1. travel
2. tourist facilities
3. hotel

COVER SHEET
7 7 8 2 3
SEC Registration Number
C I T Y L A N D
D E V E L O P ME N T
C O R P O R A T I O N
(Company’s Full Name)
1 5 6
H . V .
D E L A
C O S T A
S T . ,
,
S A L C E D O
V I L L A G E ,
MA K A T I
C I T Y
(Business Address: No. Street City/Town/Province)
893 – 6060
Rufina C. Buensuceso
Contact Person
1 2
Company Telephone Number
3 1
Month
1 7 - A (1)
Day
0 6
FORM TYPE
Month
Fiscal Year
0
3
Day
Annual Meeting
(Secondary License Type, If Applicable)
MS R D
Dept. Requiring this Doc.
Amended Articles Number / Section
Total Amount of Borrowings
Domestic
Foreign
Equity Ownership (Outstanding Shares)
702
3,197,555,494 (93.99%)
Total No. of Stockholders
Domestic
204,292,899 (6.01%)
Foreign
----------------------------------------------------------------------------------------------------------------------To be accomplished by SEC Personnel concerned
File Number
LCU
Document ID
Cashier
STAMPS
Remarks = pls. use black ink for scanning purposes
SECURITIES AND EXCHANGE COMMISSION
SEC FORM 17-A (1)
ANNUAL REPORT PURSUANT TO SECTION 17
OF THE SECURITIES REGULATION CODE AND SECTION 141
OF THE CORPORATION CODE OF THE PHILIPPINES
1. For the fiscal year ended December 31, 2013
2. SEC Identification Number: 77823
3. BIR Tax Identification No.: 000-527-103
4. Exact name of issuer as specified in its charter: Cityland Development Corporation
5. Makati City, Philippines
Address of Principal Office
6.
(SEC Use Only)
Industry Classification Code
7. 2F Cityland Condominium 10 Tower 1
#156 H.V. Dela Costa St., Salcedo Village Makati City
Address of Principal Office
1226
Postal Code
8. 632-8936060
Issuer’s Telephone Number, including area code
9. Former Name, Former Address and Former Fiscal Year, if changed since last report N/A
10. Securities registered pursuant to Sections 8 and 12 of the SRC, or Sec. 4 and 8 of the RSA
Title of Each Class
Number of Shares of Common
Stock Outstanding
Unclassified Common Shares
3,401,848,393
11. Are any or all of these securities listed on a Stock Exchange?
Yes [ X ]
No [
]
If Yes, state the name of such stock exchange and the classes of securities listed therein:
Stock Exchange
Title of Each Class
Philippine Stock Exchange
Unclassified Common Shares
12. Check whether the issuer:
(a) Has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17
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 90 days?
Yes [ X ]
No [
]
13. Aggregate market value of the voting shares held by non-affiliates:
Number of Shares
847,814,181
Price *
x
* Closing price on April 8, 2014
Php 1.10
Aggregate Market Value
=
Php 932,595,599
TABLE OF CONTENTS
Page No
PART I
BUSINESS AND GENERAL INFORMATION
Item I
Business
1
Item II
Properties
7
Item III
Legal Proceedings
9
Item IV
Submission of Matters to a Vote of Security Holders
PART II
10
OPERATIONAL AND FINANCIAL INFORMATION
Item V
Market for Registrant’s Common Equity and Related Stockholders
Matters
11
Item VI
Management’s Discussion and Analysis or Plan of Operations
12
Item VII
Financial Statements
20
Item VIII
Changes in and Disagreements With Accountants and Financial
Disclosure
20
PART III
CONTROL AND COMPENSATION INFORMATION
Item IX
Directors and Executive Officers of the Registrant
20
Item X
Executive Compensation
25
Item XI
Security Ownership of Certain Beneficial Owners and Management
25
Item XII
Certain Relationships and Related Transactions
27
PART IV
EXHIBITS AND SCHEDULES
Item XIII
Exhibits and Reports on SEC Form 17-A
SIGNATURES
28
29
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES
103
INDEX TO EXHIBITS
116
1
PART I - BUSINESS AND GENERAL INFORMATION
Item I.
Business
A. Background Information
1.
Brief Company History
Cityland Development Corporation is a domestic publicly listed corporation which is duly
organized and existing under and by virtue of the laws of the Philippines since January 31, 1978
with the primary purpose of engaging in real estate development.
2.
Listing in Stock Exchange
Cityland Development Corporation was listed with the Manila and Makati Stock Exchange in
March 1983.
3.
Subsidiaries
a.
b.
4.
City & Land Developers, Inc.: a real estate company incorporated under the laws of the
Philippines and registered with the Securities and Exchange Commission on June 28, 1988.
Cityplans, Incorporated: a pre-need company incorporated under the laws of Philippines and
registered with the Securities and Exchange Commission on October 27, 1988.
Nature of Operations
The Company's primary purpose is to acquire and develop suitable land sites for residential, office,
commercial, institutional, and industrial uses.
Its projects include medium to high-rise office, commercial, and residential condominiums located
in cities of Makati, Mandaluyong, Manila and Pasig; and residential subdivisions and farmlots in
Bulacan and Cavite.
B. Development of Business for the past three (3) years (2011-2013)
We present herewith the status of sales and construction of our projects as of the end of the following
years:
Cityland Development Corporation
Pines Peak Tower I
Grand Central Residences I
Makati Executive Tower IV
Mandaluyong Executive Mansion III
Makati Executive Tower III
Manila Executive Regency
Rada Regency
Corinthian Executive Regency
Makati Executive Tower II
PERCENTAGE SOLD
2011
20122
2013
–
2.333%
4.68%
11.72 %
17.99
30.03
18.90
47.37
84.03
62.72
92.45
99.00
88.09
91.47
94.59
99.89
99.23
99.76
100.00
100.00
99.69
99.84
100.00
99.84
100.00
98.96
99.88
Launched in 2012
Launched in 2010
Launched in 2009
Launched in 2008
Launched in 2006
Launched in 2005
Launched in 2005
Launched in 2004
Launched in 2003
2
PERCENTAGE OF COMPLETION
2011
–
7.22%
75.06
100.00
100.00
100.00
100.00
100.00
100.00
Pines Peak Tower I
Grand Central Residences I
Makati Executive Tower IV
Mandaluyong Executive Mansion III
Makati Executive Tower III
Manila Executive Regency
Rada Regency
Corinthian Executive Regency
Makati Executive Tower II
20122
––
29.25%
98.36
100.00
100.00
100.00
100.00
100.00
100.00
2013
24.88 %
60.11
100.00
100.00
100.00
100.00
100.00
100.00
100.00
City & Land Developers, Inc.
PERCENTAGE SOLD
2011
20122
72.52 %
90.855%
86.50
95.22
99.79
99.89
Manila Residences Bocobo
Grand Emerald Tower
Pacific Regency
Manila Residences Bocobo
Grand Emerald Tower
Pacific Regency
2013
96.46 % Launched in 2009
98.85
Launched in 2006
99.89
Launched in 2004
PERCENTAGE OF COMPLETION
2011
20122
2013
96.36%
100.00 %
100.00 %
97.52
100.00
100.00
100.00
100.00
100.00
Cityplans, Inc.
PERCENTAGE SOLD
2011
20122
2013
87.46 %
93.74%
100.00 % Launched in 2007
95.71
96.50
100.00
Launched in 2004
Windsor Mansion
Oxford Mansion
Windsor Mansion
Oxford Mansion
1.
PERCENTAGE OF COMPLETION
2011
20122
2013
100.00 %
100.00 %
100.00 %
100.00
100.00
100.00
The details of the above projects are as follows:
Cityland Development Corporation (Parent)
Pines Peak Tower I
Pines Peak Tower I is a 27-storey residential condominium located at Union corner Pines St.,
Barangka, City of Mandaluyong. Its amenities include swimming pool, viewing deck, multi-purpose
function room with movable children play set, gym, and 24-hour association security.
Estimated Date of Completion: March 2016
Grand Central Residences I
Grand Central Residences I is a 40-storey office, commercial and residential condominium located at
EDSA corner Sultan St., (fronting MRT Shaw), Mandaluyong City. It is in close proximity to schools,
churches, malls, and hospitals. It is equipped with swimming pool, multi-purpose function room, gym,
multi-purpose deck, CCTV and 24-hour association security.
Estimated Date of Completion: March 2015
3
Makati Executive Tower IV
Makati Executive Tower IV is a 29-storey commercial and residential condominium located at
Cityland Square, Sen. Gil Puyat Ave., cor. P. Medina St., Makati City. It is in close proximity to
schools, malls, hypermarkets and hospitals. Its amenities include swimming pool, gym, playground,
function room, roof deck and 24-hour association security.
Mandaluyong Executive Mansion III
Mandaluyong Executive Mansion III is a 7-storey commercial and residential condominium located at
G. Enriquez St., Brgy. Vergara, Mandaluyong City. It is in close proximity to schools, malls, churches
and hospitals. Its amenities include playground, swimming pool, basketball court and 24-hour
association security.
Makati Executive Tower III
Makati Executive Tower III is a 37-storey commercial, office, and residential condominium located at
Cityland Square, Sen. Gil Puyat Avenue, Pio Del Pilar, Makati City. Its amenities include swimming
pool, sauna, viewing deck, jogging area, mini-gym, children’s playground, function room, and 24-hour
association security.
Manila Executive Regency
Manila Executive Regency is a 39-storey office, commercial and residential condominium situated
along J. Bocobo St. Ermita. This property has a close proximity to churches, malls, parks, party places,
historical places, government institutions, and commercial establishments. Its amenities and facilities
include swimming pool, gym, spa, function room, children’s playground, and Manila Bay viewing
deck.
Corinthian Executive Regency
Corinthian Executive Regency is a 39-storey office, commercial and residential condominium located
along Ortigas Avenue, Pasig City. It has an excellent location and close proximity to various schools
(La Salle Greenhills, Poveda), churches, hospitals (the new Medical City), banks, shopping malls
(Robinson Galleria, SM Megamall, the Podium, Shangrila), restaurants and other leisure centers. Its
amenities and facilities include swimming pool, gym, sauna for men and women, viewing deck,
function room, laundromat, provision for children’s playground, and 24-hour association security.
City & Land Developers, Inc. (Subsidiary)
Manila Residences Bocobo
Manila Residences Bocobo is a 34-storey commercial, office and residential condominium located
along Jorge Bocobo St., Ermita, Manila City. Its amenities and facilities include swimming pool,
children’s play area, gym, multi-purpose deck, function room and 24-hour association security. It is
proximate to schools, malls, banks, hospitals, restaurants, churches, government offices and other
leisure establishments.
Grand Emerald Tower
Grand Emerald Tower is a 39-storey commercial, office and residential condominium located along
Emerald corner Ruby and Garnet Streets, Ortigas Center, Pasig City. Its amenities and facilities include
swimming pool, gymnasium, viewing deck, sauna, children’s playground, multi purpose function
room, and 24-hour association security. It is proximate to schools, hospitals, shopping malls, banks,
restaurants, hotels , churches and other leisure and business establishments.
4
Pacific Regency
Pacific Regency is a 38-storey commercial, office, and residential condominium located at Pablo
Ocampo Sr. Ave. (formerly Vito Cruz Street) in front of Rizal Memorial Sports Complex in Manila.
Amenities and facilities include swimming pool, gymnasium, separate sauna for male and female,
function room, children’s playground, 24-hour association security, viewing area, and jogging areas at
the roof deck.
Cityplans, Inc (Subsidiary)
Windsor Mansion
Windsor Mansion is an 8-storey commercial and residential condominium located along Evangelista
St., New Santolan, Pasig City. Amenities and facilities include 2 elevators, administrative office,
visitor’s lounge, provision for cable TV and telephone line, individual water submeter / Meralco meter
and 24-hour association security. This project is also developed together with Cityland, Inc.
Oxford Mansion
Oxford Mansion is an 8-storey commercial and residential condominium located along Evangelista St.,
New Santolan, Pasig City. Amenities and facilities include 2 elevators, administrative office, visitor’s
lounge, provision for cable TV and telephone line, individual water submeter / Meralco meter and 24hour association security. This project is also developed together with Cityland, Inc.
2.
Marketing
All projects are sold by direct company salesmen and independent brokers.
3.
Revenue Contribution to Total Revenues on Sales of Real Estate
PERCENTAGE
Cityland Development Corporation
Pines Peak Tower I
Grand Central Residences I
Makati Executive Tower IV
Mandaluyong Executive Mansion III
Cityland Makati Executive Tower III
Manila Executive Regency
Rada Regency
Corinthian Executive Regency
Cityland Makati Executive Tower II
Las Piñas Property
Others
City & Land Developers, Inc.
Manila Residences Bocobo
Grand Emerald Tower
Pacific Regency
Others
Cityplans, Inc.
Windsor Mansion
Oxford Mansion
Pasig Royale Mansion
Total
2011
20122
2013
–
0.85%
10.45
11.22
10.99
2.21
0.73
1.52
0.73
1.57
0.04%
6.72
29.04
15.39
9.18
0.51
0.53
0.95
0.36
0.72
1.60%
22.82
39.42
4.99
8.03
0.47
0.06
0.30
1.21
4.28
1.07
35.50
23.33
0.62
0.28
21.18
14.29
0.27
0.02
4.83
10.16
0.41
-
0.65
0.15
-
0.12
0.13
0.10
100.00%
100.00%
100.00%
5
4.
Domestic and Foreign Sales Contribution to Total Sales
2011
PERCENTAGE
2012
2013
Sales
Filipino Citizens
Foreign Citizens
Total
5.
88.53%
11.47
100.00%
85.42%
14.58
100.00%
81.14%
18.86
100.00%
Competition
In the property development industry, the principal methods of competition among the developers are
as follows: price; product or the type of development (i.e. high, middle, low-end); service or property
management after the project is turned over to the buyers.
Cityland sells its products which consist of condominium projects, to both end-users and investors at
affordable prices. It foresees that the demand for real estate products such as residential units will
remain underserved due to: i) continued shift from rural to urban areas; ii) continued increase in
number of Overseas Filipino Workers (OFW) who have shown growing propensity for home purchase;
and iii) population growth.
Makati Executive Towers III and IV are located at Sen. Gil Puyat Ave., Makati City. Other
condominium project which is quite similar in terms of classification and proximity to Makati
Executive Towers III and IV is The Linear which is located at corner Yakal, Malugay and Mayapis St.,
Makati City. This is a project of Filinvest Land Inc.
Mandaluyong Executive Mansion III is a 7-storey commercial and residential condominium located at
G. Enriquez St., Brgy. Namayan, Mandaluyong City. Other condominium project that is quite similar
in classification and proximity to Mandaluyong Executive Mansion III is the Tivoli Garden Towers
which is located along Coronado St., Mandaluyong City. This is a project of DMCI.
Grand Central Residences I is a 40-storey commercial and residential condominium located at EDSA
corner Sultan St., Mandaluyong City. Other condominium projects that are quite similar in
classification and proximity to Grand Central Residences I is the Light Residences which is located
along EDSA corner Madison St., Mandaluyong City. This is a project of SM Development
Corporation and Amaia Shaw of Amaia Land located along Shaw Blvd. corner Samat St., Brgy.
Highway Hills, Mandaluyong City.
Pines Peak Tower I is a 27-storey residential condominium located at Union corner Pines St.,
Barangka, City of Mandaluyong. Other condominium project that is quite similar in classification and
proximity to Pines Peak Tower I is the Avida Towers Centera which is located in Mandaluyong City.
This is a project of Avida Land Corporation.
Cityland believes that Makati Executive Towers III and IV, Mandaluyong Executive Mansion III,
Grand Central Residences I and Pines Peak Tower I are competitive projects because of good
locations and affordable pricing.
6.
Customers
Cityland has a broad market base and is not dependent upon a single or few customers. It has no single
customer that accounts for 20% or more of its sales. Likewise, there are no major existing sales
contracts.
6
7.
Purchases of Raw Materials and Supplies
Cityland engaged the services of Millenium Erectors Corporation and Capcons Philippines Corporation
for the civil and architectural works in the development of its projects.
As to the construction materials, Cityland has no major existing supply contracts for its projects. The
major construction materials like steel bars, cement, etc. are sourced through canvassing and bidding
from its list of accredited suppliers. Cityland then buys the materials from the lowest bidder.
8.
Transactions with and /or Dependence on Related Parties
Significant transactions with related parties consist of interest bearing cash advances from/to its
affiliates.
9.
Number of Employees
Cityland Development Corporation has a total of 230 employees as of December 31, 2013 classified as
follows:
Managerial
Rank & file
Total
35
195
230
Administrative
Operations
Total
117
113
230
The number of employees is expected to increase by 10% within the next 12 months. The Company
maintains an organizational framework whereby important management functions as well as
administrative tasks are shared within the Cityland group. The Company compensates the group for the
actual costs of these services.
The Company gives bonuses to its employees. Also, employees are entitled to vacation and sick leaves
and are covered by a retirement plan. All employees are not subject to collective bargaining agreement.
The Company’s employees are not on strike neither are threatening to strike nor have they been on strike
in the past three (3) years.
10. Government Approval of Projects
Projects launched and completed during 2011 – 2013 are covered by the following permits:
a.
Housing and Land Use Regulatory Board
 Certificate of Registration/License to Sell
b.
City/Municipal Building Official / Department of Public Works and Highways
 Development Permit/Location
 Building Permit
- excavation
- sidewalk
- sanitary
- electrical
- mechanical
- fire
- civil
 Occupancy Permit
- electrical
- mechanical
- sanitary
- civil
- fire
Department of Environmental and Natural Resources
 Environmental Compliance Certificate
c.
d.
Laguna Lake Development Authority
 Permit to Construct
 Permit to Operate
7
11. Effect of Existing Government Regulations on the Business
The Company has complied with all the appropriate government regulations prior to the development
and marketing of its projects. Compliance with these requirements symbolizes the unrelenting
commitment of the management to service and protection of its community and environment.
12. Amount Spent for Research/Development Activities
There is no amount spent for research and development activities.
13. Cost and effect of Compliance with Environmental Laws
2012
Payment of P
=356,015.00 to Wet Consultancy Inc. in securing the ECC & LLDA
clearance of CITYNET1.
2013
No payment.
14. Major Risks Involved in Each of the Businesses of the Company
The Company is primarily engaged in real estate development. Risk factors are:
Economic:
Results of operations is influenced by the general condition of the Philippine
economy. Any economic instability or failure to register improved economic
performance may adversely affect the Company’s operations.
Political:
The Company’s business like all other businesses may be influenced by the
political situation in the country. Any political instability in the future could
have a material adverse effect in the Company’s business.
Industry:
The industry is characterized by boom-bust cyclical pattern exhibited in the past
couple of decades where the industry normally goes through years of robust
growth following years of slowdown. The industry is still in the boom stage.
The management manages the above risks by conducting assessments of the economic and political
situations of the country as well as new developments in the industry. The procedures involved the
gathering of information of economic indicators and political events as well as being aware of the new
developments in the industry through media, business conferences, economic briefings and other
sources.
With this information, the Company is able to assess and manage the risks mentioned above.
Item II.
Properties
Investments in real estate properties as of December 31, 2013 are as follows:
Cityland Development Corporation, Parent Company:
Particular
1. Land &
building
Location
Corner Pioneer and
Reliance Sts., partly
located in
Mandaluyong City &
Pasig City
Total Area
12,502
Description
The property is located near
MRT3 Boni Station; about
a km. away from Ortigas
Center and presently
improved with warehouse
buildings. Portion of
property is mortgaged with
banks.
Only 7,816 sqm of property
is mortgaged with bank.
Mortgagee/
Limitation
Security Bank /
=1,600M
P
&
Metrobank /
=200M
P
8
The land is located in an
area where land
development is for
commercial and industrial
purposes
–
501,832
The land is adjacent to
Eagle Ridge Golf Course
and Gateway Business
Park.
–
Brgy. Sabang, Naic
Cavite City
670,891
The land is for mixed
commercial and residential
use.
–
5. Land
Bo. Wack-Wack,
Mandaluyong City
2,367
The land is located near
POEA in front of
Robinson's Galleria; along
EDSA very near MRT3
Ortigas Station. Property is
mortgaged with bank.
Security Bank /
=1,600M
P
6. Office Condo
H.V. Dela Costa St.,
Salcedo Village, Makati
City
3,493
This is an office
condominium for lease and
office use located at
Cityland 10 Tower I&II in
H.V.dela Costa corner
Geronimo and Valero
Sts.,Makati City. Only
1,683.42 sqm of property is
mortgaged with bank.
Metrobank /
=200M
P
7. Land
Brgy. Sabang, Naic
Cavite
513,705
Lot is near subdivisions like
Coastal City and
Retirement Village
–
8. Land
Brgy. Highway Hills,
Mandaluyong City
Lot is located near EDSA
Central & Shangri-La Mall
in Shaw Blvd.
–
2. Land
Corner Union and
Pines Sts.,
Mandaluyong City
3. Land
Brgy. Punungyanan,
Gen. Trias, Cavite
4. Land
2,867
2,864
City & Land Developers, Inc., Subsidiary Company:
Particular
Location
Total Area
Description
Mortgagee/
Limitation
1. Land
Roxas Blvd. Cor.
Seaside Drive, Brgy.
Tambo, Parañaque City
3,154
Lot is located along Roxas
Blvd. Property.
–
2.. Land
Samar Ave. cor.
Eugenio Lopez Ave.,
Quezon City
Lanutan Alley, Brgy.
Veterans Village,
Quezon City
1939 Taft Avenue,
Malate, City of Manila
3,096
Lot is located along Samar
Ave., Quezon City
–
1,661
Lot is located along EDSA
cor Lanutan Alley.
–
2,038
Lot is located along Taft
Avenue.
–
3.. Land
4. Land
9
Ownership
The Company has complete ownership of the above-mentioned properties.
Plan to Purchase
The Company has intentions to acquire property(ies) within the next 12 months depending on the outcome
of its negotiation with the prospective seller(s). We are also continuously receiving property offers and at
the same time reviewing them but no definite property is identified yet.
Lease Contracts
Leased properties as of December 31, 2013 are as follows:
Pioneer – Warehouse / Parking
Makati Executive Towers
Grand Emerald Tower – Units/Parking
Cityland Condominium 10 Towers I and II - Units/Parking
Mandaluyong Executive Mansion 3 – Units/Parking
Roxas Boulevard – Lot
Cityland Dela Rosa Condominium – Parking/Storage
Cityland Herrera Tower – Parking/Storage
Edsa Ortigas – Lot
Rada parking
Windsor Mansion – Units
Others
Total
Rental Income
=15,144,244
P
4,914,378
4,169,834
3,385,641
691,894
925,813
750,154
420,007
43,750
300,616
233,550
1,460,291
P
= 32,440,172
In November 2011, the Company has entered into a non-cancellable operating lease agreement with third
parties that permits the lessee to use the property as a fast food outlet for a term of ten years. Generally,
term of lease contracts ranges from 1 month to 1 year.
Renewal Options: Lease contracts are renewable upon agreement of the parties.
Item III.
Legal Proceedings
A. Cityland Development Corporation (Parent)
1.
Esmeraldo Balosa vs. Cityland Development Corporation
Civil Case No. MC08 – 3563
Mandaluyong Regional Trial Court – Branch 208
Date Instituted: April 11, 2008
Esmeraldo Balosa filed a case for preliminary Mandatory Injunction with damages against
Cityland after the Business and License Department of Mandaluyong City closed his stalls due to
Balosa’s failure to secure the necessary permits. He alleged that he has not been paying the lease
because another entity is also claiming ownership of the leased property and that property cannot
be used for his business. Balosa claims Cityland illegally ejected him. We are awaiting resolution
on our motion to dismiss the case on grounds of “res judicata.”
2.
Arthur M. Litonjua vs. Cityland Development Corporation
LRC Case No. R-7442
Pasig Regional Trial Court – Branch 161
Date Instituted: October 29, 2010
Arthur M. Litonjua filed a Petition dated October 29, 2010 and received by Cityland last February
1, 2011, seeking an order to compel Cityland or any person in possession of the owner’s duplicate
10
copy of TCT No. 38762, to surrender the same to the Register of Deeds of Pasig City. In the
alternative, Litonjua prayed for the annulment of said owner’s duplicate copy should the person
holding the same refuses to surrender the same, and for the Register of Deeds of Pasig City to issue
a new certificate of title in the name of Litonjua and possession of the subject property. Cityland
commented that it had previously sold the property to Roy L. Borbon way back in March 28, 1995
but Borbon never claimed the title from Cityland to undertake the registration of the same. The
case is still pending with the admission of the Amended Petition of Litonjua.
3.
Cristy Katsui vs. Cityland Development Corporation
Case No. NCR REM-062612-14812
HLURB – Expanded National Capital Region Field Office
Date Instituted: June 26, 2012
Cristy Katsui filed a complaint dated June 20, 2012 which was received by Cityland on July 20,
2012, seeking an order for the rescission of the Contract to Sell over a commercial unit no. G-11 in
Makati Executive Tower IV and for the return of all the amortizations paid by her and her children
in the total amount of P
=1,634,000.00. Cityland stated in its Answer that it cancelled the abovementioned Contract to Sell in compliance with the instruction of Katsui in her letter, in behalf of
all the buyers, dated June 21, 2011. She was informed that she is not entitled to any cash surrender
value under R.A. No. 6552 that requires a minimum payment of 24 monthly installments. Katsui
paid only 14 installments. Besides, the unit is a commercial unit which is not covered by the law
which seeks to protect buyers of residential units. The case has been submitted for decision.
B. City and Land Developers, Inc. (Subsidiary)
1.
Sta. Ana Village Homeowners’ Assoc. Inc. (SAVHA) vs. CLDI
Civil Case No. 12-009
Parañaque Regional Trial Court – Branch 274
Date Instituted: January 16, 2012
SAVHA filed a Complaint dated January 16, 2012 which was received by CLDI on March 3,
2012, to enjoin defendant and all persons allowed by said defendant CLDI from using Benedictine
Street in Sta. Ana Village, Barangay Sun Valley, Paranaque City; and to order the defendant by
way of a writ of mandatory injunction to open another outlet to the main road without cost or
liability to plaintiff. CLDI stated in its Answer that plaintiff has not proven its claim over
Benedictine Street because the Deed of Donation used by the plaintiff is a falsified and/or spurious
document. Furthermore, there is a Right-of-Way Agreement for Benedictine Street. Case was
dismissed. However, SAVHA filed a Motion for Reconsideration which was granted. Presentation
of evidences is on going.
2.
Republic of the Philippines represented by the Department of Public Works and Highways
(DPWH), through the Bureau of Design - Right of Way Office (BOD-ROWO) versus City &
Land Developers, Inc.
Civil Case No. 13-0209
Paranaque Regional Trial Court – Branch 274
Date Instituted: July 16, 2013
DPWH filed a Complaint for Expropriation of certain portions of the properties, including the
improvements therein, of CLDI located in Barangay Tambo, Paranaque City, which will be part of
the NAIA Expressway Project Phase II. CLDI in its Answer prayed, among others, that DPWH
pay just compensation on the price of P89,700 per square meter for the lots which is the prevailing
market value of the properties in the area. The case is still pending with the admission of the
Amended Complaint of DPWH.
11
Item IV.
Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the fourth quarter of the fiscal year
covered by this report.
PART II - RATIONAL AND FINANCIAL INFORMATION
Item V.
1.
Market for Registrant's Common Equity and Related Stockholders Matters
Dividends Policy
Dividends declared by the Company on its shares of stocks are payable in cash or in additional shares
of stock. The payment of dividends in the future will depend upon the earnings, cash flow, and
financial condition of the Corporation and other factors.
2.
Dividends
2013
=0.03 per share
P
5%
Cash
Stock
3.
2012
=0.03 per share
P
10%
Stock Prices
2012
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2013
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Unclassified Common Shares
High
Low
1.13
0.97
1.36
1.01
1.17
0.95
1.19
1.05
1.14
1.15
1.16
1.14
1.06
0.92
1.01
1.03
Note: Prices in 2013 took into account the 5% stock dividends declared to the stockholders of record
as of July 4, 2013.
4.
Trading Market
The Company's common equity is traded in the Philippine Stock Exchange.
The Corporation has no plans of acquisition, business combination, or other reorganization that will
take effect in the near future that involves issuances of securities.
5.
Price Information on the Latest Practicable Date
6.
The Company’s shares were last traded on April 8, 2014 at P
=1.10 per share.
5. Public Ownership
Public Ownership
Total number of shares owned by the public is 843,411,059 shares which represent 24.79% of the total
3,401,848,393 shares issued and outstanding.
12
7.
Holders
a. The number of shareholders of record as of December 31, 2013 was 702.
b. Top 20 Stockholders of record as of December 31, 2013:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
8.
Name
Cityland Incorporated
Roxas, Stephen C.
PCD Nominee Corporation –Filipino
Liuson, Grace C.
Fan, Lucy
Gohoc, Alice
Liuson, Andrew I.
Roxas, Helen C.
Gohoc, Josef C.
Chiong, Daniel Yen
Recto, Ester
Gohoc, Josua
Gohoc, Joel
Gohoc, Joanna
Gohoc, Johann C.
PCD Nominee Corporation -Foreign
Jefcon, Inc.
Tan, Joyce Liuson or Philip Sim Tan
Chang, Rita D.
Obadiah, Inc.
No. of Shares Held
1,715,072,691
250,892,400
227,950,257
181,512,066
124,228,745
123,528,365
104,122,385
51,710,464
45,596,381
43,092,137
26,565,139
25,470,394
25,357,687
25,263,982
25,118,328
24,449,729
15,776,542
15,196,136
14,714,905
14,530,085
Percentage
50.42%
7.38
6.70
5.34
3.65
3.63
3.06
1.52
1.34
1.27
0.78
0.75
0.75
0.74
0.74
0.72
0.46
0.45
0.43
0.43
Recent Sale of Unregistered Securities (including recent issuance of securities constituting an exempt
transaction)
Item VI.
a.
There was no sale of unregistered securities.
b.
The total number of shares issued and outstanding of the Company increased from 3,239,855,939
to 3,401,848,393 as a result of the 5% stock dividends distributed on July 30, 2013. Stock
dividends are exempted from registration under SRC Rule 10.1-2 (Exempt Transaction Not
Requiring Notice).
Management’s Discussion and Analysis or Plan of Operation
Financial Performance
The Philippine economy expanded by 7.2% in 2013, higher than the 6.8% posted last year. Growth
could have been higher but was hampered by the devastation caused by the super typhoon and other
natural calamities. Strong macroeconomic fundamentals such as the continuously expanding BPO
(business process outsourcing) sector, growing private consumption and increasing government
investments made the country one of the best performing economies in Asia. With the recent credit
rating achievements, investments are seen to continue and give bright prospects for the real estate sector.
The low interest rates and overseas remittances continued to fuel the housing boom, while the BPO
industry continued to drive the office property sector. The Company is optimistic that investments in
real estate will continue as the outlook on the global economy is becoming more favorable and as the
domestic economy remains robust.
On February 2013, the Company completed and turned over, 10 months in advance Makati Executive
Tower IV, a 29-storey office, commercial and residential condominium located at Cityland Square,
Senator Gil Puyat Avenue, Pio del Pilar Makati City. CDC is now selling the remaining units.
13
To address the increasing demand for BPO offices, the Company has ventured into a new line of
