1. business and industrial
2. company
3. annual report

COVER SHEET
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(Business Address : No. Street Company / Town / Province)
MS. RACHELLE R. GATPANDAN
636-1170
Contact Person
Company Telephone Number
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FORM TYPE
PRELIMINARY
Month
Annual Meeting
N/A
Secondary License Type, If Applicable
Dept. Requiring this Doc.
Amended Articles Number/Section
Total Amount of Borrowings
Total No. of Stockholders
Domestic
To be accomplished by SEC Personnel concerned
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Foreign
Philippine
Realty& Holdings
Gorpotation
Notice of Annual StockholdersMeetins
Notice is hereby given that the Annual Meeting of the Stockholdersof this
Corporation shall be held at the Auditorium of the Philippine Stock Exchange
centre, ExchangeRoad,ortigas center, Pasigcity, at 9:30 a.m.on october 3a,2013
to considerthe following agenda:
Certificationof noticeand quorum;
ReadingandApprovalof the Minutesof theNovember2A,2Al2
Annual Stockholders'Meetingand actiontakenthereon;
Reportof the Board of Directors;
Ratificationof the acts,contracts,and deedsofthe Directorsand
Officers;
Electionof Directorsfor the ensuingyear;
Appointmentof ExternalAuditor;
Othermatter;and
Adjournment
Registrationwill start at 9:00 a.m. Pleasebring some form of identification,
suchas Driver'sLicense,CreditCard,or Voter'sI.D..
.:
Only stockholdersof recordas at September13, 2013 shall be entitledto vote
at saidmeeting.
The minutesof the meetingsand resolutionsof the Board of Directors,since
the last Annual Stockholdermeeting,may be.reviewed during office hours at the
office of the corporate Secretary,E-1503, 15ft Floor, East Tower, philippine stock
ExchangeCentre,ExchangeRoad,OrtigasCenter,PasigCity.
Pasig,Metro Manila,September
09,2013.
n^
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6-nz%.
(d
AMADOR C. BACANI
President
)
160,5
5iF,Rrn.512-5l3EastTower,PhilippineStockExchangeCentre3xchangeRoad,OrtigasCenter,PasigCity,
Tel.Nos.: 631-3179to 80,631-8579to80
Fax: (632) 634-1504
SECURITIES & EXCHANGE COMMISSION
SEC FORM 20-IS
Information Statement Pursuant to Rule 20
of the Securities Regulation Code
1.
2.
Check the appropriate box
X Preliminary Information Statement
Definitive Information Statement
Name of registrant as specified in its charter
PHILIPPINE REALTY AND HOLDINGS CORPORATION
3.
Country of Incorporation : Philippines
4.
SEC Identification
5.
Tax Identification No. :
6.
Address of Principal Office: Andrea North Complex, Balete Drive cor.
N. Domingo St., New Manila, Quezon City,
1111
:
Address of Satellite Office:
7.
99905
116-000-188-233
5th Floor, East Tower, Philippine Stock
Exchange Centre, Exchange Road, Ortigas
Center, Pasig City, 1605
Registrant’s telephone number, including area code:
(02) 631-3179
8.
Date, time and place of the meeting of the security holders
October 30, 2013, 9:30 a.m.
Auditorium of the Philippine Stock Exchange Centre
Auditorium Exchange Road, Ortigas Center, Pasig City
9.
Approximate date on which the Information Statement is first to be sent or
given to security holders
October 09, 2013
10.
Securities registered pursuant to Sections 4 and 8 of the RSA:
Title of each Class
Number of Shares of Common
Stock Outstanding or amount of
Debt Outstanding
Common
4,922,324,908 shares
3
11.
Are any or all of registrant’s securities listed on the Philippine Stock
Exchange?
Yes X
No ___
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY
GENERAL INFORMATION
Date, Time and Place of Annual Stockholders’ Meeting
The 2013 Annual Meeting of Stockholders (“Meeting” for brevity) of the
Philippine Realty and Holdings Corporation (“Company” for brevity) will be held on
October 30, 2013 at 9:30 a.m., at the Auditorium of the Philippine Stock Exchange
Centre, Exchange Road, Ortigas Center, Pasig City.
The complete mailing address of the satellite office of the Company is 5th
Floor, East Tower, Philippine Stock Exchange Centre, Exchange Road, Ortigas
Center, Pasig City.
The approximate date on which the Information Sheet is first to be sent and
given to the security holders shall be October 09, 2013.
Dissenters’s Right of Appraisal
The shareholders’ shall have appraisal right or the right to dissent and demand
payment of the fair value of their shares in the manner provided for under Section 82
of the Corporation Code of the Philippines, under any of the following circumstances:
(a) In case any amendment to the Articles of Incorporation has the effect of changing
or restricting the rights of any stockholders or class of shares, or of authorizing
preferences in any respect superior to those of outstanding shares of any class, or of
extending or shortening the term of corporate existence; (b) In case of sale, lease,
exchange, transfer, mortgage, pledge or other disposition of all or substantially all of
the corporate property and assets as provided in the Corporation code; and (c) In case
of merger or consolidation.
NO ACTION is being proposed or submitted in the meeting that may call for
the exercise of a stockholder’s right of appraisal.
Interest of Certain Person in or Opposition to Matters to be Acted Upon
(a)
No current director or officer of the Company, or nominee for election as
director of the Company or any associate thereof, has any substantial interest,
direct or indirect, by security holdings or otherwise, in any matter to be acted
upon other than election to office.
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(b)
No director has informed the Company that he intends to oppose any action to
be taken by the registrant at the meeting.
CONTROL AND COMPENSATION INFORMATION
Voting Securities and Principal Holders Thereof
The number of shares outstanding as of September 13, 2013 and entitled to
vote in the stockholders’ meeting is 4,922,324,908 shares. The record date for
purpose of determining stockholders’ entitled to vote in the meeting is September 13,
2013. A stockholder entitled to vote at the Meeting shall have the right to vote in
person the number of shares registered in his name in the stock transfer books of the
Company as of the record date, for as many persons as there are directors to be
elected. Each stockholder shall have the right to cumulate said shares and give one
candidate as many votes as the number of directors to be elected multiplied by the
number of his shares shall equal, or he may distribute them on the same cumulative
voting principle among as many nominees as he shall see fit; provided, that the whole
number of votes cast by him shall not exceed the number of said shares multiplied by
the whole number of directors to be elected.
