities as e-commerce continues to grow exponentially in the Philippines especially during the
pandemic.
Anchor Land’s planned projects in the near future include high-end residential tower The Panorama Manila
along Roxas Boulevard aimed at sustaining our momentum in the Bay Area.
Likewise, there are at least three more logistics centers in the pipeline, all in Chinatown: Divisoria Logistics
and two as yet unnamed projects that will be built in company-owned properties along Yuchengo Street
and Juan Luna Street.
Our hotel and resort developments in world-famous Boracay island and two others in Palawan – in the
island municipalities of San Vicente and Coron – likewise remain in the pipeline as we await better
opportunities and improved market conditions in the tourism sector.
While the year 2020 may have proven a challenging one, Anchor Land remains unfazed and unshaken in
our commitment to continue creating value for our customers and shareholders.
We shall remain at the forefront of innovation in the local real estate industry, and continue our leadership
in niche markets where we have built trust, confidence and the reputation for always creating new trends
that soon become industry-wide practices.
Page 9 of 54
KEY OPERATING SUBSIDIARIES
Anchor Properties Corporation (APC), formerly Manila Towers Development Corporation, was registered
with the Philippine SEC on May 11, 1981. APC is a wholly owned subsidiary of ALHI and is engaged in
residential development. APC’s completed projects are Mandarin Square, Wharton Parksuites, and Oxford
Parksuites. It is currently constructing a project in Davao City called 202 Peaklane, another project along
T. Alonzo Street, Binondo called 8 Alonzo Parksuites, and is developing another project along Benavidez
Street, Manila called One Legacy Grandsuites.
Posh Properties Development Corporation (PPDC), a wholly-owned subsidiary of ALHI, was registered
with the Philippine SEC on January 29, 2008 and started operations thereafter. PPDC is engaged in the
residential development of Solemare Parksuites Phase 1, Solemare Parksuites Phase 2, Clairemont Hills
Parksuites and Monarch Parksuites, as well as commercial developments like One Shopping Center and
Two Shopping Center. PPDC is also the developer of The Centrium, a project which will be dedicated for
office and commercial spaces. Construction of PPDC’s newest condominium project located along
Macapagal Avenue, Copeton Baysuites, has already started, and the retrofitting of acquired Kanlaon Tower
in Pasay City completed in 2020.
Gotamco Realty Investment Corporation (GRIC), registered with the Philippine SEC on August 27, 1969,
was acquired by and became a wholly-owned subsidiary of ALHI in 2008. GRIC has completed its 56-storey
residential condominium known as Anchor Skysuites in 2014. GRIC now has two projects along Masangkay
St., Binondo: Anchor Grandsuites and Cornell Parksuites. GRIC is also constructing the Juan Luna Logistics
Center in Binondo, Manila, and Cosmo Suites in Pasay City. The development of One Financial Center along
Quintin Paredes Street, Manila has also begun.
Nusantara Holdings, Inc. (NHI) was registered with the Philippine SEC on December 11, 1995 and became
a wholly owned subsidiary of APC in 2013 through the acquisition of its issued and outstanding shares. NHI
has completed a luxurious 39-storey residential development called Princeview Parksuites along Quintin
Paredes Street, Binondo, Manila.
Admiral Realty Company, Inc. (ARCI) was incorporated on August 31, 1963 and became a wholly-owned
subsidiary of APC in 2009. ARCI has completed the construction of a luxury residential condominium called
Admiral Baysuites, and is now in the completion stages of another luxury condominium project called
Admiral Grandsuites. It is also completing the redevelopment of the Admiral Hotel into a boutique hotel.
ARCI’s future projects include one along Roxas Boulevard called The Panorama Manila, one in Coron,
Palawan, one in San Vicente, Palawan, and one in Boracay, Aklan.
1080 Soler Corp. (1080 Soler) was incorporated on June 8, 2010. It is wholly owned by Anchor Land Global
Corporation (ALGC), which was incorporated on April 8, 2010 and is, in turn, another fully owned
subsidiary of ALHI. It has completed, and is now operating, One Soler, a 10-storey structure that offers
warehousing facilities, office and commercial spaces for lease in the Divisoria area.
Basiclink Equity Investment Corp. (BEIC), incorporated on January 24, 2011, is 60% owned by PPDC and
40% owned by ALGC. It has completed the construction of One Logistics Center, a 15-storey commercial
building that offers office spaces and warehousing facilities in Baclaran.
Globeway Property Ventures, Inc. (GPVI), incorporated on October 25, 2012, is 70% owned by ALHI. It has
completed a 5-storey structure named Bay Life Venue over a 4,897.50 square meters property located at
Aseana City, Parañaque City for retail/restaurant purposes. The East Ocean Palace Restaurant, which is
touted to be the biggest seafood restaurant in the Philippines, is now operational. Bay Life Venue includes
private and open dining areas, commercial units, function rooms, holding rooms and a roof deck.
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Eisenglas Aluminum and Glass, Inc. (EAGI), incorporated on March 4, 2011, is 60% owned by MPMC. EAGI’s
primary purpose is to install and sell aluminum, glass and hardware products.
Anchor Land Hotels & Resorts, Inc. (ALHRI) was incorporated on June 13, 2017 and is a wholly-owned
subsidiary of ALHI. ALHRI was formed and organized to operate and manage the Admiral Hotel and future
hotel and resort developments.
ALHI, in its regular conduct of business, has entered into transactions with its subsidiaries principally
consisting of advances and reimbursement of expenses, development, management, marketing, leasing and
administrative service agreements.
Enterprises and individuals that directly or indirectly, through one or more intermediaries, control or are
controlled by or under common control, with the Group, including holding companies, subsidiaries and
fellow subsidiaries, are related parties of the Group. Associates and individuals owning, directly or
indirectly, an interest in the voting power of the Group that gives them significant influence over the
enterprise, key management personnel, including directors and officers of the Group and close members of
the family of these individuals, and companies associated with these individuals, also constitute related
parties.
In considering each possible related party relationship, attention is directed to the substance of the
relationship and not merely to the legal form.
Outstanding balances between companies within the Group are unsecured, interest-free and settlement
occurs in cash. Related party transactions and balances were eliminated in the consolidated financial
statements.
INTELLECTUAL PROPERTY
Under existing Philippine laws governing intellectual property rights, the registrant of a tradename and a
trademark shall be granted the exclusive right to use the same in relation to a particular product or service.
Thus, to protect its right to exclusively use the names and logos utilized in its business operations, the
Group has registered the following tradenames and trademarks with the Intellectual Property Office (IPO)
of the Philippines as at December 31, 2020:
Anchor Properties APC February 15, 2012 / May 17, 2012 / Class 36
Corporation 4-2012-001815 4-2012-001815
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Mayfair Tower ALHI April 5, 2013 / November 7, Class 36
(stylized) 4-2013-003852 2013/
4-2013-003852
Anchor Skysuites ALHI April 5, 2013 / August 8, 2013 / Class 36
4-2013-003856 4-2013-003856
Two Shopping Center PPDC April 5, 2013 / January 16, 2014 / Class 35
(stylized) 04-2013-003863 04-2013-003863
One Shopping Center PPDC April 5, 2013 / January 16, 2014 / Class 35
(stylized) 04-2013-003862 04-2013-003862
Clairemont Hills PPDC February 15, 2012 / March 20, 2014 / Class 36
4-2012-001814 04-2012-001814
Admiral Grandsuites ARCI July 01, 2014 / 04- April 23, 2015 / Class 36
2014-008273 04-2014-008273
One Logistics Center BEIC May 17, 2013/ October 3, 2013 / Classes 35 / 39
(stylized) 04-2013-005679 04-2013-005679
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Juan Luna Logistics GRIC February 14, 2018/ November 8, 39
Center 4-2018-00002930 2018/ 4-2018-
00002930
One Soler 1080 Soler Corp. February 14, 2018/ July 5, 2018/ 4- 39
4-2018-00002932 2018-00002932
One Financial Center GRIC March 26, 2019/ 04- June 23, 2019/ 35
(Word Mark) 2019-005051 4/2019/005051
Admiral Hotel Manila ALHRI November 12, 2019/ December 18, 2020 43
42019019697 / 42019019697
The Panorama Manila ARCI January 30, 2020/ December 18, 2020 36
(Word Mark) 42020500806 / 42020500806 37
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As the IPO provides, the certificates of registration covering the foregoing trade names and trademarks
shall remain in force for ten (10) years, unless sooner terminated, and may be renewed for periods of ten
(10) years thereafter. Since these names and logos have become distinctive with the luxury homes and
quality service for which the Group is known, the renewal of these certificates shall be made upon their
expiration and the Group shall continue to safeguard its rights over the same. For the same reasons, the
Group also applied for the registration of the trade names and trademarks of its newest development
projects and these applications are currently pending before the IPO.
For the purpose of regulating the subdivision and condominium businesses in the country, Congress has
enacted Presidential Decree No. 957, as amended (PD 957), otherwise known as the “Subdivision and
Condominium Buyer’s Protective Decree”. The power to enforce the provisions of PD 957 is vested on the
Department of Human Settlements and Urban Development (DHSUD), formerly known as Housing and
Land Use Regulatory Board and, to a certain degree, on the concerned local government units (LGUs). PD
957 mandates the registration of all projects intended for the construction of residential, commercial,
industrial or recreational subdivisions, as well as residential and commercial condominiums. It also
prescribes the procedure by which real estate companies may acquire such registration, and the various
licenses, permits and certificates necessary to prove that their development projects are carried out
according to existing statutory requirements.
For condominium projects, PD 957 and the existing rules promulgated by the DHSUD require all owners or
developers to apply for Development Permit, Certificate of Registration and License to Sell with the DHSUD
and pertinent LGUs prior to actual development and selling of units. These documentary requirements
were duly accomplished by the Group for all its projects as it regularly applies for the required government
approvals for any condominium project it undertakes to develop.
In anticipation of the passage and effectivity of the amended Anti-Money Laundering Act of 2001, which
includes real estate developers as covered persons, ALHI Group has taken steps to comply and will
comply with the reportorial requirements for covered and suspicious transactions.
The ALHI Group of companies, like many other corporations, have been impacted by the current worldwide
pandemic of Covid-19.
During the enhanced community quarantine imposed by the Inter-Agency Task Force on Infectious
Diseases (IATF) on the National Capital Region from March 17, 2020 to
May 15, 2020, the Group was forced to close its offices and suspend its construction operations. Upon the
return of daily operations under the modified enhanced community quarantine and general community
quarantine, the Group saw a slower flow of transactions due to restrictions in transportation, stricter safety
measures in government agencies, and limitations in doing face to face business. As a result of more
stringent regulations that the Group has to adhere to in doing business in general, business operations and,
ultimately, the Group’s performance for the year 2020 was affected.
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Development Permits
The Development Permits for each of the Group’s condominium projects were obtained from the DHSUD
as at December 31, 2020:
The Group also applied for the issuance of Development Permits for the new condominium projects it plans
to complete and these applications are now pending before the DHSUD.
Certificate of Registration
After the Group registered its condominium projects with the DHSUD and obtained the necessary approval
of the condominium plans to be used therein, the following Certificates of Registration were issued in favor
of the projects of the Group:
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The Group is also in the process of applying for the Certificates of Registration of its latest projects from the
DHSUD.
License to Sell
The DHSUD further authorized the Group to offer the condominium units in its projects for sale to the public
by issuing the following Licenses to Sell in favor of the Group:
At the appropriate time, the Group also intends to procure the required Licenses to Sell for its future
condominium projects.
Further, in connection with this requirement, and pursuant to the mandatory provisions of PD 957, all
active real estate dealers, brokers and salesmen directly connected with the Group and its projects have
registered themselves with the DHSUD. Moreover, in compliance with Republic Act No. 9646 (RA 9646),
otherwise known as the “Real Estate Service Act of the Philippines”, all real estate service practitioners,
except salespersons, engaged by the Group, have taken the required licensure examination and other
continuing education programs in their field.
The Company and its subsidiaries has likewise secured all the necessary business permits and licenses
required from all government agencies which include registrations and licenses from the SEC, Social
Security System (SSS), and the Bureau of Internal Revenue (BIR).
To date, as far as the Group is concerned, there is no existing legislation or governmental regulation that is
expected to materially affect its business.
In the Philippines, the owner or developer of any project that poses a potential environmental threat or is
likely to cause a significant impact on the environment in a particular area is required to secure an
Environmental Compliance Certificate (ECC) from the Department of Environment and Natural Resources
(DENR). The ECC is issued by the Environmental Management Bureau (EMB) of the DENR, which serves as
a certification that, after reviewing the proposed project, the EMB found that the project will not cause a
significant negative impact on the environment. The issuance of the ECC also certifies that the project
complied with all the requirements of the Environmental Impact Statement (EIS) and the applicant has
committed to implement its approved Environmental Management Plan. In some instances, the ECC
likewise contains specific measures that must be complied with before and during the operation of the
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project, and lists the conditions required to be performed at the abandonment phase of the project to
reduce identified potential impacts on the environment.
Among the projects classified by law to be environmentally critical and mandated to procure ECC prior to
commencement of operation are those involving the construction and development of condominiums.
Hence, the Group has consistently applied for the required ECCs for all its projects. After presenting the
details of its projects before the members of the EMB, satisfying all requirements and proving that no
serious environmental damage shall result from the construction of its condominiums, the Group was able
to secure the necessary ECCs for its projects. The relevant details of the ECCs issued in favor of the Group
and its subsidiaries are as follows:
Environmental
Compliance Certificate
(ECC) No. Date Issued Project Name
ECC NCR 2004-01-28-047-216 January 28, 2004 Lee Tower
ECC-LLDA-2006-109-8420 July 31, 2006 Mayfair Tower
ECC-LLDA-2007-115-8420 August 16, 2007 Mandarin Square
ECC-NCR-0804-048-5011 July 14, 2008 Solemare Parksuites 1
ECC-LDBW-1001-0005 January 29, 2010 Wharton Parksuites
ECC-NCR-1104-0129 May 22, 2010 Admiral Baysuites
ECC-NCR-1009-0350 October 12, 2010 Anchor Skysuites
ECC-NCR-1010-0356 October 22, 2010 Clairemont Hills Parksuites
ECC-NCR-1012-0454 January 28, 2011 Solemare Parksuites 2
ECC-NCR-1303-0109 April 16, 2013 Oxford Parksuites
ECC-NCR-1302-0060 February 18, 2013 Monarch Parksuites
ECC-NCR-1401-0040 January 29, 2014 Princeview Parksuites
ECC-NCR-1408-0316 September 29, 2014 Admiral Grandsuites
ECC-NCR-1602-0017 March 21, 2016 Anchor Grandsuites
ECC-OL-NCR-2016-0041 April 22, 2016 East Ocean Seafood Restaurant
ALHI Corporate Center
ECC-NCR-1609-0058 October 3, 2016 (The Centrium)
ECC-OL-NCR-2017-0129 September 22, 2017 Cosmo Suites
ECC-OL-NCR-2018-0183 August 20, 2018 Juan Luna Logistics Center
ECC-R11-1710-0021 September 28, 2018 202 Peaklane
ECC-OL-NCR-2017-0017 December 19, 2018 8 Alonzo Parksuites
ECC-NCR-1812-0081 December 19, 2018 Copeton Baysuites
ECC-OL-NCR-2019-0270 October 4, 2019 Cornell Parksuites
ECC-OL-NCR-2019-0288 October 18, 2019 One Legacy Grandsuites
ECC-OL-NCR-2021-0017 February 18, 2021 One Financial Center
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HUMAN RESOURCES
The Group has 399 employees. Of these, 93 employees performed clerical functions, 207 employees were
involved in operations and 99 performed administrative functions. The Group has no collective bargaining
agreements with employees and there are no organized labor organizations in the Group. The Group
complies with the minimum compensation benefits standards pursuant to Philippine law. The Group has
not experienced any disruptive labor disputes, strikes or threats of strikes and the Group believes that its
relationship with its employees in general is satisfactory.
RISKS
The Group is subject to competition in each of its principal businesses. This competition comes in terms of
attracting buyers for its condominium units and tenants for its commercial spaces. The Group manages
this risk by identifying the underserved and/or hard to penetrate market, recognizing their needs and
wants prior to project inception, prompt project delivery and maintaining highest turnover standards.
With this, the Group is confident that it will surpass the competition.
Item 2. Properties
The real estate properties owned by the Company and its subsidiaries as at December 31, 2020 are as
follows:
Mayfair Tower
The Mayfair Tower having been completed, standing tall within the 958.9 square meter of land located at
United Nations Avenue corner A. Mabini Street in Ermita, Manila covered by TCT Nos. 269918 and 269919.
This 33-storey residential condominium boasts of world-class amenities and facilities, exclusive to the
privileged few. The sky terrace, one of its best features, allows as much as 200 people to enjoy the wonderful
view of the city and the lush landscape that surrounds the area.
Solemare Parksuites (Phase I), completed in February 2012, is a 18-storey twin tower residential
condominium within a 6,281 square meter property located at ASEANA Business Park in Paranaque, (near
SM Mall of Asia) is covered by TCT No.180308. The Solemare Parksuites is located just off busy Macapagal
Boulevard. Inspired by the Venetian Architecture, Solemare Parksuites’ elegant interiors and proximity to
almost all of the key establishments makes it appealing to its young target market in search of second home.
PPDC acquired a parcel of land situated in Pasay City containing an area of One Thousand Six Hundred
Seven square meters and 20 square decimeters (1,607.20) covered by TCT Nos. 150541 and 150542. It is
now developed as a commercial center which is called One Shopping Center.
Two Shopping Center, having been completed, is a commercial center situated in Pasay City containing an
area of Six Thousand Five Hundred Thirty Three square meters and 90 square decimeters (6,533.90)
covered by TCT Nos. 145526, 145527, 145528, 151248, 151544 and 151545.
Anchor Skysuites
This 56-storey residential condominium is situated in Ongpin Street, Binondo, Manila containing an area of
Three Thousand Sixty Five square meters and 70 square decimeters (3,065.70) covered by
TCT Nos. 97893, 97894, 97895, 282204, and 002-2015003474. The Anchor Skysuites currently holds the
record of being the tallest residential building in all the Chinatowns around the world.
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Admiral Baysuites
Admiral Baysuites is a 53-storey luxury condominium located in Roxas Blvd. The land area of this project
is Three Thousand Four Hundred Forty Six square meters and 20 square decimeters (3,446.20) covered by
TCT No. 002-2011001508.
A parcel of land situated in San Juan City, Metro Manila containing an area of Five Thousand Six Hundred
Twenty Seven square meters (5,627) covered by TCT Nos. 012-201100061, 012-2011000642 and 012-
2011000643 was developed into an integrated development that features medium-rise condominium and
townhouses known as Clairemont Hills Parksuites.
Solemare Parksuites (Phase II) is completed as at December 31, 2014. This 18-storey twin tower
residential condominium is situated in Paranaque City containing an area of Six Thousand Eight Hundred
Nine square meters and 50 square decimeters (6,809.50) covered by TCT No. 180889.
Oxford Parksuites
Situated in La Torre St. corner Masangkay and Benavidez St., Sta. Cruz, Manila, Oxford Parksuites is a
39-storey luxurious residential condominium that is very ideal for investment. The property contains an
area of Eight Hundred Ten square meters and 90 square decimeters (810.90) covered by TCT Nos. 002-
2012003087 and 002-2012003088.
Monarch Parksuites
Monarch Parksuites is a four-tower residential condominium located at Aseana Business Park, Tambo,
Parañaque City, containing an area of Eighteen Thousand One Hundred Nineteen square meters and 40
square decimeters (18,119.40) covered by TCT Nos. 010-2017002202 and 010-2015000742.
Princeview Parksuites
Princeview Parksuites is located in 434 Quintin Paredes St., Binondo, Manila, with an aggregate area of One
Thousand (1,000.00) square meters covered by TCT No. 226613. Princeview Parksuites will offer practical
unit sizes suited to young families as well as businessmen who want to live near their livelihood.
One Soler
One Soler is a 10-storey structure that will offer warehousing facilities in the Divisoria area. It is located in
the corner of Soler Street and Reina Regente Streets, Binondo, Manila covered by TCT No. 002-2011001906.
Admiral Hotel
Directly adjacent to Admiral Baysuites project is Admiral Hotel, consisting of One Thousand Six Hundred
Fifty Five square meters and 10 square decimeters (1,655.10) and covered by TCT No. 002-2011001507,
002-2015002437 and 002-2015002436.
Page 20 of 54
Admiral Grandsuites
Admiral Grandsuites is being constructed on three (3) parcels of land located at Ermita, Malate, Manila
containing an area of One Thousand Six Hundred Thirty square meters and 70 square decimeters
(1,630.70) covered by TCT Nos. 002-2011001323, 002-2011001324 and 002-2011001325.
Anchor Grandsuites
One Logistics Center offers office spaces and warehousing facilities. It is a 15-storey commercial building
located in Lot 2A, Taft Avenue Extension, Pasay City, covered by TCT No. 003-2011000139.
The Centrium
Situated in Parańaque City, The Centrium has been completed by PPDC on a lot consisting of Nine Thousand
Five Hundred Eighty Three square meters (9,583) covered by TCT Nos. 010-2013004248, 010-
2013004251, 010-2016004448 and 010-2016004447. It will be dedicated mostly for leasable office and
commercial spaces.
202 Peaklane
202 Peaklane is a residential condominium project being developed by APC along C.M. Recto St., Davao City.
It will consist of two (2) towers that will have 28 floors each, on four (4) lots consisting of Four Thousand
Forty square meters (4,040) and covered by TCT Nos. 146-2017001274, 146-2017001275, 146-
2017001276, and 146-2017022355.
Copeton Baysuites
Copeton Baysuites will be another luxury condominium project situated in the heart of Aseana City. PPDC
shall be developing four (4) parcels of land covered by TCT Nos. 010-2017001627, 010-2017001628, 010-
2017001629 and 010-2017001630, with a total area of Seven Thousand Seven Hundred Nineteen square
meters (7,719), located along Belle Avenue corner Macapagal Avenue, Parañaque City.
Cosmo Suites
Cosmo Suites is a project being developed as a dormitory for lease to individuals and small families. GRIC
purchased a parcel of land located along P. Celle Street, Pasay City containing an area of Four Thousand
Forty Eight square meters and 24 square decimeters (4,048.24) covered by TCT No. 003-2017000468.
8 Alonzo Parksuites
Located at T. Alonzo Street, Binondo, Manila and covered by TCT No. 002-2015002505, 8 Alonzo Parksuites
is a 47-level residential condominium building to be constructed and developed by APC.
Page 21 of 54
Juan Luna Logistics Center
A parcel of land in Juan Luna St., Tondo, Manila containing an area of One Thousand Six Hundred Seventy
Three square meters (1,673) was purchased by GRIC and covered by TCT No. 002-2018002702, to be
developed into a warehouse facility for sale to business owners in the heart of Divisoria.
GRIC purchased a parcel of land situated along Quintin Paredes Street in the City of Manila, presently
covered by a TCT No. 002-2018001798, with a total declared area of One Thousand One Hundred One
square meters and 90 square decimeters (1,101.90). The property will be developed as a Financial Center
in Binondo, catering to commercial offices.
Cornell Parksuites
GRIC purchased two (2) parcels of land situated along Masangkay Street in the City of Manila, presently
covered by TCT Nos. 002-2018001256 and 002-2018001257, with a total declared area of One Thousand
One Hundred Seventy Seven square meters and 40 square decimeters (1,177.40). A residential
condominium will be developed in the land.
APC purchased three (3) parcels of land situated along Benavidez street corner Recto Street in the City of
Manila, presently covered by TCT Nos. 002-2019000651, 002-2019000652, and 002-2019000653, with a
total declared area of Two Thousand Nine Hundred Eighty square meters (2,980.00). The Group intends
to develop a high-rise condominium in the property.
PPDC is the registered owner of 64 units in Kanlaon Tower Condominium, all covered by Condominium
Certificates of Title, from CCT Nos. 003-2019000436 to 003-2019000499. The condominium units are
located along Roxas Boulevard in Pasay City, and are leased to commercial and residential tenants.
ARCI purchased a parcel of land located along Roxas Boulevard, Manila to be developed into a high-rise
luxury mixed residential and commercial condominium, a portion of which will become a hotel. The total
lot area is Two Thousand Two Hundred Forty square meters and Forty square decimeters (2,240.40).
APC purchased two (2) contiguous parcels of commercial land located at Lot Nos. 1 and 2, Block 1896, M.
De Santos, C. Planas and P. Chavez Streets, Barangay 269 Zone 025, Binondo District (San Nicolas District -
per tax declaration), Manila, with a total area of One Thousand Thirty One square meters and Thirty square
decimeters (1,031.30), covered by TCT Nos. 002-2017002028 and 002-2017002027 for future projects.
ARCI purchased four (4) lots in Barangay 3, Coron, Palawan, covered by TCT Nos. 065-2017000849, 065-
2017000902, 065-2019000055 and 065-2020000307 and Tax Declaration Nos. 09-003-0441 and 09-003-0442.
The property is to be developed as a hotel resort.
Page 22 of 54
Fersan Realty Corporation is holding title to four (4) parcels of land located along Soler Street, Binondo,
Manila, presently covered by TCT Nos. 138428, 138429, 138430, and 138431, with a total lot area of Three
Thousand Eight Hundred Seventeen square meters and Thirty square decimeters (3,817.30) to be
developed into the Recto Logistics Center.
ARCI purchased a parcel of land in San Vicente, Palawan, with a total lot area of Seven Thousand Four
Hundred Sixty Nine square meters (7,469), covered by TCT No. 065-2019001563, to be developed into a
resort hotel.
GRIC also purchased three parcels of land in Binondo and Tondo with a total lot area of Four Thousand
Three Hundred Eighty Three square meters and Ten square decimeters (4,383.1) to be developed as future
residential and commercial projects. These are located at (1) Nueva Street (Yuchengco) with a lot area of
Two Thousand Eighty Five square meters and Nine square decimeters (2,085.9); (2) Juan Luna (Binondo)
with a lot area of One Thousand Five Hundred Two square meters and Nine square decimeters (1,502.9),
and (3) Juan Luna (Tondo) with a lot area of Seven Hundred Ninety Four square meters and Four square
decimeters (794.4).
Finally, ARCI has several properties in Boracay Island located at Barangay Manoc Manoc, Malay, Aklan,
totaling Twenty Six Thousand Two Hundred Sixty Six square meters (26,266), which is to be developed as
luxury resort.
The Group’s properties located in Roxas Boulevard, Pasay, Binondo, Manila and Paranaque were used as
collateral to secure the Group’s loans. Under the loan agreements, there are no limitations on the
ownership and usage of these properties.
Leased Properties
The Group leases its principal place of business at Unit 11B, 11 th Floor L.V. Locsin Building, 6752 Ayala
Avenue, corner Makati Avenue, Makati City, Philippines, 1228. The leased premise has an area of Four
Hundred Forty square meters and 25 square decimeters (440.25), an additional four (4) free basement
parking slots, with an area of about Fourteen square meters and 50 square decimeters (14.50) each.
The Group is also currently leasing at 15th and 16th Floors L.V. Locsin Building, 6752 Ayala Avenue, corner
Makati Avenue, Makati City, Philippines, 1228. Both leased premises have an area of Eight Hundred Eighty
Eight square meters and 24 square decimeters (888.24), including seven (7) basement parking slots each.
On October 1, 2015, the Group, under GPVI, entered into a lease with Bay Area Holdings, Inc. over a property
consisting of Four Thousand Eight Hundred Ninety-Seven square meters (4,897), more or less, located at
Aseana City, Parañaque City, wherein it is currently building a structure called Bay Life Venue for
retail/restaurant purposes. The lease is for a term of ten (10) years, commencing on June 1, 2016 and shall
end on May 31, 2026.
APC is currently leasing a showroom for the Anchor Grandsuites project in Bonondo, Manila with an area of
One Thousand Five Hundred square meters (1,500).
Page 23 of 54
Properties for future acquisition
As at December 31, 2020, the Group plans to acquire other properties through cash purchase, funded by
the Group’s working capital.
To the best of the Company’s knowledge, there has been no occurrence of any of the following events during
the past five (5) years up to the present which are material to an evaluation of the ability and integrity of
any director, any person nominated to become director, executive officer or control person of the Company:
1. Any insolvency or bankruptcy petition filed by or against any business of which such person was
a general partner or executive officer whether at the time of insolvency or within two (2) years
prior to that time;
2. Any conviction by final judgment in a criminal proceeding, domestic or foreign, in any pending
criminal proceeding, domestic or foreign, excluding traffic violations and other minor offenses;
3. Any final and executory order, judgment or decree of any court of competent jurisdiction, domestic
or foreign, permanently or temporarily, enjoining, barring, suspending or otherwise limiting
involvement in any type of business, securities, commodities or banking activities; and
4. Any final and executory judgment by a domestic or foreign court or competent jurisdiction (in a
civil action), the SEC, or comparable foreign body, or domestic or foreign exchange or electronic
marketplace or self regulatory organization, for violation of a securities or commodities law.
There are no legal proceedings to which the Company or its subsidiaries or any of their properties is
involved in or subject to any legal proceedings which would have material effect adverse effect on the
business or financial position of the Company or its subsidiaries.
The stockholders’ meeting of the Company was held virtually last November 26, 2020 at 3 o’clock in the
afternoon. At the said meeting, the following were presented and approved by the stockholders present
representing 77.16% of the outstanding shares entitled to vote:
The following were elected as Directors of the Company for the year 2020-2021, namely: Charles Stewart
Lee, Steve Li, Digna Elizabeth L. Ventura, Christine P. Base, Lorna Pangilinan, Avelino M. Guzman, Jr., Violeta
Josef, Victoria Villaluz, Edwin Lee, Clinton Steven Lee and Neil Y. Chua.
Other than those matters mentioned above, there are no other matters submitted to a vote by the security
holders.
*******************************************************************
Page 24 of 54
PART II - OPERATIONAL AND FINANCIAL INFORMATION
Item 5. Market for Issuer's Common Equity and Related Stockholder Matters
(a) The principal market of the Company’s shares of stock is the Philippine Stock Exchange. The
closing prices of the Company’s share for each quarter for the last two fiscal years were as
follows:
(b) The closing price of the Company’s stocks as of the latest practicable trading dates were as
follows:
(2) Holders
The approximate number of shareholders as at December 31, 2020 is 100. The top twenty (20)
stockholders of the Company as provided by the stock transfer agent’s report as at December 31, 2020
were as follows:
Page 25 of 54
13. Jan Reiner B. Uy 15,000
14. Maria Charito B. Uy 15,000
15. Haidee Generoso and/or Sandy Edward Generoso 11,400
16. Ma. Christmas R. Nolasco 8,200
17. Robert Chua 6,000
18. Edwin Lee 3,000
19. Avelino M. Guzman, Jr. 1,000
20. Violeta Josef 1,000
21. Ma. Victoria Villaluz 1,000
TOTAL 1,040,000,842
(3) Dividends
Cash Dividends
On April 7, 2021, Parent Company’s BOD declared cash dividends as follows:
1. For preferred shares - 8% dividends per issued and outstanding preferred share; and
2. For common shares - = P 0.02 per issued and outstanding common share.
On June 18, 2020, Parent Company’s BOD declared cash dividends as follows:
3. For preferred shares - 8% dividends per issued and outstanding preferred share; and
4. For common shares - = P 0.09 per issued and outstanding common share.
1. For preferred shares - 8% dividends per issued and outstanding preferred share; and
2. For common shares - = P 0.08 per issued and outstanding common share.
The record date is June 5, 2019 and the dividends shall be payable on June 20, 2019.