business with the launching of its new BPO hub, Citynet 1 on December 2013. Citynet 1 is a 5-storey
premiere business technology hub located along 183 EDSA, Barangay Wackwack, Mandaluyong City.
The Company is pre-selling the following on-going projects:
Pines Peak Tower I, a 27-storey residential condominium located at Union corner Pines St. central
business district of Manadaluyong City, a project of CDC.
Grand Central Residences, a 39-storey office and residential condominium located at EDSA corner
Sultan St., Mandaluyong City, a project of CDC.
The Company and its subsidiaries are selling the following completed projects:
Manila Residences Bocobo, a 34-storey office and residential condominium project located at Jorge
Bocobo St., Ermita, Manila City, a project of CLDI.
Grand Emerald Tower, a 39-storey commercial, office and residential condominium located along
Emerald corner Ruby and Garnet Streets, Ortigas Center, Pasig City, a project of CLDI.
Makati Executive Tower III, a 37-storey office, commercial and residential condominium located at
Cityland Square, Senator Gil Puyat Avenue, Pio del Pilar Makati City, a project of CDC.
Mandaluyong Executive Mansion III, a residential condominium located at Mandaluyong Executive
Mansion Subdivision, G. Enriquez St., Brgy. Vergara, Mandaluyong City, a project of CDC.
Oxford Mansion, an 8-storey commercial and residential condominium located along Evangelista St.,
New Santolan, Pasig City, a joint project of Cityplans, Inc. (CPI), a subsidiary of CDC and
Cityland, Inc. (CI).
Windsor Mansion, an 8-storey commercial and residential condominium located at New Santolan, Pasig
City, a joint project of CPI and CI.
The Company has also a number of prime lots reserved for future projects. Its land bank is situated in
strategic locations ideal for horizontal and vertical developments.
Internal sources of liquidity come from sales of condominiums and real estate projects, collection of
installment receivables, maturing short-term investments while external sources come from SECregistered commercial papers and Home Guaranty Corporation’s promissory notes.
Plan of Operations
The Company will continue to maintain a cautious stance in order to continuously achieve a healthy
financial position. This will ensure that the development and construction of all its existing projects will
be delivered on time or even ahead of its scheduled turnover. The Company will also continue to scout
and develop quality projects suited for the middle and working class which will be situated at convenient
locations with affordable and flexible payment terms. The Company’s projects will be funded through
cash generated from operations and issuance of SEC-registered commercial papers and Home Guaranty
Corporation’s promissory notes. The Company plans to remain liquid in order to avail attractive
investment opportunities that may arise to readily meet the demands of the present growing economy.
Financial Condition/Changes in Financial Condition (2013 vs. 2012)
The Company’s balance sheet remained strong as it ended the year with total assets of P
=8.197B as
compared to P
=8.470B of the previous year. Sales of real estate decreased the inventory account, while
collections decreased the Company’s installment contracts receivable. The Company’s resources were
substantially utilized for condominium development which led to the early completion of Makati
Executive Tower IV and the fast completion rates of Grand Central Residences and Pines Peak Tower I.
It can be noted that all projects of the subsidiary company, CLDI were almost fully sold, which led to the
decrease in its Real Estate Properties for Sale. However, CLDI plans to open a new project soon which
will increase the said account. On the liabilities side, CLDI managed its development costs prudently
which resulted to the reversal of excess estimated development cost over the actual cost thereby reducing
the accounts payable and accrued expenses account. The Company also partially settled its outstanding
accounts payable and accrued expenses and its maturing notes and contracts payable resulting to the
14
decrease in total liabilities of 24.04%. Remaining funds were shifted from cash and cash equivalents to
short term cash investments for higher interest earnings.
Total stockholders’ equity stood at P
=6.133B as of December 31, 2013 as compared to P
=5.748B due to net
income of P
=519.53M less cash dividends of P
= 142.37M plus other adjustments of P
=7.60M.
The decrease in liabilities strengthened the Company’s solvency position as debt equity ratio improved to
0.28:1 from 0.37:1. Acid test and current ratio also improved to 1.68:1 and of 2.50:1 as of December 31,
2013 as compared with 1.52:1 and 2.22:1 in December 31, 2012.
Financial Condition/Changes in Financial Condition (2012 vs. 2011)
The Company’s balance sheet remained healthy with total assets of P
=8.470B in 2012 as compared to the
previous level of P
=8.020B. The increase can be attributed to the increase in cash and cash equivalents and
real estate properties held for future development. Sales, collection of receivables, issuance of promissory
notes and the shift to shorter period placements increased cash and cash equivalent account by 67.23%.
The healthy cash position of the Company has allowed the launching of a new project, Pines Peak Tower
I, and the high completion rates of its on-going condominium projects. In addition, the subsidiary
company, CLDI has completed Manila Residences Bocobo and has purchased a lot, increasing real estate
properties for future development by 8.93%. On the liabilities side, accounts payable and accrued
expenses were also reduced by 30.27%, strengthening its liquidity position with acid test and current ratio
of 1.52:1 and 2.22:1, as compared with 2011 of 1.19:1 and 1.98:1, respectively. Asset-to-liability ratio
and debt-to-equity ratio were at 3.11:1 and 0.37:1 from the previous year of 2.99:1 and 0.34:1,
respectively.
Total stockholders’ equity stood at P
=5.748B, higher by 7.70% as compared with 2011 of P
=5.337B. The
increase was due to net income of P
=530.16M less cash dividends of P
=138.46M plus other adjustments of
=19.30M.
P
Financial Condition/Changes in Financial Condition (2011 vs. 2010)
The Company’s balance sheet remained solid with total assets of P
= 8.020B in 2011, higher than the
previous year's level of P
=7.890B. Cash and cash equivalents increased due to net cash inflows from
operating activities and the shift of investments to shorter period resulting to the reclassification of
account. The Company’s funds were substantially utilized for the construction of condominium projects,
to purchase a prime lot, partially settle loans and notes payable and pay cash dividends. As a result of the
foregoing, the group strengthened its liquidity position with acid test and current ratio of 1.19:1 and
1.98:1 as compared to 2010 of 1.77:1 and 1.07:1, respectively. The decrease in liabilities improved its
solvency position with asset-to-liability ratio and debt-to-equity ratio at 2.99:1 and 0.34:1 compared with
the previous year of 2.64:1 and 0.46:1, respectively.
Results of Operation (2013 vs. 2012)
Revenue from sales reached P
=1.169B as compared to the previous year of P
=1.421B. Although sales of
the subsidiary, CLDI decreased due to low inventory, sales and fast completion of the projects of the
parent company, CDC, contributed significantly to total revenues. The projects of CDC, namely, Makati
Executive Tower IV and Grand Central Residences were in full blast construction which led to their
100.00% and 60.11% completion, and contributed substantially to total revenues. On the other hand,
Pines Peak Tower I, the newest project of CDC, contributed modestly to total sales, as it reached 24.88%
completion in 2013. Meantime, the Company’s other completed projects, Makati Executive Tower III,
Mandaluyong Executive Mansion III steadily contributed to total revenues and provided stable cash flows
as they reached a sell-out rate of 94.59%and 99.00%, respectively at the end of the year. CLDI is selling
the remaining units of Manila Residences Bocobo and Grand Emerald Tower. The Company projects that
sales will further improve when CLDI opens a new project next year.
Other sources of revenues are financial income and rent income. Financial income is primarily composed
of interest income from sale of real estate properties accounting for 21.46% of total revenues. With
respect to lease operations, rent income for the year increased by 13.99% due to increase in units
available for lease. Income from lease operations is expected to increase next year due to the launching of
15
the new BPO hub in the fourth quarter of the year. For other revenues account, the increase was due to
adjustment of the excess of estimated development cost over the actual cost of a completed project of
CLDI.
On the cost side, lower revenues decreased cost of sales and provision for income tax. Although
revenues decreased, operating expenses increased due to adjustments in staff benefits and professional
fees. Increase in other expenses was due to reversal of gross profit recognized in prior years due to
forfeiture/cancellation of sales. On the other hand, financial expenses dropped to P
=26.08M from
=47.64M, due to payment of notes and contracts payable and lower interest rates. Altogether, the
P
Company earned a consolidated net income of P
=519.53M slightly lower from P
=530.16M of the previous
year which translated to earnings per share and return on equity of P
= 0.12 and 8.05% as compared with
last year’s P
=0.12 and 8.14%.
Results of Operation (2012 vs. 2011)
The Company posted a consolidated net income of P
=530.16 from the previous year’s P
=603.43M. Total
revenue reached P
=1.913B from P
=2.098B. The decrease in sales was due to lower inventory level of the
subsidiary company, CLDI. The two projects, Grand Emerald Tower and Manila Residences Bocobo
were sold at 86.50% and 72.52% at the beginning of the year. Nevertheless sales of the remaining
inventory resulted to a sell-out rate of Grand Emerald Tower and Manila Residences Bocobo at 95.22%
and 90.85%, respectively. On the other hand, the parent company’s sales increased by 42.54% due to
sales and percentage of completion. The completed projects, Makati Executive Tower III and
Mandaluyong Executive Mansion III were sold at 91.47% and 92.45%, respectively. In addition, its
ongoing project, Makati Executive Tower IV was 98.36% completed and was sold at 47.37%. Grand
Central Residences and Pines Peak Tower I are the two new projects which are still in the initial stages of
construction thus contributing 17.99% and 2.33% to annual sales.
On the cost side, lower revenues decreased cost of sales and operating expenses. Operating expenses
decreased due to lower personnel and professional fees. Interest expense remained manageable at
=47.64M as compared to the previous year at P
P
=56.57M, due to lower interest rates. Altogether, net
income after tax translated to earnings per share and return on equity of P
=0.12 and 8.14% as compared
with last year’s P
=0.13 and 9.65%.
Results of Operation (2011 vs. 2010)
The Company’s sales of real estate properties increased by 8.25% to P
=1.574B from the previous year of
=1.454B. The sales growth can be attributed to sales and the construction accomplishment of several
P
projects. The Company’s on-going project, Makati Executive Tower IV reached 75.06% completion,
while the subsidiary’s projects, Grand Emerald Tower and Manila Residences Bocobo reached a
completion rate of 100% and 96.36%, respectively. Meantime, the Company’s other completed projects
like the Makati Executive Tower III and Mandaluyong Executive Mansion continued to contribute
modestly to total revenues and provided stable cash flows. Grand Central Residences, the newest
addition, is still in the initial stages of construction. Other sources of revenues are financial income and
rent income. Financial income which is substantially composed of interest income from sale of real
estate properties accounted for 22.82% of total revenues.
On the cost side, the Company remained prudent in managing costs and other disbursements during the
year. Cost of sales and operating expenses increased since these move in tandem with sales. Cost of sales
was recorded at P
= 953.76M in 2011 as compared with P
=965.27B in 2010. Operating expenses also
increased by 19.85% due to higher personnel and professional fees. However, payment of loans and notes
payable eased interest payments resulting to the decline in financial expenses by 20.26%, while lower
taxable income decreased income tax by 17.86%.
Altogether, financial performance for the year 2011 resulted to a net income of P
=603.43M. This translated
to an earnings per share and return on equity of P
=0.13 and 9.65% in 2011 as compared with P
=0.14 and
10.47% in 2010
16
Key Performance Indicators (2013 vs 2012 vs 2011)
Cityland Development Corp. (Consolidated)
Earnings per share
Return on equity
Solvency ratio
Interest rate coverage ratio
Asset to liability ratio
Asset to equity ratio
Debt – equity ratio
Current ratio
Acid – test ratio
City & Land Developers, Inc. (Subsidiary)
Earnings per share
Return on equity
Solvency ratio
Interest rate coverage ratio
Asset to liability ratio
Asset to equity ratio
Debt – equity ratio
Current ratio
Acid – test ratio
Cityplans, Inc. (Subsidiary)
Earnings per share
Return on equity
Solvency ratio
Interest rate coverage ratio
Asset to liability ratio
Asset to equity ratio
Debt – equity ratio
Current ratio
Acid – test ratio
2013
=
P0.12
8.05%
0.26 00.2
27.73
3.97
1.56
0.28
2.50
1.68
2012
=
P0.12
8.14%
0.20
15.59
3.11
1.72
0.37
2.22
1.52
2011
=
P0.13
9.65%
0.23
14.18
2.99
1.75
0.34
1.98
1.19
=
P0.20
11.26%
0.51
51.35
5.55
1.22
0.12
3.39
3.07
=
P0.26
16.02%
0.44
30.22
3.73
1.37
0.16
2.77
2.33
=
P0.33
21.97%
0.41
36.94
2.86
1.54
0.22
2.00
1.26
=
P0.02
0.81%
0.03
-5.16
1.30
-12.45
11.46
=
P0.06
2.60%
0.14
-5.86
1.27
-15.13
14.15
=
P0.07
3.02%
0.15
-5.91
1.23
-22.93
21.09
Manner of Calculations:
Earnings per share
=
Net income attributable to equity holders of the parent
Average number of shares issued & outstanding
Return on equity
=
Net income attributable to equity holders of the parent
Total stockholder's equity, net of non-controlling interests
Solvency ratio
=
Net Income after Tax + Depreciation Expense
Total Liabilities
Interest rate coverage
ratio
=
Net Income Before Tax + Depreciation Expense + Interest Expense
Interest Expense
Asset-to-liability ratio
=
Asset-to-equity ratio
=
Total Assets / Total Liabilities
Total Assets
Stockholder's Equity (net of Net Changes in Fair Value of Investments)
Debt-to-equity ratio
=
Notes and Contracts Payable
Stockholder's Equity (net of Net Changes in Fair Value of Investments)
Current ratio
=
Total Current Assets / Total Current Liabilities
Cash and Cash Equivalents + Short-term Cash Investments +
Acid-test ratio
=
Installment Contracts Receivable, current +
Other Receivables, current
Total Current Liabilities
17
1.
Any Known Trends, Events or Uncertainties (material impact on liquidity)
There are no known trends, events, and uncertainties that have a material effect on liquidity.
2.
Internal and External Sources of Liquidity
Internal sources come from sales of condominiums and real estate projects, collection of installment
receivables, maturing short-term investments, and other sources such as rental income, interest income,
and dividend income. External sources come from commercial papers and promissory notes.
3.
Any Material Commitments for Capital Expenditures and Expected Sources of Funds of such
Expenditures
The estimated development cost of P
=236.02 million as of December 31, 2013 representing the cost to
complete the development of real estate projects sold will be sourced through:
a)
b)
c)
d)
e)
4.
Sales of condominium and real estate projects
Collection of installment receivables
Maturing short-term investments
Issuance of commercial papers and promissory notes
Availment of bank lines (bank lines as of December 31, 2013 amounted to P
=2.515 billion of which
no loan availment was made).
Any Known Trend or Events or Uncertainties (Material Impact on Net Sales or Revenues or Income)
There is no known trend, event, or uncertainties that have a material effect on the net sales or revenues
or income.
5.
Any Significant Elements of Income or Loss that did not arise from Registrants Continuing Operations
There is no significant element of income or loss that did not arise from registrants continuing
operations.
6.
Any Known Trends or Events or Uncertainties (Direct or Contingent Financial Obligation)
There are no events nor any default or acceleration of an obligation that will trigger direct or contingent
financial obligation that is material to the Company.
7.
Any Known Trends or Events or Uncertainties (Material off-balance sheet transactions, arrangements,
obligations and other relationships)
There are no material off-balance sheet transactions, arrangements, obligations (including contingent
obligations), and other relationships of the Company with unconsolidated entities or other persons
created during the reporting period.
8.
Causes for any Material Changes from Period to Period in One or More Line of the Registrant's
Financial Statements
Financial Condition (2013 vs. 2012)
a. Decrease in Cash and Cash Equivalents was substantially due to shift of placements to Short-term
Cash Investments.
b. Increase in Short-term Cash Investments was due to additional placements.
c. Decrease in Investment in Trust Funds was due to maturity of plans.
d. Decrease in Installment Contracts Receivable was due to collections.
e. Increase in Other Receivables was due to increase in advances from affiliates
f. Decrease in Real Estate Properties for Sale was due to sales.
g. Decrease in Real Estate Properties Held for Future Development was due to reclass of lot cost of
the newly launched BPO (business process outsourcing office) to Investment Properties-net.
h. Increase in Investment Properties was due to set up of the new BPO office and reclassification of
lot cost to investment property.
18
i.
j.
k.
l.
m.
n.
o.
p.
q.
r.
s.
t.
u.
Decrease in Property and Equipment was due to sale of transportation equipment and depreciation.
Increase in Other Assets was due to increase in retirement plan assets.
Decrease in Accounts Payable and Accrued Expenses was due to payment.
Decrease in Notes and Contracts Payable was due to payment.
Increase in Income Tax Payable was due to higher taxable income.
Increase in Pre-need and Other reserves was due to decrease in earnings of trust fund.
Decrease in Deferred Tax Liabilities was due to lower financial income as compared to taxable
income.
Increase in Capital Stock was due to stock dividends.
Decrease in Net Changes in Fair Value of Available-for-sale Investment was due to decrease in
market value of AFS.
Increase in Retained Earnings was due to net income less dividends and other adjustments.
Increase in Accumulated Re-measurement on Defined Benefit Plan Reserve was due to increase in
value of retirement asset.
Increase in Treasury Stock was due to increase in market value of investments of CPI to CDC.
Increase in Non-controlling Interest was due to net income of subsidiary.
Financial Condition (2012 vs. 2011)
a. Increase in Cash and Cash Equivalents was due to sales, collection of receivables and shift of
placements of short-term cash investments to shorter period.
b. Decrease in Short-term Cash Investments was due to maturity of placements.
c. Decrease in Investment in Trust Funds was due to maturity of plans.
d. Decrease in Installment Contracts Receivable was due to collections.
e. Decrease in Other Receivables was due to decrease in advances to customers.
f. Decrease in Real Estate Properties for Sale was due to sales.
g. Increase in Real Estate Properties Held for Future Development was due to purchase of a lot.
h. Decrease in Investment Properties was due to shift of lot cost to inventory available for sale.
i. Decrease in Property and Equipment was due to depreciation.
j. Increase in Other Assets was due to input vat of the new property.
k. Decrease in Accounts Payable and Accrued Expenses was due to payment.
l. Increase in Notes and Contracts Payable was due to issuance of promissory note.
m. Increase in Income Tax Payable was due to higher taxable income.
n. Decrease in Retirement Benefits Liability was due to increase in value of retirement benefits.
o. Decrease in Deferred Tax Liabilities was due to lower financial income as compared to taxable
income.
p. Increase in Capital Stock was due to stock dividends.
q. Increase in Net Change on Fair Value of Available-for-sale Financial Assets was due to increase in
market value of AFS.
r. Increase in Accumulated Re-measurement on Defined Benefit Plan Reserve was due to increase in
value of retirement asset.
s. Increase in Retained Earnings was due to Net income less cash dividends.
t. Increase in Treasury Stock was due to increase in market value of investments of CPI to CDC.
u. Increase in Non-Controlling Interest was due to net income of subsidiaries.
Financial Condition (2011 vs. 2010)
a. Increase in Cash and Cash Equivalents was due to reclassification of investments to shorter period.
b. Decrease in Short-term Cash Investments was due to maturity of investments.
c. Decrease in Investments in Trust Funds was due to maturity and termination of plans.
d. Increase in Other Receivables was due to increase in advances to customers.
e. Increase in Real Estate Properties held for Future Development was due to the purchase of a lot.
f. Decrease in Property and Equipment was primarily due to depreciation.
g. Increase in Other Assets was due to increase in electric meter deposits.
h. Increase in Accounts Payable and Accrued Expenses was due to developments costs, trade
payables and accrued director’s fee.
i. Decrease in Notes and Loans Payable was due to payment.
j. Decrease in Deferred tax liabilities was due to lower accounting income as compared with taxable
income.
k. Increase in Capital Stock was due to 20% stock dividends.
19
l. Decrease in Retained Earnings was due to stock and cash dividends.
m. Increase in Non-controlling Interests was due to net income of subsidiaries.
Results of Operations (2013 vs. 2012)
a. Decrease in Sales of Real Estate was due to low inventory of the subsidiary company.
b. Decrease in Financial Income was due to decrease in interest income from real estate properties as
a result of lower level of receivable.
c. Increase in Rent Income was due to increase in units available for lease.
d. Increase in Other Revenues was due to the reversal of estimated development cost over the actual
cost of a completed project.
e. Decrease in Cost of Sales was due to lower sales.
f. Increase in Operating Expenses was due to adjustment in staff benefits, professional fee and
miscellaneous income.
g. Decrease in Financial Expenses was due to lower interest rates and partial settlement of notes and
contracts payable.
h. Increase in Provision for Income Tax was due to higher taxable income.
i. Decrease in Net Income was due to lower revenues and higher provision for income tax.
Results of Operations (2012 vs. 2011)
a. Decrease in Sales of Real Estate Properties was due to the lower inventory level of subsidiary.
b. Decrease in Financial Income was due to decrease in interest income from real estate properties.
c. Increase in Rent Income was due to increase in units available for rent.
d. Decrease in Cost of Sales was due to lower sales.
e. Decrease in Operating Expenses was due to lower personnel expenses and professional fees.
f. Decrease in Financial Expenses was due to lower interest rates.
g. Increase in Provision for Income Tax was due to higher taxable income.
h. Decrease in Net Income was due to lower revenues and higher provision for income tax.
Results of Operations (2011 vs. 2010)
a.
b.
c.
d.
e.
f.
g.
Increase in Revenue on Sales of Real Estate was due to sales and high completion rate of projects.
Decrease in Financial Income was due to lower interest income from sales of real estate properties.
Increase in Rent Income was due to increase in units available for lease.
Decrease in Other Income was due to decrease in miscellaneous income.
Increase in Operating Expenses was due to higher personnel expenses, professional fee,
membership dues and rent expense.
Decrease in Financial Expenses was due to termination of loans and notes payable.
Decrease in Provision for Income Tax was due to lower taxable income.
Information On Independent Accountant
Audit and Audit-Related Fees
Tax Fees
All Other Fees
Total
External Audit Fees
2013
2012
=720,000
P
=840,000
P
----=720,000
P
=840,000
P
The Audit Committee’s approval policies and procedures consist of:
a.
Discussion with the external auditors of the Audited Financial Statements.
b.
Recommendation to the Board of Directors for the approval and release of the Audited Financial
Statements.
20
Item VII.
Financial Statements
The consolidated financial statements and schedules listed in the accompanying Index to Financial
Statements and Supplementary Schedules (page 30) are filed as part of this Form 17-A (pages 34 – 101).
Item VIII.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
There is no change in and disagreements with accountants on accounting and financial disclosure.
PART I I I - CONTROL AND COMPENSATION INFORMATION
Item IX.
Directors and Executive Officers
1) Identify Directors and Executive Officers:
Name
Citizenship
Position(s)
Term
currently/ previously held
of
with the Registrant
Office
(Year)
Chairman of the Board /
1
Independent Director
Period
of
Service
Age
Family
Relationship
06/13/01 to present
92
---
Washington SyCip
American
Stephen C. Roxas
Filipino
Chairman of the
Executive Committee/
Director
1
07/01/97 to present
72
Husband of Helen Roxas,
brother of Grace Liuson
and Alice Gohoc
Andrew I. Liuson
Filipino
Vice Chairman of the Board
/ Director
1
01/16/08 to present
69
Husband of Grace Liuson
Grace C. Liuson
Filipino
Deputy Vice Chairman of
the Board / Director
1
02/01/11 to present
68
Wife of Andrew Liuson
and sister of Stephen Roxas
and Alice Gohoc
Josef C. Gohoc
Filipino
President / Director
---
02/01/11 to present
01/14/11 to present
43
Nephew of Stephen Roxas
and Grace Liuson; son of
Alice Gohoc
Peter S. Dee
Filipino
Independent Director
1
1982 to present
72
---
Sabino R. Padilla, Jr.
Filipino
Director
1
2006 to present
78
---
Alice C. Gohoc
Filipino
Director
1
1996 to present
71
Sister of Stephen Roxas
and Grace Liuson
Helen C. Roxas
Filipino
Director
1
1979 to present
64
Wife of Stephen Roxas
Rufina C. Buensuceso
Filipino
Executive Vice-President
---
02/01/11 to present
64
---
Emma A. Choa
Filipino
---
02/01/11 to present
53
---
Eden F. Go
Filipino
Senior Vice President /
Treasurer
Vice President
---
01/16/08 to present
61
---
Rudy Go
Filipino
Vice President
---
08/16/07 to present
54
---
Melita M. Revuelta
Filipino
Vice President
---
01/16/08 to present
55
---
Romeo E. Ng
Filipino
Vice President
---
01/10/05 to present
52
---
Melita L. Tan
Filipino
Vice President
---
02/16/04 to present
53
---
Josie T. Uy
Filipino
Vice President-Manila Br
---
02/16/04 to present
58
---
Emma G. Jularbal
Filipino
Vice President – Legal
Affairs / Corporate
Secretary
---
07/01/01 to present
57
---
21
a) Washington SyCip
Name of Office
Present position in other private institutions:
Asian Eye Institute
Belle Corporation
Century Properties Group Inc.
Commonwealth Foods, Inc.
First Philippine Holdings Corporation
Highlands Prime, Inc.
Lopez Holdings Corporation
Lufthansa Technik Philippines, Inc.
MacroAsia Corporation
Position
Date Assumed
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Chairman
Chairman
September 22, 2000
July 1, 1996
July 11, 2011
June 23, 2000
November 10, 1997
January 4, 2002
April 30, 1997
July 12, 2000
November 5, 1996
Metro Pacific Investment Corporation
Director
Philippine Equity Management Inc.
Philippine Airlines, Inc
Philippine Hotelier, Inc.
Philippine National Bank
Philamlife, Inc.
The PHINMA Group
Realty Investment, Inc
Stateland Inc.
State Properties Corporation
Steag State Power, Inc.
Independent Director
Independent Director
Director
Independent Director
Director
Independent Director
Independent Director
Independent Director
Independent Director
Chairman
Chairman
August 4, 2011
to May 25,2012
May 25, 2012
October 26, 1998
February 11, 1997
September 3, 1997
December 8, 1999
April 26, 2001
September 12, 1996
April 28, 2005
July 1, 1996
April 19, 1999
March 26, 2004
b) Stephen C. Roxas
Name of Office
Present position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
Cityplans, Incorporated
c)
Position
Director / Chairman of the Excom
Director / Chairman of the Board
Director / President
Date Assumed
July 1997
July 1997
October
1988
Andrew I. Liuson
Name of Office
Present position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
Cityplans, Incorporated
Past position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
Cityplans, Incorporated
Position
Date Assumed
Director / Vice Chairman of Board
Director / Vice Chairman of Board
Director / Chairman of the Board
January 16, 2008
January 16, 2008
September 2006
Director / President
Director / President
Director / Exec. Vice Pres. / Vice
Chairman of the Board
July 1997 - Feb. 2008
July 1997 - Feb. 2008
October 1988
d) Grace C. Liuson
Name of Office
Present position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
Cityplans, Incorporated
Position
Director / Deputy Vice Chairman of
the Board
Director / Deputy Vice Chairman of
the Board
Director / Exec. Vice President
Date Assumed
February 1, 2011
February 1, 2011
September 2006
22
Past position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
Cityplans, Incorporated
e)
f)
Director / President
Director / President
Director / Senior Vice Pres.
Feb. 2008 – Jan. 2011
Feb. 2008 – Jan. 2011
October 1988
Josef C. Gohoc
Name of Office
Present position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
Position
Date Assumed
Director / President
Director / President
Jan. 2011 / Feb. 2011
Jan. 2011 / Feb. 2011
Past position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
Senior Vice President / Treasurer
Senior Vice President / Treasurer
Jan. 2008 – Jan. 2011
Jan. 2008 – Jan. 2011
Sabino R. Padilla, Jr.
Name of Office
Present position in other private institutions:
Padilla Law Office
Apostolic Nunciature to the Phils.
Catholic Bishops Conference of the
Philippines (CBCP) and various
archdiocese, dioceses, & prelatures
Assoc. of Major Religious Superiors of the
Phil.
Philippine Association of Religious
Treasurers
Grace Christian College
Various Catholic religious orders, societies,
& congregations for men and women
(Dominicans, Augustinian, Franciscan,
Columbans, Religious of the Virgin
Mary, Daughters of Charity, Carmelite
Sisters)
Bank of the Philippine Islands and its subs.
Ayala Land, Inc
State Investment Trust, Inc
Stateland Investment, Inc
Mother Seton Hospital
Our Lady of Lourdes Hospital
St. Paul Hospital, Cavite
Various Catholic universities, colleges, and
schools
Various Catholic universities, colleges,
schools and foundations
Cityland Development Corporation
Position
Partner
Legal Counsel
Legal Counsel
Duration
Past 5 years up to present
- do - do -
Legal Counsel
- do -
Legal Counsel
- do -
Legal Counsel
Legal Counsel
- do - do -
Legal Counsel
Legal Counsel
Legal Counsel
Chairman of the Board /
Legal Counsel
Legal Counsel
Legal Counsel
Legal Counsel
Legal Counsel
- do - do - do - do -
Trustee
- do -
Director
2006 to present
- do - do - do - do -
g) Peter S. Dee
Name of Office
Present position in other private institutions:
Asean Finance Corporation, Ltd.
Alpolac, Inc.
Bankers’ Association of the Philippines
Position
Director
Director
Director
Duration
Past 5 years up to present
- do - do -
23
China Banking Corp.
CBC Forex Corporation
CBC Insurance Brokers, Inc.
CBC Properties & Computer Center, Inc.
GDSK Development Corp.
Hydee Mgt. & Resources Corp.
Kemwerke, Inc.
Silver Falcon Insurance Agency
Makati Curbs Holdings Corporation
Great Expectation Holdings, Inc.
Commonwealth Foods, Inc.
The Big D Holdings Corporation
Cityplans, Incorporated
Cityland Development Corporation
Cityland, Inc.
Director / President and CEO
Director / Chairman of the Board
Chairman of the Board
Director / President
Director