Security Ownership of Certain Record and Beneficial Owners and Management
The following persons are known to the Company to be directly or indirectly
the record or beneficial owner of more than 5% of the Company’s voting security as
of August 31, 2013.
Title of
Class
Common
Name and Address of Record
Owner and Relationship with
Issuer
Name and Address of
Beneficial Owner and
Relationship with Record
Owner
Phil. Depository & Trust Corp.
37/F Tower I, The Enterprise
Center, 6766 Ayala Avenue
cor. Paseo de Roxas, Makati /
PCD Nominee
Citizenship
Number of
Shares
Owned
Filipino/
NonFilipino
2,064,436,725
shares
Common
Greenhills Properties, Inc.
E-2003B,
PSE
Centre
Exchange Rd.,
Pasig City / Stockholder
Filipino
1,755,779,066
shares
Common
A Brown Co., Inc.
Xavier
Estates
Uptown
Airport Road Cagayan de
Oro City / Stockholder
Filipino
278,505,248
shares
Common
Campos, Lanuza & Co., Inc.
5
%
Owned
41.94%
35.67%
5.66%
E-2003B,
PSE
Centre Campos, Lanuza & Co., Inc.
PSE
Centre
Exchange Road, Pasig City / E-2003B,
Exchange Rd.,
Stockholder
Pasig City / Stockholder
Fil./Ameri
can/Spanis
h/Other
Alien
275,418,451
shares ( net of
shares under
PCD )
Note: Greenhills Properties, Inc. is represented by its President, Andrew D. Alcid
and Treasurer, Antonio O. Olbes.
Campos, Lanuza & Co., Inc. is represented by its President, Antonio ReyesCuerva and Vice President, Gerardo Domenico Antonio V. Lanuza, while A
Brown Co., Inc. is represented by its Chairman, Walter W. Brown and
President & CEO, Robertino Pizarro.
PCD Nominee holds 41.94% interest. PCD Nominee is the registered owner
of shares beneficially owned by participants in the PCD. Campos, Lanuza &
Co., a participant of PCD has a total of 1,462,311,877 shares under PCD
equivalent to 29.707% of the Company’s voting securities.
Shares held by Directors and Executive Officers as reported by transfer agent as
of August 31, 2013:
Title of
Class
Common
Common
Common
Common
Common
Common
Common
Common
Common
Common
Common
Common
Name of Beneficial
Owner
Antonio O. Olbes
Amador C. Bacani
Gerardo Lanuza, Jr.
Juan Antonio Lanuza
Mariano C. Ereso, Jr.
Manuel O. Orros
Ramon F. Cuervo, III
Gerardo Domenico
Antonio V. Lanuza
Gregory G. Yang
Andrew C. Ng
Andrew D. Alcid
Directors and Officers
As a Group
Amount and
Nature of Class
Citizenship
%age
Owned
506,388 / Direct
229,980 / Direct
174,024 / Direct
78,035 / Direct
10,000 / Direct
1 / Direct
1 / Direct
Filipino
Filipino
Spanish
Spanish
Filipino
Filipino
Filipino
0.010%
0.005%
0.004%
0.002%
0.000%
0.000%
0.000%
6,312,000/ Direct
100,000 / Direct
10,000 / Indirect
50,000 / Indirect
Filipino/Spanish
Filipino
Filipino
Filipino/American
0.128%
0.002%
0.000%
0.000%
0.15%
7,470,429 / Direct
60,000 / Indirect
6
5.60%
Holders
As of August 31, 2013 the Company had 2,505 stockholders. The list of the
top twenty stockholders of the Company as of August 31, 2013 is as follows:
Name of Stockholder
PCD Nominee Corporation
Greenhills Properties, Inc.
A Brown Company, Inc.
Campos, Lanuza & Co., Inc.
Philex Mining Corporation
Belson Securities, Inc.
Socorro C. Ramos
Universal Travel Corp.
Brisot Economic Dev. Corp
Vulcan Industrial & Mining Corp.
National Bookstore, Inc.
Ricardo Leong
Ramon de Leon
Calixto Laureano
Consuelo Madrigal
Wealth Securities, Inc.
Oscar S. Cu ITF Anthony Cu
Meridian Securities
Guoco Sec (Phils) Inc.
Citisecurities, Inc.
Guild Securities, Inc.
E. Chua Chiaco Securities, Inc.
Total
Citizenship
Filipino
Other Alien
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
No. of Shares
2,041,214,262
23,222,643
1,755,779,066
278,505,248
275,418,451
68,865,002
30,580,956
21,291,750
15,807,000
15,280,621
15,159,434
13,258,728
11,810,854
11,810,854
11,810,854
11,500,000
9,339,953
7,390,000
6,269,888
5,961,532
5,628,078
5,597,712
5,539,016
4,646,041,722
Percentage
(%)
41.47%
.47%
35.67%
5.66%
5.60%
1.40%
.62%
.43%
.32%
.31%
.31%
.27%
.24%
.24%
.24%
.23%
.19%
.15%
.13%
.12%
.11%
.11%
.11%
94.40%
Voting Trust Agreement
There is no voting trust holder of 5% or more with the Company as of August
31, 2013.
Change in Control
As of the present, there is no change in control nor is the Company aware of
any arrangement that may result in a change in control of the Company since the
beginning of the last fiscal year.
Directors and Their Business Affiliation for the Past Five Years
Gerardo Lanuza, Jr./ 67 – Other Alien/Spanish
Mr. Lanuza has served as Director of PRHC since 1981 and has been its Chairman
for the past fifteen years. He also holds the following significant positions:
Chairman of Universal Travel Corporation, Greenhills Properties, Inc.; Director,
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Meridian Assurance Corp., Xcell Property Ventures, Inc. He is also a Member of
the Philippine Stock Exchange, Inc.
Antonio O. Olbes/ 66 - Filipino
Mr. Olbes has served as Director of PRHC since 1986 and as a Vice-Chairman for
nineteen years. His concurrent positions are: Chairman of File Managers, Inc.;
Director of Greenhills Properties, Inc., Universal Travel Corporation and Xcell
Property Ventures, Inc.