On May 03, 2018, the Company’s BOD declared cash dividends as follows:
1. For preferred shares - 8% dividends per issued and outstanding preferred share; and
2. For common shares - = P 0.07 per issued and outstanding common share.
The Company has no restrictions that will limit the ability to pay dividends on common equity. But the
Company, as a general rule, shall only declare from surplus profit as determined by the Board of Directors
as long as such declaration will not impair the capital of the Company.
As at reporting date, no sales of unregistered securities or shares of the Company were sold except during
the date of listing with the Philippine Stock Exchange.
Page 26 of 54
Item 6. Management’s Discussion and Analysis
Basis of Presentation
Financial Statements
Basis of Preparation
The consolidated financial statements of the Group have been prepared using the historical cost
basis. The consolidated financial statements are presented in Philippine Peso ( =
P ), the Parent Company’s
functional currency and presentation currency under Philippine Financial Reporting Standards (PFRS). All
amounts are rounded to the nearest peso, except when otherwise indicated.
The accompanying consolidated financial statements have been prepared under the going concern
assumption. While the government eases restrictions of business activities to revive economic growth, the
impact of COVID-19 may continue to evolve giving inherent uncertainties on businesses.
Statement of Compliance
The accompanying consolidated financial statements of the Group have been prepared in compliance with
PFRS, which include the availment of the relief granted by the SEC under Memorandum Circular Nos. 14-
2018 and 3-2019, that deferred the implementation of the following accounting pronouncements until
December 31, 2020. These accounting pronouncements address the issues of PFRS 15, Revenue from
Contracts with Customers affecting the real estate industry:
Deferral of the following provisions of the Philippine Interpretations Committee (PIC) Q&A 2018-12, PFRS
15 Implementation Issues Affecting the Real Estate Industry
a. Exclusion of land in the determination of percentage of completion (POC) discussed in PIC Q&A No.
2018-12-E
b. Assessing if the transaction price includes significant financing component (as amended by
PIC Q&A No. 2020-04)
Deferral of the adoption of PIC Q&A No. 2018-14: PFRS 15 – Accounting for Cancellation of Real Estate Sales
Deferral of the Implementation of IFRS Interpretations Committee ("IFRIC") Agenda Decision on Over Time
Transfer of Constructed Goods [Philippine Accounting Standards (PAS) 23-Borrowing Cost] For Real Estate
Industry
In December 2020, the SEC issued Memorandum Circular No. 34-2020, allowing the further deferral of the
adoption of provisions (a) and (b) above of PIC Q&A 2018-12 and the IFRIC Agenda Discussion on
Borrowing Cost, for another 3 years or until December 31, 2023.
The details and the impact of the adoption of the above financial reporting reliefs are discussed in the
PFRSs include PFRS, Philippine Accounting Standards and Interpretations issued by PIC.
Basis of Consolidation
The consolidated financial statements comprise the financial statements of the Company and its
subsidiaries. The financial statements of the subsidiaries are prepared for the same reporting period as
the Company using consistent accounting policies.
The subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group
obtains control, and continues to be consolidated until the date that such control ceases.
The following management’s discussion and analysis of the Group’s financial condition and results of
operations should be read in conjunction with the Group’s audited financial statements, including the
related notes, contained in this report. This report contains forward-looking statements that involve risks
and uncertainties. The Group cautions investors that its business and financial performance is subject to
substantive risks and uncertainties.
Page 27 of 54
Results of Operations Jan-Dec 31, 2020 vs. Jan-Dec 31, 2019
The Group generated a total of P =351.39 million consolidated net income for the year ended
December 31, 2020. This is 57% lower than P
=814.27 million recognized in the prior year.
The decrease in the consolidated net income was mainly due to the decrease in real estate sales of about
=2,605.97 million or 55% due to low construction accomplishment and low sales volume due to limited
P
selling activities as a result of the quarantine measures implemented by the Government with ongoing
COVID 19 pandemic. The Group has four new projects expected to be launched in 2021.
On the other hand, the Group’s revenue from rental continues to improve in 2020, contributing 31% to
the total consolidated revenue or an amount of P=1,022.47 million compared to the P =782.99 million
recorded in 2019. The increased rental income of the Group was mainly from the rentals earned from
The Centrium.
The significant increase in rental income and the ongoing construction of The Centrium, Cosmo Suites
and Admiral Hotel are all in line with the Group’s continuing efforts to invest and increase its recurring
income projects to rebalance the mix of its revenue sources.
In general, the Group’s operation has been significantly affected by the disruptions caused by the
COVID-19 pandemic. Nevertheless, the revenue increase from rental operations helped the Group to
remain profitable despite the pandemic’s negative effect to the Group’s consolidated net income.
The Group incurred construction and development cost of P =2,663.21 million under real estate for
development and sale. Moreover, reclassification of assets, particularly the land assets for the
Panorama, Recto Logistics, and Rosan Logistics which are previously recorded under investment
properties contributed to the significant increase in the real estate for development and sale in 2020.
The construction and development cost incurred for The Centrium, Admiral Hotel, Central Link and
Cosmo Suites caused the increase in property and equipment and investment properties. The
construction of the Central Link, the Public-Private Partnership (PPP) project with the local government
of Paranaque City started in 2020. This resulted to an increase to other noncurrent assets due to the
advances paid to the contractors.
The Group’s total liabilities has grown by P=1.85 billion partly from the loans availments in 2020, the
increase in payables related to the Group’s ongoing projects and the customer’s deposits and advances
from the Group’s buyers that include collections of receivables not yet recognized as revenue.
Page 28 of 54
Results of Operations Jan-Dec 31, 2019 vs. Jan-Dec 31, 2018
The increase in the consolidated net income is mainly due to the growing rental operations. The rental
operations of the Group posted a stronger performance in 2019 as evidenced by an increase of 29% in
rental income compared to 2018. This is brought about by the significant increase in rental income from
The Centrium, Baylife Venue and Kanlaon Tower Project.
Real estate sales revenue, on the other hand, decreased by 12% because the Group has sold most of its real
estate inventories while 3 new projects that were planned to be launched in 2019 were pushed back to
2020.
The significant increase in rental income and the ongoing construction of The Centrium, Cosmo Suites and
Admiral Hotel are all in line with the Group’s continuing efforts to invest and increase its recurring income
projects while rebalancing the mix of its revenue sources.
The increase of 23% in the Group’s total liabilities was mainly brought about by the bank loans availed
during the year to acquire several properties in the City of Manila and deposits received from the
prospective lessees and from the buyers of the Group’s new and ongoing projects which includes new sales
that are not yet recognized as revenue.
Retained earnings - increase brought by the net income for the year ended December 31, 2019
which was slightly offset by the dividends declared on April 3, 2019.
Other comprehensive income – decrease resulted from the remeasurements in pension liabilities.
Non-controlling interests - decrease due to net loss attributable to the non-controlling interests.
The increase in the Group’s net income is mainly due to the steadily growing rental operations of the Group
as evidenced by the 65% increase in rental income thereby accounting for 9% of the Group’s total revenue
in 2018. Higher income from rental operations is due to the continuous rise in the occupancy in recurring
income projects which included the turned-over commercial units in Solemare Parksuites, Monarch
Parksuites, Oxford Parksuites, BayLife Venue and the newly acquired Kanlaon Tower. Moreover, the Group
continues to generate recurring income from its warehousing facilities, namely One Soler and One Logistics
Center, and from its warehouse and commercial centers pertaining to One Shopping Center and Two
Shopping Center.
The Group has ongoing construction of recurring income projects. These are The Centrium located in
Aseana City, Paranaque which is expected to be completed in 2020 and Cosmo Suites which will offer bed
spacing facilities in Pasay. These developments are presented as investment properties in the Group’s
consolidated financial statements and the related rental income is recognized when construction of these
assets are completed and leased out to third parties.
Page 29 of 54
The significant increase in rental income and the ongoing construction of The Centrium and Cosmo Suites
are all in line with the Group’s continuing efforts to invest and increase its recurring income projects while
rebalancing the mix of its revenue sources.
The increase of 9% or = P 1.72 billion in the Group’s total liabilities is mainly due to the additional availment
of loans during 2018 in order to partly fund the Group’s continuing construction activities and property
acquisitions. Further, the advances, downpayments and deposits paid by the Group’s buyers of
condominium units and lessees of commercial units have likewise contributed to the increase in the
Group’s total liabilities as at December 31, 2018.
These key indicators were chosen in order to provide management with a measure of the Group’s financial
strength (Current Ratio and Debt to Equity) and ability to maximize the value of its stockholders’
investment in the Group (Basic Earnings per Share, Income before Interest, Taxes, Depreciation and
Page 30 of 54
Amortization and Return on Equity).
The Group will continue to identify potential sites for development and pursue expansion activities by
establishing landmark developments in the high rise residential luxury condominium and investment
properties. The Group intends to implement this by putting up the required resources needed for the
development of its existing and future projects.
Receivables (including noncurrent portion) dropped by 17% due to the lower real estate sales
recognized during the year and the reduction from continuing collections from the buyers.
Real estate for development and sale increased by 30% or = P 1,801.30 million as a result of
reclassifications of assets from investment properties with a net amount of =P 1,385.95 million and the
incurred construction and other direct cost of =
P 2,663.21 million gross of =
P 2,247.86 million recognized as
cost of sales during the year.
Other assets (including noncurrent portion) increased by 9% or =P 264.26 million. It was mainly brought
by the advances paid to the contractor for the development of The Central Link, the PPP project with the
local government of Paranaque City.
The increase in property and equipment of = P 622.95 million was mainly attributable to the construction
cost incurred for the development of Admiral Hotel and the right-of-use asset recognized related to the
renewal of lease contract for the head office.
The increase in deferred tax assets of 13% was mainly due to the increase in deferred taxes due to the
other comprehensive income recognized from pension during the year.
Accounts and other payables (including noncurrent portion) increased by 7% or = P 241.16 million due to
the increase in payable to contractors due to continuing development of the Group’s real estate projects.
Income tax payable decreased by 61% compared to the balance as at December 31, 2019 due to the lower
taxable income recognized during the year.
Loans payable (including noncurrent portion) increased by 8% as a result of loan availments during the
year made to finance the Group’s ongoing real estate projects.
The increase in customers’ deposits of 10% was mainly brought by deposits paid by the buyers for the
Group’s new and existing projects. This also includes new sales not yet recognized as revenue during the
year.
Increase in lease liabilities (including noncurrent portion) increased by =P 59.09 million mainly due to the
additional liability recognized related to the renewal of lease contract for the Group’s head office.
Pension liability decreased by =P 29.93 million due to the other comprehensive income recongnized as a
result to changes in financial assumptions in 2020.
Material Changes to the Statements of Income for the Year Ended December 31, 2020
Compared to the Year Ended December 31, 2019 (Increase/Decrease of 5% or more)
Real estate sales revenue decreased by 55% mainly due to the lower construction accomplishment and low
sales volume during the year due the quarantine measures implemented by the Government to fight the
COVID-19 pandemic.
Management fees decreased by 7% mainly due to the expiration of property management agreement of
the Group with Mayfair Tower Condominium.
The significant increase in rental revenue of about =P 239.48 million or 31% was mainly brought by the
significant increase in rental income from The Centrium. The Group likewise continues to generate rental
income from other recurring income projects such as One Soler, One Logistics Center, One Shopping Center,
Two Shopping Center and from other commercial facilities in the Group’s completed condominium
projects.
The =
P 1,484.71 million or 40% decrease in cost of real estate was mainly due to lower real estate sales
revenue recognized.
Selling and administrative expenses decreased by 13% mainly due to the decrease in sales and marketing
expenses.
The increase in finance cost of 5% was mainly brought by the interest expense recognized related to the
amortization of lease liabilities.
Income before income tax and provision for income tax decreased by 56% and 55%, respectively, as a
collective result of the above-mentioned causes.
Cash and cash equivalents increased by 12% as the net result of proceeds from loan availments and
settlements, and collections from customers less disbursements for construction activities and property
acquisitions.
The 10% decrease in real estate for development and sale is mainly due to the construction costs charged
to cost of sales related to the units sold for the year and the transfer to investment properties pertaining to
the costs of completed commercial units in Princeview Parksuites project.
Other assets (including noncurrent portion) increased by 17% mainly due to the higher advances to
contractors and suppliers related to the construction activities. Moreover, higher input value added tax,
creditable withholding tax and prepaid expenses also contributed to the increase in other assets.
Property and equipment increased by 77% as a result of the continuing construction and development of
Admiral Hotel.
The 51% increase in investment properties is mainly due to the continuing construction and development
of The Centrium, Cosmo Suites and Kanlaon Tower and acquisitions of several properties in the City of
Manila (Binondo and Roxas Boulevard) and San Vicente, Palawan. Due to the adoption of PFRS 16,
Page 32 of 54
recognition of right-of-use asset for the lease of land in Aseana City, Paranaque, also contributed to the
increase in investment properties byP =209.52 million.
The increase of 35% in deferred tax assets mainly resulted from the recognition of the difference between
tax and book basis of accounting for real estate transactions and revenue.
Accounts and other payables (including noncurrent portion) increased by 43% mainly attributed to the
increase in rental security deposits related to the Group’s new recurring income project, The Centrium.
Increase in accruals for commission and interests, other taxes payable, and retention payable related to
construction also contributed to the increase in accounts and other payables.
Loans payable increased by 13% or = P 2.03 billion due to the recent loan availments partly to finance the
Group’s ongoing construction and land acquisitions.
Customers’ advances and deposits increased by 83% due to the increase in advances and deposits paid by
buyers for the Group’s new and existing projects. This account also includes the new sales not yet
recognized as revenue during the period.
Lease liabilities (including noncurrent portion) increased by = P 259.93 million due to the result of the
adoption of PFRS 16 in 2019. The amount of increase is net of rental payments and amortization of interest
expense during the year.
The increase in income tax payable by 144% is due to higher taxable net income in 2019. This also resulted
to higher current income tax expense in 2019.
The decrease of 52% in deferred tax liabilities mainly resulted from the recognition of the difference
between tax and book basis of accounting for real estate transactions.
The 13% increase in retained earnings represents consolidated net income net of cash dividend declaration
in 2019.
Material Changes to the Statements of Income for the Year Ended December 31, 2019
Compared to the Year Ended December 31, 2018 (Increase/Decrease of 5% or more)
Real estate sales revenue decreased by 12% mainly due to the decrease in sales in terms of the number of
units since most of the inventories have already been sold for the old projects.
Rental income increased by 29% in 2019 mainly due to the increase in rental income from commercial and
office units to =
P 445.02 million in 2019 compared to = P 283.81 million in 2018. Rental income from
warehousing facilities and commercial centers contributed = P 337.97 million in 2019 which slightly
increased from =P 320.95 million in 2018.
Interest and other income increased by 67% mainly due to higher amortization of discount on installment
contracts receivable from Copeton Baysuites, 202 Peaklane, 8 Alonzo Parksuites, Anchor Grandsuites and
Juan Luna Logistics Center.
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Cost of real estate sales went down by 12% or =
P 487.70 million due to the lower level of realized sales of
residential units during the year.
The increase in selling and administrative expenses of 10% is primarily brought by the increase in
depreciation and amortization of the Group’s completed recurring income projects and right-of-use assets.
The higher operating costs on the Group’s recurring income projects also contributed to the increase in
selling and administrative expenses.
Finance cost increased by 39% or = P 14.30 million mainly due to the amortization of interest expense on the
Group’s lease liability in relation to the adoption of the new accounting standard for leases in 2019.
Income before income tax and provision for income tax increased by 16%, respectively, as a collective
result of the above-mentioned transactions.
Cash and cash equivalents increased by 11% as the net result of proceeds from loan availments and
settlements, and collections from customers less disbursements for construction activities and property
acquisitions.
The 11% decrease in Real estate for development and sale is mainly due to the sold units during the year
and the transfer of the costs of the completed commercial units to investment properties.
The 25% increase in Other assets is mainly due to the advance payments made for the future acquisition of
shares of a company and the increase in advances made to contractors and suppliers.
Property and equipment increased by 31% as a result of the continuing construction and development of
Admiral Hotel.
Investment properties increased by 28% or = P 2.15 billion mainly due to the acquisition of Kanlaon Tower,
the continuing construction and development of The Centrium and Cosmo Suites, and the transfer from
real estate for development and sale of the costs of the completed commercial units of Monarch Parksuites
and Oxford Parksuites, and completion of BayLife Venue.
The increase of 187% or =P 36.76 million in Deferred tax assets mainly resulted from the recognition of the
difference between tax and book basis of accounting for real estate transactions and contracts revenue.
The decrease in income tax payable by 11% is due to the higher amount of creditable withholding taxes
claimed against income tax expense in 2018.
The 12% increase in Loans payable is the net result of loan availments and settlement of loans. These loans
were obtained to partly finance the Group’s construction of ongoing projects and property acquisitions.
The 9% increase in Retained earnings represents 2018 net income net of cash dividend declaration in 2018
and the effect of the initial adoption of new accounting standards.
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Non-controlling interests decreased by 115% or =
P 4.47 million due to current period net loss attributable
to the non-controlling interests.
Material Changes to the Statements of Income for the Year Ended December 31, 2018
Compared to the Year Ended December 31, 2017 (Increase/Decrease of 5% or more)
Rental income increased by 65% mainly due to the increased occupancy in recurring income projects which
included the turned-over commercial units in Solemare Parksuites, Monarch Parksuites, Oxford Parksuites
and Baylife Venue, and the residential and commercial units in Kanlaon Tower. The Group likewise
continues to generate rental income from other recurring income projects such as One Soler, One Logistics
Center, One Shopping Center, Two Shopping Center and from other commercial units in the Group’s
completed condominium projects.
Interest and other income increased by 71% mainly due to higher amortization of discount on installment
contracts receivable.
The 8% increase in cost of real estate is mainly due to the increase in costs to complete the Group’s
condominium projects.
Income before income tax and provision for income tax increased by 12% and 10%, respectively, as a
collective result of the above-mentioned transactions.
These amendments had no significant impact to the Group’s consolidated financial statements.
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Amendments to PAS 1, Presentation of Financial Statements, and PAS 8, Accounting Policies, Changes
in Accounting Estimates and Errors, Definition of Material
The amendments provide a new definition of material that states “information is material if omitting,
misstating or obscuring it could reasonably be expected to influence decisions that the primary users
of general purpose financial statements make on the basis of those financial statements, which
provide financial information about a specific reporting entity.”
The amendments clarify that materiality will depend on the nature or magnitude of information,
either individually or in combination with other information, in the context of the financial
statements. A misstatement of information is material if it could reasonably be expected to influence
decisions made by the primary users.
The revised Conceptual Framework includes new concepts, provides updated definitions and
recognition criteria for assets and liabilities and clarifies some important concepts.
A lessee that applies this practical expedient will account for any change in lease payments resulting
from the COVID-19 related rent concession in the same way it would account for a change that is not
a lease modification, i.e., as a variable lease payment.
The amendments are effective for annual reporting periods beginning on or after June 1, 2020.
The amendments did not have a significant impact to the Group as there are no rent concessions
granted to the group as a lessee.
Adoption of PIC Q&A 2020-03, Q&A No. 2018-12-D: STEP 3 - On the Accounting of the
Difference When the Percentage of Completion is Ahead of the Buyer’s Payment.
PIC Q&A 2020-03 was issued by the PIC on September 30, 2020 aims to provide an additional option
to the preparers of financial statements to present as receivables, the difference between the POC and
the buyer’s payment, with the POC being ahead. This PIC Q&A is consistent with the PIC guidance
issued to the real estate industry in September 2019.
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Effective beginning on or after January 1, 2021
Amendments to PFRS 9, PFRS 7, PFRS 4 and PFRS 16, Interest Rate Benchmark Reform – Phase 2
The amendments provide the following temporary reliefs which address the financial reporting
effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest
rate (RFR):
Practical expedient for changes in the basis for determining the contractual cash flows as a
result of IBOR reform
Relief from discontinuing hedging relationships
Relief from the separately identifiable requirement when an RFR instrument is designated as
a hedge of a risk component
The amendments are effective for annual reporting periods beginning on or after January 1, 2021 and
apply retrospectively, however, the Group is not required to restate prior periods.
The amendments are intended to replace a reference to the Framework for the Preparation and
Presentation of Financial Statements, issued in 1989, with a reference to the Conceptual Framework
for Financial Reporting issued in March 2018 without significantly changing its requirements. The
amendments added an exception to the recognition principle of PFRS 3, Business Combinations to
avoid the issue of potential ‘day 2’gains or losses arising for liabilities and contingent liabilities that
would be within the scope of PAS 37, Provisions, Contingent Liabilities and Contingent Assets or
Philippine-IFRIC 21, Levies, if incurred separately.
At the same time, the amendments add a new paragraph to PFRS 3 to clarify that contingent assets do
not qualify for recognition at the acquisition date.
The amendments are effective for annual reporting periods beginning on or after January 1, 2022 and
apply prospectively.
The amendments prohibit entities deducting from the cost of an item of property, plant and
equipment, any proceeds from selling items produced while bringing that asset to the location and
condition necessary for it to be capable of operating in the manner intended by management. Instead,
an entity recognizes the proceeds from selling such items, and the costs of producing those items, in
profit or loss.
The amendment is effective for annual reporting periods beginning on or after January 1, 2022 and
must be applied retrospectively to items of property, plant and equipment made available for use on
or after the beginning of the earliest period presented when the entity first applies the amendment.
The amendments specify which costs an entity needs to include when assessing whether a contract is
onerous or loss-making. The amendments apply a “directly related cost approach”. The costs that
relate directly to a contract to provide goods or services include both incremental costs and an
allocation of costs directly related to contract activities. General and administrative costs do not
relate directly to a contract and are excluded unless they are explicitly chargeable to the counterparty
under the contract.
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The amendments are effective for annual reporting periods beginning on or after January 1, 2022.
The Group will apply these amendments to contracts for which it has not yet fulfilled all its
obligations at the beginning of the annual reporting period in which it first applies the amendments.
o Amendments to PFRS 9, Financial Instruments, Fees in the ’10 per cent’ test for derecognition of
financial liabilities
The amendment clarifies the fees that an entity includes when assessing whether the terms of a
new or modified financial liability are substantially different from the terms of the original
financial liability. These fees include only those paid or received between the borrower and the
lender, including fees paid or received by either the borrower or lender on the other’s behalf. An
entity applies the amendment to financial liabilities that are modified or exchanged on or after
the beginning of the annual reporting period in which the entity first applies the amendment.
The amendment is effective for annual reporting periods beginning on or after January 1, 2022
with earlier adoption permitted. The Group will apply the amendments to financial liabilities that
are modified or exchanged on or after the beginning of the annual reporting period in which the
entity first applies the amendment.
The amendment removes the requirement in paragraph 22 of PAS 41 that entities exclude cash
flows for taxation when measuring the fair value of assets within the scope of
PAS 41.
An entity applies the amendment prospectively to fair value measurements on or after the
beginning of the first annual reporting period beginning on or after January 1, 2022 with earlier
adoption permitted. The amendments are not expected to have a material impact on the Group.
The amendments are effective for annual reporting periods beginning on or after January 1, 2023 and
must be applied retrospectively. The standard will affect the future classification of liabilities as
current or noncurrent when there are future deferral of settlement of the Group’s financial liabilities.
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PFRS 17, Insurance Contracts
PFRS 17 is a comprehensive new accounting standard for insurance contracts covering recognition
and measurement, presentation and disclosure. Once effective, PFRS 17 will replace PFRS 4,
Insurance Contracts. This new standard on insurance contracts applies to all types of insurance
contracts (i.e., life, non-life, direct insurance and re-insurance), regardless of the type of entities that
issue them, as well as to certain guarantees and financial instruments with discretionary
participation features. A few scope exceptions will apply.
The overall objective of PFRS 17 is to provide an accounting model for insurance contracts that is
more useful and consistent for insurers. In contrast to the requirements in PFRS 4, which are largely
based on grandfathering previous local accounting policies, PFRS 17 provides a comprehensive
model for insurance contracts, covering all relevant accounting aspects. The core of PFRS 17 is the
general model, supplemented by:
A specific adaptation for contracts with direct participation features (the variable fee approach)
A simplified approach (the premium allocation approach) mainly for short-duration contracts
PFRS 17 is effective for reporting periods beginning on or after January 1, 2023, with comparative
figures required. Early application is permitted.
The Group is not engaged in the business of insurance; hence, this standard is not applicable to the
Group.
Deferred Effectivity
Amendments to PFRS 10, Consolidated Financial Statements, and PAS 28, Sale or Contribution of
Assets between an Investor and its Associate or Joint Venture
The amendments address the conflict between PFRS 10 and PAS 28 in dealing with the loss of
control of a subsidiary that is sold or contributed to an associate or joint venture. The
amendments clarify that a full gain or loss is recognized when a transfer to an associate or joint
venture involves a business as defined in PFRS 3. Any gain or loss resulting from the sale or
contribution of assets that does not constitute a business, however, is recognized only to the
extent of unrelated investors’ interests in the associate or joint venture.
On January 13, 2016, the Financial Reporting Standards Council deferred the original effective
date of January 1, 2016 of the said amendments until the International Accounting Standards
Board (IASB) completes its broader review of the research project on equity accounting that may
result in the simplification of accounting for such transactions and of other aspects of accounting
for associates and joint ventures.
The Group does not expect these amendments to have significant impact to the consolidated
financial statements because it does not currently have interests in associates and joint ventures.
Deferral of Certain Provisions of PIC Q&A 2018-12, PFRS 15 Implementation Issues Affecting the
Real Estate Industry (as amended by PIC Q&As 2020-02 and 2020-04)
On February 14, 2018, the PIC issued PIC Q&A 2018-12 which provides guidance on some PFRS
15 implementation issues affecting the real estate industry. On October 25, 2018 and February
08, 2019, the Philippine Securities and Exchange Commission (SEC) issued SEC MC No. 14-2018
and SEC MC No. 3-2019, respectively, providing relief to the real estate industry by deferring the
application of certain provisions of this PIC Q&A for a period of three years until December 31,
2020. On December 15, 2020, the Philippine SEC issued SEC MC No. 34-2020 which further
extended the deferral of certain provisions of this PIC Q&A until December 31, 2023.
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A summary of the PIC Q&A provisions covered by the SEC deferral and the related deferral
period follows:
Deferral Period
a. Assessing if the transaction price includes a Until December 31, 2023
significant financing component as discussed in
PIC Q&A 2018-12-D (amended by PIC Q&A 2020-
04)
b. Treatment of land in the determination of the POC Until December 31, 2023
discussed in PIC Q&A 2018-12-E
The SEC Memorandum Circulars also provided the mandatory disclosure requirements should an
entity decide to avail of any relief. Disclosures should include:
In November 2020, the PIC issued the following Q&As which provide additional guidance on the
real estate industry issues covered by the above SEC deferrals:
PIC Q&A 2020-04, which provides additional guidance on determining whether the
transaction price includes a significant financing component
The Group availed of the SEC reliefs to defer the above specific provisions of PIC Q&A No. 2018-
12. Had these provisions been adopted, the Group assessed that the impact would have been as
follows:
The mismatch between the POC of the real estate projects and right to an amount of
consideration based on the schedule of payments explicit in the contract to sell would constitute
a significant financing component. In case of the presence of significant financing component, the
guidance should have been applied retrospectively and would have resulted to restatement of
prior year financial statements. Adoption of this guidance would have impacted interest income,
interest expense, revenue from real estate sales, instalment contracts receivable, provision for
deferred income tax, deferred tax asset or liability for all years presented, and the opening
balance of retained earnings. Currently, any significant financing component arising from the
mismatch discussed above is not considered for revenue recognition purposes.
The exclusion of land in the determination of POC would reduce the percentage of completion of
real estate projects resulting in a decrease in beginning retained earnings as well as a decrease in
the revenue from real estate sales in 2020.
The above would have impacted the cash flows from operations and cash flows from financing
activities for all years presented.
As prescribed by SEC MC No. 34-2020, for financial reporting periods beginning on or after
January 1, 2021, the availment of the above deferral will impact the Group’s financial reporting
during the period of deferral as follows:
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a. The financial statements are not considered to be in accordance with PFRS and should specify in
the “Basis of Preparation of the Financial Statements” section of the financial statements that the
accounting framework is:
PFRS, as modified by the application of the following financial reporting reliefs issued and
approved by the Securities and Exchange Commission in response to the COVID-19 pandemic:
1. Treatment of land in the determination of the percentage-of-completion; and
2. Assessing if the transaction price includes a significant financing component (as amended by
PIC Q&A 2020-04)
Upon full adoption of the above deferred guidance, the accounting policies will have to be applied
using full retrospective approach following the guidance under PAS 8, Accounting Policies, Changes in
Accounting Estimates and Errors.
Deferral of PIC Q&A 2018-14, Accounting for Cancellation of Real Estate Sales (as amended by PIC
Q&A 2020-05)
On June 27, 2018, PIC Q&A 2018-14 was issued providing guidance on accounting for cancellation of
real estate sales. Under SEC MC No. 3-2019, the adoption of PIC Q&A No. 2018-14 was deferred until
December 31, 2020. After the deferral period, real estate companies will adopt PIC Q&A No. 2018-14
and any subsequent amendments thereto retrospectively or as the SEC will later prescribe.
On November 11, 2020, PIC Q&A 2020-05 was issued which supersedes PIC Q&A 2018-14. This PIC
Q&A adds a new approach where the cancellation is accounted for as a modification of the contract (i.e.,
from non-cancellable to being cancellable). Under this approach, revenues and related costs previously
recognized shall be reversed in the period of cancellation and the inventory shall be reinstated at cost.
PIC Q&A 2020-05 will have to be applied prospectively from approval date of the Financial Reporting
Standards Council which was November 11, 2020.
The Group availed of the SEC relief to defer the adoption of this PIC Q&A until December 31, 2020.
Currently, the Group records the repossessed inventory at cost. The Group opted to implement
approach 3 in its accounting for sales cancellation.