Director
Director
Director
Director
Director / Chairman; President
Director
Director / Chairman; President
Independent Director
Independent Director/
Member – Audit Committe
Independent Director
- do - do - do - do - do - do - do - do - do - do - do - do - do - do - do - do -
h) Alice Gohoc
Name of Office
Present position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
i)
Director
Director
Date Assumed
1996
September 2001
Helen C. Roxas
Name of Office
Present position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
Cityplans, Incorporated
Good Tidings Foundation Inc
MGC New Life Christian Academy
j)
Position
Position
Director
Director
Director
Treasurer
Board of Trustee
Date Assumed
1988
January 1997
October 1988
1992
1992
Rufina C. Buensuceso
Name of Office
Present position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
Cityplans, Incorporated
Position
Executive Vice President
Executive Vice President
Comptroller
Date Assumed
February 2011
February 2011
September 1990
k) Emma A. Choa
Name of Office
Present position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
l)
Position
Senior Vice President / Treasurer
Senior Vice President / Treasurer
Date Assumed
February 2011
February 2011
Eden F. Go
Name of Office
Present position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
Position
Vice President
Vice President
Date Assumed
January 2008
January 2008
24
m) Rudy Go
Name of Office
Present position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
Position
Vice President
Vice President
Date Assumed
August 2007
August 2007
n) Melita M. Revuelta
Name of Office
Present position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
Position
Vice President
Vice President
Date Assumed
January 2008
January 2008
o) Romeo E. Ng
Name of Office
Present position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
Position
Vice President
Vice President
Date Assumed
January 2005
January 2005
p) Josie T. Uy
Name of Office
Present position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
Position
Vice President – Manila Branch
Vice President – Manila Branch
Date Assumed
February 2004
February 2004
q) Melita L. Tan
Name of Office
Present position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
r)
Position
Vice President
Vice President
Date Assumed
February 2004
February 2004
Emma G. Jularbal
Name of Office
Present position in other private institutions:
City & Land Developers, Inc.
Cityland Incorporated
Position
Vice President – Legal Affairs /
Corporate Secretary
Vice President – Legal Affairs /
Corporate Secretary
Date Assumed
July 2001 / January
2013
July 2001 / July
1997
2) Identify Significant Employees
There is no identifiable significant employee because the Company expects each employee to do his /
her share in achieving the corporation’s set goal.
3) Involvement in Certain Legal Proceedings of Any of the Directors and Executive Officers, during the
past five years:
During the past five years, there is no involvement in certain legal proceedings of any of the directors
and executive officers in any court or administrative agency of the government.
a.
b.
c.
None of them has been involved in any bankruptcy petition.
None of them has been convicted by final judgment in any criminal proceeding or being
subject to a pending criminal proceeding, both domestic and foreign.
None of them has been subjected to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, domestic or foreign,
25
permanently or temporarily enjoining, barring, suspending or otherwise limiting their
involvement in any type of business, securities, commodities or banking activities.
None of them has been found by a domestic or foreign court of competent jurisdiction (in a
civil action), the Commission or comparable body, or a domestic or foreign exchange or other
organized trading market or self-regulatory organization, to have violated a securities or
commodities law or regulation.
Item X. Executive Compensation
Executive Compensation Summary Table
Name
Position
Josef C. Gohoc
CEO / President
Rufina C. Buensuceso Executive Vice Pres.
Josie T. Uy
VP - Manila
Emma G. Jularbal
VP - Legal
Patrocinio M. Pablo
AVP – RDD
Salaries
Bonus
Others
Total (Top 5)
Salaries
Bonus
Others
All officers & directors as a group unnamed
Grand Total
2012
x
x
x
x
x
=3,447,576.00
P
4,015,034.00
1,959,003.00
= 9,421,613.00
P
=16,420,252.00
P
10,803,844.00
13,099,008.00
=40,323,104.00
P
= 49,744,717.00
P
2013
x
x
x
x
x
=5,227,681.00
P
10,373,625.00
3,578,149.00
= 19,179,455.00
P
=17,097,574.94
P
9,049,834.00
1,322,003.00
= 27,469,411.94
P
= 46,648,866.94
P
2014 (estimate)
x
x
x
x
-=6,330,556.00
P
1,682,492.00
30,709.00
=8,043,757.00
P
=17,424,355.00
P
4,408,606.00
55,993.00
= 21,888,954.00
P
= 29,932,711.00
P
The Company has no standard arrangements with regards to the remuneration of its directors. In 2013 and
2012, the Board of Directors received a total of P
=15,317,088.41 and P
=12,173,505.70 respectively, including a
total per diem of P
=108,000.00 per annum for each director for the board meetings attended, as part of the
compensation under all officers and directors as a group unnamed. Moreover, the Company has no standard
arrangement with regards to the remuneration of its existing officers aside from the compensation received nor
any other arrangement with employment contracts, compensatory plan and stock warrants or options.
Item XI.
a.
Security Ownership of Certain Beneficial Owners and Management
Security Ownership of Record and Beneficial Owner owning more than 5% of the outstanding capital stock
of the Registrant as of December 31, 2013:
Title of
Name, Address &
Class
Relationship with Issuer
Unclassified Cityland Incorporated *
common 2F Cityland Condo 10 T1
shares
156 H.V. Dela Costa St., Ayala
North, Makati City
- principal stockholder
Unclassified Stephen C. Roxas
common 1392 Campañilla St.,
shares
Dasmariñas Village, Makati
- director / chairman of
executive committee
Beneficial Owner &
Relationship
Lincoln
Roxas
Jefcon, Inc
Obadiah
Inc.
Immediate family
sharing the same
household
Corporation of w/c
record owner is a
controlling
shareholder
Filipino
No. of Shares
Held
1,715,072,691
%
50.42%
Filipino
250,892,400
7.38%
Citizenship
26
Unclassified Grace C. Liuson
common 2072 Lumbang cor. Cypress
shares
Dasmariñas Village, Makati
- director / deputy vice
chairman of the board
*
- NA -
Filipino
181,512,066
5.34%
The following directors direct the voting or disposition of the shares held by Cityland, Inc.: (Beneficial
Owners)
Name
Position
Stephen C. Roxas
Chairman of the Board
Andrew I. Liuson
Vice Chairman of the Board
Grace C. Liuson
Deputy Vice Chairman of the Board
Josef C. Gohoc
President
b.
No change of control in the corporation has occurred since the beginning of its last fiscal year.
c.
Security Ownership of Management as of December 31, 2013:
Title of Class
Directors:
Unclassified
common shares
Unclassified
common shares
Unclassified
common shares
Unclassified
common shares
Unclassified
common shares
Unclassified
common shares
Unclassified
common shares
Unclassified
common shares
Unclassified
common shares
Executive Officers:
Unclassified
common shares
Unclassified
common shares
Unclassified
common shares
Unclassified
common shares
Unclassified
common shares
Unclassified
common shares
Unclassified
common shares
Unclassified
common shares
Unclassified
common shares
Unclassified
common shares
Note:
Name of Beneficial Owner / Position
Washington SyCip
Independent Director / Chairman of the
Board
Stephen C. Roxas
Director / Chairman of Excom
Andrew I. Liuson
Director / Vice Chairman of the Board
Grace C. Liuson
Director / Deputy Vice Chairman of the
Board
Josef C. Gohoc
Director / President
Peter S. Dee
Independent Director
Sabino R. Padilla, Jr.
Director
Alice C. Gohoc
Director
Helen C. Roxas
Director
Rufina C. Buensuceso
Executive Vice President
Emma A. Choa
Senior Vice President / Treasurer
Eden F. Go
Vice President
Rudy Go
Vice President
Melita M. Revuelta
Vice President
Romeo E. Ng
Vice President
Melita L. Tan
Vice President
Josie T. Uy
Vice President – Manila Branch
Emma G. Jularbal
Vice President- Legal / Corporate
Secretary
Catherine Grace T. Wong
Assistant Corporate Secretary
No. of Shares
Held
936
Nature of
Ownership
Direct
Citizenship
%
American
--
287,696,891
Direct / Indirect
Filipino
8.457%
123,794,525
Direct / Indirect
Filipino
3.639%
181,512,066
Direct
Filipino
5.336%
Direct / Indirect
Filipino
1.463%
434,981
Direct
Filipino
0.013%
62,136
Direct
Filipino
0.002%
Direct / Indirect
Filipino
3.723%
Direct
Filipino
1.520%
4,581,423
Direct / Indirect
Filipino
0.135%
2,297,496
Direct
Filipino
0.068%
296,197
Direct
Filipino
0.009%
1,550,442
Direct
Filipino
0.046%
144,298
Direct
Filipino
0.004%
2,114,017
Direct
Filipino
0.062%
520,349
Direct
Filipino
0.015%
3,785
Direct
Filipino
--
3,000
Direct
Filipino
--
3,844,108
Direct
Filipino
0.113%
49,775,084
126,635,397
51,710,464
The above security ownership of management consists of Unclassified Common Shares
amounting to P
=836,977,595 which is equivalent to 24.60%.
27
d.
The Corporation knows no person holding more than 5% of common shares under a voting trust or similar
agreement.
Item XII.
Certain Relationships and Related Transactions
1) Transactions of Registrants with Any Director, Executive Officer of the Registrant and Any Nominee
for Election as a Director
There is no transaction (or series of similar transactions) with or involving the registrant or any of each
subsidiary with a director, executive officer, and a nominee for election as a director.
2) Related Party Transactions
The Company and its subsidiaries, in their regular conduct of business, have entered into transactions
with associates and related parties principally consisting of advances, reimbursement of expenses, and
purchase and sale of real estate properties. These transactions to and from related parties are made on
an arm’s length basis and at current market prices at the time of the transaction.
There is an existing management contract with Cityland Incorporated (CI), its parent company, wherein
CI provides management services for the business of the Registrant. The agreement is for a period of
five years renewable automatically for another five years unless either party notifies the other six
months prior to expiration. The management fee is based on a certain percentage of net income as
mutually agreed upon by both parties. The management fees for 2013, 2012 and 2011 were waived by
CI. There are no conditions attached to the waiver of these management fees.
There were no transactions with promoters in the past five years.
The Registrant or its related parties have no relationship on parties that fall outside the definition of
related parties that enables to negotiate terms of material transactions that may not be available from
others or independent parties on an arm’s length basis. Moreover, the Registrant has no transactions
with former senior management or persons that would result in negotiations of terms that are more or
less favorable than those available on an arm’s length basis from clearly independent parties that are
material to the Registrant’s financial position or financial performance.
Please refer to Note 25 – Related Parties Transactions of the Notes to Consolidated Financial
Statements of the 2013 Audited Financial Statements which is incorporated in the Index to Financial
Statements and Supplementary Schedules.
3) Parent of the Registrant
Cityland, Inc. owns 50.42% of the outstanding capital stock of the Registrant.
28
PART IV – EXHIBITS AND SCHEDULES
Item XIII.
Exhibits and Reports on SEC Form 17-A
A. Exhibits - See accompanying Index to Exhibits (page 116).
The following exhibit is filled as a separate section of this report:
(18)
Majority Owned Subsidiaries of the Registrant
The other exhibits, as indicated in the Index to Exhibits are either not applicable to the Company or require
no answer.
B. Reports on SEC Form 17-C
Date Filed
01/25/2013
01/29/2013
03/21/2013
04/22/2013
04/26/2013
06/05/2013
06/06/2013
06/21/2013
07/02/2013
08/22/2013
09/10/2013
11/25/2013
12/18/2013
Events Reported
Sworn Certification of Compliance Officer on the Company’s compliance with the Manual
of Corporate Governance (SEC Form MCG- 2002)
Sworn Certification of Corporate Secretary on the Attendance of Directors for the year
2012
Authorization for Issuance of Audited Financial Statements 2012
Notice of Annual Stockholders’ Meeting
Declaration of 5% Stock Dividends
Annual Stockholders’ Meeting and Declaration of Cash Dividends
Organizational Meeting of the Board of Directors
Topping off Ceremony of Grand Central Residences
Appointment of Ms. Catherine T. Wong as Assistant Corporate Secretary
Press Release of CityNet 1
BOD Approval for Renewal of STCPs
SEC Releases the Certificate of Permit to Offer Securities for Sale amounting to P
=1.4
Billion
SEC Releases the Certificate of Filing of Amended Articles of Incorporation (Amending
the Article IV by shortening the term of its existence, thereby dissolving the Corporation)
of Asian City and Land Development Corporation, a subsidiary of the Company.
30
CITYLAND DEVELOPMENT CORPORATION
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES
FORM 17-A, Item 7
Page No.
Financial Statements
Statement of Management’s Responsibility for Financial Statements
Report of Independent Public Accountant
Balance Sheets as of December 31, 2013, 2012 and 2011
Statements of Income for the years ended December 31, 2013, 2012 and 2011
Statements of Comprehensive Income for the years ended December 31, 2013, 2012 and 2011
Statements of Changes in Stockholders’ Equity for the years ended December 31, 2013, 2012 and 2011
Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011
Notes to Financial Statements
Supplementary Schedules
Report of Independent Public Accountants on Supplementary Schedules
Index to the Financial Statements and Supplementary Schedules
Schedule I.
Supplementary Schedules Required by Annex 68-E
A. Financial Assets
B. Amounts Receivable from Directors, Officers, Employees, Related parties and Principal
Stockholders (Other than Related Parties)
C. Amounts Receivable from Related Parties which are Eliminated during Consolidation of
Financial Statements
D. Intangible Assets – Other Assets
E. Long-Term Debt
F. Indebtedness to Related Parties
G. Guarantees of Securities of Other Issuers
H. Capital Stock
Schedule II.
Schedule of Retained Earnings Available for Dividend Declaration
Schedule III. Map of the relationships of the companies within the group (for investment houses that
are part of a conglomerate; Part 1,4J
Schedule IV. Schedule of all effective standards and interpretations (Part 1, 4J)
Schedule V. Schedule of Financial soundness indicators
Schedule VI. Schedule of Gross and Net Proceeds of Short-term Commercial Papers (STCPs) Issued
31
32-33
34
35
36
37-38
39-40
41-101
102
103
104
**
106
**
**
**
**
106
107
108
109-112
113
114-115
** These schedules, which are required by Part IV(e) of RSA Rule 48, have been omitted because they are
either not required, not applicable or the information required to be presented is included in the
Company's financial statements or the notes to financial statements.
34
CITYLAND DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
2013
ASSETS
Cash and Cash Equivalents (Note 4)
Short-term Cash Investments (Note 4)
Investments in Trust Funds (Note 5)
Installment Contracts Receivable (Note 6)
Other Receivables (Note 7)
Real Estate Properties for Sale
(Notes 8 and 15)
Real Estate Properties Held for Future
Development (Note 9)
Investment Properties (Notes 10 and 15)
Property and Equipment (Note 11)
Other Assets (Notes 12 and 22)
TOTAL ASSETS
LIABILITIES AND EQUITY
Liabilities
Accounts Payable and Accrued Expenses
(Notes 13 and 25)
Notes and Contracts Payable (Note 14)
Income Tax Payable
Retirement Benefits Liability
Pre-need and Other Reserves (Note 5)
Deferred Income Tax Liabilities - net (Note 24)
Total Liabilities
Equity
Attributable to equity holders of the Parent Company
Capital stock - P
=1 par value (Note 15)
Authorized - 4,000,000,000 shares in 2013
and 2012 and 3,000,000,000 in 2011
Issued - 3,403,786,340 shares in 2013 held
by 702 equity holders, 3,241,793,886
shares in 2012 held by 719 equity
holders, and 2,947,261,781 shares in
2011 held by 746 equity holders
Additional paid-in capital
Retained earnings (Notes 8, 10, 11 and 15)
Net changes in fair values of available-forsale financial assets (Note 12)
Accumulated re-measurement on defined
benefit plan (Note 2)
Treasury stock - 3,921,874, 3,827,401,
3,655,633 shares in 2013, 2012 and
2011, respectively, at cost (Note 15)
Non-controlling Interests (Note16)
Total Equity
TOTAL LIABILITIES AND EQUITY
December 31,
2012
(As restated,
Note 2)
January 1,
2012
(As restated,
Note 2)
P
= 660,010,397
2,053,350,000
36,512,483
1,606,674,422
53,814,548
=2,397,757,053
P
307,600,000
41,079,341
1,960,431,150
50,287,767
=1,433,826,099
P
507,750,000
45,691,673
2,147,940,019
52,235,624
1,432,346,524
1,470,772,832
1,591,546,671
1,096,213,374
1,190,731,848
26,666,879
40,993,812
P
= 8,197,314,287
1,288,400,125
868,508,858
42,924,285
42,110,089
=8,469,871,500
P
1,182,830,001
986,036,006
55,395,091
16,291,073
=8,019,542,257
P
P
= 227,263,014
1,470,358,464
115,829,551
=482,626,177
P
1,839,294,867
43,085,655
–
–
52,625,401
198,375,533
2,064,451,963
47,317,197
309,435,385
2,721,759,281
=692,124,146
P
1,566,460,772
26,865,178
4,621,401
46,502,391
345,943,582
2,682,517,470
3,403,786,340
7,277,651
1,894,148,244
3,241,793,886
7,277,651
1,718,165,151
2,947,261,781
7,277,651
1,695,116,815
1,586,037
1,770,510
521,418
(18,831,090)
(15,435,630)
(26,553,360)
(31,130,586)
5,256,836,596
876,025,728
6,132,862,324
P
= 8,197,314,287
(31,172,734)
4,922,398,834
825,713,385
5,748,112,219
=8,469,871,500
P
(32,405,913)
4,591,218,392
745,806,395
5,337,024,787
=8,019,542,257
P
See accompanying Notes to Consolidated Financial Statements.
35
CITYLAND DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
2013
REVENUE
Sales of real estate properties
Financial income (Note 20)
Rent income (Note 10)
Other income (Note 22)
Years Ended December 31
2012
2011
(As restated,
(As restated,
Note 2)
Note 2)
P
= 1,168,719,804
369,098,980
32,440,172
149,816,279
1,720,075,235
=1,421,385,193
P
441,901,868
28,458,124
21,263,447
1,913,008,632
=1,574,293,008
P
478,693,976
23,077,618
21,515,652
2,097,580,254
640,070,218
382,030,316
26,078,104
25,096,676
1,073,275,314
852,994,651
338,496,572
47,641,893
18,389,043
1,257,522,159
953,756,046
363,128,222
56,570,373
17,317,999
1,390,772,640
INCOME BEFORE INCOME TAX
646,799,921
655,486,473
706,807,614
PROVISION FOR INCOME TAX
(Note 24)
127,274,208
125,330,305
103,380,902
P
= 519,525,713
=530,156,168
P
=603,426,712
P
P
= 423,260,092
96,265,621
P
= 519,525,713
=400,865,344
P
129,290,824
=530,156,168
P
=443,010,407
P
160,416,305
=603,426,712
P
P
= 0.12
=0.12
P
=0.13
P
EXPENSES
Cost of real estate sales (Note 8)
Operating expenses (Note 17)
Financial expenses (Note 21)
Other expenses (Note 22)
NET INCOME
Attributable to:
Equity holders of the parent
Non-controlling interests
BASIC/DILUTED EARNINGS PER
SHARE (Note 29)
See accompanying Notes to Consolidated Financial Statements.
36
CITYLAND DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
2013
NET INCOME
P
= 519,525,713
OTHER COMPREHENSIVE INCOME
(LOSS)
Other comprehensive income to be reclassified
to profit or loss in subsequent periods:
Changes in fair value of available-for-sale
financial assets (Note 12)
Other comprehensive loss not to be reclassified to
profit or loss in subsequent periods:
Re-measurement gain (loss) on defined
benefit obligation (Note 23)
Income tax effect
TOTAL COMPREHENSIVE INCOME
Attributable to:
Equity holders of the parent
Non-controlling interests
(498,348)
(5,431,275)
1,629,383
(4,300,240)
2012
(As restated,
Note 2)
2011
(As restated,
Note 2)
=530,156,168
P
603,426,712
1,631,027
16,353,714
(4,906,114)
13,078,627
(2,050)
(30,386,612)
9,115,984
(21,272,678)
P
= 515,225,473
=543,234,795
P
=582,154,034
P
P
= 419,680,159
95,545,314
P
= 515,225,473
=413,232,166
P
130,002,629
=543,234,795
P
=422,605,571
P
159,548,463
=582,154,034
P
See accompanying Notes to Consolidated Financial Statements.
37
CITYLAND DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011
Capital
Stock
(Note 15)
Additional
Paid-in
Capital
Net Changes
in Fair Values of
Available-for-sale
Retained Earnings
financial assets
(Note 15)
(Note 12)
Accumulated
Re-measurement
on Defined
Benefit Plan
(Note 2)
Treasury
Stock
(Note 15)
BALANCES AT JANUARY 1, 2011, AS PREVIOUSLY
REPORTED
Change in accounting policy for employee benefits (Note 2)
P
=2,456,374,741
–
P
=7,277,651
–
P
=1,844,992,886
14,985,260
P
=512,786
–
P
=–
(6,139,892)
(P
= 32,259,775)
–
BALANCES AT JANUARY 1, 2011, AS RESTATED
Total comprehensive income, as previously reported
Change in accounting policy for employee benefits (Note 2)
2,456,374,741
–
–
7,277,651
–
–
1,859,978,146
441,337,900
1,672,507
512,786
8,632
–
(6,139,892)
–
(20,413,468)
(32,259,775)
–
–
–
–
443,010,407
8,632
(20,413,468)
–
–
2,871,517
–
–
–
2,794,372
–
490,887,040
–
–
–
–
–
–
–
–
–
BALANCES AT DECEMBER 31, 2011, AS RESTATED
BALANCES AT DECEMBER 31, 2011, AS
PREVIOUSLY REPORTED
Change in accounting policy for employee benefits (Note 2)
Total comprehensive income, as restated
Transfer of deferred tax liability on deemed cost adjustment of
property and equipment absorbed through depreciation
Transfer of deferred tax liability on deemed cost adjustment of
properties realized through sale
Parent Company shares of stock held by CPI’s investments in
trust fund
Stock dividends - 20%
Fractional shares
Cash dividends - P
=0.05 per share
Cash dividends declared by subsidiaries
Cash dividends received by CPI on Parent Company shares of
stock
BALANCES AT DECEMBER 31, 2011, AS RESTATED
Total comprehensive income, as previously reported
Change in accounting policy for employee benefits (Note 2)
Total comprehensive income, as restated
(Forward)
Total
P
=4,276,898,289
8,845,368
Non-controlling
Interests
Total
P
=625,244,685
(23,534)
P
=4,902,142,974
8,821,834
4,285,743,657
441,346,532
(18,740,961)
625,221,151
160,485,791
(937,328)
4,910,964,808
601,832,323
(19,678,289)
–
422,605,571
159,548,463
582,154,034
–
–
2,871,517
–
2,871,517
–
–
–
2,794,372
–
2,794,372
–
(490,887,040)
(318)
(122,721,840)
–
–
–
–
–
–
–
–
–
–
–
(146,138)
–
–
–
–
–
71,571
–
–
–
71,571
–
71,571
P
=2,947,261,781
P
=7,277,651
P
=1,695,116,815
P
=521,418
(P
= 26,553,360)
(P
= 32,405,913)
P
=4,591,218,392
P
=745,806,395
P
=5,337,024,787
P
=2,947,261,781
–
P
=7,277,651
–
P
=1,678,459,048
16,657,767
P
=521,418
–
P
=–
(26,553,360)
(P
= 32,405,913)
–
P
=4,601,113,985
(9,895,593)
P
=746,767,257
(960,862)
P
=5,347,881,242
(10,856,455)
2,947,261,781
–
–
–
7,277,651
–
–
–
1,695,116,815
400,532,990
332,354
400,865,344
521,418
1,249,092
–
1,249,092
(26,553,360)
–
11,117,730
11,117,730
(32,405,913)
–
–
4,591,218,392
401,782,082
11,450,084
413,232,166
745,806,395
129,636,102
366,527
130,002,629
5,337,024,787
531,418,184
11,816,611
543,234,795
–
(146,138)
–
(318)
(122,721,840)
–
–
–
(292)
–
(38,962,927)
(146,138)
–
(610)
(122,721,840)
(38,962,927)
38
-2-
Capital
Stock
(Note 15)
Transfer of deferred tax liability on deemed cost adjustment
of property and equipment absorbed through depreciation
Transfer of deferred tax liability on deemed cost adjustment
of properties realized through sale
Parent Company shares of stock held by CPI
Appropriation - CPI
Stock dividends - 10%
Fractional shares
Cash dividends - P
=0.03 per share
Cash dividends declared by subsidiaries
Cash dividends received by CPI on Parent Company shares of
stock
Additional
Paid-in
Capital
Net Changes
in Fair Values of
Available-for-sale
Retained Earnings
financial assets
(Note 15)
(Note 12)
Accumulated
Re-measurement
on Defined
Benefit Plan
(Note 2)
=–
P
P
=–
=2,871,517
P
=–
P
=–
P
–
–
–
294,532,105
–
–
–
–
–
–
–
–
–
–
10,215,118
–
(8,063,075)
(294,532,105)
(278)
(88,359,715)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
Non-controlling
Interests
Total
=–
P
=2,871,517
P
=–
P
=2,871,517
P
–
1,233,179
–
–
–
–
–
10,215,118
1,233,179
(8,063,075)
–
(278)
(88,359,715)
–
–
–
–
–
(282)
–
(50,095,357)
10,215,118
1,233,179
(8,063,075)
–
(560)
(88,359,715)
(50,095,357)
–
–
51,530
–
51,530
–
51,530
BALANCES AT DECEMBER 31, 2012, AS RESTATED
P
=3,241,793,886
P
=7,277,651
P
=1,718,165,151
P
=1,770,510
(P
= 15,435,630)
(P
= 31,172,734)
P
=4,922,398,834
P
=825,713,385
P
=5,748,112,219
BALANCES AT DECEMBER 31, 2012, AS PREVIOUSLY
REPORTED
Change in accounting policy for employee benefits (Note 2)
P
=3,241,793,886
–
P
=7,277,651
–
P
=1,701,175,030
16,990,121
P
=1,770,510
–
–
(15,435,630)
(P
= 31,172,734)
–
P
=4,920,844,343
1,554,491
P
=826,307,720
(594,335)
(15,435,630)
–
(3,395,460)
(3,395,460)
(31,172,734)
–
–
–
BALANCES AT DECEMBER 31, 2012, AS RESTATED
Net income
Other comprehensive income
Total comprehensive income
Transfer of deferred tax liability on deemed cost adjustment
of property and equipment absorbed through depreciation
Transfer of deferred tax liability on deemed cost adjustment
of properties realized through sale
Parent Company shares of stock held by CPI
Stock dividends - 5%
Fractional shares
Cash dividends - P
=0.03 per share
Cash dividends declared by subsidiaries
BALANCES AT DECEMBER 31, 2013
See accompanying Notes to Consolidated Financial Statements.
3,241,793,886
–
–
–
7,277,651
–
–
–
1,718,165,151
423,260,092
–
423,260,092
1,770,510
–
(184,473)
(184,473)
–
Treasury
Stock
(Note 15)
–
–
–
2,871,517
–
–
–
–
–
161,992,454
–
–
–
–
–
–
–
–
–
8,983,275
–
(161,992,454)
(343)
(97,138,994)
–
–
–
–
–
–
–
–
–
–
42,148
–
–
–
–
–
P
=3,403,786,340
P
=7,277,651
P
=1,894,148,244
P
=1,586,037
(P
= 18,831,090)
(P
= 31,130,586)
4,922,398,834
423,260,092
(3,579,933)
419,680,159
2,871,517
8,983,275
42,148
–
(343)
(97,138,994)
–
P
= 5,256,836,596
825,713,385
96,265,621
(720,307)
95,545,314
–
–
–
–
(324)
–
(45,232,647)
P
=876,025,728
5,747,152,063
960,156
5,748,112,219
519,525,713
(4,300,240)
515,225,473
2,871,517
8,983,275
42,148
–
(667)
(97,138,994)
(45,232,647)
P
=6,132,862,324
39
CITYLAND DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
2013
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
Adjustments for:
Interest income (Note 20)
Interest expense - net of amounts capitalized
(Note 21)
Depreciation (Note 19)
Retirement benefits cost (income) (Note 23)
Trust fund income (Note 22)
Gain on sale of available-for-sale financial
assets
Dividend income (Note 20)
Operating income before working capital changes
Decrease (increase) in:
Installment contracts receivable
Other receivables
Real estate properties for sale
Real estate properties held for future development
Deposits and others
Increase (decrease) in:
Accounts payable and accrued expenses
Pre-need and other reserves
Cash generated from operations
Interest received
Income taxes paid, including creditable and
final withholding taxes
Contributions to the plan
Net cash flows from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of short-term cash investments
Additions to:
Investment properties (Note 10)
Property and equipment (Note 11)
Withdrawals from investments in trust funds
Contributions to investments in trust fund (Note 5)
Proceeds from:
Sale of property and equipment
Matured short-term cash investments
Sale of available-for-sale financial assets
Dividends received
Net cash flows from (used in) investing activities
(Forward)
Years Ended December 31
2012
2011
P
= 646,799,921
=655,486,473
P
=706,807,614
P
(369,057,978)
(441,867,563)
(478,657,522)
24,823,432
16,710,266
2,017,185
(1,780,146)
46,240,977
19,323,228
3,260,846
(2,582,951)
55,051,749
18,842,759
(326,547)
(2,213,192)
(507,469)
(41,002)
318,964,209
–
(34,305)
279,826,705
–
(36,454)
299,468,407
353,756,728
(2,152,326)
70,248,202
(12,201,447)
(3,671,489)
187,508,869
2,745,259
258,129,790
(108,538,811)
(13,302,364)
9,930,666
(14,217,214)
80,324,236
(131,270,607)
8,403,790
(250,482,259)
5,334,356
479,795,974
367,683,523
(210,111,565)
(5,318,551)
390,939,332
441,070,161
154,564,035
(2,599,360)
404,603,953
480,919,527
(152,105,990)
(3,309,821)
692,063,686
(137,437,504)
(3,309,821)
691,262,168
(167,630,548)
(118,683)
717,774,249
(1,745,750,000)
(145,166,589)
(1,893,372)
7,782,478
(1,218,183)
1,068,572
–
512,299
41,002
(1,884,623,793)
–
(5,074,145)
(1,257,143)
10,201,360
(2,806,952)
–
200,150,000
–
34,305
201,247,425
–
(6,800,632)
–
7,932,724
(2,430,147)
–
729,700,028
–
36,454
728,438,427
40
-2-
2013
Years Ended December 31
2012
2011
CASH FLOWS FROM FINANCING ACTIVITIES
Availments of short-term notes
Payments of short-term notes
Dividends paid
Interest paid
Payment of contracts payable
Payments of long-term loans
Net cash flows from (used in) financing activities
P6,266,974,699 =
P6,813,299,073
P
= 6,178,329,528 =
(6,529,884,681) (6,011,521,854) (7,186,551,299)
(137,737,618)
(161,031,325)
(141,982,384)
(46,293,866)
(59,095,590)
(34,267,762)
–
–
(17,381,250)
–
(10,000,000)
–
71,421,361
(603,379,141)
(545,186,549)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS
(1,737,746,656)
963,930,954
842,833,535
1,433,826,099
590,992,564
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR
2,397,757,053
CASH AND CASH EQUIVALENTS
AT END OF YEAR (Note 4)
=2,397,757,053 P
=1,433,826,099
P
= 660,010,397 P
See accompanying Notes to Consolidated Financial Statements.
41
CITYLAND DEVELOPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Corporate Information
Cityland Development Corporation (the Parent Company) was incorporated in the Philippines on
January 31, 1978. It has two subsidiaries, Cityplans, Incorporated (CPI) and City & Land
Developers, Incorporated (CLDI), a publicly listed company, all domiciled in the Philippines. The
Parent Company’s and CLDI’s primary business purpose is to acquire, develop, improve,
subdivide, cultivate, lease, sublease, sell, exchange, barter and/or dispose of agricultural,
industrial, commercial, residential and other real properties, as well as to construct, improve, lease,
sublease, sell and/or dispose of houses, buildings and other improvements thereon, and to manage
and operate subdivisions and housing projects or otherwise engage in the financing and trading of
real estate. CPI is engaged in the business of establishing, organizing, developing, maintaining,
conducting, operating, marketing and selling pension plans. The Parent Company is 50.42%
owned by Cityland, Inc. (CI), the ultimate parent company incorporated in the Philippines, which
also prepares consolidated financial statements.
The Parent Company’s and its subsidiaries’ (the Group) registered office and principal place of
business is 2nd and 3rd Floor, Cityland Condominium 10, Tower I, 156 H. V. de la Costa Street,
Ayala North, Makati City.
The consolidated financial statements of the Group were authorized for issuance by the Board of
Directors (BOD) on March 19, 2014.
2. Summary of Significant Accounting and Financial Reporting Policies
Basis of Preparation
The consolidated financial statements of the Group have been prepared using the historical cost
basis, except for financial assets at fair value through profit or loss and available-for-sale financial
assets that have been measured at fair values. These consolidated financial statements are
presented in Philippine peso (Peso), which is the Group’s functional currency, and rounded to the
nearest Peso except when otherwise indicated.
The consolidated financial statements provide comparative information in respect of the previous
period. In addition, the Group presents an additional consolidated balance sheet at the beginning of
the earliest period presented when there is a retrospective application of an accounting policy, a
retrospective restatement, or a reclassification of items in consolidated financial statements. An
additional consolidated balance sheet as at January 1, 2012 is presented in the consolidated
financial statements due to retrospective application of a certain accounting policy (refer to
changes in accounting policies discussed below).
Statement of Compliance
The consolidated financial statements have been prepared in compliance with Philippine Financial
Reporting Standards (PFRS).
42
Changes in Accounting Policies
The accounting policies adopted are consistent with those of the previous financial year except for
the following amended PFRS and Philippine Accounting Standards (PAS) effective as of
January 1, 2013:

PAS 1, Presentation of Financial Statements - Presentation of Items of Other Comprehensive
Income (Amendments), introduced a grouping of items presented in other comprehensive
income. Items that will be reclassified (or “recycled”) to profit or loss at a future point in time
(for example, upon derecognition or settlement) will be presented separately from items that
will never be recycled. The amendments affect presentation only and have no impact on the
Group’s financial position or performance.

Revised PAS 19, Employee Benefits, requires all actuarial gains and losses to be recognized in
other comprehensive income and unvested past service costs previously recognized over the
average vesting period to be recognized immediately in profit or loss when incurred.
Prior to adoption of the Revised PAS 19, the Group recognized actuarial gains and losses as
income or expense when the net cumulative unrecognized gains and losses for each individual
plan at the end of the previous period exceeded 10% of the higher of the defined benefit
obligation and the fair value of the plan assets and recognized unvested past service costs as
an expense on a straight-line basis over the average vesting period until the benefits become
vested. Actuarial gains and losses can no longer be deferred and recognized over the
remaining estimated service lives of the employees. Upon adoption of the Revised PAS 19,
the Group changed its accounting policy to recognize all actuarial gains and losses in other
comprehensive income and all past service costs in profit or loss in the period they occur.
The Revised PAS 19 replaced the interest cost and expected return on plan assets with the
concept of net interest on defined benefit liability or asset which is calculated by multiplying
the net balance sheet defined benefit liability or asset by the discount rate used to measure the
employee benefit obligation, each as at the beginning of the annual period.
The Revised PAS 19 also amended the definition of short-term employee benefits and requires
employee benefits to be classified as short-term based on expected timing of settlement rather
than the employee’s entitlement to the benefits. In addition, the Revised PAS 19 modifies the
timing of recognition for termination benefits. The modification requires the termination
benefits to be recognized at the earlier of when the offer cannot be withdrawn or when the
related restructuring costs are recognized.
Changes to definition of short-term employee benefits and timing of recognition for
termination benefits do not have any impact to the Group’s financial position and financial
performance.
Revised PAS 19 also requires more extensive disclosures. These have been provided in
Note 23.
The changes in accounting policies have been applied retrospectively, with the following
permitted exceptions:
 The carrying amounts of other assets have not been adjusted for changes in employee
benefit costs that were included before January 1, 2012.
43
 Sensitivity disclosures for the defined benefit obligation for comparative period have not
been applied.
The effects of adoption on the consolidated financial statements are as follows:
December 31,
2013
Increase (decrease) in:
Consolidated balance sheets
Retirement plan assets
Deferred tax liability
Retained earnings
Accumulated re-measurement on
defined benefit plan
Non-controlling interest
Consolidated statements of
comprehensive income
Net income for the year
Re-measurement gain (loss)
of defined benefit obligation
Income tax effects
Other comprehensive income for the
year, net of tax
Total comprehensive income
Attributable to:
Parent Company
Non-controlling interests
January 1,
2012
P
=2,506,343
(751,903)
18,099,950
=1,371,651
P
411,495
16,990,121
(P
=15,509,221)
(4,652,766)
16,657,767
(18,831,090)
(1,023,300)
(15,435,630)
(594,335)
(26,553,360)
(960,862)
2013
Increase (decrease) in:
Consolidated statements of income
Operating expenses
Provision from income tax
Net income for the year
Attributable to:
Parent Company
Non-controlling interests
December 31,
2012
2012
2011
(P
=1,553,283)
465,985
(P
=1,087,298)
(P
=527,158)
158,147
P
=369,011
(P
=2,274,769)
682,430
=1,592,339
P
(P
=1,109,829)
22,531
=332,354
P
36,657
=1,672,507
P
(80,168)
(P
=1,087,298)
=369,011
P
=1,592,339
P
16,353,714
(4,906,114)
(30,386,612)
9,115,984
(5,431,275)
1,629,383
(3,801,892)
(P
=2,714,594)
11,447,600
=11,816,611
P
(21,270,628)
(P
=19,678,289)
(P
=2,285,629)
(428,965)
=11,450,084
P
366,527
(P
=18,740,961)
(937,328)
The adoption did not have an impact on consolidated statement of cash flows.

PFRS 7, Financial Instruments: Disclosures - Amendments to Offsetting Financial Assets and
Financial Liabilities, requires an entity to disclose information about rights of offset and
related arrangements (such as collateral agreements). The new disclosures are required for all
recognized financial instruments that are offset in accordance with PAS 32. These disclosures
also apply to recognized financial instruments that are subject to an enforceable master netting
arrangement or ‘similar agreement’, irrespective of whether they are offset in accordance with
PAS 32. The amendments require entities to disclose, in a tabular format, unless another
format is more appropriate, the following minimum quantitative information.
44
This is presented separately for financial assets and financial liabilities recognized at the end
of the reporting period:
a) The gross amounts of those recognized financial assets and recognized financial
liabilities;
b) The amounts that are offset in accordance with the criteria in PAS 32 when determining
the net amounts presented in the consolidated balance sheet;
c) The net amounts presented in the consolidated balance sheet;
d) The amounts subject to an enforceable master netting arrangement or similar agreement
that are not otherwise included in (b) above, including:
i.
Amounts related to recognized financial instruments that do not meet some or all
of the offsetting criteria in PAS 32; and
ii. Amounts related to financial collateral (including cash collateral); and
e) The net amount after deducting the amounts in (d) from the amounts in (c) above.
The amendments affect disclosures only and have no impact on the Group’s financial
position or performance.

PFRS 10, Consolidated Financial Statements, replaced the portion of PAS 27, Consolidated
and Separate Financial Statements, that addressed the accounting for consolidated financial
statements. It also included the issues raised in SIC 12, Consolidation - Special Purpose
Entities. PFRS 10 established a single control model that applied to all entities including
special purpose entities. The changes introduced by PFRS 10 require management to exercise
significant judgment to determine which entities are controlled, and therefore, are required to
be consolidated by a parent, compared with the requirements that were in PAS 27. The
application of PFRS 10 does not have an impact on the financial position or performance of
the Group. However, the assessment of control has changed but the result is similar to prior
conclusions. The Group assessed controls based on the factors set-out in the standard
including the Group’s power over the investees and the Group’s exposure to variable returns.

PFRS 12, Disclosure of Interests in Other Entities, sets out the requirements for disclosures
relating to an entity’s interests in subsidiaries, joint arrangements, associates and structured
entities. The requirements in PFRS 12 are more comprehensive than the previously existing
disclosure requirements for subsidiaries (for example, where a subsidiary is controlled with
less than a majority of voting rights). The additional disclosure requirements in PFRS 12 are
set-out on Note 16 of the consolidated financial statements.

PFRS 13, Fair Value Measurement, establishes a single source of guidance under PFRSs for
all fair value measurements. PFRS 13 does not change when an entity is required to use fair
value, but rather provides guidance on how to measure fair value under PFRS. PFRS 13
defines fair value as an exit price. PFRS 13 also requires additional disclosures.
As a result of the guidance in PFRS 13, the Group re-assessed its policies for measuring fair
values, in particular, its valuation inputs such as non-performance risk for fair value
measurement of liabilities. The Group has assessed that the application of PFRS 13 has not
materially impacted the fair value measurements of the Group. Additional disclosures, where
required, are provided in the individual notes relating to the assets and liabilities whose fair
values were determined. Fair value hierarchy is provided in Note 26.
45
Annual Improvements to PFRSs (2009-2011 cycle)
 PAS 1, Presentation of Financial Statements - Clarification of the Requirements for
Comparative Information, clarify the requirements for comparative information that are
disclosed voluntarily and those that are mandatory due to retrospective application of an
accounting policy, or retrospective restatement or reclassification of items in the financial
statements. An entity must include comparative information in the related notes to the
financial statements when it voluntarily provides comparative information beyond the
minimum required comparative period. The additional comparative period does not need to
contain a complete set of financial statements. On the other hand, supporting notes for the
third balance sheet (mandatory when there is a retrospective application of an accounting
policy, or retrospective restatement or reclassification of items in the financial statements) are
not required. As a result, the Group has not included comparative information in respect of the
opening consolidated balance sheet as at January 1, 2012. The amendments affect disclosures
only and have no impact on the Group’s financial position or performance.

PAS 16, Property, Plant and Equipment - Classification of Servicing Equipment, clarifies that
spare parts, stand-by equipment and servicing equipment should be recognized as property,
plant and equipment when they meet the definition of property, plant and equipment and
should be recognized as inventory if otherwise. This amendment has no significant impact on
the consolidated financial statements.

PAS 34, Interim Financial Reporting - Interim Financial Reporting and Segment Information
for Total Assets and Liabilities, clarifies that the total assets and liabilities for a particular
reportable segment need to be disclosed only when the amounts are regularly provided to the
chief operating decision maker and there has been a material change from the amount
disclosed in the entity’s previous annual financial statements for that reportable segment. The
amendment affects disclosures only and has no impact on the Group’s financial position or
performance.
The adoption of the following new and amended PFRS, PAS and Philippine Interpretations and
annual improvements to PFRS (2009-2011 cycle) are either not relevant to or have no significant
impact on the consolidated financial statements:






PFRS 1, First-time Adoption of International Financial Reporting Standards - Government
Loans (Amendments)
PFRS 11, Joint Arrangements
PAS 27, Separate Financial Statements (as revised in 2011)
PAS 28, Investments in Associates and Joint Ventures
Philippine Interpretation IFRIC 20, Stripping Costs in the Production Phase of a Surface Mine
Annual Improvements to PFRSs (2009-2011 cycle)
(i) PFRS 1, First-time Adoption of International Financial Reporting Standards Government Loans (Amendments)
(ii) PAS 32, Financial Instruments: Presentation - Tax Effect of Distribution to Holders of
Equity Instruments
Basis of Consolidation
The consolidated financial statements consist of the financial statements of the Parent Company
and its subsidiaries as of December 31 of each year. The financial statements of the subsidiaries
are prepared for the same reporting year as the Parent Company using consistent accounting
policies.
46
These subsidiaries, all incorporated and domiciled in the Philippines, and the percentage of
ownership of the Parent Company in 2013 and 2012 are as follows:
CPI
CLDI
Percentage of
Ownership
90.81
49.73
Nature of
Activity
Pre-need pension plans
Real estate
The registered office and principal place of business of CLDI is 3rd Floor, Cityland Condominium
10, Tower I, 156 H. V. de la Costa Street, Ayala North, Makati City. On the other hand, registered
office address of CPI is at 3rd Floor, Cityland Condominium 10, Tower II, 154 H.V. de la Costa
Street, Salcedo Village, Makati City.
A subsidiary is an entity that is controlled by the Parent Company. Control is achieved when the
Parent Company is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over the investee.
When the Parent Company has less than a majority of the voting or similar rights of an investee,
the Group considers all relevant facts and circumstances in assessing whether it has power over an
investee, including:
 The contractual arrangement with the other vote holders of the investee
 Rights arising from other contractual arrangements
 The Parent Company’s voting rights and potential voting rights
The Parent Company re-assesses 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.
The Group consolidates the accounts of CLDI even though it owns less than 50% of voting
interest. The factors that the Group considers in making this determination include the size of its
block of voting shares and the relative size and dispersion of holdings by other shareholders. The
Group is the single largest shareholder of CLDI with 49.73% equity interest. The Parent
Company, some of its stockholders and affiliates (whose stockholders also own equity ownership
in the Parent Company) collectively own more than 50% of the equity of CLDI giving the Parent
Company effective control over CLDI. In addition, majority of the members of its governing
body or for which its key management personnel are the same as those of CLDI.
Subsidiaries are consolidated from the date on which control is transferred to the Parent Company
and cease to be consolidated from the date on which control is transferred out of the Parent
Company.
The equity, net income and total comprehensive income attributable to non-controlling interests of
the consolidated subsidiaries are shown separately in the consolidated balance sheet, consolidated
statement of income and consolidated statement of comprehensive income, respectively.
All significant intercompany accounts and transactions are eliminated.
Non-controlling Interests
Non-controlling interests represent the interests in CPI and CLDI not held by the Parent Company,
and are presented separately in the consolidated statement of income, consolidated statement of
comprehensive income and within the equity section of the consolidated balance sheet, separate
from the Parent Company’s equity. The losses applicable to the non-controlling interests in a
47
consolidated subsidiary may exceed the non-controlling interest’s equity in the subsidiary even if
the losses exceed the non-controlling equity investment in the subsidiary.
Changes in the parent company’s ownership interest in a subsidiary that do not result in a loss of
control are accounted for as equity transactions. In such circumstances, the carrying amounts of
the controlling and non-controlling interests shall be adjusted to reflect the changes in their
relative interests in the subsidiary. Any difference between the amount by which the noncontrolling interests is adjusted and the fair value of the consideration paid or received shall be
recognized directly in equity and attributed to the owners of the parent.
If the Group losses control over a subsidiary, it: (a) derecognizes the assets (including goodwill)
and liabilities of the subsidiary; (b) derecognizes the carrying amounts of any non-controlling
interest; (c) recognizes the fair value of consideration received; (d) recognizes the fair value of any
investment retained; (e) recognizes any surplus or deficit in the consolidated statement of income;
and (f) reclassifies the Group’s share of components previously recognized in consolidated
statement of comprehensive income to the consolidated statement of income or retained earnings,
as appropriate.
Cash and Cash Equivalents
Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid
investments that are readily convertible to known amounts of cash with original maturities of three
months or less from dates of acquisition, and are subject to an insignificant risk of change in value.
Short-term Cash Investments
Short-term cash investments are investments with maturities of more than three months but not
exceeding one year from dates of acquisition.
Financial Assets and Financial Liabilities
Date of recognition
The Group recognizes a financial asset or a financial liability in the consolidated balance sheet
when it becomes a party to the contractual provisions of the instrument. In the case of a regular
way purchase or sale of financial assets, recognition and derecognition, as applicable, is done
using settlement date accounting.
Initial recognition of financial instruments
Financial instruments are recognized initially at fair value, which is the fair value of the
consideration given (in case of an asset) or received (in case of a liability). The initial
measurement of financial instruments, except for those designated at fair value through profit or
loss, includes directly attributable transaction cost.
Classification of financial instruments
Subsequent to initial recognition, the Group classifies its financial instruments in the following
categories: financial assets and financial liabilities at fair value through profit or loss, loans and
receivables, held-to-maturity investments, available-for-sale financial assets and other financial
liabilities. The classification depends on the purpose for which the instruments are acquired and
whether they are quoted in an active market. Management determines the classification at initial
recognition and, where allowed and appropriate, re-evaluates this classification at each end of
reporting period.
48
a. Financial Assets or Financial Liabilities at Fair Value through Profit or Loss
A financial asset or financial liability is classified in this category if acquired principally for
the purpose of selling or repurchasing in the near term or upon initial recognition it is
designated by management as at fair value through profit or loss.
Financial assets or financial liabilities classified in this category are designated as at fair value
through profit or loss by management on initial recognition when the following criteria are
met:

The designation eliminates or significantly reduces the inconsistent treatment that would
otherwise arise from measuring the assets or liabilities or recognizing gains or losses on
them on a different basis; or

The assets or liabilities are part of a group of financial assets or financial liabilities, or
both financial assets and financial liabilities, which are managed and their performance is
evaluated on a fair value basis, in accordance with a documented risk management or
investment strategy; or

The financial instrument contains an embedded derivative, unless the embedded
derivative does not significantly modify the cash flows or it is clear, with little or no
analysis, that it would not be separately recorded.
Financial assets or financial liabilities classified under this category are carried at fair value in
the consolidated balance sheet. Changes in the fair value of such assets and liabilities are
recognized in the consolidated statement of income.
The Group designated its investments in trust funds as financial assets at fair value through
profit or loss. The Group’s investments in trust funds directly relate to the Pre-need Reserves
accounts.
b. Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They arise when the Group provides money, goods or
services directly to a debtor with no intention of trading the receivables. Loans and receivables
are carried at amortized cost in the consolidated balance sheet. Amortization is determined
using the effective interest rate method. Loans and receivables are included in current assets if
maturity is within 12 months from the end of reporting period. Otherwise, these are classified
as noncurrent assets.
The Group’s loans and receivables consist of cash in banks and cash equivalents, short-term
cash investments, installment contracts receivable and other receivables.
c. Held-to-maturity Investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturities wherein the Group has the positive intention and ability to hold
to maturity. Held-to-maturity investments are carried at amortized cost in the consolidated
balance sheet. Amortization is determined using the effective interest rate method. Assets
under this category are classified as current assets if maturity is within 12 months from the end
of reporting period and noncurrent assets if maturity is more than one year.
49
The Group has no held-to-maturity investments as of December 31, 2013 and 2012.
d. Available-for-sale Financial Assets
Available-for-sale financial assets are non-derivatives that are either designated in this
category or not classified in any of the other categories. Available-for-sale financial assets are
carried at fair value in the consolidated balance sheet. Changes in the fair value of such assets
are accounted in the consolidated statement of comprehensive income and in equity. These
financial assets are classified as noncurrent assets unless the intention is to dispose such assets
within 12 months from the end of reporting period.
The Group’s available-for-sale financial assets consist of investments in quoted equity
securities that are traded in liquid markets, held for the purpose of investing in liquid funds
and not generally intended to be retained on a long-term basis.
e. Other Financial Liabilities
Other financial liabilities are non-derivative financial liabilities with fixed or determinable
payments that are not quoted in an active market. They arise when the Group owes money,
goods or services directly to a creditor with no intention of trading the payables. Other
financial liabilities are carried at cost or amortized cost in the consolidated balance sheet.
Amortization is determined using the effective interest rate method. Other financial liabilities
are included in current liabilities if maturity is within 12 months from the end of reporting
period, otherwise, these are classified as noncurrent.
The Group’s other financial liabilities consist of accounts payable and accrued expenses and
notes and contracts payable.
Determination of fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either:


In the principal market for the asset or liability, or
In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible to by 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.
50
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 the end of each reporting period.
“Day 1” Difference
Where the transaction price in a non-active market is different from the fair value from other
observable current market transactions in the same instrument or based on a valuation technique
whose variables include only data from observable market, the Group recognizes the difference
between the transaction price and fair value (a “Day 1” difference) in the consolidated statement
of income unless it qualifies for recognition as some other type of asset. In cases where inputs are
made of data which are not observable, the difference between the transaction price and model
value is only recognized in the consolidated statement of income 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.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the
consolidated balance sheet if, and only if, there is a currently enforceable legal right to offset the
recognized amounts and there is an intention to settle on a net basis, or to realize the asset and
settle the liability simultaneously.
Derecognition of Financial Assets and Financial Liabilities
Financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is derecognized when:



the rights to receive cash flows from the asset have expired; or
the Group retains the right to receive cash flows from the asset, but has assumed an obligation
to pay them in full without material delay to a third party under a “pass-through” arrangement;
or
the Group has transferred its right to receive cash flows from the asset and either (a) has
transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the
asset.
Where the Group has transferred its rights to receive cash flows from a financial asset and has
neither transferred nor retained substantially all the risks and rewards of the asset nor transferred
control of the asset, the asset is recognized to the extent of the Group’s continuing involvement in
the asset. Continuing involvement that takes the form of a guarantee over the transferred financial
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.
51
Financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged,
cancelled or has expired.
Where 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 a derecognition of the original liability and the recognition of a new
liability, and the difference in the respective carrying amounts is recognized in the consolidated
statement of income.
Impairment of Financial Assets
The Group assesses at each reporting period whether a financial asset or a group of financial assets
is impaired.
Assets carried at amortized cost
The Group first assesses whether objective evidence of impairment exists individually for
financial assets that are individually significant, and individually or collectively for financial
assets that are not individually significant. Objective evidence includes observable data that
comes to the attention of the Group about loss events such as, but not limited to significant
financial difficulty of the counterparty, a breach of contract, such as default or delinquency in
interest or principal payments, probability that the borrower will enter bankruptcy or other
financial reorganization. If it is determined that no objective evidence of impairment exists for an
individually assessed financial asset, whether significant or not, the asset is included in the group
of financial assets with similar credit risk and characteristics and that group of financial assets is
collectively assessed for impairment. Assets that are individually assessed for impairment and for
which an impairment loss is recognized are not included in a collective assessment of impairment.
The impairment assessment is performed at each end of reporting period. For the purpose of
collective evaluation of impairment, financial assets are grouped on the basis of such credit risk
characteristics such as customer type, payment history, past-due status and term.
If there is an objective evidence that an impairment loss on loans and receivables carried at
amortized cost has been incurred, the amount of loss is measured as the difference between the
asset’s carrying amount and the present value of estimated future cash flows (excluding future
credit losses that have not been incurred) discounted at the financial asset’s original effective
interest rates (i.e., the effective interest rate computed at initial recognition). The carrying amount
of the asset shall be reduced either directly or through the use of an allowance account. The
amount of loss, if any, is recognized in the consolidated statement of income.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognized, the previously
recognized impairment loss is reversed by adjusting the allowance account. The amount of the
reversal is recognized in the consolidated statement of income. Interest income continues to be
accrued on the reduced carrying amount based on the original effective interest rate of the asset.
Loans together with the associated allowance are written off when there is no realistic prospect of
future recovery and all collateral, if any, has been realized or has been transferred to the Group. If
in a subsequent year, the amount of the estimated impairment loss increases or decreases because
of an event occurring after the impairment was recognized, the previously recognized impairment
loss is increased or reduced by adjusting the allowance for impairment losses account. If a future
write off is later recovered, the recovery is recognized in the consolidated statement of income
under “Other income” account. Any subsequent reversal of an impairment loss is recognized in
52
the consolidated statement of income to the extent that the carrying value of the asset does not
exceed its amortized cost at reversal date.
Assets carried at cost
If there is an objective evidence that an impairment loss of an unquoted equity instrument that is
not carried at fair value because its fair value cannot be reliably measured, or a derivative asset
that is linked to and must be settled by delivery of such an unquoted equity instrument has been
incurred, the amount of loss is measured as the difference between the asset’s carrying amount and
the present value of estimated future cash flows discounted at the current market rate of return for
a similar financial asset.
Available-for-sale financial assets
In the case of debt instruments classified as available-for-sale financial assets, impairment is
assessed based on the same criteria as financial assets carried at amortized cost. Future interest
income is based on the reduced carrying amount and is accrued based on the rate of interest used
to discount future cash flows for the purpose of measuring impairment loss. Such accrual is
recorded as part of “Financial income” in the consolidated statement of income. If, in subsequent
year, the fair value of a debt instrument increases and the increase can be objectively related to an
event occurring after the impairment loss was recognized in the consolidated statement of income,
the impairment loss is reversed through the consolidated statement of income.
In case of equity investments classified as available-for-sale financial assets, this would include a
significant or prolonged decline in the fair value of the investments below its cost. Where there is
evidence of impairment, the cumulative loss - measured as the difference between the acquisition
cost and the current fair value, less any impairment loss on that financial asset previously
recognized in the consolidated statement of income - is removed from equity and recognized in the
consolidated statement of income. Increases in fair value after impairment are recognized in the
consolidated statement of comprehensive income and directly in the consolidated statement of
changes in equity.
Real Estate Properties for Sale and Real Estate Properties Held for Future Development
Property acquired or being constructed for sale in the ordinary course of business and held for
future development, rather than to be held for rental or capital appreciation, is classified as real
estate properties for sale and real estate properties held for future development and are measured
at the lower of cost and net realizable value (NRV).
Cost includes:
 Land cost
 Amounts paid to contractors for construction
 Borrowing costs, planning and design costs, costs of site preparation, professional fees,
property transfer taxes, construction overheads and other related costs.
NRV is the estimated selling price in the ordinary course of the business, based on market prices
at the reporting date, less estimated costs of completion and the estimated costs of sale.
Upon commencement of development, the real estate properties held for future development is
transferred to real estate properties for sale.
Investment Properties
Investment properties which represent real estate properties for lease are measured initially at cost,
including transaction costs. The carrying amount includes the cost of replacing part of existing
investment properties at the time that cost is incurred if the recognition criteria are met, and
excludes the costs of day-to-day servicing of the property. The carrying values of revalued
53
properties transferred to real estate properties for lease on January 1, 2004 were considered as the
assets’ deemed cost as of said date.
Subsequent to initial measurement, investment properties, except land, are carried at cost less
accumulated depreciation and amortization and any impairment in value. Land is carried at cost
less any impairment in value. Buildings for lease are depreciated over their useful life of 25 years
using the straight-line method.
Investment properties are derecognized when either they have been disposed of or when the
property is permanently withdrawn from use and no future economic benefit is expected from its
disposal. Any gains or losses on the retirement or disposal of investment properties are
recognized in the consolidated statement of income in the year of retirement or disposal.
Transfers are made to investment properties when, and only when, there is a change in use,
evidenced by ending of owner-occupation, commencement of an operating lease to another party,
or ending of construction or development. Transfers are made from investment properties when,
and only when, there is a change in use, evidenced by commencement of owner-occupation or
commencement of development with a view to sale.
Transfers between investment properties, owner-occupied property and inventories do not change
the carrying amount of the property transferred and they do not change the cost of that property for
measurement or disclosure purposes.
Construction in progress is stated at cost. This includes costs of construction and other direct costs
related to the investment property being constructed. Construction in progress is not depreciated
until such time when the relevant assets are complete and ready for use.
Property and Equipment
Property and equipment, except for office premises, are stated at cost less accumulated
depreciation and any impairment in value. Office premises are stated at appraised values (asset’s
deemed cost) as determined by independent firms of appraisers at the date of transition to PFRS,
less accumulated depreciation and any impairment in value. Subsequent additions to office
premises are stated at cost less accumulated depreciation and any impairment in value.
The initial cost of property and equipment consists of the purchase price and any directly
attributable cost of bringing the assets to their working condition and location for their intended
use. Expenditures incurred after the property and equipment have been put into operations, such as
repairs and maintenance costs, are normally charged to the consolidated statement of income in
the period in which the costs are incurred. In situations where it can be clearly demonstrated that
the expenditures have resulted in an increase in the future economic benefits expected to be
obtained from the use of an item of property and equipment beyond its originally assessed
standard of performance, the expenditures are capitalized as an additional cost of property and
equipment.
Depreciation of an item of property and equipment begins when the asset becomes available for
use, i.e., when it is in the location and condition necessary for it to be capable of operating in the
manner intended by management. Depreciation ceases at the earlier of the date that the item is
classified as held for sale (or included in a disposal group that is classified as held for sale) in
accordance with PFRS 5, Noncurrent Assets Held for Sale and Discontinued Operations, and the
date the asset is derecognized.
54
Depreciation is computed using the straight-line method over the estimated useful lives of the
properties as follows:
Office premises
Furniture, fixtures and office equipment
Transportation and other equipment
Years
25
5
5
The assets’ useful lives and depreciation method are reviewed periodically to ensure that these are
consistent with the expected pattern of economic benefits from items of property and equipment.
When property and equipment are sold or retired, the cost and related accumulated depreciation
and any impairment in value are removed from the accounts, and any gains or losses from their
disposal is included in the consolidated statement of income.
Impairment of Nonfinancial Assets
The carrying values of investment properties and property and equipment are reviewed for
impairment when events or changes in circumstances indicate that the carrying values may not be
recoverable. If any such indication exists and where the carrying value exceeds the estimated
recoverable amount, the assets are either written down to their recoverable amount or provided
with valuation allowance. The recoverable amount of the assets is the greater of fair value less
costs to sell and value-in-use. Valuation allowances are provided for the carrying amounts of
assets which are not expected to be recovered. Impairment losses, if any, are recognized in the
consolidated statement of income.
The Group assesses at each reporting period whether there is an indication that previously
recognized impairment losses may no longer exist or may have decreased. The Group considers
external and internal sources of information in its assessment of the reversal of previously
recognized impairment losses. 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, had no impairment loss been recognized for the asset in
prior years. Such reversal is recognized in the consolidated statement of income. After such a
reversal, the depreciation 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.
Value-added Tax (VAT)
Revenue, expenses, assets and liabilities are recognized, net of the amount of VAT, except where
the VAT incurred on a purchase of assets or services is not recoverable from the taxation
authority, in which case the VAT is recognized as part of the cost of acquisition of the asset or as
part of the expense item as applicable.
The net amount of VAT recoverable from or payable to, the taxation authority is included as part
of “Other assets” or “Accounts payable and accrued expenses,” respectively, in the consolidated
balance sheet.
55
Pre-Need Reserves
CPI’s pension plans are calculated on the basis of the methodology and assumptions set out in Preneed Rule 31, as Amended, as follows:

the amount of provision is the present value of the funding expected to be required to settle the
obligation with due consideration of the different probabilities as follows:
On Currently-Being-Paid Plans
i.
Provision for termination values applying the inactivity and surrender rate experience of
CPI.
ii. For the portion of currently-being-paid plans that will reach full payment, applying the full
payment experience of CPI, the liability is equivalent to the present value of future
maturity benefits reduced by the present value of future trust fund contributions required
per Product Model discounted at the approved hurdle rate per Product Model of the
Group.
.
On Lapsed Plans within the Allowable Reinstatement Period
i.
Provision for termination values applying the reinstatement experience of CPI. The trend
of surrender rate experience is disclosed in the note to consolidated financial statements
(see Note 3).
On Fully Paid Plans
i.
For those due for payment within the next five years, the reserve is the present value of
future maturity benefits discounted at the attainable rate, as determined and certified by
the CPI’s trustee using industry best practices and principles which shall be indicated in
such certification;
ii. For those not yet due for payment within the next five years, the reserves is the present
value of future maturity benefits discounted at the approved hurdle rate per Product Model
of CPI.