Juan Antonio Lanuza/ 75 – Other Alien/Spanish
Mr. Lanuza has served as Director of PRHC since 1987 and has been a ViceChairman for fourteen years. He is also a Director of Greenhills Properties, Inc.
and Campos Lanuza & Co., Inc.
Ramon C-F. Cuervo, III / 58 (Independent Director) - Filipino
Mr. Cuervo has served as Independent Director of PRHC for nine years. He also
held the following significant positions: Chairman of Property Partnership, Inc.
and Cuervo Far East, Inc. Director of R. F. Cuervo, Inc. and Member of Manila
Board of Realtors, Inc., Philippine Association of Real Estate, International Real
Estate Institute, Institute of Philippine Real Estate Appraisers, Philippine
Association of Real Estate Consultants, and Financial Executives Institute.
Manuel O. Orros/65 (Independent Director) - Filipino
Mr. Orros has served as Independent Director of PRHC for nine years. He is a
Director/Treasurer of Australian International Export-Import, Inc. and the
President of O’ Mai Khan, Inc. in Baguio City.
Amador C. Bacani/65 - Filipino
Mr. Bacani, has served as Director of PRHC since 1998 and is currently the
President after serving as its Executive Vice President for seven years. His
concurrent positions are: Chairman of Tektite Insurance Brokers, Inc. and PRHC
Property Managers, Inc.; Director, Universal Travel Corporation and Meridian
Assurance Corporation, President, Xcell Property Ventures, Inc.
Atty. Mariano C. Ereso, Jr./80-Filipino
Atty. Ereso is a Partner, Corporate & Tax Consulting Practice of Ongkiko Kalaw
Manhit & Acorda Law Offices since October 1999. He has been the
Principal/Head-Tax Consulting of various auditing firms the latest of which Laya
Mananghaya & Co., CPAs/KPMG, from October 1995 to September 30, 1999.
His expertise in the field of taxation has led him to be the Team Leader of the
Presidential Fact Finding Committee for the Improvement of the operations of the
Bureau of Internal Revenue and Chairman of the Committee for Review and
Codification of Income Tax Regulations.
Gerardo Domenico Antonio V. Lanuza/30 – Filipino
Mr. Lanuza was elected as Director on January 15, 2009 and is Vice President for
Special Projects of PRHC, Vice President of Campos, Lanuza & Co., Inc. and
Director of A Brown Co., Inc..
8
Gregory G. Yang/57 – Filipino
Mr. Yang is currently the Senior Vice President of McDonalds Philippines. He
had been a Branch Manager of International Corporate Bank prior to his stint at
McDonalds. He was elected as Director last August 20, 2009.
Andrew C. Ng/30 – Filipino
Mr. Ng is currently the Vice-President of Alpha Alleanza Manufacturing, Inc. He
was formerly Operations Manager of Pinncale Foods, Inc. He was elected as
Director last August 20, 2009.
Andrew D. Alcid/54 – Filipino/American
Mr. Alcid was elected as Director on November 8, 2012. He is currently the
President of Greenhills Properties, Inc. (GPI). Prior to his stint at GPI, he was the
President and CEO of Coastal Road Corporation and Knowledge City Holdings &
Development Corporation. He occupied the same position in AXA Philippines
from 2006 to 2008.
As of the date of this Information Statement, it is the intention of the
Management to re-elect the same board of directors.
Pursuant to Section 38 of the new Securities Regulation Code and SEC
Memorandum Circular No. 16-02 (Guidelines on the Nomination and Election of
Independent Directors), the By-Laws has been amended on October 30, 2003 to
provide for the Nomination Committee and Election of Independent Directors under
Article II, Sections 5 and 6, which reads:
“Section 5. Nomination Committee-There shall be a Nomination
Committee which shall be independent and shall have at least three
(3) voting members, one of whom is an independent director. It
shall promulgate guidelines or criteria to govern the conduct of the
nomination. It shall pre-screen the qualifications and prepare a final
list of candidates which shall contain all the information about all
the nominees for independent directors.
The Committee shall be constituted at least one month before the
date set for the annual stockholders’ meeting. The nomination of
independent director/s shall be conducted by the Committee prior to
a stockholders’ meeting.
Only nominees whose names appear on the Final List of Candidates
shall be eligible for election as Independent Director/s. No other
nomination shall be entertained after the Final List of Candidates
shall have been prepared. No further nominations shall be
entertained or allowed on the floor during the actual annual
stockholders’ meeting.”
“Section 6. Election of Independent Directors-The election of
Independent Directors shall be made in accordance with the by-laws
of the Corporation, except as otherwise provided in other parts of
these by-laws and subject to pertinent existing laws, rules and
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regulations of the Commission.
Cumulative voting shall not apply to the election of an independent
director. Single balloting for the regular and independent director/s
shall be made. In case however of failure of election for
independent director/s, the Chairman of the Meeting shall call a
separate election during the same meeting to fill up the vacancy.
In case of resignation, disqualification or cessation of independent
directorship, the vacancy shall be filled by the vote of at least a
majority of the remaining directors, if still constituting a quorum,
upon the nomination of the Nomination Committee; otherwise, said
vacancies shall be filled by the stockholders in a regular or special
meeting called for that purpose. An independent director so elected
to fill a vacancy shall serve only for the unexpired term of his
predecessor in office.”
The Nomination Committee was constituted last November 28, 2012 during
the organizational meeting of the Board of Directors. It is composed of Mr. Andrew
Ng, Mr. Gerardo Lanuza, Jr., and Mr. Manuel Orros. Mr. Ramon C-F. Cuervo, III and
Mr. Manuel Orros were nominated as the two (2) Independent Directors to be elected
at the Meeting. They were nominated by minority stockholders, Eduardo Lucero and
Alfredo Alfonso, respectively. Mr. Lucero and Mr. Alfonso are not related with the
nominees.
Further in compliance with the Notice of the Commission dated October 20,
2006, both nominees have executed a Certification, under oath, that they possess all
the qualifications and none of the disqualifications provided for in the SRC and its
Implementing Rules and Regulations.