IFRIC Agenda Decision on Over Time Transfer of Constructed Goods (PAS 23, Borrowing Cost)
In March 2019, IFRIC published an Agenda Decision on whether borrowing costs can be capitalized
on real estate inventories that are under construction and for which the related revenue is/will be
recognized over time under paragraph 35(c) of IFRS 15 (PFRS 15). IFRIC concluded that borrowing
costs cannot be capitalized for such real estate inventories as they do not meet the definition of a
qualifying asset under Philippine Accounting Standards (PAS) 23, Borrowing Costs, considering that
these inventories are ready for their intended sale in their current condition.
The IFRIC Agenda Decision would change the Group’s current practice of capitalizing borrowing costs
on real estate projects with pre-selling activities.
On February 11, 2020, the Philippine SEC issued Memorandum Circular No. 4-2020, providing relief
to the Real Estate Industry by deferring the mandatory implementation of the above IFRIC Agenda
Decision until December 31, 2020. Further, on December 15, 2020, the Philippine SEC issued SEC MC
No. 34-2020, which extends the relief on the application of the IFRIC Agenda Decision provided to the
Real Estate Industry until December 31, 2023. Effective January 1, 2024, the Real Estate Industry will
adopt the IFRIC agenda decision and any subsequent amendments thereto retrospectively or as the
Page 41 of 54
SEC will later prescribe. A real estate company may opt not to avail of the deferral and instead
comply in full with the requirements of the IFRIC Agenda Decision.
The Group opted to avail of the relief as provided by the SEC. Had the Group adopted the IFRIC agenda
decision, borrowing costs capitalized to real estate inventories related to projects with pre-selling
activities should have been expensed out in the period incurred. This adjustment should have been
applied retrospectively and would have resulted in restatement of prior year financial statements.
Adoption of the IFRIC agenda decision would have impacted interest expense, cost of sales, provision
for deferred income tax, real estate inventories, deferred tax liability and the opening balance of
retained earnings. The above would have impacted the cash flows from operations and cash flows
from financing activities for all years presented.
Other Disclosures
Other than those already disclosed in the consolidated financial statements, there were no material
events or uncertainties known to management as at December 31, 2020, in respect of the following:
Any known trends, demands, commitments, events or uncertainties that are reasonably expected
to have a material effect on liquidity. The Group does not anticipate having within the next 12
months any liquidity problems nor does it anticipate any default or breach of any of its existing
notes, loans, leases or other indebtedness or financing agreement.
Material off-balance sheet transactions, arrangements, obligations and other relationships of the
Group with unconsolidated entities or other persons created during the reporting period.
Known trends, events or uncertainties that have had or that are reasonably expected to have a
material impact on net sales/revenue/income from continuing operations.
Significant elements of income or loss that did not arise from the Group’s continuing operations.
Seasonal aspects that had material effect on the financial condition or result of operations.
The financial statements and schedules listed in the accompanying Index to Financial Statements and
Supplementary Schedules are filed as part of this Form 17-A as Annex “A”.
The aggregate fees for each of the last three (3) years for professional services rendered by the Group’s
external auditors:
(a) Audit and audit related fees for the Group was for expressing an opinion on the financial statements
and assist ance in preparing the annual income tax return.
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(b) There are no other assurance and related services by the external auditor that are reasonably related
to the performance of the audit or review of the registrant’s financial statements.
(c) There were no tax fees paid for the years 2020, 2019 and 2018.
(d) There were no other fees paid to the external auditors for the years 2020, 2019 and 2018.
(e) Audit committee’s approval policies and procedures for the above services – the committee will
evaluate the proposals from known external audit firms. The review will focus on quality of service,
commitment to deadline and fees as a whole, and no one factor should necessarily be determinable.
There were no changes in and disagreements with accountants on accounting and financial disclosure.
Page 43 of 54
PART III – CONTROL AND COMPENSATION INFORMATION
The incumbent directors and executive officers of the Company are as follows:
Year of
Assumption of No. of
Office Name Age Office Years/Month
Director and Chairman of Charles Stewart Lee 30 2014/2020 6 years/
the Board of Directors 6months
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Directors
CHARLES STEWART LEE, British, 30 years old, is incumbent Chairman of the Board of Directors of Anchor
Land Holdings, Inc. He is currently the Director of Pacific Apex Food Ventures, Inc. Mr. Lee studied at the
University of Southern California, Los Angeles, California, USA where he obtained his Business of Arts
Degree in Social Science with emphasis in Economics.
STEVE LI, Hong Kong SAR National, 50 years old, is the Vice-Chairman and Chief Executive Officer of Anchor
Land Holdings, Inc. since 2007 and 2013, respectively. He is concurrently the managing Director of MFT
International Ltd. (Hong Kong). Mr. Li graduated from York University, Toronto, Canada with a Bachelor’s
Degree in Business Administration major in Finance and Accounting.
AVELINO M. GUZMAN, JR., Filipino, 47 years old, was elected as Director of the Company. He is the Managing
Partner of A.M. Guzman, Jr. and Associates Law Office, and of Golden Ace Credit Solutions Company, Ltd. He
also serves as the President and Chairman of the Board of Whidbey Holdings Corporation and as the
Corporate Secretary of Santino Metal Industries, Inc., Merckammed Concepts, Inc., IdeashipPhils. Holdings,
Inc., LTC Group of Companies, VS Marketing Corporation, Anchor Land Global Corporation and Akuna
(Philippines) Inc. He was previously a Senior Associate Lawyer at Saulog & De Leon Law Offices from
January 1999-December 2009. Mr. Guzman, Jr. obtained his Bachelor of Arts major in Economics and his
Bachelor of Laws from San Beda College. He became a Member of the Integrated Bar of the Philippines in
1999.
DIGNA ELIZABETH L. VENTURA, Filipino, 48 years old, is the President of Anchor Land Holdings, Inc. since
August 15, 2011. From July 2005, she served as the Asst. Vice President for Sales & Marketing and in 2009,
she was promoted as the Vice President for Sales & Marketing of the Company. Prior to joining the
Company, she was the Sales Director of Filinvest, Inc., Sales and Marketing Manager of the Waterfront Hotel
and Megaworld Properties and Holdings, Inc. Ms. Ventura earned her Bachelor of Science Degree in Hotel
and Restaurant Management from the University of Santo Tomas.
LORNA PANGILINAN, Filipino, 65 years old, is an Independent Director of the Company. Currently, she does
consultancy engagements with various companies. Her clients includes Fraport AG, Macroasia Corporation,
Sublic Leisure Inc., Zuellig, MRT-4 (Bouygues), Asia’s Emerging Dragon Corporation, Metropolitan Medical
Center, and Ever-Gotesco Group of Companies. She held several executive positions from 1977 to 2010. She
also served as director and committee member to different private and financial institutions such as Savers
Dome Inc., Tong Yang Savings Bank, Chamber of Thrift Banks, Capwire and Pocketbell, Republic
Telecommunications Holdings, Inc., AG Finance Inc., DBP Management Corporation, DBP Data Center, Inc.
and DBP Provident Fund Committee and DBP-Institutional Banking Group Credit Committee. She also
earned her bachelor’s degree in Economics at the University of the Philippines Diliman and a MA candidate
in Economics at Ateneo de Manila University.
CHRISTINE P. BASE, Filipino, 50 years old is the Corporate Secretary and a member of the Audit committee
of the Anchor Land Holdings, Inc. since April 10, 2007. She is currently a Corporate and Tax Lawyer at Pacis
and Reyes, Attorneys and the Managing Director of Legisforum, Inc. She is the Corporate Secretary of SBS
Philippines Corporation, Italpinas Development Corporation, Araneta Properties, Inc., SL Agritech
Corporaiton, Asiasec Equities, Inc. and Ever-Gotesco Resources and Holdings, Inc. She was the Compliance
Officer of Bloomberry Resorts Corporation. She is a director and/or corporate secretary of several private
corporations. She was an Auditor and then Tax Lawyer of Sycip, Gorres, Velayo & Co. She is a graduate of
Ateneo De Manila University School of Law with a degree of Juris Doctor. She passed the Bar Examination
in 1997. Ms. Base is also a Certified Public Accountant. She graduated from De La Salle University with a
degree of Bachelor of Science in Commerce major in Accounting.
CLINTON STEVEN LEE, British, 27 years old, has been working for Anchor Land Holdings, Inc. since 2016
under the Office of the Chairman. He heads the Business Development Group as well as the Market
Research Group. Mr. Lee graduated from the University of California, Los Angeles, California USA where he
obtained his degree of Bachelor of Arts Degree in Sociology.
VIOLETA J. JOSEF, Filipino, 74 years old, was elected as Independent Director of the Company. She
completed her Bachelor in Business Administration from the University of East. She is a Certified Public
Accountant and received her Masters Degree in Business Administration-Top Executive Program from the
Page 45 of 54
Pamantasan ng Lungsod ng Maynila where she is now a part-time Lecturer in PLM’s Graduate School of
Business. She also completed her General Management Executive Program at the National University of
Singapore, Faculty of Business Administration in 1992. She held various executive positions such as Senior
Vice-President, Treasurer, Controller and Director at the Multinational Group of Companies from 1972-
2014. She started her career in public practice in SGV and Co. immediately after completing her Bachelor’s
Degree. Ms. Josef was also a former board member of the Professional Regulatory Board of Accountancy,
for years 1995 to 1998. She has held several positions in various professional and civic organizations, such
as Past National President of the Philippine Institute of Certified Public Accountants in 2013-2014, Deputy
Vice-President of the Philippine Federation of Professional Associations in 2014-2016, life-time member
of the Philippine Association of Professional Regulatory Board Members since 1995, Past President of the
Association of CPAs in Commerce and Industry in 1986 and a former member of the Auditing Standards
and Practices Council. As PICPA President, she was a board and council member of various international
accountancy organizations, such as the Asean Federation of Accountants (AFA), the Confederation of Asian
and Pacific Accountants (CAPA) and the International Federation of Accountants (IFAC).
MA. VICTORIA A. VILLALUZ, Filipino, 67 years old, is the Lead Independent Director of the Company. She
is a Member of the Integrated Bar of the Philippines, the UP Women Lawyers’ Circle and the Tax
Management Association of the Philippines where she also served as President in 2010. She previously
worked with Sycip, Gorres, Velayo & Co. from 1980 until her retirement in 2014 as a Partner in the Tax
Services Group where she provided, among others, tax advisory and tax planning, as well as quality and
risk management, services to clients from various industries such as utilities (power, water, oil and gas),
telecommunications, entertainment, engineering and construction, real estate, hotel, transportation,
trading and manufacturing. Ms. Villaluz is an accredited lecturer in the Mandatory Continuing Legal
Education (MCLE) prescribed by the Supreme Court for lawyers; she was also the tax training director for
the Arthur Anderson New Tax Seniors’ Training Seminar in Penang Malaysia until 2001 and was a
lecturer in the Arthur Andersen New Manager’s training seminars in St. Charles, Illinois. Ms. Villaluz
obtained her Bachelor of Arts in Philosophy and her Bachelor of Laws from the University of the
Philippines.
NEIL Y. CHUA, Filipino, 50 years old, is the Director and Chief Finance Officer of Anchor Land Holdings, Inc.
since 2013 and 2009, respectively. Neil Y. Chua has worked with various accounting firms before joining
Anchor Land Holdings, Inc. He was a senior manager at KPMG, Auckland, New Zealand from March 2008
to May 2009; Purwantono, Sarwoko & Sandjaja / Ernst & Young, Indonesia from October 2002 to February
2008. He was also an Andersen Worldwide Manager of Prasetio, Utomo & Co/Andersen, Indonesia and a
supervisor at SGV & Co./Arthur Andersen, Philippines from November 1991 to
September 1996. Mr. Chua obtained his Bachelor of Accountancy from the University of San Carlos Cebu
City. He is also a Certified Public Accountant and a member Philippine Institute of Certified Public
Accountant since 1992.
EDWIN LEE, Filipino, 63 years old, was elected as a Director of Anchor Land Holdings, Inc. on
June 28, 2012 but only assumed office on April 2, 2013 i.e., when the SEC approved the amendment of the
Company’s Articles of Incorporation which effectively increased the number of Directors from
seven (7) to nine (9). He is currently serving as the Senior Assistant Vice President at the Office of the
President of SM Investments Corporation. He graduated from De La Salle University with a Bachelor of
Science Degree in Commerce major in Business Management.
Key Officers
The members of the management team aside from those mentioned above are as follows:
HONORIO A. ALVAREZ, JR., Filipino, 52 years old, is the Assistant Vice-President for Engineering. He was
formerly the General Manager and Vice President of DD Happy Homes Residential Centers, Inc., a subsidiary
of Double Dragon Properties, from June 2015 to January 2017. He also served as the Senior Assistant Vice
President-Project Management Head, High Rise Division/Special Projects of Eton Properties Philippines,
Inc. from March 2011 to March 2015. He graduated from the University of Santo Tomas with a Bachelor of
Science in Civil Engineering in 1989.
Page 46 of 54
SARAH JOELLE C. LINTAG, Filipino, 48 years old, is the Head of the Corporate Affairs Department. She was
formerly the Vice President for Billings, Credit Operations and Legal Services from June 2015 to December
2015 for ACM Landholdings, Inc. (Philippines), where she also served as its Assistant Vice President for
Legal and Human Resources and Administration from July 2013 to May 2015. She was also the Chief
Political Affairs Officer in the Office of the Honorable Edgardo “Sonny” Angara in the House of
Representatives from October 2010 to June 2013. She graduated from California State University,
Northridge, California (USA) with a Bachelor of Arts degree in Political Science in 1995, and earned her
Bachelor of Laws degree from the University of the Philippines, Diliman, Quezon City in 1999.
EDWIN L. AQUINO, Filipino, 43 years old, is the Internal Audit Manager at Anchor Land Holdings, Inc. He is
a Certified Public Accountant and a Certified Internal Auditor. He was a former Audit Head of the Century
Properties Group from May 2015 to April 2019. He was also previously an Audit Manager of the Siycha
Group of Companies, Watsons Personal Care Stores (Philippines), Inc., Steel Asia Manufacturing
Corporation, and a Senior Internal Auditor of San Miguel Corporation Group. He obtained his Bachelor of
Science in Accountancy degree at the University of the East in 1998.
No single person is expected to make a significant contribution to the business since the Company considers
the collective efforts of all its employees as instrumental to the success of the Company.
Aside from Mr. Charles Stewart Lee and Mr. Clinton Steven Lee, there are no family relationship, either by
affinity or consanguinity up to the fourth civil degree among the directors, executive officers and persons
nominated and chosen by the Company to become directors and executive officers.
The Company is not aware of any bankruptcy petition of any civil or criminal legal proceedings filed against
any one of its directors or executive officer during the past five (5) years. Also, there are no material legal
proceedings to which the Company or its subsidiary or any of their properties are involved in or subject to
any legal proceedings which would have material effect adverse on the business or financial position of the
Company or its subsidiaries.
As at December 31, 2020, the Group is not involved in any litigation it considers material. However, the
Group’s directors and officers were not spared from having their names dragged in legal disputes instituted
by disgruntled persons with whom they transacted with. For the past five (5) years, the Group’s directors
and officers were wrongfully impleaded in several labor cases which were accordingly dismissed by the
concerned tribunals where they were filed.
Page 47 of 54
Item 10. Executive Compensation
Information as to the aggregate compensation during the last three (3) fiscal years paid to the Company’s
officers and other most highly compensated executive officers as a group is as follows:
Under the By-Laws of the Company, by resolution of the Board, each director shall receive a reasonable per
diem allowance for his attendance at each meeting of the Board. As compensation, the Board shall receive
and allocate an amount of not more than ten percent (10%) of the net income before income tax of the
corporation during the preceding year. Such compensation shall be determined and apportioned among
directors in such manner as the Board may deem proper, subject to the approval of stockholders
representing at least majority of the outstanding capital stock at a regular or special meeting of the
stockholders.
Other than those mentioned above, there are no other arrangements for compensation either by way of
payments for committee participation or special assignments. There are also no outstanding warrants or
options held by the Company’s Chief Executive Officer and other officers and/or directors.
There are no special contracts of employment between the Company and the named directors and
executive officers, as well as special compensatory plans or arrangements, including payments to be
received from the Company with respect to any named directors or executive officers. All other employees
are either hired as regular, project based or fixed-term engagement. Termination of employees are with
valid cause, or may due to end of contract or project.
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Item 11. Security Ownership of Certain Record & Beneficial Owners and Management
There were no delinquent stocks, and the direct and indirect record and beneficial owners of more than
five percent (5%) of the Company’s voting securities as at December 31, 2020 are as follows:
Common Cindy Sze Mei Ngar Cindy Sze Mei Ngar British 155,999,298 15.00% 15.00%
Room 21B Ocean
Preferred Tower 51,999,766 15.00%
Roxas Boulevard,
Manila
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As at December 31, 2020, the following are known to the Company as participants of the PCD holding 5%
or more of the Company’s common shares:
The following is a summary of the aggregate shareholdings of the Company’s directors and executive
officers in the Company and the percentage of their shareholdings as at December 31, 2020:
Percentage
Amount and Held Out of
Nature of Percentage the Total
Title of Name of Beneficial Owner / Beneficial Per Class of Outstanding
Class Address Ownership Citizenship Share Shares
Page 50 of 54
Percentage
Amount and Held Out of
Nature of Percentage the Total
Title of Name of Beneficial Owner / Beneficial Per Class of Outstanding
Class Address Ownership Citizenship Share Shares
Common Christine P. Base 300,003 Filipino 0.03% 0.03%
Corporate Secretary/Director Direct
8/F Chatham House, 116 Valero
Preferred St., Salcedo Village, Makati City 100,000 0.03%
Direct
Page 51 of 54
(3) Voting Trust Holders of 5% or More
There is no voting trust or similar arrangement executed among holders of five percent (5%) or more of
the issued and outstanding shares of common stock of the Company.
The Company’s Articles and By-Laws do not contain any provision that will delay, deter, or prevent a change
in control of the Company. However, because the Company owns land, Philippine laws limit foreign
shareholdings in the Company to a maximum of 40% of its issued and outstanding capital stock. Any
transfer of the Company’s shares by Filipinos to Non-Filipinos will be subject to the limitation that any such
transfer will not cause foreign shareholdings in the Company to exceed 40% of the Company’s issued and
outstanding capital stock. In the event that foreign ownership of the Company’s issued and outstanding
capital stock will exceed 40%, the Company has the right to reject a transfer request to persons other than
Philippine National or corporations organized under Philippine laws and whose capital stock is at least
60% owned by Filipinos and has the right not to record such purchases in the books of the Company.
(1) As at December 31, 2019, the following is a summary of the Group’s director who owned ten percent
(10%) or more of the outstanding shares of the Company:
The Group, in the normal course of business, enters into transaction with related parties consisting
primarily of non-interest bearing advances for working capital requirements.
Outstanding balances with related parties included in the appropriate accounts in the consolidated balance
sheets are as follows:
Compensation of key management personnel pertaining to directors’ fees and allowances amounted to
=
P 1.8 million in 2020, 2019 and 2018.
No transaction was entered by the Group with parties who are not considered related parties but with
whom the Group or its related parties have a relationship that enables the parties to negotiate terms of
material transactions.
Page 52 of 54
PART IV. EXHIBITS AND SCHEDULES
As indicated in the SEC Memorandum Circular No. 15 Series of 2017, all publicly listed companies shall
submit a fully accomplished Integrated Annual Corporate Governance Report (I-ACGR) on May 30 of the
following year for every year that the company remains listed in the PSE.
(a) Exhibits
The Audited Financial Statements ending December 31, 2020 are hereto attached and incorporated
by reference as Annex “A”.
The sustainability report of the company is also attached and incorporated as Annex “B”.
Page 53 of 54
COVER SHEET
C S 2 0 0 4 1 1 5 9 3
COMPANY NAME
A N C H O R L A N D H O L D I N G S , I N C . A N D
S U B S I D I A R I E S
1 1 t h F l o o r , L . V . L o c s i n B u i l d i
n g , 6 7 5 2 A y a l a A v e n u e c o r n e r M
a k a t i A v e n u e , M a k a t i C i t y
Form Type Department requiring the report Secondary License Type, If Applicable
A A F S C R M D N / A
COMPANY INFORMATION
Company’s Email Address Company’s Telephone Number Mobile Number
Annual Meeting
No. of Stockholders (Month/Day) Fiscal Year (Month / Day)
11th Floor, L.V. Locsin Building, 6752 Ayala Avenue corner Makati Avenue, Makati City
NOTE 1 : In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be reported to the Commission within
thirty (30) calendar days from the occurrence thereof with information and complete contact details of the new contact person designated.
2 : All Boxes must be properly and completely filled-up. Failure to do so shall cause the delay in updating the corporation’s records with the Commission
and/or non-receipt of Notice of Deficiencies. Further, non-receipt of Notice of Deficiencies shall not excuse the corporation from liability for its deficiencies.
*SGVFSM006755*
SyCip Gorres Velayo & Co. Tel: (632) 8891 0307 BOA/PRC Reg. No. 0001,
6760 Ayala Avenue Fax: (632) 8819 0872 October 4, 2018, valid until August 24, 2021
1226 Makati City ey.com/ph SEC Accreditation No. 0012-FR-5 (Group A),
Philippines November 6, 2018, valid until November 5, 2021
Opinion
We have audited the consolidated financial statements of Anchor Land Holdings, Inc. and its Subsidiaries
(the Group), which comprise the consolidated statements of financial position as at December 31, 2020
and 2019, and the consolidated statements of comprehensive income, consolidated statements of changes
in equity and consolidated statements of cash flows for each of the three years in the period ended
December 31, 2020, and notes to the consolidated financial statements, including a summary of
significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Group as at December 31, 2020 and 2019, and its consolidated
financial performance and its consolidated cash flows for each of the three years in the period ended
December 31, 2020 in accordance with Philippine Financial Reporting Standards (PFRSs).
We conducted our audits in accordance with Philippine Standards on Auditing (PSAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Consolidated Financial Statements section of our report. We are independent of the Group in
accordance with the Code of Ethics for Professional Accountants in the Philippines (Code of Ethics)
together with the ethical requirements that are relevant to our audit of the consolidated financial
statements in the Philippines, and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters. For each matter below, our
description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Consolidated Financial Statements section of our report, including in relation to these matters.
Accordingly, our audit included the performance of procedures designed to respond to our assessment of
the risks of material misstatement of the consolidated financial statements. The results of our audit
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procedures, including the procedures performed to address the matters below, provide the basis for our
audit opinion on the accompanying consolidated financial statements.
The Group’s revenue recognition process, policies and procedures are significant to our audit because
these involve application of significant judgment and estimation in the following areas:
(1) assessment of the probability that the entity will collect the consideration from the buyer; (2)
application of the output method as the measure of progress (percentage of completion or POC) in
determining real estate revenue; (3) determination of the actual costs incurred as cost of sales; and (4)
recognition of cost to obtain a contract.
In evaluating whether collectability of the amount of consideration is probable, the Group considers the
significance of the buyer’s initial payments in relation to the total contract price (or buyer’s equity).
Collectability is also assessed by considering factors such as past history with the buyer, and the pricing
of the property. Management regularly evaluates the historical sales cancellations and back-outs, after
considering the impact of the coronavirus pandemic, if it would still support its current threshold of
buyers’ equity before commencing revenue recognition.
In measuring the progress of its performance obligation over time, the Group uses the output method.
This method measures progress based on physical proportion of work done on the real estate project
which requires technical determination by the Group’s specialists (project engineers).
In determining the actual costs incurred to be recognized as cost of sales, the Group estimates costs
incurred on materials, labor and overhead which have not yet been billed by the contractor.
The Group identifies sales commission after contract inception as the cost of obtaining the contract. For
contracts which qualified for revenue recognition, the Group capitalizes the total sales commission due to
sales agent as cost to obtain contract and recognizes the related commission payable. The Group uses
POC method in amortizing sales commission consistent with the Group’s revenue recognition policy.
The disclosures related to the real estate revenue are included in Notes 2 and 3 to the consolidated
financial statements.
Audit Response
For the buyers’ equity, we evaluated management’s basis of the buyer’s equity by comparing this to the
historical analysis of sales cancellations from buyers with accumulated payments above the collection
threshold. We also considered the impact of the coronavirus pandemic to the number of cancellations
during the year and checked whether the buyer’s equity would remain reasonable despite the trend. We
traced the analysis to supporting documents such as official receipts, deposit slips, and bank statements.
For the application of the output method, in determining real estate revenue, we obtained an
understanding of the Group’s processes for determining the POC, and performed tests of the relevant
controls. We obtained the certified POC reports prepared by the project engineers and assessed their
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competence and objectivity by reference to their qualifications, experience and reporting responsibilities.
For selected projects, we conducted ocular inspections, made relevant inquiries, including inquiries on
how the coronavirus pandemic affected the POC during the year, and obtained the supporting details of
POC reports showing the completion of the major activities of the project construction.
For the cost of sales, we obtained an understanding of the Group’s cost accumulation process and
performed tests of the relevant controls. For selected projects, we traced costs accumulated, including
those incurred but not yet billed costs, to supporting documents such as invoices and accomplishment
reports from contractors.
For the recognition of cost to obtain a contract, we obtained an understanding of the sales commission
process. For selected contracts, we agreed the basis for calculating the sales commission capitalized and
portion recognized in profit or loss, particularly (a) the percentage of commission due against contracts
with sales agents, (b) the total commissionable amount (e.g., net contract price) against the related
contract to sell, and, (c) the POC against the POC used in recognizing the related revenue from real estate
sales.
Adequacy of Allowance for Credit Losses on Trade Receivables from Real Estate Sales
The Group applies simplified approach in calculating expected credit loss (ECL). There is no allowance
for credit losses and no provision for credit losses on trade receivables from real estate sales as of and for
the year ended December 31, 2020. The use of ECL model is significant to our audit as it involves the
exercise of significant management judgment.
Key areas of judgment include: segmenting the Group’s credit risk exposures; determining the method to
estimate lifetime ECL; defining default; determining assumptions to be used in the ECL model such as
timing and amount of expected net recoveries from defaulted accounts; and incorporating forward-
looking information (called overlays), including the impact of coronavirus pandemic, in calculating ECL.
The disclosures in relation to allowance for credit losses using the ECL model are included in Notes 2 and
3 to the consolidated financial statements.
Audit Response
We obtained an understanding of the methodology and model used for the Group’s credit exposure and
assessed whether it has considered the requirements of PFRS 9 to reflect the time value of money and the
best available forward-looking information.
We (a) assessed the Group’s segmentation of its credit risk exposures based on homogeneity of credit risk
characteristics; (b) checked the methodology used in applying the simplified approach by evaluating the
key inputs, assumptions, and formulas used; (c) tested the definition of default against historical analysis
of accounts and credit risk management policies and practices in place, (d) tested loss given default by
inspecting historical recoveries including the timing, related direct costs, and write-offs; and (e) checked
the forward-looking information used for overlay through statistical test and corroboration using publicly
available information and our understanding of the Group’s lending portfolios and broader industry
knowledge, including the impact of coronavirus pandemic.
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Further, we checked the data used in the ECL model, such as the historical analysis of defaults and
cancellations by tracing these to the real estate sales worksheets per project and supporting documents
such as notice of cancellations and schedule of payments. We also checked management’s assumption on
the timing of recoveries by tracing the subsequent resale of cancelled units to supporting documents. We
recalculated the net cash flows on a sample basis.
In view of the continuing community quarantine being implemented due to the coronavirus pandemic, the
Group’s hotel segment continues to be adversely affected by travel restrictions and delay in the
construction activities. While the hotel property of the Group is still under construction as of
December 31, 2020, the impact of the coronavirus pandemic is still expected to continue even after the
completion of the construction as travel and mobility restrictions, social distancing and stay-at-home
orders, among other measures, are still being implemented. These events and conditions are impairment
indicators requiring the assessment of the recoverable amount of the hotel property, which involves
significant judgment, estimation and assumptions about occupancy rates, average room rates, as well as
external inputs such as discount rate. Hence, the review of such impairment assessment is a key audit
matter in our audit.
The disclosures in relation to the recoverability of hotel property are included in Notes 2 and 3 to the
consolidated financial statements.
Audit Response
We obtained the management’s impairment assessment and evaluated the assumptions used in the
forecasted cash flows. We checked the status of the construction of the hotel through an ocular
inspection. We tested the assumptions used in the projection by comparing the occupancy rates and room
rates against market data, taking into consideration the impact associated to the coronavirus pandemic.
We tested the parameters used in the determination of the discount rate against market data. We also
tested the sensitivity of the present value of discounted cash flows to changes in assumptions used. We
also reviewed the Group’s disclosures on the determination of the recoverable amount of the hotel
property.
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Other Information
Management is responsible for the other information. The other information comprises the information
included in the SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A and Annual Report
for the year ended December 31, 2020, but does not include the consolidated financial statements and our
auditor’s report thereon. The SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A and
Annual Report for the year ended December 31, 2020 are expected to be made available to us after the
date of this auditor’s report.
Our opinion on the consolidated financial statements does not cover the other information and we will not
express any form of assurance conclusion thereon.
In connection with our audits of the consolidated financial statements, our responsibility is to read the
other information identified above when it becomes available and, in doing so, consider whether the other
information is materially inconsistent with the consolidated financial statements or our knowledge
obtained in the audits, or otherwise appears to be materially misstated.
Responsibilities of Management and Those Charged with Governance for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with PFRSs, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management either intends to liquidate the Group or to
cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with PSAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
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aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these consolidated financial statements.
As part of an audit in accordance with PSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group to cease
to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
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From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Jennifer D. Ticlao.
Jennifer D. Ticlao
Partner
CPA Certificate No. 109616
SEC Accreditation No. 1758-A (Group A),
July 2, 2019, valid until July 1, 2022
Tax Identification No. 245-571-753
BIR Accreditation No. 08-001998-110-2020,
November 27, 2020, valid until November 26, 2023
PTR No. 8534373, January 4, 2021, Makati City
April 7, 2021
*SGVFSM006755*
A member firm of Ernst & Young Global Limited
ANCHOR LAND HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
December 31
2020 2019
ASSETS
Current Assets
Cash and cash equivalents (Note 4) P
=1,375,280,379 =1,189,078,934
P
Receivables (Note 5) 3,269,717,658 2,307,928,846
Real estate for development and sale (Note 6) 7,780,358,358 5,979,057,990
Other current assets (Note 7) 1,918,269,794 2,206,611,659
14,343,626,189 11,682,677,429
Noncurrent Assets
Receivables - net of current portion (Note 5) 2,059,680,944 4,120,495,943
Property and equipment (Note 8) 2,720,174,308 2,097,219,920
Investment properties (Note 9) 15,221,425,058 14,893,755,115
Deferred tax assets - net (Note 18) 86,321,439 76,213,398
Other noncurrent assets (Note 10) 1,200,966,836 648,369,145
21,288,568,585 21,836,053,521
P
=35,632,194,774 =33,518,730,950
P
Current Liabilities
Accounts and other payables (Note 11) P
=2,840,023,931 =2,072,676,517
P
Lease liabilities – current portion (Note 22) 53,529,685 26,478,237
Income tax payable 95,100,843 245,879,632
Loans payable (Note 12) 5,198,865,013 4,056,442,393
Customers’ advances and deposits – current portion (Note 13) 3,119,924,447 2,761,757,937
11,307,443,919 9,163,234,716
Noncurrent Liabilities
Accounts and other payables – net of current portion (Note 11) 1,063,599,634 1,589,784,993
Lease liabilities – noncurrent portion (Note 22) 265,492,122 233,449,765
Loans payable – net of current portion (Note 12) 14,111,782,490 13,817,555,703
Customers’ advances and deposits – net of current portion (Note 13) 364,759,905 412,396,680
Deferred tax liabilities - net (Note 18) 148,910,338 167,257,495
Pension liabilities (Note 17) 74,717,911 104,652,471
16,029,262,400 16,325,097,107
P
=27,336,706,319 =25,488,331,823
P
(Forward)
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December 31
2020 2019
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ANCHOR LAND HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
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ANCHOR LAND HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
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ANCHOR LAND HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
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ANCHOR LAND HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Corporate Information and Authorization for the Issuance of the Financial Statements
Corporate Information
Anchor Land Holdings, Inc. (the Parent Company) was incorporated in the Philippines and registered
with the Philippine Securities and Exchange Commission (SEC) on July 29, 2004. The Parent
Company started its operations on November 25, 2005 and eventually traded its shares to the public
in August 2007. The registered office address of the Parent Company is at 11th Floor, L.V. Locsin
Building, 6752 Ayala Avenue corner Makati Avenue, Makati City.