The rates of surrender, cancellation, reinstatement, utilization, and inflation considered the
actual experience of CPI in the last three years.

The computation of the foregoing assumptions has been validated by the internal qualified
actuary of CPI.

Based on the Group’s experience, the probability of pre-termination on surrender of fully paid
plans is below 5% and therefore considered insignificant. As such, no pre-termination rate
was considered in determining the PNR of fully paid plans. The derecognition of liability
shall be recorded at pre-termination date.
As of December 31, 2013 and 2012, the principal assumptions used in determining the pre-need
reserves was based on the Insurance Commission (IC) Circular Letter No. 23-2012 dated
November 28, 2012 (See Note 4). The transitory discount interest rate that shall be used in the
valuation of pre-need reserves shall not exceed the lower of the attainable rates as certified by the
Trustee of 5.81% and the IC rate of 8% for 2013 and lower of attainable rates as certified by the
Trustee of 9% and IC rate of 8% in 2012.
56
Other reserves
The Group set-up other provisions in accordance with PAS 37 to cover obligations such as
insurance premium reserve, pension bonus and trust fund deficiency.
Capital Stock
Capital stock is measured at par value for all shares issued and outstanding. When the Parent
Company issues more than one class of stock, a separate account is maintained for each class of
stock and the number of shares issued. Incremental costs incurred directly attributable to the
issuance of new shares are shown in equity as a deduction from proceeds, net of tax.
When the shares are sold at premium, the difference between the proceeds and the par value is
credited to the “Additional paid-in capital” account. When 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 Parent Company, the shares shall be
measured either at the fair value of the shares issued or fair value of the liability settled, whichever
is more reliably determinable.
The Parent Company’s shares which are reacquired (treasury shares) are recognized at cost and
deducted from equity. No gain or loss is recognized in the consolidated statement of income on the
purchase, sale, issue or cancellation of the Parent Company’s own equity instruments. Any
difference between the carrying amount and the consideration, if reissued is recognized as
additional paid-in capital.
Retained Earnings
Retained earnings represent the cumulative balance of net income or loss, dividend distributions,
effects of changes in accounting policy and other capital adjustments.
Unappropriated retained earnings represent that portion of retained earnings which is free and can
be declared as dividends to stockholders. Appropriated retained earnings represent that portion of
retained earnings which has been restricted and therefore is not available for any dividend
declaration.
Dividend Distributions
Dividends on common shares are deducted from retained earnings when declared. Dividends for
the year that are approved and declared after the end of the reporting period but before the
approval for issuance of the financial statements are dealt with as an event after the reporting
period.
Revenue and Costs Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Group and the amount of revenue can be reliably measured. Revenue is measured at the fair value
of the consideration received excluding VAT. The Group assesses its revenue arrangements
against specific criteria in order to determine if it is acting as principal or agent. The Group has
concluded that it is acting as a principal in all of its revenue arrangements. The following specific
recognition criteria must also be met before revenue is recognized:
Sales of real estate properties
Sales of condominium units and residential houses where the Group has material obligations under
the sales contract to provide improvements after the property is sold are accounted for under the
percentage of completion method. Under this method, revenue on sale is recognized as the related
obligations are fulfilled.
57
Revenue from sales of completed residential lots and housing units, where a sufficient down
payment has been received, the collectability of the sales price is reasonably assured, the refund
period has expired, the receivables are not subordinated and the seller is not obligated to complete
improvements, is accounted for under the full accrual method. If the criterion of full accrual
method was not satisfied, any cash received by the Group is included in the “Accounts payable
and accrued expenses” account in the consolidated balance sheet until all the conditions for
recording a sale are met.
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 gives the buyer a stake in the
property sufficient that risk of loss through default motivates the buyer to honor his obligation.
Collectability is also assessed by considering factors such as the credit standing of the buyer, age,
and location of the property.
Cost of real estate sales
Cost of real estate sales is recognized consistent with the revenue recognition method applied.
Cost of subdivision land and condominium units sold before the completion of the development is
determined on the basis of the acquisition cost of the land plus its full development costs, which
include estimated costs for future development works, as determined by the Group’s in-house
technical staff.
The cost of inventory recognized in consolidated statement of income on disposal (cost of real
estate sales) is determined with reference to the specific costs incurred on the property, allocated
to saleable area based on relative size and takes into account the percentage of completion used for
revenue recognition purposes.
Any changes in estimated development costs used in the determination of the amount of revenue
and expenses are recognized in consolidated statement of income in the period in which the
change is made and in subsequent periods.
Sales of pre-need plans
Premiums from sale of pre-need plans, included under “Other income” account in the consolidated
statement of income are recognized as earned when collected.
Cost of sales of pre-need plans
Cost of contracts issued included under “Operating expenses” account in the consolidated
statement of income, pertains to (a) the increase in pre-need reserves as at the current year as
compared to the provision for the same period of the previous year. If there is a decrease in the
pre-need reserves as a result of new information or new developments, the amount shall be
deducted from the cost of contracts issued of the current period; (b) amount of trust funds
contributed during the year; and (c) documentary stamp taxes and SEC registration fees.
Interest income
Interest income from cash in banks, cash equivalents, short-term cash investments and installment
contracts receivables is recognized as the interest accrues taking into account the effective yield on
interest.
Dividend income
Dividend income is recognized when the Group’s right to receive the payment is established.
58
Operating leases
Operating leases represent those leases under which substantially all risks and rewards of
ownership of the leased assets remain with the lessor. Rent income from operating leases is
recognized as income when earned on a straight-line basis over the term of the lease agreement.
Initial direct costs incurred specifically to earn revenue from an operating lease are recognized as
an expense in the consolidated statement of income in the period in which they are incurred.
Operating expenses
Operating expenses constitute costs of administering the business. These costs are expensed as
incurred.
Financial expenses
Financial expenses consist of interest incurred from notes payable. Interest attributable to a
qualifying asset is capitalized as part of the cost of the property; otherwise, these are expensed as
incurred.
Interest costs are capitalized if they are directly attributable to the acquisition, development and
construction of real estate projects as part of the cost of such projects. Capitalization of interest
cost (1) commences when the activities to prepare the assets for their intended use are in progress
and expenditures and interest costs are being incurred, (2) is suspended during extended periods in
which active development is interrupted, and (3) ceases when substantially all the activities
necessary to prepare the assets for their intended use are complete. If the carrying amount of the
asset exceeds its recoverable amount, an impairment loss is recorded.
Other Comprehensive Income
Other comprehensive income comprises items of income and expense that are not recognized in
the consolidated statement of income in accordance with PFRS. Other comprehensive income of
the Group includes gains and losses on fair value changes of available-for-sale financial assets,
re-measurements comprising actuarial gains and losses, return on plan assets and any change in
the effect of the asset ceiling (excluding net interest on defined benefit liability).
Retirement Benefits Cost
The net defined benefit liability or asset is the aggregate of the present value of the defined benefit
obligation at the end of the reporting period reduced by the fair value of plan assets (if any),
adjusted for any effect of limiting a net defined benefit asset to the asset ceiling. The asset ceiling
is the present value of any economic benefits available in the form of refunds from the plan or
reductions in future contributions to the plan.
The cost of providing benefits under the defined benefit plans is actuarially determined using the
projected unit credit method.
Defined benefit costs comprise the following:
 Service cost
 Net interest on the net defined benefit liability or asset
 Re-measurements of net defined benefit liability or asset
Service costs which include current service costs, past service costs and gains or losses on nonroutine settlements are recognized as expense in profit or loss. Past service costs are recognized
when plan amendment or curtailment occurs. These amounts are calculated periodically by
independent qualified actuary.
59
Net interest on the net defined benefit liability or asset is the change during the period in the net
defined benefit liability or asset that arises from the passage of time which is determined by
applying the discount rate based on government bonds to the net defined benefit liability or asset.
Net interest on the net defined benefit liability or asset is recognized as expense or income in
consolidated statement of income.
Re-measurements comprising actuarial gains and losses, return on plan assets and any change in
the effect of the asset ceiling (excluding net interest on defined benefit liability) are recognized
immediately in consolidated statement of comprehensive income in the period in which they arise.
Re-measurements are not reclassified to profit or loss in subsequent periods.
Plan assets are assets that are held by a long-term employee benefit fund or qualifying insurance
policies. Plan assets are not available to the creditors of the Group, nor can they be paid directly to
the Group. Fair value of plan assets is based on market price information. When no market price
is available, the fair value of plan assets is estimated by discounting expected future cash flows
using a discount rate that reflects both the risk associated with the plan assets and the maturity or
expected disposal date of those assets (or, if they have no maturity, the expected period until the
settlement of the related obligations). If the fair value of the plan assets is higher than the present
value of the defined benefit obligation, the measurement of the resulting defined benefit asset is
limited to the present value of economic benefits available in the form of refunds from the plan or
reductions in future contributions to the plan.
The Group’s right to be reimbursed of some or all of the expenditure required to settle a defined
benefit obligation is recognized as a separate asset at fair value when and only when
reimbursement is virtually certain.
Employee leave entitlement
Employee entitlements to annual leave are recognized as a liability when they are accrued to the
employees. The undiscounted liability for leave expected to be settled wholly before twelve
months after the end of the annual reporting period is recognized for services rendered by
employees up to the end of the reporting period. Accumulating leave credits which are not
expected to be settled wholly before twelve months from the reporting date are classified as
noncurrent liabilities at its discounted amount.
Provisions and Contingencies
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. If the effect of the time value of money is material, provisions are determined by
discounting the effective future cash flows at a pre-tax rate that reflects current market assessment
of the time value of money and where appropriate, the risks specific to the liability. Where
discounting is used, the increase in the provision due to the passage of time is recognized as an
interest expense.
Contingent liabilities are not recognized in the consolidated financial statements. They are
disclosed unless the possibility of an outflow of resources embodying economic benefits is
remote. A contingent asset is not recognized in the consolidated financial statements but disclosed
when an inflow of economic benefits is probable.
60
Income Taxes
Current income tax
Current income 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 the tax
laws used to compute the amount are those that are enacted or substantively enacted at the end of
reporting period.
Current income tax for current and prior periods shall, to the extent unpaid, be recognized as a
liability under “Income tax payable” account in the consolidated balance sheet. If the amount
already paid in respect of current and prior periods exceeds the amount due for those periods, the
excess shall be recognized as an asset under “Other assets” account in the consolidated balance
sheet.
Deferred income tax
Deferred income tax is recognized on all temporary differences at the end of reporting period
between the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes.
Deferred income tax liabilities are recognized for all taxable temporary differences, including
assets revaluations. Deferred income tax assets are recognized for all deductible temporary
differences to the extent that it is probable that sufficient future taxable profits will be available
against which the deductible temporary differences can be utilized. Deferred income tax assets
and deferred income tax liabilities are not recognized when it arises 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 profit nor taxable profit or loss.
Deferred income tax liabilities are not provided on nontaxable temporary differences associated
with investments in subsidiaries and affiliates.
The carrying amount of deferred income tax assets is reviewed at each end of reporting period and
reduced to the extent that it is no longer probable that sufficient future taxable profits will be
available to allow all or part of the deferred tax assets to be utilized. Unrecognized deferred
income tax assets are reassessed at each end of reporting period and are recognized to the extent
that it has become probable that sufficient future taxable profits will allow the deferred income tax
asset to be recovered.
Deferred income tax assets and deferred income tax liabilities are measured at the tax rates that are
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 end of reporting period.
Deferred income tax relating to items recognized directly in equity is recognized in equity and
those directly in comprehensive income such as re-measurement of defined benefit plan are
recognized in the consolidated statement of comprehensive income and not in the consolidated
statement of income.
Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable
right exists to offset current tax assets against current income tax liabilities and the deferred taxes
relate to the same taxable entity and the same taxation authority.
61
Earnings Per Share
Basic earnings per share is computed by dividing the net income for the year attributable to equity
holders of the Parent Company by the weighted average number of ordinary shares issued and
outstanding after considering the retroactive effect, if any, of stock dividends declared during the
year.
Diluted earnings per share is calculated by dividing the net income for the year attributable to
equity holders of the Parent Company by the weighted average number of ordinary shares
outstanding during the year, excluding treasury shares and adjusted for the effects of all dilutive
potential common shares, if any. In determining both the basic and diluted earnings per share, the
effect of stock dividends, if any, is accounted for retrospectively.
Segment Reporting
The Group’s operating businesses are organized and managed separately according to the nature
of the products and services provided, with each segment representing a strategic business unit
that offers different products and serves different markets. Financial information on business
segments is presented in Note 30 to the consolidated financial statements. The Group’s assetproducing revenues are located in the Philippines (i.e., one geographical location). Therefore,
geographical segment information is no longer presented.
Events After the Reporting Period
Post year-end events that provide additional information about the Group’s position at the end of
reporting period (adjusting events) are reflected in the consolidated financial statements. Post
year-end events that are not adjusting events are disclosed in the notes to the consolidated
financial statements when material.
New Accounting Standards, Interpretations and Amendments to
Existing Standards Effective Subsequent to December 31, 2013
The Group will adopt the standards and interpretations enumerated below when these become
effective. The relevant disclosures will be included in the notes to the consolidated financial
statements when these become effective.

PAS 36, Impairment of Assets - Recoverable Amount Disclosures for Non-Financial Assets
(Amendments), removes the unintended consequences of PFRS 13 on the disclosures required
under PAS 36. In addition, these amendments require disclosure of the recoverable amounts
for the assets or cash-generating units for which impairment loss has been recognized or
reversed during the period. These amendments are effective retrospectively for annual periods
beginning on or after January 1, 2014 with earlier application permitted, provided PFRS 13 is
also applied. The amendments affect disclosures only and have no impact on the Group’s
financial position or performance.

Investment Entities (Amendments to PFRS 10, PFRS 12 and PAS 27). These amendments are
effective for annual periods beginning on or after January 1, 2014. They provide an exception
to the consolidation requirement for entities that meet the definition of an investment entity
under PFRS 10. The exception to consolidation requires investment entities to account for
subsidiaries at fair value through profit or loss. This amendment is not relevant to the Group.

Philippine Interpretation IFRIC 21, Levies (IFRIC 21), clarifies that an entity recognizes a
liability for a levy when the activity that triggers payment, as identified by the relevant
legislation, occurs. For a levy that is triggered upon reaching a minimum threshold, the
interpretation clarifies that no liability should be anticipated before the specified minimum
threshold is reached. IFRIC 21 is effective for annual periods beginning on or after
62
January 1, 2014. The Group does not expect that IFRIC 21 will have material financial impact
in future consolidated financial statements.

PAS 39, Financial Instruments: Recognition and Measurement - Novation of Derivatives and
Continuation of Hedge Accounting (Amendments), provides relief from discontinuing hedge
accounting when novation of a derivative designated as a hedging instrument meets certain
criteria. These amendments are effective for annual periods beginning on or after
January 1, 2014. The Group has no derivatives during the current period.

PAS 32, Financial Instruments: Presentation - Offsetting Financial Assets and Financial
Liabilities (Amendments), clarifies the meaning of “currently has a legally enforceable right to
offset” and also clarify the application of the PAS 32 offsetting criteria to settlement systems
(such as central clearing house systems) which apply gross settlement mechanisms that are not
simultaneous. The amendments affect presentation only and have no impact on the Group’s
financial position or performance. The amendments to PAS 32 are to be retrospectively
applied for annual periods beginning on or after January 1, 2014.

PAS 19, Employee Benefits - Defined Benefit Plans: Employee Contributions (Amendments),
applies to contributions from employees or third parties to defined benefit plans. Contributions
that are set out in the formal terms of the plan shall be accounted for as reductions to current
service costs if they are linked to service or as part of the re-measurements of the net defined
benefit asset or liability if they are not linked to service. Contributions that are discretionary
shall be accounted for as reductions of current service cost upon payment of these
contributions to the plans. The amendments to PAS 19 are to be retrospectively applied for
annual periods beginning on or after July 1, 2014. The Group will quantify financial impact
related to this amendment.
Annual Improvements to PFRSs (2010-2012 cycle)
The Annual Improvements to PFRSs (2010-2012 cycle) contain non-urgent but necessary
amendments to the following standards:

PFRS 2, Share-based Payment - Definition of Vesting Condition, revised the definitions of
vesting condition and market condition and added the definitions of performance condition
and service condition to clarify various issues. This amendment shall be prospectively applied
to share-based payment transactions for which the grant date is on or after July 1, 2014. This
amendment does not apply to the Group as it has no share-based payments.

PFRS 3, Business Combinations - Accounting for Contingent Consideration in a Business
Combination, clarifies that a contingent consideration that meets the definition of a financial
instrument should be classified as a financial liability or as equity in accordance with PAS 32.
Contingent consideration that is not classified as equity is subsequently measured at fair value
through profit or loss whether or not it falls within the scope of PFRS 9 (or PAS 39, if PFRS 9
is not yet adopted). The amendment shall be prospectively applied to business combinations
for which the acquisition date is on or after July 1, 2014. The Group shall consider this
amendment for future business combinations.

PFRS 8, Operating Segments - Aggregation of Operating Segments and Reconciliation of the
Total of the Reportable Segments’ Assets to the Entity’s Assets, requires entities to disclose the
judgment made by management in aggregating two or more operating segments. This
disclosure should include a brief description of the operating segments that have been
aggregated in this way and the economic indicators that have been assessed in determining
that the aggregated operating segments share similar economic characteristics. The
63
amendments also clarify that an entity shall provide reconciliations of the total of the
reportable segments’ assets to the entity’s assets if such amounts are regularly provided to the
chief operating decision maker. These amendments are effective for annual periods beginning
on or after July 1, 2014 and are applied retrospectively.

PFRS 13, Fair Value Measurement - Short-term Receivables and Payables, clarifies that
short-term receivables and payables with no stated interest rates can be held at invoice
amounts when the effect of discounting is immaterial. The amendment has no significant
impact on the Group’s financial position or performance.

PAS 16, Property, Plant and Equipment - Revaluation Method - Proportionate Restatement of
Accumulated Depreciation, clarifies that, upon revaluation of an item of property, plant and
equipment, the carrying amount of the asset shall be adjusted to the revalued amount, and the
asset shall be treated in one of the following ways:
a. The gross carrying amount is adjusted in a manner that is consistent with the revaluation
of the carrying amount of the asset. The accumulated depreciation at the date of
revaluation is adjusted to equal the difference between the gross carrying amount and the
carrying amount of the asset after taking into account any accumulated impairment losses.
b. The accumulated depreciation is eliminated against the gross carrying amount of the asset.
The amendment is effective for annual periods beginning on or after July 1, 2014. The
amendment shall apply to all revaluations recognized in annual periods beginning on or after
the date of initial application of this amendment and in the immediately preceding annual
period. The amendment has no impact on the Group’s financial position or performance.

PAS 24, Related Party Disclosures - Key Management Personnel, clarifies that an entity is a
related party of the reporting entity if the said entity, or any member of a Group for which it is
a part of, provides key management personnel services to the reporting entity or to the parent
company of the reporting entity. The amendments also clarify that a reporting entity that
obtains management personnel services from another entity (also referred to as management
entity) is not required to disclose the compensation paid or payable by the management entity
to its employees or directors. The reporting entity is required to disclose the amounts incurred
for the key management personnel services provided by a separate management entity. The
amendments are effective for annual periods beginning on or after July 1, 2014 and are
applied retrospectively. The amendments affect disclosures only and have no impact on the
Group’s financial position or performance.

PAS 38, Intangible Assets - Revaluation Method - Proportionate Restatement of Accumulated
Amortization, clarifies that, upon revaluation of an intangible asset, the carrying amount of the
asset shall be adjusted to the revalued amount, and the asset shall be treated in one of the
following ways:
a. The gross carrying amount is adjusted in a manner that is consistent with the revaluation
of the carrying amount of the asset. The accumulated amortization at the date of
revaluation is adjusted to equal the difference between the gross carrying amount and the
carrying amount of the asset after taking into account any accumulated impairment losses.
b. The accumulated amortization is eliminated against the gross carrying amount of the asset.
The amendments also clarify that the amount of the adjustment of the accumulated
amortization should form part of the increase or decrease in the carrying amount accounted for
in accordance with the standard.
64
The amendments are effective for annual periods beginning on or after July 1, 2014. The
amendments shall apply to all revaluations recognized in annual periods beginning on or after
the date of initial application of this amendment and in the immediately preceding annual
period. The amendments have no impact on the Group’s financial position or performance.
Annual Improvements to PFRSs (2011-2013 cycle)
The Annual Improvements to PFRSs (2011-2013 cycle) contain non-urgent but necessary
amendments to the following standards:

PFRS 1, First-time Adoption of Philippine Financial Reporting Standards - Meaning of
‘Effective PFRSs’, clarifies that an entity may choose to apply either a current standard or a
new standard that is not yet mandatory, but that permits early application, provided either
standard is applied consistently throughout the periods presented in the entity’s first PFRS
financial statements. This amendment is not applicable to the Group as it is not a first-time
adopter of PFRS.

PFRS 3, Business Combinations - Scope Exceptions for Joint Arrangements, clarifies that
PFRS 3 does not apply to the accounting for the formation of a joint arrangement in the
financial statements of the joint arrangement itself. The amendment is effective for annual
periods beginning on or after July 1, 2014 and is applied prospectively.

PFRS 13, Fair Value Measurement - Portfolio Exception, clarifies that the portfolio exception
in PFRS 13 can be applied to financial assets, financial liabilities and other contracts. The
amendment is effective for annual periods beginning on or after July 1, 2014 and is applied
prospectively. The amendment has no significant impact on the Group’s financial position or
performance.

PAS 40, Investment Property, clarifies the interrelationship between PFRS 3 and PAS 40
when classifying property as investment property or owner-occupied property. The
amendment stated that judgment is needed when determining whether the acquisition of
investment property is the acquisition of an asset or a group of assets or a business
combination within the scope of PFRS 3. This judgment is based on the guidance of PFRS 3.
This amendment is effective for annual periods beginning on or after July 1, 2014 and is
applied prospectively. The Group does not expect that the amendment will have material
financial impact in future financial statements.

PFRS 9, Financial Instruments, reflects the first and third phases of the project to replace PAS
39 and applies to the classification and measurement of financial assets and liabilities and
hedge accounting, respectively. Work on the second phase, which relates to impairment of
financial instruments, and the limited amendments to the classification and measurement
model is still ongoing, with a view to replace PAS 39 in its entirety. PFRS 9 requires all
financial assets to be measured at fair value at initial recognition. A debt financial asset may,
if the fair value option (FVO) is not invoked, be subsequently measured at amortized cost if it
is held within a business model that has the objective to hold the assets to collect the
contractual cash flows and its contractual terms give rise, on specified dates, to cash flows that
are solely payments of principal and interest on the principal outstanding. All other debt
instruments are subsequently measured at fair value through profit or loss. All equity financial
assets are measured at fair value either through other comprehensive income or profit or loss.
Equity financial assets held for trading must be measured at fair value through profit or loss.
For liabilities designated as at FVPL using the fair value option, the amount of change in the
fair value of a liability that is attributable to changes in credit risk must be presented in other
comprehensive income. The remainder of the change in fair value is presented in profit or
65
loss, unless presentation of the fair value change relating to the entity’s own credit risk in
other comprehensive income would create or enlarge an accounting mismatch in profit or loss.
All other PAS 39 classification and measurement requirements for financial liabilities have
been carried forward to PFRS 9, including the embedded derivative bifurcation rules and the
criteria for using the FVO. The adoption of the first phase of PFRS 9 will have an effect on
the classification and measurement of the Group’s financial assets, but will potentially have no
impact on the classification and measurement of financial liabilities.
On hedge accounting, PFRS 9 replaces the rules-based hedge accounting model of PAS 39
with a more principles-based approach. Changes include replacing the rules-based hedge
effectiveness test with an objectives-based test that focuses on the economic relationship
between the hedged item and the hedging instrument, and the effect of credit risk on that
economic relationship; allowing risk components to be designated as the hedged item, not
only for financial items, but also for non-financial items, provided that the risk component is
separately identifiable and reliably measurable; and allowing the time value of an option, the
forward element of a forward contract and any foreign currency basis spread to be excluded
from the designation of a financial instrument as the hedging instrument and accounted for as
costs of hedging. PFRS 9 also requires more extensive disclosures for hedge accounting.
PFRS 9 currently has no mandatory effective date. PFRS 9 may be applied before the
completion of the limited amendments to the classification and measurement model and
impairment methodology. The Group will not adopt the standard before the completion of the
limited amendments and the second phase of the project.

Philippine Interpretation IFRIC 15, Agreements for the Construction of Real Estate, covers
accounting for revenue and associated expenses by entities that undertake the construction of
real estate directly or through subcontractors. The Securities and Exchange Commission
(SEC) and the Financial Reporting Standards Council (FRSC) have deferred the effectivity of
this interpretation until the final Revenue standard is issued by the International Accounting
Standards Board (IASB) and an evaluation of the requirements of the final Revenue standard
against the practices of the Philippine real estate industry is completed. The adoption of this
interpretation may significantly affect the determination of the Group’s revenue from real
estate sales and corresponding costs, and related installment contract receivables, deferred tax
liabilities, and retained earnings account The Group will quantify the effect on the
consolidated financial statements when the final Revenue standard is issued.
3. Significant Accounting Judgments, Estimates and Assumptions
The preparation of the consolidated financial statements requires management to make judgments,
estimates and assumptions that affect the amounts reported in the consolidated financial statements
and accompanying notes.
In the opinion of management, these consolidated financial statements reflect all adjustments
necessary to present fairly the results for the period presented. Actual results could differ from
such estimates.
66
Judgments
In the process of applying the Group’s accounting policies, management has made the following
judgments, apart from those involving estimations, which has the most significant effect on the
amounts recognized in the consolidated financial statements:
Determination of the Group’s functional currency
The Group, based on the relevant economic substance of the underlying circumstances, has
determined its functional currency to be Peso. It is the currency that influences the Group’s sale of
real estate properties and the cost of selling the same.
Determination of control
The Group considers that it controls CLDI even though it owns less than 50% of voting interest.
The factors that the Group considers in making this determination include the size of its block of
voting shares and the relative size and dispersion of holdings by other shareholders. The Group is
the single largest shareholder of CLDI with 49.73% equity interest. The Parent Company, some
of its stockholders and affiliates (whose stockholders also own equity ownership in the Parent
Company) also collectively own more than 50% of the equity of CLDI giving the Parent Company
effective control over CLDI. In addition, majority of the members of its governing body or for
which its key management personnel are the same as those of CLDI.
Revenue recognition
Selecting the appropriate revenue recognition method for particular real estate transaction requires
certain judgments based on the following, among others:


Buyer’s commitment on the sale which may be ascertained through the significance of the
buyer’s initial investments; and
Stage of completion of the project.
Collectability of sales price
For sale of real estate properties, in determining whether the sales prices are collectible, the Group
considers the initial and continuing investments by the buyer of about 10% would demonstrate the
buyer’s commitment to pay.
Classification of financial instruments
The Group classifies a financial instrument, or its component parts, on initial recognition as a
financial asset, a financial liability or an equity instrument in accordance with the substance of the
contractual arrangement and the definitions of a financial asset, a financial liability or an equity
instrument. The substance of a financial instrument, rather than its legal form, governs its
classification in the Group’s consolidated balance sheet.
The Group determines the classification at initial recognition and, where allowed and appropriate,
re-evaluates this designation at every end of reporting period.
Classification of leases - Group as lessor
The Group has entered into property leases of its investment properties where it has determined
that the risks and rewards of ownership are retained with the Group. As such, these lease
agreements are accounted for as operating leases.
Classification of real estate properties
The Group determines whether a property is classified as for sale, for future development, for
lease and for capital appreciation.
67
Real estate properties which are not occupied, substantially for use by, or in the operations of, the
Group, nor for sale in the ordinary course of business, but are held primarily to earn rental income
and capital appreciation are classified as investment properties. Investment properties amounted
to P
=1,190.73 million and P
=868.51 million as of December 31, 2013 and 2012, respectively
(see Note 10).
Real estate properties which the Group develops and intends to sell before or on completion of
construction are classified as real estate properties for sale and for future development. Carrying
values of real estate properties for sale and for future development amounted to P
=2,528.56 million
and P
=2,759.17 million as of December 31, 2013 and 2012, respectively (see Notes 8 and 9).
Provisions
The Group provides for present obligations (legal or constructive) where it is probable that there
will be an outflow of resources embodying economic benefits that will be required to settle said
obligations. An estimate of the provision is based on known information at the end of reporting
period, net of any estimated amount that may be reimbursed to the Group. If the effect of the time
value of money is material, provisions are discounted using a current pretax rate that reflects the
risks specific to the liability. The amount of provision is being re-assessed at least on
an annual basis to consider new relevant information. No provision was recognized as of
December 31, 2013 and 2012 (see Note 32).
Estimates
The key assumptions concerning the future and other key sources of estimation uncertainty at the
end of reporting period, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are discussed below:
Determination of fair value of financial instruments
Financial assets and financial liabilities, on initial recognition, are accounted for at fair value. The
fair values of financial assets and financial liabilities, on initial recognition, are normally the
transaction prices. In the case of those financial assets and financial liabilities that have no active
markets, fair values are determined using an appropriate valuation technique. The fair values of
the Group’s financial assets are disclosed in Note 26.
Estimation of allowance for impairment of receivables
The level of this allowance is evaluated by management based on past collection history and other
factors, which include, but not limited to the length of the Group’s relationship with customer, the
customer’s payment behavior and known market factors that affect the collectability of the
accounts. As of December 31, 2013 and 2012, installment contracts receivable and other
receivables aggregated to P
=1,660.49 million and P
=2,010.72 million, respectively. There was no
impairment of receivables in 2013 and 2012 (see Notes 6 and 7).
Impairment of available-for-sale financial assets
An impairment issue arises when there is an objective evidence of impairment, which involves
significant judgment. In making this judgment, the Group evaluates the financial health of the
issuer, among others. The Group treats available-for-sale equity financial assets as impaired when
there has been a significant or prolonged decline in the fair value below its cost or where other
objective evidence of impairment exists. The Group treats “significant” generally as 20% or more
of cost and “prolonged” as greater than 12 months for quoted equity securities. In addition, the
Group evaluates other factors, including normal volatility in share price for quoted equities and the
future cash flows and the discount factors for unquoted equities.
68
Available-for-sale financial assets amounted to P
=1.44 million and P
=2.09 million as of
December 31, 2013 and 2012, respectively (see Note 12).
Estimation of percentage of completion of projects
The Group’s revenue recognition policies require management to make use of estimates and
assumptions that may affect the reported amounts of revenue and cost. The Group estimates the
percentage of completion of ongoing projects for purposes of accounting for the estimated costs of
development as well as revenue to be recognized. Actual costs of development could differ from
these estimates. Such estimates will be adjusted accordingly when the effects become reasonably
determinable.
The percentage of completion is based on the technical evaluation of the independent project
engineers as well as management’s monitoring of the costs, progress and improvements of the
projects. Gross profit on sales of real estate properties amounted to P
=528.65 million,
=568.39 million and P
P
=620.54 million in 2013, 2012 and 2011, respectively. In 2013, CLDI
reversed the cost accrual in excess of actual costs of completed projects amounting to
=119.74 million (see Note 22).
P
Determination of net realizable value of real estate properties for sale and held for future
development
The Group’s estimates of net realizable value of inventories are based on the most reliable
evidence available at the time the estimates are made, or the amount that the inventories are
expected to be realized. These estimates consider the fluctuations of price or cost directly relating
to events occurring after the end of the reporting period to the extent that such events confirm
conditions existing at the end of the period. A new assessment is made of net realizable value in
each subsequent period. When the circumstances that previously caused inventories to be written
down below cost no longer exist or when there is a clear evidence of an increase in net realizable
value because of changes in economic circumstances, the amount of the write-down is reversed so
that the new carrying amount is the lower of the cost and the revised net realizable value. The
Group’s real estate properties for sale and held for future development as of December 31, 2013
and 2012 amounted to P
=2,528.56 million and P
=2,759.17 million, respectively (see Notes 8 and 9).
Estimation of useful lives of investment properties and property and equipment
The Group estimates the useful lives of investment properties and property and equipment based
on the internal technical evaluation and experience with similar assets. Estimated lives of
investment properties and property and equipment are reviewed periodically and updated if
expectations differ from previous estimates due to wear and tear, technical and commercial
obsolescence and other limits on the use of the assets. Net book value of investment properties as
of December 31, 2013 and 2012 amounted to P
=1,190.73 million and P
=868.51 million, respectively
(see Note 10). On the other hand, the net book value of property and equipment amounted to
=26.67 million and P
P
=42.92 million as of December 31, 2013 and 2012, respectively (see Note 11).
Impairment of investment properties and property and equipment
The Group determines whether its nonfinancial assets such as investment properties and property
and equipment are impaired when impairment indicators exist such as significant
underperformance relative to expected historical or projected future operating results and
significant negative industry or economic trends. This requires an estimation of the value-in-use
of the cash-generating units to which the assets belong. Estimating the value-in-use requires the
Group to make an estimate of the expected future cash flows from the cash-generating unit and
also to choose an appropriate discount rate in order to calculate the present value of those cash
flows. Net book value of investment properties as of December 31, 2013 and 2012 amounted to
=1,190.73 million and P
P
=868.51 million, respectively (see Note 10). On the other hand, the net
69
book value of property and equipment amounted to P
=26.67 million and P
=42.92 million as of
December 31, 2013 and 2012, respectively (see Note 11).
Estimation of retirement benefits cost
The cost of the defined benefit plan and the present value of the defined benefit obligation are
determined using actuarial valuations. An actuarial valuation involves making various
assumptions that may differ from actual developments in the future. These include the
determination of the discount rate, future salary increases, mortality rates and future pension
increases. Due to the complexities involved in the valuation and its long-term nature, a defined
benefit obligation is highly sensitive to changes in these assumptions. All assumptions are
reviewed at each reporting date.
In determining the appropriate discount rate, management considers the PDEX PDST-R2 rates at
various tenors, rates for intermediate durations were interpolated and the rates were then weighted
by the expected benefits payments at those durations to arrive at the single weighted average
discount rate.
The mortality rate is based on publicly available mortality table in the Philippines. Future salary
increases are based on expected future inflation rates. Further details about assumptions used are
given in Note 23.
Net retirement benefits cost amounted to P
=2.02 million and P
=3.26 million in 2013 and 2012,
respectively, and net retirement income of P
=0.33 million in 2013 (see Note 23). Retirement plan
assets as of December 31, 2013 and 2012 amounted to P
=7.64 million and P
=11.78 million,
respectively (see Notes 12 and 23).
Estimation of pre-need and other reserves
Pre-need reserve is set-up for all pre-need benefits guaranteed and payable by CPI as defined in
the pre-need plan contracts. The determination of pre-need reserves is based on the actuarial
formula, methods and assumptions allowed by applicable SEC and IC circulars.
As of December 31, 2013 and 2012, the principal assumptions used in determining the pre-need
reserves were based on the IC Circular Letter No. 23-2012 dated November 28, 2012. The
transitory discount interest rate used in the valuation of pre-need reserves should not exceed the
lower of the attainable rates as certified by the Trustee of 5.81% and the IC rate of 8% in 2013 and
lower of the attainable rates as certified by the Trustee of 9% and IC rate of 8% in 2012.
The following are the assumptions used in the computation of pre-need reserves:
December 31, 2013:
a. Currently-Being-Paid Pension Plans - Actively Paying Plans