Except for proceedings involving a director or executive office in his/her
official capacity, no one from the directors/executive officers for election at the
Meeting has been involved in any legal or administrative proceedings in his/her
personal capacity during the past five (5) years up to the present date that would
materially affect his/her ability and integrity to serve as a director or executive officer.
Significant Employees
Any director or officer who may be elected at the Meeting is expected to make
significant contributions to the operations and business of the Company. Likewise,
each employee is expected to do his share in achieving the Company’s set goals.
Involvement in Certain Legal Proceedings
*
Petition for Corporate Rehabilitation with Prayer for Suspension of Payments
filed with the Regional Trial Court Quezon City
On December 12, 2002, the Company filed a Petition for Corporate
Rehabilitation with Prayer for Suspension of Payments with the Regional Trial
Court of Quezon City (Rehab Court) to stop its creditors from foreclosing on
10
the mortgages over the Company’s real properties to the prejudice of the other
stakeholders of the Company. The court gave due course to the Petition on
February 26, 2003 and appointed Mr. Ricardo Ysmael, as Rehabilitation
Receiver. On June 20, 2003, the Company filed an Amended Rehabilitation
Plan which was approved by the Rehab Court in its Order dated June 11 2004.
On February 2, 2011, the Company filed a Motion to Terminate
Rehabilitation Proceedings. In November 2012 the Rehabilitation Court, upon
the recommendation of the Rehabilitation Receiver denied the motion on the
basis that the Company has still substantial obligation to pay in accordance
with the court-approved rehabilitation plan.
*
Ley Construction and Development Corporation vs. Philippine Realty and
Holdings Corporation, Dennis A. Abcede and Joselito L. Santos, Civil Case
No. 96-160, Regional Trial Court Makati City Branch 135
This is a complaint for sum of money and damages filed by Ley
Construction and Development Corporation (“Ley Construction”) against the
Company arising from various construction projects of the Company. On
January 31, 2001, the Regional Trial Court of Makati City (“RTC”) rendered a
Decision in favor of Ley Construction and against the Company. The
Company appealed the Decision to the Court of Appeals which Ley
Construction moved for partial reconsideration of the RTC Decision. On May
7, 2001, the RTC modified its January 31, 2011 Decision. The Company
appealed Modified Decision to the Court of Appeals. On September 30, 2004,
the Court of Appeals reversed and set aside the January 31, 2001 Decision and
May 7, 2001 Modified Decision of the RTC and entered a new Decision
finding Ley Construction liable to the Company a net amount of
P3,747,793.50. Ley Construction appealed the Decision of the Court of
Appeals to the Supreme Court. On June 30, 2011 the Supreme Court ruled in
favor of Ley Construction and against the Company. The Company moved for
reconsideration which was denied by the Supreme Court with finality on
October 25, 2011 and directing the Company to pay P57 million plus legal
interest from the time of filing of the case. The Company has booked the
prospective settlement expenses in the amount of P112.75 million in its 2011
financial statements. On July 16, 2012, the Company has received a Notice of
Garnishment and Notice to Comply/Pay in connection with the claim of “Ley
Construction” which was lifted December 16, 2012 on account of the
Company’s Corporate Rehabilitation. Ley Construction has presented its claim
to the Rehabilitation court where it is pending.
*
Philippine Realty and Holdings Corp. vs. DMCI Project Developers, Inc.,
Universal Rightfield Property Holdings, Inc., and Universal Leisure
Corporation, Civil Case No. 67092, and pending before Branch 161, Regional
Trial Court, Pasig City.
Universal Leisure Corporation (ULC) bought several condominium
units from the Company under two (2) contracts to sell. After paying the
down payment ULC refused to pay the balance due on the principal sums of
P32,534,202.66 and P32,383,972.00. ULC claims that it is an assignee of
11
receivable from DMCI Project Developers, Inc.(DMCI) and Universal
Rightfield Property Holdings, Inc. (URPHI) for a sum of money allegedly
owed by the Company to DMCI and URPHI as a result of cancellation of joint
venture agreement entered into by the Company, URPHI and DMCI. The trial
Court ruled against Philrealty. Thus, it ordered the Company to pay a sum of
money to ULC, DMCI and URPHI and deliver titles to fourteen condominium
units and two storage units situated at 34th Floor West Tower as well as the
seventy four parking slots situated at the West Podium 3 Parking Level of the
PSE Centre. The Company appealed the case to the Court of Appeals(CA)
which affirmed the trial court’s decision. In December 2012, Philrealty filed a
Motion for Reconsideration and the same was denied. Thereafter, the Parent
Company filed a Petition for Review with the Supreme Court where the matter
is still pending as of report date.
Family Relationships
Mr. Gerardo Lanuza, Jr., Chairman of the Board, is the younger brother of Mr.
Juan Antonio Lanuza, Vice Chairman; first cousin of Mr. Antonio O. Olbes, and
father of Director, Mr. Gerardo Domenico Antonio V. Lanuza. Mr. Gregory Yang is
the father-in-law of Mr. Gerardo Domenico Antonio V. Lanuza.
Related Party Transactions
The Company’s related transactions were made in arm’s length basis. There
was no special pricing policy between related parties. The Company engaged the
services of its subsidiary, PRHC Property Managers, Inc. (PPMI) in managing
Company-owned/developed properties. PPMI, on the other hand, purchased a
condominium unit back in 1996 from the Company, which is still being amortized as
of to date. The Company also secures insurance from subsidiary, Meridian Assurance
Corporation (MAC) through subsidiary, Tektite Insurance Brokers, Inc. The Company
is given 90-day period within which to settle the premiums, the same period granted
to any assured. Also, the Company extends interest-bearing financial assistance to its
subsidiary, PPMI for working capital purposes.
The Company has transaction with subsidiary, Universal Travel Corporation and
affiliate, Alexandra, USA, wherein the Company extended non-interest bearing loan
as additional working capital. In 2008 and 2011, the Company provided an allowance
for doubtful accounts on its receivable from Alexandra, USA. The Company has not
entered into any material transaction nor is it a party to any transaction in which any
director, executive officer or significant shareholder of the Company or any member
of the immediate family of any of the persons mentioned in the foregoing had or is to
have a direct or indirect material interest.