Below are the Parent Company’s subsidiaries with its respective percentage ownership in
2020 and 2019:
Property Development
Gotamco Realty Investment Corporation (GRIC) 100%
Anchor Properties Corporation or APC (formerly Manila Towers
Development Corporation) 100%
Posh Properties Development Corporation (PPDC) 100%
Admiral Realty Company, Inc. (ARCI) 100%
Anchor Land Global Corporation 100%
Realty & Development Corporation of San Buenaventura 100%
Pasay Metro Center, Inc. 100%
1080 Soler Corp. 100%
Nusantara Holdings, Inc. 100%
Globeway Property Ventures, Inc. (GPVI) 70%
Basiclink Equity Investment Corp. 100%
Irenealmeda Realty, Inc. 100%
Frontier Harbor Property Development, Inc. 100%
TeamEx Properties Development Corporation (TPDC) 100%
WeWork Realty Development Corporation (WRDC) 100%
All Farm Genetic Venture Corp. (AFGVC) 70%
Fersan Realty Corporation (FRC) 100%
Hotels and Resorts
Anchor Land Hotels & Resorts, Inc. (ALHRI) 100%
Property Management
Momentum Properties Management Corporation (MPMC) 100%
Aluminum and Glass Doors and Windows Fabrication and
Installation
Eisenglas Aluminum and Glass, Inc. (EAGI) 60%
All of the Parent Company’s subsidiaries were incorporated and domiciled in the Philippines.
The Parent Company and its subsidiaries (collectively called “the Group”) have principal business
interest in the development and sale of high-end residential condominium units and in the
development and leasing of commercial, warehouse and office spaces. MPMC provides property
management services to the Group’s completed projects, commercial centers and buyers. ALHRI
was incorporated in June 2017 to engage in the Group’s hotel and resort operations. TPDC and
WRDC were incorporated in September 2018 and November 2018, respectively, to engage in the
Group’s property development operations. AFGVC was incorporated in November 2018 to engage in
the Group’s development and operate agricultural lands and farms.
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On January 7, 2019, the Group through APC acquired 100% of the voting shares of FRC, a company
registered in the Philippines whose principal activity is to engage in property development
(see Notes 3 and 9).
As of December 31, 2020, FRC, TPDC, WRDC, AFGVC and ALHRI have not yet started
commercial operations.
In 2020, EAGI has stopped its operations. EAGI is previously engaged in the fabrication and
installation of aluminum and glass doors and windows.
There are non-controlling interests of 30% in AFGVC, 30% in GPVI and 40% in EAGI in 2020 and
2019.
Basis of Preparation
The consolidated financial statements of the Group have been prepared using the historical cost
basis. The consolidated financial statements are presented in Philippine Peso (P
=), the Parent
Company’s functional currency and presentation currency under Philippine Financial Reporting
Standards (PFRS). All amounts are rounded to the nearest peso, except when otherwise indicated.
The accompanying consolidated financial statements have been prepared under the going concern
assumption. While the government eases restrictions of business activities to revive economic growth,
the impact of COVID-19 may continue to evolve giving inherent uncertainties on businesses.
Statement of Compliance
The accompanying consolidated financial statements of the Group have been prepared in compliance
with PFRS, which include the availment of the relief granted by the SEC under Memorandum
Circular Nos. 14-2018 and 3-2019, to defer the implementation of the following accounting
pronouncements until December 31, 2020. These accounting pronouncements address the issues of
PFRS 15, Revenue from Contracts with Customers affecting the real estate industry:
Deferral of the following provisions of the Philippine Interpretations Committee (PIC) Q&A 2018-12,
PFRS 15 Implementation Issues Affecting the Real Estate Industry
a. Exclusion of land in the determination of percentage of completion (POC) discussed in PIC Q&A
No. 2018-12-E
b. Assessing if the transaction price includes significant financing component (as amended by PIC
Q&A No. 2020-04)
Deferral of the adoption of PIC Q&A No. 2018-14: PFRS 15 – Accounting for Cancellation of Real
Estate Sales (as amended by PIC Q&A 2020-05)
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In December 2020, the SEC issued Memorandum Circular No. 34-2020, allowing the further deferral
of the adoption of provisions (a) and (b) above of PIC Q&A 2018-12 and the IFRIC Agenda
Discussion on Borrowing Cost, for another 3 years or until December 31, 2023.
The details and the impact of the adoption of the above financial reporting reliefs are discussed in the
Adoption of New and Amended Accounting Standards and Interpretations section of Note 2.
PFRSs include Philippine Financial Reporting Standards, Philippine Accounting Standards and
Interpretations issued by the Philippine Interpretations Committee (PIC).
Basis of Consolidation
The consolidated financial statements comprise the financial statements of the Parent Company and
its subsidiaries, entities over which the Parent Company has control.
Specifically, the Parent Company controls an investee if and only if the Parent Company has all the
following:
Power over the investee (i.e., existing rights that give it the current ability to direct the relevant
activities of the investee);
Exposure or rights to variable returns from its involvement with the investee; and,
The ability to use its power over the investee to affect its returns.
When the Parent Company has less than a majority of the voting rights of an investee, the Parent
Company considers all relevant facts and circumstances in assessing whether it has power over the
investee, including:
Any contractual arrangement with the other vote holders of the investee;
Rights arising from other contractual arrangements; and,
The Parent Company’s voting rights and potential voting rights.
The Parent Company reassesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Parent
Company obtains control, and continue to be consolidated until the date when such control ceases.
Specifically, income and expenses of a subsidiary acquired or disposed of during the period are
included in the consolidated statement of comprehensive income from the date the Parent Company
gains control or until the date when the Parent Company ceases to control the subsidiary.
The financial statements of the subsidiaries are prepared for the same reporting period as the Parent
Company, using consistent accounting policies. All intra-group balances, transactions and gains and
losses resulting from intra-group transactions and dividends are eliminated in full. Profit or loss and
each component of other comprehensive income (OCI) are attributed to the equity holders of the
Parent Company and to the non-controlling interests (NCI), even if this results in the non-controlling
interests having a deficit balance.
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A change in the ownership interest in a subsidiary, without a loss of control, is accounted for as an
equity transaction. When the Parent Company loses control over a subsidiary, it:
Non-controlling Interests
NCI represent the portion of income and expense and net assets in subsidiaries that are not held by the
Parent Company and are presented separately in the consolidated statements of comprehensive
income and within equity in the consolidated statements of financial position, separate from the
equity attributable to the equity holders of the Parent Company.
Reclassification
The consolidated financial statements provide comparative information in respect of the previous
period. In 2020, the Group reclassified the noncurrent portion of Input VAT from other current assets
amounting to =P65.43 million as of December 31, 2019 (see Note 10). As a result, the balance of the
current portion of Input VAT as at December 31, 2019 was adjusted to = P462.13 million (see Note 7).
As the reclassification had no significant impact on the Group’s current and noncurrent assets, total
liabilities and total equity as at January 1, 2020, management believes that the presentation of the
consolidated statements of financial position as at beginning of the earliest period presented is not
necessary. The reclassification did not also impact the consolidated statement of comprehensive
income and consolidated statement of cash flows for the year ended December 31, 2019, including
the basic/diluted earnings per share of the Group.
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These amendments had no significant impact to the Group’s consolidated financial statements.
The amendments clarify that materiality will depend on the nature or magnitude of information,
either individually or in combination with other information, in the context of the financial
statements. A misstatement of information is material if it could reasonably be expected to
influence decisions made by the primary users.
The revised Conceptual Framework includes new concepts, provides updated definitions and
recognition criteria for assets and liabilities and clarifies some important concepts.
A lessee that applies this practical expedient will account for any change in lease payments
resulting from the COVID-19 related rent concession in the same way it would account for a
change that is not a lease modification, i.e., as a variable lease payment.
The amendments are effective for annual reporting periods beginning on or after June 1, 2020.
The amendments did not have a significant impact to the Group as there are no rent concessions
granted to the Group as a lessee.
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Adoption of PIC Q&A 2020-03, Q&A No. 2018-12-D: STEP 3 - On the Accounting of the
Difference When the Percentage of Completion is Ahead of the Buyer’s Payment.
PIC Q&A 2020-03 was issued by the PIC on September 30, 2020 aims to provide an additional
option to the preparers of financial statements to present as receivables, the difference between
the POC and the buyer’s payment, with the POC being ahead. The adoption of this PIC Q&A did
not impact the consolidated financial statements of the Group since it has previously adopted the
additional guidance issued by the PIC in September 2019.
Amendments to PFRS 9, PFRS 7, PFRS 4 and PFRS 16, Interest Rate Benchmark Reform –
Phase 2
The amendments provide the following temporary reliefs which address the financial reporting
effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free
interest rate (RFR):
Practical expedient for changes in the basis for determining the contractual cash flows as a
result of IBOR reform
Relief from discontinuing hedging relationships
Relief from the separately identifiable requirement when an RFR instrument is designated as
a hedge of a risk component
The amendments are effective for annual reporting periods beginning on or after January 1, 2021
and apply retrospectively, however, the Group is not required to restate prior periods.
The amendments are intended to replace a reference to the Framework for the Preparation and
Presentation of Financial Statements, issued in 1989, with a reference to the Conceptual
Framework for Financial Reporting issued in March 2018 without significantly changing its
requirements. The amendments added an exception to the recognition principle of PFRS 3,
Business Combinations to avoid the issue of potential ‘day 2’gains or losses arising for liabilities
and contingent liabilities that would be within the scope of PAS 37, Provisions, Contingent
Liabilities and Contingent Assets or Philippine-IFRIC 21, Levies, if incurred separately.
At the same time, the amendments add a new paragraph to PFRS 3 to clarify that contingent
assets do not qualify for recognition at the acquisition date.
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The amendments are effective for annual reporting periods beginning on or after January 1, 2022
and apply prospectively.
Amendments to PAS 16, Plant and Equipment: Proceeds before Intended Use
The amendments prohibit entities deducting from the cost of an item of property, plant and
equipment, any proceeds from selling items produced while bringing that asset to the location and
condition necessary for it to be capable of operating in the manner intended by management.
Instead, an entity recognizes the proceeds from selling such items, and the costs of producing
those items, in profit or loss.
The amendment is effective for annual reporting periods beginning on or after January 1, 2022
and must be applied retrospectively to items of property, plant and equipment made available for
use on or after the beginning of the earliest period presented when the entity first applies the
amendment.
The amendments specify which costs an entity needs to include when assessing whether a
contract is onerous or loss-making. The amendments apply a “directly related cost approach”.
The costs that relate directly to a contract to provide goods or services include both incremental
costs and an allocation of costs directly related to contract activities. General and administrative
costs do not relate directly to a contract and are excluded unless they are explicitly chargeable to
the counterparty under the contract.
The amendments are effective for annual reporting periods beginning on or after January 1, 2022.
The Group will apply these amendments to contracts for which it has not yet fulfilled all its
obligations at the beginning of the annual reporting period in which it first applies the
amendments.
The amendment permits a subsidiary that elects to apply paragraph D16(a) of PFRS 1 to
measure cumulative translation differences using the amounts reported by the parent, based
on the parent’s date of transition to PFRS. This amendment is also applied to an associate or
joint venture that elects to apply paragraph D16(a) of PFRS 1.
Amendments to PFRS 9, Financial Instruments, Fees in the ’10 per cent’ test for
derecognition of financial liabilities
The amendment clarifies the fees that an entity includes when assessing whether the terms of
a new or modified financial liability are substantially different from the terms of the original
financial liability. These fees include only those paid or received between the borrower and
the lender, including fees paid or received by either the borrower or lender on the other’s
behalf. An entity applies the amendment to financial liabilities that are modified or
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exchanged on or after the beginning of the annual reporting period in which the entity first
applies the amendment.
The amendment removes the requirement in paragraph 22 of PAS 41 that entities exclude
cash flows for taxation when measuring the fair value of assets within the scope of
PAS 41.
An entity applies the amendment prospectively to fair value measurements on or after the
beginning of the first annual reporting period beginning on or after January 1, 2022 with
earlier adoption permitted. The amendments are not expected to have a material impact on the
Group.
The amendments are effective for annual reporting periods beginning on or after January 1, 2023
and must be applied retrospectively. The standard will affect the future classification of liabilities
as current or noncurrent when there are future deferral of settlement of the Group’s financial
liabilities.
Deferred Effectivity
Amendments to PFRS 10, Consolidated Financial Statements, and PAS 28, Sale or Contribution
of Assets between an Investor and its Associate or Joint Venture
The amendments address the conflict between PFRS 10 and PAS 28 in dealing with the loss of
control of a subsidiary that is sold or contributed to an associate or joint venture. The
amendments clarify that a full gain or loss is recognized when a transfer to an associate or joint
venture involves a business as defined in PFRS 3. Any gain or loss resulting from the sale or
contribution of assets that does not constitute a business, however, is recognized only to the
extent of unrelated investors’ interests in the associate or joint venture.
On January 13, 2016, the Financial Reporting Standards Council deferred the original effective
date of January 1, 2016 of the said amendments until the International Accounting Standards
Board (IASB) completes its broader review of the research project on equity accounting that may
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result in the simplification of accounting for such transactions and of other aspects of accounting
for associates and joint ventures.
The Group does not expect these amendments to have significant impact to the consolidated
financial statements because it does not currently have interests in associates and joint ventures.
Deferral of Certain Provisions of PIC Q&A 2018-12, PFRS 15 Implementation Issues Affecting
the Real Estate Industry (as amended by PIC Q&As 2020-02 and 2020-04)
On February 14, 2018, the PIC issued PIC Q&A 2018-12 which provides guidance on some
PFRS 15 implementation issues affecting the real estate industry. On October 25, 2018 and
February 08, 2019, the Philippine Securities and Exchange Commission (SEC) issued SEC MC
No. 14-2018 and SEC MC No. 3-2019, respectively, providing relief to the real estate industry by
deferring the application of certain provisions of this PIC Q&A for a period of three years until
December 31, 2020. On December 15, 2020, the Philippine SEC issued SEC MC No. 34-2020
which further extended the deferral of certain provisions of this PIC Q&A until
December 31, 2023. A summary of the PIC Q&A provisions covered by the SEC deferral and
the related deferral period follows:
Deferral Period
a. Assessing if the transaction price includes a Until December 31, 2023
significant financing component as discussed in
PIC Q&A 2018-12-D (amended by PIC Q&A
2020-04)
The SEC Memorandum Circulars also provided the mandatory disclosure requirements should an
entity decide to avail of any relief. Disclosures should include:
In November 2020, the PIC issued PIC Q&As 2020-04 which provides additional guidance on
determining whether the transaction price includes a significant financing component.
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The Group availed of the SEC reliefs to defer the above specific provisions of PIC Q&A
No. 2018-12. Had these provisions been adopted, the Group assessed that the impact would have
been as follows:
The mismatch between the POC of the real estate projects and right to an amount of consideration
based on the schedule of payments explicit in the contract to sell would constitute a significant
financing component. In case of the presence of significant financing component, the guidance
should have been applied retrospectively and would have resulted to restatement of prior year
financial statements. Adoption of this guidance would have impacted interest income, interest
expense, revenue from real estate sales, instalment contracts receivable, provision for deferred
income tax, deferred tax asset or liability for all years presented, and the opening balance of
retained earnings. Currently, any significant financing component arising from the mismatch
discussed above is not considered for revenue recognition purposes.
The exclusion of land in the determination of POC would reduce the percentage of completion of
real estate projects resulting in a decrease in beginning retained earnings as well as a decrease in
the revenue from real estate sales in 2020.
The above would have impacted the cash flows from operations and cash flows from financing
activities for all years presented.
As prescribed by SEC MC No. 34-2020, for financial reporting periods beginning on or after
January 1, 2021, the availment of the above deferral will impact the Group’s financial reporting
during the period of deferral as follows:
a. The financial statements are not considered to be in accordance with PFRS and should specify in
the “Basis of Preparation of the Financial Statements” section of the financial statements that the
accounting framework is:
PFRS, as modified by the application of the following financial reporting reliefs issued and
approved by the Securities and Exchange Commission in response to the COVID-19 pandemic:
1. Treatment of land in the determination of the percentage-of-completion; and
2. Assessing if the transaction price includes a significant financing component (as amended by
PIC Q&A 2020-04)
Upon full adoption of the above deferred guidance, the accounting policies will have to be applied
using full retrospective approach following the guidance under PAS 8, Accounting Policies, Changes
in Accounting Estimates and Errors.
Deferral of PIC Q&A 2018-14, Accounting for Cancellation of Real Estate Sales (as amended by PIC
Q&A 2020-05)
On June 27, 2018, PIC Q&A 2018-14 was issued providing guidance on accounting for cancellation of
real estate sales. Under SEC MC No. 3-2019, the adoption of PIC Q&A No. 2018-14 was deferred until
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December 31, 2020. After the deferral period, real estate companies will adopt PIC Q&A No. 2018-14
and any subsequent amendments thereto retrospectively or as the SEC will later prescribe.
On November 11, 2020, PIC Q&A 2020-05 was issued which supersedes PIC Q&A 2018-14. This PIC
Q&A adds a new approach where the cancellation is accounted for as a modification of the contract
(i.e., from non-cancellable to being cancellable). Under this approach, revenues and related costs
previously recognized shall be reversed in the period of cancellation and the inventory shall be
reinstated at cost. PIC Q&A 2020-05 will have to be applied prospectively from approval date of the
Financial Reporting Standards Council which was November 11, 2020.
The Group availed of the SEC relief to defer the adoption of this PIC Q&A until December 31, 2020.
Currently, the Group records the repossessed inventory at cost. The Group is still evaluating the
approach to be availed among the existing options. Had the relief not been adopted and the current
practice would be different from the approach to be implemented, this could have impacted the
recording of revenue, cost of sales, valuation of repossessed inventory and gain or loss from
repossession in 2020.
IFRIC Agenda Decision on Over Time Transfer of Constructed Goods (PAS 23, Borrowing Cost)
In March 2019, IFRIC published an Agenda Decision on whether borrowing costs can be capitalized
on real estate inventories that are under construction and for which the related revenue is/will be
recognized over time under paragraph 35(c) of IFRS 15 (PFRS 15). IFRIC concluded that borrowing
costs cannot be capitalized for such real estate inventories as they do not meet the definition of a
qualifying asset under Philippine Accounting Standards (PAS) 23, Borrowing Costs, considering that
these inventories are ready for their intended sale in their current condition.
The IFRIC Agenda Decision would change the Group’s current practice of capitalizing borrowing costs
on real estate projects with pre-selling activities.
On February 11, 2020, the Philippine SEC issued Memorandum Circular No. 4-2020, providing relief
to the Real Estate Industry by deferring the mandatory implementation of the above IFRIC Agenda
Decision until December 31, 2020. Further, on December 15, 2020, the Philippine SEC issued SEC
MC No. 34-2020, which extends the relief on the application of the IFRIC Agenda Decision provided
to the Real Estate Industry until December 31, 2023. Effective January 1, 2024, the Real Estate
Industry will adopt the IFRIC agenda decision and any subsequent amendments thereto
retrospectively or as the SEC will later prescribe. A real estate company may opt not to avail of the
deferral and instead comply in full with the requirements of the IFRIC Agenda Decision.
The Group opted to avail of the relief as provided by the SEC. Had the Group adopted the IFRIC
agenda decision, borrowing costs capitalized to real estate inventories related to projects with pre-selling
activities should have been expensed out in the period incurred. This adjustment should have been
applied retrospectively and would have resulted in restatement of prior year financial statements.
Adoption of the IFRIC agenda decision would have impacted interest expense, cost of sales, provision
for deferred income tax, real estate inventories, deferred tax liability and the opening balance of retained
earnings. The above would have impacted the cash flows from operations and cash flows from
financing activities for all years presented.
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Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.
Financial Instruments
Date of recognition
The Group recognizes a financial asset or a liability in the consolidated statements of financial
position when it becomes a party to the contractual provisions of the instrument. Purchases or sales
of financial assets that require delivery of assets within the time frame established by regulation or
convention in the marketplace are recognized on the settlement date.
a. Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as financial asset at amortized cost, fair value
through OCI (FVTOCI) and fair value through profit of loss (FVTPL).
The classification of financial assets at initial recognition depends on the financial asset’s
contractual cash flow characteristics and the Group’s business model for managing them. With
the exception of trade receivables that do not contain a significant financing component, the
Group initially measures a financial asset at its fair value plus, in the case of a financial asset not
at FVTPL, transaction costs. Trade receivables, except for installment contract receivables, are
measured at the transaction price determined under PFRS 15. Refer to the accounting policies on
revenue from contracts with customers.
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In order for a financial asset to be classified and measured at amortized cost or FVTOCI, it needs
to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the
principal amount outstanding. This assessment is referred to as the SPPI test and is performed at
an instrument level.
Day 1’ difference
Where the transaction price in a non-active market is different from the fair value from other
observable current market transactions of the same instrument or based on a valuation technique
whose variables include only data from an observable market, the Group recognizes the
difference between the transaction price and fair value (‘Day 1’ difference) in profit or loss unless
it qualifies for recognition as some other type of asset and liability. In cases where inputs to the
valuation technique are not observable, the difference between the transaction price and model
value is only recognized in profit or loss when the inputs become observable or when the
instrument is derecognized. For each transaction, the Group determines the appropriate method
of recognizing the ‘Day 1’ difference amount.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
Financial assets at amortized cost (debt instruments);
Financial assets at FVTOCI with recycling of cumulative gains and losses (debt instruments);
Financial assets FVTOCI with no recycling of cumulative gains and losses upon
derecognition (equity instruments); and
Financial assets at FVTPL.
Financial assets at amortized cost are subsequently measured using the effective interest rate
(EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss
when the asset is derecognized, modified or impaired.
The Group’s financial assets at amortized cost include cash and cash equivalents, trade
receivables from real estate sales which are included in the installment contracts receivable, rental
receivable, due from condominium associations, other receivables, utility and security deposits
and construction bond deposits.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is primarily derecognized (i.e., removed from the Group’s consolidated
statements of financial position) when:
The rights to receive cash flows from the asset have expired; or
The Group has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under
a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the
risks and rewards of the asset, or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred control of the asset
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When the Group has transferred its rights to receive cash flows from an asset or has entered into a
pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards
of ownership. When it has neither transferred nor retained substantially all of the risks and
rewards of the asset, nor transferred control of the asset, the Group continues to recognize the
transferred asset to the extent of its continuing involvement. In that case, the Group also
recognizes an associated liability. The transferred asset and the associated liability are measured
on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured
at the lower of the original carrying amount of the asset and the maximum amount of
consideration that the Group could be required to repay.
For trade receivables from real estate sales, the Group applies a simplified approach in calculating
ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss
allowance based on lifetime ECLs at each reporting date. The Group uses the vintage analysis
that is based on historical credit loss experience, adjusted for forward-looking factors specific to
the debtors and the economic environment.
For other financial assets such as rental receivables, due from condominium associations, other
receivables and deposits, ECLs are recognized in two stages. For credit exposures for which
there has not been a significant increase in credit risk since initial recognition, ECLs are provided
for credit losses that result from default events that are possible within the next 12-months (a 12-
month ECL). For those credit exposures for which there has been a significant increase in credit
risk since initial recognition, a loss allowance is required for credit losses expected over the
remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For cash and cash equivalents, the Group applies the low credit risk simplification. The
probability of default and loss given defaults are publicly available and are considered to be low
credit risk investments. It is the Group’s policy to measure ECLs on such instruments on a
12-month basis. However, when there has been a significant increase in credit risk since
origination, the allowance will be based on the lifetime ECL. The Group uses external credit
ratings of the banks to assess whether the financial instrument has significantly increased in credit
risk and to estimate ECLs.
The key inputs in the model include the Group’s definition of default and historical data of five
years for the origination, maturity date and default date. The Group considers a financial asset in
default when contractual payment are 90 days past due. However, in certain cases, the Group
may also consider a financial asset to be in default when internal or external information indicates
that the Group is unlikely to receive the outstanding contractual amounts in full before taking into
account any credit enhancements held by the Group.
A financial asset is written off when there is no reasonable expectation of recovering the
contractual cash flows.
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b. Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, loans
and borrowings, payables, or as derivatives designated as hedging instruments in an effective
hedge, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of loans and
borrowings and payables, net of directly attributable transaction costs.
The Group’s financial liabilities include “Accounts and other payables” (except “Other taxes
payable”) and “Loans payable” and other liabilities that meet the above definition (other than
liabilities covered by other accounting standards).
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Amortized cost is calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the EIR. The EIR amortization is included as finance
costs in the consolidated statements of comprehensive income.
This category generally applies to accounts and other payables (excluding other taxes and
statutory payables) and loans payable.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as the derecognition of the original liability
and the recognition of a new liability. The difference in the respective carrying amounts is
recognized in the consolidated statements of comprehensive income.
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Cost includes the purchase price of land and those costs incurred for the development and
improvement of the properties such as amounts paid to contractors, capitalized borrowing costs,
planning and design costs, costs of site preparation, professional fees for legal services, property
transfer taxes, construction overheads and other related costs.
Advances to contractors and suppliers are classified based on the actual realization of such advances
based on the determined usage/realization of the asset to which it is intended for (e.g. inventory,
investment property).
Portion of the contractors’ progress billings which are withheld by the Group are presented as
“Retention payable” under “Accounts and other payables” in the consolidated statements of financial
position. These serve as security from the contractor should there be defects in the project and will be
released after the satisfactory completion of the contractors’ work.
When VAT from sales of goods and/or services (output VAT) exceeds VAT passed on from
purchases of goods or services (input VAT), the excess is recognized as payable in the consolidated
statements of financial position. When VAT passed on from purchases of goods or services (input
VAT) exceeds VAT from sales of goods and/or services (output VAT), the excess is recognized as an
asset in the consolidated statements of financial position to the extent of the recoverable amount.
Prepaid Expenses
Prepaid expenses are carried at cost less the amortized portion. These typically comprise
prepayments of rent, insurance premiums and real property taxes. These also include the deferred
portion of commissions paid to sales or marketing agents that are yet to be charged to the period the
related revenue is recognized.
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Property and equipment are carried at cost less accumulated depreciation and amortization, and any
impairment in value.
The initial cost of property and equipment consists of its purchase price, including import duties,
taxes and any directly attributable costs of bringing the asset to its working condition and location for
its intended use, including capitalized borrowing cost. When significant parts of property and
equipment are required to be replaced in intervals, the Group recognizes such parts as individual
assets with specific useful lives and depreciation. Likewise, when a major inspection is performed,
its cost is recognized in the carrying amount of the equipment as a replacement if the recognition
criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as
incurred.
Effective January 1, 2019, it is the Group’s policy to classify right-of-use assets as part of property
and equipment. Prior to that date, all of the Company’s leases are accounted for as operating leases in
accordance with PAS 17, hence, not recorded on the consolidated statement of financial position.
The Group recognizes right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost
of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred,
and lease payments made at or before the commencement date less any lease incentives received and
estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset,
restoring the site on which it is located or restoring the underlying asset to the condition required by
the terms and conditions of the lease, unless those costs are incurred to produce inventories.
Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease
term, the recognized right-of-use assets are depreciated on a straight-line basis over the shorter of
their estimated useful life and lease term. Right-of-use assets are subject to impairment.
Depreciation and amortization of property and equipment commences when the assets are available
for use and is computed on a straight-line basis over the estimated useful lives (EUL) of the property
and equipment as follows:
Years
Office equipment 2-5
Furniture and fixtures 2-5
Transportation equipment 3-5
Leasehold improvements are amortized on a straight-line basis over term of the lease or the EUL of
the asset of 2 to 5 years.
Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease
term, the recognized right-of-use assets are amortized on a straight-line basis over the term of lease.
Depreciation on hotel property, excluding land which is not subject to depreciation, does not
commence until it is complete and available for use. The useful life and, depreciation and
amortization methods are reviewed periodically to ensure that the period and method of depreciation
and amortization are consistent with the expected pattern of economic benefits from items of property
and equipment.
When property and equipment are retired or otherwise disposed of, the cost of the related
accumulated depreciation and amortization, and accumulated provision for impairment losses, if any,
*SGVFSM006755*
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are removed from the accounts and any resulting gain or loss is credited to or charged against current
operations.
Fully depreciated property and equipment are retained in the accounts until they are no longer in use
and no further depreciation is charged against current operations.
Investment Properties
Investment properties comprise of properties which are held to earn rentals and properties under
construction or redevelopment which will be held for rental upon completion as well as land currently
held for undetermined use. Investment properties also include right-of-use assets involving real
properties that are subleased to other entities.
Investment properties are measured initially at cost, including transaction costs. The carrying amount
includes the cost of the replacing part of an existing investment property at the time that cost is
incurred if the recognition criteria are met and excludes the costs of day-to-day servicing of an
investment property. Subsequent to initial recognition, investment properties are carried at historical
cost less provisions for depreciation and impairment. Accordingly, land is carried at cost less any
impairment in value and building is carried at cost less depreciation and any impairment in value.
Construction-in-progress (CIP) is stated at cost. The initial cost of investment property consists of its
construction costs, and any directly attributable costs of bringing the asset to its working condition
and location for its intended use, including capitalized borrowing cost. CIP is not depreciated until
such time as the relevant assets are completed and put into operational use. CIP are carried at cost
and transferred to the related investment property account when the construction and related activities
to prepare the property for its intended use are complete, and the property is ready for occupation.