Plans issued prior to 2006 and after - 5.81% discount rate (ROI rate) and no
surrender/lapse rates were used.
b. Currently-Being-Paid Pension Plans - Lapsed Plans

Plans issued prior to 2006 and after - reserves equal the termination values (as originally
computed) at the date of lapse and no reinstatement rate was assumed.
70
c. Fully paid plans - Availing and Not Yet Availing
 Plans with maturity dates in years 2012 and after - 5.81% discount rate (ROI rate) and no
surrender rates were assumed for fully paid plans.
December 31, 2012:
a. Currently-Being-Paid Pension Plans - Actively Paying Plans

Plans issued prior to 2006 and after - 8% discount rate (IC rate) and no surrender/lapse
rates were used.
b. Currently-Being-Paid Pension Plans - Lapsed Plans

Plans issued prior to 2006 and after - reserves equal the termination values (as originally
computed) at the date of lapse and no reinstatement rate was assumed.
c. Fully paid plans - Availing and Not Yet Availing

Plans with maturity dates in years 2012 and after - 8% discount rate (IC rate) and no
surrender rates were assumed for fully paid plans.
December 31, 2011:
d. Currently-Being-Paid Pension Plans - Actively Paying Plans

Plans issued prior to 2006 - 12% (hurdle rate) discount rate and no surrender/lapse rates
were used.

Plans issued in 2006 and after - 10% (hurdle rate) discount rate and surrender /lapse rates
were used as per original assumptions.
e. Currently-Being-Paid Pension Plans - Lapsed Plans

f.
Plans issued prior to 2006 and after - reserves equal the termination values (as originally
computed) at the date of lapse and no reinstatement rate was assumed.
Fully paid plans - Availing and Not Yet Availing

Plans with maturity dates in years 2012 to 2016 - 6.03% discount rate (average rate of
return of the three trustee banks) and no surrender rates were assumed for fully paid
plans.

Plans with maturity dates in years 2017 and after - 12% (hurdle rate) discount rate and no
surrender rates were assumed for fully paid plans.
Management believes that the amount of pre-need reserves and other reserves recorded in the
books closely reflect potential plan claims as of end of reporting period. As of December 31, 2013
and 2012, pre-need reserve and other reserves amounted to P
=52.63 million and P
=47.32 million,
respectively (see Note 5).
Recognition of deferred income tax assets
The Group reviews the carrying amounts of deferred income tax assets at the end of each reporting
period and reduces deferred income tax assets to the extent that it is no longer probable that
71
sufficient future taxable profits will be available to allow all or part of the deferred income tax
assets to be utilized.
As of December 31, 2013 and 2012, deferred income tax assets amounted to P
=15.25 million and
=6.26 million, respectively (see Note 24).
P
4. Cash and Cash Equivalents and Short-term Cash Investments
Cash and cash equivalents consist of:
Cash on hand and in banks
Cash equivalents
2013
P
=13,238,700
646,771,697
P
= 660,010,397
2012
=9,390,820
P
2,388,366,233
=2,397,757,053
P
Cash in banks earn interest at the respective bank deposit rates. Cash equivalents are made for
varying periods up to three months depending on the immediate cash requirements of the Group,
and earn interest at the respective short-term investment rates.
Short-term cash investments amounting to P
=2,053.35 million and P
=307.60 million as of
December 31, 2013 and 2012, respectively, are placed with banks with maturities of more than
three months to one year from dates of acquisition and earn interest at the prevailing market rates.
Interest income earned from cash and cash equivalents and short-term cash investments amounted
to P
=75.28 million, P
=99.32 million and P
=91.04 million in 2013, 2012 and 2011, respectively
(see Note 20).
5. Investments in Trust Funds and Pre-need and Other Reserves
Investments in trust funds
The SEC requires, among others, that companies engaged in the sale of pre-need plans and similar
contracts set up a trust fund to guarantee the delivery of property or performance of service in the
future. Withdrawals from these trust funds are limited to, among others, payments of pension plan
benefits, bank charges and investment expenses in the operation of the trust funds, termination
value payable to plan holders, contributions to the trust funds of cancelled plans and final taxes on
investment income of the trust funds.
In accordance with the SEC requirements, CPI has funds deposited with two local trustee
banks with net assets aggregating to P
=36.51 million and P
=41.08 million as of December 31, 2013
and 2012, respectively, which are recorded under “Investments in trust funds” account in the
consolidated balance sheets.
72
The details of investments in trust funds as of December 31 are as follows:
2013
Assets
Cash and cash equivalents
Debt and listed equity securities
Others
Liabilities
P
= 4,009,545
27,854,267
4,871,373
36,735,185
(222,702)
P
=36,512,483
2012
=16,784,405
P
19,042,507
5,496,383
41,323,295
(243,954)
=41,079,341
P
Total contributions to the trust funds amounted to P
=1.22 million and P
=2.81 million in 2013 and
2012, respectively.
Pre-need and other reserves
Details of pre-need and other reserves are as follows:
Transitory pre-need reserves
Reserve for trust fund deficiency
Pension bonus reserve
Insurance premium reserve (Note 8)
2013
P
=34,096,538
17,083,018
1,138,132
307,713
P
=52,625,401
2012
=37,527,882
P
8,063,075
1,405,320
320,920
=47,317,197
P
In the opinion of management and the independent actuary, the CPI’s net contractual liabilities
amounting to P
=51.18 million and P
=45.59 million in 2013 and 2012, respectively, which is based on
the actuarial reports, closely reflect actual potential plan claims as of those dates.
In accordance with IC Circular Letter No. 23-2012 issued on November 28, 2012, the Group
computed for the transitory pre-need reserves which amounted to P
=34.10 million and
=37.53 million as of December 31, 2013 and 2012, respectively. If the resulting pre-need reserve
P
is greater than the actual trust fund balance at the end of the year, the transitory pre-need reserves
shall be computed in accordance with the schedule provided in the IC Circular Letter.
The Group has deemed it prudent and opted to record the difference in net contractual liabilities
and transitory pre-need reserve amounting to P
=17.08 million and P
=8.06 million under “Reserve for
trust fund deficiency” account as of December 31, 2013 and 2012, respectively, which is to be
funded for the next eight years.
The trust fund deficiency amounting to P
=2.14 million and P
=0.9 million in 2013 and 2012,
respectively, should be placed in the trust fund within 60 days from April 30 following the
valuation date. The trust fund deficiency for the year represents the difference of pre-need reserve
and trust fund investment, net of investment in trust funds allocated to pension bonus and
unrealized gains.
The current portion of pre-need and other reserves amounted to P
=2.06 million and P
=2.75 million as
of December 31, 2013 and 2012, respectively (see Note 27).
73
6. Installment Contracts Receivable
Installment contracts receivable arise from sales of real estate properties.
The installment contracts receivable on sales of real estate properties are collectible in monthly
installments for periods ranging from one to 10 years and bear monthly interest rates of 0.67% to
2.00% in 2013, 2012, and 2011 computed on the diminishing balance. Interest income earned
from installment contracts receivable amounted to P
=289.99 million, P
=340.31 million and
=385.66 million in 2013, 2012 and 2011, respectively (see Note 20).
P
The portion due within one year amounted to P
=260.66 million and P
=553.05 million as of
December 31, 2013 and 2012, respectively (see Note 27).
In 2013 and 2012, the Group and CI entered into a contract of guaranty under Retail Guaranty
Line in the amount of P
=1.00 billion for each year with Home Guaranty Corporation (HGC). The
amount of installment contracts receivable enrolled and renewed by the Group amounted to
=1.47 billion and P
P
=1.57 billion in 2013 and 2012, respectively. The Group paid a guarantee
premium of 1.00%, based on outstanding principal balance of the receivables enrolled in 2013 and
2012.
7. Other Receivables
Other receivables consist of:
Accrued interest
Advances to:
Customers
Due from related parties
Contractors
Others (Note 26)
2013
P
= 9,330,650
2012
=7,956,195
P
27,377,201
5,858,085
5,679,936
5,568,676
P
=53,814,548
30,903,513
–
6,147,827
5,280,232
=50,287,767
P
Advances to customers are receivables of the Group for the real estate property taxes of sold units
whereas advances to contractors are advances made by the Group for the contractor’s supply
requirements.
Other receivables include receivables from customers relating to registration of title and other
expenses initially paid by the Group on behalf of the buyers and employees’ advances.
Other receivables due within one year amounted to P
=52.65 million and P
=48.94 million as of
December 31, 2013 and 2012, respectively (see Note 27).
8. Real Estate Properties for Sale
Real estate properties for sale consist of cost incurred in the development of condominium units
and residential houses.
74
The movement of real estate properties for sale follows:
2012
2013
P1,591,546,671
P
= 1,470,772,832 =
613,075,004
573,259,659
(852,994,651)
(640,070,218)
137,355,951
28,046,100
9,102,672
4,468,036
–
3,775,795
(27,312,815)
(7,905,680)
=1,470,772,832
P
=1,432,346,524 P
Balances at beginning of year
Construction/development costs incurred
Disposals (recognized as cost of sales)
Transfer from investment property (Note 10)
Borrowing costs capitalized (Note 21)
Transfer from property and equipment (Note 11)
Other adjustments/reclassifications
Real estate properties for sale account includes capitalized interest costs incurred during each year
in connection with the development of the properties. The average capitalization rate used to
determine the amount of interest costs eligible for capitalization is 2.17%, 3.80% and 3.86% in
2013, 2012 and 2011, respectively.
Real estate properties for sale includes deemed cost adjustment amounting to P
=112.20 million and
=177.80 million as of December 31, 2013 and 2012, respectively (see Note 15). The deemed cost
P
adjustment arose when the Group transitioned to PFRS in 2005.
9. Real Estate Properties Held for Future Development
Movements in real estate properties held for future development are as follows:
Balance at beginning of year
Transfers to investment properties (Note 10)
Additions
Disposal
Balance at end of year
2012
2013
P1,182,830,001
P
= 1,288,400,125 =
(20,349,937)
(204,388,198)
125,920,061
12,501,301
–
(299,854)
=1,288,400,125
P
= 1,096,213,374 P
Real estate properties held for future development includes land properties reserved by the Group
for its future condominium projects. In 2012, CLDI acquired a parcel of land amounting to
=123.13 million for future development.
P
10. Investment Properties
Investment properties represent real estate properties for lease which consist of:
2013
Construction in
Building
Progress
Land
Costs
Balances at beginning of year
P
= 835,134,001 P
= 91,456,330
Additions
–
–
Transfer to real estate properties
for sale (Note 8)
(28,046,100)
–
(Forward)
P
=–
145,166,589
–
Total
P
= 926,590,331
145,166,589
(28,046,100)
75
Land
Capitalized interest (Note 21)
P
=–
Reclassification from real estate
properties held for future
development
(Note 9)
204,388,198
Balances at end of year
1,011,476,099
Accumulated Depreciation
Balances at beginning of year
–
Depreciation for the year
(Notes 17 and 19)
–
Balances at end of year
–
Net Book Values
P
=1,011,476,099
Costs
Balances at beginning of year
Additions
Transfer to real estate properties
for sale (Note 8)
Reclassification from real estate
properties held for future
development (Note 9)
Balances at end of year
Accumulated Depreciation
Balances at beginning of year
Depreciation for the year
(Notes 17 and 19)
Balances at end of year
Net Book Values
2013
Construction in
Building
Progress
P
=–
P
= 4,118,158
Total
P
= 4,118,158
–
91,456,330
–
149,284,747
204,388,198
1,252,217,176
58,081,473
–
58,081,473
3,403,855
61,485,328
P
= 29,971,002
–
3,403,855
–
61,485,328
P
= 149,284,747 P
= 1,190,731,848
Land
2012
Building
Total
=967,415,807
P
5,074,145
=71,106,393
P
–
=1,038,522,200
P
5,074,145
(137,355,951)
–
(137,355,951)
–
835,134,001
20,349,937
91,456,330
20,349,937
926,590,331
–
52,486,194
52,486,194
–
–
=835,134,001
P
5,595,279
58,081,473
=33,374,857
P
5,595,279
58,081,473
=868,508,858
P
In 2013, the Parent Company started construction of a building for lease which is still in progress
as of December 31, 2013.
The net book values of land and building include net deemed cost adjustment amounting to
P
=219.83 million and P
=198.26 million as of December 31, 2013 and 2012, respectively
(see Note 15). The deemed cost adjustment arose when the Group transitioned to PFRS in 2005.
Investment properties are rented out at different rates generally for a one-year term renewable
every year.
In November 2011, the Parent Company has entered into a non-cancellable operating lease
agreement with third parties that permits the lessee to use the property as a fast food outlet for a
term of 10 years.
76
The future minimum lease payments for the said lease agreement as of December 31 are as
follows:
2012
P4,146,417
=
25,514,109
18,749,358
=48,409,884
P
2013
P
=4,474,308
27,527,368
12,934,023
P
= 44,935,699
Within one year
After one year but not more than five years
Later than five years
Rent income from investment properties amounted to P
=32.44 million, P
=28.46 million and P
=23.08
million in 2013, 2012 and 2011, respectively.
Based on the appraisal reports by independent firms of appraisers using market data approach at
various dates in 2013 and 2012, the appraised values of these investment properties are
P
=2,312.13 million and P
=1,088.94 million as of dates of appraisal (see Note 26).
Direct operating expenses on investment properties pertaining to depreciation, real estate taxes
and other expenses amounted to P
=18.06 million, P
=16.73 million and P
=14.44 million in 2013,
2012 and 2011, respectively.
11. Property and Equipment
Property and equipment consist of:
2013
At Cost
Balances at beginning of year
Additions
Disposal
Balances at end of year
Accumulated Depreciation
Balances at beginning of year
Depreciation for the year
(Notes 17 and 19)
Disposal
Balances at end of year
Net Book Value
At Deemed Cost
Balances at beginning of year
Transfer to real estate properties
for sale (Note 8)
Balances at end of year
Accumulated Depreciation
Balances at beginning of year
Transfer to real estate properties
for sale (Note 8)
Depreciation for the year
(Notes 17 and 19)
Balances at end of year
Net Deemed Cost
Total
Office
Premises
Furniture,
Fixtures
and Office
Equipment
P–
=
–
–
–
=28,530,802
P
1,893,372
–
30,424,174
=6,972,749
P
–
(1,257,143)
5,715,606
=35,503,551
P
1,893,372
(1,257,143)
36,139,780
–
28,330,737
4,931,607
33,262,344
–
–
–
–
668,109
–
28,998,846
1,425,328
–
(188,571)
4,743,036
972,570
668,109
(188,571)
33,741,882
2,397,898
259,448,852
–
–
259,448,852
(6,083,224)
253,365,628
–
–
–
–
(6,083,224)
253,365,628
218,765,774
–
–
218,765,774
–
–
–
–
–
=1,425,328
P
–
–
–
= 972,570
P
(2,307,429)
12,638,302
229,096,647
24,268,981
= 24,268,981
P
Transportation
and Other
Equipment
Total
(2,307,429)
12,638,302
229,096,647
24,268,981
=26,666,879
P
77
2012
At Cost
Balances at beginning of year
Additions
Balances at end of year
Accumulated Depreciation
Balances at beginning of year
Depreciation for the year
(Notes 17 and 19)
Balances at end of year
Net Book Value
At Deemed Cost
Accumulated Depreciation
Balances at beginning of year
Depreciation for the year
(Notes 17 and 19)
Balances at end of year
Net Deemed Cost
Total
Office
Premises
Furniture,
Fixtures and
Office
Equipment
Transportation
and Other
Equipment
Total
P–
=
–
–
=28,530,802
P
–
28,530,802
P5,715,606
=
1,257,143
6,972,749
=34,246,408
P
1,257,143
35,503,551
–
27,914,576
4,258,122
32,172,698
–
–
259,448,852
416,161
28,330,737
200,065
–
673,485
4,931,607
2,041,142
–
1,089,646
33,262,344
2,241,207
259,448,852
206,127,471


206,127,471
12,638,303
218,765,774
40,683,078
=40,683,078
P
–
–
–
=200,065
P
–
–
–
=2,041,142
P
12,638,303
218,765,774
40,683,078
=42,924,285
P
For the office premises, the Group elected to apply the optional exemption under PFRS 1, FirstTime Adoption of PFRS, to use the revalued amount as deemed cost as at January 1, 2005, the date
of transition to PFRS. As of December 31, 2013 and 2012, the balances at pre-PFRS cost of the
office premises as of December 31 are as follows:
Office premises
Less accumulated depreciation
2013
P
= 55,775,746
50,497,783
P
= 5,277,963
2012
=61,858,970
P
49,738,635
=12,120,335
P
Difference between the net deemed cost and the net pre-PFRS cost amounting to P
=18.99 million
and P
=28.56 million as of December 31, 2013 and 2012, respectively, represents the remaining
balance of the deemed cost adjustment (see Note 15).
The cost of fully depreciated property and equipment still in use as of December 31, 2013 and
2012 amounted to P
=32.45 million.
12. Other Assets
Other assets consist of:
Available-for-sale financial assets
Retirement plan assets (Note 23)
Deposits and others
2013
P
= 1,441,591
7,642,647
31,909,574
P
=40,993,812
2012
P2,090,093
=
11,781,286
28,238,710
=42,110,089
P
Available-for-sale financial assets consist of investments in quoted equity securities. The fair
values of available-for-sale financial assets were determined based on published prices in an active
market.
78
The movement in “Net changes in fair values of available-for-sale financial assets” account
presented in the equity section of the consolidated balance sheets is as follows:
Balances at beginning of year
Mark-to-market gain (loss) attributable to equity
holders of the Parent Company
Balances at end of year
2013
P
= 1,770,510
(184,473)
P
= 1,586,037
2012
=521,418
P
1,249,092
=1,770,510
P
Mark-to-market gain on available-for-sale financial assets pertaining to the non-controlling
interests amounted to P
=0.31 million and P
=0.38 million in 2013 and 2012, respectively. Market to
market loss on available-for-sale financial assets pertaining to the non-controlling interests
amounted to P
=0.01 million in 2011.
Dividend income from available-for-sale financial assets amounted to P
=41,002, P
=34,305 and
=36,454 in 2013, 2012 and 2011, respectively (Note 20).
P
Deposits and others represent payments made by the Group to various utility companies for the
installation of electric and water meters for condominium units still unsold and input VAT on the
purchase of lot.
The portion of other assets due within one year aggregated to P
=26.64 million and P
=30.33 million
as of December 31, 2013 and 2012, respectively (see Note 27).
13. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consist of:
Trade payables
Accrued expenses:
Development costs
Personnel costs
Director’s fee
Interest payable
Taxes, premiums, others
Deposits
Withholding taxes payable
Dividends payable
VAT payable
Reservation fees
Others (Note 25)
2013
P
=83,265,456
2012
=72,755,043
P
46,459,365
31,156,067
18,603,238
2,415,201
1,761,119
13,591,464
5,582,465
7,413,422
337,023,595

7,126,335
9,888,882
P
= 227,263,014

20,291,901
7,741,375
3,119,264
17,161,733
6,054,147
6,968,148
1,084,122
2,240,028
8,186,821
=482,626,177
P
Trade payables consist of payables to contractors and other counterparties, whereas deposits
consist of rental deposits and collected deposits for water and electric meters of the sold units.
Accrued expenses represent various accrual of the Group for its expenses and real estate projects.
Accrued development costs represent the corresponding accrued expenses for the sold real estate
projects of the Group. Other payables consist of customers’ reservation fees and employees’
payables.
79
Accounts payable and accrued expenses due within one year amounted to P
=209.49 million and
=285.01 million as of December 31, 2013 and 2012, respectively (see Note 27).
P
14. Notes and Contracts Payable
The details of notes and contracts payable are as follows:
Notes payable:
Short-term promissory notes with varying
maturities and annual interest rates ranging
from 1.06% to 2.34% in 2013 and 1.81% to
4.77% in 2012
Short-term promissory notes enrolled with HGC
with varying maturities and annual interest
rates ranging from 0.85% to 1.15% in 2013
and 1.70% to 2.75% in 2012
Contracts payable
2013
2012
P
= 1,186,000,000
=1,200,200,000
P
284,358,464
1,470,358,464
–
P
= 1,470,358,464
621,713,617
1,821,913,617
17,381,250
=1,839,294,867
P
On various dates in 2013 and 2012, the SEC authorized the Parent Company and CLDI to issue
P
=1,400.00 million worth of short-term commercial papers (STCP) registered with the SEC in
accordance with the provision of the Securities Regulation Code and its implementing rules and
regulations, the code of Corporate Governance and other applicable laws and orders. Outstanding
STCP issued by the Group as of December 31, 2013 and 2012 aggregated to P
=1,186.00 million
and P
=1,200.20 million, respectively.
In 2013 and 2012, the Parent Company and CLDI entered a contract of guaranty under a
Revolving Cash Guaranty Line with HGC in the amount of P
=1,900.00 million. The guaranty
covers the unpaid principal due on the outstanding STCP and unpaid interest thereon of 10.00%
per annum. The guaranty premium paid was 0.90% per annum based on enrolled commercial
papers in 2013 and 2012, respectively. Outstanding STCP covered by the guaranty amounted to
=284.36 million and P
P
=621.71 million as of December 31, 2013 and 2012, respectively.
Interest expense related to short-term notes payable amounted to P
=33.26 million, P
=55.73 million
and P
=65.39 million in 2013, 2012 and 2011, respectively. Capitalized interests in 2013, 2012 and
2011 amounted to P
=8.59 million, P
=9.55 million and P
=11.57 million, respectively (see Note 21).
The Group has omnibus credit line with financial institutions aggregating to about
=2,515.00 million and P
P
=1,950.00 million as of December 31, 2013 and 2012, respectively, which
is available for drawing by any of the companies of the Group. The Group’s properties with
carrying values amounting to P
=714.79 million and P
=316.24 million as of December 31, 2013 and
2012, respectively, will be used as collaterals for omnibus credit line. No loans were availed from
omnibus credit line in 2013 and 2012.
The Parent Company has specific credit lines amounting to P
=215.00 million in 2013 and 2012.
Contracts payable represent liabilities arising from contracts to purchase land for future
development.
80
Notes and contracts payable due within one year amounted to P
=1,470.36 million and
=1,839.29 million as of December 31, 2013 and 2012, respectively (see Note 27).
P
15. Equity
a. The following table summarizes the reconciliation of the authorized, issued and outstanding
shares of capital stock for each of the following:
Authorized - P
=1 par value
Balance at beginning of year
Increase in authorized shares
Balance at end of year
Issued, beginning of year
Treasury stock
Outstanding
Stock dividends
Treasury stock
Issued, ending of year
2013
2012
2011
4,000,000,000
–
4,000,000,000
3,000,000,000
1,000,000,000
4,000,000,000
3,000,000,000
–
3,000,000,000
3,241,793,886
(3,921,874)
3,237,872,012
161,992,454
3,399,864,466
3,921,874
3,403,786,340
2,947,261,781
(3,827,401)
2,943,434,380
294,532,105
3,237,966,485
3,827,401
3,241,793,886
2,456,374,741
(3,655,633)
2,452,719,108
490,887,040
2,943,606,148
3,655,633
2,947,261,781
Treasury stock includes 1,983,927 shares and 1,889,454 shares in 2013 and 2012,
respectively, held by CPI.
The Parent Company registered 10,000,000 shares with SEC on June 15, 1978 with an initial
offer price of P
=10.00. On July 27, 2012, the SEC approved the Amended Articles of
Incorporation on the application for increase in authorized capital stock from
=3,000.00 million to P
P
=4,000.00 million with a par value of P
=1.00 each.
As of
December 31, 2013 and 2012, the Parent Company has 3,403,786,340 shares held by 702
equity holders and 3,241,793,886 shares held by 719 equity holders, respectively.
b. Dividends declared and issued/paid by the Parent Company in 2013, 2012 and 2011 are as
follows:
Dividends
Cash
Stock
Date Approved
June 4, 2013
May 18, 2012
May 30, 2011
April 25, 2013
August 15, 2012
June 7, 2011
Per Share
=0.03
P
0.03
0.05
5%
10%
20%
Stockholders of
Record Date
June 19, 2013
June 15, 2012
June 13, 2011
July 4, 2013
August 27, 2012
July 7, 2011
Date Issued/Paid
July 15, 2013
July 11, 2012
July 8, 2011
July 30, 2013
September 20, 2012
August 2, 2011
Fractional shares of stock dividends were paid in cash based on the par value.
The SEC authorized the issuance of 5% stock dividends declared by the BOD in 2013, 10%
stock dividends declared in 2012 and 20% stock dividends declared in 2011.
c. As of December 31, 2013 and 2012, the retained earnings attributable to equity holders of the
Parent Company and the non-controlling interest include the remaining balance of deemed
cost adjustment which arose when the Group transitioned to PFRS in 2005.
81
The components of the net deemed cost adjustment included in the equity as of December 31 are
as follows:
Real estate properties for sale (Note 8)
Investment properties (Note 10)
Property and equipment (Note 11)
Deemed cost adjustment
Deferred tax liability (Note 24)
Net deemed cost adjustment
2013
P
=112,204,695
219,825,103
18,991,017
351,020,815
(105,306,244)
P
=245,714,571
2012
=177,802,994
P
198,260,985
28,562,742
404,626,721
(121,388,016)
=283,238,705
P
The net deemed cost adjustment is allocated in the equity as follows:
Attributable to:
Equity holders of the Parent Company
Non-controlling interest
2013
2012
P
= 239,769,954
5,944,617
P
= 245,714,571
=277,294,088
P
5,944,617
=283,238,705
P
The deemed cost adjustment has yet to be realized through additional depreciation in profit or loss
in case of depreciable assets (classified under property and equipment) and building (classified
under investment properties) and through sales in case of inventory (classified under real estate
properties for sale) and land (classified under investment properties).
The balance of retained earnings is restricted for the payment of dividends to the extent of the
Parent Company’s shares of stock held in treasury, net deemed cost adjustment in properties and
undistributed earnings of subsidiaries as follows:
Undistributed earnings of subsidiaries
Net deemed cost adjustment in properties
Cost of treasury shares
2013
P
= 945,995,415
239,769,954
31,130,586
P
= 1,216,895,955
2012
=881,260,306
P
277,294,088
31,172,734
=1,189,727,128
P
16. Material Partly-owned Subsidiary
Below are the summarized financial information of the subsidiaries that has non-controlling
interest that is material to the Group. The amounts disclosed are based on those included in the
consolidated financial statements before intercompany eliminations.
Proportion of equity interest held by non-controlling interests as of December 31, 2013 and 2012:
CLDI
CPI
50.27%
9.19%
82
As of December 31, the summarized balance sheets of subsidiaries are as follows:
Total assets
Total liabilities
Equity
Attributable to non-controlling
interests
CLDI
2012
2013
=2,185,124,499
P
=2,072,864,057 P
587,121,843
374,256,840
1,698,607,217 1,598,002,656
853,889,848
803,315,935
CPI
2012
2013
=334,528,113
P
P
= 317,053,974
57,076,097
61,595,678
277,452,016
255,458,296
25,497,840
23,499,311
Summarized statements of income for the years ended December 31 are as follows:
Revenue
Expenses
Provision for (benefit from)
income tax
Net income
Attributable to:
Non-controlling interests
Cash dividends paid to
non-controlling interest
CLDI
2012
2013
=676,140,702
P
P
= 429,041,905
369,581,600
177,787,330
CPI
2013
P
= 17,287,115
15,769,628
2012
=28,916,997
P
20,872,584
59,982,620
191,271,955
50,513,961
256,045,141
(546,893)
2,064,380
833,440
7,210,973
96,152,412
128,713,892
189,717
662,689
44,859,718
50,976,969
1,148,628