Disagreement with Director
None of the directors have resigned or declined to stand for re-election to the
Board of Directors since the date of the last annual meeting of security holders due to
disagreement with the Company on any matter relating to the Company’s operations,
policies or practices.
12
Executive Compensation
Year
CEO & four most highly
compensated executive
officers- Gerardo Lanuza
(Chairman of the Board),
Amador C. Bacani
(President), Jose Ma.
Francisco (Vice
President-Finance and
Admin until August
2011), Jose F. Santos
(Vice President – Mktg
and Bus. Dev.), Gerardo
Domenico Antonio V.
Lanuza (VP Special
Projects) and Robirose
M. Abbot
(Vice President-Finance
and Admin. from
September 1, 2011)
2013 (est.only)
2012
2011
All officers & directors
as a group – Other
officers include: Juan
Antonio Lanuza (ViceChairman), Antonio
Olbes (Vice Chairman),
Dennis Aranaz
(Construction Manager)
and Josefa Ma.
Bernadette Dizon
(Accounting Manager)
and all other directors
2013(est. only)
2012
2011
Salary
Per
Diem
Other
Annual
Compensa
tion
Total
None
None
None
117,000.00
111,000.00
84,000.00
None
None
None
11,126,340.32
10,40,103.10
8,874,436.82
None
None
None
488,000.00
414,000.00
458,000.00
None
None
None
13,524,627.43
12,619,595.73
11,849,086.08
Bonus
11,009,340.32
10,289,103.10
8,790,436.82
13,329,627.43
12,457,595.73
11,435,086.08
The Executive Officers are elected annually by the Board of Directors at its
first meeting following the annual stockholders’ meeting. Every officer, including the
President, is subject to removal at any time by the Board of Directors. All officers
hold office for one year and until their successors are duly elected and qualified;
provided that any officer elected to fill any vacancy shall hold office only for the
unexpired term of the office filled.
The compensation of the Company’s executive officers is fixed by the Board
of Directors. They are covered by contract of employment and as such they are
entitled to all the benefits accruing to salaried employees of the Company.
13
Compensation of Directors
Normally, directors are entitled to a per diem of P3,000.00 for board meetings
attended except for independent directors who receive P10,000.00. In addition, the
Board is entitled to a portion of the 5% of net income before tax profit-sharing
incentive for directors, officers and staff.
The directors of the registrant received per diem in the amount of P488,000,
P414,000 and P458,000 for 2012, 2011 and 2010, respectively.
Independent Public Accountants
The auditing and accounting firm of Maceda Valencia & Co. (formerly
Maceda Farnacio & Co.) is the Company’s Independent Public Accountants
appointed in the 2012 Annual Stockholders Meeting. It replaced Manabat Delgado
Amper & Co. There has been no disagreement between the Company and Maceda
Valencia & Co. with regard to any matter relating to accounting principles or
practices, financial statement disclosure or auditing scope or procedure. Nor did such
disagreement exist between the Company and its previous auditor, Manabat Delgado
Amper & Co.
The Members of the Audit Committee are as follows:
Chairman:
Ramon CF Cuervo, III (Independent Director)
Members:
Atty. Mariano C. Ereso
Antonio O. Olbes
Audit and Audit Related Fees
The professional fees of Maceda Valencia & Co., for 2011 and 2012 amounted
to P822,250 and P862,500, exclusive of VAT, respectively. Out of pocket expenses
pegged at 15% for 2011 and 2012.
Tax Fees
The Company did not engage the services of Maceda Valencia& Co. with
regard to tax services.
Compliance with Corporate Governance
The Company, its directors, officers and employees complied with the leading
practices and principles on good corporate governance as embodied in the Company’s
Manual on Corporate Governance (“Manual”). The Company accomplished the PSE
Corporate Governance Guidelines for Listed Companies: Disclosure Survey for 2012.
On August 28, 2012, the Company’s Board of Directors approved the Audit
Committee Charter in compliance with SEC Memorandum Circular No. 4, Series of
2012. Pursuant thereto, the Company created an Internal Audit Unit and has engaged
the services of an Accountant for the Internal Auditor post.
The Company has complied with all leading practices of good governance. An
evaluation system has been established to measure the level of compliance with the
14
Manual by Directors and top level management. The Company has undertaken minor
revisions in its internal control system and adopted a strict implementation of the
provisions of its Manual including the adoption of appropriate penalties for noncompliance. Since the last Annual Meeting, there has been no deviation from the
Company’s Manual that would require a report or disclosure.
Actions with Respect to Reports and Other Proposed Actions
The following reports/minutes shall be submitted to the stockholders for
approval/ratification:
1. Minutes of the 2012 Annual Stockholders Meeting held on November 20,
2012
2. Report of the Board of Directors for 2012
3. 2012 Audited Financial Statements
4. Ratification of all acts of the Board of Directors and officers from
November 2012 to August 2013.
5. Election of Directors for the ensuing year
6. Appointment of External Auditor
All the management concerns, operational problems, new investment
opportunities, and issues presented to the Board were duly acted upon and resolved by
the Board during the year 2012.
During the 2012 Annual Stockholders’ Meeting, all the corporate acts and
proceedings of the Board of Directors and Officers since the 2011 Annual Meeting
were ratified by the majority of the stockholders who attended and/or represented in
said meeting.
The copy of the Minutes of the 2012 Annual Stockholders’ Meeting signed by
the Chairman, Mr. Gerardo O. Lanuza,Jr. and by the Corporate Secretary, Atty. Rex
Bonifacio, is herewith attached for your reference.
The major acts of the Boards of Directors to be ratified in the forthcoming
Stockholders’ Meeting are summarized as follows:
1. Approval of the Company’s 2012 Audited Financial Statements;
2. Approval, Ratification and Confirmation of the Establishment of the
Company’s Retirement Plan; Appointment of a Trustee to Manage the
Retirement Fund; and Creation of a Retirement Committee and
Appointment of Committee Members;
3. Investment of portion of the Retirement Fund in Special Deposit Account
Tax Exempt Facility;
4. Opening
of
Peso/Dollar/Acceptable
Third
Currencies
Savings/Current/Time Deposit Accounts with Union Bank of the
Philippines
5. Additional Investment in Meridian Assurance Corporation
15
Voting Procedures
In the electionof directors,the (11) nomineesrvith the greatestnumberof
votesrvill be electeddirectors. If the numberof nomineesfor electionas directors
doesnot exceedthe number of directorsto be elected,the Secretaryof the Meeting
shall be instructedto castall votesrepresentedat the Meeting equally in favor of ai
suchnominees.However,if the numberof nomineesfor electionas directorsexceeds
the numberof directorsto be elected,voting shall be done by ballot, cumulative
voting will be followed, and countingof votes shall be done by tkee (3) election
inspectorsto be appointedby the stockholderspresentat the meeting.