For those right-of-use assets that qualify as investment properties, i.e., those land that are leased by
the Group, these are classified under investment properties. Consistent with the Group’s policy
regarding the measurement of investment properties, these assets are subsequently measured at cost
less amortization and impairment in value.
Depreciation of investment properties are computed using the straight-line method over the EUL of
the assets 17 to 30 years or lease term, whichever is lower. ROU recognized under investment
properties, which is comprised of land, is depreciated over the lease term of 17 years. The useful life
and depreciation method are reviewed periodically to ensure that the period and method of
depreciation are consistent with the expected pattern of economic benefits from items of investment
properties.
Investment properties are derecognized when either they have been disposed of or when the
investment property is permanently withdrawn from use and no future economic benefit is expected
from its disposal. The difference between the net disposal proceeds and the carrying amount of the
asset is recognized in profit or loss in the period of derecognition.
A transfer is made to investment property when there is a change in use, evidenced by ending of
owner-occupation or commencement of an operating lease to another party. A transfer is made from
investment property when and only when there is change in use, evidenced by commencement of
owner-occupation or commencement of development with a view to sale. A transfer between
investment property, owner-occupied property and inventory does not change the carrying amount of
the property transferred nor the cost of that property for measurement or disclosure purposes.
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An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less
costs of disposal and its value in use and is determined for an individual asset, unless the asset does
not generate cash inflows that are largely independent of those from other assets or groups of assets.
Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. Impairment
losses are recognized in the expense categories of profit or loss consistent with the function of the
impaired asset.
An assessment is made at each reporting date as to whether there is any indication that previously
recognized impairment losses may no longer exist or may have decreased. If such indication exists,
the recoverable amount is estimated. A previously recognized impairment loss is reversed only if
there has been a change in the estimates used to determine the asset’s recoverable amount since the
last impairment loss was recognized. If that is the case, the carrying amount of the asset is increased
to its recoverable amount. That increased amount cannot exceed the carrying amount that would have
been determined, net of depreciation and amortization, had no impairment loss been recognized for
the asset in prior years. Such reversal is recognized in profit or loss. After such reversal, the
depreciation and amortization charge is adjusted in future periods to allocate the asset’s revised
carrying amount, less any residual value, on a systematic basis over its remaining useful life.
Equity
Capital stock is measured at par value for all shares issued. When the Group issues more than one
class of share, a separate account is maintained for each class of share and the number of shares
issued. When the shares are sold at premium, the difference between the proceeds and the par value
is credited to additional paid-in capital. When the shares are issued for a consideration other than
cash, the proceeds are measured by the fair value of the consideration received. In case the shares are
issued to extinguish or settle the liability of the Group, the shares are measured either at the fair value
of the shares issued or fair value of the liability settled, whichever is more reliably determinable.
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An entity typically incurs various costs in issuing or acquiring its own equity instruments. Those
costs might include registration and other regulatory fees, amounts paid to legal, accounting and other
professional advisers, printing costs and stamp duties. The transaction costs of an equity transaction
are accounted for as deductions from equity (net of related income tax benefit) to the extent they are
incremental costs directly attributable to the equity transaction that otherwise would have been
avoided. The costs of an equity transaction that is abandoned are recognized as an expense.
Retained earnings represent the cumulative balance of net income or loss, net of any dividend
declaration.
Revenue Recognition
Revenue from Contract with Customers
Revenue from contracts with customers is recognized when profit or loss control of the goods or
services are transferred to the customer at an amount that reflects the consideration to which the
Group expects to be entitled in exchange for those goods or services. The Group assesses its revenue
arrangements against specific criteria to determine if it is acting as a principal or as an agent. The
Group has concluded that it is acting as principal in majority of its revenue arrangements.
The disclosures of significant accounting judgments and the use of estimates relating to revenue from
contracts with customers are provided in Note 3.
The Group derives its real estate revenue from sale of condominium units and warehouses. Revenue
from sales of completed real estate project is accounted using the full accrual method. Revenue from
the sale of uncompleted real estate projects are recognized over time during the construction period
(or POC) since based on the terms and conditions of its contract with the buyers, the Group’s
performance does not create an asset with an alternative use and the Group has an enforceable right to
payment for performance completed to date.
In measuring the progress of its performance obligation over time, the Group uses the output method.
The Group recognizes revenue on the basis of direct measurements of the value to customers of the
goods or services transferred to date, relative to the remaining goods or services promised under the
contract. Progress is measured using survey of performance completed to date. This is based on the
monthly project accomplishment report prepared by the third party surveyor as approved by the
construction manager which integrates the surveys of performance to date of the construction
activities for both sub-contracted and those that are fulfilled by the developer itself.
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If any of the criteria under the full accrual or POC method is not met, the deposit method is applied
until all the conditions for recording a sale are met. Pending recognition of sale, cash received from
buyers are likewise considered as contract liabilities which is presented under the “Customers’
advances and deposits” account in the consolidated statements of financial position.
Payment commences upon signing of the contract to sell and the consideration is payable in cash or
under a financing scheme entered with the customer. The financing scheme would include payment
of certain percentage of the contract price spread over a certain period (e.g. 4 to 7 years) at a fixed
monthly payment with the remaining balance payable in full at the end of the period either through
cash or external financing. The amount due for collection under the amortization schedule for each of
the customer does not necessarily coincide with the progress of construction.
The Group provides a quality assurance warranty which is not treated as a separate performance
obligation.
Rental income
Rental income under cancellable leases on investment properties is recognized in profit or loss based
on the terms of the lease as provided under the lease contract. Rental income under a noncancellable
lease agreement is recognized as income on a straight-line basis over the lease term.
Management fee
Management fees consist of revenue arising from contracts of administering a property. The tenants
pay either a fixed amount or depending on the agreement and such payment is recognized when the
related services are rendered.
Income from forfeited reservation and collections is recognized when the deposits from potential
buyers are deemed nonrefundable, subject to provision of Republic Act (RA) No. 6552, Realty
Installment Buyer Protection Act, upon prescription of the period for the payment of required
amortizations from defaulting buyers.
Costs and expenses are recognized in the consolidated statements of comprehensive income:
On the basis of a direct association between the costs incurred and the earning of specific items of
income;
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On the basis of systematic and rational allocation procedures when economic benefits are
expected to arise over several accounting periods and the association can only be broadly or
indirectly determined; or
Immediately when expenditure produces no future economic benefits or when, and to the extent
that, future economic benefits do not qualify or cease to qualify, for recognition in the statements
of financial position as an asset.
Contract costs include all direct materials and labor costs and those indirect costs related to contract
performance. Expected losses on contracts are recognized immediately when it is probable that the
total contract costs will exceed total contract revenue.
Commissions paid to sales or marketing agents on the sale of pre-completed real estate units are
deferred when recovery is reasonably expected and are charged to expense in the period in which the
related revenue is recognized as earned. Accordingly, when the POC method is used, commissions
are likewise charged to expense in the period the related revenue is recognized.
Contract Balances
Installment contract receivable
An installment contracts receivable represents the Group’s right to an amount of consideration that is
unconditional (i.e., only the passage of time is required before payment of the consideration is
due). It also includes the difference between the consideration received from the customer and the
transferred goods or services to a customer. If the Group performs by transferring goods or services
to a customer before the customer pays consideration or before payment is due, amount is classified
as installment contracts receivable.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Group
has received consideration from the customer. If a customer pays consideration before the Group
transfers goods or services to the customer, a contract liability is recognized when the payment is
made. Contract liabilities are recognized as revenue when the Group performs under the contract.
The contract liabilities also include payments received by the Group from the customers for which
revenue recognition has not yet commenced.
Contract liabilities is shown as part of the “Customers’ advances and deposits” account in the
consolidated statements of financial position.
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Costs incurred prior to obtaining contract with customer are not capitalized but are expensed as
incurred.
If other standards are not applicable to contract fulfillment costs, the Group applies the following
criteria which if met, result in capitalization (i) costs directly relate to a contract or to a specifically
identifiable anticipated contract; (ii) costs generate or enhance resources of the entity that will be used
in satisfying (or in continuing to satisfy) performance obligations in the future; and (iii) costs are
expected to be recovered. The assessment of this criteria requires the application of judgement
particularly in determining whether costs generate or enhance resources to be used to satisfy future
performance obligations and whether costs are expected to be recoverable.
Amortization, derecognition and impairment of contract fulfillment assets and capitalized costs to
obtain a contract
The Group amortizes contract fulfillment assets and capitalized costs to obtain a contract to cost of
sales over the expected construction period using POC following the pattern of real estate revenue
recognition. The amortizations of contract fulfilment assets and capitalized costs to obtain a contract
are included in the “Real estate” and “Selling and administrative” accounts under “Costs and
Expenses” in the consolidated statements of comprehensive income.
A contract fulfillment asset or capitalized costs capitalized to obtain a contract is derecognized when
it is disposed of or when no further economic benefits are expected to flow from its use or disposal.
At each reporting date, the Group determines whether there is an indication that a contract fulfillment
asset may be impaired. If such indication exists, the Group makes an estimate by comparing the
carrying amount of the asset to the remaining amount of consideration that the Group expects to
receive less those costs that relate to providing services under the contract. In determining the
estimated amount of consideration, the Group uses the same principles as it does to determine the
contract transaction price, except that any constraints used to reduce the transaction price is removed
when testing for impairment.
In case the relevant costs demonstrate indicators of impairment, judgement is required in ascertaining
the future economic benefits from these contracts as sufficient to recover the relevant assets.
Borrowing Costs
Borrowing costs incurred during the construction period on borrowings used to finance property
development are capitalized as part of development costs (included in “Real estate for development
and sale”, “Property and Equipment” and “Investment properties” accounts in the consolidated
statements of financial position). Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds. Capitalization of borrowing costs commences
*SGVFSM006755*
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when the activities to prepare the asset are in progress and expenditures and borrowing costs are
being incurred. Capitalization of borrowing costs ceases when substantially all the activities
necessary to prepare the asset for its intended use or sale are complete.
Capitalized borrowing cost is based on applicable weighted average borrowing rate for those coming
from general borrowings and the actual borrowing costs eligible for capitalization for funds borrowed
specifically.
All other borrowing costs are expensed in the period in which they are incurred.
Pension Liabilities
The Group has an unfunded, noncontributory defined benefit retirement plan covering all of its
qualified employees. The Group’s pension liability is the aggregate of the present value of the
defined benefit obligation as of the reporting date.
The cost of providing benefits under the defined benefit plans is actuarially determined using the
projected unit credit method.
Service costs which include current service costs, past service costs and gains or losses on non-
routine settlements are recognized as expense in profit or loss. Past service costs are recognized
when plan amendment or curtailment occurs. These amounts are calculated annually by independent
qualified actuaries.
Interest on the pension liability is the change during the period in the pension liability that arises from
the passage of time which is determined by applying the discount rate based on government bonds to
the pension liability. Interest on the pension liability is recognized in the consolidated statement of
comprehensive income as “Finance costs”.
Remeasurements comprising actuarial gains and losses are recognized immediately in OCI in the
period in which they arise. Remeasurements are not reclassified to profit or loss in subsequent
periods.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
Group as a lessor
Leases where the Group does not transfer substantially all the risks and benefits of ownership of the
assets are classified as operating leases. In determining significant risks and benefits of ownership,
the Group considers, among others, the significance of the lease term as compared with the EUL of
*SGVFSM006755*
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the related asset. Rental income is recognized over the lease term on a straight-line basis, unless
another systematic basis is more representative of the time pattern in which use benefit is derived.
The Group requires its tenants to pay leasehold rights pertaining to the right to use the leased unit
which is reported under “Customers’ advances and deposits” in the consolidated statements of
financial position. Upon commencement of the lease, these payments are recognized in the
consolidated statements of comprehensive income under “Rental income” on a straight-line basis over
the lease term.
Lease modification
Lease modification is defined as a change in the scope of a lease, or the consideration for a lease, that
was not part of the original terms and conditions of the lease (for example, adding or terminating the
right to use one or more underlying assets, or extending or shortening the contractual lease term).
A lessor shall account for a modification to an operating lease as a new lease from the effective date
of the modification, considering any prepaid or accrued lease payments relating to the original lease
as part of the lease payments for the new lease. If a change in lease payments does not meet the
definition of a lease modification that change would generally be accounted for as a negative variable
lease payment. In the case of an operating lease, a lessor recognizes the effect of the rent concession
by recognizing lower income from leases.
Lease liabilities
At the commencement date of the lease, the Group recognizes lease liabilities measured at the
present value of lease payments to be made over the lease term. The lease payments include
fixed payments (including in substance fixed payments) less any lease incentives receivable,
variable lease payments that depend on an index or a rate, and amounts expected to be paid under
residual value guarantees. The lease payments also include the exercise price of a purchase
option reasonably certain to be exercised by the Group and payments of penalties for terminating
a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease
payments that do not depend on an index or a rate are recognized as expense in the period on
which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate
at the lease commencement date if the interest rate implicit in the lease is not readily
determinable. After the commencement date, the amount of lease liabilities is increased to reflect
the accretion of interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a
change in the in-substance fixed lease payments or a change in the assessment to purchase the
underlying asset.
*SGVFSM006755*
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Income Taxes
Current taxes
Current tax assets and liabilities for the current and prior periods are measured at the amount expected
to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute
the amount are those that are enacted or substantively enacted as at the reporting date.
Deferred taxes
Deferred tax is provided using the liability method on temporary differences, with certain exceptions,
at the reporting date between the tax base of assets and liabilities and their carrying amounts for
financial reporting purposes.
Deferred tax liabilities are recognized for all taxable temporary differences, including asset
revaluations. Deferred tax assets are recognized for all deductible temporary differences, carry
forward benefit of unused tax credits from the excess of minimum corporate income tax (MCIT) over
the regular corporate income tax (RCIT) and unused net operating loss carryover (NOLCO), to the
extent that it is probable that future taxable profit will be available against which the deductible
temporary differences and carryforward of unused tax credits from MCIT and unused NOLCO can be
utilized. Deferred tax, however, is not recognized on temporary differences that arise from the initial
recognition of an asset or liability in a transaction that is not a business combination and at the time of
the transaction, affects neither the accounting income nor taxable income.
Deferred tax liabilities are not provided on non-taxable temporary differences associated with
investments in domestic subsidiaries and associates.
The carrying amounts of deferred tax assets are reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient future taxable income will be available to allow all
or part of the deferred tax assets to be utilized. Unrecognized deferred tax assets are reassessed at
each reporting date and are recognized to the extent that it has become probable that future taxable
income will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rate that is expected to apply to the period
when the asset is realized or the liability is settled, based on tax rates and tax laws that have been
enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset, if a legally enforceable right exists to offset current tax
assets against current tax liabilities and the deferred income taxes relate to the same taxable entity and
the same taxation authority.
*SGVFSM006755*
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As at December 31, 2020 and 2019, the Group has no dilutive potential common shares.
Segment Reporting
The Group’s operating business is composed of condominium sales, leasing and property
management. Financial information on the Group’s business segments are presented in Note 21.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial
statements are categorized within the fair value hierarchy, described as follows, based on the lowest
level input that is significant to the fair value measurement as a whole:
Level 1 - quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
Level 3 - valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
For assets and liabilities that are recognized in the consolidated financial statements on a recurring
basis, the Group determines whether transfers have occurred between Levels in the hierarchy by
re-assessing categorization (based on the lowest level input that is significant to the fair value
measurement as a whole) at each reporting date.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on
the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value
hierarchy as explained above.
The principal or the most advantageous market must be accessible to the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants
would use when pricing the asset or liability, assuming that market participants act in their economic
best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable inputs
and minimizing the use of unobservable inputs.
Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.
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Contingencies
Contingent liabilities are not recognized in the consolidated financial statements. These are disclosed
unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent
assets are not recognized in the consolidated financial statements but disclosed when an inflow of
economic benefits is probable.
The preparation of the consolidated financial statements in compliance with PFRSs requires
management to make judgments and estimates that affect the amounts reported in the consolidated
financial statements. The judgments and estimates used in the consolidated financial statements are
based upon management’s evaluation of relevant facts and circumstances as of the date of the
consolidated financial statements. Future events may occur which will cause the judgments and
assumptions used in arriving at the estimates to change. The effects of any change in judgments and
estimates are reflected in the consolidated financial statements as they become reasonably
determinable.
Judgments and estimates are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the
circumstances.
Judgments
In the process of applying the Group’s accounting policies, management has made the following
judgments, apart from those involving estimations, which have the most significant effect on the
amounts recognized in the consolidated financial statements:
Leases
The Group applied the following judgments that significantly affect the determination of the amount
and timing of income from lease contracts:
Determination of lease term of contracts with renewal options – Group as a lessee (Effective
January 1, 2019)
The Group has several lease contracts that include extension options. The Group applies judgment in
evaluating whether it is reasonably certain whether or not to exercise the option to renew the lease.
That is, it considers all relevant factors that create an economic incentive for it to exercise either the
renewal. After the commencement date, the Group reassesses the lease term if there is a significant
event or change in circumstances that is within its control and affects its ability to exercise or not to
exercise the option to renew (e.g., construction of significant leasehold improvements or significant
customization to the leased asset).
The Group included the renewal period as part of the lease term for the lease of a parcel of land where
one of the Group’s investment property is located. The Group assessed that the option to renew the
lease contract is reasonably certain to be exercised.
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Existence of a contract
The Group’s primary document for a contract with a customer is a signed contract to sell. It has
determined, however, that in cases wherein contract to sell is not signed by both parties, the other
signed documentations such as purchase agreement and reservation application would contain all the
criteria to qualify as contract with the customer under PFRS 15.
Equity threshold
Part of the Group’s assessment process before revenue recognition is to assess the probability that the
Group will collect the consideration to which it will be entitled in exchange for the real estate
property that will be transferred to the customer. Collectability of the sales price is demonstrated by
the buyer’s commitment to pay, which in turn is supported by substantial initial and continuing
investments that give the buyer a stake in the property sufficient that the risk of loss through default
motivates the buyer to honor its obligation to the seller. Collectability is also assessed by considering
factors such as past history with the buyer, and the pricing of the property. Management regularly
evaluates the historical sales cancellations and back-outs, after considering the impact of the
coronavirus pandemic, if it would still support its current threshold of buyers’ equity before
commencing revenue recognition.
The promised property covering specific condominium unit and/or parking slot is specifically
identified in the contract. The Group is contractually restricted to sell the promised property to
another buyer or to direct it for another use. In addition, the Group has the right to enforce payment
from the buyer up to the performance completed to date.
The Group has determined that output method used in measuring the progress of the performance
obligation faithfully depicts the Group’s performance in transferring control of real estate
development to the customers.
When the acquisition of subsidiaries does not represent a business combination, it is accounted for as
an acquisition of a group of assets and liabilities. The cost of the acquisition is allocated to the assets
and liabilities acquired based upon their relative fair values, and no goodwill or deferred tax is
recognized.
The Group’s acquisition of 100% of the voting shares of FRC in 2019 represents acquisition of an
asset.
Distinction between real estate for development and sale, property and equipment and investment
properties
The Group determines whether a property qualifies as real estate for development and sale, property
and equipment or investment properties by considering whether the property is occupied substantially
*SGVFSM006755*
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for use by or in operations of the Group; for sale in the ordinary course of the business; or, held
primarily to earn rental income and capital appreciation.
Real estate for development and sale comprise both condominium units for sale and land held for
future development, which are properties that are held for sale in the ordinary course of the business.
Principally, these are properties that the Group develops and intends to sell before or upon completion
of construction.
Properties intended to earn rental and for capital appreciation are classified as investment properties
while properties occupied by the Group are considered as property and equipment. Some properties
comprise a portion that is held to earn rentals or for capital appreciation and another portion that is
held for services or for administrative purposes. If these portions cannot be sold separately at the
reporting date, the property is accounted for as investment property only if an insignificant portion is
held for use for administrative purposes. Judgment is applied in determining whether ancillary
services are so significant that a property does not qualify as investment property. The Group
considers each property separately in making its judgment.
Quantitative criteria
The Group has applied the presumption indicated within PFRS 9 pertaining to the default definition;
that is, default of a financial instrument does not occur later than when a financial asset is 90 days
past due.
Qualitative criteria
The counterparty meets unlikeliness to pay criteria, which indicates the borrower is in significant
financial difficulty. These are instances where:
The counterparty is in long-term forbearance;
The counterparty is deceased;
The counterparty is insolvent;
The counterparty is in breach of financial covenant(s);
An active market for that financial asset has disappeared because of financial difficulties;
Concessions have been granted by the Group relating to the counterparty’s financial difficulty;
It is becoming probable that the counterparty will enter bankruptcy; or
Financial assets are purchased or originated at a deep discount that reflects the incurred credit
losses.
The criteria above have been applied to all financial instruments held by the Group and are consistent
with the definition of default used for internal credit risk management purposes. The default
definition has been applied consistently to model the PD, Exposure at Default (EAD), and LGD,
including the impact of the coronavirus pandemic for the expected timing of recoveries, throughout
the Group’s expected loss calculations.
An instrument is considered to no longer be in default (i.e. to have cured) when it no longer meets any
of the default criteria for a consecutive period of six months.
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If such indications are present and where the carrying amount of the asset exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount.
2020 2019
Property and equipment (Note 8) P
=2,720,174,308 =2,097,219,920
P
Investment properties (Note 9) 15,221,425,058 14,893,755,115
Advances to contractors and supplier
(Notes 7 and 10) 1,599,968,533 1,166,651,958
Deposits on real estate properties (Notes 7 and 10) 77,390,800 150,388,427
Software and brand development costs (Note 10) 8,184,278 7,895,697
Management assessed that there are no indicators of impairment for the Group’s nonfinancial assets
as at December 31, 2020 and 2019 except for the hotel property under construction. No impairment
loss was recognized in 2020 as the recoverable amount exceeds the carrying value of the hotel
property as of December 31, 2020. Refer to discussion under estimates.
The Group applies judgment when assessing whether the rent concessions granted is considered a
lease modification under PFRS 16. In making this judgment, the Group determines whether the rent
concessions granted has changed the scope of the lease, or the consideration thereof, that was not part
of the original terms and conditions of the lease, including consideration of general and special laws
in the Philippines which may apply.
The impact of lease concessions granted by the Group decreased total rental income in 2020 by
=57.57 million for concessions accounted as lease modification.
P
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NRV for completed real estate inventories is assessed with reference to market conditions and prices
existing at the reporting date and is determined by the Group in light of recent market transactions
and having taken suitable external advice. NRV in respect of inventory under construction is
assessed with reference to market prices at the reporting date for similar completed property, less
estimated costs to complete construction and less an estimate of the time value of money to the date
of completion.
The estimates used took into consideration fluctuations of price or cost directly relating to events
occurring after the reporting date to the extent that such events confirm conditions existing at the
reporting date. As at December 31, 2020 and 2019, the Group’s real estate for development and sale
which are carried at cost amounted to = P7,780.36 million and P=5,979.06 million, respectively
(see Note 6).
Revenue recognition
The Group’s revenue from real estate sales are recognized based on the POC method. POC is
determined based on the physical proportion of work done on the real estate project which requires
technical determination by the Group’s project engineers. The rate of completion is validated by the
responsible department to determine whether it approximates the actual completion rate. Changes in
estimate may affect the reported amounts of revenue and receivables.
*SGVFSM006755*
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and level of future taxable income together with future planning strategies. The Group assessed its
projected performance in determining the sufficiency of future taxable profit.
The net deferred tax assets recognized as at December 31, 2020 and 2019 amounted to
=86.32 million and =
P P76.21 million, respectively. The Group’s unrecognized deferred tax assets
amounted to =P1.07 million and =P1.04 million as at December 31, 2020 and 2019, respectively (see
Note 18).
As at December 31, 2020 and 2019, the Group has not provided any allowance for impairment losses
on its trade receivables from real estate sales of =
P4,633.66 million and P
=5,997.42 million as at
December 31, 2020 and 2019, respectively (see Note 5), after consideration of credit enhancement
(see Note 20).
In determining the appropriate discount rate, management considers the interest rates of government
bonds that are denominated in the currency in which the benefits will be paid, with extrapolated
maturities corresponding to the expected duration of the defined benefit obligation.
The mortality rate is based on publicly available mortality tables for the specific country and is
modified accordingly with estimates of mortality improvements. Future salary increases and pension
increases are based on expected future inflation rates for the specific country.
While the Group believes that the assumptions are reasonable and appropriate, significant differences
between actual experiences and assumptions may materially affect the cost of employee benefits and
related obligations.
*SGVFSM006755*
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As at December 31, 2020 and 2019, the present value of benefit obligation amounted to
=74.72 million and =
P P104.65 million, respectively. Net pension cost amounted to P
=24.03 million and
=18.51 million for the years ended December 31, 2020 and 2019, respectively (see Note 17).
P
As at December 31, 2020 and 2019, lease liabilities of the Group amounted to =
P319.02 million and
=259.93 million, respectively (see Notes 20 and 22).
P
In view of the continuing community quarantine being implemented due to the coronavirus pandemic
in 2020, the Group’s hotel segment continues to be adversely affected by travel restrictions and delay
in the construction activities. While the hotel property of the Group is still under construction as of
December 31, 2020, the impact of the coronavirus pandemic is still expected to continue even after
the completion of the construction as travel and mobility restrictions, social distancing and stay-at-
home orders, among other measures, are still being implemented. These events and conditions are
impairment indicators requiring the assessment of the recoverable amount of the hotel property,
which involves significant judgment, estimation and assumptions about occupancy rates, average
room rates, as well as external inputs such as discount rate.
The Group estimates the recoverable amount based on the value-in-use. In determining the present
value of estimated future cash flows expected to be generated from the continued use of these assets
of the hotel segment, the Group is required to make estimates and assumptions that may affect the
nonfinancial assets. The significant assumptions used in the valuation of the hotel property being
constructed is the (a) discount rate of 10.10%, (b) estimated increase in room rates ranging from 5%
to 10% and (c) estimated occupancy rates ranging from 20% to 70%. The Group considered in its
assumptions the impact of the coronavirus pandemic on the occupancy rate and room rates which are
not expected to normalize until 2025. No impairment loss was recognized in 2020 as the recoverable
amount exceeds the carrying value of the hotel property as of December 31, 2020.
*SGVFSM006755*
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2020 2019
Cash on hand P
=5,512,395 =5,540,393
P
Cash in banks 1,357,294,996 1,175,738,740
Cash equivalents 12,472,988 7,799,801
P
=1,375,280,379 =1,189,078,934
P
Cash in banks earn interest at the respective bank deposit rates. Cash equivalents are acquired for
varying periods of up to three months depending on the immediate cash requirements of the Group
and earn interest at the prevailing short-term investment rates. Investment rates for Peso denominated
placements ranges from 0.38% to 2.50% in 2020 and 2019 while investment rates for United States
Dollar denominated placements are 0.38% to 1.13% and 1.00% to 1.13%, on December 31, 2020 and
2019, respectively. The carrying values of cash and cash equivalents approximate their fair values as
of reporting date.
Interest income derived from cash in banks and cash equivalents amounted to =
P3.69 million,
P5.41 million and =
= P1.83 million for the years ended December 31, 2020, 2019 and 2018, respectively
(see Note 15).
5. Receivables
2020 2019
Installment contracts receivable - net of
unamortized discount P
=4,633,662,911 =5,997,416,832
P
Rental receivable 521,157,951 224,438,779
Advances to employees and agents 35,361,605 37,275,616
Due from condominium associations 29,118,594 31,258,327
Others 127,483,984 155,421,678
5,346,785,045 6,445,811,232
Less allowance for impairment losses 17,386,443 17,386,443
5,329,398,602 6,428,424,789
Less noncurrent portion of installment
contracts receivable 2,059,680,944 4,120,495,943
P
=3,269,717,658 =2,307,928,846
P
Installment contracts receivable consist of receivables from the sale of real estate properties. These
are collectible in equal monthly principal installments over a period ranging from four to seven years
depending on the agreement. Installment contracts receivable are generally noninterest-bearing. The
corresponding titles to the condominium units sold under this arrangement are transferred to the buyer
upon full payment of the contract price.
Rental receivables pertain to receivables from the leasing operation of the Group including the effect
of straight-lining. These receivables are noninterest-bearing and are collectible within the normal
terms of 30 days.
Advances to employees and agents represent advances for operational purposes and discounts given
to clients that are chargeable to agents which are noninterest-bearing and are expected to be liquidated
or payable within one year.
*SGVFSM006755*
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Due from condominium associations pertains to utilities, janitorial, security and maintenance
expenses paid by the Group in behalf of the condominium association and unpaid balances from
management fees for administering properties. These are noninterest-bearing and are payable on
demand.
Other receivables include receivables from unit owners which pertains to transfer taxes and other
charges initially paid by the Group in behalf of the unit owners. These receivables are noninterest-
bearing and are normally settled within one year.
As at December 31, 2020 and 2019, the Group has not provided allowance for impairment losses on
its receivables, except for the allowance for impairment losses of =
P17.39 million provided on other
receivables in 2018. No additional allowance was provided during 2020 and 2019.
2020 2019
Balance at beginning of year P
=1,280,321,940 =P1,474,525,107
Additions 103,973,198 436,152,840
Accretion (Note 15) (534,019,221) (630,356,007)
Balance at end of year P
=850,275,917 P=1,280,321,940
Receivable financing
The Group enters into various agreements with banks whereby the Group sold its installment
contracts receivable. The Group still retains the sold receivables in the receivables account and
records the proceeds from these sales as loans payable (see Note 12). The carrying value of
installment contracts receivable sold and the related loans payable accounts amounted to
=1,297.34 million and =
P P865.33 million as at December 31, 2020 and 2019, respectively. These
receivables are used as collateral to secure the corresponding loans payables obtained.
2020 2019
Condominium units for sale P
=4,174,257,623 =3,891,771,270
P
Land held for future development 3,606,100,735 2,087,286,720
P
=7,780,358,358 =5,979,057,990
P
*SGVFSM006755*
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2020 2019
Balance at beginning of year P
=5,979,057,990 =6,652,280,366
P
Additions during the year 2,663,207,364 3,081,258,450
Disposals - recognized as cost of real estate
sales (Note 16) (2,247,861,019) (3,732,573,320)
Transfers from (to) investment properties (Note 9) 1,385,954,023 (21,907,506)
Balance at end of year P
=7,780,358,358 =P5,979,057,990
Additions during the year pertain to capitalized construction costs, borrowing costs, and other land
acquisition costs incurred on the Group’s ongoing projects and land held for future development.
Borrowings were used to finance the Group’s ongoing projects. The related borrowing costs were
capitalized as part of real estate for development and sale. The capitalization rate used to determine
the borrowings eligible for capitalization ranges from 4.25% to 8.33% in 2020 and 4.35% to 8.33% in
2019. Borrowing costs on loans payable capitalized as part of “Real estate for development and sale”
amounted to = P617.64 million and = P481.49 million for the years ended December 31, 2020
and 2019, respectively (see Note 12).