Summarized statements of comprehensive income for the years ended December 31 are as
follows:
Net income
Other comprehensive income (loss)
Total comprehensive income (loss)
Attributable to:
Non-controlling interests
CLDI
2012
2013
=256,045,141
P
P
= 191,271,955
1,180,896
(1,429,517)
257,226,037
189,842,438
95,433,794
129,307,529
CPI
2013
P
= 2,064,380
(2,403,811)
(339,431)
2012
=7,210,973
P
7,449,730
14,660,703
(31,194)
1,342,749
Summarized statements of cash flows for the years ended December 31 are as follows:
‘
Cash flows from operating activities
Cash flows from (used in) investing
activities
Cash flows from (used in) financing
activities
CLDI
2012
2013
=329,340,163
P
P
= 354,143,204
160,358,762
(571,987,173)
(140,136,334)
(198,929,241)
CPI
2012
2013
=11,904,117
P
P
= 8,340,159
(31,598,443)
(20,165,371)
(12,500,000)
–
83
17. Operating Expenses
Operating expenses consist of:
Personnel (Notes 18 and 23)
Taxes and licenses
Professional fees
Insurance (Notes 6 and 14)
Depreciation (Note 19)
Membership dues
Outside services
Advertising and promotions
Brokers’ commission
Light, power and water
Repairs and maintenance
Postage, telephone and telegraph
Stationery and office supplies
Donations
Others
2013
P
=185,875,299
47,011,916
35,312,756
24,868,282
16,710,266
14,030,786
9,529,062
8,858,564
5,945,532
4,731,784
4,576,107
2,420,000
2,121,291
1,862,546
18,176,125
P
=382,030,316
2012
(As restated,
Note 2)
=172,294,155
P
46,386,404
21,940,502
15,324,145
19,323,228
13,558,915
9,188,786
6,608,926
5,737,736
4,056,231
2,696,321
2,492,371
1,315,860
710,000
16,862,992
=338,496,572
P
2011
(As restated,
Note 2)
=152,983,806
P
52,023,492
48,607,854
17,758,594
18,842,759
18,812,757
8,577,753
6,208,824
6,787,361
4,068,586
3,414,874
2,163,449
1,333,493
5,003,000
16,541,620
=363,128,222
P
2013
P
=101,779,235
2012
(As restated,
Note 2)
=69,162,758
P
2011
(As restated,
Note 2)
=56,158,112
P
48,125,728
33,953,151
59,829,837
40,040,714
45,550,434
51,601,807
2,017,185
P
=185,875,299
3,260,846
(326,547)
=172,294,155
P
=152,983,806
P
2013
P
=3,403,855
13,306,411
P
=16,710,266
2012
=5,595,279
P
13,727,949
=19,323,228
P
2011
=4,960,329
P
13,882,430
=18,842,759
P
18. Personnel Expenses
Personnel expenses consist of:
Salaries and wages
Bonuses and other employee
benefits
Commissions
Retirement benefits cost
(income) (Note 23)
19. Depreciation
Depreciation consists of:
Investment properties (Note 10)
Property and equipment (Note 11)
84
20. Financial Income
Financial income consists of:
Interest income from:
Installment contracts receivable
relating to sales of real estate
(Note 6)
Cash equivalents and short-term
cash investments (Note 4)
Cash in banks (Note 4)
Others (Note 24)
Dividend income (Note 12)
2013
2012
2011
P
=289,986,626
=340,309,950
P
=385,658,918
P
75,218,273
65,476
3,787,603
41,002
P
=369,098,980
99,238,128
77,067
2,242,418
34,305
=441,901,868
P
90,915,532
123,549
1,959,523
36,454
=478,693,976
P
2013
2012
2011
P
=33,262,934
–
33,262,934
=55,732,939
P
–
55,732,939
=65,385,026
P
304,974
65,690,000
(8,586,194)
24,676,740
146,692
24,823,432
1,254,672
P
=26,078,104
(9,551,549)
46,181,390
59,587
46,240,977
1,400,916
=47,641,893
P
(11,574,197)
54,115,803
935,946
55,051,749
1,518,624
=56,570,373
P
2012
=–
P
2,582,951
18,680,496
=21,263,447
P
2011
=–
P
2,213,192
19,302,460
=21,515,652
P
21. Financial Expenses
Financial expenses consist of:
Interest expense on:
Notes payable (Note 14)
Loans payable
Capitalized interest
(Notes 8, 10 and 14)
Others
Finance charges
22. Other Income/Expenses
Other income consists of:
Reversal of excess cost accrual
Trust fund income
Others
2013
P
= 119,737,311
1,780,146
28,298,822
P
= 149,816,279
Reversal of excess cost accrual represents excess of estimated development cost over the actual
cost of completed projects. Others include penalties for customers’ late payments and sale of
scraps, forfeiture of reservations and down payments received on sales which were not
consummated.
85
Other expenses
Other expenses pertain to reversal of gross profit recognized in prior years due to
forfeiture/cancellation of sales. In 2013, the Group reassessed the classification of the reversal of
gross profit arising from forfeiture/cancellation of real estate sales and recognized such as part of
“Other expenses” account in the statements of income. In prior years, this was included under
“Cost of real estate sales” account in the statements of income. The 2012 and 2011 presentation
was reclassified to conform with the 2013 presentation. The reclassification has no impact on the
Parent Company’s financial position, results of operations and cash flows as of December 31,
2012 and 2011.
23. Retirement Benefits Cost
The Group, jointly with affiliated companies, has funded, noncontributory defined benefit
retirement plan, administered by trustee covering all of its permanent employees. This provides for
payment of benefits to covered employees upon retirement subject to certain condition which is
based on a certain percentage of employee’s final monthly salary and the number of years of
service. The fund is administered by a trustee bank under the supervision of the Retirement
Committee of the plan. The committee is responsible for investment strategy of the plan.
The details of net retirement benefits cost (income), which is included in “Personnel expense”
account, are as follows:
Current service cost
Interest cost (income) on defined benefit
obligation
Net retirement benefits cost (income)
2013
P
=2,638,269
2012
(As restated,
Note 2)
=2,983,674
P
2011
(As restated,
Note 2)
=1,164,396
P
(621,084)
P
=2,017,185
277,172
=3,260,846
P
(1,490,943)
(P
=326,547)
Re-measurement losses (gains) recognized in the statements of comprehensive income follows:
2013
Actuarial loss (gain) on defined benefit
obligation
Due to change in financial
assumption
Due to experience
Loss on plan assets excluding amounts
included in net interest cost
Changes in effect of asset ceiling
Re-measurement losses (gains)
2012
(As restated,
Note 2)
2011
(As restated,
Note 2)
=5,271,683)
(P
= 3,702,869) (P
(2,831,791) (11,698,437)
=25,333,957
P
−
616,406
1,881,640
−
10,084,295
=16,353,714)
P
= 5,431,275 (P
5,052,655
−
=30,386,612
P
86
Movements in net retirement plan assets are as follows:
Beginning balances
Retirement benefits cost
Re-measurement losses (gains)
Contributions
Ending balances
2013
(P
= 11,781,286)
2,017,185
5,431,275
(3,309,821)
(P
= 7,642,647)
2012
(As restated,
Note 2)
=4,621,403
P
3,260,846
(16,353,714)
(3,309,821)
(P
=11,781,286)
The details of the retirement plan assets are as follows:
Defined benefit obligation
Fair value of plan assets
Surplus
Asset ceiling adjustment
Retirement plan assets
2013
P
=38,646,103
(56,373,045)
(17,726,942)
10,084,295
(P
= 7,642,647)
2012
(As restated,
Note 2)
=41,419,272
P
(53,200,558)
(11,781,286)
−
(P
=11,781,286)
Changes in present value of defined benefit obligation are as follows:
Defined benefit obligation, January 1
Current service cost
Interest cost on benefit obligation
Benefits paid
Actuarial losses (gains)
Defined benefit obligation, December 31
2013
P
=41,419,272
2,638,269
2,186,875
(1,063,653)
(6,534,660)
P
=38,646,103
2012
(As restated,
Note 2)
=52,930,403
P
2,983,674
3,158,126
(682,811)
(16,970,120)
=41,419,272
P
2013
P
=53,200,558
2012
(As restated,
Note 2)
=48,309,001
P
926,319
3,309,821
(1,063,653)
P
=56,373,045
2,264,547
3,309,821
(682,811)
=53,200,558
P
Changes in fair value of plan assets are as follows:
Fair value of plan assets, January 1
Actual return including amount
recognized in net interest cost
Contributions to the plan
Benefits paid
Fair value of plan assets, December 31
87
The major categories of plan assets of the Group with its affiliated companies as a percentage of
the fair value of net plan assets are as follows:
2013
37.96%
9.28%
50.88%
2.38%
(0.50%)
100.00%
Cash and cash equivalents
Investments in equity securities
Investment properties
Receivables
Payables
2012
83.95%
10.01%
–
6.04%
–
100.00%
Cash and cash equivalents consists of saving deposits and short-term time deposits with maturities
of less than 3 months. Investments in equity securities consist of investment in shares of stock of
listed companies. Investments in equity securities have quoted market prices in an active market.
Loans and receivables include loans to individuals and accrued interest income. Investment
properties pertain to condominium units which will be used for lease.
The Group expects to contribute P
=3.70 million to the retirement fund in 2014.
The Group does not currently employ any asset-liability matching.
The latest actuarial valuation report is as of December 31, 2013. The principal assumptions used in
determining retirement benefits obligation cost for the Group’s plan are as follows:
Discount rate per annum
Future annual increase in salary
Number of employees
Mortality rate
Disability rate
2012
2013
5.86%-5.32%
4.15%-4.86%
4.50%
3.00%
215
224
1983 GAM
1983 GAM
1952
1952
Disability Study Disability Study
The defined benefit obligation is subject to several key assumptions. The sensitivity analysis has
been determined based on reasonably possible changes of each significant assumption on the
defined benefit obligation as of December 31, 2013, assuming if all other assumptions were held
constant.
Discount rate
Salary increase rate
Increase
(decrease) in
Basis Points
+0.50%
-0.50%
Increase
(decrease) in
defined benefit
obligation
(P
=1,986,771)
2,187,352
+1.00%
-1.00%
4,472,232
(3,766,863)
88
Shown below is the maturity analysis of the undiscounted expected benefit payments:
Plan year
Less than one year
More than one year to five years
More than five years to 10 years
More than 10 years to 15 years
More than 15 years to 20 years
More than 20 years
No. of Retirees
1
3
8
21
26
165
224
Total Benefit
3,714,306
2,729,465
10,896,181
29,853,310
38,153,353
180,190,482
265,537,097
The average duration of the defined benefit obligation as of December 31, 2012 is 13.8 years.
24. Income Taxes
a. Provision for income tax consists of:
Current
Deferred
Final tax on interest income
2013
P
= 209,793,135
(97,575,677)
112,217,458
15,056,750
P
= 127,274,208
2012
=133,794,942
P
(28,327,676)
105,467,266
19,863,039
=125,330,305
P
2011
=129,620,127
P
(44,447,040)
85,173,087
18,207,815
=103,380,902
P
b. The components of the net deferred tax liabilities are as follows:
Deferred income tax assets on
accrued expenses and others
Deferred income tax liabilities:
Deemed cost adjustment in properties
(Note 15)
Unrealized gain on real estate transactions
Capitalized interest
Retirement plan assets
Net deferred income tax liabilities
2013
2012
P
=15,252,319
=6,259,938
P
105,306,244
102,288,901
3,739,913
2,292,794
213,627,852
P
= 198,375,533
121,388,016
185,863,894
4,909,027
3,534,386
315,695,323
=309,435,385
P
c. The reconciliation of income tax computed at the statutory tax rate to provision for income tax
follows:
Income tax at statutory tax rate
Additions to (reductions in) income
tax resulting from:
Income entitled to tax holiday
(Note 30)
Tax-exempt interest income
(Forward)
2013
P
=194,039,976
(36,457,556)
(40,074,206)
2012
=196,645,941
P
(42,759,331)
(35,292,573)
2011
=212,042,283
P
(68,910,859)
(43,698,374)
89
Nondeductible decrease in
pre-need reserves - net
Interest income subjected to
final tax
Nontaxable dividend income
Final tax on interest income
Nondeductible interest expense
Trust fund income already
subjected to final tax
Others - net
Provision for income tax
2013
2012
2011
P
=22,944,161
=9,302,105
P
(22,585,124)
(16,973,853)
15,056,750
6,553,819
(29,794,558)
(774,885)
19,863,039
(10,291)
(27,311,724)
(10,934)
18,207,815
8,235,827
(534,044)
5,304,285
P
=127,274,208
(771,880)
8,922,738
=125,330,305
P
(663,958)
6,162,272
=103,380,902
P
(P
=671,446)
25. Related Party Transactions
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 entity relationship, attention is directed to the substance of the relationship and not merely
the legal form.
The Group discloses the nature of the related party relationship and information about the
transactions and outstanding balances necessary for an understanding of the potential effect of the
relationship on the consolidated financial statements, including, as a minimum, the amount of
outstanding balances and its terms and conditions including whether they are secured, and the
nature of the consideration to be provided in settlement.
90
The Parent Company, in the normal course of business, has transactions and account balances with related parties consisting mainly of the following:
Nature of Transaction
Ultimate parent (CI)
Sharing of expenses charged by (to) the
Company (Note 24a)
Subsidiaries (CLDI & CPI)*
Sale of real estate properties to CPI
(Note 24b)
Amount of Transactions
2012
2013
P
=10,555,661
(P
=4,697,576)
2011
Outstanding Balances
Receivable (Note 6)
Payable (Note 13)
2012
2013
2013
2012
(P
=2,883,044)
P
=5,858,085
=–
P
=–
P
=4,697,575
P
–
Terms and Conditions
30-day, unsecured, non-interest
bearing; to be settled in cash
20,486,300
65,332,152
20,007,675
–
–
–
Sharing of expenses charged by (to) the
Company (Note 24a)
1,318,035
(4,273,600)
425,840
–
–
302,447
Retirement Plan
Contribution to the plan (Note 24d)
1,260,119
3,309,821
118,683
–
–
–
–
Settled in cash
91,965,753
3,585,846
88,955,372
4,137,074
85,679,808
3,039,934
–
–
–
–
–
–
–
–
Settled in cash
Settled in cash
821,622,480
736,762,617
721,695,328
–
P
=5,858,085
–
=–
P
–
P
=302,447
–
=6,318,145
P
Key management personnel
Short-term salaries and compensation
(Note 24f)
Long-term employee benefits (Note 24f)
BOD
Shares of stock held by BOD (Note 24e)
Total
Received in cash
30-day, unsecured, non-interest
bearing; to be received or
1,620,570 settled in cash; no impairment
*Parent Company’s transactions with CLDI and CPI are eliminated in the consolidated balance sheets and consolidated statements of income.
91
The Group has various shared expenses with other affiliates pertaining to general and
administrative expenses such as salaries, transportation, association dues, professional fees and
rent.
a. In 2013 and 2012, the Parent Company sold real estate properties to CPI.
b. The Group, jointly with affiliated companies under common control, has a trust fund for the
retirement plan of their employees. The trust fund is being maintained by a trustee bank. The
Group’s share on the fair value of plan assets amounted to P
=56.37 million and P
=53.20 million
as of December 31, 2013 and 2012, respectively. The Group’s share on carrying value of plan
assets amounted to P
=55.50 million and P
=51.86 million as of December 31, 2013 and 2012,
respectively.
The major categories of plan assets are cash and cash equivalents, investments in securities
and loans and receivables (see Note 23). Investments in equity securities of plan assets
include investment in shares of the Parent Company with fair value amounting to
=4.58 million and P
P
=4.86 million as of December 31, 2013 and 2012, respectively, with
original cost of P
=3.16 million. Unrealized gain on changes of fair value of these investments
amounted to P
=1.42 million and P
=1.74 million as of December 31, 2013 and 2012, respectively.
Loans and receivables of plan assets include installment contracts receivable purchased in
prior years on a non-recourse basis from the Parent Company amounting to
=1.03 million and P
P
=2.86 million as of December 31, 2013 and 2012, respectively. In 2013, the
retirement plan purchased condominium units from the Parent Company which will be used
for lease.
c. The Parent Company’s shares held by members of the BOD aggregated to 821,622,480 and
736,762,617 as of December 31, 2013 and 2012, respectively. On the other hand, shares held
by the ultimate parent and affiliate totaled to 1,717,056,617 and 1,635,292,018 as of
December 31, 2013 and 2012, respectively.
d. Compensation of key management personnel are as follows:
Salaries
Bonuses
Other benefits
2013
P
=31,112,546
29,312,815
31,540,392
P
=91,965,753
2012
=29,265,211
P
31,614,398
28,075,763
=88,955,372
P
2011
=27,745,084
P
26,044,679
31,890,045
=85,679,808
P
The Group has no standard arrangements with regards to the remuneration of its directors. In
2013, 2012 and 2011, the BOD received a total of P
=27.75 million, P
=23.70 million and
=28.26 million, respectively. Moreover, the Group has no standard arrangement with regards
P
to the remuneration of its existing officers aside from the compensation received or any other
arrangements in the employment contracts and compensatory plan. The Group does not have
any arrangements for stock warrants or options offered to its employees.
In 2013, 2012 and 2011, the long-term employee benefits pertaining to retirement benefits for
key management personnel of the Parent Company amounted to P
=0.84 million, P
=1.02 million
and P
=1.03 million, respectively. Total present value of obligation amounted to P
=7.77 million
and P
=8.37 million, respectively.
92
26. Financial Instruments
Financial Risk Management Objectives and Policies
The Group’s principal financial instruments comprise cash and cash equivalents, short-term cash
investments and notes and contracts payable. The main purpose of these financial instruments is
to finance the Group’s operations. The Group’s other financial instruments consist of availablefor-sale financial assets, which are held for investing purposes and investments in trust funds to
cover pre-need reserves obligation. The Group has various other financial instruments such as
installment contracts receivables, other receivables and accounts payable and accrued expenses
which arise directly from its operations.
It is, and has been throughout the year under review, the Group’s policy that no trading in
financial instruments shall be undertaken.
The main risks arising from the Group’s financial instruments are market risk (i.e., cash flow
interest rate risk and equity risk), credit risk and liquidity risk. The BOD reviews and approves
policies for managing these risks and they are summarized as follows:
Market risk
Cash flow interest rate risk
Cash flow interest rate risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the
risk for changes in market interest rates relates primarily to the Group’s short-term notes payable,
all with repriced interest rates.
The Group’s policy in addressing volatility in interest rates includes maximizing the use of
operating cash flows to be able to fulfill principal and interest obligations even in periods of rising
interest rates.
The following table demonstrates the sensitivity of the Group’s income before income tax to a
reasonably possible change in interest rates based on forecasted and average movements of
interest rates (with all other variables held constant):
December 31, 2013
December 31, 2012
Change in
Basis Points (bps)
-/+24bps
-/+11bps
Effect on Income
before Income Tax
+/-P
= 36,179,150
+/-P
=2,023,224
There is no impact on the Group’s equity other than those already affecting income before
income tax.
Equity price risk
Equity price risk is the risk that the fair values of investments in equity securities will decrease as
a result of changes in the market values of individual shares of stock. The Group is exposed to
equity price risk because of investments held by the Group classified as available-for-sale
financial assets included under “Other assets account” in the consolidated balance sheets. The
Group employs the service of a third-party stock broker to manage its investments in shares of
stock.
The following table demonstrates the sensitivity analysis of the Group’s equity to a reasonably
possible change in equity price based on forecasted and average movements of equity prices (with
all other variables held constant):
93
Change in
Equity Price Effect on Equity
+/-P
= .07
+/-P
= 104,858
+/-P
=0.23
+/-P
=474,719
2013
2012
Credit risk
Credit risk arises when the Group will incur a loss because its customers, clients or counterparties
fail to discharge their obligations. The Group trades only with recognized, creditworthy third
parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to
credit verification procedures. In addition, receivable balances are monitored on an on-going basis
with the objective that the Group’s exposure to bad debts is not significant. The Group’s policy is
to enter into transactions with a diversity of creditworthy parties to mitigate any significant
concentration of credit risk. There are no significant concentrations of credit risk within the
Group.
The tables below show the Group’s exposure to credit risk for the components of the consolidated
balance sheets. The exposure as of December 31, 2013 and 2012 is shown at gross, before taking
the effect of mitigation through the use of collateral agreements and other credit enhancements,
and at net, after taking the effect of mitigation through the use of collateral agreements and other
credit enhancements.
December 31, 2013:
Gross
maximum
exposure
Financial assets at fair value through profit or loss:
Investments in trust funds
=36,512,483
P
Loans and receivables:
Cash and cash equivalents, excluding
cash on hand
659,819,998
Short-term cash investments
2,053,350,000
Installment contracts receivable
1,606,674,422
Other receivables:
–
Accrued interest
9,330,650
Retention
1,624,200
Advances to customers
27,377,201
Others*
9,802,561
Total credit risk exposure
=4,404,491,515
P
*Excludes nonfinancial assets amounting to =
P 5,679,936.
Fair value of
collaterals/
Net
exposure
Financial effect of
collateral/credit
enhancements
=–
P
=36,512,483
P
=–
P
–
–
3,931,690,447
–
–
–
–
–
= 3,931,690,447
P
659,819,998
2,053,350,000
–
–
9,330,650
1,624,200
27,377,201
9,802,561
=2,797,817,093
P
–
–
1,606,674,422
–
–
–
–
–
=1,606,674,422
P
Fair value of
collaterals/
Net
exposure
Financial effect of
collateral/credit
enhancements
=–
P
=41,079,341
P
=–
P
–
–
4,537,520,779
2,397,564,517
307,600,000
–
–
–
1,960,431,150
–
–
–
=4,537,520,779
P
7,956,195
30,903,513
5,280,232
=2,790,383,798
P
–
–
–
=1,960,431,150
P
December 31, 2012:
Gross
maximum
exposure
Financial assets at fair value through profit or loss:
Investments in trust funds
=41,079,341
P
Loans and receivables:
Cash and cash equivalents, excluding
cash on hand
2,397,564,517
Short-term cash investments
307,600,000
Installment contracts receivable
1,960,431,150
Other receivables:
Accrued interest
7,956,195
Advances to customers
30,903,513
Others*
5,280,232
Total credit risk exposure
=4,750,814,948
P
*Excludes nonfinancial assets amounting to =
P 6,147,827
94
The following tables summarize the aging analysis of receivables:
December 31, 2013:
Past due But Not Impaired
> One year
< 30 days
31 - 60 days
61- 90 days
Over
90 days
Total
=240,445,978 P
P
= 1,346,014,655
= 9,454,469
P
=1,636,166
P
= 1,082,106
P
=8,041,048
P
=1,606,674,422
P
9,330,650
–
17,128,270
–
1,139,996
482,112
8,863,607
685,118
=276,908,501 P
P
= 1,347,181,885
–
–
2,092
253,836
= 9,710,397
P
–
776,439
–
–
=2,412,605
P
–
395,606
–
–
= 1,477,712
P
–
9,076,886
–
–
=17,117,934
P
9,330,650
27,377,201
1,624,200
9,802,561
=1,654,809,034
P
Current
Installment contracts
receivable
Other receivables:
Accrued interest
Advances to customers
Retention
Others
December 31, 2012:
Past due But Not Impaired
> One year
< 30 days
31 - 60 days
61- 90 days
Over
90 days
Total
=531,856,633 P
P
=1,407,381,201
=9,337,984
P
=2,190,092
P
=1,679,046
P
=7,986,194
P
=1,960,431,150
P
7,956,195
–
19,797,331
–
3,278,502
1,346,120
=562,888,661 P
P
=1,408,727,321
–
–
655,610
=9,993,594
P
–
891,588
–
=3,081,680
P
–
391,481
–
=2,070,527
P
–
9,823,113
–
=17,809,307
P
7,956,195
30,903,513
5,280,232
=2,004,571,090
P
Current
Installment contracts
receivable
Other receivables:
Accrued interest
Advances to customers
Others
The tables below show the credit quality by class of asset for loan-related balance sheet lines,
based on the Group’s credit rating system:
December 31, 2013:
Financial asset at fair value through profit
or loss - investments in trust funds
Loans and receivables:
Cash and cash equivalents, excluding
cash on hand
Short-term cash investments
Installment contracts receivable
Other receivables:
Accrued interest
Advances to customers
Retention
Others
Total
Neither past due nor impaired
Medium
High Grade*
Grade**
Past Due but
not Impaired
Total
=36,512,483
P
=–
P
=–
P
= 36,512,483
P
659,819,998
2,053,350,000
1,586,460,633
–
–
–
–
–
20,213,789
659,819,998
2,053,350,000
1,606,674,422
9,330,650
17,128,270
1,622,108
7,936,264
4,335,647,923
=4,372,160,406
P
–
–
–
1,612,461
1,612,461
= 1,612,461
P
–
9,330,650
10,248,931
27,377,201
2,092
1,624,200
253,836
9,802,561
30,718,648 4,367,979,032
= 30,718,648 =
P
P4,404,491,515
** High Grade - financial assets with reputable counterparties and which management believes to be reasonably assured to be
recoverable.
** Medium Grade - financial assets for which there is low risk of default of counterparties.
95
December 31, 2012:
Financial asset at fair value through profit
or loss - investments in trust funds
Loans and receivables:
Cash and cash equivalents, excluding
cash on hand
Short-term cash investments
Installment contracts receivable
Other receivables:
Accrued interest
Advances to customers
Others
Total
Neither past due nor impaired
Medium
High Grade*
Grade**
Past Due but
not Impaired
Total
=41,079,341
P
=–
P
=–
P
=41,079,341
P
2,397,564,518
307,600,000
1,939,237,834
–
–
–
–
–
21,193,316
2,397,564,518
307,600,000
1,960,431,150
7,956,195
19,797,331
3,538,166
4,675,694,044
=4,716,773,385
P
–
–
1,086,456
1,086,456
=1,086,456
P
–
7,956,195
11,106,182
30,903,513
655,610
5,280,232
32,955,108 4,709,735,608
=32,955,108 =
P
P4,750,814,949
** High Grade - financial assets with reputable counterparties and which management believes to be reasonably assured to be
recoverable.
** Medium Grade - financial assets for which there is low risk of default of counterparties.
The main considerations for impairment assessment include whether any payments are overdue or
if there are any known difficulties in the cash flows of the counterparties. The Group assesses
impairment into two areas: individually assessed allowances and collectively assessed allowances.
The Group determines allowance for each significant receivable on an individual basis. Among
the factors that the Group considers in assessing impairment is the inability to collect from the
counterparty based on the contractual terms of the receivables. The Group also considers the fair
value of the real estate collateralized in computing the impairment of the receivables. Receivables
included in the specific assessment are those receivables under the installment contracts receivable
accounts.
For collective assessment, allowances are assessed for receivables that are not individually
significant and for individually significant receivables where there is no objective evidence of
individual impairment. Impairment losses are estimated by taking into consideration the age of the
receivables, past collection experience and other factors that may affect collectability.
Liquidity risk
Liquidity risk is defined as the risk that the Group would not be able to settle or meet its
obligations on time or at a reasonable price.
The Group’s objective is to maintain a balance between continuity of funding and flexibility
through the use of STCPs and bank loans.
96
The tables below summarize the maturity analysis of the Group’s financial assets held for
managing liquidity and financial liabilities based on contractual undiscounted payments:
December 31, 2013:
30 days
31-90 days
91-180 days
181-360 days
Above 1 year
Total
P580,360,397
=
676,500,000
54,986,568
1,311,846,965
P79,650,000
=
998,450,000
56,333,920
1,134,433,920
=–
P
378,400,000
77,906,693
456,306,693
P–
=
–
127,529,448
127,529,448
P–
=
–
1,373,941,026
1,373,941,026
= 660,010,397
P
2,053,350,000
1,690,697,655
4,404,058,052
115,560,525
723,426,032
838,986,557
Liquidity Position
=472,860,408
P
** Excludes statutory liabilities amounting to =
P 7,248,555.
** Includes interest expense amounting to =
P 31,577,657.
1,205,736
587,910,434
589,116,170
= 545,317,750
P
38,137,046
154,839,420
192,976,466
= 263,330,227
P
47,341,690
35,760,235
83,101,925
=44,427,523
P
17,769,462
–
17,769,462
= 1,356,171,564
P
220,014,459
1,501,936,121
1,721,950,580
=2,682,107,472
P
30 days
31-90 days
91-180 days
181-360 days
Above 1 year
Total
=174,705,004
P
–
59,128,905
233,833,909
=2,223,052,049
P
51,000,000
237,199,240
2,511,251,289
=–
P
256,600,000
105,982,967
362,582,967
=–
P
–
189,653,697
189,653,697
=–
P
–
1,452,064,233
1,452,064,233
=2,397,757,053
P
307,600,000
2,044,029,042
4,749,386,095
P15,957,919
=
722,345,590
–
738,303,509
=1,772,947,780
P
P53,916,873
=
422,523,620
17,381,250
493,821,743
(P
=131,238,776)
=112,481,826
P
42,818,036
–
155,299,862
=34,353,835
P
=197,614,796
P
–
–
197,614,796
=1,254,449,437
P
=475,487,906
P
1,891,170,018
17,381,250
2,384,039,174
=2,365,346,921
P
Financial Assets
Cash and cash equivalents
Short-term cash investments
Installment contracts receivable
Financial Liabilities
Accounts payable and accrued
expenses*
Notes payable**
December 31, 2012:
Financial Assets
Cash and cash equivalents
Short-term cash investments
Installment contracts receivable
Financial Liabilities
Accounts payable and accrued
expenses*
Notes payable**
Contracts payable
P95,516,492
=
703,482,772
–
798,999,264
Liquidity Position
(P
=565,165,355)
** Excludes statutory liabilities amounting to =
P 7,138,269.
** Includes interest expense amounting to =
P 69,256,401.
Fair Values
The carrying amounts of recorded financial assets and financial liabilities as of December 31 are
as follows:
Date of
Valuation
Level 1
Fair value
Level 2
Level 3
P
= 36,512,483
P
=–
P
=–
1,441,592
–
–
–
–
1,606,674,422
–
–
2,312,134,000
Financial assets measured at
fair value
Financial assets at FVPL
Available-for-sale financial assets
Assets for which fair values are
disclosed
Loans and receivables:
Installment contracts receivable
Investment properties
December 31,
2013
December 31,
2013
December 31,
2013
December 31,
2013
97
Date of
Valuation
Assets
Financial assets measured at
fair value
Financial assets at FVPL
Investment in trust fund
Available-for-sale financial assets
Assets for which fair value are
disclosed
Loans and receivables:
Installment contracts receivable
Investment properties
December 31,
2012
December 31,
2012
December 31,
2012
December 31,
2012
Level 1
Fair value
Level 2
Level 3
=41,079,341
P
=–
P
=–
P
=2,090,093
P
=–
P
=–
P
–
–
1,960,431,150
–
–
1,088,944,418
Cash and cash equivalents, short-term cash investments, other receivables, accounts payable and
accrued expenses and contracts payable
Due to the short-term nature of the transactions, the fair values of cash and cash equivalents,
short-term cash investments, other receivables and accounts payable and accrued expenses
approximate their carrying amounts.
Financial assets at FVPL and available-for-sale financial assets
Financial assets at FVPL and available-for-sale financial assets are stated at fair value based on
quoted market prices.
Installment contracts receivable
Estimated fair value of installment contracts receivable is based on the discounted value of future
cash flows using the prevailing interest rate for similar types of receivables as of the reporting date
using the remaining terms of maturity. The discount rate used ranged from 0.67% to 2.00% in
2013 and 2012.
Investment properties
The fair value of investment properties is determined using sales comparison. Sales comparison
approach considers the sales of similar or substitute properties and other related market data had
the investment properties been transacted in the market. The significant unobservable inputs used
in determining the fair value are the sales price per square meter of similar or substitute property,
location, size, shape of lot and the highest and best use. The fair value of the investment
properties as of December 31, 2013 and 2012 approximates and represents the highest and best
use of the said properties
27. Current Assets and Current Liabilities
The Group’s current assets and current liabilities follow:
Current Assets:
Cash and cash equivalents (Note 4)
Short-term cash investments (Note 4)
Installment contracts receivable (Note 6)
Other receivables (Note 7)
Real estate properties for sale (Note 8)
Other assets (Note 12)
2013
2012
P
= 660,010,397
2,053,350,000
260,659,767
52,647,318
1,432,346,524
26,641,912
P
= 4,485,655,918
=2,397,757,053
P
307,600,000
553,049,949
48,941,647
1,470,772,832
30,328,804
=4,808,450,285
P
98
Current Liabilities:
Accounts payable and accrued expenses (Note 13)
Notes and contracts payable (Note 14)
Income tax payable
Pre-need and other reserves (Note 5)
2013
2012
P
= 209,493,552
1,470,358,464
115,829,551
2,061,040
P
= 1,797,742,607
=285,011,251
P
1,839,294,867
43,085,655
2,752,200
=2,170,143,973
P
28. Capital Management
The primary objective of the Group’s capital management is to ensure that it maintains a strong
credit and healthy capital ratios in order to support its business and maximize shareholder value.
The Group manages its capital structure and makes adjustment to it in light of changes in
economic conditions. It monitors its use of capital using leverage ratios on both gross debt and net
debt basis. Debt consists of short-term and long-term debt. Net debt includes short-term and
long-term debt less cash and cash equivalents and short-term cash investments. The Group
considers as capital the equity holders of the parent company less net changes in fair values of
available-for-sale financial assets as accumulated re-measurement on defined benefit plan.
As of December 31, 2013 and 2012, the Group had the following ratios:
Notes and contracts payable
Total equity holders of the parent
Less net changes in fair values of
available-for-sale financial assets
Accumulated re-measurement on defined
benefit plan
Debt to equity ratio
Notes and contracts payable
Less:
Cash and cash equivalents
Short-term cash investments
Total equity holders of the parent
Less net changes in fair values of
available-for-sale financial assets
Accumulated re-measurement on defined
benefit plan
Net debt to equity ratio
2013
P
= 1,470,358,464
2012
(As restated,
Note 2)
=1,839,294,867
P
P
= 5,256,836,596
=4,922,398,834
P
1,586,037
1,770,510
(15,435,630)
(18,831,090)
=4,920,628,324
P
= 5,255,250,559 P
0.37:1
0.28:1
P
= 1,470,358,464
660,010,397
2,053,350,000
(1,243,001,933)
5,256,836,596
1,586,037
=1,839,294,867
P
2,397,757,053
307,600,000
(866,062,186)
4,922,398,834
1,770,510
(15,435,630)
(18,831,090)
=4,920,628,324
P
= 5,255,250,559 P
(0.18):1
(0.24):1
As of December 31, 2013 and 2012, the Group has no externally imposed capital requirements.
99
29. Basic/Diluted Earnings Per Share
Basic/diluted earnings per share amounts were computed as follows:
Net income attributable to equity
holders of the Parent
Weighted average number of shares
Basic/diluted earnings
per share (a/b)
2013
2012
2011
P
=423,260,092
3,401,848,393
=400,865,344
P
3,401,848,393
=443,010,407
P
3,401,848,393
P
=0.12
=0.12*
P
=0.13*
P
* After retroactive effect of 5% stock dividend in 2013.
The Group has no potential dilutive common shares for the years ended December 31, 2013, 2012
and 2011. Thus, the basic and diluted earnings per share are the same as of those dates.
30. Business Segments
The Group derives its revenues primarily from the sale and lease of real estate properties and
marketing of pension plans. The Group does not have any major customers and all sales and
leases of real estate properties and sales of pension plans are made to external customers.
Segment Revenue and Expenses
2013
Sales of Real
Lease of Real
Pension Plan
Estate Properties Estate Properties
Operations
Revenue:
Sales of real estate
Financial income
Rent income
Other income
Cost of sales
Operating expenses:
Personnel
Taxes and licenses
Professional fees
Depreciation
Insurance
Others
Financial expenses
Other expense
Provision for (benefit from) income tax
Net income
=1,168,719,804
P
368,547,008
–
146,704,027
635,522,340
P–
=
–
32,440,172
–
–
183,780,132
42,217,617
34,967,297
13,306,411
24,867,421
57,925,730
26,078,104
25,096,676
120,716,152
= 519,492,959
P
–
4,098,529
–
2,245,459
–
4,776,292
–
–
6,395,968
=14,923,924
P
=–
P
551,972
–
3,112,252
4,547,878
2,095,167
695,770
345,459
1,158,396
861
9,549,775
–
–
162,088
(P
=14,891,170)
Total
= 1,168,719,804
P
369,098,980
32,440,172
149,816,279
640,070,218
185,875,299
47,011,916
35,312,756
16,710,266
24,868,282
72,251,797
26,078,104
25,096,676
127,274,208
= 519,525,713
P
100
Segment Revenue and Expenses
Revenue:
Sales of real estate
Financial income
Rent income
Other income
Cost of sales
Operating expenses:
Personnel
Taxes and licenses
Professional fees
Depreciation
Insurance
Others
Financial expenses
Other expenses
Provision for (benefit from) income tax
Net income
Sales of Real
Estate Properties
2012
Lease of Real
Estate Properties
=1,421,385,193
P
440,455,320
–
17,296,312
846,548,746
169,883,351
43,026,777
21,319,326
13,727,949
15,323,229
59,966,512
47,641,893
18,389,043
122,064,869
=521,245,130
P
Pension Plan
Operations
Total
P–
=
–
28,458,124
–
–
=–
P
1,446,548
–
3,967,135
6,445,905
=1,421,385,193
P
441,901,868
28,458,124
21,263,447
852,994,651
–
3,255,427
–
5,595,279
–
3,231,341
–
–
4,912,823
=11,463,254
P
2,410,804
104,200
621,176
–
916
30,285
–
–
(1,647,387)
(P
=2,552,216)
172,294,155
46,386,404
21,940,502
19,323,228
15,324,145
63,228,138
47,641,893
18,389,043
125,330,305
=530,156,168
P
Pension Plan
Operations
Total
=1,574,293,008
P
478,693,976
23,077,618
21,515,652
953,756,046
2011
Sales of Real Estate
Lease of Real
Properties Estate Properties
Revenue:
Sales of real estate
Financial income
Rent income
Other income
Cost of sales
Operating expenses:
Personnel
Taxes and licenses
Professional fees
Insurance
Depreciation
Others
Financial expenses
Other expenses
Provision for (benefit from) income tax
Net income
=1,574,293,008
P
475,449,808
–
18,746,298
953,756,046
P–
=
–
23,077,618
–
–
=–
P
3,244,168
–
2,769,354
–
151,296,806
48,156,604
47,840,969
17,757,635
13,882,430
66,563,902
56,570,373
17,317,999
99,942,523
=595,403,827
P
–
3,255,070
–
–
4,960,329
1,123,346
–
–
4,121,662
=9,617,211
P
1,687,000
611,818
766,885
959
–
5,224,469
–
–
(683,283)
(P
=1,594,326)
Sales of Real
Estate
Properties
=6,825,121,875
P
2,029,705,169
Lease of
Real Estate
Properties
= 1,190,731,848
P
7,378,499
Pension Plan
Operations
= 181,460,564
P
27,368,295
Total
= 8,197,314,287
P
2,064,451,963
Sales of Real
Estate
Properties
=7,396,514,154
P
2,663,147,232
Lease of
Real Estate
Properties
=868,508,858
P
7,538,219
Pension Plan
Operations
=204,848,488
P
51,073,830
Total
P8,469,871,500
=
2,721,759,281
152,983,806
52,023,492
48,607,854
17,758,594
18,842,759
72,911,717
56,570,373
17,317,999
103,380,902
=603,426,712
P
Segment Assets and Liabilities
December 31, 2013:
Total assets
Total liabilities
December 31, 2012:
Total assets
Total liabilities
101
31. Income Subject to Income Tax Holiday
Registration with the Board of Investments (BOI)
The Group has registered the following New Developer of Low-Cost Mass Housing Projects with
BOI under the Omnibus Investment Code of 1987 (Executive Order No. 226):
As of December 31, 2013:
Name
CDC
Grand Central Residence Tower I
Makati Executive Tower IV
Pines Peak Tower I
Registration No.
Date Registered
2010-117
2009-016
2012-092
June 16, 2010
February 12, 2009
June 1, 2012
As of December 31, 2012:
Name
CDC
Mandaluyong Executive Mansion III
Grand Central Residence Tower I
Makati Executive Tower IV
Pines Peak Tower I
CLDI
Manila Residences Bocobo
Registration No.
Date Registered
2008-006
2010-117
2009-016
2012-092
January 8, 2008
June 16, 2010
February 12, 2009
June 1, 2012
2008-249
August 26, 2008
32. Contingencies
The Group is contingently liable for certain lawsuits or claims filed by third parties which are
either pending decisions by the courts or are under negotiation, the outcomes of which are not
presently determinable. In the opinion of management and its legal counsel, the eventual liability
under these lawsuits or claims, if any, will not have a material effect on the consolidated financial
statements. Hence, no provision was recognized as of December 31, 2013 and 2012.
103
CITYLAND DEVELOPMENT CORPORATION AND SUBSIDIARIES
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS AND
SUPPLEMENTARY SCHEDULES
Schedule I
Schedule II
:
:
Schedule III
:
Schedule IV
Schedule V
Schedule VI
:
:
:
Supplementary schedules required by Annex 68-E
Reconciliation of Retained Earnings Available for Dividend Declaration
(Part 1, 4C, Annex 68-C)
Map of the relationships of the companies within the group (for investments
houses that are part of a conglomerate; Part 1, 4H)
Schedule of all effective standards and interpretation (Part 1, 4J)
Schedule of financial soundness indicators
Schedule of Gross and Net Proceeds of Short-term Commercial Papers
(STCPs) Issued
104
SCHEDULE I
CITYLAND DEVELOPMENT CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY SCHEDULES REQUIRED BY ANNEX 68-E
Schedule A. Financial Assets
Name of Issuing Entity and Description of
Each Issue
Cash and Cash Equivalents
Cash on hand and in banks
Cash equivalents
UCPB Savings Bank
Philippine Savings Bank
China Bank Savings
Citysavings Bank
Banco de Oro
Philippine Bank of Communications
Philippine Commercial Capital Inc.
Amalgamated Investment Bancorporation
Other maturities during the year
Short-term Cash Investments
China Bank Savings
Union Bank of the Philippines
Bank of Commerce
Rizal Commercial Banking Corporation
Asia United Bank
Philippine Veterans Bank
Maybank
(Forward)
Number of Shares
or Principal Amount
of Bonds and Notes
Amount Shown in
the Balance Sheet
Value Based on
Market Quotations
at Balance Sheet
Date
Income Received and
Accrued
–
=13,238,700
P
=13,238,700
P
=65,476
P
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
164,100,000
160,000,000
129,500,000
88,000,000
72,500,000
20,000,000
8,671,697
4,000,000
–
P
=660,010,397
164,100,000
160,000,000
129,500,000
88,000,000
72,500,000
20,000,000
8,671,697
4,000,000
–
P
=660,010,397
5,126,878
1,834,176
2,226,700
191,937
2,764,657
77,778
1,510,442
1,218,433
14,890,392
P
=29,906,869
P
=378,000,000
234,000,000
292,000,000
186,650,000
180,000,000
175,000,000
151,000,000
=378,000,000
P
234,000,000
292,000,000
186,650,000
180,000,000
175,000,000
151,000,000
=5,280,129
P
5,556,091
2,538,545
2,357,109
2,327,682
1,658,199
2,378,577
105
Name of Issuing Entity and Description of
Each Issue
Philippine Savings Bank
UCPB Savings Bank
Philippine Bank of Communications
Amalgamated Investment Bancorporation
Philippine Commercial Capital Inc.
Philippine National Bank
Banco de Oro
Citysavings Bank
Other maturities during the year
Available-for-sale Investments
PLDT Common
Filinvest
Union Bank
Empire East
Ayala Corp. “B” Common
Ayala Corp. “B” Preferred
Ayala Land “B” Common
Ayala Land “B” Preferred
First Holdings B
Swift Foods
Empire East
Investments in Trust Funds
Installment Contract Receivables
Others Receivables
Number of Shares
or Principal Amount
of Bonds and Notes
Amount Shown in
the Balance Sheet
–
–
–
–
–
–
–
–
–
=127,500,000
P
101,700,000
80,000,000
55,000,000
44,500,000
24,000,000
12,000,000
12,000,000
–
P
= 2,053,350,000
Value Based on
Market Quotations
at Balance Sheet
Date
=127,500,000
P
101,700,000
80,000,000
55,000,000
44,500,000
24,000,000
12,000,000
12,000,000
–
P
= 2,053,350,000
77
1,445
415
300,301
676
227
75
16,875
5,126
1,866
300,301
627,384
–
–
–
–
=205,282
P
2,038
52,290
276,277
350,168
227
1,856
1,687
275,266
224
276,276
P
=1,441,591
36,512,483
1,606,674,422
53,814,548
P
= 4,411,803,442
=205,282
P
2,038
52,290
276,277
350,168
227
1,856
1,687
275,266
224
276,276
P
=1,441,591
36,512,483
1,606,674,422
53,814,548
P
= 4,411,803,442
Income Received and
Accrued
=3,197,647
P
6,990,106
1,305,469
1,433,698
2,712,457
634,684
56,000
519,115
6,431,372
P
=45,376,880
=–
P
–
–
–
–
–
–
–
–
–
–
=–
P
–
–
–
P
=–
Schedule C. Amounts Receivable from Related Parties which are Eliminated during Consolidation of Financial Statements
106
Name and
Designation of Debtor
CI (parent company)
CLDI (subsidiary)
CPI (subsidiary)
CAI (affiliate)
CLHI (affiliate)
Balance at
beginning of
period
-520,000
----
Additions
5,889,730
6,187,003
190,491
1,276
114
Amounts collected
5,889,730
6,727,037
190,491
1,276
114
Amounts
written-off
-
Current
-520,000
----
Non-current
------
Balance at
end of period
-520,000
----
Parent Company’s transactions with CDC, CLDI, CPI, CAI and CLHI are eliminated in the consolidated balance sheets.
Schedule H. Capital Stock
Title of Issue
Common Stock – P1 par value
Number of Shares
Authorized
4,000,000,000
Number of Shares
Issued and
Outstanding
3,401,848,393
Number of Shares
Reserved for Options,
Warrants, Conversion
and Other Rights
--
Number of Shares Held By
Affiliates
1,717,056,617
Directors, Officers
and Employees
836,977,595
Others
847,814,181
107
SCHEDULE II
CITYLAND DEVELOPMENT CORPORATION
SUPPLEMENTARY SCHEDULE OF RETAINED EARNINGS
AVAILABLE FOR DIVIDEND DECLARATION
DECEMBER 31, 2013
Unappropriated retained earnings, beginning
Deemed cost adjustment on real estate properties, net of tax
Treasury shares
Deferred income tax assets, beginning
Unappropriated retained earnings, as adjusted to
available for dividends declaration, beginning
Add: Net income actually earned/realized during the year
Net income during the year closed to retained earnings
Realized deemed cost adjustments on real estate properties
Movement in deferred income tax assets
Less:
Dividends declared during the year
Stock dividends
Cash dividends
Fractional shares of stock dividends
Unappropriated retained earnings available for dividends declaration, end
=849,751,656
P
(271,413,322)
(28,524,728)
(3,024,335)
546,789,271
406,101,260
49,378,926
7,863,630
1,010,133,087
161,992,454
97,195,678
343
259,188,475
=750,944,612
P
108
SCHEDULE III
CITYLAND DEVELOPMENT CORPORATION
MAP OF THE RELATIONSHIPS OF THE COMPANIES WITHIN THE GROUP
CITYLAND, INC. (CI)
(ultimate parent)
100.00%
↓
100.00%
↓
CREDIT & LAND HOLDINGS,
INCORPORATED (CLHI)
(subsidiary of CI)
CITYADS, INC. (CAI)
(subsidiary of CI)
50.42%
CITYLAND DEVELOPMENT CORPORATION (CDC)
(subsidiary of CI)
29.54%
CITY & LAND DEVELOPERS,
INCORPORATED (CLDI)
(subsidiary of CDC)
9.18%
49.73%
90.81%
CITYPLANS, INCORPORATED (CPI)
(subsidiary of CDC)
109
SCHEDULE IV
CITYLAND DEVELOPMENT CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY SCHEDULE OF ALL EFFECTIVE
STANDARDS AND INTERPRETATIONS (PART 1, 4J)
List of Philippine Financial Reporting Standards (PFRSs) [which consist of PFRSs, Philippine
Accounting Standards (PASs) and Philippine Interpretations] and Philippine Interpretations
Committee (PIC) Q&As effective as of December 31, 2013:
PHILIPPINE FINANCIAL REPORTING STANDARDS AND
INTERPRETATIONS
Effective as of December 31, 2013
Framework for the Preparation and Presentation of Financial
Statements
Conceptual Framework Phase A: Objectives and qualitative
characteristics
Adopted
Not Early
Not
Adopted Applicable