For corporatemattersthat will be submittedfor approvaland for such other
mattersas maJvproperlycomebeforethe Meeting,a vote of the majoritv of the shares
presentat the Meetingis necessary
for their approval.Voting shallbe doneviva voce
or by the raisingof handsandthe votesfor or againstthe mattershall be tallied by the
Secretary.
Interest of certain Personsin or opposition to Matters to be Acted upon
No director has informed the registrantin wtiting that he intendsto oppose
any action to be taken at the meeting. There are no matters intended for the
approval/disapproval
by the stockholders.
The company undertakes to provideofi-ee of chargeothe Annuat Report
on SEC Form 17-A, shouldthe stockholderrequestfor one. The written request
should be forwarded to Atty. Rex P. BonifaciooCorporate Secretary,philippine
Realty and Holdings corporation, 5th Floor East Tower, philippine Stock
Exchangecentre, ExchangeRoad, ofiigas centeropasig City. At the discretion
of managementoa charge may be made for exhibits, provided such charge is
limited to rrcasonableexpensesincurred by the registrant in furnishing iuch
exhibits.
The company also undertakesto distribute sEC Form l7-e ending June
30,2013during the Annual Stockholder.s'
Meeting.
SIGNATURE
After reasonableinquiry and tq the bestof my knowledgeand belief, I certify
that the informationsetfort! in this reportis true, completeand correct. This reportis
signedin the PasigCity on YfZa :?, !!11,sPHILIPPINEREALTY AND HOLDINGS CORPORATION
Issuer
"t .-:1
7*4/%
AMADOR C. BACANI
President
16
EXHIBIT 1
MANAGEMENT’S DISCUSSION AND ANALYSIS
Sales of Skyline Tower slowed down as fewer units became available to buyers while new sales
were booked on sale of Icon Plaza units which is 47% completed as of year-end. Rental income
inched up due to escalation in rental rate. Gross Profit from the sale of condominium units in
2012 amounted to about P51.89 million higher by 34.44 million from 2011. Non-recurring
expenses dropped from P138.56 million in 2011 to P0.950 million in 2012 as no impairment
occurred in 2012.
The table below shows the material change from period to period in the Statement of
Comprehensive Income. Material shall refer to changes or items amounting to five percent (5%)
of the relevant accounts:
Sale of real estate
Other income
Cost of real estate
General and administrative expense
Other expense
2012
72.66%
1.68%
62.77%
32.51%
.18%
VERTICAL
2011
67.81%
11.79%
64.67%
50.33%
21.22%
2010
71.49%
12.22%
83.02%
17.43%
6.84%
HORIZONTAL
2012
2011
1.00%
(29.87%)
(86.60%)
(28.63%)
(8.57%)
(42.41%)
(39.10%)
113.49%
(99.19%)
129.44%
The Group posted a net income of P4.69 million in 2012; net loss of P213.02 million and P55.25
in 2011 and 2010, respectively. The loss in 2010 was due to the higher construction cost upon
resumption without adjustment on the selling price of old units sold, while loss in 2011 was due to
impairments recognized for investments and advances. The sale of real estate pertains to units
sold at Skyline Tower located at New Manila, Quezon City and Icon Plaza located at Bonifacio
Global City. Other income consists of an adjustment in the interest computation in settlement
expenses of LCDC in 2012 and the reversal of the allowance for decline in value of a Bonifacio
Global City lot and Leon Guinto property of P53.50 million in 2011 and 55.64 million in 2010,
respectively. Dividend income received from A Brown Co. contributed to income in 2010 of
about P19.10 million.
Our insurance subsidiary, Meridian Assurance Corporation (MAC), posted a net income of
P17.05 million, a turnaround from last year’s P7.56 million due to a sale of property located at
Quezon City with a gain in the amount of P6.74 million; and also an increase in interest income
from money market placements from P2.99 million in 2011 to P3.41million in 2012. Other
income on the other hand decreased from P2.12 million in 2011 to P.133 million in 2012.
Our property management subsidiary, PRHC Property Managers, Inc. (PPMI), registered a net
income of P2.25 million, which dropped by 1.58% from last year’s net income of P2.27 million
due to increase in direct cost. Currently, PPMI manages a total of 11 buildings located in various
cities in Metro Manila.
Tektite Insurance Brokers, Inc. (TIBI) the Group’s insurance brokerage firm posted an income of
P.459 million from last year’s income of P.099 million, due to increase in production.
Consolidated general and administrative expenses dropped to P170.51 million from P280.06
million in 2011 since no impairment occurred during the year compared to 2011 whereby the
Company set-up impairment loss on receivables and investments from subsidiary, Universal
Travel Corporation and affiliate Alexandra USA. Other expenses also dropped due to non-accrual
of interest on the judicial settlement on the Parent Company’s case with contractor LCDC
awaiting decision of the Rehab Court on this case.
The Company is aware of the causes of the continuous losses it incurred for the last three years.
However, we could not avoid the high costs of labor and materials at the time we resumed the
construction of Skyline Tower which we could not pass on to our old buyers.
The table below shows the material change from period to period in the Statement of Financial
Position. Material shall refer to changes or items amounting to five percent (5%) of the relevant
accounts.