Transfers in 2020 amounting to = P1,385.95 million pertains to the commercial areas of Monarch
Parksuites, and parcels of land intended to be developed as real estate property for sale, while transfer
in 2019 amounting to =P21.91 million pertains to the cost of commercial areas of Princeview and
Anchorsky commercial space (see Note 9). These constitute significant noncash transactions in the
consolidated statements of cash flows.
The Group recorded no provision for impairment and no reversal was recognized in 2020 and 2019.
As at December 31, 2020 and 2019, the carrying amount of real estate for development and sale used
as collateral to secure the Group’s bank loans amounted to =
P5,398.78 million and =
P4,743.34 million,
respectively (see Note 12).
2020 2019
Advances to contractors and suppliers P
=787,688,498 =828,867,808
P
Input VAT 444,561,806 462,125,965
Creditable withholding tax 394,872,450 450,833,575
Prepaid expenses 260,779,781 323,377,937
Deposits on real estate properties – 92,779,852
Others – net of allowance 30,367,259 48,626,522
P
=1,918,269,794 =2,206,611,659
P
Advances to contractors and suppliers represent advances and downpayments for the construction of
real estate for development and sale that are recouped every progress billing payment depending on
the percentage of accomplishment.
*SGVFSM006755*
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Input VAT represents taxes imposed on the Group for the acquisition of lots, purchase of goods from
its suppliers and availment of services from its contractors, as required by Philippine taxation laws
and regulations. This will be used against future output VAT liabilities or will be claimed as tax
credits. Management has estimated that all input VAT is recoverable at its full amount.
Creditable withholding tax pertains mainly to the amounts withheld from income derived from real
estate sales and leasing activities. Creditable withholding tax will be applied against income tax due.
Prepaid expenses are attributable to prepayments of rent, insurance premiums, real property taxes and
cost to obtain contracts, i.e. commission that is related to the real estate sales.
The movements during the year of the current and noncurrent portions (see Note 10) of prepaid
commission which pertains to the cost to obtain a contract as required by PFRS 15 follows:
2020 2019
Balance at beginning of year P
=258,457,489 =233,588,994
P
Additions 53,012,712 127,101,183
Amortization (46,172,612) (102,232,688)
Balance at end of year P
=265,297,589 =258,457,489
P
Additions in 2020 and 2019 of =P53.01 million and = P127.10 million, respectively, constitute
significant noncash transactions in the consolidated statements of cash flows. This represents the
capitalized portion of the commission that will be incurred and amortized using the POC method.
Deposits on real estate properties represent the Group’s advance payments to real estate property
owners for the acquisition. In 2020, the deposits on real estate properties recorded under current
assets have been refunded to the Group as a result of the cancellation of the purchase agreement.
*SGVFSM006755*
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2019
Right- of-
Hotel Leasehold Office Furniture Transportation Use Assets
Property Improvements Equipment and Fixtures Equipment (Building) Total
Cost
At January 1 =1,157,955,809
P =38,652,190
P P38,223,800
= =47,202,254
P P77,699,364
= =43,632,448
P =1,403,365,865
P
Additions 855,636,733 – 24,839,773 3,437,710 35,348,392 – 919,262,608
At December 31 2,013,592,542 38,652,190 63,063,573 50,639,964 113,047,756 43,632,448 2,322,628,473
Accumulated Depreciation and
Amortization
At January 1 – 37,926,364 33,429,863 42,127,481 58,502,435 – 171,986,143
Depreciation and amortization
(Note 16) – 628,278 6,097,894 3,980,767 8,779,780 33,935,691 53,422,410
At December 31 – 38,554,642 39,527,757 46,108,248 67,282,215 33,935,691 225,408,553
Net Book Value =2,013,592,542
P =97,548
P =23,535,816
P =4,531,716
P =45,765,541
P =9,696,757
P =2,097,219,920
P
The Group’s hotel property pertains to the land and ongoing construction costs of Admiral Hotel.
Borrowings were used to finance the Group’s ongoing construction of hotel property. The related
borrowing costs were capitalized as part of property and equipment. The capitalization rate used to
determine the borrowings eligible for capitalization ranges from 5.25% to 8.37% in 2020 and 5.25%
to 8.37% in 2019. Total borrowing cost capitalized as part of hotel property amounted to
=111.55 million and =
P P99.62 million for the years ended December 31, 2020 and 2019, respectively
(see Note 12).
As of December 31, 2020 and 2019, capital commitments for hotel property amounted to
=326.27 million and =
P P722.72 million, respectively.
9. Investment Properties
2020
Commercial Projects Construction in Progress
Right-Of-Use
Land Building Land Building Asset (Land) Total
Cost
At January 1 =
P930,286,297 P
= 4,999,078,422 P
= 6,425,177,292 =
P3,107,860,980 P
= 222,287,791 P
= 15,684,690,782
Additions (Note 11) – 35,541,273 391,092,207 1,506,028,433 – 1,932,661,913
Transfers (Note 6) 6,939,978 368,603,616 (1,672,155,583) (89,342,034) – (1,385,954,023)
At December 31 937,226,275 5,403,223,311 5,144,113,916 4,524,547,379 222,287,791 16,231,398,672
Accumulated Depreciation
At January 1 – 778,172,732 – – 12,762,935 790,935,667
Depreciation (Note 16) – 206,275,012 – – 12,762,935 219,037,947
At December 31 – 984,447,744 – – 25,525,870 1,009,973,614
Net Book Value =
P937,226,275 P
= 4,418,775,567 P
= 5,144,113,916 =
P4,524,547,379 P
= 196,761,921 P
= 15,221,425,058
*SGVFSM006755*
- 40 -
2019
Commercial projects pertain to the Group’s completed commercial projects, namely One Shopping
Center, Two Shopping Center, One Logistics Center and One Soler, and the commercial units of the
Group’s completed condominium projects. Construction in progress comprises ongoing construction
of the commercial development in Aseana Bay City and Parañaque City (see Note 22) and parcels of
land for future development.
Transfers in 2020 amounting to = P1,385.95 million pertains to the commercial areas of Monarch
Parksuites and parcels of land intended to be developed as real estate property for sale, while transfer
in 2019 amounting to =P21.91 million pertains to the cost of commercial areas of Princeview and
Anchorsky commercial storage (see Note 6). These constitute significant noncash transactions in the
consolidated statements of cash flows.
Borrowings were used to finance the Group’s ongoing construction of investment properties. The
related borrowing costs were capitalized as part of investment properties.
The capitalization rate used to determine the borrowings eligible for capitalization ranges from 4.25%
to 7.89% in 2020 and 4.50% to 7.89% in 2019. Total borrowing cost capitalized as part of investment
properties amounted to = P458.15 million and =
P482.15 million for the years ended December 31, 2020
and 2019, respectively (see Note 12).
For the years ended December 31, 2020, 2019 and 2018, rental income from these investment
properties amounted to =P1,022.47 million, =
P782.99 million and =P604.76 million, respectively
(see Note 22). Depreciation charged to operations for the years ended December 31, 2020, 2019 and
2018 amounted to =P219.04 million, =
P199.73 million and = P144.78 million, respectively (see Note 16).
Selling and administrative expenses, exclusive of depreciation, related to these investment properties
amounted to =P202.27 million, P
=197.54 million and =P163.79 million for the years ended
December 31, 2020, 2019 and 2018, respectively.
The aggregate fair value of investment properties amounted to = P26,906.65 million and
=22,888.50 million as of December 31, 2020 and 2019, respectively, which were determined based
P
on valuations performed by independent qualified appraisers. The appraisers are industry specialists
in valuing these types of properties. The value was estimated by using a combination of the Market
Approach, a comparative approach to value that considers the sale of similar or substitute properties
and related market data, and Cost Approach, an approach that provides an indication of value by
calculating the current replacement or reproduction cost of an asset and making deductions for
physical deterioration and all other relevant forms of obsolescence. Under the Market Approach, a
higher estimated price per square meter of the subject property would yield higher fair value. The fair
*SGVFSM006755*
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value measurement for the Group’s investment properties has been categorized as Level 3 based on
the inputs to the valuation techniques used.
As of December 31, 2020 and 2019, capital commitments for investment properties amounted to
=902.12 million and =
P P2,826.89 million, respectively.
As of December 31, 2020, and 2019, the carrying amount of investment properties used to secure the
Group’s bank loans amounted to P
=10,053.83 million and =
P8,715.51 million, respectively (see Note
12).
2020 2019
Advances to contractors and suppliers P
=812,280,035 =337,784,150
P
Prepaid expenses (Note 7) 131,417,762 83,451,971
Utility and security deposits – net of allowance 93,826,487 76,160,709
Deposits on real estate properties 77,390,800 57,608,575
Input VAT 57,827,555 65,428,124
Construction bond deposits 20,039,919 20,039,919
Software and brand development costs 8,184,278 7,895,697
P
=1,200,966,836 =648,369,145
P
Advances to contractors and suppliers represent advances and down payments for the construction of
investment properties and property and equipment that are recouped every progress billing payment
depending on the percentage of accomplishment.
Prepaid expenses pertain to the noncurrent portion of costs to obtain contracts, i.e. commission that is
related to the real estate sales. As disclosed in Note 7, this represents the capitalized portion of the
commission that will be incurred and amortized using the POC method. This constitutes significant
noncash transactions in the consolidated statements of cash flows in 2020 and 2019.
Deposits on real estate properties represent the noncurrent portion of the Group’s advance payments
to real estate property owners for the future acquisition and will be recovered upon consummation of
the transaction.
Utility and security deposits pertain to the initial set-up of services rendered by public utility
companies and other various long-term deposits necessary for the construction and development of
real estate projects.
Construction bond deposits pertain to the bond for the Group’s ongoing project developments.
Software costs pertains to the capitalizable cost incurred in the design and implementation of a
system. Brand development costs, on the other hand, pertains to the marketing designs that binds the
identity of the group of hotels. Amortization of software and brand development cost amounted to
=4.54 million and =
P P0.91 million in 2020 and 2019, respectively.
*SGVFSM006755*
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2020 2019
Payable to contractors and suppliers P
=1,334,071,926 =1,006,297,954
P
Retention payable 962,058,447 904,131,766
Accrued expenses
Accrued commission 581,392,231 515,029,816
Accrued interest expense 100,396,724 64,174,009
Rental deposit 530,828,417 825,573,430
Other taxes payable 243,437,232 227,875,598
Liabilities for purchased land (Note 6) 30,420,000 30,420,000
Others 121,018,588 88,958,937
3,903,623,565 3,662,461,510
Less noncurrent portion of:
Retention payable 709,257,245 785,977,783
Rental deposit 192,504,627 689,935,239
Accrued commission 131,417,762 83,451,971
Liabilities for purchased land 30,420,000 30,420,000
1,063,599,634 1,589,784,993
P
=2,840,023,931 =2,072,676,517
P
Payable to contractors and suppliers are attributable to construction costs incurred but not yet paid as
of reporting date. These are noninterest-bearing and are normally settled within 30 to 120 days.
Retention payable pertains to the portion of contractors’ progress billings which are withheld and will
be released after the satisfactory completion of the contractors’ work. The retention payable serves as
a security from the contractor should there be defects in the project. These are noninterest-bearing
and are normally settled upon completion of the relevant contract arrangements.
Accrued commission represents the commissions to be paid to the marketing agents in relation to the
real estate sales. This includes capitalized portion of the commission which has been accrued in 2020
and 2019, respectively. This constitutes significant noncash transactions in the consolidated
statements of cash flows in 2020 and 2019.
Accrued interest expense pertains to the incurred but unpaid interest which is normally settled within
one to three months.
Rental deposit consists of security deposits on lease and utility deposit payable.
Other taxes payable consists of taxes withheld by the Group from employees, contractors and
suppliers, which are payable within one year.
Others consist of non-trade payables and premium payable to SSS, Philhealth and Pag-ibig. These
are normally settled within one year.
*SGVFSM006755*
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These loans were secured with various investment properties owned by the Group which are located
in Pasay City and Binondo, Manila. The aggregate carrying amount of these properties used as
collateral amounted to =
P542.92 million and =
P558.46 million as of December 31, 2020 and 2019,
respectively (see Note 9).
Long-term Loans
Long-term bank loans
In December 2020, PPDC secured a five-year loan facility amounting to = P1,100.00 million. This loan
facility has fixed interest rate of 5% per annum. There is no outstanding loan balance under this
facility as of December 31, 2020.
In December 2020, PPDC secured a five-year loan facility amounting to = P1,500.00 million available
for single drawdown. This loan facility has a floating interest rate. There is no outstanding loan
balance under this facility as of December 31, 2020.
In July 2020, GRIC secured a five-year loan facility from a local bank amounting to
=450.00 million. The facility is available in multiple drawdowns. The outstanding balance of loan
P
under this facility amounted to =
P450.00 million as at December 31, 2020 a with 4.25% interest rate
per annum.
In June 2019, GRIC secured a seven-year loan facility from a local bank amounting to
=1,150.00 million. The facility is available in multiple drawdowns. The outstanding balance of loan
P
under this facility amounted to =
P590.00 million and =P510.00 million as at December 31, 2020 and
December 31, 2019 with interest rates ranging from 6.65% to 7.07% and 7.07% to 7.58% rate per
annum, respectively.
In April 2019, GRIC secured a five-year loan facility from a local bank amounting to
=1,040.00 million. The facility is available in multiple drawdowns. The outstanding balance of loan
P
under this facility amounted to =
P560.00 million and =P460.00 million as at December 31, 2020 and
December 31, 2019 respectively, with interest rates ranging from 6.25% to 6.86% per annum.
*SGVFSM006755*
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In February 2019, APC secured a six-year loan facility from a local bank amounting to
=1,970.00 million. The facility is available in multiple drawdowns. The outstanding balance of loan
P
under this facility amounted to =
P920.00 million and =P570.00 million as at December 31, 2020 and
December 31, 2019 with interest rates ranging from 5.95% to 7.79% and 6.02% to 7.79% per annum,
respectively.
In December 2018, APC secured APC secured five-year and six-year loan facilities from a local bank
amounting to =P4,665.00 million. The facility is available in multiple drawdowns. The outstanding
balance of loan under this facility amounted to =
P765.00 million as at December 31, 2020 and
December 31, 2019 with 8.37% interest rate per annum.
In December 2018, GRIC secured three-year and five-year loan facilities from a local bank
amounting to =P1,620.00 million. The facility is available in multiple drawdowns. The outstanding
balance of loan under this facility amounted to =
P139.00 million and =P220.00 million as at
December 31, 2020 and December 31, 2019 with 8.28% interest rate per annum.
In December 2018, GRIC secured a five-year loan facility from a local bank amounting to
=1,080.00 million. The facility is available in multiple drawdowns. The outstanding balance of loan
P
under this facility amounted to =
P170.00 million as at December 31, 2020 and December 31, 2019
with 8.33% interest rate per annum.
In December 2017, PPDC secured a seven-year loan facility from a local bank amounting to
=3,700.00 million. The facility is available in multiple drawdowns. The outstanding balance of loan
P
under this facility amounted to =
P1,654.05 million and =P1,700.00 million as at December 31, 2020 and
December 31, 2019 with 6.02% to 6.06% and 6.73% to 7.01% interest rate per annum, respectively.
In December 2017, BEIC secured a seven-year loan facility from a local bank amounting to
=
P450.00 million with 6.00% interest rate per annum. The outstanding balance of loan under this
facility amounted to =
P441.00 million and =
P445.50 million as at December 31, 2020 and
December 31, 2019, respectively.
In December 2015, PPDC secured a 10-year loan facility from a local bank amounting to
=4,100.00 million. The facility is available in multiple drawdowns with interest rates of 5.50% per
P
annum for the first five years and 5.75% per annum thereafter. The outstanding balance of loan under
this facility amounted to =
P4,100.00 million as at December 31, 2020 and December 31, 2019.
In September 2015, ARCI secured several term loan facilities from a local bank with aggregate
amount of =P890.00 million. The facilities are available in multiple drawdowns with interest rates
ranging from 4.50% to 6.49% per annum. The outstanding balance of loans under these facilities
amounted to = P180.00 million and =
P221.60 million as at December 31, 2020 and December 31, 2019,
respectively.
In September 2015, GRIC secured a six-year loan facility from a local bank amounting to
=4,100.00 million. In December 2020, the loan facility has been extended for another two years until
P
December 20, 2023. The facility is available in multiple drawdowns with interest rates from 5.25%
to 6.50% per annum. The outstanding balance of loan under this facility amounted to =
P3,370.00
million and =
P2,480.00 million at December 31, 2020 and December 31, 2019, respectively.
In December 2014, PPDC secured a seven-year loan facility from a local bank amounting to
=500.00 million. The facility is available in multiple drawdowns with 6.00% interest rate per annum.
P
The outstanding balance of loans under this facility amounted to =
P475.00 million and
=480.00 million as at December 31, 2020 and December 31, 2019, respectively.
P
*SGVFSM006755*
- 45 -
In March 2014, PPDC secured a seven-year loan facility from a local bank amounting to
=4,100.00 million. The facility is available in multiple drawdowns with interest rates ranging from
P
4.50% to 7.07% per annum. Partial principal payments are scheduled annually which commenced in
2015 up to 2018 with the remaining balance to be paid upon maturity. As at December 31, 2020 and
December 31, 2019, the outstanding balance of loans under this facility amounted to
=1,000.00 million.
P
In December 2013, PPDC secured a seven-year loan facility from a local bank amounting to
=
P500.00 million. The facility is available in multiple drawdowns with 6.00% interest rate per annum.
Principal repayment at the end of the second year from initial drawdown date and every year
thereafter shall be 1.00% of the drawdown amount, with the remaining balance to be paid upon
maturity. As at December 31, 2020 and 2019, the outstanding balance of loans under this facility
amounted to nil and = P475.00 million, respectively.
In January 2013, PPDC secured a 10-year loan facility from a local bank amounting to
=1,200.00 million. The facility is available in multiple drawdowns with interest rates of
P
7.07% per annum for the first five years and 7.89% per annum thereafter. Quarterly principal
repayments up to three years shall be 0.75% of the drawdown amount with the remaining balance to
be paid upon maturity. As at December 31, 2020 and December 31, 2019, the outstanding balance of
loans under this facility amounted to =
P937.13 million.
Unamortized issuance costs deducted from the above-mentioned long-term bank loans as at
December 31, 2020 and December 31, 2019 amounted to = P83.13 million and =
P72.51 million,
respectively.
The rollforward analyses of unamortized debt discount and issuance costs on long-term bank loans as
at December 31, 2020 and December 31, 2019 follow:
2020 2019
Balance at beginning of year P
=72,505,145 =69,622,497
P
Additions 39,600,000 27,613,136
Amortization (28,976,463) (24,730,488)
Balance at end of year P
=83,128,682 =72,505,145
P
These term loans were secured with various land and buildings owned by the Group which are
located in Roxas Boulevard, Pasay City, Binondo, Manila and Parañaque City, recorded under real
estate for development and sale, property and equipment and investment properties. As at
December 31, 2020 and December 31, 2019, these properties have an aggregate carrying value
amounting to =P17,504.73 million and P=14,913.98 million, respectively (see Notes 6, 8 and 9).
Receivable financing
The loans payable on receivable financing as discussed in Note 5 arises from installment contracts
receivable sold by the Group to various local banks with a total carrying amount of P
=1,297.34 million
and P
=865.33 million as at December 31, 2020 and December 31, 2019, respectively. These loans
bear fixed interest rates ranging from 4.75% to 6.25% in 2020 and 4.35% to 8.00% 2019, payable on
equal monthly installments for a period of 1 to 6 years depending on the terms of the installment
contracts receivable.
*SGVFSM006755*
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Notes payable
Notes payable represents the car loans availed by the Group for its employees. Annual interest rates
ranged from 3.90% to 4.70% in 2020 and 2019. The Group’s transportation equipment with a
carrying value of P
=16.57 million and =
P28.02 million as at December 31, 2020 and
December 31, 2019, respectively, are held as collateral to secure the Group’s notes payable
(see Note 8). Interest expense recognized under “Finance costs” amounted to = P1.38 million and
=0.91 million for the years ended December 31, 2020 and 2019, respectively.
P
Borrowing costs
Total borrowing costs arising from loans payable amounted to = P1,213.17 million, =
P1,088.23 million
and P
=851.65 million for the years ended December 31, 2020, 2019 and 2018, respectively. Total
borrowing costs capitalized under real estate for development and sale, property and equipment and
investment properties amounted to = P1,187.34 million, =P1,063.26 million and =P818.72 million for the
years ended December 31, 2020, 2019, respectively (see Notes 6, 8 and 9). Borrowing costs
recognized in profit or loss under “Finance costs” in the consolidated statements of comprehensive
income amounted to = P25.83 million, =
P24.97 million and =P32.93 million for the years ended
December 31, 2020, 2019 and 2018, respectively.
2020 2019
Deposits from real estate buyers P
=2,816,704,219 =2,337,519,184
P
Deposits from lessees 667,980,133 836,635,433
3,484,684,352 3,174,154,617
Less noncurrent portion of deposits from lessees 364,759,905 412,396,680
P
=3,119,924,447 =2,761,757,937
P
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The Parent Company, in its regular conduct of business, has entered into transactions with its
subsidiaries principally consisting of advances and reimbursement of expenses, development,
management, marketing, leasing and administrative service agreements. Outstanding balances
between companies within the Group are unsecured, interest-free and settlement occurs in cash.
Related party transactions (RPT) and balances were eliminated in the consolidated financial
statements.
Enterprises and individuals that directly or indirectly, through one or more intermediaries, control or
are controlled by or under common control, with the Group, including holding companies,
subsidiaries and fellow subsidiaries, are related parties of the Group. Associates and individuals
owning, directly or indirectly, an interest in the voting power of the Group that gives them significant
influence over the enterprise, key management personnel, including directors and officers of the
Parent Company and close members of the family of these individuals, and companies associated
with these individuals, also constitute related parties.
In considering each possible related party relationship, attention is directed to the substance of the
relationship and not merely to the legal form.
The Parent Company has an approval requirement such that material related party transaction (RPT)
shall be reviewed by the Risk Management Committee (the Committee) and endorsed to the BOD for
approval. Material RPTs are those transactions that meet the threshold value as approved by the
Committee amounting to 10% or higher of the Group’s total consolidated assets based on its latest
audited financial statements.
Other income includes income from forfeitures from cancelled sales and leases, as well as penalties
and other surcharges billed against defaulted installment contracts receivable, among others. Income
*SGVFSM006755*
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from forfeitures mainly arises from cancellation of nonrefundable reservation fees, amortization
payments, deposits and advance rentals net of recovered costs and the balances of buyers and tenants.
Other income mainly pertains to forfeitures from cancelled sales and leases amounting to
=103.09 million, P
P =12.44 million, and =P11.14 million in 2020, 2019, and 2018, respectively.
Other income also includes administrative fees and expenses charged on account of the agents,
service fees and other items considered as not material.
The Group has an unfunded, noncontributory defined benefit plan covering all of its regular
employees. The benefits are based on the projected retirement benefit of 22.5 days pay per year of
service in accordance with RA No. 7641, Retirement Pay Law. An independent actuary, using the
projected unit credit method, conducts an actuarial valuation of the retirement benefit obligation.
*SGVFSM006755*
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The components of the Group’s pension costs (included in “Salaries, wages and employee benefits”
under “Selling and administrative expenses” and in “Finance costs”) follow:
2020 2019
Current service cost P
=19,065,767 =13,410,004
P
Interest cost on benefit obligation 5,692,533 5,101,269
Settlement gain on curtailment (725,958) –
P
=24,032,342 =18,511,273
P
Movements in the present value of defined benefit obligations (DBO) as of December 31, 2020 and
2019 follow:
2020 2019
Balance at beginning of year P
=104,652,471 =66,294,659
P
Net benefit cost in profit or loss
Current service cost 19,065,767 13,410,004
Interest cost 5,692,533 5,101,269
Settlement gain curtailment (725,958) –
24,032,342 18,511,273
Remeasurements in OCI
Actuarial changes arising from changes in
financial assumptions (56,778,091) 29,599,268
Actuarial changes arising from experience
adjustments 6,732,302 (9,451,330)
(50,045,789) 20,147,938
Benefits paid (3,921,113) (301,399)
Balance at end of year P
=74,717,911 =104,652,471
P
The principal assumptions used to determine pension benefits of the Group follow:
2020 2019
Discount rate 4.46% to 5.03% 5.20% to 5.54%
Salary increase rate 5.00% 10.00%
There were no changes from the previous period in the methods and assumptions used in preparing
sensitivity analysis.
The average duration of the DBO as of the reporting date is 15.90 to 16.70 years in 2020 and 11.50 to
21.60 years in 2019.
The sensitivity analysis below has been determined based on reasonably possible changes of each
significant assumption on the defined benefit obligation as of the reporting date, assuming all other
assumptions are held constant. It should be noted that the changes assumed to be reasonably possible
at the valuation date are open to subjectivity, and do not consider more complex scenarios in which
changes other than those assumed may be deemed to be more reasonable.
*SGVFSM006755*
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2020 2019
Less than 1 year P
=2,006,948 =1,930,643
P
More than 1 year to 2 years 2,054,599 860,616
More than 2 years to 4 years 1,292,891 2,273,396
More than 4 years 56,358,248 34,875,827
On September 30, 2020, the BIR issued Revenue Regulations No. 25-2020 implementing Section
4(bbbb) of “Bayanihan to Recover As One Act” which states that the NOLCO incurred for taxable
years 2020 and 2021 can be carried over and claimed as a deduction from gross income for the next
five (5) consecutive taxable years immediately following the year of such loss.
Details of NOLCO that can be claimed as deduction from future taxable profit and MCIT that can be
claimed as tax credits against income tax liabilities follow:
NOLCO
Year Incurred Amount Used/Expired Balance Expiry Year
2017 =24,770,433
P P
=24,770,433 =–
P 2020
2018 25,317,633 22,079,763 3,237,870 2021
2019 77,304,950 43,605,074 33,699,876 2022
2020 79,417,544 – 79,417,544 2025
=206,810,560
P =90,455,270 P
P =116,355,290
MCIT
Year Incurred Amount Used/Expired Balance Expiry Year
2018 P819,429
= =819,429
P =–
P 2021
2020 2,192,474 – 2,192,474 2023
=3,011,903
P =819,429
P =2,192,474
P
*SGVFSM006755*
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Net deferred tax assets of the Group as of December 31, 2020 and 2019 follow:
2020 2019
Deferred tax assets on:
Pension liabilities recognized in profit or loss P38,606,402
= P32,632,444
=
Lease liability 91,846,191 77,449,112
NOLCO 33,836,705 36,987,666
Difference between tax and book basis of accounting for
real estate and leasing transactions 16,262,429 6,906,105
Unamortized discount on installment contracts
receivable 1,308,464 2,256,224
Allowance on impairment losses 7,721,704 7,721,704
Commissions expense per books in excess of actual
commissions paid 79,872 –
MCIT 54,098 –
=189,715,865
P =163,953,255
P
Deferred tax liabilities on:
Right-of-use assets 84,812,011 64,583,363
Difference between tax and book basis of accounting for
real estate and leasing transactions 2,391,387 21,683,195
Pension liabilities recognized in OCI 16,191,028 1,146,283
Actual commissions paid in excess of commissions
expense per books – 327,016
103,394,426 87,739,857
=86,321,439
P =76,213,398
P
Net deferred tax liabilities of the Group as of December 31, 2020 and 2019 follow:
2020 2019
Deferred tax asset on:
Unamortized discount on installment contracts
receivable =264,520,872
P =310,642,149
P
Lease liability 3,860,351 529,289
Difference between tax and book basis of accounting for
real estate and leasing transactions 128,066,298 152,128,150
Commissions expense per books in excess of
actual commissions paid 3,686,727 10,657,904
Nondeductible expenses 34,805,330 33,978,856
MCIT – 819,429
=434,939,578
P =508,755,777
P
Deferred tax liabilities on:
Difference between tax and book basis of accounting for
real estate and leasing transactions =556,539,585
P =659,240,277
P
Right-of-use assets 4,521,551 1,183,121
Unamortized discount on loans payable 15,244,703 9,003,177
Actual commissions paid in excess of commissions
expense per books 7,544,077 6,586,697
583,849,916 676,013,272
=148,910,338
P =167,257,495
P
*SGVFSM006755*
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The Group has deductible temporary differences for which deferred tax assets have not been
recognized since management assessed that no sufficient taxable income is available in the future to
allow all or part of deferred tax assets on certain temporary differences to be realized and/or utilized.
NOLCO for which no deferred tax assets were recognized amounted to = P3.57 million and
=3.45 million as at December 31, 2020 and 2019, respectively. The Group’s unrecognized deferred
P
tax assets on NOLCO amounted to P =1.07 million and =
P1.04 million as at December 31, 2020 and
2019, respectively.
Statutory reconciliation
The reconciliation of the statutory income tax rate to the effective income tax rate follows:
2020 2019
Statutory income tax rate 30.00% 30.00%
Tax effect of:
Nondeductible expenses 0.06 0.13
Changes in unrecognized deferred tax assets 3.12 –
Interest income subject to final tax (0.07) (0.05)
Others (2.03) 0.18
Effective income tax rate 31.08% 30.26%
19. Equity
Capital Stock
The details of the Parent Company’s capital stock which consists of common and preferred shares
follow:
Common shares
Details of the Parent Company’s common shares as of December 31, 2020 and 2019 follow:
On August 8, 2007, the Parent Company launched its Initial Public Offering where a total of
86,667,000 common shares were offered at an offering price of P
=8.93 per share. The registration
statement was approved on July 30, 2007. The Parent Company has 100 and 99 existing shareholders
as of December 31, 2020 and 2019, respectively.
On November 8, 2013, the Philippine SEC approved the increase in the Parent Company’s capital
stock by increasing common stock from = P2.30 billion divided into 2.30 billion shares with par value
of P
=1.00 each to =
P3.50 billion divided into 3.50 billion shares with par value of =
P1.00 each.
Preferred shares
The preferred shares are voting, nonparticipating, nonredeemable and are entitled to 8% cumulative
dividends. Details of the Parent Company’s preferred shares as at December 31, 2020 and 2019
follow:
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Cash Dividends
On April 7, 2021, Parent Company’s BOD approved the declaration of cash dividends as follows:
For preferred shares - 8% dividends per issued and outstanding preferred share; and
For common shares - = P0.02 per issued and outstanding common share.
The record date is May 27, 2021 and payment date is on June 17, 2021.
On June 18, 2020, Parent Company’s BOD declared cash dividends as follows:
For preferred shares - 8% dividends per issued and outstanding preferred share; and
For common shares - = P0.09 per issued and outstanding common share.
For preferred shares - 8% dividends per issued and outstanding preferred share; and
For common shares - = P0.08 per issued and outstanding common share.
For preferred shares - 8% dividends per issued and outstanding preferred share; and
For common shares - = P0.07 per issued and outstanding common share.