PFRSs Practice Statement Management Commentary
Philippine Financial Reporting Standards
PFRS 1
(Revised)
First-time Adoption of Philippine Financial Reporting
Standards

Amendments to PFRS 1 and PAS 27: Cost of an
Investment in a Subsidiary, Jointly Controlled Entity or
Associate

Amendments to PFRS 1: Additional Exemptions for Firsttime Adopters

Amendment to PFRS 1: Limited Exemption from
Comparative PFRS 7 Disclosures for First-time Adopters

Amendments to PFRS 1: Severe Hyperinflation and
Removal of Fixed Date for First-time Adopters

Amendments to PFRS 1: Government Loans

Share-based Payment

Amendments to PFRS 2: Vesting Conditions and
Cancellations

Amendments to PFRS 2: Group Cash-settled Share-based
Payment Transactions

PFRS 3
(Revised)
Business Combinations

PFRS 4
Insurance Contracts

Amendments to PAS 39 and PFRS 4: Financial Guarantee
Contracts

PFRS 2
PFRS 5
Non-current Assets Held for Sale and Discontinued
Operations
PFRS 6
Exploration for and Evaluation of Mineral Resources


110
PHILIPPINE FINANCIAL REPORTING STANDARDS AND
INTERPRETATIONS
Effective as of December 31, 2013
PFRS 7
Adopted
Financial Instruments: Disclosures

Amendments to PAS 39 and PFRS 7: Reclassification of
Financial Assets

Amendments to PAS 39 and PFRS 7: Reclassification of
Financial Assets - Effective Date and Transition

Amendments to PFRS 7: Improving Disclosures about
Financial Instruments

Amendments to PFRS 7: Disclosures - Transfers of
Financial Assets

Amendments to PFRS 7: Disclosures - Offsetting Financial
Assets and Financial Liabilities

Not Early
Not
Adopted Applicable

Amendments to PFRS 7: Mandatory Effective Date of
PFRS 9 and Transition Disclosures*

PFRS 8
Operating Segments
PFRS 9
Financial Instruments

Amendments to PFRS 9: Mandatory Effective Date of
PFRS 9 and Transition Disclosures

PFRS 10
Consolidated Financial Statements

Amendments to PFRS 10: Investment Entities

PFRS 11
Joint Arrangements

PFRS 12
Disclosure of Interests in Other Entities


Amendments to PFRS 10: Investment Entities
PFRS 13
Fair Value Measurement

Philippine Accounting Standards
PAS 1
(Revised)
Presentation of Financial Statements

Amendment to PAS 1: Capital Disclosures


Amendments to PAS 32 and PAS 1: Puttable Financial
Instruments and Obligations Arising on Liquidation
Amendments to PAS 1: Presentation of Items of Other
Comprehensive Income

PAS 2
Inventories

PAS 7
Statement of Cash Flows

PAS 8
Accounting Policies, Changes in Accounting Estimates
and Errors

PAS 10
Events after the Reporting Period

PAS 11
Construction Contracts

PAS 12
Income Taxes

Amendment to PAS 12 - Deferred Tax: Recovery of
Underlying Assets

111
PHILIPPINE FINANCIAL REPORTING STANDARDS AND
INTERPRETATIONS
Effective as of December 31, 2013
Adopted
Not Early
Not
Adopted Applicable
PAS 16
Property, Plant and Equipment

PAS 17
Leases

PAS 18
Revenue

PAS 19
Employee Benefits

Amendments to PAS 19: Actuarial Gains and Losses,
Group Plans and Disclosures

PAS 19
(Amended)
Employee Benefits

PAS 20
Accounting for Government Grants and Disclosure of
Government Assistance

PAS 21
The Effects of Changes in Foreign Exchange Rates


Amendments to PAS 19: Defined Benefit Plans: Employee
Contributions
Amendment: Net Investment in a Foreign Operation

PAS 23
(Revised)
Borrowing Costs

PAS 24
(Revised)
Related Party Disclosures

PAS 26
Accounting and Reporting by Retirement Benefit Plans

PAS 27
Consolidated and Separate Financial Statements

PAS 27
(Amended)
Separate Financial Statements

Amendments to PAS 27: Investment Entities

PAS 28
Investments in Associates

PAS 28
(Amended)
Investments in Associates and Joint Ventures

PAS 29
Financial Reporting in Hyperinflationary Economies

PAS 31
Interests in Joint Ventures

PAS 32
Financial Instruments: Disclosure and Presentation


Amendments to PAS 32 and PAS 1: Puttable Financial
Instruments and Obligations Arising on Liquidation
Amendment to PAS 32: Classification of Rights Issues

Amendments to PAS 32: Offsetting Financial Assets and
Financial Liabilities


Amendments to PAS 32: Offsetting Financial Assets and
Financial Liabilities
PAS 33
Earnings per Share

PAS 34
Interim Financial Reporting

112
PHILIPPINE FINANCIAL REPORTING STANDARDS AND
INTERPRETATIONS
Effective as of December 31, 2013
PAS 36
Impairment of Assets
Adopted
Not Early
Not
Adopted Applicable


Amendments to PAS 36: Recoverable Amount Disclosures
for Non-Financial Assets

PAS 37
Provisions, Contingent Liabilities and Contingent Assets
PAS 38
Intangible Assets
PAS 39
Financial Instruments: Recognition and Measurement

Amendments to PAS 39: Transition and Initial Recognition
of Financial Assets and Financial Liabilities


Amendments to PAS 39: Cash Flow Hedge Accounting of
Forecast Intragroup Transactions

Amendments to PAS 39: The Fair Value Option

Amendments to PAS 39 and PFRS 4: Financial Guarantee
Contracts

Amendments to PAS 39 and PFRS 7: Reclassification of
Financial Assets

Amendments to PAS 39 and PFRS 7: Reclassification of
Financial Assets - Effective Date and Transition

Amendments to Philippine Interpretation IFRIC-9 and
PAS 39: Embedded Derivatives

Amendment to PAS 39: Eligible Hedged Items


Amendments to PAS 39: Novation of Derivatives and
Continuation of Hedge Accounting*
PAS 40
Investment Property
PAS 41
Agriculture


Philippine Interpretations
IFRIC 1
Changes in Existing Decommissioning, Restoration and
Similar Liabilities

IFRIC 2
Members' Share in Co-operative Entities and Similar
Instruments

IFRIC 4
Determining Whether an Arrangement Contains a Lease
IFRIC 5
Rights to Interests arising from Decommissioning,
Restoration and Environmental Rehabilitation Funds

IFRIC 6
Liabilities arising from Participating in a Specific Market Waste Electrical and Electronic Equipment

IFRIC 7
Applying the Restatement Approach under PAS 29
Financial Reporting in Hyperinflationary Economies

IFRIC 8
Scope of PFRS 2

IFRIC 9
Reassessment of Embedded Derivatives

Amendments to Philippine Interpretation IFRIC-9 and
PAS 39: Embedded Derivatives


113
PHILIPPINE FINANCIAL REPORTING STANDARDS AND
INTERPRETATIONS
Effective as of December 31, 2013
Adopted
Not Early
Not
Adopted Applicable
IFRIC 10
Interim Financial Reporting and Impairment

IFRIC 11
PFRS 2- Group and Treasury Share Transactions

IFRIC 12
Service Concession Arrangements

IFRIC 13
Customer Loyalty Programmes

IFRIC 14
The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction

Amendments to Philippine Interpretations IFRIC- 14,
Prepayments of a Minimum Funding Requirement

IFRIC 16
Hedges of a Net Investment in a Foreign Operation

IFRIC 17
Distributions of Non-cash Assets to Owners

IFRIC 18
Transfers of Assets from Customers

IFRIC 19
Extinguishing Financial Liabilities with Equity
Instruments

IFRIC 20
Stripping Costs in the Production Phase of a Surface Mine

IFRIC 21
Levies
SIC-7
Introduction of the Euro

SIC-10
Government Assistance - No Specific Relation to
Operating Activities

SIC-12
Consolidation - Special Purpose Entities

Amendment to SIC - 12: Scope of SIC 12

SIC-13
Jointly Controlled Entities - Non-Monetary Contributions
by Venturers

SIC-15
Operating Leases - Incentives

SIC-25
Income Taxes - Changes in the Tax Status of an Entity or
its Shareholders

SIC-27
Evaluating the Substance of Transactions Involving the
Legal Form of a Lease
SIC-29
Service Concession Arrangements: Disclosures

SIC-31
Revenue - Barter Transactions Involving Advertising
Services

SIC-32
Intangible Assets - Web Site Costs



114
SCHEDULE V
CITYLAND DEVELOPMENT CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY SCHEDULE OF
FINANCIAL SOUNDNESS INDICATORS
Ratio
2013
2.50
1.56
0.28
3.97
0.26
27.73
1.68
8.05%
Current
Asset-to-equity
Debt-to-equity
Asset-to-liability
Solvency
Interest rate coverage
Acid-test ratio
Return on equity (%)
December 31
2012
2.22
1.72
0.37
3.11
0.20
15.59
1.52
8.14%
Manner of Calculation:
Current ratio
=
Total Current Assets / Total Current Liabilities
Asset-to-equity ratio
=
Stockholder's Equity (net of Net Changes in Fair Value of
Investments)
Debt-to-equity ratio
=
Stockholder's Equity (net of Net Changes in Fair Value of
Investments)
Asset-to-liability ratio
=
Total Assets / Total Liabilities
Solvency ratio
=
Net Income after Tax + Depreciation Expense
Total Liabilities
Interest rate coverage
ratio
=
Net Income Before Tax + Depreciation Expense + Interest Expense
Interest Expense
Acid-test ratio
=
Cash and Cash Equivalents + Short-term Cash Investments +
Installment Contracts Receivable, current + Other Receivables, current
+ Available-for-sale Financial Assets
Total Current Liabilities
Return on equity ratio
=
Net Income after Tax
Stockholder's Equity
Earnings per share
=
Net income after Tax
Outstanding shares
Total Assets
Notes and Contracts Payable
2011
1.98
1.75
0.34
2.99
0.23
14.18
1.19
9.65%
115
SCHEDULE VI
CITYLAND DEVELOPMENT CORPORATION
SCHEDULE OF GROSS AND NET PROCEEDS OF SHORT-TERM
COMMERCIAL PAPERS ISSUED
I.
SEC-CFD Order No. 180, Series of 2012 dated November 23, 2012
A. As stated in the Final Prospectus (December 2012 to November 2013)
Gross Proceeds
P
=1,000,000,000
Less: Expenses
Registration Fees
(820,625)
Legal and Accounting Fees
(30,000)
Publication Fees
(29,000)
Documentary Stamps Tax
(5,000,000)
Printing costs
(30,000)
(5,909,625)
994,090,375
Net Proceeds
Use of Proceeds
Project-related Costs
650,000,000
Payment of maturing loans/ notes
306,290,375
Interest expense
37,800,000
Total
P
=994,090,375
B. Use of Proceeds (December 2012 to November 2013)
Gross Proceeds
P
= 967,200,000
Less: Expenses
Registration Fees
(820,625)
Legal and Accounting Fees
(30,000)
Publication Fees
(29,792)
Documentary Stamps Tax
(4,828,552)
Printing costs
(56,500)
(5,765,469)
961,434,531
Net Proceeds
Use of Proceeds
Project-related Costs
(574,667,826)
Payment of maturing commercial papers
(373,155,501)
Interest expense
(13,611,204)
Balance of Proceeds as of December 31,
2013
C. Outstanding Short-Term Commercial Papers as of
December 31, 2013
(961,434,531)
P
= --
P
= 654,950,000
116
II. SEC-MSRD Order No. 67, Series of 2013 dated November 22, 2013
A. As stated in the Final Prospectus (December 2013 to November 2014)
Gross Proceeds
P
= 1,400,000,000
Less: Expenses
Registration Fees
(921,625)
Legal and Accounting Fees
(30,000)
Publication Fees
(29,000)
Documentary Stamps Tax
(7,000,000)
Printing costs
(30,000)
(8,010,625)
1,391,989,375
Net Proceeds
Use of Proceeds
Project-related Costs
480,000,000
Payment of maturing loans/ notes
890,709,375
Interest expense
21,280,000
Total
P
= 1,391,989,375
B. Use of Proceeds (December 2013)
Gross Proceeds
P
= 372,700,000
Less: Expenses
Registration Fees
(921,625)
Legal and Accounting Fees
(30,000)
Publication Fees
(29,792)
Documentary Stamps Tax
(427,198)
Printing costs
(5,150)
(1,413,765)
371,286,235
Total Net Proceeds
Use of Proceeds
Project-related Costs
(51,371,554)
Balance of Proceeds as of December 31,
2013
C.
Outstanding Short-Term Commercial Papers as of
December 31, 2013
(51,371,554)
P
= 319,914,681
P
=372,700,000