Cash and cash equivalents
Available for sale investments
Trade and other receivables-net
Prepayments and other assets
Real estate inventories
Real estate held for dev and sale
Investment properties
Trade and other payables
Funds held in trust
Reserves
2012
13.57%
7.74%
17.64%
4.67%
20.45%
21.46%
9.22%
8.52%
15.58%
9.20%
VERTICAL
2011
11.14%
7.21%
10.53%
5.61%
14.56%
35.59%
10.06%
8.21%
16.07%
8.92%
2010
7.48%
7.53%
10.00%
5.42%
24.46%
34.93%
3.06%
4.75%
15.19%
8.63%
HORIZONTAL
2011
2010
28.35%
45.86%
13.04%
(6.21%)
76.56%
3.15%
(12.40%)
1.48%
47.97%
(41.67%)
(36.47%)
(0.19%)
(3.43%)
221.99%
9.37%
69.44%
2.17%
3.60%
8.69%
1.19%
The Company’s total assets stood at P4.19 billion as of year-end 2012, higher by P214.00 million
from the end-2011 level. The Company’s real estate assets comprise 41.91%; 50.15% and 59.39%
of the total assets of the Company for 2012; 2011 and 2010, respectively. Real estate inventories
increase due to take up of Icon Plaza units corresponding to the cost of the FBDC Lot 9-4
contributed to the joint venture with Xcell Property Ventures, Inc. In 2011, the dropped in real
estate inventories was due to the reclassification of Tektite I and II properties and provincial lots
to investment properties.
As at year-end, cash and cash equivalents reached P569.02 million, which is about 13.57% of the
total assets. Cash flow from operations, generated mainly from collections of receivable accounts,
underwriting, lease rentals, management and consultancy fees, were utilized to settle current
payables.
Trade and other receivables increased by 76.56% from P418.83 million in 2011 to P739.49
million in 2012 due to the recognition of receivable from the sale of units of Skyline and Icon
Plaza units. The receivables comprise about 17.64% of the total assets of the Company.
Available-for-sale investments rose in 2012 due to additional acquisition of investment by our
subsidiary, MAC. Also, in 2012 the Parent Company disposed 2.51 million of A Brown shares
from which we realized a gain of P3.33 million. In 2011, AFS investments declined due to
disposal of investments made by MAC. In 2010, lower share price of A Brown Company, Inc.
(ABCI) shares brought AFS down by 12.50%. Also in 2010, ABCI declared a cash dividend of
P0.20 per share which the Company recognized as income amounting to P19.10 million in 2010.
Further, ABCI declared a 16:1 property dividend, thus increasing shares held by 5,970,000 shares.
Trade and other payables increased from P326.60 million to P357.19 million due to increase in
Claims outstanding by subsidiary Meridian Assurance Corporation from P29.62 million in 2011
to P39.80 million in 2012. Unearned income rose due to the recognition of percentage
uncompleted on sale of Icon Plaza Units as of year-end 2012.
Total cash received from JV partner, Xcell Property Venture, amounted to P653.09 million as of
end 2012. Part of these funds was used to settle full obligation with Landbank of the Philippines.
As a result of the foregoing, the Company’s stockholders’ equity went up to P2.90 billion from
the prior year’s P2.86 billion.
Top Five Performance Indicators
Gross Revenue
Current Assets
Current Ratio = Current Liabilities
Liabilities
Debt-to-Equity Ratio= Equity
Book value per share=SHE + Subs. Rec.
# of shares outstanding
Earnings Before Interest, Tax, Depreciation and
Amortization
2011
2012
P 470,993,400
2,464,867,748
992,334,482 = 2.48
0.00
P 454,268,436
1,812,086,837
814,463,710 = 2.22
0.00
3,408,216,555
4,877,907,002 = .69
3,373,090,090
4,877,907,002= .69
P1,438,282
( P 222,448,982)
Gross revenue includes sale of real estate, rent, commission, management fees and underwriting
income. The increase in occupancy of leased areas, rental rates and number of customers will
contribute significantly to the cash inflows of the company.
The Company has filed with the court a petition for corporate rehabilitation with prayer for
suspension of payments in 2002. Settlement has been reached with all the five creditor banks
through dacion-en-pago, cash payments from the sale of assets and loan restructuring. The
Company has completed another major component of the rehabilitation plan which is the
completion of construction of the Andrea North Skyline Tower. This led to the Company’s filing
of the Motion to terminate rehabilitation proceeding on the account of successful implementation
of the Rehabilitation Plan last February 2011. The Rehabilitation Court denied our petition on the
account that the Company has still substantial obligation to settle per Rehabilitation Plan.
The Company’s obligation that will have effect on cash is the settlement of its obligation to
contractor, Ley Construction Development Corporation (LCDC) which amounts to about P57
million plus legal interest from 1996 to present. The expense was booked in 2011. There is no
other event that will trigger direct or contingent financial obligation that is material to the
Company. Moreover, there are no material off-balance sheet transactions, arrangements,
obligations and other relationships of the Company with unconsolidated entities or other persons
created during this period.
Planning and design of the next tower at Andrea North Towers to be called “Skybreeze”, is in its
final stages and construction is ongoing. Construction of the joint venture project, Icon Plaza in
the Bonifacio Global City with Xcell Property Ventures commenced mid 2010 is ongoing.
PHILIPPINE
REALTYAND HOLDINGS
CORPORATION
Minutesof the AnnualStockholders'
Meeting
November
20.2012
The Annual Stockholders'
Meetingof the PhilippineRealty and Holdings
was heldon Monday,November
20,2012,9:3O
am at the Philippine
Corporation
Stock ExchangeCentre Auditorium,PSE Centre, ExchangeRoad, Ortigas
Center,PasigCity.
The followingdirectorswerepresent:
Mr. GerardoO. Lanuza,Jr., Chairmanof the Board
of the Board
Mr. JuanAntonioO. Lanuza.Vice-Chairman
Mr.AntonioO. Olbes,ViceChairman
of the Board
Mr.AmadorC. Bacani,President
Mr.MarianoC. Ereso
Mr. GregoryYang
Mr.AndrewDavidAlcid
Mr. Domenico
AntonioV. Lanuza
Mr.AndrewNg
Mr. ManuelOrros,Independent
Director
Mr. RamonCuervo,lll, Independent
Director
Alsoin attendance:
l\4r.RicardoYsmael,Receiver
CALLTO ORDER
of the Boardassumed
Mr.GerardoO. Lanuza,Jr.,Chairman
the chairand
presided
calledthe meetingto order at 9;30 a.m. and
over the same.The
CorporateSecretaryrecordedthe minutesof the meeting.