Retained Earnings
The Parent Company’s retained earnings available for dividend distribution amounted to
=1,558.66 million and =
P P1,179.94 million as of December 31, 2020 and 2019, respectively. The
undistributed earnings from subsidiaries amounting to =
P58.64 million and =P421.81 million as of
December 31, 2020 and 2019, respectively, is not available for dividend distribution until actually
declared by the subsidiaries.
Under the Tax Code, publicly-held Corporations are allowed to accumulate retained earnings in
excess of capital stock and are exempt from improperly accumulated earnings tax.
On December 10, 2020, =P300.00 million and =P100.00 million appropriated retained earnings for 202
Peaklane and 8 Alonzo, respectively were extended for release on or before December 31, 2024.
*SGVFSM006755*
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In 2018, retained earnings amounting to =P100.00 million and =P50.00 million were appropriated for
the project development of hotel projects and 8 Alonzo project, respectively. These appropriations
are expected to be released gradually until 2023. Appropriated retained earnings for the project
development of Princeview Parksuites and for EAGI’s working capital amounting to
=68.00 million, and =
P P8.25 million, respectively, were released from appropriation in 2018.
On December 12, 2012, retained earnings amounting to =P150.00 million was appropriated for the
project development of Oxford Parksuites and was released gradually up to 2017.
*SGVFSM006755*
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Capital Management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit
rating and healthy capital ratios in order to support its business and maximize shareholder value. The
Group establishes the appropriate capital structure for each business line that properly reflects its
premier credit rating and allows it the financial flexibility, while providing it sufficient cushion to
absorb cyclical industry risks.
The Group considers debt as a stable source of funding. The Group lengthened the maturity profile of
its debt portfolio and makes it a point to spread out its debt maturities by not having a significant
percentage of its total debt maturing in a single year.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic
conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to
shareholders, return capital to shareholders or issue new shares.
The following table shows the components of what the Group considers its capital as at
December 31, 2020 and 2019:
2020 2019
Capital stock:
Common stock P
=1,040,001,000 =1,040,001,000
P
Preferred stock 346,667,000 346,667,000
Additional paid-in capital 632,687,284 632,687,284
Retained earnings 6,247,694,534 6,019,379,136
P
=8,267,049,818 =8,038,734,420
P
The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net
debt. Net debt includes accounts and other payables, interest-bearing loans and borrowings, and
customers’ advances and deposits, less cash and cash equivalents. Capital pertains to equity
attributable to the equity holders of the parent, excluding OCI.
2020 2019
Accounts and other payables P
=3,903,623,565 =3,662,461,510
P
Lease liabilities 319,021,807 259,928,002
Loans payable 19,310,647,503 17,873,998,096
Customers’ advances and deposits 3,484,684,352 3,174,154,617
27,017,977,227 24,970,542,225
Less cash and cash equivalents (1,375,280,379) (1,189,078,934)
Net debt 25,642,696,848 23,781,463,291
Capital (excluding OCI) 8,267,049,818 8,038,734,420
Total capital and net debt P
=33,909,746,666 =31,820,197,711
P
Gearing ratio 76% 75%
No changes were made in the Group’s objectives, policies or processes during the years ended
December 31, 2020 and 2019.
*SGVFSM006755*
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2020 2019
Carrying Value Fair Value Carrying Value Fair Value
Financial Asset
Installment contracts receivable P
=4,633,662,911 P
=6,356,735,073 =5,997,416,832
P =7,147,130,940
P
Financial asset
The fair value of installment contracts receivable, which is based on the level 3 valuation technique is
computed using discounted value of future cash flows using the prevailing interest rates for similar
types of receivables as of the reporting date based on the remaining terms to maturity. The discount
rates used ranged from 0.99% to 2.92% in 2020 and 3.12% to 3.39% in 2019 for installment contracts
receivable.
There were no assets or liabilities whose fair value is disclosed using Level 1 and Level 2 valuation
techniques.
There was no change in the valuation techniques used by the Group in determining the fair market
value of the assets and liabilities.
There were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into
and out of Level 3 fair value measurements.
The significant risks arising from the Group’s financial instruments are liquidity risk, credit risk and
interest rate risk. The exposures to these risks and how they arise, as well as the Group’s objectives,
policies and processes for managing the risks and the methods used to measure the risks did not
change from prior years.
The main objectives of the Group’s financial risk management are as follows:
to identify and monitor such risks on an ongoing basis;
to minimize and mitigate such risks; and,
to provide a degree of certainty about costs.
The BOD reviews and agrees on policies for managing each of these risks.
*SGVFSM006755*
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Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet commitments
associated with financial instruments. Liquidity risk may result from either: the inability to sell
financial assets quickly at their fair values; the counterparty failing on repayment of a contractual
obligation; or the inability to generate cash inflows as anticipated.
The Group’s objective is to maintain balance between continuity of funding and flexibility through
the use of bank loans. The Group monitors its cash flow position, debt maturity profile and overall
liquidity position in assessing its exposure to liquidity risk. The Group maintains a level of cash and
cash equivalents deemed sufficient to finance its operations and to mitigate the effects of fluctuation
in cash flows. Capital expenditures, operating expenses and working capital requirements are
sufficiently funded through cash collections and bank loans. Accordingly, its financial liabilities,
obligations and bank loans maturity profile are regularly reviewed to ensure availability of funding
through an adequate amount of credit facilities with financial institutions. As at December 31, 2020
and 2019, the Group has undrawn facilities amounting = P17.60 billion and =
P19.29 billion, respectively.
The tables below summarize the maturity profile of the Group’s financial liabilities based on
contractual undiscounted payments and the financial assets and contract assets to manage liquidity as
at December 31, 2020 and 2019:
2020
More than
On Demand Within 1 year 1 year Total
Financial Assets
Cash and cash equivalents P
=1,362,807,391 P
=12,472,988 P
=– P
=1,375,280,379
Receivables:
Installment contracts receivable* – 6,363,967,993 7,734,256,996 14,098,224,989
Rental receivable – 521,157,951 – 521,157,951
Due from condominium associations – 29,118,594 – 29,118,594
Due from agents – 29,602,135 – 29,602,135
Others** – 110,097,541 – 110,097,541
Deposits – 30,367,259 113,866,406 144,233,665
Total Financial Assets P
=1,362,807,391 P
=7,096,784,461 P
=7,848,123,402 P
=16,307,715,254
*Includes future interest receivable
**Net of allowance for impairment losses
Financial Liabilities
Accounts and other payables:
Payable to contractors and suppliers P
=– P
=1,334,071,926 P
=– P=1,334,071,926
Retention payable – 252,801,202 709,257,245 962,058,447
Accrued expenses* – 460,779,659 – 460,779,659
Rental security deposits – 338,323,790 192,504,627 530,828,417
Others** – 117,349,665 – 117,349,665
Lease liabilities*** – 54,924,829 436,790,311 491,715,140
Loans payable*** – 6,330,328,249 15,267,809,673 21,598,137,922
Total Financial Liabilities P
=– P
=8,888,579,320 P
=16,606,361,856 P
=25,494,941,176
*Excludes cost to obtain new contracts
**Others exclude statutory payables
***Includes future interest payment
*SGVFSM006755*
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2019
More than
On Demand Within 1 year 1 year Total
Financial Assets
Cash and cash equivalents =1,181,279,133
P =7,799,801
P =–
P =1,189,078,934
P
Receivables:
Installment contracts receivable* – 5,647,097,400 9,746,161,228 15,393,258,628
Rental receivable – 224,438,779 – 224,438,779
Due from condominium associations – 31,258,327 – 31,258,327
Due from agents – 34,179,544 – 34,179,544
Others** – 138,035,236 – 138,035,236
Deposits – 30,878,997 96,200,628 127,079,625
Total Financial Assets =1,181,279,133
P =6,113,688,084
P =9,842,361,856 =
P P17,137,329,073
*Includes future interest receivable
**Others represents net of allowance for impairment losses
Financial Liabilities
Accounts and other payables:
Payable to contractors and suppliers P–
= =1,006,297,954
P =– P
P =1,006,297,954
Retention payable – 118,153,983 785,977,783 904,131,766
Accrued expenses* – 344,967,108 – 344,967,108
Rental security deposits – 135,638,191 689,935,239 825,573,430
Others** – 86,987,768 – 86,987,768
Lease liabilities*** – 27,392,370 420,312,502 447,704,872
Loans payable*** – 5,163,800,181 16,579,257,714 21,743,057,895
Total Financial Liabilities =–
P =6,883,237,555 =
P P18,475,483,238 =
P25,358,720,793
*Excludes cost to obtain new contracts
**Others exclude statutory payables
***Includes future interest payment
Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or
customer contract, leading to a financial loss. The Group trades only with recognized, creditworthy
third parties. The Group’s receivables are monitored on an ongoing basis resulting to a manageable
exposure to bad debts. Real estate buyers are subject to standard credit check procedures, which are
calibrated based on the payment scheme offered. The Group’s respective credit management unit
conducts a credit investigation and evaluation of each buyer to establish creditworthiness.
Receivable balances are being monitored on a regular basis to ensure timely execution of necessary
intervention efforts. In addition, the credit risk for real estate receivables is mitigated as the Group
has the right to cancel the sales contract without need for any court action and take possession of the
subject condominium units in case of refusal by the buyer to pay the due installment contracts
receivable on time. This risk is further mitigated because the corresponding title to the condominium
units sold under this arrangement is transferred to the buyers only upon full payment of the contract
price.
*SGVFSM006755*
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As at December 31, 2020 and 2019, the Group’s maximum exposure to credit risk without
considering the effects of collaterals and other credit enhancements follows:
2020 2019
Cash in banks and cash equivalents P
=1,369,767,984 =1,183,538,541
P
Receivables and contract assets:
Installment contracts receivable 4,633,662,911 5,997,416,832
Rental receivable 521,157,951 224,438,779
Due from condominium associations 29,118,594 31,258,327
Due from agents 29,602,135 34,179,544
Others 127,483,984 155,421,678
Deposits 144,233,665 127,079,624
P
=6,855,027,224 =7,753,333,325
P
The subjected condominium units for sale are held as collateral for all installment contracts
receivable. The maximum exposure to credit risk, before considering credit exposure, from the
Group’s installment contracts receivable amounted to = P4,633.66 million and =P5,997.42 million as at
December 31, 2020 and 2019, respectively. The fair value of the related collaterals amounted to
=24,104.12 million and =
P P35,367.47 million as at December 31, 2020 and 2019, respectively resulting
to zero net exposure amounts as of December 31, 2020 and 2019. The basis for the fair value of the
collaterals is the current selling price of the condominium units.
Given the Group’s diverse base of counterparties, it is not exposed to large concentrations of credit
risk.
As at December 31, 2020 and 2019, the credit quality per class of financial assets are as follows:
2020
Neither Past Due nor Impaired Substandard Past Due But Individually
Grade A Grade B Grade Not Impaired Impaired Total
Cash in banks and cash
equivalents =
P1,369,767,984 =
P– =
P– =
P– =
P– =
P1,369,767,984
Receivables:
Installment contracts receivable 4,602,654,842 – – 31,008,069 – 4,633,662,911
Rental receivable 505,571,253 – – 15,586,698 – 521,157,951
Due from condominium
associations 29,118,594 – – – – 29,118,594
Due from agents 29,602,135 – – – – 29,602,135
Others 110,097,541 – – – 17,386,443 127,483,984
Deposits 144,233,665 – – – – 144,233,665
Total =
P6,791,042,014 =
P– =
P– P
= 46,594,767 P
= 17,386,443 P
= 6,855,027,224
2019
Neither Past Due nor Impaired Substandard Past Due But Individually
Grade A Grade B Grade Not Impaired Impaired Total
Cash in banks and cash
equivalents =1,183,538,541
P =–
P =–
P =–
P =–
P =1,183,538,541
P
Receivables:
Installment contracts receivable 5,991,895,920 – – 5,520,912 – 5,997,416,832
Rental receivable 224,438,779 – – – – 224,438,779
Due from condominium
associations 31,258,327 – – – – 31,258,327
Due from agents 34,179,544 – – – – 34,179,544
Others 138,035,235 – – – 17,386,443 155,421,678
Deposits 127,079,624 – – – – 127,079,624
Total =7,730,425,970
P =–
P =–
P =5,520,912
P =17,386,443
P =7,753,333,325
P
*SGVFSM006755*
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The credit quality of the financial assets and contract assets was determined as follows:
Cash in banks and cash equivalents are considered Grade A due to the counterparties’ low probability
of insolvency. The Group transacts only with institutions or banks which have demonstrated
financial soundness for several years.
Grade A installment contracts receivable are considered to be of high value where the counterparties
have a very remote likelihood of default and have consistently exhibited good paying habits.
Grade B accounts are active accounts with minimal to regular instances of payment default, due to
collection issues. These accounts are typically not impaired as the counterparties generally respond
to the Group’s collection efforts and update their payments accordingly.
Substandard grade accounts are accounts which have probability of impairment based on historical
trend. These accounts show propensity to default in payment despite regular follow-up actions and
extended payment terms. The Group assessed that there are no financial assets that will fall under
this category as the Group transacts with recognized third parties.
Rental receivable, due from condominium associations, other receivables and deposits are considered
as Grade A. The credit quality rating of Grade A pertains to receivables with no defaults in payment.
The Group determines financial assets as impaired when the probability of recoverability is remote
and in consideration of the lapse in the period which the asset is expected to be recovered. As at
December 31, 2020 and 2019, the aging analysis of the Group’s past due but not impaired installment
contracts receivable and rental receivable follows:
The table below demonstrates the sensitivity of the Group’s profit before tax and equity to a
reasonably possible change in interest rates on December 31, 2020 and 2019, with all variables held
constant (through the impact on floating rate borrowings):
*SGVFSM006755*
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Business segment information is reported on the basis that is used internally for evaluating segment
performance and deciding how to allocate resources among operating segments. Accordingly, the
segment information is reported based on the nature of service the Group is providing.
As at December 31, 2020 and 2019, the Group considers the following as its reportable segments:
Condominium sales - development of high-end condominium units for sale to third parties
Leasing and hotel - development of hotel and, commercial units and shopping centers for lease to
third parties
Property management - facilities management and consultancy services covering condominium
and building administration
The Chief Executive Officer (CEO) has been identified as the chief operating decision-maker
(CODM). The CODM reviews the Group’s internal reports in order to assess performance and
allocate resources. Management has determined the operating segments based on these reports. The
Group does not report results based on geographical segments because the Group operates only in the
Philippines.
The financial information about the operations of the reportable segments for the years ended
December 31, 2020 and 2019 and 2018 follow:
2020
Intersegment
Condominium Leasing Property Eliminating
Sales and Hotel Management Adjustments Total
REVENUE
Real estate sales =
P2,125,814,640 =
P– =
P– =
P– =
P2,125,814,640
Rental income – 1,022,465,244 – – 1,022,465,244
Management fee – – 48,665,690 (17,718,851) 30,946,839
Interest and other income 434,925,007 281,966,676 2,719,412 – 719,611,095
2,560,739,647 1,304,431,920 51,385,102 (17,718,851) 3,898,837,818
COSTS AND EXPENSES
Cost of condominium units 2,247,861,019 – – – 2,247,861,019
Selling and administrative 629,132,077 431,651,305 44,826,480 (17,718,851) 1,087,891,011
2,876,993,096 431,651,305 44,826,480 (17,718,851) 3,335,752,030
Earnings before interest and taxes (316,253,449) 872,780,615 6,558,622 – 563,085,788
Finance costs 32,807,667 20,320,337 94,834 – 53,222,838
Income (loss) before tax (P
= 349,061,116) =
P852,460,278 =
P6,463,788 =
P– =
P509,862,950
*SGVFSM006755*
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2020
Intersegment
Condominium Leasing Property Eliminating
Sales and Hotel Management Adjustments Total
ASSETS
Cash and cash equivalents =
P1,027,726,351 =
P343,031,060 =
P4,522,968 =
P– =
P1,375,280,379
Receivables 4,797,696,122 521,157,951 10,544,529 – 5,329,398,602
Real estate for development
and sale 7,780,358,358 – – – 7,780,358,358
Other current assets 256,943,159 1,661,286,926 39,709 – 1,918,269,794
Property and equipment 114,393,909 2,605,748,628 31,771 – 2,720,174,308
Investment properties – 15,221,425,058 – – 15,221,425,058
Other noncurrent assets 1,090,283,183 105,104,893 5,578,760 – 1,200,966,836
=
P15,067,401,082 P
= 20,457,754,516 =
P20,717,737 =
P– P
= 35,545,873,335
LIABILITIES
Accounts and other payables =
P2,268,982,097 =
P1,375,147,561 =
P16,056,675 =
P– =
P3,660,186,333
Lease liabilities 12,867,836 306,153,971 – – 319,021,807
Customers’ advances and deposits 2,816,704,219 667,980,133 – – 3,484,684,352
Loans payable 11,212,986,976 8,097,660,527 – – 19,310,647,503
=
P16,311,541,128 =
P10,446,942,192 =
P16,056,675 =
P– =
P26,774,539,995
2019
Intersegment
Condominium Leasing Property Eliminating
Sales and Hotel Management Adjustments Total
REVENUE
Real estate sales =4,731,787,587
P =–
P =–
P =–
P =4,731,787,587
P
Rental income – 782,989,213 – – 782,989,213
Management fee – – 48,781,842 (15,628,506) 33,153,336
Interest and other income 643,317,973 10,009,285 1,811,608 – 655,138,866
5,375,105,560 792,998,498 50,593,450 (15,628,506) 6,203,069,002
COSTS AND EXPENSES
Cost of condominium units 3,732,573,320 – – – 3,732,573,320
Selling and administrative 868,439,541 354,148,410 45,210,982 (15,628,506) 1,252,170,427
4,601,012,861 354,148,410 45,210,982 (15,628,506) 4,984,743,747
Earnings before interest and taxes 774,092,699 438,850,088 5,382,468 – 1,218,325,255
Finance costs 30,902,890 19,685,082 77,766 – 50,665,738
Income before tax =743,189,809
P =419,165,006
P =5,304,702
P =–
P =1,167,659,517
P
ASSETS
Cash and cash equivalents =
P1,093,163,131 =
P86,644,006 =
P9,271,797 =
P– P
=1,189,078,934
Receivables 6,195,840,447 224,438,779 8,145,563 – 6,428,424,789
Real estate for development
and sale 5,979,057,990 – – – 5,979,057,990
Other current assets 1,026,881,203 1,174,828,292 4,902,164 – 2,206,611,659
Property and equipment 65,398,906 2,031,807,948 13,066 – 2,097,219,920
Investment properties – 14,893,755,115 – – 14,893,755,115
Other noncurrent assets 556,619,959 91,749,186 – – 648,369,145
=14,916,961,636
P =18,503,223,326
P =22,332,590
P =–
P =33,442,517,552
P
LIABILITIES
Accounts and other payables =
P2,598,972,468 =
P822,758,230 =
P12,855,214 =
P– P
=3,434,585,912
Lease liabilities 7,163,420 252,764,582 – – 259,928,002
Customers’ advances and deposits 2,337,519,184 836,635,433 – – 3,174,154,617
Loans payable 10,729,649,733 7,144,348,363 – – 17,873,998,096
=15,673,304,805
P =9,056,506,608
P =12,855,214
P =–
P =24,742,666,627
P
*SGVFSM006755*
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2018
Intersegment
Condominium Leasing Property Eliminating
Sales and Hotel Management Adjustments Total
REVENUE
Real estate sales =5,371,389,610
P =–
P =–
P =–
P =5,371,389,610
P
Rental income – 604,761,508 – – 604,761,508
Management fee – – 44,910,192 (15,190,058) 29,720,134
Interest and other income 387,835,927 2,952,129 1,780,811 – 392,568,867
5,759,225,537 607,713,637 46,691,003 (15,190,058) 6,398,440,119
COSTS AND EXPENSES
Cost of condominium units 4,220,273,321 – – – 4,220,273,321
Selling and administrative 802,749,028 308,562,375 39,921,011 (15,190,058) 1,136,042,356
5,023,022,349 308,562,375 39,921,011 (15,190,058) 5,356,315,677
Earnings before interest and taxes 736,203,188 299,151,262 6,769,992 – 1,042,124,442
Finance costs 36,100,631 – 268,686 – 36,369,317
Income before tax =
P700,102,557 =
P299,151,262 =
P6,501,306 =
P– P
=1,005,755,125
ASSETS
Cash and cash equivalents =
P982,277,935 =
P73,961,456 =
P3,448,168 =
P– P
=1,059,687,559
Receivables 6,414,676,652 266,191,850 54,991,078 – 6,735,859,580
Real estate for development
and sale 6,652,280,366 – – – 6,652,280,366
Other current assets 1,024,024,069 882,714,540 3,516,990 – 1,910,255,599
Property and equipment 29,693,999 1,158,013,275 40,000 – 1,187,747,274
Investment properties – 9,860,631,961 – – 9,860,631,961
Other noncurrent assets 516,449,643 21,160,526 – – 537,610,169
=
P15,619,402,664 P
=12,262,673,608 =
P61,996,236 =
P– P
=27,944,072,508
LIABILITIES
Accounts and other payables =2,246,970,384
P =303,983,207
P =11,349,510
P =–
P =2,562,303,101
P
Lease liabilities – – – – ‒
Customers’ advances and deposits 1,034,042,325 703,683,381 – – 1,737,725,706
Loans payable 11,476,494,322 4,361,703,193 – – 15,838,197,515
=14,757,507,031
P =5,369,369,781
P =11,349,510
P =–
P =20,138,226,322
P
1. Segment assets exclude deferred tax assets.
2. Segment liabilities exclude income tax payable, other taxes payable, pension liabilities and deferred tax liabilities.
The CEO separately monitors the operating results of the Group’s business units for the purpose of
making decisions about resource allocation and performance assessment. Segment performance is
evaluated based on the operating profit or loss and is measured consistently with operating profit or
loss in the consolidated financial statements. Intersegment revenue and costs amounted to
=17.72 million, P
P =15.63 million and = P15.19 million for the years ended December 31, 2020, 2019
and 2018, respectively.
Set out below is the amount of revenue recognized from the following:
2020 2019
Amounts included in contract liabilities
at the beginning of the year P
=2,337,519,184 P
=1,034,042,325
*SGVFSM006755*
- 64 -
Real estate sale pertains only to the sale of high-rise condominium. This sale is revenue from
contract with customer recognized over time and generated mostly in the Luzon area.
Rental income is mainly derived from rental of malls, warehouse spaces and other commercial
facilities.
Management fee, which is recognized over time, represents the service fee for administering the
condominiums.
Set out below is the reconciliation of contracts with customers with the amounts disclosed in the
tables above:
2020
Condominium Leasing Property
Sales and Hotel Management Total
Sales to external customers P
=2,125,814,640 P
=1,022,465,244 P
=30,946,839 P
=3,179,226,723
Inter-segment sales – – 17,718,851 17,718,851
2,125,814,640 1,022,465,244 48,665,690 3,196,945,574
Inter-segment eliminations – – (17,718,851) (17,718,851)
Total revenue from contract with
customers P
=2,125,814,640 P
=1,022,465,244 P
=30,946,839 P
=3,179,226,723
2019
Condominium Leasing Property
Sales and Hotel Management Total
Sales to external customers =4,731,787,587
P =782,989,213
P =33,153,336
P =5,547,930,136
P
Inter-segment sales – – 15,628,506 15,628,506
4,731,787,587 782,989,213 48,781,842 5,563,558,642
Inter-segment elimination – – (15,628,506) (15,628,506)
Total revenue from contract with
customers =4,731,787,587
P =782,989,213
P =33,153,336
P =5,547,930,136
P
2018
Condominium Leasing Property
Sales and Hotel Management Total
Sales to external customers =5,371,389,610
P =604,761,508
P =29,720,134
P =6,005,871,252
P
Inter-segment sales – – 15,190,058 15,190,058
5,371,389,610 604,761,508 44,910,192 6,021,061,310
Inter-segment eliminations – – (15,190,058) (15,190,058)
Total revenue from contract with
customers =5,371,389,610
P =604,761,508
P =29,720,134
P =6,005,871,252
P
*SGVFSM006755*
- 65 -
Performance obligations
The transaction price allocated to the remaining performance obligations (unsatisfied or partially
satifisfied) as at December 31, 2020 and 2019 are as follows:
2020 2019
Within one year P
=2,225,277,345 =1,131,607,573
P
More than five years 5,258,209,433 6,705,916,849
P
=7,483,486,778 =7,837,524,422
P
22. Commitments
Lease Commitments
Future minimum rental receivable under the noncancellable operating lease as at December 31, 2020
and 2019 are as follows:
2020 2019
One year P
=406,166,700 P787,091,104
=
After one year but not beyond five years 1,119,447,990 3,441,521,234
Beyond five years 12,003,711 247,362,081
P
=1,537,618,401 =4,475,974,419
P
The Group also entered into noncancellable lease agreement for a parcel of land in Parañaque where
one of the Group’s investment property is located. The lease contract has a lease term of 10 years and
is renewable at the sole option of the lessee. Monthly rent shall be fixed for the first two years and
will increase by 5% and 7% on the third year to fifth year and on the sixth year to tenth year,
respectively.
*SGVFSM006755*
- 66 -
2020 2019
Amortization expense of right-of-use assets
(Notes 8 and 9) P
=47,529,122 =46,698,627
P
Interest expense on lease liability 20,320,334 19,685,082
Rental expense (Note 16) 6,696,142 11,186,609
Total amount recognized in statements of
comprehensive income P
=74,545,598 =77,570,318
P
Rental expense recognized pertains to lease agreements related to short-term leases and leases of low-
value assets.
The movements in the lease liabilities as at December 31, 2020 and 2019 are presented below:
2020 2019
Beginning balance P
=259,928,002 =292,811,011
P
Additions 94,351,938 –
Interest expense 20,320,334 19,685,082
Payments (55,578,467) (52,568,091)
Ending balance P
=319,021,807 =259,928,002
P
The Group has certain lease contracts that include extension options. These options are negotiated by
management to provide flexibility in managing the leased-asset portfolio and align with the Group’s
business need. Management exercises significant judgement in determining whether these extension
options are reasonably certain to be exercised (see Note 3).
Set out below are the undiscounted potential future rental payments as at December 31, 2020 and
2019, relating to period following the exercise date of extension options that are not included in the
lease term:
2020 2019
Less than one year P
=‒ =19,524,942
P
After one year but not more than five years 104,007,298 66,821,230
More than five years 8,015,561 ‒
P
=112,022,859 =86,346,172
P
2020 2019
Less than one year P
=54,924,829 =27,392,370
P
After one year but not more than five years 138,631,150 94,310,292
More than five years 298,159,161 326,002,210
P
=491,715,140 =447,704,872
P
*SGVFSM006755*
- 67 -
On July 16, 2019, the Group signed a public-private partnership (JDA) contract with the local
government of Paranaque City (LGU) for a mixed-use development three-tower project. The
established project completion is within 48 months. Based on the JDA, the Group will develop a
building with three towers (the Project) over a parcel of land owned by the local government of
Paranaque City which is located in Barangay Tambo, Paranaque, with the Group bearing all the cost
related to the land development and construction of the towers. The parcel of land and the
constructed building shall be the contribution of the LGU and the Group, respectively to the JDA.
The Group and the LGU shall then receive their respective allocation of the building after the project
is completed. The agreement shall be effective for a period of 25 years from the date all conditions
stated have been satisfied or waived, renewable for another 25 years at the option of the Group.
As at December 31, 2020, the Group incurred construction cost of the building amounting
=243.41 million are accounted for as investment properties – construction in progress (see Note 9)
P
since the Group has all interest over the project prior to its completion and will be used as commercial
properties.
Basic/diluted EPS amounts attributable to equity holders of the Parent Company for the years ended
December 31, 2020, 2019 and 2018 follow:
The Parent Company does not have potentially dilutive common shares as at December 31, 2020,
2019 and 2018.
Additions/
January 1, Accretion of December 31,
2020 interest Cash flows 2020
Loans payable =17,873,998,096
P =27,209,971
P =1,409,439,436 P
P =19,310,647,503
Lease liabilities 259,928,002 114,672,272 (55,578,467) 319,021,807
Dividends payable – 121,333,450 (121,333,450) –
Total liabilities arising from
financing activities =18,133,926,098
P =263,215,693
P =1,232,527,519
P =19,629,669,310
P
*SGVFSM006755*
- 68 -
Additions/
January 1, Accretion of December 31,
2019 interest Cash flows 2019
Loans payable =15,838,197,515
P =8,305,500
P =2,027,495,081
P =17,873,998,096
P
Lease liabilities 292,811,011 19,685,082 (52,568,091) 259,928,002
Dividends payable – 110,933,440 (110,933,440) –
Total liabilities arising from
financing activities =16,131,008,526
P =138,924,022
P =1,863,993,550
P =18,133,926,098
P
On March 11, 2020, the World Health Organization declared the COVID-19 outbreak as a global
pandemic. In a move to contain the COVID-19 outbreak, several quarantine measures have been
implemented in the National Capital Region (NCR) and other areas with significant number of
COVID-19 cases. These quarantine measures have resulted in disruptions in the Group’s business and
economic activities.
On March 27, 2021, the Presidential Spokesperson has announced that ECQ will be implemented in
the NCR+ “bubble” covering the NCR, Bulacan, Rizal, Cavite and Laguna starting March 29, 2021
until April 4, 2021 and subsequently extended until April 11, 2021 as approved by the President.
Considering the evolving nature of the pandemic, the Group will continue to monitor the situation and
adopt appropriate risk management procedures and business continuity strategies in order to mitigate
the adverse impact of the pandemic.
As clarified by the Philippine Financial Reporting Standards Council in its Philippine Interpretations
Committee Q&A No. 2020-07, the CREATE Act was not considered substantively enacted as of
December 31, 2020 even though some of the provisions have retroactive effect to July 1, 2020. The
passage of the CREATE Act into law on March 26, 2011 is considered as a non-adjusting subsequent
event. Accordingly, current and deferred taxes as of and for the year ended December 31, 2020
*SGVFSM006755*
- 69 -
continued to be computed and measured using the applicable income tax rates as of
December 31, 2020 (i.e., 30% RCIT / 2% MCIT) for financial reporting purposes.
Applying the provisions of the CREATE Act, entities within the Group would have been subjected to
lower regular corporate income tax rate of 25% RCIT/1% MCIT effective July 1, 2020.
This will result in lower provision for current income tax for the year ended December 31, 2020
and lower income tax payable as of December 31, 2020 by an expected amount of
=17.22 million, which will be reflected in the 2020 annual income tax return but will only be
P
recognized for financial reporting purposes in the 2021 financial statements.
This will result in lower deferred tax assets and liabilities as of December 31, 2020 and higher
provision for deferred tax for the year then ended by = P10.59 million, =
P24.76 million, and
=11.48 million, respectively. These reductions will be recognized in the 2021 financial
P
statements.
*SGVFSM006755*
SyCip Gorres Velayo & Co. Tel: (632) 891 0307 BOA/PRC Reg. No. 0001,
6760 Ayala Avenue Fax: (632) 819 0872 October 4, 2018, valid until August 24, 2021
1226 Makati City ey.com/ph SEC Accreditation No. 0012-FR-5 (Group A),
Philippines November 6, 2018, valid until November 5, 2021
We have audited, in accordance with Philippine Standards on Auditing, the consolidated financial
statements of Anchor Land Holdings, Inc. and its subsidiaries (the Group) as at and for the year ended
December 31, 2020 and 2019, and for each of the three years in the period ended December 31, 2020,
included in this Form 17-A and have issued our report thereon dated April 7, 2021. Our audits were made
for the purpose of forming an opinion on the basic consolidated financial statements taken as a whole.
The schedules listed in the Index to the Consolidated Financial Statements and Supplementary Schedules
are the responsibility of the management of the Group. These schedules are presented for purposes of
complying with the Revised Securities Regulation Code Rule 68, and are not part of the basic
consolidated financial statements. These schedules have been subjected to the auditing procedures
applied in the audit of the basic consolidated financial statements and, in our opinion, fairly state in all
material respects the information required to be set forth therein in relation to the basic consolidated
financial statements taken as a whole.
Jennifer D. Ticlao
Partner
CPA Certificate No. 109616
SEC Accreditation No. 1758-A (Group A),
July 2, 2019, valid until July 1, 2022
Tax Identification No. 245-571-753
BIR Accreditation No. 08-001998-110-2020,
November 27, 2020, valid until November 26, 2023
PTR No. 8534373, January 4, 2021, Makati City
April 7, 2021
*SGVFSM006755*
A member firm of Ernst & Young Global Limited
SyCip Gorres Velayo & Co. Tel: (632) 891 0307 BOA/PRC Reg. No. 0001,
6760 Ayala Avenue Fax: (632) 819 0872 October 4, 2018, valid until August 24, 2021
1226 Makati City ey.com/ph SEC Accreditation No. 0012-FR-5 (Group A),
Philippines November 6, 2018, valid until November 5, 2021
We have audited in accordance with Philippine Standards on Auditing, the consolidated financial
statements of Anchor Land Holdings, Inc. and Subsidiaries (the Group) as at December 31, 2020 and
2019 and for each of the three years in the period ended December 31, 2020, and have issued our report
thereon dated April 7, 2021. Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The Supplementary Schedule on Financial Soundness Indicators,
including their definitions, formulas, calculation, and their appropriateness or usefulness to the intended
users, are the responsibility of the Group’s management. These financial soundness indicators are not
measures of operating performance defined by Philippine Financial Reporting Standards (PFRS) and may
not be comparable to similarly titled measures presented by other companies. This schedule is presented
for the purpose of complying with the Revised Securities Regulation Code Rule 68 issued by the
Securities and Exchange Commission, and is not a required part of the basic financial statements prepared
in accordance with PFRS. The components of these financial soundness indicators have been traced to
the Group’s financial statements as at December 31, 2020 and 2019 and for each of the three years in the
period ended December 31, 2020 and no material exceptions were noted.
Jennifer D. Ticlao
Partner
CPA Certificate No. 109616
SEC Accreditation No. 1758-A (Group A),
July 2, 2019, valid until July 1, 2022
Tax Identification No. 245-571-753
BIR Accreditation No. 08-001998-110-2020,
November 27, 2020, valid until November 26, 2023
PTR No. 8534373, January 4, 2021, Makati City
April 7, 2021
*SGVFSM006755*
A member firm of Ernst & Young Global Limited
Anchor Land Holdings, Inc. and Subsidiaries
INDEX TO SUPPLEMENTARY SCHEDULES
December 31, 2020
Name of issuing entity Number of shares or Amount shown Valued based on market
and association of each principal amount of in the balance quotation at end of Income received
Financial assets issue bonds and notes sheet reporting period and accrued
Not Applicable
1
ANCHOR LAND HOLDINGS, INC. & SUBSIDIARIES
SCHEDULE B – AMOUNTS RECEIVABLE FROM DIRECTORS, OFFICERS, EMPLOYEES, RELATED PARTIES AND PRINCIPAL STOCKHOLDERS (OTHER THAN RELATED
PARTIES)
As of December 31, 2020
Balance at beginning
Balance at end of
of period Amounts collected
Name Additions Current Non-current period
Not Applicable
2
ANCHOR LAND HOLDINGS, INC. & SUBSIDIARIES
SCHEDULE C – AMOUNTS RECEIVABLE FROM/PAYABLE TO RELATED PARTIES WHICH ARE ELIMINATED DURING
THE CONSOLIDATION OF FINANCIAL STATEMENTS
As of December 31, 2020
=
P 1,928,967,403 =
P 243,977,771 (P
=197,067,107) =
P– =
P 1,975,878,067 =
P 1,975,878,067 =
P 1,975,878,067 =
P–
3
Amounts payable by Subsidiaries to Posh Properties Development Corporation (PPDC)
Receivable balance per PPDC
Balance at Amounts Amounts Balance at end Payable balance Non-
Name of subsidiary beginning period Additions collected written off period per subsidiary Current current
Admiral Realty Co., Inc. =
P 1,800,450,429 =P- =42,770,384)
(P =
P- =
P 1,757,680,045 =
P 1,757,680,045 =
P 1,757,680,045 -
Anchor Properties Corporation 1,117,136,379 - (264,167,272) - 852,969,107 852,969,107 852,969,107 -
Gotamco Realty Investment Corporation 573,916,230 - (573,916,230) - - - - -
Globeway Property Ventures, Inc. 239,177,467 9,014,975 - - 248,192,442 248,192,442 248,192,442 -
Nusantara Holdings, Inc. 92,521,320 - (84,998,160) - 7,523,160 7,523,160 7,523,160 -
Anchor Land Hotels & Resorts, Inc. 39,130,512 41,047,291 - - 80,177,803 80,177,803 80,177,803 -
Eisenglas Aluminum and Glass, Inc. 34,232,016 - (34,232,016) - - - - -
Momentum Properties Management 4,334,677 - (4,334,677) - - - - -
Corporation
Anchor Land Global Corporation 1,004,950 - - - 1,004,950 1,004,950 1,004,950 -
Realty & Development Corporation of San 3,000 - - - 3,000 3,000 3,000 -
Buenaventura
Frontier Harbor Property Development, - 91,057,396 - 91,057,396 91,057,396 91,057,396
Inc.
=
P 3,901,906,980 =
P 141,119,662 (P
=1,004,418,739) =
P– =
P 3,038,607,903 =
P 3,038,607,903 =
P 3,038,607,903 =
P–
4
Frontier Harbor Development, Inc. - 50,000,000 50,000,000 50,000,000 50,000,000 -
Irenealmeda Realty, Inc. - 413 413 413 413 -
Fersan Realty Corp. - 2,357,250 2,357,250 2,357,250 2,357,250 -
Anchor Land Global Corporation 150 - - 150 150 150 -
=
P 561,472,822 =
P 222,906,524 =
P– =
P– =
P 784,379,346 =
P 784,379,346 =
P 784,379,346 =
P–
5
Amounts payable by Subsidiaries to Admiral Realty Company, Inc. (ARCI)
Receivable balance per ARCI Payable
Balance at Amounts Amounts Balance at end balance per Non-
Name of subsidiary beginning period Additions collected written off period subsidiary Current current
Globeway Property Ventures, Inc. =
P 2,987,000 =
P- (P
=2,987,000) =P- =
P- =
P- =
P- -
Momentum Properties Management 1,117,630 5,431,802 - 6,549,432 6,549,432 6,549,432 -
Corporation
1080 Soler Corp. 1,065,673 - - 1,065,673 1,065,673 1,065,673 -
Frontier Harbor Property Development, 1,028,502 226,412,348 - 227,440,850 227,440,850 227,440,850 -
Inc.
Anchor Land Global Corporation 625,005 - - 625,005 625,005 625,005 -
Eisenglas Aluminum and Glass, Inc. 19,396 - (19,396) - - - - -
Wework Realty Development Corp. - 1,000 - 1,000 1,000 1,000 -
=
P 6,843,206 =
P 231,845,150 (P
=3,006,396) =
P– =
P 235,681,960 =
P 235,681,960 =
P 235,681,960 =
P–
6
Amounts payable by Subsidiaries to Globeway Property Ventures, Inc. (GPVI)
Receivable balance per GPVI
Amounts Payable
Balance at written Balance at end balance per Non-
Name of subsidiary beginning period Additions Amounts collected off period subsidiary Current current
Basiclink Equity Investment Corp. =
P 5,000,000 =
P- =
P- =
P- =
P 5,000,000 =
P 5,000,000 =
P 5,000,000 -
Admiral Realty Co., Inc. - 1,867,160 - 1,867,160 1,867,160 1,867,160 -
Momentum Properties Management - 2,000,000 - 2,000,000 2,000,000 2,000,000 -
Corporation
Anchor Land Global Corporation 4,309,697 - - 4,309,697 4,309,697 4,309,697 -
=
P 9,309,697 =
P 3,867,160 =
P- =
P– =
P 13,176,857 =
P 13,176,857 =
P 13,176,857 =
P–
7
Amounts payable by Subsidiaries to Nusantara Holdings, Inc. (NHI)
Receivable balance per NHI
Balance at Amounts Payable
beginning Amounts written Balance at end balance per Non-
Name of subsidiary period Additions collected off period subsidiary Current current
Gotamco Realty Investment Corporation =
P 24,537,119 =
P– (P
=24,537,119) =
P– =
P– =
P– =
P– =
P–
Admiral Realty Co., Inc. 15,145,418 15,001,000 – – 30,146,418 30,146,418 30,146,418 –
Frontier Harbor Property Development, Inc. – 15,000,000 – – 15,000,000 15,000,000 15,000,000 –
Globeway Property Ventures, Inc. – 1,000,000 – – 1,000,000 1,000,000 1,000,000 –
1080 Soler Corp. 5,879,520 – – 5,879,520 5,879,520 5,879,520 –
=
P 45,562,057 =
P 31,001,000 (P
=24,537,119) =
P– =
P 52,025,938 =
P 52,025,938 =
P 52,025,938 =
P–
8
Amounts payable by Subsidiaries to 1080 Soler Corp. (1080)
Receivable balance per 1080
Balance at Amounts Payable
beginning Amounts written Balance at end balance per Non-
Name of subsidiary period Additions collected off period subsidiary Current current
Posh Properties Development Corporation =
P 1,660,550 =
P 2,999,837 =
P- =
P– =
P 4,660,387 =
P 4,660,387 =
P 4,660,387 =P–
Frontier Harbor Property Development, Inc. – 5,000,000 – – 5,000,000 5,000,000 5,000,000 –
=
P 1,660,550 =
P 7,999,837 =
P- =
P– =
P 9,660,387 =
P 9,660,387 =
P 9,660,387 =
P–
Amounts payable by Subsidiaries to Anchor Land Hotel & Resorts, Inc. (ALHRI)
Receivable balance per ALHRI
Balance at Amounts Payable
beginning Amounts written Balance at end balance per Non-
Name of subsidiary period Additions collected off period subsidiary Current current
Admiral Realty Co., Inc. =
P 12,583,043 =
P– (P=986,702) =
P– =
P 11,596,341 =
P 11,596,341 =
P 11,596,341 =
P–
9
ANCHOR LAND HOLDINGS, INC. & SUBSIDIARIES
SCHEDULE D – LONG TERM DEBT
As of December 31, 2020
10
ANCHOR LAND HOLDINGS, INC. & SUBSIDIARIES
SCHEDULE E – INDEBTEDNESS TO RELATED PARTIES (LONG-TERM LOANS FROM RELATED PARTIES)
As of December 31, 2020
Balance at beginning of
Name of related party period Balance at end of period
Not Applicable
11
ANCHOR LAND HOLDINGS, INC. & SUBSIDIARIES
SCHEDULE F – GUARANTEES OF SECURITIES OF OTHER ISSUERS
As of December 31, 2020
12
ANCHOR LAND HOLDINGS, INC. & SUBSIDIARIES
SCHEDULE G – CAPITAL STOCK
As of December 31, 2020
Number of shares issued and Number of shares reserved for Number of shares
Number of shares outstanding at shown under options, warrants, conversion held by related Directors, officers
Title of issue authorized related balance sheet caption and other rights parties and employees Others
13
ANCHOR LAND HOLDINGS, INC.
SCHEDULE H – RECONCILIATION OF RETAINED EARNINGS AVAILABLE FOR DIVIDEND DECLARATION
For the year ended December 31, 2020
14
ANCHOR LAND HOLDINGS, INC. & SUBSIDIARIES
SCHEDULE I – MAP OF THE RELATIONSHIPS OF THE COMPANIES WITHIN THE GROUP
December 31, 2020
Anchor Land
Holdings, Inc.
70%
Gotamco Realty 100% 100% 100% TeamEx Properties
Nusantara Holdings, Pasay Metro Center, 100%
Investment Development
Inc. Inc. All Farm Genetic
Corporation Corporation
Venture Corp.
100%
15
ANCHOR LAND HOLDINGS, INC.
SCHEDULE J – FINANCIAL SOUNDNESS INDICATORS
For the year ended December 31, 2020
16
Sustainability Report
Contextual Information
Company Details
Name of Organization Anchor Land Holdings, Inc. (“Anchor
Land”)
Location of Headquarters 15th Floor L.V. Locsin Building, 6752
Ayala Ave. corner Makati Ave., Makati
City
Location of Operations Philippines
Report Boundary: Legal entities (e.g. Key operating subsidiaries:
subsidiaries) included in this report 1. Anchor Properties Corporation
2. Posh Properties Development
Corporation
3. Gotamco Realty Investment
Corporation
4. Nusantara Holdings, Inc.
5. Admiral Realty Company, Inc.
6. Momentum Properties Management
Corporation
7. 1080 Soler Corp.
8. Basiclink Equity Investment Corp.
9. Globeway Property Ventures, Inc.
10. Eisenglas Aluminum and Glass, Inc.
11. Anchor Land Hotels & Resorts, Inc.
Business Model, including Primary Anchor Land is a holding company with
Activities, Brands, Products, and Services affiliate and subsidiary companies that
engage in real estate development
activities. The company began with the
development of residential
condominiums, and expanded its
portfolio to include logistics hubs,
hotels, offices, and dormitories.
Reporting Period January 1 to December 31, 2020
Highest Ranking Person responsible for Atty. Sarah Joelle C. Lintag
this report Head, Corporate Affairs Department /
Compliance Information Officer
The Disclosure Topics in the template provided by the Securities and Exchange
Commission (SEC), attached to its Memorandum Circular No. 4 Series of 2019 as Annex
“A” of the Guidelines, are largely based on the GRI framework. The Project Team has
thus decided to use such Disclosure Topics in this report, instead of the actual GRI
items.
The materiality, or the impact, of each Disclosure Topic to the economy, environment,
and society is evaluated keeping in mind (1) the U.N. Sustainable Development Goals
(SDG) to which the Disclosure Topic contributes and (2) the degree to which Anchor
Land generates the impact and/or the impact’s relevance to its stakeholders.
Relevant topics, which potentially merit inclusion in the report, are those that can
reasonably be considered important for reflecting the organization’s economic,
environmental, and social impacts, or influencing the decisions of stakeholders. In
this context, ‘impact’ refers to the effect an organization has on the economy, the
environment, and/or society (positive or negative). A topic can be relevant – and so
potentially material – based on only one of these dimensions.
Since all material impacts lead to the 17 U.N. Sustainable Development Goals (SDGs),
considered herein as an ultimate and universal set of targets for sustainability, the
Project Team has decided to make the U.N. SDGs incident to materiality.
With respect to the degree to which Anchor Land generates the impact and/or the
impact’s relevance to its stakeholders, each Disclosure Topic is rated either as High
wherein the company immediately causes the impact; Medium wherein the company
influences, but not causes, the impact; and Low to Not Applicable. In all 3 ratings,
the company’s stakeholders are considered, if a particular item affects their decisions
and/or interests. Those rated as High or Medium are considered material in this
report.
Stakeholders can therefore be thought of as parties that are affected by the impact
and/or those that affect the organization that generates the impact. Depending on
the item, the company’s stakeholders can mean its employees, suppliers, customers,
Government, the community, and so forth.
Sustainability Report | ALHI
2
The following table is a summary of the result of the Materiality Process:
SDG #13
Climate Action
Solid and Hazardous Waste SDG #3 Medium
Good Health and Well-Being
Effluents SDG #14 Medium
Life below Water
Environmental Compliance SDG #16 High
Peace, Justice, and Strong
Institutions
Social
Employee Management
Employee Hiring and Benefits SDG #8 High
Decent Work and Economic
Growth
Employee Training and SDG #4 High
Development Quality Education
Labor-Management Relations SDG #8 High
Decent Work and Economic
Growth
Diversity, Equal Opportunity, SDG #5 High
and Anti-Discrimination Gender Equality
SDG #10
Reduced Inequalities
Workplace Conditions, Labor
Standards, and Human Rights
Occupational Health and Safety SDG #3 High
Good Health and Well-Being
Labor Standards and Human SDG #16 High
Rights Peace, Justice, and Strong
Institutions
Supply Chain Management SDG #16 High
Peace, Justice, and Strong
Institutions
Relationship with Community
Significant Impacts on Local SDG #10 High
Communities Reduced Inequalities
Customer Management
Customer Satisfaction No U.N. SDG found to be High
directly applicable.
Health and Safety SDG #3 High
Good Health and Well-Being
Marketing and Labelling No U.N. SDG found to be High
directly applicable.
Customer Privacy No U.N. SDG found to be High
directly applicable.
Note: Given the Covid-19 pandemic, some parties are unable to provide data and, as such, some of the
figures, particularly in the Environmental section, may only be indicative. There are some 2019
undertakings that are still in the process of completion.
ECONOMIC
Economic Performance
What is the impact and where Which stakeholders are Management Approach
does it occur? What is the affected?
organization’s involvement in
the impact?
Impact: These financial Stakeholders that Cause / Anchor Land aims to
results impact the local Influence the Impact: The consistently manage properly
economy in which the organization itself. the company’s financial well-
company is domiciled. The Stakeholders Affected by being, build sustainable
local economy includes the Impact: communities, and create more
employment, investment o Third-Party Suppliers / products and services. It
activities, tax payments, Service Providers / continues to do this by
and community assistance, Contractors. creating a niche, serving the
all of which are factors in o Investors. under-served market, which
U.N. SDG # 8: Decent Work o Government. led to its ever-increasing
and Economic Growth. o Community. portfolio of projects.
Where the Impact Occurs:
In the course of the
company’s business.
The Organization’s
Involvement: Directly.
Procurement Practices
What is the impact and where Which stakeholders are Management Approach
does it occur? What is the affected?
organization’s involvement in
the impact?
Impact: Procuring from Stakeholders that Cause / Anchor Land supports the local
local suppliers provides for Influence the Impact: economy by sourcing products
sustainable sourcing Procurement Team. and talents from local
capability* which ultimately Stakeholders Affected by suppliers. It maintains long-
impacts the local economy. the Impact: term relationship with partners
*In U.N. SDG # 12: o 3rd-Party Suppliers / that share the same passion
Responsible Consumption Service-Providers. for excellence and provides
and Production. o Community. opportunities to new
Where the Impact Occurs: consultants with specific
During commissioning of technical expertise/skills to
3rd-Party Suppliers / Service help the company offer quality
Providers. projects and unique solutions
The Organization’s to its clientele.
Involvement: Directly.
Anti-Corruption
Incidents of Corruption
ENVIRONMENT
Resource Management
What is the impact and where Which stakeholders are Management Approach
does it occur? What is the affected?
organization’s involvement in
the impact?
Impact: In particular, use Stakeholders that Cause / Anchor Land regularly
of fossil fuels such as gas Influence the Impact: monitors its energy usage on a
and diesel increases carbon o Construction / Property monthly basis and finds ways
emission, ultimately Management Teams. to reduce its energy
leading to climate change. o 3rd-Party Contractors. consumption.
It is also adverse to U.N. o Residents / Tenants.
Sustainability Report | ALHI
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SDG # 7: Affordable and Stakeholders Affected by
Clean Energy, since such the Impact: Community.
energy sources are not
considered clean and
environmental.
Where the Impact Occurs:
During construction and
property management.
The Organization’s
Involvement: Indirectly
through 3rd-party
contractors and residents /
tenants.
What are the Risk/s Identified? Which stakeholders are Management Approach
affected?
Fossil fuels can run out and are Stakeholders that Cause / Anchor Land uses experiential
thus not sustainable in the Influence the Impact: data to determine the project
short-term. In the long-term, o Construction / Property stages with high energy
carbon emission which changes Management Teams. consumption levels, in order to
climate patterns can cause o 3rd-Party Contractors. address those stages
unpredictable events such as o Residents / Tenants. accordingly.
hurricanes and rising sea levels. Stakeholders Affected by
the Impact: Community.
What are the Opportunity/ies Which stakeholders are Management Approach
Identified? affected?
New technologies that can Stakeholders that Cause / Anchor Land is always on the
improve the company’s energy Influence the Impact: lookout for new technologies
efficiency are available. o Construction / Property that can save on energy
Management Teams. consumption.
o 3rd-Party Contractors.
o Residents / Tenants. For example, in Centrium, an
Stakeholders Affected by LEED pre-certified Gold
the Impact: Community. property, Anchor Land uses an
energy-saving materials,
equipment, and design that
promote use of natural light.
**The company currently does not have an efficient way of tracking materials by weight or volume, and
whether recycled materials are used as inputs in the organization’s products. Nonetheless, the company
intends to put in place a good metric for subsequent reports.
What is the impact and where Which stakeholders are Management Approach
does it occur? What is the affected?
organization’s involvement in
the impact?
Impact: Use of renewable Stakeholders that Cause / Prospectively, Anchor Land
materials and recycling can Influence the Impact: intends to institutionalize
positively impact the o Construction / Property recycling within the
environment and provide Management Teams. organization, particularly on
for a more efficient o 3rd-Party Contractors. Construction and Property
management of resources, Stakeholders Affected by Management (i.e., the direct
aligned with U.N. SDG # 12: the Impact: Community. contributors to its primary
Responsible Consumption product).
and Production.
Where the Impact Occurs:
During construction and
property management.
The Organization’s
Involvement: Indirectly
through 3rd-party
contractors.
What are the Risk/s Identified? Which stakeholders are Management Approach
affected?
Materials are finite resources Stakeholders that Cause / Anchor Land has ventured into
which can run out. However, Influence the Impact: an LEED project that promotes
recycled materials may impart a o Construction / Property correct usage of materials
low-quality impression to Management Teams. during construction. In
customers. o 3rd-Party Contractors. Centrium, for example, Anchor
Stakeholders Affected by Land strictly collects and stores
the Impact: its recyclables, so it can
o Customers / Clients. prospectively track the reuse of
o Community. its construction materials.
What is the impact and where Which stakeholders are Management Approach
does it occur? What is the affected?
organization’s involvement in
the impact?
Impact: Projects located Stakeholders that Cause / Anchor Land maintains its
near (or has access to) Influence the Impact: sewage systems in order to
bodies of water can cause o Construction / Property ensure that the projects do not
water pollution which can Management Teams. compromise marine life.
then impact marine o 3rd-Party Contractors.
Sustainability Report | ALHI
15
biodiversity (U.N. SDG # 14: o Residents / Tenants.
Life Below Water). Stakeholders Affected by
Where the Impact Occurs: the Impact: Community.
During construction and
property management.
The Organization’s
Involvement: Indirectly
through 3rd-party
contractors and residents /
tenants.
What are the Risk/s Identified? Which stakeholders are Management Approach
affected?
Laguna Lake, in particular, is an Stakeholders that Cause / Anchor Land ensures that
important fishery and source of Influence the Impact: water treatment and sewage
irrigation. It is therefore o Construction / Property facilities are in place to protect
unsustainable to compromise Management Teams. natural waterways near the
it, as it poses risk to food o 3rd-Party Contractors. project.
source. o Residents / Tenants.
Stakeholders Affected by
the Impact: Community.
What are the Opportunity/ies Which stakeholders are Management Approach
Identified? affected?
There is an opportunity to Stakeholders that Cause / Anchor Land includes in its
formalize this into a campaign Influence the Impact: Corporate Social Responsibility
that raises awareness on Public Relations Team. (CSR) Programs the continued
protecting marine biodiversity. Stakeholders Affected by awareness on environmental
the Impact: Community. protection. It can
prospectively plan on creating
a CSR program specifically for
protecting marine biodiversity
for a major body of water like
Laguna Lake.
Air Emissions
GHG
**The company currently does not have reliable means of tracking its GHG emission inventory. The
company intends to develop a way to measure emissions in order to present more comprehensive
subsequent reports.
What is the impact and where Which stakeholders are Management Approach
does it occur? What is the affected?
organization’s involvement in
the impact?
Impact: NOx and SOx Stakeholders that Cause / Anchor Land regularly
emissions impact air Influence the Impact: monitors air quality in its
quality, first and foremost, o Construction / Property construction sites and in
and contributes to global Management Teams. properties that it manages, as
warming in the longer o 3rd-Party Contractors. a matter of practice.
term. It covers both U.N. Stakeholders Affected by
SDG # 3: Good Health and the Impact: Community.
Well-Being and # 13:
Climate Action.
Where the Impact Occurs:
During construction and
property management.
The Organization’s
Involvement: Indirectly
through 3rd-party
contractors.
What are the Risk/s Identified? Which stakeholders are Management Approach
affected?
Compromised air quality Stakeholders that Cause / Anchor Land constantly
caused by deteriorating Influence the Impact: monitors and maintains
machines and equipment o Construction / Property machines and equipment used
carries health hazards. Management Teams. in its properties.
o 3rd-Party Contractors.
Stakeholders Affected by
the Impact: Community.
What are the Opportunity/ies Which stakeholders are Management Approach
Identified? affected?
New technologies and more Stakeholders that Cause / Anchor Land can invest in
modern machines that cause Influence the Impact: more modern, less
less emissions and air o Construction / Property maintainable, and better
pollutants can be explored. Management Teams. quality machines.
o 3rd-Party Contractors.
Stakeholders Affected by Anchor Land also ensures
the Impact: Community. continuous compliance with
Solid Waste
What is the impact and where Which stakeholders are Management Approach
does it occur? What is the affected?
organization’s involvement in
the impact?
Impact: Improper disposal Stakeholders that Cause / Anchor Land strictly requires
of solid waste causes soil, Influence the Impact: the General Contractor to
water, and air o Construction Team. properly manage their waste
contamination, which in o 3rd-Party Contractors. generation and disposal during
turn impacts health (U.N. Stakeholders Affected by construction.
SDG # 3: Good Health and the Impact: Community.
Well-Being).
Where the Impact Occurs:
Mostly during construction.
The Organization’s
Involvement: Indirectly
through 3rd-party
contractors.
Hazardous Waste
What is the impact and where Which stakeholders are Management Approach
does it occur? What is the affected?
organization’s involvement in
the impact?
Impact: Improper disposal Stakeholders that Cause / Anchor Land strictly requires
of hazardous waste Influence the Impact: the General Contractor to
impacts health (U.N. SDG # o Construction Team. properly manage their waste
3: Good Health and Well- o 3rd-Party Contractors. generation and disposal during
Being). Stakeholders Affected by construction.
Where the Impact Occurs: the Impact: Community.
Mostly during construction.
The Organization’s
Involvement: Indirectly
through 3rd-party
contractors.
Effluents
What is the impact and where Which stakeholders are Management Approach
does it occur? What is the affected?
organization’s involvement in
the impact?
Impact: If untreated, Stakeholders that Cause / Anchor Land follows a set of
effluents can be a hazard Influence the Impact: guidelines on proper
to marine life (U.N. SDG # o Construction / Property management of effluents and
14: Life below Water). Management Teams. discharge.
Where the Impact Occurs: o 3rd-Party Contractors.
During construction and o Residents / Tenants. Prospectively, Anchor Land has
project management. Stakeholders Affected by to come up with a mechanism
The Organization’s the Impact: Community. for recycling wastewater. As a
Involvement: Indirectly side effect, recycling also
through 3rd-party improves the company’s water
contractors and residents / efficiency.
tenants.
Environmental Compliance
What is the impact and where Which stakeholders are Management Approach
does it occur? What is the affected?
organization’s involvement in
the impact?
Impact: Non-compliance Stakeholders that Cause / Anchor Land requires strict
with environmental laws Influence the Impact: enforcement of regulations to
and regulations directly o Construction / Property ensure that its projects comply
impacts the general Management Teams. with all applicable laws and
environment, as such laws o 3rd-Party Contractors. regulations.
exist for the environment’s o Government,
protection. As an aside, it particularly DENR.
Employee Management
Employee Data
*Vulnerable sector includes, elderly, persons with disabilities, vulnerable women, refugees, migrants,
internally displaced persons, people living with HIV and other diseases, solo parents, and the poor or
the base of the pyramid (BOP; Class D and E).
Do you have policies that explicitly disallows violations of labor laws and human rights
(e.g. harassment, bullying) in the workplace?
*Anchor Land complies with all applicable laws and regulations in relation to forced and child labor,
despite not having written policies that prohibit them. Anchor Land is against forced or child labor and
ensures that the company, as well as its partner contractors, do not practice such.
Do you have a supplier accreditation policy? If yes, please attach the policy or link to
the policy: The Company’s Supplier Accreditation Policy has been drafted and is for
approval by the Board of Directors.
Operations with significant (positive or negative) Central Link: A mixed-use commercial project
impact on local communities (exclude CSR under a Public-Private Partnership (PPP) scheme
projects; this has to be business operations) with the City Government of Parañaque.
*Vulnerable sectors include children and youth, elderly, persons with disabilities, vulnerable women,
refugees, migrants, internally displaced persons, people living with HIV and other diseases, solo parents,
and the poor or the base of the pyramid (BOP; Class D and E).
For operations that are affecting IPs, indicate the total number of Free and Prior
Informed Consent (FPIC) undergoing consultations and Certification Preconditions
(CPs) secured and still operational and provide a copy or link to the certificates if
available: Not Applicable
Customer Management
Customer Satisfaction
*Anchor Land provides customer feedback through various platforms. However, the company is still in
the process of putting-up a capability to properly quantify and monitor the satisfaction of its buyers /
lessees, in pursuit of having a metric ready in the subsequent reports.
*Substantiated complaints include complaints from customers that went through the organization’s
formal communication channels and grievance mechanisms as well as complaints that were lodged to
and acted upon by government agencies.
*Substantiated complaints include complaints from customers that went through the organization’s
formal communication channels and grievance mechanisms as well as complaints that were lodged to
and acted upon by government agencies.
Customer Privacy
*Substantiated complaints include complaints from customers that went through the organization’s
formal communication channels and grievance mechanisms as well as complaints that were lodged to
and acted upon by government agencies.
Data Security