The CorporateSecretaryintroducedthe membersof the Board,namely:
of the Board,Mr.JuanAntonioO. Lanuza,
lvlr.GerardoO. Lanuza,Jr.,Chairman
Vice-Chairman
of the Board,Mr. AntonioO. Olbes,Vice Chairmanof the Board,
Mr.AmadorC. Bacani,President,
Mr.AndrewDavidAlcid,Mr.MarianoC. Ereso,
Mr.GregoryYang,Mr. Domenico
AntonioV. Lanuza,Mr.AndrewNg,Mr.Manuel
Director.
Orros,Independent
Director,and Mr. RamonCuervo,lll, Independent
CERTIFICATION
NOTICE
OF SERVICE
The Chairmanrequestedthe CorporateSecretaryfor proof that the
requirednoticesfor the meetingwere duly sent to all stockholdersof recordof
the Corporationprior to the meeting.As requested,the CorporateSecretary
submittedan Affidavitof Ms. RachelleRonquillo,certifyingthat on October3'1,
2012 noticesfor the Annual Stockholder'sMeetingwere sent by mail, courier
serviceor messengerto all stockholders
of recordincludingthe beneflcialowners
PageI of 15
of PCD NomineeCorporationas of October17, 2012 in accordancewith the ByLawsof the Corporation.
CERTIFICATION
OF THEPRESENCE
QUORUM
The Chairmaninquiredfromthe CorporateSecretarywhethera quorumis
presentfor the transactionof business.The CorporateSecretaryrepliedthat
sharesrepresenting72.23'/oof the
there were presentin person3,555,391,900
sharesof the capitalstockof the Corporationissuedand standing.Thus,on the
basis of the registeredattendance,the Secretarycertifiedthe presenceof
quorum.
READINGAND APPROVALOF THE MINUTESOF THE LAST ANNUAL
MEETING
OF STOCKHOLDERS
The Chairmanannouncedthat the meeting would proceed with the
readingand approvalof the Minutesof the last Annual Stockholders'Meeting
held on July 18, 2011, copiesof whichwere madeavailableat the Ofiiceof the
area.
CorporateSecretaryand at the registration
Meeting
A motionto dispensethe readingof the lsst AnnualStockholders
ratification
and
approval
was
made,
submit
the
same
for
confirmation,
and
secondedand carried.
AND APPROVALOF THE ANNUALREPORTAND THE
PRESENTATION
STATEMENTS
20I1 AUDITEDFINANCIAL
The next item in the agendawas the presentationof the AnnualReport
and the AuditedFinancialStatementsfor the year ended2011, copiesof which
priorto the meeting.
werefurnishedto the shareholders
for Marketingand Business
The Chairmanintroducedthe Vice-President
gave
on the
a PowerPointpresentation
Development,
Mr. Jose Santos,Jr., whp
for 2011.
ooerationof the CorDoration
P a g e 2 o f l5
Pase3or,'
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'
;;
1:
r*--' Sl
Page4 of 15
Page5 of l5
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Page8 of 15
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Page13of 15
After the report, the Chairmanentertainedsome questionsfrom the
shareholdersall of which were directedto and answeredby the president.
Thereafter,a motionto approvethe AnnualReportof the Boardof Directorsfor
the year 2011togetherwith the AuditedFinancialSiatementsfor the year ended
December31, 2011 was made,secondedand caried.
RATIFICATION
OF ALL CORPORATE
ACTS
A motionwas made for the ratification.approvaland confirmationof Ihe
acts, resolutionsand proceedingsof the Board of Directorsand Corporate
Officerssincethe lastAnnualMeeting.The motionwas duly seconded.
The motion having been secondedand there being no objections,the
Chairmandeclaredthe motioncarried.
ELECTION
OF THEBOARDOF DIRECTORS
The Chairmanannouncedthat the Meeting would proceed with the
slectionof the BoardDirectors.
Before proceedingwith the nomination,the Chairman advised the
shareholdersof the SEC requirementto elect at least two (2) independent
directorspursuantto SEC Circular No. 16 Series of 2002. The Chairman
acknowledgedthe two (2) independentdirectorsin the Board, namely, Mr.
Ramon Cuervo lll and Mr. Manuel Onos. They were again nominatedby a
minoritystockholderand qualifiedfor this year's electionby the Nomination
Committeepriorto the meeting.
The followingwere nominatedas membersof the Boardof Directorsfor
theensuingyear:
Mr.GerardoO. Lanuza,Jr.
Mr.JuanAntonioO. Lanuza
Mr.AnotinioO. Olbes
lvlr.AmadorC. Bacani
Mr.Mr.MarianoC. Ereso
Mr. GregoryYang
Mr. AndrewDavidAlcid
Mr. DomenicoAntonioV. Lanuza
Mr. AndrewNg
Director
Mr. ManuelOrros,Independent
Mr RamonCuervo,lll, Independent
Director
A motionto closethe nominationand directthe CorporateSecretaryto
cast all volesin favof of thosenominatedeonsideringthat only eleven(11)were
nominatedto fill the eleven (11) seats in the Board. The motion was duly
seconoeo.
Page14of 15
The motion having been secondedand there being no objections'the
Boardof
Cnaumanleciareathe m6tioncarried Thus,electedas membersofthe
Directorsfor the ensuingyearare the following:
Mf. GerardoO. Lanuza,Jr.
Mr. JuanAntonioO. Lanuza
Mr.AntonioO. Olbes
Mr.AmadorC. Bacani
Mr. MarianoC. Ereso
Mr. GregoryYang
N/r.AndrewDavidAlcid
AntonioV Lanuza
Mf. Domenico
Mr. AndrewNg
Director
Mr.ManuelOrros,Independent
Directol
Mr. RamonCuervo,lll, Independent
AUDITOR
OF INDEPENDENT
APPOINTMENT
A motjonto appointthe auditingfirm of MacedaFarnacio& Co as the
the Boafd
auditoffor thsensurngyearand to authorize
inOepenaent
Companv's
made'
was
auditor
to fix the compensationof the independent
;i D;;i";.
secondedand carried
OTHERMATTERS
None
ADJOURNMENT
There being no other mattersio be discussed,a motionto adjournthe
Meetingwas made,secondedand approved
of theMeeting
Secretary
Attestedto by:
of the Boafd
Chairman
Pagei5 of 15